Coverage Pointers - Volume XIII, No. 18

Dear Coverage Pointers Subscribers:

We have marched out of February with springtime firmly in focus.  It’s our fourth-least snowy winter in history so far and that’s a lot of history and a little snow.  Just a few years ago Buffalo had more snow in one weekend than we’ve had all of this winter.

OK, I am going to be one of those waiting in line for the iPad 3.  I admit it.  Imagine, Angry Birds in higher definition?

At the H&F shop, five of us just celebrated our 32nd anniversary as lawyers, graduates of the Class of ’79 and admitted in 1980.  How fortunate can I be to still love what I do after all these years?   

LinkedIn – New York Insurance:

So you like this stuff?  You’re not offended by spending quality time with insurance coverage types?  Join us in the New York Insurance Group in LinkedIn, founded and managed by your friends at the Hurwitz & Fine Coverage Pointers team.  We’re over 700 members strong with 70 having joined just since January 1.  It’s your interactive social media home for insurance coverage chatter.

Geographical Coverage – All of New York State (and beyond):

In case you didn’t know, we do have an office in Albany, staffed by our very own Cassandra Kazukenus.  Cassie can conveniently cover the Capital District, the Adirondacks, Southern Tier, the North Country, the Leatherstocking District, the Hudson Valley and Mid-Hudson Valley.  For those in NYC who never heard of these parts of New York State, I feel badly for you, because they are beautiful.

Probably 75% or more of our coverage work within New York State is in the New York City metropolitan area, the five boroughs, Nassau and Suffolk, Westchester, Rockland all the counties around. 

If we can help you anywhere, feel free to call upon us.  

Jumping to Conclusions – One Hundred Years Ago:

New York Times
March 2, 1912

DROPS FROM BI-PLANE WITH A PARACHUTE
Capt. Berry, with an Aviator, Goes Up 1,500 Feet in St. Louis and Lands Unhurt
Aeronaut Severs Roper Attaching Parachute to Aircraft and Falls 500 Feet Before It Opens

St. Louis – March 1 -- For the first time in the history of aviation a man dropped from an aeroplane at Jefferson Barracks this afternoon and descended to Earth in a parachute.  The man was Capt. Albert Berry. The parachute leap was witnessed by hundreds of soldiers.
Editor’s Note:  The Missouri National Guard celebrated the 100th Anniversary of that jump yesterday with a ceremony at Jefferson Barracks, which included a ceremonial jump.

 

Must Read Alert:

Let’s start out this issue with a book review on the second edition of a publication that I’ve talked about before:

General Liability Insurance Coverage - Key Issues in Every State
Second Edition

Authors: Randy Maniloff and Jeffrey Stempel
Publisher: Oxford University Press

If you liked the first edition – and I surely did – you will like the second edition even more.  Put this book on your MUST HAVE list.  

Randy Maniloff and Jeffrey Stempel have just published a second edition of their tremendously useful and practical state-by-state summary of insurance coverage issues.  I praised the first edition in a March 2011 issue of Coverage Pointers and this revision gives you more of the same, 150 pages more along with a new chapter of material on recovery of pre-tender costs.  This is the most useful handbook of insurance cases I’ve found and I’ve kept the first edition on my desk, now replaced with the second.  I reference this publication with regularity. 

Where do you turn when you get those kinds of calls: 

• “I know that in New York, punitive damages are uninsurable; how about in Arkansas?” (Yes.  You’ll find the answer with case authority on page 511). 
• “Does Hawaii follow the Cumis approach to independent counsel?”  (No – the Supreme Court of Hawaii believes defense counsel selected by carriers can be ethical – page 134). 
• “Is emotional distress considered a bodily injury in Georgia?”  (Not usually – page 263).

 

What I’ve always wanted to have by my side is a quick reference to other states’ laws.  This soft-covered book has it.  Twenty-two chapters from “Choice of Law in Coverage Disputes,” to “Duty to Defend Standard: ‘Four Corners’ or ‘Extrinsic Evidence’” to “Insurer’s Right to Reimbursement of Defense Costs” to “Number of Occurrence” and a whole lot more.

General Liability Insurance Coverage - Key Issues in Every State (Second Edition), published by Oxford University Press, is a coverage compendium, a 640-page "first place to look" handbook that provides 50-state surveys on key issues of general liability coverage. Short, crisp and well-supported summaries of each state's positions are provided in a well-indexed and organized soft-covered offering.

For each state and each coverage issue, you'll find a one paragraph, concise summary of the current state of the law with reference to the key appellate cases, if that state's appellate courts have so ruled. If not, and the authors have found a lower court decision, they offer that instead.

Still priced at only $125 and available on the Oxford University Press website, you'll make up the cost of this fine publication, the first time you can avoid a LEXIS or WESTLAW search for that one important citation.

 

From Audrey Seeley, Queen of No Fault:

We have a number of diverse no-fault issues being reported on this edition from medical necessity of MUA to use and operation to the one year rule for your review.  There is also an interesting decision regarding whether an arbitrator can deny a claim submitted for the first time with the AR-1 when it would violate the 45 day rule.  The insurer did not issue a blanket denial and the applicant did not submit after receiving the denial the bills sought in the arbitration.  Does the applicant still have the obligation to timely submit future bills under Domotor?  The assigned arbitrator denied the claim without prejudice and left it to the parties to take action as they saw advisable.  Also, while the assigned arbitrator noted that the bills submitted with the AR-1 was not submission of a claim should the insurer issue the denial now or wait until the applicant submits the claims as is usually done.

Please remember you can still sign up for DRI Insurance Law Committee’s Insurance Coverage and Claims Institute from March 28-30 in Chicago.  If you need any information please feel free to email me at [email protected].

            Audrey

 

One Hundred Years Ago Today:

Girl Scouts was founded by Juliette Gordon Low on March 2, 1912 in Savannah, Georgia. For the first year it was called "Girl Guides" like the Girl Guides in England, on which it was based.

 

Upcoming Programming:  DRI, FDCC, NYSBA

There is some great insurance programming coming up.  DRI’s Insurance Coverage and Claims Institute will be held in Chicago later this month (see Audrey’s note above).  The FDCC 2012 Litigation Management College and Graduate Program is coming up in June.  Let me tell you tell you something about that offering.

The eighteenth annual Litigation Management College and the ninth annual Graduate Program of the Litigation Management College are scheduled for June 10-14, 2011 at Emory University Conference Center in Atlanta, Georgia. Our annual goal for enrollment is 75-100 students for the College and 25 students for the Graduate Program.
The FDCC looks forward to continuing to provide claims professionals a sophisticated level of training offered by experts in negotiation, evaluation and litigation. The Litigation Management College has earned an international reputation as the premier advanced litigation training course for claims professionals. Utilizing a new fact pattern, the College offers an intensive four-day experience of workshops, based on a case study and participatory interactive educational experiences. The curriculum is fast-paced and cutting-edge with a practical approach to litigation management. The program provides a unique opportunity for claims professionals to explore, study and discuss issues of current interest.

The College is sponsored by the FDCC as a service to claims professionals, third-party administrators and self-insured corporate litigation managers working in the insurance industry or in corporate law and claim departments handling litigation matters. The College is designed for claim and litigation management professionals with five to fifteen years claims or litigation management experience.

The Graduate Program consists of an intensive 32-hour classroom and workshop curriculum intended to expand the litigation management, evaluation and negotiation skills learned in the College. It builds upon the solid foundation provided by the College to further refine the students’ understanding of advanced insurance coverage issues, strategic litigation tactics and alternatives for resolution of disputes on favorable terms. It allows students to gain additional experience and participation in application of their skills in a cost effective manner with any type of litigation challenge that may arise in their workloads.

Students have included representatives from Acadia Insurance, Zurich North America, Harleysville Insurance, EMC Insurance, Axis Insurance, Meadowbrook Insurance Group, Dollar General Stores, Liberty Mutual Insurance, Hanover Insurance, Hartford Insurance, Mountain States Insurance, Dean Foods Company, Infinity Insurance, AIG, RSUI, General Star, Akzo Nobel, NGM Insurance, Guilford Specialty, IMT Insurance and Mitsui Sumitomo Insurance.

Every year, both the LMC and Graduate Programs receive rave reviews from students. “Excellent, intensive, hands on/real practice exercises with high potential for mental retention.” “The faculty is so knowledgeable and very willing to take the time to answer questions and assist in any way they can.” “Great group of speakers.” “This was the best seminar I have attended in 15 years.”

The faculty of the College and the Graduate Program consists of numerous prominent attorneys and insurance industry executives, all of whom are members of the FDCC, and many of whom have devoted years of service in educating class after class of students. The College also provides training from outside experts as a part of the experience. These include:

• Audrey Nelson, Ph.D. of Nelson Communications in Boulder, Colorado, an internationally recognized trainer, keynote speaker, and consultant specializing in gender communication, conflict management and dealing with difficult people and communication skills;
• John Patrick Dolan, Esquire, a well-known attorney who is also a professional speaker on the classic principles of effective negotiation; and
• The jury consulting firm of Tsongas Litigation Consulting uses its experience, methodology, audiovisual technology, and expert knowledge of communication to assist with witness preparation (including the claims professional) and provides insight into the use of mock juries.

 

We believe the students attending the 2012 Litigation Management College and Graduate Program will have an excellent experience and take home skills which they can utilize in their everyday job performance. A full description of the College and Graduate Program, as well as applications which can be downloaded, may be found on the FDCC website, www.thefederation.org.

 

Peiper’s Persepctives

As we flip the calendar to another month, I must take the time to remind you that we do house calls.  As you’re putting your list of training dates for the upcoming year together, please keep in mind that in addition to a number of liability programs we offer, we also have a collection of first party presentations that we’d love to share with you.  This includes presentations on emerging first party risks, complex business income losses, and identifying fraud, among a host of others. If you’re at all interested, please drop us a line. 

We’ve got an interesting issue for you in this week’s potpourri.  Faithful readers will recall that we recently reviewed the First Department’s detailed analysis of e-discovery rules under New York law.  The Court is back again this week with a thoughtful analysis over who is obligated to “foot the bill” for voluminous discovery undertakings.  In US Bank v. GreenPoint, the First Department provides a list of relevant factors to consider when determining whom should pay for large discovery production.  In addition, the court also provides us with the preferred route to handle discovery disputes where the issue of cost of production may become an issue. 

In addition, for those of you who love a tangled mess of indemnity claims, please take a moment to review the Naughton, Jr. v. NYC case.  The First Department offers a dissertation on the current status of common law and contractual indemnity claims.  If you handle Labor Law cases, or insurance coverage cases, these rules are “must knows”. 

That’s it for this week.   See you in two more.

Steve Peiper
[email protected]

 

Mark This On Your Calendar – May 21, 2012 in Buffalo

New York State Bar Association – Torts, Insurance and Compensation Law Program:  Advance Coverage Issues

I was delighted to be asked to chair the Advanced Coverage program being offered by the TICL Section of the New York State Bar Association.  Here’s the program being offered.  Steve Peiper will be speaking on Evaluating Disclaimers and besides chairing the program, I’ll be presenting on the current state of bad faith in New York.

 

Update on CGL Policy Defenses & Recap of Important Decisions

• Discussion on exclusions such as expected or intended causes, contractual liability, employer’s liability, damage to property;
• Late notice under the old and new law.

Bad Faith Litigation

• Discussion of recent case law and impact on litigation in New York;
• Covenant of good faith & fair dealing: unreasonably denying a claim, refusing to defend, defenses and damages;
• Consequential damages under Bi-Economy;
• Updates in first and third party context.

Exclusions in Personal Lines Insurance

• Application of various exclusions such as: sexual abuse; off-premises injuries; contractor’s injuries; cyber bullying and electronic aggression
• Implications for lack of coverage situations
• Necessary investigation and disclaimers.

Update on Additional Insured Coverage

• Review of case law on blanket additional insured coverages;
• B.P. Air Conditioning v Worth Construction – update on the state of the battle between the two;
• Other insurance clauses.

Environmental Coverage Claims

• Traditional environmental coverages;
• Unraveling priority of coverage issues in long tail claims;
• Lead, Asbestos and other non-traditional contaminants;
• Continuous trigger, allocation, exclusions

Evaluating Disclaimers and Options Available

• Review of Insurance Law § 3420 as it affects disclaimers;
• Notice of claim and time requirements in First & Third Party Claim;
• Declaratory Judgment Actions v. Direct Actions;
• Standing issues for carriers, insureds and injured parties.

Ethical Obligations in the Tripartite Relationship

• The ways in which a claim professional, a coverage attorney and a defense lawyer should handle a situation and protect interests;
• When a reservation of rights creates a conflict;
• The right to independent counsel under Goldfarb and Cumis.

           
While Steve and I won’t be in attendance in other cities for this program, it is being is being offered in Albany and Long Island on the same day, May 21, in New York City on June 1 and in Syracuse on June 7.

 

One Hundred Years Ago Today:

The Ironwood (Michigan) Times
March 2, 1912
Page 1

BIG LIFE INSURANCE POLICIES

The largest amount of life insurance held by any woman in the world is now carried by Mrs. Charles Netcher, head of a Chicago department store.

Mrs. Netcher has just taken out a life insurance policy for $200,000, which raises her total insurance to $1,200,000, more than any other person in Chicago, it was announced.

Mrs. Netcher has followed a platform of her husband, who, when he died in 1904, was insured for $500,000.  After the death of her husband, Mrs. Netcher assumed control of the store and had conducted the business ever since, building it up and constantly increasing her holdings in real estate as the profits from her business increased.

She soon became what is known in insurance circles as a “good risk”.  When she decided to take out large policies on her life, the various companies extended to her the usual rights allowed business men.  And, according to the Chicago executive representative of a big eastern company, who has written her insurance, it is uncommon for a woman to be allowed the same rights as a man in the writing of large policies.

“Women are usually limited in the amount of insurance they are allowed to take out,” he said.  “However, we regard Mrs. Netcher as an extraordinary business woman and one who is important enough to carry the largest insurance in Chicago…”
Editor’s Note:  Charles Netcher founded “The Boston Store,” a mercantile establishment in Chicago.  Before Charles died in 1904, the Boston Store expanded rapidly and soon occupied almost the entire half-block on the north side of Madison between State and Dearborn.

It was, however, Charles' wife, Mollie Netcher, who guided the store through its most successful years as a major Chicago department store. In the early days of the Boston Store, she had worked as a clerk and underwear buyer. She and Charles married in 1891. After her husband's death, Mollie skillfully transformed the old-fashioned dry-goods store into a first-rate, full-line department store, making it a leading competitor of Marshall Field's.

By the late 1930s, business at the Boston Store had begun to decline and what had once been State Street's second-highest-grossing department store had slipped to seventh. The Boston Store closed in July of 1948.

Her daughter was Mollie Wilmot, who died in 2002.  Formerly the next-door-neighbor of Rose Kennedy, Wilmot became a celebrity when a freighter ran aground on her property and remained there for over 100 days.

 

In This Week’s Coverage Pointers:

 

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

Court of Appeals

• A Fiduciary Policy Provides Coverage ONLY for Breaches of Fiduciary (Not Ordinary Business) Duties

 

Appellate Departments

• Carrier Permitted to Argue that Injuries Not Caused by Occurrence, Even in Light of Default Judgment in Underlying Lawsuit
• Policies Pro-rate Because there Had No Request to Cancel Previous Policy
• Carrier Had Enough Information to Deny Coverage on Late Reporting and Failed to Do So
• Question of Fact as to Whether Two Year Delay in Giving Notice was Excusable
• In Uninsured Motorist Case, Carrier Entitled to Discovery on Liability Issues
• Professional Liability Exclusion Inapplicable
• Borrowers, and Not Mortgage Company, Had Obligation to Insure Premises

 

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

• Trial Court’s Denial of Defendants’ Motion Is Affirmed Where Issue of Fact Is Raised Regarding Causation and There Is Conflicting Medical Testimony
• Plaintiff Sustains Burden With Respect to Significant Disfigurement and Significant Limitation of Use Categories
• Plaintiff Need Not Specifically Address Claim of Degenerative Changes IF His Experts Relate Injuries to Accident
• Plaintiff Raises Triable Issue to Defeat Defendants’ Motion
• Again, Plaintiff Raises Triable Issue of Fact
• Defendants Fail to Show Lack of Causal Relationship but Nevertheless Show no Serious Injury
• Defendants Fail on Both Counts: Causation and Threshold
• Defendants Prevail on Both Counts: Causal Relationship and Threshold
• Defendants’ Expert Finds Significant Limitations, Defeating Motion
• Plaintiff Raised Issue of Fact with Regard to Serious Injury to the Brain
• Jury Award for Past Pain and Suffering Is Affirmed on Appeal: Not Excessive

 

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

• Peer Review Insufficient to Denial Electrodiagnostic Testing When No Discussion of Positive MRI Findings
• Right Shoulder Injury Ascertainable Within One Year of Accident
• Claim Denied Without Prejudice Even Though Claims Violate 45 Day Rule And No Blanket Denial Issued
• Thorough Medical Necessity Letter, Whose Specific Issues Were Unrebutted, Persuasive in MUA
• Peer Review Is Verification Tool But Does Not Toll 30 Day Timeframe
• Fall On Bus Due To Braking Is Use and Operation

 

LITIGATION

• Insurer Demonstrates Failure To Appear For EUO
• Medical Affidavit From Physician That Does Not Reference Treatment of Assignor Or Review of Medical Records Insufficient Opposition of Summary Judgment Motion
• IME No Show Denial Upheld
• Procedures Billed and Medical Records Submitted Did Not Match Up Thus Plaintiff Did Not Prove Treatment Billed Was Rendered

 

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

Property

• Failure to Timely Submit Proof of Loss Still Fatal, but Court Finds a Question of Fact on the Date of Submission

 

Potpourri

• Costs of Discovery, Including E-Discovery, are the Obligation of the Producing Party
• Common Law Indemnity Claim Require (1) Proof that Indemnitee Was Not Negligent and (2) that Indemnitor Was Negligent, or at Least Supervised or Controlled the Work
• Question of Fact Regarding Whether Service Contractor Owed a Duty to Injured Party

 

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

• Bad Faith Legislation Introduced -- Again

 

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

• Abuse and Molestation Exclusion – Interpreting “Care, Custody or Control”

 

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

• Complaint Against Broker Sticks
• A Certificate of Insurance Is Not a Contract to Insure the Designated Party

 

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

SEIZED MARIJUANA FIRST PARTY CLAIM “WEEDED” OUT

 

That’s all for this issue.  See you in a couple of weeks.  Do remember that March 5, 1953 marks the 59th anniversary of the death of Joseph Stalin.  My mother told me that if he hadn’t died that day, six hours before I was born, I would have been named Joseph.  Who knew?

Dan
Dan D. Kohane
Hurwitz & Fine, P.C.
1300 Liberty Building
Buffalo, NY 14202    
Phone: 716.849.8942
Fax:      716.855.0874
E-Mail:  [email protected]
H&F Website:  www.hurwitzfine.com
LinkedIn: www.linkedin.com/in/kohane

Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York

NEWSLETTER EDITOR
Dan D. Kohane
[email protected]

ASSOCIATE EDITOR
Audrey A. Seeley
[email protected]

ASSISTANT EDITOR
Margo M. Lagueras
[email protected]

 

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

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

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

Jody E. Briandi
Steven E. Peiper

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

Margo M. Lagueras
Cassandra Kazukenus
Jennifer A. Ehman

APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
 
Scott M. Duquin
Diane F. Bosse

Index to Special Columns

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

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

Court of Appeals

02/21/12         Federal Ins. Co. v. International Business Machines Corp.
Court of Appeals
A Fiduciary Policy Provides Coverage ONLY for Breaches of Fiduciary (Not Ordinary Business) Duties
The Court of Appeals agreed with the Second Department’s decision, reported
in Volume XII, No. 11 of this publication:

Federal issued an Executive Protection Excess Insurance Policy (“Federal Policy”) to the IBM Corp. (“IBM” IBM sponsored defendant IBM Personal Pension Plan (“Plan”), a defined benefit plan within the meaning of the ERISA. The Federal Policy followed form provided coverage in excess of an underlying fiduciary liability policy issued by Zurich.

The Zurich policy provided “wrongful act” coverage, defined as "any breach of the responsibilities, obligations or duties by an Insured which are imposed upon a fiduciary of a Benefit Program by the ERISA.

Cooper filed a class action against IBM and the Plan, alleging that amendments to the Plan made by IBM in 1995 and 1999 violated various provisions of ERISA. The case eventually settled and the settlement included payment of Cooper’s attorney’s fees.

The court concluded that the violations of the age discrimination provisions of ERISA, which were at the heart of the lawsuit, were not duties imposed upon a fiduciary, but duties of a settlor of a plan.
Editor’s Note: Not every function related to ERISA plans are fiduciary duties. Violations of rules which are basically business judgments do not qualify as breaches of fiduciary duties. For a good discussion about the basic differences, click here . This case provides an important reminder to look closely at duties being challenged when considering the breadth of coverage under a fiduciary policy.

Appellate Departments

03/01/12         Hough v. USAA Casualty Insurance Company
Appellate Division, First Department
Carrier Permitted to Argue that Injuries Not Caused by Occurrence, Even in Light of Default Judgment in Underlying Lawsuit
USAA denied coverage to its insured and a default judgment was entered in the personal injury action.  The carrier is still permitted to raise that issue in a subsequent action seeking coverage, despite the underlying parties’ attempts to establish negligence.  If the injuries were not the result of an occurrence, USAA would not been required to disclaim in any event because the loss would be outside the policy coverage.

03/01/12         Whitehouse Early, Inc., v. Progressive Insurance Company
Appellate Division, First Department
Policies Pro-rate Because there Had No Request to Cancel Previous Policy
Progressive argued that its policy no longer in effect when replacement policy from another carrier came into effect.  However, court held that policies were both in effect as request for Progressive cancellation was not made until two weeks after the accident/

02/23/12         Yu v. General Security Insurance Co.
Appellate Division, First Department
Carrier Had Enough Information to Deny Coverage on Late Reporting and Failed to Do So
This case came to the Court as a “Direct Action” under Insurance Law Section 3420(a).  Yu, the underlying plaintiff, took a $500,000 judgment against General Security’s (“General”) insured, Lep Keng Corp. after General denied coverage to the insured due to a clear breach the insured’s obligation to promptly notify its insurer of an accident or occurrence.  Under the statutory authority for Direct Actions, the injured party turned judgment creditor is then able to present the judgment to the carrier for payment.  If 30 days go by without payment, the injured party can then directly sue the carrier for an amount not exceeding the policy limits.  The insurer can then raise coverage defenses available.

Here, the defense raised by the insurer was late notice, a valid defense, if raised timely.  However the court found that the insurer did not raise it timely and thus waived that coverage defense.  Accordingly, judgment was entered against the insurer for $500,000.

The carrier’s delay was cause, it was claimed, by the insurer awaiting a judicial determination as to whether its insured purposely left mail unclaimed, which would include notice of the lawsuit.  However, that took three years from the time the carrier first had notice of the lawsuit.  The court found that the carrier had notice of the policy breach in 2004, when it learned that its insured had been served with suit papers by the Secretary of State.  It could have disclaimed then.
Editor’s Note:  The courts have been encouraging prompt declaratory judgment actions to resolve late notice issues like this one.  That did not happen here.

02/21/12         Utica First Insurance Company v. Vazquez
Appellate Division, Second Department
Question of Fact as to Whether Two Year Delay in Giving Notice was Excusable
Notice of the accident was not given to Utica for two years following its occurrence.  However, the insured presented proof that the delay in giving notice might be reasonable based on the insured’s principal’s lack of knowledge of the accident or on a good faith belief in the non-liability of her employee.  The question of fact precludes determination of the question by summary judgment.

02/21/12         Jones v. American Commerce Insurance Company
Appellate Division, Second Department
In Uninsured Motorist Case, Carrier Entitled to Discovery on Liability Issues
The plaintiff allegedly sustained serious injuries after his motorcycle was struck by an uninsured vehicle.  Two months after plaintiff commenced an action to recover UM benefits, and prior to discovery, plaintiff moved for summary judgment on liability.  Court agreed that carrier-defendant should be afforded an opportunity to conduct discovery before the SJ motion was heard.

02/14/12         Qian v. New York College of Traditional Chinese Medicine
Appellate Division, Second Department
Professional Liability Exclusion Inapplicable
While the decision does not reflect the nature of the treatments being provided, State Farm was unsuccessful in its claim that its insured was engaged in performing “professional services and treatment” when he or she allegedly caused plaintiff’s injuries.

02/14/12         Martin v. Liberty Mutual Insurance Company
Appellate Division, Second Department
Borrowers, and Not Mortgage Company, Had Obligation to Insure Premises
Eloy Martin owned a piece of property that he conveyed to himself and his brother Lorenzo, as joint owners, in 2008.  Meridian lent money for the transaction and promised to notify the Eloy’s insurer, Liberty, of the change in owner and the need to add Lorenzo to the policy as a named insured.  Meridian did contact Liberty and added itself as mortgagee on the property but failed to add Lorenzo.  A fire occurs in 2009 and since Lorenzo was not on the policy, Liberty denied coverage to him for his losses.  Liberty is sued and made a motion to dismiss several causes of action.
‘
One claim was that Meridian agreed to procure the applicable amendment in the policy to reflect Lorenzo Martin as a named insured.  Meridian submitted the mortgage contract in support of the branch of its motion which provided that the borrowers, not Meridian, had the obligation to maintain the insurance.  The so-called oral agreement to impose that duty on Meridian failed and that claim was dismissed.

In the absence of an agreement to the contrary, the mortgagee is under no obligation to insure the mortgaged premises and there was no documentary evidence that established that Meridian was acting in the role of an insurance agent or broker, and thus, the duties imposed upon insurance agents or brokers do not apply here.

 

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

02/21/12         Seck v. Balla
Appellate Division, First Department
Trial Court’s Denial of Defendants’ Motion Is Affirmed Where Issue of Fact Is Raised Regarding Causation and There Is Conflicting Medical Testimony
Plaintiff was fur months pregnant when the cab in which she was a passenger was rear-ended by another cab.  She immediately complained of cervical, low back and left wrist pain.  X-rays were taken at the hospital, but only of the cervical spine.  She underwent physical therapy for almost a year until her benefits ran out.  Following the birth of her baby, she had a cervical MRI which showed degenerative disc disease from C2-3 through C6-7.  It also revealed other conditions including mild bulges at C3-4, C4-5 and C6-7, and a small protrusion at C5-6.  The lumbar MRI revealed a central herniation at L3-4 with extension of disc into the neural foramen bilaterally and herniations at L4-5 and L5-S1.  She initially missed two days of work and although she testified that she missed more time, she could not provide the number of days.  She also testified that she could only work perhaps four days a week rather than seven, that a year and a half after the accident she continued to have pain, and that she had difficulty with other activities, including carrying her 22-pound baby on her back.

Defendants moved for summary judgment and submitted affirmations from their examining orthopedist and neurologist who found normal range-of-motion, and from their radiologist who stated that the soft-tissue injuries shown in the MRIs were degenerative, not traumatic.  Because plaintiff’s treating physician asserted that plaintiff, despite any pre-existing degeneration, was asymptomatic prior to the accident, there was an issue of fact regarding causation.  That coupled with the conflicting opinions of the various doctors, precluded summary judgment.  However, plaintiff’s 90/180-day claim was properly dismissed. 

02/17/12         Langensiepen v. Kruml
Appellate Division, Fourth Department
Plaintiff Sustains Burden With Respect to Significant Disfigurement and Significant Limitation of Use Categories
Plaintiff was a passenger in defendant’s car when it struck a tree.  Defendant pleaded guilty to driving while intoxicated.  On appeal, plaintiff was granted partial summary judgment on the issue of negligence.

Plaintiff also claimed injuries under the permanent consequential limitation of use and the 90/180-day categories.  With respect to those claims, the trial court was affirmed.

However, with respect to his claim of significant disfigurement, on appeal the complaint is reinstated as the court determined that whether the scar on plaintiff’s hip would constitute a serious injury under that standard (whether a reasonable person viewing his hip in the altered state would regard it as unattractive, objectionable or the subject of pity or scorn) was an issue of fact.  The court also concluded that plaintiff raised an issue of fact with respect to the significant limitation of use category.

02/16/12         Williams v. Perez
Appellate Division, First Department
Plaintiff Need Not Specifically Address Claim of Degenerative Changes IF His Experts Relate Injuries to Accident
Plaintiff claimed serious injuries under the permanent consequential, significant limitation of use, and 90/180-day categories.  Within a year after the accident, he underwent two surgeries, both related to the accident:  1) a percutaneous disc ablation for post-traumatic disc disease and lumbar radiculopathy, and 2) arthroscopic right shoulder surgery.  Plaintiff’s surgeons performed ROM testing both before and after the surgeries.

Defendants’ experts found plaintiff had full ROM in his shoulders and cervical and lumbar spine and that MRIs of the neck, back and left shoulder mainly showed degenerative changes.  Defendants also submitted plaintiff’s testimony that the surgeries were successful, that he continued to lift weights and had returned to construction work.

Plaintiff’s treating orthopedists, however, found significant ROM limitations and that plaintiff continued to have back spasms, weakness and a permanent consequential limitation in the use of the right shoulder.  Both the spasms and the shoulder limitations were specifically attributed to the accident.  Therefore, by relating the injuries to the accident, it was not necessary for plaintiff’s experts to specifically address the degenerative change findings of defendants’ experts.  However, as regards the 90/180-day claim, the evidence established that plaintiff missed less than 90 days of work and otherwise worked “light duty.”  Therefore, the 90/180-day claim was dismissed.  The trial court was otherwise affirmed with respect to its denial of defendants’ motion.

02/14/12         Torres v. Ozel
Appellate Division, Second Department
Plaintiff Raises Triable Issue to Defeat Defendants’ Motion
In a decision without facts, plaintiff claimed serious injury to her cervical and thoracolumbar spine and both shoulders.  Although defendants met their prima facie burden, plaintiff raised an issue of fact such that defendants’ motion should have been denied.

02/14/12         Moise v. U.S. Royal Transit, Inc.
Appellate Division, Second Department
Again, Plaintiff Raises Triable Issue of Fact
In another decision with no facts, plaintiff claimed injuries to her cervical and lumbar spine and submitted sufficient competent medical evidence to defeat defendants’ motion so the trial court’s denial was affirmed.

02/14/12         Kyung Kook Chang
Appellate Division, Second Department
Defendants Fail to Show Lack of Causal Relationship but Nevertheless Show no Serious Injury
Plaintiff claimed injuries to his left shoulder and right knee.  Defendants failed in their attempt to show that the injuries were not caused by the accident, but nevertheless established that the claimed injuries did not meet threshold.  Therefore, dismissal was appropriate.

02/14/12         Kliche v. All Island Truck & Leasing
Appellate Division, Second Department
Defendants Fail on Both Counts: Causation and Threshold
The trial court had granted defendants’ motion to dismiss finding that defendants established that the injuries were not causally related to the accident.  On appeal, the court reversed.  In addition, the court determined that plaintiff submitted sufficient competent medical evidence to show serious injury to his left shoulder under the permanent consequential and/or significant limitation of use categories.

02/14/12         Hall v. Hecht
Appellate Division, Second Department
Defendants Prevail on Both Counts: Causal Relationship and Threshold
The trial court is reversed and, on appeal, the court determines that defendants sufficiently established both that plaintiff’s alleged injury to the left shoulder was not causally related to the accident and also did not meet threshold.

02/14/12         Kearney v. Garrett
Appellate Division, Second Department
Defendants’ Expert Finds Significant Limitations, Defeating Motion
Plaintiff claimed injury to his right knee.  Defendants failed to show that the injury was not caused by the accident and, in addition, their examining orthopedist found significant range-of-motion limitations in the knee.  Defendants, therefore, did not meet their burden and the complaint should not have been dismissed.

02/14/12         Gellis v. Singho
Appellate Division, Second Department
Plaintiff Raised Issue of Fact with Regard to Serious Injury to the Brain
Although defendants met their prima facie burden, the trial court properly denied their motion where plaintiff raised an issue of fact as to whether she sustained a permanent consequential limitation of use to her brain as a result of the accident.

02/14/12         Arroyo v. Fox
Appellate Division, Second Department
Jury Award for Past Pain and Suffering Is Affirmed on Appeal: Not Excessive
The jury awarded plaintiff $175,000 under the 90/180-day category for past pain and suffering.  Defendant unsuccessfully moved to set aside the verdict and for judgment as a matter of law, and to set aside the verdict as contrary to the weight of the evidence or, alternatively, to reduce the amount of the verdict on the grounds of excessiveness.

On appeal, the judgment is affirmed.  The court found that the jury’s determination that plaintiff sustained a serious injury under the 90/180-day category was legally sufficient, that the verdict was based on a fair interpretation of the evidence and not contrary to the weight of the evidence, and that the award for past pain and suffering was not excessive and, under the facts of the case, did not deviated materially from what would be considered reasonable.

 

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

ARBITRATION

2/29/12           John Ward, DC v. GEICO Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Peer Review Insufficient to Denial Electrodiagnostic Testing When No Discussion of Positive MRI Findings
The Applicant sought reimbursement for upper EMG/NCV testing performed on the assignor arising out of injuries sustained from a February 13, 2011, accident.  The assignor underwent a cervical spine MRI in March 2011, which revealed a C4/5 right paramedian disc herniation; C5/6 left paracentral disc herniation with cord impingement, and a C6/7 right central disc herniation.  The assignor complained to Applicant of upper extremity numbness and paresthesia.  Upon examination the assignor had a positive Valsalva test and diminished C5 reflex.  She was diagnosed with cervical radiculitis and carpel tunnel syndrome.  The assignor was referred for an EMG/NCV study.

The EMG/NCV study revealed moderate left carpel tunnel syndrome.

The insurer denied the electrodiagnostic test upon the peer review of Dr. Warrant Cohen.  Dr. Cohen criticized the “incomplete” clinical evaluation.  He also cited an authoritative source regarding a proper physical examination for suspected cervical radiculopathy.  Instead, the symptoms reported were indicative of mild radiculopathy traumatic in origin that would resolve without further investigation.

The assigned arbitrator did not find the peer review report persuasive.  Dr. Cohen’s report did not comment on the positive cervical spine MRI and the positive objective testing.  Further, Dr. Cohen’s reliance upon some of the cited medical journals was not entirely accurate, according to the assigned arbitrator.  Accordingly, the assigned arbitrator found in favor of the Applicant.

2/29/12           Applicant v. Allstate Prop. and Cas. Ins. Co.
Arbitrator Mary Anne Theiss, Onondaga County
Right Shoulder Injury Ascertainable Within One Year of Accident
The Applicant was involved in an April 18, 2009, accident and complained at the hospital the same day of neck, back, and right shoulder pain.  Two days post-accident, the Applicant suffered a heart attack and underwent open heart surgery in September 2009.  Her physicians would not permit her to pursue her right shoulder complaints due to her heart surgery.  The insurer denied treatment to the right shoulder based upon the one year ascertainability rule.

The assigned arbitrator determined the denial was improper.  The Applicant complained immediately of right shoulder pain and the records reflected this injury.  The fact that the Applicant could not treat her shoulder due to her open heart surgery does not eliminate the fact that it was ascertainable that Applicant would need further treatment to the shoulder.

 

2/28/12           Applicant v. Allstate Ins. Co.
Arbitrator Thomas J. McCorry, Erie County
Claim Denied Without Prejudice Even Though Claims Violate 45 Day Rule And No Blanket Denial Issued
The Applicant sought reimbursement for Pilates therapy, a memory foam mattress and a brace, none of which were submitted to the insurer for reimbursement before filing the AR-1.  The Applicant argued under Domotor, it was not required to submit further claims once continued treatment and pharmaceuticals were denied.  Instead, the insurer must rely upon that defense it asserted for all future unfiled claims.

The only denial issued was for pain management wherein Dr. Bagnall opined that oxycodone should be discontinued.  This was not a blanket denial that is referred to in Domotor. 

The assigned arbitrator determined that the Applicant did not establish its prima facie case but would not rule that Applicant violated the 45 day rule.  The assigned arbitrator also noted that presentation of these bills for the first time with the AR-1 does not qualify as submitting a claim “setting forth its proof of the fact and the amount of the loss.”  Instead the claim was denied without prejudice for the parties to take whatever action they deemed advisable.

[Note for Consideration:   If this was not a blanket denial then doesn’t the Applicant have the continuing obligation to timely submit a claim?  It is also interesting that it is noted that the submission of the AR-1 does not qualify as submitting a claim.  Despite this note in the decision does the insurer have to issue a denial now and if it does could it even be timely?  Rather, does the Applicant now have to submit its bills to the insurer and wait for the timely denial, which after this decision the Applicant knows is coming.]

2/22/12           Stephen Novelli, DC v. Allstate Prop. and Cas. Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Thorough Medical Necessity Letter, Whose Specific Issues Were Unrebutted, Persuasive in MUA
The Applicant sought reimbursement for chiropractic manipulation under anesthesia (“MUA”) performed on the assignor for three days.  The assignor was involved in a February 25, 2011, accident and complained of neck, low back and pelvic area injuries.  In March 2011, she came under the Applicant’s care for acute neck, shoulder, thoracic, and lumbar pain.  The assignor began a course of chiropractic care.  Approximately six days after beginning her treatment with Applicant she was prescribed a lumbar support and TENS unit.  By early May 2011, the assignor had some improvement in pain. By mid May 2011, the assignor had slow responsiveness to conservative care and the Applicant recommended MUA.

On May 24, 2011, the Applicant performed the first of three MUA to the assignor’s full spine, right shoulder, sacroiliac and hips.  The attending physician, Dr. Paul Biddle, issued a letter of medical necessity for MUA citing to adherence to the National Academy of MUA Physicians standards and protocols.  He also explained why three days of MUA was needed.

The insurer denied the MUA based upon the peer review of Albert Claps, DC.  Mr. Claps opined that the treating chiropractic notes revealed disparities regarding the assignor’s response to treatment.  Also there was no little evidence of pain to the hip and pelvis and the records conflicted as to the extent of the injuries. 

The assigned arbitrator found Dr. Biddle’s letter of medical necessity persuasive even though Mr. Claps’ peer review and testimony raised relevant issues.  Dr. Biddle cited to eight separate authorities to support his opinion.  Also, he raised specific issues and references to support medical necessity.  These specific issues were not rebutted by Mr. Claps.

2/22/12           WJW Med. Products, Inc. v. State Farm Mut. Auto. Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Peer Review Is Verification Tool But Does Not Toll 30 Day Timeframe
The Applicant sought reimburse for a lumbar orthotic dispensed to the assignor arising out of a May 29, 2009, accident.  The durable medical equipment was denied upon the peer review of Michael Cardamone, DC.  The assigned arbitrator reviewed the denial and noted that the service date was May 24, 2011, the bill date was May 24, 2011, the insurer received it on May 24, 2011, final verification was required on June 10, 2011, and verification was received on July 13, 2011.  The assigned arbitrator indicated that the claim was delayed pending an examination with Mr. Cardamone on June 24, 2011.  Then on July 13, 2011, Mr. Cardamone performed a peer review.

The assigned arbitrator relying upon 11 NYCRR §65-3.8(b)(1) determined that neither the examination nor the peer review tolls the 30 day timeframe to pay or deny a claim.

2/17/12           Applicant v. Regional Transit Service Inc.
Arbitrator Mary Anne Theiss, Onondaga County
Fall On Bus Due To Braking Is Use and Operation
The issue was whether the Applicant’s injuries arose out of the use and operation of a motor vehicle.  The Applicant was a bus passenger who fell when the bus driver slammed on the brakes.  The Applicant injured the left side of her body and her left hand.  The insurer denied the claim as not arising out of the use and operation of a motor vehicle.

The assigned arbitrator after proceeding through a thoughtful analysis of Walton and Wagman, determined that the Applicant did sustain injury arising out of the use and operation of the vehicle. 

LITIGATION

2/22/12           Bath Ortho Supply, Inc. a/a/o Clarence Echols v. New York Cent. Mut. Fire Ins. Co.
Appellate Term, First Department
Insurer Demonstrates Failure To Appear For EUO
The insurer was entitled to summary judgment as it established it properly mailed EUO notices to the assignor and that the assignor failed to appear for the EUO.  The plaintiff did not raise a triable issue of fact as to the reasonableness of the request or the assignor’s failure to attend.  The insurer was not required to demonstrate that the assignor’s failure to attend the EUO was willful.

2/16/12           Darlington Med. Diag., PC a/a/o Belgrave Kirk v. Praetorian Ins. Co.
Appellate Term, First Department
Medical Affidavit From Physician That Does Not Reference Treatment of Assignor Or Review of Medical Records Insufficient Opposition of Summary Judgment Motion
The insurer was entitled to summary judgment on lack of medical necessity based upon a chiropractor’s sworn peer review.  The plaintiff’s medical affidavit failed to raise a triable issue of fact.  The medical affidavit from a physician of an unspecified field of practice contained generic conclusions that did not indicate they were based upon a medical examination or a review of plaintiff’s medical records.  

2/14/12           Raz Acupuncture, PC a/a/o Diana Quiroz v. Praetorian Ins. Co.
Appellate Term, Second Department
IME No Show Denial Upheld
The plaintiff’s summary judgment motion should have been denied as the affidavit from a third party billing company’s president was insufficient to establish the bills were admissible.  The insurer was only entitle to summary judgment on its cross motion with regard to the services rendered from October 30, 2007 through January 30, 2008, as the plaintiff did not rebut the sworn report from the insurer’s licensed acupuncturist/chiropractor.

2/9/12             Second Med., PC a/a/o Divine Bayard v. GEICO
Appellate Term, Second Department
Procedures Billed and Medical Records Submitted Did Not Match Up Thus Plaintiff Did Not Prove Treatment Billed Was Rendered
Plaintiff’s summary judgment motion should have been denied.  The submission of an affidavit from the third party billing company’s owner was insufficient as it did not demonstrate how the company had incorporated plaintiff’s medical records into its own records and relied upon them.  Also, the plaintiff’s owner’s affidavit set forth “symptom checklists” documents in admissible form.  Yet, those documents did not reflect that the specific procedures billed for were actually performed.  Therefore, there was no evidence that the billed for treatment was actually rendered to the assignor.

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

02/24/12         Turkow v Security Mutual Ins. Co.  
Appellate Division, Third Department
Failure to Timely Submit Proof of Loss Still Fatal, but Court Finds a Question of Fact on the Date of Submission
Plaintiff’s property was destroyed by fire in July of 2001.  On October 4, 2001, Security Mutual sent proofs of loss to the plaintiffs therein demanding a response with 60 days per establish New York law.  When the proofs of loss were not received in a timely fashion, Security Mutual denied the claim on December 28, 2001. 

Initially, the Court noted that failure to provide proofs of loss within 60 days of receipt is, generally, a bar to coverage under the policy.  In addition, the Court also noted that the one limited exception to the 60-day rule, a carrier’s repudiation of liability, did not apply in this instance.

Nonetheless, because plaintiffs submitted sworn affidavits indicating that they had timely submitted the proofs of loss, the Court found a question of fact.   In turn, Security Mutual’ s motion for summary judgment was denied.  

Peiper’s Point – Although this appeal wasn’t argued until Mid-January, the Court must have still been in the Holiday Spirit.  Plaintiffs’ claims survive by the hair on their chinny-chin-chins

Potpourri

02/28/12         U.S. Bank Nat. Assoc. v GreenPoint Mortgage Funding, Inc.,
Appellate Division, First Department
Costs of Discovery, Including E-Discovery, are the Obligation of the Producing Party
Another lengthy, yet interesting, decision on discovery rules in New York.  The instant matter involved securities litigation based on the residential mortgage collapse.  Needless to say, the potential costs associated with discovery of nearly 30,000 mortgages which were allegedly mismanaged were obviously enormous. 

When faced with this burden, GreenPoint requested a stay in discovery until after its motion to dismiss could be heard.  In the alternative, GreenPoint requested that the Court issue a protective order on the scope and confidentiality of discovery.  Finally, GreenPoint requested that US Bank bear GreenPoint’s costs of producing the voluminous discovery. 

GreenPoint, in arguing that the requesting party ought to be made to pay for the costs of discovery, pointed to the fact that if the requesting party were obligated to pay for discovery costs it would be less likely to engage in lengthy “fishing expeditions.”

However, the First Department held that it was the responsibility of the producing party to bear the costs of discovery.  It noted, however, that the producing party may seek redress of the costs associated with the discovery.  If granted, the Trial Court would then be empowered with the ability to shift exposure for discovery costs to the requesting party. 

In so holding, the Appellate Division pointed to seven key factors which should be considered by any Court in evaluating these issues.  The factors, which the Court specifically advised are not a checklist, include:

• The extent of which the information sought is specifically tailored;
• The availability of the information from other sources;
• The cost of producing the discovery, as compared with the amount in controversy;
• The cost of producing the discovery, as compared with the resources of each party;
• The ability of both parties to control the cost of the production;
• The importance of the issues at stake in the litigation; and,
• The relative benefits of the requesting party.

 

In addition, the First Department also provided guidance on how to proceed in a discovery dispute where the costs of production may become an issue.  To that end, litigants are advised to first make a motion to strike or limit the scope and extent of discovery.  If, at the conclusion of the motion for a protective order, the producing party still believes the costs of discovery are prohibitive, litigants are then invited to submit an application to the Court requesting that production costs be shifted to the requesting party. 

Finally, although not directly addressed by the Appellate Division, it is noted that the Trial Court denied GreenPoint’s second argument that it should likewise be entitled to shift the legal expenses associated with voluminous discovery to the requesting party.  While the Court would certainly entertain shifting the costs of locating and reproducing the documentation, it would appear that a party will not be able to also shift its attorney time in reviewing the documentation.

02/23/12         Naughton, Jr. v The City of New York
Appellate Division, First Department
Common Law Indemnity Claim Require (1) Proof that Indemnitee Was Not Negligent and (2) that Indemnitor Was Negligent, or at Least Supervised or Controlled the Work
Lots of good stuff in this lengthy decision from the First Department.  The facts of the surrounding incident are relatively straightforward.  The City of New York retained Petrocelli to serve as the general contractor for the renovation of the New York County Family Court building.  Petrocelli, in turn, entered into a subcontract with W&W Glass, wherein W&W Glass agreed to perform all curtain wall, glass and stonework.  W&W Glass then subcontracted the unloading and installation of certain curtain wall panels to Metal Sales.  Metal Sales employed the plaintiff at the time of the incident. 

Essentially, plaintiff was instructed by Metal Sales supervisors to ascend a stack of panels which where bundled and sitting on a flatbed delivery truck. Although plaintiff was required to stand 15-16 feet above street level, Metal Sales denied his request for a ladder (or any other safety device for that matter).  During the course of hoisting a panel bundle from the truck to a nearby sidewalk bridge, plaintiff was struck and knocked from the area where he was standing. 

The resulting injuries gave rise to this instant lawsuit.  Not surprisingly, plaintiff’s Labor Law § 240(1) claim was granted on summary judgment motion.  The factual background leads us to a variety of indemnity issues which the Court addressed individually.

Petrocelli’s Common Law Indemnity Claim Against W&W
The Appellate Division affirmed the Trial Court’s dismissal of Petrocelli’s (GC) motion for common law indemnity against W&W Glass. While Petrocelli established that it, itself, was not negligent, its motion failed where it could not establish negligence on the part of W&W Glass. 

On the contrary, the Record established that W&W Glass was not negligent, and likewise did not direct, supervise or control plaintiff’s work.  Accordingly, there was no basis for a common law indemnity claim. 

Petrocelli’s Contractual Indemnity Claim Against W&W
Here, the Appellate Division reversed the Trial Court’s dismissal of Petrocelli’s contractual claim.  Essentially, W&W’s contract provided that it would indemnify Petrocelli for any loss occasioned out of work performed by W&W or a W&W subcontractor.  Where, as here, there was a question of the subcontractor’s negligence (Metal Sales), Petrocelli may have possessed a valid indemnity claim.

On the other hand, however, Petrocelli failed to establish, as a matter of law, that plaintiff’s employer (Metal Sales) was negligent.  Instead of actually proving negligence in its papers, Petrocelli argued that under res ipsa loquitur the Court had to find Metal Sales negligent.  The Court noted that, on the Record before it, Metal Sales’ negligence was not “inescapable” and accordingly Petrocelli failed to meet its burden.

Petrocelli’s Judicial Estoppel Claim
Petrocelli argued that W&W Glass was judicially estopped from denying Metal Sales’ negligence.  Petrocelli pointed to the fact that W&W Glass had submitted papers which stated, in effect, plaintiff was the sole proximate cause of his injuries.  As plaintiff’s negligence would become the negligence of Metal Sales (his employer), Petrocelli argued that W&W Glass had conceded Metal Sales’ negligence.  The Appellate Division quickly disposed of this claim by noting that judicial estoppel only applies to statements of fact.  Petrocelli’s arguments were based in law, and as such were not subject to the judicial estoppel rules.

Petrocelli’s Claim for Contractual Indemnification from Metal Sales
The Appellate Division affirmed the Trial Court’s denial of Petrocelli’s motion against Metal Sales on the basis that Petrocelli was not in privity of contract with Metal Sales.  Where there was (a) no privity, (b) no third-party beneficiary status, and (c) the terms of the Petrocelli/W&W Glass Contract were not explicitly incorporated into Metal Sales contract, the Appellate Division refused to create an indemnity obligation out of thin air. 

02/21/12         Gorham v Reliable Fence & Supply Co., Inc.
Appellate Division, Second Department
Question of Fact Regarding Whether Service Contractor Owed a Duty to Injured Party
Plaintiff was injured when his hand was crushed by an electric gate.  The gate in question was installed by defendant Reliable.  Reliable argued that as a service contractor it owed no duty to the plaintiff. 

Not so fast sayeth the Second Department.  While it is true that  a service contractor will not have liability unless, among other things, it launches an instrument of harm, the Court noted that in the current circumstance a question of fact existed as to whether Reliable’s failure to exercise reasonable care in the installation of the subject gate “launched an instrument of harm.”  Accordingly, Reliable’s motion for summary judgment was denied.

 

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

Bad Faith Legislation Introduced -- Again

A4548

            This bill was introduced in 2011 as well, but it was only referred to the Insurance Committee.  This bill proposes to make an insurer liable to the policy holder for damages where by a preponderance of the evidence it is found the insurer refused to pay or unreasonably delayed payment that was not substantially justified.  An insurer is not substantially justified when:

• The carrier intentionally, recklessly or by gross negligence failed to provide accurate information to the insured and that information related to the coverage at issue.
• The carrier failed to effectuate in good faith a prompt, fair and equitable settlement of a claim when liability of carrier was reasonably clear.
• The carrier failed to provide a written denial of the claim with a full and complete explanation, including references to specific policy provisions wherever possible.
• The carrier failed to make a final determination and failed to notify the insured in writing of its position on both liability and value within six months of the date the claim is received.
• The carrier failed to act in good faith by compelling the insured to institute suit in order to recover because it offered substantially less than the amount ultimately recovered as a result of the lawsuit.

 

The bill allows an insured who establishes one of the above to recover punitive damages, interest, costs, disbursements, compensatory damages and reasonable attorneys’ fees incurred in recovering the money due.  This Legislation was brought because “an individual has no remedy against an insurer’s unfair practices and unwarranted delay tactic in settling claims, which can cause extreme financial and sometimes emotional or physical hardship to an individual and his or her family.” (See, Sponsor’s Memorandum).
This Legislation has once again been referred to the Assembly Insurance Committee but has not been considered by the Committee at this time.

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

02/22/12         Valley Forge Ins. Co. v. Carson Center for Human Services
First Circuit Court of Appeals – Massachusetts
Abuse and Molestation Exclusion – Interpreting “care, custody or control”.
This declaratory judgment action arises out of the “long term horrific abuse” of an 11 year old girl by her adoptive mother and stepfather.  The child’s legal guardian brought suit in the Superior Court of the Commonwealth of Massachusetts against several defendants including the Carson Center for Human Services, Inc. [“Carson Center”], and one of its employees, licensed social worker, Carol Field.  The child was Field’s patient during the relevant time period. The complaint alleged that they failed to detect or report to state authorities, signs of ongoing physical abuse of the child. This state court action led to this declaratory judgment action in Federal Court.

The issue is one of policy language interpretation.  It is whether the policy language of an Abuse or Molestation Exclusion in a Professional Liability Coverage Part precludes coverage.  The language of these Exclusions precludes coverage for abuse that occurs to anyone in the insureds’ “care, custody or control.”  The question is whether the Exclusions apply where, as here, at the time of the abuse the victim was not in the physical custody of the insureds and had been receiving bi-weekly outpatient therapeutic services from them for fourteen months covered by the policies in question.

The coverage parts at issue are the Professional Liability and Commercial Umbrella coverage parts.  These coverage parts each contained an Abuse and Molestation Exclusion.   The pertinent part of the Abuse or Molestation Exclusion to the Professional Liability Coverage reads:  “This insurance does not apply to damages arising out of:  (1) The actual or threatened sexual or physical abuse or molestation by anyone to any person while in the care, custody or control of any insured…”.  The same exclusion in the Commercial Umbrella Coverage part is essentially identical to the Professional Liability Exclusion so the Court followed the district court and the parties in referring to a single exclusion.

In affirming the district court decision which granted summary judgment to the plaintiff insurers, the First Circuit [“Court”] analyzed decisional law in Massachusetts, along with other jurisdictions and an insurance reporter series entitled Commercial Liability Insurance, published by the Insurance Risk Management Institute.

In their arguments both the insurers and the defendant argued that the Abuse and Molestation Exclusion at issue here was unambiguous, offering competing interpretations of its language.  The Court, citing to precedent in the First Circuit, noted that an exclusion is not necessarily ambiguous if competing interpretations are given.  The defendants argued that “care, custody or control” should be given the meaning “physical dominion or control.”  The insurers argued that “care” should be given its plain, ordinary meaning.  There was no dispute that the child was not in the physical dominion of either Fields or the Carson Center at the time the abuse took place, and it is not a prerequisite to the application of the Abuse or Molestation Exclusion that an insured be the abuser, nor is it necessary that the abuse occur on the insured’s premises.

The underlying complaint alleges the child was not only a patient of the insureds, but also that she was in the care of the Carson Center and Field when she was abused.  In applying the canons of policy construction under Massachusetts law the Court determined that the term “care” must be given a meaning and effect apart from the term “custody” and the term “control”, because the three words are connection by the disjunctive “or”, signaling that they are to be read separately. 

The primary argument of the defendants is that, regardless of the common meaning, the word “care” in the phrase “care, custody or control” should be treated as an insurance industry term of art, or a technical term of art across all types of coverage, meaning “physical dominion or control.”  The Court disagreed with defendants holding that the case law and treatises cited by defendants was specific to “care, custody or control” of property, not persons.

The Court opined that the cases cited by defendants reinforce the plain and ordinary meaning rule and the preconditions for applying the technical terms of art rule was not met in this case.  Further, the court stated that the cases supported its view that the technical terms of art rule applies to the specific field of expertise involved, and does not justify abandonment of the ordinary meaning rule where a specific technical field is not involved.

Defendants also argued that if “care” is construed to mean the outpatient care provided by the insureds, the use of “care” in this endorsement is surplusage because a “patient” is necessarily in the “care” of a person providing treatment.  The Court disagreed stating that the defendants’ precise argument assumes that under Massachusetts insurance law, the ordinary meaning rule is trumped by a no-surplusage-language rule, and the Court saw no basis for that assumption.  In fact, the Court disagreed that there was indeed surplusage.  The Court agreed with the district court that a patient who received “care services” on only a single occasion or infrequently is not necessarily “in the care” of a provider.  Furthermore, the Court found that in this case it did not need to decide at what point a recipient of “care services” is considered to be “in the care” of a treatment provider; it was only necessary to decide that on the facts alleged in the underlying suit, the child was clearly in the care of Field and the Carson Center.

As a final argument the defendants contend that the Exclusions make coverage illusory and leave them stripped of coverage that an objectively reasonable person would have expected to have.  The Court disagreed stating that there are many instances of professional malpractice that are covered, which are not concerned with sexual or physical abuse by another of someone in the care of the insured.

Accordingly, the Court held that the Exclusion was not ambiguous and the Carter Center and Field had no reasonable expectation of coverage.

One judge disagreed and issued a dissenting opinion holding that where there are two rational interpretations of policy language, the insured is entitled to the benefit of the one that is more favorable to it.  Because neither Field nor the Carson Center exercised any dominion or control over the child at the time the abuse took place, the dissenting justice concluded that the Exclusion does not apply and coverage for the claim asserted exists.

 

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

02/17/12         Trans-Packers Servs. Corp. v. National Union Fire Ins. Co. of Pittsburgh, PA
Supreme Court, New York County
Complaint Against Broker Sticks
This case deals with an action brought against Sterling & Sterling, Inc. (“Sterling”), plaintiff’s full-service insurance broker, and other parties.  Sterling moved to dismiss plaintiff’s complaint for failure to state a cause of action and on the grounds of a defense founded upon documentary evidence.  According to the facts, as presented by the court, Sterling exclusively handled all of plaintiff’s insurance needs, recommended and procured insurance appropriate for plaintiff’s business needs, and handled all aspects of its claims processing.

In 1997, plaintiff purchased a $1 million product contamination policy from National Union, which was continually renewed.  In 2002, plaintiff added to its portfolio an umbrella policy, which was also continuously renewed. 

Thereafter, in 2009, plaintiff made a claim under the umbrella policy for a $5 million dollar loss related to positive salmonella tests in one of its products.  The umbrella carrier denied the claim.   Apparently, the umbrella policy was not excess over the product contamination policy since the product contamination policy was not listed as an underlying policy.   

In considering this motion to dismiss, the court began by describing Sterling’s relationship with plaintiff.  Sterling met annually with representatives of plaintiff to review its insurance portfolio.  It held itself out as being “able to identify and procure all coverage needs for [plaintiff’s] business, and [to] provide ongoing advice and consultation with [plaintiff] on its insurance requirements…” 

The complaint, here, contained four causes of action directed at Sterling.  The first two (one in contract and one in tort) alleged that Sterling entered into an oral agreement in February 2009 to act as plaintiff’s broker in procuring insurance coverage with proper and adequate limits for plaintiff’s business, an agreement/duty Sterling breached. 

The final two causes of action (again, one in contract and one in tort) related to Sterling’s failure to procure an umbrella policy with limits up to $10 million that covered product contamination claims. 

Sterling moved to dismiss all causes of action as time-barred.  It argued that all the actions against it accrued on the date the initial policies commenced (1997 and 2002); thus, they were now time-barred.  The court disagreed.  It held that, accepting all allegations in the complaint as true, Sterling orally agreed in February 2009 to act as plaintiff’s broker in procuring proper and adequate coverage for the renewal of both the National Union and umbrella polices.  This oral contract constituted an assumption of the duty to advise upon the appropriateness of policy limits beyond the initial policy periods.  Thus, as this agreement occurred in 2009, none of the claims were time-barred. 

The court further clarified that absent such an explicit agreement, the duty of a broker in New York is limited to obtaining the coverage that their clients request.  However, here, in light of the oral agreement, and Sterling’s other representations, there were sufficient allegations that it took on a professional-like duty to advise plaintiff of its insurance coverage needs annually.  

02/16/12         Amedore Land Devs., LLC v. National Grange Mut. Ins. Co.
Supreme Court, Albany County
A Certificate of Insurance Is Not a Contract to Insure the Designated Party
Plaintiffs moved for summary judgment seeking a declaration that they were entitled to defense and indemnity as additional insureds under a policy issued by National Grange.  Plaintiffs submitted a certificate of insurance which listed them as “certificate holder [and]…as additional insured” with National Grange as the insurer.

In New York, a certificate of insurance is only evidence of a carrier’s intent to provide coverage, but it is not a contract to insure the designated party nor is it conclusive proof, standing alone, that such a contract exists.  However, an insurance company that issued a certificate of insurance naming a particular party as an additional insured may be estopped from denying coverage to that party where the party reasonably relied on the certificate of insurance to its detriment. 

Here, the court dismissed plaintiffs’ claim of estoppel noting that its papers failed to explain or address the two clear disclaimers contained on the face of the certificate of insurance.  Also, plaintiffs failed to establish that they lacked the means of obtaining knowledge of the truth that they were not covered. 

In a secondary argument, plaintiffs claimed that in the underlying action the court had permitted them to offer “secondary evidence” of a contract they entered into with National Grange’s insured that was lost.  While the court agreed that plaintiffs had been granted permission to submit that evidence in the underlying action, here, in the DJ action, they failed to submit the same evidence of a diligent search for the agreement.  Without such foundation here, plaintiffs could not present “secondary evidence” of a contract that would be necessary to even attempt to trigger coverage under the AI endorsement for obligations assumed in a written contract. 

 

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

SEIZED MARIJUANA FIRST PARTY CLAIM “WEEDED” OUT

            In a recent case, a California court held that an insurance carrier did not act in bad faith when it determined that law enforcement seizure of an insured’s marijuana plants did not fall within the policy’s theft coverage.  Barnett v State Farm General Insurance Co., 2011 WL 5121064 (California Court of Appeals, October 31, 2011). 

            Mr. Barnett had a homeowner’s policy with State Farm which provided coverage for theft, including of “trees, shrubs and other plants”.  In August 2007, law enforcement executed a search warrant for marijuana at the home and removed a dozen 7 foot tall marijuana plants from the back yard, as well as two bags of marijuana, etc.  Mr. Barnett claimed that his doctor recommended the marijuana for “medical problems”. 

            In June 2009, nearly two years after the seizure, a criminal court did order that the plants be returned to Mr. Barnett.  Meanwhile, Barnett filed a claim with State Farm for the “property” taken from his home, which he valued at $98,000.00.  After claim denial, Barnett sued State Farm for breach of contract and bad faith.  State Farm moved for summary judgment, and both the trial court and the appeals court ruled in favor of State Farm. 

            Initially, the courts concluded that the seizure of the marijuana plants did not constitute a “theft” because it was neither criminal nor was there evidence of intent to deprive Barnett of his property permanently and in a criminal manner rather than by due process of law.  In short, the claim of right under a valid warrant to take the disputed property negated the criminal intent necessary for a “theft” to occur.  The court pointed out the difference by noting that, if an officer were to pocket an item found in executing a search and retained it for personal use that might involve a theft in that situation. 

            The court also ruled that State Farm’s claims handling and investigation was not in bad faith.  The policyholder argued that the insurer should have waited for the conclusion of the criminal trial before making a decision as to coverage.  The appellate court said it was irrelevant that the criminal court later held that the seized marijuana plants should be returned to Barnett. 

            The lessons of Barnett are to closely examine the policy language, and also the intent and purpose of covering provisions, exclusions, etc. to determine their defined and logical meaning and scope.  In Barnett, no “theft” occurred because although the marijuana plants were removed from the premises, it was pursuant to a valid search warrant negating the criminal intent and deprivation elements necessary to otherwise constitute a theft.  A legal seizure, even if later reversed or modified by the courts, did not constitute an illegal theft as defined and intended by the policy.

 

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

02/15/12         New London County Mutual Ins. Co. v. Nantes
Connecticut Supreme Court
Injuries Arising from Conduct Proximately Caused by an Act to Which an Insurance Policy Exclusion Applies Fall Within that Same Exclusion
Two houseguests suffered serious injuries after their host left her car running overnight in an attached garage and the house filled with carbon monoxide. The victims sustained injuries both from the contaminated air and from being dragged out of the house by the home owner in effort to save their lives. The homeowner’s insurance company denied coverage under the policy, relying on an exclusion for injuries arising out of use of a motor vehicle. On appeal, the victims argued that injuries they suffered from being dragged out of the house should not fall within the rubric of the motor vehicle exclusion. Siding with the insurer, the Supreme Court of Connecticut held that if an actor's negligent conduct puts another person in peril, that conduct is deemed to be the proximate cause of any injuries negligently inflicted by a foreseeable rescuer. Thus, because homeowner’s negligent act of leaving her car running in the garage was the proximate cause of victim’s dragging injuries, it follows that those injuries arose out of her use of the car and were therefore covered by the policy exclusion.
Submitted by: Michael O'Connell, Michelle L. Bibeau, Steven J. Zakrzewski and Peter Golfman of O'Connell, Flaherty & Attmore, L.L.C.

02/10/12         Rhodes v. AIG Domestic Claims, Inc.
Massachusetts Supreme Judicial Court
An Insurer can be Liable for Punitive Damages based on the Underlying Judgment for Failure to Effectuate a Prompt Settlement
Marcia Rhodes received catastrophic injuries when a tractor trailer hit the rear end of her car. The negligent parties’ insurers contested Ms. Rhodes’ claim. Although she eventually won a $11.3 million judgment at trial, the insurers stalled in payment of her settlement for over six months. The plaintiff brought a second action against the two insurer defendants for failure to effect a prompt, fair, and equitable settlement of her claims. The Supreme Judicial Court of Massachusetts held that an award of punitive damages twice the amount of the underlying negligence judgment was not excessive because the unfair settlement practice was intimately tied to the underlying judgment. The court reasoned that willful failure to effectuate settlement on a case with high potential for a large judgment at trial opens the insurer to liability for treble damages based on the judgment awarded in the underlying proceedings.
Submitted by: Submitted by: Michael O'Connell, Michelle L. Bibeau, Steven J. Zakrzewski and Peter Golfman of O'Connell, Flaherty & Attmore, L.L.C

Reported Decisions

Qian v. New York College of Traditional Chinese Medicine

Kelly, Rode & Kelly, LLP, Mineola, N.Y. (Susan M. Ulrich of counsel), for third-party defendant-appellant-respondent.
Steven G. Legum, Mineola, N.Y. (Gina Biasi of counsel), for defendant third-party plaintiff-respondent-appellant.

DECISION & ORDER

In an action to recover damages for personal injuries, and a third-party action, inter alia, for a judgment declaring that the third-party defendant State Farm Fire & Casualty Company is obligated to defend and indemnify the defendant third-party plaintiff in the main action, the third-party defendant State Farm Fire & Casualty Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Queens County (Hart, J.), entered February 24, 2011, as denied its motion for summary judgment declaring that it is not obligated to defend and indemnify the defendant third-party plaintiff in the main action, and the defendant third-party plaintiff cross-appeals from so much of the same order as denied its cross motion for summary judgment declaring that the third-party defendant State Farm Fire & Casualty Company is obligated to defend and indemnify it in the main action.

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, the motion of the defendant third-party plaintiff for summary judgment declaring that the third-party defendant State Farm Fire & Casualty Company is obligated to defend and indemnify it in the main action is granted, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment, inter alia, declaring that the third-party defendant State Farm Fire & Casualty Company is obligated to defend and indemnify the defendant third-party plaintiff in the main action; and it is further,

ORDERED that one bill of costs is awarded to the defendant third-party plaintiff.

In response to the defendant third-party plaintiff's prima facie showing of entitlement to judgment as a matter of law, the third-party defendant insurer State Farm Fire & Casualty Company (hereinafter State Farm) failed to raise a triable issue of fact as to the applicability of an exclusion in the relevant insurance policy pertaining to injuries inflicted during the provision of "professional services or treatments." Accordingly, the defendant third-party plaintiff's cross motion for summary judgment declaring that State Farm is obligated to defend and indemnify it in the main action should have been granted (see Merchants Mut. Ins. Co. v Rutgers Cas. Ins. Co., 84 AD3d 756, 756-757; Peerless Ins. Co. v Micro Fibertek, Inc., 67 AD3d 978, 979; ACE Fire Underwriters Ins. Co. v Orange-Ulster Bd. of Coop. Educ. Servs., 8 AD3d 593, 595). For the same reason, State Farm also failed to demonstrate its prima facie entitlement to judgment as a matter of law, as it failed to demonstrate that the above-referenced policy exclusion was applicable. Therefore, its motion for summary judgment was properly denied.

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

Martin v. Liberty Mutual Insurance Company

Law Office of Jeffrey Fleischmann, P.C., New York, N.Y., for appellant.
Greenblatt & Agulnick, P.C., Great Neck, N.Y. (Scott E. Agulnick and Jennifer Ettenger of counsel), for respondents.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract and negligence, the defendant Meridian Residential Capital, LLC, doing business as First Meridian Mortgage, appeals from an order of the Supreme Court, Queens County (Gavrin, J.), entered July 26, 2011, which denied its motion pursuant to CPLR 3211(a)(1) and (7) to dismiss the amended complaint insofar as asserted against it.

ORDERED that the order is reversed, on the law, with costs, and the appellant's motion pursuant to CPLR 3211(a)(1) and (7) to dismiss the amended complaint insofar as asserted against it is granted.

"On a motion to dismiss the complaint pursuant to CPLR 3211(a)(7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Breytman v Olinville Realty, LLC, 54 AD3d 703, 703-704; see Morales v AMS Mtge. Servs., Inc., 69 AD3d 691, 692). In determining such a motion, "the sole criterion is whether the subject pleading states a cause of action, and if, from the four corners of the complaint, factual allegations are discerned which, taken together, manifest any cause of action cognizable at law, then the motion will fail" (RBE N. Funding, Inc. v Stone Mtn. Holdings, LLC, 78 AD3d 807, 808 [internal quotation marks omitted]; see Guggenheimer v Ginzburg, 43 NY2d 268, 275). "On a motion to dismiss based upon documentary evidence [under CPLR 3211(a)(1)], dismissal is only warranted if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law" (Morales v AMS Mtge. Servs., Inc., 69 AD3d at 692 [internal quotation marks omitted]; see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326).

The plaintiff Eloy Martin owned certain premises which, in 2008, he conveyed to himself and his brother, the plaintiff Lorenzo Martin, as joint owners. In this transaction, the defendant Meridian Residential Capital, LLC, doing business as First Meridian Mortgage (hereinafter Meridian), was the lender on the refinanced mortgage loan. In the amended complaint, the plaintiffs allege that, at the time of the refinancing, Meridian promised to notify the defendant Liberty Mutual Insurance Company (hereinafter Liberty) of the change of ownership and to ensure that the plaintiff Lorenzo Martin was added as a named insured on Eloy Martin's homeowner's policy. Meridian allegedly contacted Liberty to add itself as the mortgagee on the insurance policy, but failed to add Lorenzo Martin as a named insured. On July 31, 2009, the premises were damaged by fire, and Liberty denied coverage. The plaintiffs commenced this action alleging five causes of action against Liberty and three causes of action against Meridian, which filed a pre-answer motion to dismiss pursuant to CPLR 3211(a)(1) and (7). The Supreme Court denied Meridian's motion.

Under the seventh cause of action, the plaintiffs seek damages for breach of contract, alleging that Meridian agreed to procure the applicable amendment in the policy to reflect Lorenzo Martin as a named insured. Meridian submitted the mortgage contract in support of the branch of its motion which was pursuant to CPLR 3211(a)(1). The mortgage contract unequivocally provides that the plaintiffs, as borrowers, have the obligation to maintain fire and hazard insurance, and the contract is fully integrated, prohibiting amendment other than in a signed writing. The alleged oral modification of the written contract was ineffective (cf. Martini v Rogers, 6 AD3d 404), and Meridian's alleged oral assurance was not binding (see Cornielle v Aetna Cas. & Sur. Co., 208 AD2d 586, 587). Thus, the documentary evidence conclusively establishes a defense to this cause of action as a matter of law, and it must be dismissed pursuant to CPLR 3211(a)(1).

Under the sixth cause of action, the plaintiffs allege that Meridian was negligent and breached a duty of care in failing to update the policy with Liberty to include Lorenzo Martin as a named insured. Affording the pleading a liberal construction, accepting all facts as alleged to be true, and according the plaintiffs the benefit of every possible favorable inference, the sixth cause of action does not state a cognizable cause of action to recover damages for negligence. "In the absence of an agreement to the contrary, the mortgagee is under no obligation to insure the mortgaged premises" (Beckford v Empire Mut. Ins. Group, 135 AD2d 228, 232; see Gurreri v Associates Ins. Co., 248 AD2d 356; Cornielle v Aetna Cas. & Sur. Co., 208 AD2d 586; Fairfax v Dime Sav. Bank of Williamsburg, 152 AD2d 503). As shown, the documentary evidence conclusively establishes that Meridian had no duty to insure the premises. Contrary to the Supreme Court's determination, the allegations do not support the theory that Meridian was acting in the role of an insurance agent or broker, and thus, the duties imposed upon insurance agents or brokers do not apply here (cf. Bedessee Imports, Inc. v Cook, Hall & Hyde, Inc., 45 AD3d 792, 793; MacDonald v Carpenter & Pelton, 31 AD2d 952, 953). Thus, the sixth cause of action should have been dismissed pursuant to CPLR 3211(a)(1) and (7).

Under the eighth cause of action, the plaintiffs also allege that Meridian was negligent and breached a duty of care by reason of a "special relationship." Affording the pleading a liberal construction, accepting all facts as alleged to be true, and according the plaintiffs the benefit of every possible favorable inference, the eighth cause of action does not state a cognizable cause of action to recover damages for negligence premised upon a "special relationship" (cf. Rosicki, Rosicki & Assoc., P.C. v Cochems, 59 AD3d 512; Fresh Direct v Blue Martini Software, 7 AD3d 487). Moreover, the parties' mortgage contract conclusively establishes that Meridian had no duty to obtain the insurance. Accordingly, the eighth cause of action should have been dismissed pursuant to CPLR 3211(a)(1) and (7).

Arroyo v. Fox

Gordon & Silber, P.C., New York, N.Y. (Andrew B. Kaufman of counsel), for appellant.
O'Dwyer & Bernstien, LLP, New York, N.Y. (Steven Aripotch of counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, etc., the defendant Christopher J. Fox appeals (1), as limited by his brief, from so much of a judgment of the Supreme Court, Nassau County (Galasso, J.), entered June 25, 2010, as, upon a jury verdict finding that the plaintiff Jason Arroyo sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d), is in favor of that plaintiff and against him in the principal sum of $175,000 for past pain and suffering, and (2) from an order of the same court entered July 26, 2010, which denied his application, in effect, pursuant to CPLR 4404 to set aside the jury verdict and for judgment as a matter of law, to set aside the jury verdict as contrary to the weight of the evidence and for a new trial, or, in the alternative, to reduce the amount of damages awarded on the ground of excessiveness.

ORDERED that on the Court's own motion, the notice of appeal from the order entered July 26, 2010, is treated as an application for leave to appeal, and leave to appeal is granted (see CPLR 5701[c]); and it is further,

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

ORDERED that the order is affirmed; and it is further,

ORDERED that one bill of costs is awarded to the plaintiffs.
Contrary to the appellant's contentions, the jury verdict finding that the plaintiff Jason Arroyo sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d) was legally sufficient, as it was supported by a valid line of reasoning and permissible inferences (see Cohen v Hallmark Cards, 45 NY2d 493, 499). The jury verdict was not contrary to the weight of the evidence, as it was based on a fair interpretation of the evidence (see Lolik v Big V Supermarkets, 86 NY2d 744, 746). Moreover, the jury award for past pain and suffering was not excessive and did not deviate materially from what would be considered reasonable compensation under the facts of this case (see CPLR 5501[c]).

Gellis v. Singho

Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, White Plains, N.Y. (Glen S. Feinberg of counsel), for appellants.
Levine & Grossman, Mineola, N.Y. (Steven Sachs 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, Rockland County (Walsh II, J.), entered 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 affirmed, with costs.

The defendants established their prima facie entitlement to judgment as a matter of law by demonstrating that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) to her brain or the cervical region of her spine as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957; see also Matthews v Cupie Transp. Corp., 302 AD2d 566).

In opposition, the plaintiff raised a triable issue of fact as to whether she sustained a serious injury to her brain under the permanent consequential limitation of use category of Insurance Law § 5102(d) as a result of the subject accident (see Perl v Meher, 18 NY3d 208). Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

Hall v. Hecht

Richard T. Lau, Jericho, N.Y. (Keith E. Ford of counsel), for appellants.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the defendants appeal from an order of the Supreme Court, Suffolk County (Tanenbaum, J.), dated June 13, 2011, which denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff Nancy Hall 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 establishing that the plaintiff Nancy Hall (hereinafter the injured plaintiff) did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The plaintiffs alleged, inter alia, that as a result of the subject accident, the injured plaintiff's left shoulder sustained certain injuries. 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 opposition, the plaintiffs failed to provide a reasonable explanation for a cessation of the injured plaintiff's medical treatment (see Pommells v Perez, 4 NY3d 566, 574; Pou v E & S Wholesale Meats, Inc., 68 AD3d 446, 447), and failed to raise a triable issue of fact. Accordingly, the Supreme Court should have granted the defendants' motion for summary judgment dismissing the complaint.

Kearney v. Garrett

Battistoni & MacKenzie, Poughkeepsie, N.Y. (Jeffrey S. Battistoni of counsel), for appellants.
Craig P. Curcio, Middletown, N.Y. (Bryan R. Kaplan of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Dutchess County (Brands, J.), dated November 30, 2010, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff Michael D. Kearney did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The defendants failed to meet their prima facie burden of showing that the plaintiff Michael D. Kearney (hereinafter the injured plaintiff) did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The plaintiffs alleged that as a result of the subject accident, the injured plaintiff's left knee sustained certain injuries. Although the defendants attempted to establish, prima facie, that those alleged injuries did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d at 352; Gaddy v Eyler, 79 NY2d at 955-956), the defendants' examining orthopedist recounted, in an affirmed report submitted in support of the motion for summary judgment, that range-of-motion testing performed during the examination revealed the existence of a significant limitation of motion in the knee (see Scott v Gresio, 90 AD3d 736, 736). Furthermore, to the extent that the defendants also attempted to establish, prima facie, that those alleged injures were not caused by the subject accident, the defendants failed to do so, as their evidentiary submissions actually demonstrated the existence of a triable issue of fact as to causation (see Rampino v Shaffren, 90 AD3d 884, 885; Luby v Tsybulevskiy, 89 AD3d 689, 689; Kelly v Ghee, 87 AD3d 1054, 1055).

Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint, without regard to the sufficiency of the papers submitted by the plaintiffs in opposition (see Scott v Gresio, 90 AD3d at 736; Kelly v Ghee, 87 AD3d at 1055).

Kliche v. All Island Truck and Leasing

Sullivan and Sullivan, LLP, Garden City, N.Y. (James M. Sheridan, Jr., of counsel), for appellant.
Picciano & Scahill, P.C., Westbury, N.Y. (Francis J. Scahill and Andrea E. Ferrucci of counsel), for respondents.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Weiss, J.), dated February 28, 2011, which granted the motion of the defendants DJS Transport, Inc., and David J. Watson for summary judgment dismissing the complaint insofar as asserted against them on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendants DJS Transport, Inc., and David J. Watson for summary judgment dismissing the complaint insofar as asserted against them is denied.

The defendants DJS Transport, Inc., and David J. Watson (hereinafter together 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 defendants submitted competent medical evidence establishing, prima facie, that the alleged injuries to the plaintiff's left shoulder did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Staff v Yshua, 59 AD3d 614). Although the defendants also attempted to establish, prima facie, that those alleged injuries were not caused by the accident, contrary to the determination of the Supreme Court, the defendants failed to do so.

In opposition, the plaintiff submitted competent medical evidence raising a triable issue of fact as to whether the alleged injuries to his left shoulder constituted a serious injury under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 217). Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint insofar as asserted against them.

Kyung Kook Chang v. Carpenter

Sim & Park, LLP, New York, N.Y. (Sang J. Sim of counsel), for appellant.
Paganini, Cioci, Pinter, Cusumano & Farole (Gannon, Lawrence & Rosenfarb, New York, N.Y. [Lisa L. Gokhulsingh], of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Brandveen, J.), entered January 24, 2011, which granted the defendants' motion for summary judgment dismissing the complaint on the ground, inter alia, that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is affirmed, with costs.

While we affirm the order appealed from, we do so on a ground other than that relied upon by the Supreme Court.

Contrary to the conclusion of the Supreme Court, the plaintiff, in opposing the defendants' motion for summary judgment dismissing the complaint, was not required to raise a triable issue of fact as to whether the alleged injuries to his left shoulder and right knee were caused by the subject accident, since the defendants failed to establish, prima facie, that those alleged injures were not caused by the subject accident (see Jean-Baptiste v Tobias, 88 AD3d 962, 963; Messiana v Drivas, 85 AD3d 744; Hightower v Ghio, 82 AD3d 934, 935).

Nonetheless, 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, he sustained certain injuries to his left shoulder and right knee. 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 Staff v Yshua, 59 AD3d 614). In opposition to the motion, the plaintiff failed to raise a triable issue of fact as to whether those alleged injuries constituted serious injuries within the meaning of Insurance Law § 5102(d).

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

Moise v. U.S. Royal Transit, Inc.

Marjorie E. Bornes, New York, N.Y., for appellants U.S. Royal Transit, Inc., and Erron L.S. Alexander, and Glenn R. Schwartz, Westbury, N.Y., for appellant Richard M. Thomas (one brief filed).
Larock & Perez, New York, N.Y. (Mitchell Dranow of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants U.S. Royal Transit, Inc., and Erron L.S. Alexander appeal, and the defendant Richard M. Thomas separately appeals, as limited by the joint brief, from so much of an order of the Supreme Court, Kings County (Vaughan, J.), dated June 1, 2011, as denied their separate motions for summary judgment dismissing the complaint insofar as asserted against each of them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The appellants 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 appellants submitted competent medical evidence establishing, prima facie, that the alleged injuries to the regions did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795).

In opposition, the plaintiff submitted competent medical evidence raising a triable issue of fact as to whether the alleged injuries to the cervical and lumbar regions of her spine constituted serious injuries within the meaning of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 217). Accordingly, the Supreme Court properly denied the appellants' motions for summary judgment dismissing the complaint insofar as asserted against each of them.

Torres v. Ozel

Krentsel & Guzman, LLP (Pollack, Pollack, Isaac & De Cicco, New York, N.Y. [Brian J. Isaac and Michael H. Zhu], of counsel), for appellant.
DeSena & Sweeney, LLP, Hauppauge, N.Y. (Shawn P. O'Shaughnessy of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Agate, J.), dated April 11, 2011, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The plaintiff alleged, inter alia, that as a result of the subject accident, the cervical and thoracolumbar regions of her spine, and both of her shoulders, sustained certain injuries. The defendants submitted competent medical evidence establishing, prima facie, that the alleged injuries to the spine and shoulders did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795).

However, in opposition, the plaintiff submitted competent medical evidence raising a triable issue of fact as to whether the alleged injuries to the cervical and thoracolumbar regions of her spine, and her shoulders, constituted serious injuries within the meaning of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 217-218). Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint.

Williams v. Perez

Mead, Hecht, Conklin & Gallagher, LLP, White Plains (Sharon A. Mosca of counsel), for appellants.
Edelman, Krasin & Jaye, PLLC, Carle Place (Jarad Lewis Siegel of counsel), for respondents.

Order, Supreme Court, Bronx County (Ben R. Barbato, J.), entered March 3, 2011, which denied defendants' motion for summary judgment dismissing the complaint on the threshold issue of serious injury within the meaning of Insurance Law § 5102(d), unanimously modified, on the law, to the extent of dismissing the 90/180 day claim, and otherwise affirmed, without costs.

Defendants have established prima facie that plaintiff Lawrence Williams did not sustain a serious injury of a permanent nature. However, plaintiffs have submitted medical evidence in admissible form, including affirmations of two treating orthopedists, both of whom performed surgical procedures on plaintiff Lawrence Williams within the year following his accident and both of whom performed specific range of motion tests before and after the surgeries. This evidence raises triable issues as to permanent significant or consequential limitations caused by the accident.

Defendants have submitted, inter alia, the affirmed reports of medical experts who, upon examination, found that plaintiff had full range of motion in his shoulders and cervical and lumbar spines and that the MRIs of his neck, back and left shoulder mainly showed degenerative changes (see Spencer v Golden Eagle, Inc., 82 AD3d 589, 590 [2011]). They also submitted plaintiff's testimony that his surgeries were successful, that he continued to lift weights, and that he returned to construction work.

However, in opposition, plaintiffs have raised a triable issue of fact concerning a significant limitation and a permanent consequential limitation with respect to plaintiff's right shoulder. Plaintiff underwent two surgical procedures that were medically related to his accident. The first involved a percutaneous disk ablation for post-traumatic disc disease and lumbar radiculopathy and the second involved arthroscopic surgery to his right shoulder. Contrary to the findings of defendants' experts that plaintiff showed normal range of motion both with regard to his back and shoulder, plaintiffs' experts, Doctors Sebastian Lattuga and Dov J. Berkowitz, both treating orthopedic surgeons, found significantly decreased ranges of motion, and opined that plaintiff continued to have back spasms and weakness and a permanent consequential limitation of the use of his right shoulder. In duly affirmed statements, Dr. Berkowitz specifically attributed the shoulder limitation to the motor vehicle accident on December 10, 2007 and Dr. Lattuga attributed continued back spasms to the same accident. Although plaintiffs' experts did not expressly address defendants' expert's opinion that the injuries were the result of degenerative changes, by relating the injuries to the accident, plaintiffs' physicians raised triable issues of fact (Perl v Meher, 18 NY3d 208 [2011]; Linton v Nawaz, 62 AD3d 434 [2009], affd 14 NY3d 821, 822 [2010]; Yuen v Arka Memory Cab Corp., 80 AD3d 481 [2011]).

The evidence that plaintiff missed less than 90 days of work in the 180 days immediately following the accident and indeed otherwise worked "light duty" is fatal to the 90/180-day claim (see Tsamos v Diaz, 81 AD3d 546 [2011]).

Langensiepen v. Kruml

Appeal from a judgment of the Supreme Court, Steuben County (Peter C. Bradstreet, A.J.), entered February 17, 2011. The judgment dismissed the complaint.

Law Office Of Jacob P. Welch, Corning (Anna Czarples Of Counsel), For Plaintiff-Appellant.
Levene Gouldin & Thompson, LLP, Vestal (Sarah E. Nuffer Of Counsel), For Defendant-Respondent.

It is hereby ORDERED that the judgment so appealed from is unanimously modified on the law by denying defendant's cross motion in part and reinstating the complaint, as amplified by the bill of particulars, with respect to the significant disfigurement and significant limitation of use categories of serious injury within the meaning of Insurance Law § 5102 (d) and granting that part of plaintiff's amended motion for partial summary judgment on the issue of negligence, and as modified the judgment is affirmed without costs.

Memorandum: Plaintiff commenced this action seeking damages for injuries he sustained when the vehicle driven by defendant and in which plaintiff was a passenger struck a tree. We conclude that Supreme Court properly granted those parts of defendant's cross motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury under the permanent consequential limitation of use and 90/180-day categories of serious injury (see Insurance Law § 5102 [d]). Contrary to plaintiff's contention, defendant met his initial burden on the cross motion with respect to those categories and, in opposition to the cross motion, plaintiff failed to submit the requisite "objective proof of [his alleged] injury in order to satisfy the statutory serious injury threshold" (Toure v Avis Rent A Car Sys., 98 NY2d 345, 350).

We agree with plaintiff, however, that the court erred in granting those parts of defendant's cross motion with respect to the significant disfigurement and significant limitation of use categories of serious injury. According to plaintiff, the scar on his hip constituted a significant disfigurement. We conclude that the issue whether " a reasonable person viewing the plaintiff's [hip] in its altered state would regard the condition as unattractive, objectionable, or as the subject of pity or scorn' " presents an issue of fact that cannot be resolved by way of summary judgment (Waldron v Wild, 96 AD2d 190, 194; see Savage v Delacruz, 100 AD2d 707). We further conclude that the medical evidence submitted by plaintiff is sufficient to create an issue of fact with respect to the significant limitation of use category. We therefore modify the judgment by denying defendant's cross motion in part and reinstating the complaint, as amplified by the bill of particulars, with respect to the significant disfigurement and significant limitation of use categories of serious injury.

We also agree with plaintiff that the court erred in denying that part of his amended motion for partial summary judgment on the issue of negligence. Defendant pleaded guilty to driving while intoxicated based on the one-vehicle accident at issue. Moreover, defendant did not oppose that part of plaintiff's amended motion on the issue of negligence. Thus, we conclude that plaintiff established his entitlement to judgment as a matter of law with respect to defendant's negligence (see Kelsey v Degan, 266 AD2d 843), and we therefore further modify the judgment accordingly.

Federal Ins. Co. v. International Business Machines Corp.

Thomas H. Sear, for appellants.
Michael F. Perlis, for respondent.

LIPPMAN, Chief Judge:

The question before the Court is whether the disputed language in an insurance policy extends coverage to alleged violations of the Employee Retirement Income Security Act of 1974 (ERISA) by defendants-insureds, International Business Machines Corporation and the IBM Personal Pension Plan (collectively, IBM), acting in their capacity as the settlor of their employee benefit plans. We reaffirm fundamental principles of insurance contract interpretation and hold that the plain language of the policy does not cover such acts and, therefore, that the Appellate Division correctly held that plaintiff-insurer Federal Insurance Company (Federal) is entitled to summary judgment and a declaration that it is not required to indemnify IBM in the manner requested.

Federal issued an excess insurance policy to IBM for the policy period from April 14, 1999 through April 14, 2000. The underlying policy (Zurich Policy) was issued by Zurich American Insurance Company (Zurich) and it is limited to $25,000,000. A class action was filed against IBM, alleging that certain amendments to the benefit plans in 1995 and 1999 violated provisions of ERISA pertaining to age discrimination (see Cooper v IBM Personal Pension Plan, 2005 WL 1981501, 2005 US Dist LEXIS 17071 [SD Ill 2005], revd in part 457 F3d 636 [7th Cir 2006], cert denied 549 US 1175 [2007]). The parties to the Cooper action reached a settlement, which included amounts designated to cover those plaintiffs' attorneys' fees. IBM made those payments and then sought reimbursement from Federal, maintaining that the limits of the underlying Zurich Policy had been exhausted and coverage of the excess Federal policy was thereby triggered. Federal commenced the instant suit against IBM, alleging eight causes of action and requesting a declaration that the Federal policy "provides no coverage for, or duty to indemnify, any amount paid or payable by IBM and the Plan in settlement of the Cooper action which represents attorneys' fees." The parties filed cross-motions for summary judgment. The Supreme Court denied plaintiff Federal's motion and granted IBM's motion. The Appellate Division reversed, holding that plaintiff was entitled to summary judgment (78 AD3d 763 [2d Dept 2010]). This Court granted IBM leave to appeal (16 NY3d 706 [2011]). We now affirm.

As is relevant to this appeal, the Federal policy is a "follow form" policy, meaning that it conforms to the terms and endorsements of the underlying Zurich Policy (see e.g. Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 NY2d 363, 369 [1998]). A reviewing court must decide whether, "'afford[ing] a fair meaning to all of the language employed by the parties in the contract and leav[ing] no provision without force and effect'" (Consolidated Edison Co. of New York, Inc. v Allstate Ins. Co., 98 NY2d 208, 222 [2002], quoting Hooper Assoc. v AGS Computers, 74 NY2d 487, 493 [1989]), there is a "reasonable basis for a difference of opinion" as to the meaning of the policy (Greenfield v Philles Records, Inc., 98 NY2d 562, 569 [2002]). If this is the case, the language at issue would be deemed to be ambiguous and thus interpreted in favor of the insured (see Breed v Ins. Co. of N. Am., 46 NY2d 351, 353 [1978] [recognizing "the general rule that the ambiguities in an insurance policy are to be construed against the insurer"]). If not, then the policy will be found to be unambiguous, meaning that "the language it uses has 'a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion'" (Greenfield, 98 NY2d at 569, quoting Breed, 46 NY2d at 355), and shall be applied as written, either in favor of or against coverage, depending entirely on the language used. In analyzing the meaning of an insurance policy provision, it is necessary to determine the "reasonable expectations of the average insured" (Cragg v Allstate Indem. Corp., 17 NY3d 118, 122 [2011]).

The disputed language ("any breach of the responsibilities, obligations or duties by an Insured which are imposed upon a fiduciary of a Benefit Program by [ERISA]") appears in the first prong of the Zurich Policy's definition of "Wrongful Act." The term "Wrongful Act" is defined, in its entirety, in Endorsement No. 17 to the Zurich Policy as

"1. any breach of the responsibilities, obligations or duties by an Insured which are imposed upon a fiduciary of a Benefit Program by the Employee Retirement Income Security Act of 1974, as amended, or by the common or statutory law of the United States, or ERISA equivalent laws in any jurisdiction anywhere in the world; 2. any other matter claimed against an Insured solely because of such Insured's service as a fiduciary of any Benefit Program; 3. any negligent act, error or omission in the administration of any Benefit Program."

Contrary to the Supreme Court's holding in this case in which it granted IBM's motion for summary judgment, IBM was not alleged to have breached fiduciary duties in the underlying Cooper action. There is no dispute in this case that under Lockheed Corp. v Spink, (517 US 882, 890 [1996] [holding that "[p]lan sponsors [FN1] who alter the terms of a plan do not fall into the category of fiduciaries"]), IBM was not acting as an ERISA fiduciary in taking the ]actions that gave rise to the allegations in the Cooper suit. A straightforward reading of the initial language of the first prong of the "Wrongful Act" definition is that it covers violations of ERISA by an insured acting in its capacity as an ERISA fiduciary. As such, the actions alleged in the Cooper suit are not covered by the Zurich Policy.

The definition of "Wrongful Act" in the Zurich Policy explicitly refers to ERISA and specifically to duties imposed on fiduciaries by ERISA. Therefore the only reasonable approach to determining whether the disputed language in the policy requires the coverage demanded by IBM in this action is to determine whether or not IBM was acting in its capacity as an ERISA fiduciary in amending the plans. Under Lockheed, IBM was acting as a plan settlor and not as a fiduciary when it made the changes to the benefit plans that allegedly violated ERISA. The policy language is clear that coverage requires that the insured be acting in its capacity as an ERISA fiduciary in committing the alleged ERISA violation. We conclude that the average insured would reasonably interpret the disputed language in the definition of "Wrongful Act" to mean that coverage is limited to acts of an insured undertaken in its capacity as an ERISA fiduciary.

We have considered and reject IBM's contentions to the contrary, certain of which we specifically address as follows. IBM maintains that the term "fiduciary" is undefined in the Zurich policy and therefore must be given its plain, ordinary meaning, which differs from the definition provided in ERISA. This argument appears to stem from the rule that "[t]he language employed in the contract of insurance must be given its ordinary meaning, such as the average policyholder of ordinary intelligence, as well as the insurer, would attach to it" (Morgan v Greater N.Y. Taxpayers Mut. Ins. Assn., 305 NY 243, 248 [1953] [internal quotation marks and citation omited]). Under IBM's reading of the policy, there is no requirement that the insured must have been acting in its capacity as an ERISA fiduciary in order for an act to be considered a "Wrongful Act" because the ordinary, plain meaning of the term "fiduciary" is not equivalent to the "artificial" definition of the term that appears in ERISA [FN2] (see Mertens v Hewitt Assocs., 508 US 248, 255 n5 [1993] [describing ERISA's definition of fiduciary as "artificial"]). IBM maintains that because it is alleged in the Cooper action to have violated certain ERISA provisions and because IBM is a fiduciary of the benefit plans (based on the plain meaning of the term [FN3] ), the actions alleged in the Cooper action are covered and therefore IBM is entitled to recover the attorneys' fees from Federal. In other words, IBM's actions would be covered by virtue of the fact that it was an insured and a plan fiduciary that allegedly violated certain ERISA provisions, regardless of the fact that, if the allegations are correct, it undoubtedly did so in its capacity as a plan settlor and not in its capacity as an ERISA fiduciary.

IBM misapplies a general principle of insurance policy construction — that terms take on their plain, ordinary meaning — and the result is a strained and implausible interpretation of the provision at issue. Contrary to IBM's argument, this does not amount to a prohibited implied exception to coverage (see Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [1984] [holding that "whenever an insurer wishes to exclude certain coverage from its policy obligations, it must do so 'in clear and unmistakable' language. 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"] [citations omitted]). Rather, the disputed language in this case constitutes a clear expression of the parameters of coverage, easily understandable to the average insured. Moreover, if we were to endorse IBM's view, because the first prong of the "Wrongful Act" definition refers not only to duties imposed by ERISA (or foreign equivalents) but also to duties imposed by common law and statutory law, it might, if not limited to claims for breach of fiduciary duties, cover almost every lawsuit imaginable, a result we find to be unreasonable.

IBM further argues that if the disputed language is ascribed the meaning which this Court now concludes it has, then it would be unnecessary for the "Wrongful Act" definition to contain both the first and second prongs because each provision would have an identical meaning. This is not the case, as the two provisions clearly serve different functions. The first prong refers to "any breach of the responsibilities, obligations or duties by an Insured which are imposed upon a fiduciary of a Benefit Program by [ERISA] . . . or by the common or statutory law of the United States, or ERISA equivalent laws in any jurisdiction anywhere in the world." The second prong reads as follows: "any other matter claimed against an Insured solely because of such Insured's service as a fiduciary of any Benefit Program." Upon comparing these two provisions, it becomes apparent that the first requires a breach of a duty imposed by ERISA (or foreign ERISA-equivalent) or by other United States common or statutory law, in order for coverage to be triggered, whereas prong two plainly contains no such requirement. Prong two would extend coverage to an insured's claims arising from liability incurred solely due to the insured's position as a fiduciary. For instance, if the insured is named in an action solely due to its status as a fiduciary, even where the action does not allege that the insured actually breached any fiduciary duties, and the action results in a settlement or a judgment against the insured, it is possible that Zurich and Federal would be liable for funds spent to settle the suit or pay the judgment.

Finally, IBM makes much of the fact that Federal revised its own policy language in 2002 [FN4] and that certain policies in other cases use language similar to the revised Federal language (see e.g. Cement & Concrete Workers Dist. Council Pension Fund v Ulico Cas. Co., 387 F Supp 2d 175, 181 n2 [ED NY 2005], affd 199 Fed Appx 29 [2nd Cir 2006] ["'Wrongful Act' is defined in . . . the . . . policy to mean: 'any actual or alleged error or omission or breach of duty committed or alleged to have been committed by the Insureds, either jointly or severally, in the discharge of their fiduciary duties, obligations or responsibilities, including the violation of any Federal fiduciary standards'"] [emphasis added]). It is simply not the case that because the challenged provision could have been worded differently, it is ambiguous and must be construed in IBM's favor. There are often many ways of effectively conveying the same meaning and the question is not simply whether the insurer could have phrased the provision differently. Rather, the issue is, in light of the reasonable expectations of the average policy holder, whether the provision, as written, is sufficiently clear and precise such that there is no room for reasonable disagreement about the scope of coverage. Because the Zurich policy is sufficiently clear on its face, we decline to speculate about Federal's choice to revise its own policy, as we are not persuaded that any such change is material to our analysis of the disputed language in the Zurich Policy.

Accordingly, the order of the Appellate Division should be affirmed, with costs.
* * * * * * * * * * * * * * * * *
Order affirmed, with costs. Opinion by Chief Judge Lippman. Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.
Decided February 21, 2012

Footnotes

Footnote 1: Under ERISA, a plan sponsor is "(i) the employer in the case of an employee benefit plan established or maintained by a single employer, (ii) the employee organization in the case of a plan established or maintained by an employee organization, or (iii) in the case of a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the association, committee, joint board of trustees, or other similar group of representatives of the parties who establish or maintain the plan" (29 USC § 1002 [16] [B]).

Footnote 2: Regarding fiduciaries, the definition section of ERISA explains, in relevant part, that "a person is a fiduciary with respect to a plan to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan" (29 USC § 1002 [21] [A]).

Footnote 3: A fiduciary is "[a] person who is required to act for the benefit of another person on all matters within the scope of their relationship; one who owes to another the duties of good faith, trust, confidence, and candor" or "[o]ne who must exercise a high standard of care in managing another's money or property" (Black's Law Dictionary [9th ed 2009], fiduciary); see also Roni LLC v Arfa, ____NY3d___, 2011 NY Slip Op 09163, *2 [2011] [holding that "[a] fiduciary relationship arises 'between two persons when one of them is under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation.' Put differently, '[a] fiduciary relation exists when confidence is reposed on one side and there is resulting superiority and influence on the other.' Ascertaining the existence of a fiduciary relationship 'inevitably requires a fact-specific inquiry'"] [citations omitted]).

Footnote 4: According to IBM, the relevant language now reads as follows: "any breach of the responsibilities, obligations or duties imposed by ERISA upon fiduciaries of the Sponsored Plan in their capacity as such fiduciaries" (emphasis added).

Seck v. Balla

Baker, McEvoy, Morrissey & Moskovits, P.C., New York (Stacy R. Seldin of counsel), for appellants.
Ephrem J. Wertenteil, New York, for respondent.

Order, Supreme Court, Bronx County (Geoffrey D. Wright, J.), entered on or about April 12, 2010, which denied defendants' motion for summary judgment dismissing the complaint, unanimously modified, on the law, to dismiss the 90/180-day category of plaintiff's Insurance Law § 5102(d) claim, and otherwise affirmed, without costs.

On March 17, 2007, at around 6:00 a.m., plaintiff was returning home from work as restroom attendant at Webster Hall when the livery cab she was riding in was struck from behind by a taxi cab owned by defendant Abes Service Corporation and operated by defendant Mustaffa Balla. Plaintiff was 39 years old and was four months pregnant.

An ambulance transported her to the emergency room at Bellevue Hospital, where she complained of pain in the lower back, neck, and left wrist. The hospital took Xrays of her cervical spine, but was unable to Xray her lumbar spine because of her pregnancy. She was released after a few hours, with instructions to return if she continued to have problems. She returned about three or four days later, complaining of lower back pain, and was told "to do therapy and massage at home."

She began treatment with Dr. Dorina Drukman and physical therapy at Grand Central Physical Medicine, and continued until early 2008, when her insurance benefits expired. MRIs were taken of plaintiff's spine after she gave birth in September 2007.

The MRI report of her cervical spine noted "degenerative disc disease, C2-3 through C6-7," a "small Schmorl's Node at C6," and "anterior marginal hypertrophic changes involving C5 and C6." It also noted mild disc bulge at C3-4, C6-7, and C4-5, and a small disc protrusion at C5-6. Further, there was "degenerative disease of the intervertebral disc from C2-3 through C6-7 with loss of the normal cervical lordosis as well as mild flexion of [] the cervical curvature from C2 through C6." The MRI report of the lumbar spine indicated "central herniation at L3-4 with extension of disc into the neural foramen bilaterally," and herniation at L4-5 and L5-S1.

Plaintiff missed two days of work immediately after the accident. The third day was her normal day off, and she returned to work on the fourth day. Although she claimed she lost time from work thereafter, she could not provide the number of work days she missed due to the accident. Rather, she testified that she could not work seven days a week, and that she worked "maybe four days" if Webster Hall was opened seven days during a particular week. She stated that as of the date of her deposition, November 20, 2008, she still felt pain, which would intensify if she worked a lot. She said she could not work as much, go to the gym, carry her 22-pound baby on her back, or do laundry by herself, and had difficulty engaging in sex with her husband.

Defendants moved for summary judgment dismissing the complaint, arguing that plaintiff had not met the "serious injury" threshold. They relied on affirmations from an orthopedist and a neurologist who performed physical examinations of plaintiff and found no limitation of movement, and on the opinion of a radiologist who asserted that the injuries shown in the MRIs were degenerative in origin rather than traumatically induced.

Although defendants assert that the claimed soft tissue injury was not caused by the accident, but was instead solely degenerative in etiology, plaintiff's treating physician asserted, to the contrary, that "notwithstanding any prior degeneration, Ms. Seck was asymptomatic. Thus the collision was a competent producing cause of her symptoms and impairments." A question of fact exists as to causation, and any questions about the credibility of the conflicting doctors' opinions are for the jury to resolve (Perl v Meher, 18 NY3d 208 [2011]).

However, plaintiff's claim under the 90/180-day prong of § 5102(d) fails as a matter of law because, according to plaintiff's own deposition testimony and the report of her treating osteopath, she returned to work part-time four days after the accident.

Utica First Insurance Company v. Vazquez

Farber Brocks & Zane, LLP, Mineola, N.Y. (Andrew J. Mihalick and Audra S. Zane of counsel), for appellant.
Paul L. Brozdowski, LLC, Cortlandt Manor, N.Y., for respondent Jose Sanchez.

DECISION & ORDER

In an action for a judgment declaring, inter alia, that the plaintiff is not obligated to defend or indemnify the defendants Debbie Vazquez, Debbie Vazquez, doing business as Debbie Construction, Debbie Construction, and Edgardo Almenden in an underlying personal injury action entitled Sanchez v Vazquez, pending in the Connecticut Superior Court, Judicial District of Fairfield, the plaintiff appeals from an order and judgment (one paper) of the Supreme Court, Orange County (Ritter, J.), dated July 29, 2010, which denied its motion for summary judgment declaring that it is not obligated to defend or indemnify those defendants in the underlying action, granted the cross motion of the defendants Debbie Vazquez, Debbie Vazquez, doing business as Debbie Construction, Debbie Construction, and Edgardo Almenden for summary judgment declaring that it is so obligated, and declared that it is obligated to defend and indemnify the defendants Debbie Vazquez, Debbie Vazquez, doing business as Debbie Construction, Debbie Construction, and Edgardo Almenden in the underlying action.

ORDERED that the order and judgment is modified, on the law, (1) by deleting the provision thereof granting the cross motion of the defendants Debbie Vazquez, Debbie Vazquez, doing business as Debbie Construction, Debbie Construction, and Edgardo Almenden for summary judgment declaring that the plaintiff is obligated to defend and indemnify them in the underlying action, and substituting therefor a provision denying the cross motion, and (2) by deleting the provision thereof declaring that the plaintiff is obligated to defend and indemnify the defendants Debbie Vazquez, Debbie Vazquez, doing business as Debbie Construction, Debbie Construction, and Edgardo Almenden in the underlying action; as so modified, the order and judgment is affirmed, without costs or disbursements.

" Where an insurance policy requires that notice of an occurrence be given promptly, notice must be given within a reasonable time in view of all of the facts and circumstances'" (120 Whitehall Realty Assoc., LLC v Hermitage Ins. Co., 40 AD3d 719, 721, quoting Eagle Ins. Co. v Zuckerman, 301 AD2d 493, 495). Absent a valid excuse for a delay in furnishing notice, failure to satisfy the notice requirement vitiates coverage (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 441; Donovan v Empire Ins. Group, 49 AD3d 589, 590). However, there may be circumstances, such as lack of knowledge that an accident has occurred, or a reasonable belief in nonliability, that will excuse a delay in giving notice (see White v City of New York, 81 NY2d 955, 957; Felix v Pinewood [*2]Bldrs., Inc., 30 AD3d 459, 461). The insured has the burden of showing the reasonableness of such excuse (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d at 744; White v City of New York, 81 NY2d at 957; Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d at 441).

Here, the plaintiff established its prima facie entitlement to judgment as a matter of law by demonstrating that it was not provided with notice of the subject accident until almost two years after it had occurred (see Tower Ins. Co. of N.Y. v Alvarado, 84 AD3d 1354, 1355-1356; Hanover Ins. Co. v Prakin, 81 AD3d 778, 780; Lobosco v Best Buy, Inc., 80 AD3d 728, 731-732; Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d 596, 597). However, in opposition to the plaintiff's summary judgment motion, the defendants Debbie Vazquez, Debbie Vazquez, doing business as Debbie Construction, and Debbie Construction (hereinafter the Debbie Construction defendants) and the defendant Edgardo Almenden raised a triable issue of fact as to whether the delay in giving notice was reasonably based on Debbie Construction principal Debbie Vazquez's lack of knowledge of the accident (cf. Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436), or on a good faith belief in the nonliability of her employee, Almenden (see Tower Ins. Co. of N.Y. v Alvarado, 84 AD3d at 1355-1356; 25th Ave., LLC v Delos Ins. Co., 84 AD3d 781, 783-784; North Country Ins. Co. v Jandreau, 50 AD3d 1429, 1430-1431; Klersy Bldg. Corp. v Harleysville Worcester Ins. Co., 36 AD3d 1117, 1119; G.L.G. Contr. Corp. v Aetna Cas. & Sur. Co., 215 AD2d 821, 822; Triantafillou v Colonial Coop. Ins. Co., 178 AD2d 925, 926-927). Accordingly, the Supreme Court correctly denied the plaintiff's motion for summary judgment.

Since, as noted above, there is a triable issue of fact as to whether the delay in giving notice was reasonable, the Supreme Court erred in granting the cross motion of the Debbie Construction defendants and Almenden for summary judgment, and in issuing a judgment declaring that the plaintiff is obligated to defend and indemnify those defendants in the underlying action.
The parties' remaining contentions are without merit.

Jones v. American Commerce Insurance Company

McCabe, Collins, McGeough & Fowler, LLP, Carle Place, N.Y. (Patrick M. Murphy of counsel), for appellant.
Arnold I. Bernstein, White Plains, N.Y., for respondent.

DECISION & ORDER

In an action to recover uninsured motorist benefits under an insurance policy, the defendant appeals from an order of the Supreme Court, Westchester County (Liebowitz, J.), entered September 22, 2011, which granted the plaintiff's motion for summary judgment on the issue of liability.

ORDERED that the order is reversed, on the law, with costs, and the plaintiff's motion for summary judgment on the issue of liability is denied, with leave to renew after the completion of discovery.

The plaintiff allegedly sustained serious injuries after his motorcycle, which he was operating on eastbound Pound Ridge Road at or near its intersection with Pine Brook Road in the Town of Bedford, was struck by an uninsured vehicle operated by nonparty Allby Morales. At the time of the accident, the plaintiff's insurance policy with the defendant provided, inter alia, uninsured/underinsured motorist coverage and allowed the plaintiff to pursue a claim for pain and suffering against the defendant up to the stated policy limits. In January 2011, the plaintiff commenced this action against the defendant to recover uninsured motorist benefits and issue was joined in March 2011. By service of a notice of motion dated May 25, 2011, prior to any discovery being conducted, the plaintiff moved for summary judgment on the issue of liability. The Supreme Court granted the motion. The defendant appeals and we reverse.

CPLR 3212(f) provides, in relevant part, that a court may deny a motion for summary judgment "[s]hould it appear from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated" (CPLR 3212[f]; see James v Aircraft Serv. Intl. Group, 84 AD3d 1026, 1027; Juseinoski v New York Hosp. Med. Ctr. of Queens, 29 AD3d 636, 637). "This is especially so when the opposing party has not had a reasonable opportunity for disclosure prior to the making of the motion'" (James v Aircraft Serv. Intl. Group, 84 AD3d at 1027, quoting Baron v Incorporated Vil. of Freeport, 143 AD2d 792, 793; see Dietrich v Grandsire, 83 AD3d 994). Here, the plaintiff moved for summary judgment on the issue of liability prior to the exchange of any discovery. Since the defendant had no personal knowledge of the relevant facts (cf. Deleg v Vinci, 82 AD3d 1146), it should be afforded the opportunity to conduct discovery, including depositions of the plaintiff, the operator of the uninsured vehicle, and an eyewitness identified in the police accident report (see Gardner v Cason, Inc., 82 AD3d 930, 931).

Accordingly, the Supreme Court should have denied the plaintiff's motion for summary judgment on the issue of liability, with leave to renew upon the completion of discovery (see Dietrich v Grandsire, 83 AD3d at 994; Gardner v Cason, Inc., 82 AD3d at 931; cf. Gruenfeld v City of New Rochelle, 72 AD3d 1025, 1026).

Yu v. General Security Insurance Co.

Shayne, Dachs, Corker, Sauer & Dachs, LLP, Mineola (Jonathan A. Dachs of counsel), for appellant.
Melito & Adolfsen P.C., New York (S. Dwight Stephens of counsel), for respondent.

Order, Supreme Court, New York County (Richard F. Braun, J.), entered June 21, 2010, which granted defendant's motion for summary judgment dismissing the complaint and denied plaintiff's cross motion for summary judgment, unanimously reversed, on the law, with costs, the motion denied, and the cross motion granted in the principal amount of $501,055, plus interest. The Clerk is directed to enter judgment accordingly.

This is an action pursuant to Insurance Law § 3420(a)(2) by an injured person (plaintiff) against the insurer (defendant) of a tortfeasor (nonparty Lep Keng Corp.), which has not satisfied a judgment against it in plaintiff's favor. It is undisputed that Lep Keng's notice to defendant was late. However, "[a]n insurer's failure to provide notice as soon as is reasonably possible precludes effective disclaimer, even where the policyholder's own notice of the incident to its insurer is untimely" (Matter of New York Cent. Mut. Fire Ins. Co. v Aguirre, 7 NY3d 772, 774 [2006] [internal quotation marks and citation omitted]).

Defendant learned by August 27, 2004, at the latest, that plaintiff served the summons and complaint in the underlying personal injury action on the Secretary of State on December 31, 2001, that the Secretary of State had sent the documents to the address on file for Lep Keng, and that the documents had been returned unclaimed. Thus, defendant was aware by that date "of the grounds for disclaimer of liability or denial of coverage" (id. [internal quotation marks and citation omitted]). Nevertheless, it did not disclaim until July 18, 2007, almost three years later, a delay that is unreasonable as a matter of law (see e.g. First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 66 [2003]). Defendant's contention that it had to wait until the motion court in the underlying action confirmed the Special Referee's finding that Lep Keng had deliberately left mail unclaimed, is unavailing (see Republic Franklin Ins. Co. v Pistilli, 16 AD3d 477, 479 [2005]).

Hough v. USAA Casualty Insurance Company

Stanley K. Shapiro, New York, for appellant.
Robert M. Spadaro, New York, for respondent.

Order, Supreme Court, New York County (George J. Silver, J.), entered May 13, 2011, which, to the extent appealed from as limited by the briefs, upon reargument, denied plaintiff's motion for summary judgment on its claim for recovery of an unsatisfied judgment against defendant's insured, unanimously affirmed, without costs. Appeal from order, same court and Justice, entered July 6, 2010, unanimously dismissed, without costs, as abandoned.

Defendant's disclaimer of its duty to defend its insured in the underlying action does not bar it from asserting that its insured injured plaintiff intentionally, because that assertion is not a defense extending to the merits of plaintiff's personal  injury claims against the insured (see Robbins v Michigan Millers Mut. Ins. Co., 236 AD2d 769, 771 [1997]). Since the underlying action culminated in a default judgment and the issue whether the insured's acts were intentional or negligent was not litigated, defendant is not collaterally estopped to assert in this action that its insured caused plaintiff's injuries intentionally (see id.). There is support for this assertion in the record (compare Rucaj v Progressive Ins. Co., 19 AD3d 270, 273 [2005] [insurer's defenses rejected as a matter of law]).

Since issues of fact exist whether the underlying incident was an "occurrence" within the meaning of the policy, i.e., an accident, or an intentional act outside the scope of coverage, which would render a disclaimer pursuant to Insurance Law § 3420(d) unnecessary, it cannot yet be determined whether defendant's noncompliance with the statute precludes it from disclaiming
coverage (see Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188-189 [2000]; Seneca Ins. Co. v Naprawa, 294 AD2d 183 [2002]).

Whitehouse Early, Inc., v. Progressive Insurance Company

Kaplan, Hanson, Adams, Finder & Fishbein, Yonkers (Michael
A. Zarkower of counsel), for appellant.
White, Fleischner & Fino, LLP, New York (Nancy Davis
Lyness of counsel), for respondents.

Order, Supreme Court, Bronx County (Alison Y. Tuitt, J.), entered April 8, 2011, which, among other things, granted plaintiffs' motion for summary judgment declaring that defendant Progressive Insurance Company is obligated to contribute with plaintiff Lancer Insurance Company on a ratable basis to the defense and indemnification of their mutual insureds, plaintiffs Whitehouse Early, Inc. and Frank Ray, in an underlying personal injury action, unanimously affirmed, with costs.

Whitehouse's procurement of an insurance policy from Lancer effective October 9, 2008 did not render Progressive's policy terminated on that date. Rather, Progressive's policy terminated on November 19, 2008 upon receipt of Whitehouse's request for cancellation (see Savino v Merchants Mut. Ins. Co., 44 NY2d 625, 628 [1978]). Accordingly, the motion court properly determined that Progressive's policy was in effect on November 5, 2008, the date of the underlying accident.

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

 

Turkow v Security Mutual Ins. Co.  

Calendar Date: January 11, 2012
Before: Peters, J.P., Lahtinen, Kavanagh, Stein and Garry, JJ.

Williamson, Clune & Stevens, Ithaca (John H.
Hanrahan III of counsel), for appellant.
Young & Young, Binghamton (Mark H. Young of
counsel), for respondents.
MEMORANDUM AND ORDER
Peters, J.P.
Appeal from an order of the Supreme Court (Lebous, J.), entered April 1, 2011 in Broome County, which, among other things, denied defendant's motion for summary judgment dismissing the complaint.
On July 25, 2001, a fire destroyed property owned by plaintiffs in the City of Binghamton, Broome County. By certified letter dated October 1, 2001 and received by plaintiff John P. Turkow on October 4, 2001, defendant demanded sworn proofs of loss from plaintiffs and provided three forms for that purpose. On December 28, 2001, defendant denied the claim on the ground that plaintiffs failed to provide a proof of loss statement within 60 days of defendant's demand and as required by the terms of the insurance policy and the Insurance Law. Plaintiffs thereafter commenced this action seeking to recover the proceeds under the policy and defendant answered, asserting as an affirmative defense, among other things, plaintiffs' failure to timely file the sworn proof of loss statements. Defendant then moved for summary judgment dismissing the complaint and plaintiffs cross-moved for partial summary judgment on the issue of liability. Supreme Court denied both motions, and this appeal by defendant followed.
"'It is well settled that the failure to file sworn proofs of loss within 60 days of the demand therefor constitutes an absolute defense to an action on an insurance policy absent a waiver of the requirement by the insurer or conduct on its part estopping its assertion of the defense'" (Bailey v Charter Oak Fire Ins. Co., 273 AD2d 691, 692 [2000], quoting Vena v State Farm Fire & Cas. Co., 203 AD2d 790, 790-791 [1994]; see Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, 209-210 [1984]; Turkow v Erie Ins. Co., 20 AD3d 649, 649-650 [2005]). We agree with defendant that its adjuster's investigation of the claim following the fire and subsequent preparation of a report setting forth the extent of the fire damage did not serve to satisfy plaintiffs' obligation to submit sworn proofs of loss or constitute a waiver of that condition (see Maleh v New York Prop. Ins. Underwriting Assn., 64 NY2d 613, 614 [1984]; Saba Rug v Great Am. Ins. Cos., 254 AD2d 107 [1998]; Litter v Allstate Ins. Co., 208 AD2d 602, 602 [1994]; Pioneer Ins. Co. v Deleo, 167 AD2d 795, 797 [1990]). Nor have plaintiffs raised a factual issue as to whether defendant repudiated liability under the policy so as to excuse their obligation to timely file proof of loss statements (see Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d at 217-218; compare Beckley v Otsego County Farmers Coop. Fire Ins. Co., 3 AD2d 190, 194 [1957], lv dismissed 2 NY2d 990 [1957]).
We do, however, agree with Supreme Court that a triable issue of fact exists as to whether the proof of loss statements were timely filed by plaintiffs. In that regard, defendant met its initial burden on its summary judgment motion by submitting copies of its October 1, 2001 letter demanding proof of loss, the certified mail receipt signed by Turkow on October 4, 2001, as well as Turkow's examination before trial testimony acknowledging that the signature on the receipt was his and that he received the proof of loss forms. Defendant also proffered the affidavit of its claims manager averring that a search of defendant's records failed to reveal that any proof of loss forms had been received from plaintiffs. In opposition to the motion, however, plaintiffs submitted the deposition testimony and sworn affidavit of Turkow, who stated that he and his brother filled out the proof of loss forms and returned them to defendant "months" before he received defendant's December 28, 2001 letter indicating that such forms had not been received [FN1]. In addition, plaintiffs submitted a copy of a January 2002 letter from defendant's claims supervisor which memorialized a portion of a phone conversation in which plaintiffs claimed that the proof of loss forms were completed and returned. Viewing the evidence in a light most favorable to plaintiffs and giving them the benefit of all reasonable inferences that can be drawn therefrom (see Campbell v Campbell, 43 AD3d 1264, 1266 [2007]; Goff v Clarke, 302 AD2d 725, 727 [2003]), we find that a genuine issue of fact exists that cannot be determined on this record without resolving issues of credibility (see General Elec. Capital Corp. v Royal Ins. Co. of Am., 205 AD2d 396, 396-397 [1994]; Kravitz v Pioneer Ins. Co., 176 AD2d 430, 430-431 [1991]; Della Porta v Hartford Fire Ins. Co., 118 AD2d 1045, 1046-1047 [1986]; see also Turkow v Erie Ins. Co., 20 AD3d at 650). Accordingly, summary judgment on this issue was properly denied.
Lahtinen, Kavanagh, Stein and Garry, JJ., concur.
ORDERED that the order is affirmed, with costs.
Footnotes


Footnote 1:As plaintiffs received the proof of loss forms on October 4, 2001, they were required to mail the completed forms to defendant on or before December 3, 2001 (see Ball v Allstate Ins. Co., 81 NY2d 22, 24 [1993]).

Naughton, Jr. v The City of New York

Appeals from the order of the Supreme Court, New York County (Martin Shulman, J.), entered on or about December 2, 2010, which, insofar as appealed from as limited by the briefs, denied plaintiff's motion for partial summary judgment on his Labor Law § 240(1) claim, granted the cross motions of defendant Petrocelli Construction, Inc. and third-party defendants W & W Glass Systems, Inc. and Metal Sales Co., Inc. for summary judgment dismissing plaintiff's Labor Law § 240(1) and § 241(6) claims, denied Petrocelli's cross motion for summary judgment on its common-law and contractual indemnification claims against W & W Glass Systems, and for contractual indemnification against Metal Sales, granted W & W Glass's cross motion for summary judgment dismissing Petrocelli's claims for common law and contractual indemnification against it, granted Metal Sales's cross motion for summary judgment dismissing Petrocelli's claim for contractual indemnification against it, and granted W & W Glass's cross motion for contractual indemnification against Metal Sales as to liability, and from the order of the same court and Justice, entered April 12, 2011, which granted plaintiff's motion to reargue, and, upon reargument, adhered to the prior order.


Sacks and Sacks, LLP, New York (Scott Singer of
counsel), for appellant-
respondent.
Malapero & Prisco, LLP, New York (Andrew L.
Klauber and Frank L.
Lombardo of counsel), for
Petrocelli Construction, Inc.,
respondent-appellant.
Litchfield Cavo LLP, New York (Joseph E. Boury and
Beth A. Saydak of counsel),
for Metal Sales Co., Inc.,
respondent-appellant.
Law Office of James J. Toomey, New York (Eric P.
Tosca of counsel), for
respondent-respondent.

RICHTER, J.
In this Labor Law action, plaintiff alleges that he was injured when he fell approximately 15 feet to the ground while unloading bundles of curtain wall panels off a flatbed truck. The panels were part of a renovation project of the Family Court building in Lower Manhattan, and were to be used for the building's facade. Defendant Petrocelli Construction, Inc. was the general construction contractor for the job. Petrocelli retained third-party defendant W & W Glass Systems, Inc. to perform all curtain wall, glass and stone work. W & W Glass, in turn, subcontracted the unloading and installation of the curtain wall panels to third-party defendant Metal Sales Co., Inc., plaintiff's employer.
On the day of the accident, six bundles of curtain wall panels arrived at the work site on a flatbed truck. Each bundle was approximately 10 feet long, 4 feet wide and 10 feet tall. Plaintiff was instructed by his supervisor to climb on top of the bundles, attach each bundle to a crane and make sure the bundles stayed apart while they were hoisted to a sidewalk bridge above. When plaintiff asked his supervisor for a ladder, he was told that a ladder was not needed, and that instead he should climb up the side of the bundles. Plaintiff explained to his supervisor that he did not like being on top of the bundles without a ladder because there was no way to "get out of there." Despite his protestations, plaintiff was not provided with a ladder.
Plaintiff then climbed to the top of one of the bundles, which was 10-11 feet above the flatbed surface and 15-16 feet above the ground. Plaintiff explained that it was necessary to work on top of the bundles so that he could attach the chokers to the corners and ensure that the bundles did not interfere with each other while being hoisted. Two of plaintiff's coworkers were standing on the street below holding tag lines attached to the bottom of the bundles to control their movement. While standing on an adjacent bundle, plaintiff rigged one of the bundles, and the crane operator began to lift the load. After the load had been lifted several feet, one of the tag lines "got slack," and the bundle began to swing toward plaintiff. According to plaintiff, he retreated as far as he could looking for an escape route, but the bundle hit him and knocked him down 15 feet to the street below.
Plaintiff brought this action alleging violations of, inter alia, Labor Law § 240(1) and § 241(6). Petrocelli commenced a third-party action against W & W Glass and Metal Sales seeking contractual and common-law indemnification, and W & W Glass asserted a cross claim against Metal Sales for contractual indemnification. The parties then filed various motions seeking summary judgment. By a decision entered on or about December 2, 2010, the motion court dismissed plaintiff's § 240(1) claim, concluding that Petrocelli was not a general contractor or agent under the Labor Law. The court also dismissed the § 241(6) claim finding that the Industrial Code provision relied upon by plaintiff was not specific enough. As for the indemnification claims, the court dismissed Petrocelli's claims for common-law and contractual indemnification against W & W Glass and for contractual indemnification against Metal Sales, and granted W & W Glass's cross motion for contractual indemnification against Metal Sales. These appeals followed.
The motion court should have granted summary judgment to plaintiff on his Labor Law § 240(1) claim. Under that section, owners, general contractors and their agents have "a nondelegable duty to provide safety devices necessary to protect workers from risks inherent in elevated work sites" (McCarthy v Turner Constr., Inc., 17 NY3d 369, 374 [2011]). To establish liability on a Labor Law § 240(1) cause of action, a plaintiff is required to show that the statute was violated and that the violation was a proximate cause of his injuries (Harris v City of New York, 83 AD3d 104, 108 [2011]).
Here, plaintiff asked his supervisor for a ladder but was told that one was not needed. He specifically explained to the supervisor that he did not like being on top of the bundles without a ladder because there was no way to get down. Plaintiff testified that when the bundle started swinging toward him, he retreated. Since there was no ladder, he had no way to get off the bundles. Thus, plaintiff has established that the absence of a ladder was a proximate cause of the accident. Since Petrocelli and third-party defendants (defendants) point to no evidence challenging or contradicting plaintiff's assertions, plaintiff should have been granted summary judgment on his § 240(1) claim (see e.g. Roman v Hudson Tel Assoc., 11 AD3d 346 [2004]).
Aside from Petrocelli's liability for failing to provide a ladder to prevent plaintiff's fall, Petrocelli is independently liable under § 240(1) for failing to provide a secure method of hoisting the bundles. In addition to "falling worker" cases, Labor Law § 240(1) applies where a plaintiff is struck by a falling object that was improperly hoisted or inadequately secured (see Runner v New York Stock Exch., Inc., 13 NY3d 599, 604). Thus, § 240(1) "was designed to prevent those types of accidents in which the . . . hoist . . . proved inadequate to shield the injured worker from harm directly flowing from the application of the force of gravity to an object" (id. [internal quotation marks omitted]).
Here, the harm plaintiff suffered was the direct consequence of the application of the force of gravity to the bundle that was being hoisted (see Runner at 604; Harris at 109-110; Ray v City of New York, 62 AD3d 591 [2009]). The undisputed testimony in the record establishes that after the bundle began its ascent, one of the tag lines "got slack," causing the load to swing toward plaintiff. Thus, plaintiff has shown that the hoist proved inadequate to shield him from harm, and defendants point to no evidence in opposition that would create an issue of fact. Accordingly, plaintiff was entitled to summary judgment on his § 240(1) claim.
There is no merit to defendants' contention that plaintiff's accident is outside the scope of § 240(1) because it resulted from a usual and ordinary danger of a construction site. Plaintiff's fall from a height of 15-16 feet above the ground constitutes precisely the type of elevation-related risk envisioned by the statute (see Intelisano v Sam Greco Constr., Inc., 68 AD3d 1321 [2009] [the plaintiff's fall while unloading 10-foot high bundles of insulation from a flatbed trailer constitutes an elevation-related risk greater than merely falling from the bed of the trailer]; Ford v HRH Constr. Corp., 41 AD3d 639 [2007] [fall from the top of a stack of curtain wall panels on a flatbed truck within the scope of § 240(1)]; see also Ortiz v Varsity Holdings, LLC, __ NY3d __, 2011 NY Slip Op 9161 [2011] [declining to dismiss § 240(1) claim where the plaintiff fell six feet off the edge of a dumpster]).
There is no plausible view of the evidence that plaintiff's own acts or omissions were the sole proximate cause of the accident (see Vergara v SS 133 W. 21, LLC, 21 AD3d 279, 281 [2005]). Defendants argue, pointing to an accident report in the record, that plaintiff was solely to blame because he jumped onto the truck bed and then onto the street. Whether plaintiff was hit by the swinging bundle or jumped to get out of its way, it cannot be said that plaintiff was the sole proximate cause of his injuries (see e.g. Sherman v Piotrowski Bldrs., 229 AD2d 959 [1996]; Cosban v New York City Tr. Auth., 227 AD2d 160, 161 [1995]; Lockwood v National Valve Mfg. Co., 143 AD2d 509 [1988]). The court erred in dismissing plaintiff's claim under Labor Law § 241(6). 12 NYCRR 23-6.l(h) provides that "[l]oads which have a tendency to swing or turn freely during hoisting shall be controlled by tag lines." This Industrial Code provision "sets forth a specific standard of conduct and not simply a recitation of common-law safety principles" (St. Louis v. Town of N. Elba, 16 NY3d 411, 414 [2011]). We recognize that other Courts have concluded that the regulation is not sufficiently specific to establish a § 241(6) violation (see Morrison v City of New York, 5 AD3d 642, 643 [2d Dept 2004]; Smith v Homart Dev. Co., 237 AD2d 77, 80 [3d Dept 1997]). However, we have previously found that analogous regulations (see 12 NYCRR 23-8.2[c][3] ["A tag or restraint line shall be used when rotation or swinging of any load being hoisted by a mobile crane may create a hazard"]) can give rise to liability under § 241(6) (see McCoy v Metropolitan Transp. Auth., 38 AD3d 308, 309 [2007]; Cammon v City of New York, 21 AD3d 196, 201 [2005]). Although tag lines were used here, there is sufficient evidence that the tag lines did not properly control the movement of the load as it was lifted. Thus, a jury should be permitted to determine whether plaintiff may recover under § 241(6).
Defendants unpersuasively argue that Petrocelli was not a general contractor for purposes of liability under Labor Law § 240(1) and § 241(6). The record shows that Petrocelli was delegated plenary authority over the construction work at the site, which included the authority to supervise and control the work performed by its subcontractors, and was therefore a statutory agent of the owner or general contractor of the work site liable under the Labor Law (see Russin v Louis N. Picciano & Son, 54 NY2d 311 [1981]). Moreover, Petrocelli demonstrated this authority by subcontracting all curtain wall, glass, stone & metal work to W & W Glass, which engaged plaintiff's employer, Metal Sales, to unload, distribute and erect the curtain wall panels at the site (see Weber v Baccarat, Inc., 70 AD3d 487 [2010]; Williams v Dover Home Improvement, 276 AD2d 626 [2000]). Whether Petrocelli actually supervised plaintiff is irrelevant (see Burke v Hilton Resorts Corp., 85 AD3d 419, 420 [2011]).
The motion court properly dismissed Petrocelli's claim for common-law indemnification against W & W Glass. To be entitled to common-law indemnification, a party must show (1) that it has been held vicariously liable without proof of any negligence or actual supervision on its part; and (2) that the proposed indemnitor was either negligent or exercised actual supervision or control over the injury-producing work (see McCarthy v Turner Constr., Inc., 17 NY3d at 377-378; Reilly v DiGiacomo & Son, 261 AD2d 318 [1999]).
Petrocelli has met the first prong of the test. There is no showing that Petrocelli was negligent, and Petrocelli's liability is purely vicarious. However, there is no evidence in the record that W & W Glass was either negligent or actually supervised or controlled plaintiff's work. It is undisputed that W & W Glass did not perform the installation of the curtain wall panels; that work was subcontracted out to Metal Sales, plaintiff's employer. On the day of the accident, the unloading of the panels from the truck was supervised and directed by a Metal Sales foreman. Although W & W Glass's foreman was on the work site that day, Petrocelli points to no evidence showing that he was present when plaintiff's accident occurred. More importantly, there is no proof that he, or any other W & W Glass employee, actually supervised or controlled plaintiff's work. Indeed, W & W Glass's president testified that its foreman was only responsible for coordinating the delivery of the panels, and was not required to remain during the unloading.
Petrocelli argues that common-law indemnification is warranted because W & W Glass was contractually required to supervise plaintiff's work. However, in McCarthy, the Court of Appeals made clear that "a party's . . . [contractual] authority to supervise the work and implement safety procedures is not alone a sufficient basis for requiring common-law indemnification" (17 NY3d at 378). Rather, liability can only be imposed against a party who exercises actual supervision of the injury-producing work (id. at 376, 378). Since there is no view of the evidence that W & W Glass actually supervised or controlled plaintiff's work, or was otherwise negligent, Petrocelli's common-law indemnification claim was correctly dismissed.
However, the motion court should not have dismissed Petrocelli's claim for contractual indemnification against W & W Glass. The contract between the parties requires W & W Glass to indemnify Petrocelli for claims arising out the performance of W & W Glass's work, but only to the extent caused by the negligent acts or omissions of W & W Glass, its sub-subcontractors (i.e., Metal Sales), or anyone directly or indirectly employed by them. Thus, the indemnification provision is triggered if the accident was caused by the negligence of either W & W Glass or Metal Sales, or their employees. Although the record is devoid of proof of W & W's negligence, there is evidence that the accident may have been caused by the negligence of the Metal Sales's employees who did not properly control the tag lines. Thus, the contractual indemnification claim against W & W Glass should not have been dismissed.
There is no merit to Petrocelli's contention that it is entitled to summary judgment on this claim. First, Petrocelli argues that the record establishes Metal Sales's negligence as a matter of law based on the theory of res ipsa loquitur. In response, W & W Glass maintains that res ipsa is not applicable to the facts of this case. Res ipsa loquitur is a form of circumstantial evidence that creates a permissible inference of negligence that may be accepted or rejected by the factfinder (Tora v GVP AG, 31 AD3d 341 [2006]). The only instance when res ipsa can be established as a matter of law is "when the plaintiff's circumstantial proof is so convincing and the defendant's response so weak that the inference of [the] defendant's negligence is inescapable" (Morejon v Rais Constr. Co., 7 NY3d 203, 209 [2006]). We need not decide whether res ipsa loquitur applies here because even if it did, it cannot be said that the inference of Metal Sales's negligence is inescapable.
Next, Petrocelli contends that W & W Glass, during motion practice below, made a judicial admission that Metal Sales was negligent. Specifically, Petrocelli maintains that W & W Glass's argument before the motion court that plaintiff was the sole proximate cause of the accident constitutes a judicial admission of plaintiff's negligence. Thus, according to Petrocelli, W & W Glass has admitted Metal Sales's negligence under a respondeat superior theory. However, in order to constitute a judicial admission, the statement must be one of fact (People v Brown, 98 NY2d 226, 232 n 2 [2002]; GJF Constr., Inc. v Sirius Am. Ins. Co., 89 AD3d 622, 624 [2011]; Rahman v Smith, 40 AD3d 613, 615 [2007]). Here, the legal arguments made by W & W Glass's counsel in its motion papers below do not constitute judicial admissions (see Mesler v Podd, LLC, 89 AD3d 1533, 1536 [2011]; Rahman at 615).
The motion court properly granted W & W Glass's motion for summary judgment on its contractual indemnification claim against Metal Sales. Metal Sales and W & W Glass entered into a purchase order for the unloading and erection of the curtain wall panels. The indemnity provision in that order provides that Metal Sales agrees to indemnify W & W Glass for claims "arising directly or indirectly out of this order," and requires no showing of negligence by Metal Sales. Since there is no question that plaintiff's accident arose out of the purchase order, W & W Glass is entitled to be indemnified (see Velez v Tishman Foley Partners, 245 AD2d 155 [1997]). Because we have found that W & W Glass was not negligent, enforcement of the contractual indemnification provision does not run afoul of General Obligations Law § 5-322.1 (see Itri Brick & Concrete Corp. v Aetna Cas. & Sur. Co., 89 NY2d 786, 795 n 5 [1997]; Reilly v Newireen Assocs., 303 AD2d 214, 224 [2003], lv denied 100 NY2d 508 [2003]; Velez, 245 AD2d at 157).
Metal Sales's motion for summary judgment dismissing Petrocelli's claim for contractual indemnification was properly granted. Petrocelli and Metal Sales were not in contractual privity with each other, and the purchase order between W & W Glass and Metal Sales does not make Petrocelli a third-party beneficiary thereof, nor does it incorporate by reference the terms of the subcontract between Petrocelli and W & W Glass (see Vargas v New York City Tr. Auth., 60 AD3d 438, 440 [2009]).
Accordingly, the order of the Supreme Court, New York County (Martin Shulman, J.), entered or on about December 2, 2010, which, insofar as appealed from as limited by the briefs, denied plaintiff's motion for partial summary judgment on his Labor Law § 240(1) claim, granted the cross motions of defendant Petrocelli Construction, Inc. and third-party defendants W & W Glass Systems, Inc. and Metal Sales Co., Inc. for summary judgment dismissing plaintiff's Labor Law § 240(1) and § 241(6) claims, denied Petrocelli's cross motion for summary judgment on its common-law and contractual indemnification claims against W & W Glass Systems, Inc. and for contractual indemnification against Metal Sales, granted W & W Glass' cross motion for summary judgment dismissing Petrocelli's claims for common law and contractual indemnification against it, granted Metal Sales' cross motion for summary judgment dismissing Petrocelli's claim for contractual indemnification against it, and granted W & W Glass' cross motion for contractual indemnification against Metal Sales as to liability, should be modified, on the law, to reinstate plaintiff's Labor Law §§ 240(1) and 241(6) claims, grant plaintiff's motion for summary judgment as to liability on his § 240(1) claim against Petrocelli, reinstate Petrocelli's claim for contractual indemnification against W & W Glass, and otherwise affirmed, without costs. The appeal from the order of the same court and Justice, entered April 12, 2011, which granted plaintiff's motion to reargue, and, upon reargument, adhered to the prior order, should be dismissed, without costs, as academic.
All concur.

Order, Supreme Court, New York County (Martin Shulman, J.), entered on or about December 2, 2010, modified, on the law, to reinstate plaintiff's Labor Law §§ 240(1) and 241(6) claims, grant plaintiff summary judgment as to liability on his § 240(1) claim against Petrocelli, reinstate Petrocelli's claim for contractual indemnification against W & W Glass, and otherwise
affirmed, without costs. Appeal from order, same court and Justice, entered April 12, 2011, dismissed, without costs, as academic.
Opinion by Richter, J. All concur.
Gonzalez, P.J., Friedman, Moskowitz, Acosta, Richter, JJ.
Gorham v Reliable Fence & Supply Co., Inc.

Gorton & Gorton, LLP, Mineola, N.Y. (Thomas P. Gorton of
counsel), for defendant third-party defendant-appellant.
Molod Spitz & DeSantis, P.C., New York, N.Y. (Alice Spitz
and Marcy Sonneborn of counsel), for
defendant-respondent.
Gallo Vitucci & Klar, LLP, New York, N.Y. (Kimberly A.
Ricciardi of counsel), for defendant
third-party plaintiff-respondent.


DECISION & ORDER
In an action to recover damages for personal injuries, the defendant third-party defendant, Reliable Fence & Supply Co., Inc., appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Ruchelsman, J.), dated June 18, 2010, as, upon reargument, adhered to the determination in an order dated November 10, 2009, denying its motion for summary judgment dismissing the complaint and all cross claims insofar as asserted against it, granting that branch of the cross motion of the defendant Premier Storage Solutions of Third Avenue, LLC, which was for summary judgment dismissing the complaint and all cross claims insofar as asserted against that defendant, and granting those branches of the cross motion of the defendant third-party plaintiff, Racanelli Construction Company, Inc., which were for summary judgment dismissing the complaint and all cross claims insofar as asserted against that defendant and for summary judgment on that defendant's third-party cause of action for contractual indemnification insofar as asserted against it, and granted that branch of the cross motion of the defendant Premier Storage Solutions of Third Avenue, LLC, which was for summary judgment on that defendant's cross claim for contractual indemnification insofar as asserted against it.
ORDERED that the appeal from so much of the order dated June 18, 2010, as, upon reargument, adhered to the determination in the order dated November 10, 2009, granting those branches of the respective cross motions of the defendant Premier Storage Solutions of Third Avenue, LLC, and the defendant third-party plaintiff Racanelli Construction Company, Inc., which were for summary judgment dismissing the complaint insofar as asserted against each of them, and all cross claims insofar as asserted by each of them against each other, is dismissed, without costs or disbursements, as the appellant is not aggrieved thereby (see Mixon v TBV, Inc., 76 AD3d 144); and it is further,
ORDERED that the order dated June 18, 2010, is modified, on the law, (1) by deleting the provision thereof, upon reargument, adhering to the determination in the order dated November 10, 2009, granting those branches of the cross motion of the defendant third-party plaintiff, Racanelli Construction Company, Inc., which were for summary judgment dismissing the cross claims of the defendant third-party defendant Reliable Fence & Supply Co., Inc., insofar as asserted against it, and for summary judgment on its third-party cause of action for contractual indemnification against the defendant third-party defendant, Reliable Fence & Supply Co., Inc., and substituting therefor a provision, upon reargument, vacating the determination in the order dated November 10, 2009, granting those branches of the cross motion, and thereupon denying those branches of the cross motion, and (2) by deleting the provision thereof granting that branch of the cross motion of the defendant Premier Storage Solutions of Third Avenue, LLC, which was for summary judgment on its cross claim for contractual indemnification against the defendant third-party defendant, Reliable Fence & Supply Co., Inc., and substituting therefor a provision denying that branch of the cross motion; as so modified, the order dated June 18, 2010, is affirmed insofar as reviewed, without costs or disbursements.
On April 24, 2004, the plaintiff allegedly sustained personal injuries when an electronically operated fence closed on his hand. He commenced the instant action sounding in negligence against the defendants Premier Storage Solutions of Third Avenue, LLC (hereinafter Premier), the owner of the subject premises, Racanelli Construction Company, Inc. (hereinafter Racanelli), the general contractor, and Reliable Fence & Supply Co., Inc. (hereinafter Reliable), the installer of the fence. Thereafter, Racanelli commenced a third-party action against, among others, Reliable.
Reliable moved for summary judgment dismissing the complaint and all cross claims insofar as asserted against it. Thereafter, Premier cross-moved for summary judgment dismissing the complaint and all cross claims insofar as asserted against it. Racanelli also cross-moved for summary judgment dismissing the complaint and all cross claims insofar as asserted against it. In an order dated November 10, 2009, the Supreme Court, inter alia, denied Reliable's motion, granted those branches of the respective cross motions of Premier and Racannelli which were for summary judgment dismissing the complaint and all cross claims insofar as asserted against each of them, and granted that branch of Racanelli's cross motion which was for summary judgment on its cross claim for contractual indemnification insofar as asserted against Reliable. In an order dated Juen 18, 2010, the Supreme Court, upon reargument, adhered to its prior determination, and granted that branch of Premier's cross motion which was for summary judgment on its cross claim for contractual indemnification insofar as asserted against Reliable.
Contrary to Reliable's contention, the Supreme Court, upon reargument, properly adhered to its prior determination denying that branch of its motion which was for summary judgment dismissing the complaint insofar as asserted against it. A party who enters into a contract to render services may be said to have assumed a duty of care and, thus, may be potentially liable in tort to third persons where, inter alia, "the contracting party, in failing to exercise reasonable care in the performance of his duties, launche[s] a force or instrument of harm" (Espinal v Melville Snow Contrs., 98 NY2d 136, 140 [internal quotation marks omitted]; see Mosca v OCE Holding, Inc., 71 AD3d 1103, 1104). Here, triable issues of fact exist as to whether, in allegedly failing to exercise reasonable care in the installation of the subject gate, Reliable launched a force or instrument of harm (see Martin v Huang, 85 AD3d 1132, 1133). Since there are triable issues of fact as to Reliable's negligence, the Supreme Court, upon reargument, also properly adhered to its prior determination denying those branches of Reliable's motion which were for summary judgment dismissing the cross claims insofar as asserted against it (id.; see Shea v Putnam Golf, Inc., 79 AD3d 1013, 1015; Bellefleur v Newark Beth Israel Med. Ctr., 66 AD3d 807, 808).
However, the Supreme Court, upon reargument, should not have adhered to its prior determination granting that branch of Racanelli's cross motion which was for summary judgment dismissing Reliable's cross claims insofar as asserted against it. Racanelli made a prima facie showing of entitlement to judgment as a matter of law by submitting, inter alia, the affidavit of its project manager, who stated, in effect, that Racanelli did not have control over the work site (see Soto v City of New York, 244 AD2d 544, 545; cf. Keating v Nanuet Bd. of Educ., 40 AD3d 706, 708-709). However, in opposition, Reliable raised triable issues of fact, inter alia, as to whether Racanelli had control over the work site. In this regard, Reliable submitted deposition testimony indicating that Racanelli employees inspected the subject gate to make sure that it was properly installed and that a Racanelli employee inspected all of the work of its subcontractors.
Moreover, it was premature to grant those branches of the cross motions of Premier and Racanelli which were for summary judgment on their respective cross claim and third-party cause of action for contractual indemnification against Reliable (see Brasch v Yonkers Constr. Co., 306 AD2d 508, 510-511; Rodriguez v Savoy Boro Park Assoc. Ltd. Partnership, 304 AD2d 738, 739).
Reliable's remaining contentions are without merit.
RIVERA, J.P., BALKIN, LEVENTHAL and ROMAN, JJ., concur.
U.S. Bank National Association v GreenPoint Mortgage Funding, Inc.,

Plaintiff appeals from the order of the Supreme Court, New York County (Bernard J. Fried, J.), entered October 13, 2010, and April 13, 2010, which, insofar as appealed from, required plaintiff to bear the cost incurred in the production of discovery.

Nixon Peabody LLP, New York (Constance M. Boland
of counsel), for appellant.
LeClairRyan, A Professional Corporation, New York
(Michael T. Conway of counsel), and BuckleySandler LLP,
New York (Matthew P. Previn of counsel), for respondent.

ACOSTA, J.,
This case requires us to determine which party is to incur the cost of searching for, retrieving and producing both electronically stored information and physical documents that have been requested as part of the discovery process. Consistent with this Court's recent decision in Voom HD Holdings LLC v Echostar Satellite LLC ( ___ AD3d ___, NY Slip Op 00658 [January 31, 2012]), which adopted the standards articulated by Zubulake v UBS Warburg LLC (220 FRD 212 [SD NY 2003]) in the context of preservation and spoliation, we are persuaded that Zubulake should be the rule in this Department, requiring the producing party to bear the cost of production to be modified by the IAS court in the exercise of its discretion on a proper motion by the producing party. Accordingly, the matter is remanded to the motion court for further proceedings.
Background
The complaint alleges that prior to August 2007, when its operations were allegedly shut down, defendant GreenPoint Mortgage Funding, Inc. was in the mortgage loan origination business, specializing in what were called "no-doc" and "low-doc" loans, i.e., mortgages for individuals with little to no documentation of income and assets. GreenPoint securitized these loans by pooling them into a trust and then offering for sale notes that were secured by and to be paid down by the cash flow received from the underlying loans.
In accordance with these practices, from 2005 to 2006, GreenPoint sold notes on approximately 30,000 residential mortgages it had securitized, valued at $1.83 billion, to non-party GMAC Mortgage Corporation. Subsequently, GMAC assigned these notes to Lehman Brothers Bank; which, in turn, subsequently assigned them to its parent company, Lehman Brothers Holding; which, in turn, assigned the notes to an affiliated special purpose entity, the Structured Asset Securities Corporation; which, in turn, assigned them to plaintiff-appellant herein, U.S. Bank, NA, as the Indenture Trustee for the benefit of the insurers and noteholders of GreenPoint Mortgage Funding Trust 2006-HE1, Home Equity Loan Asset-Backed Notes, Series 2006-HE1. In addition, certain payments of the notes were guaranteed by two insurance companies, Syncora Guarantee, formerly known as XL Capital Assurance, Inc., and CIFG Assurance North America (CIFG).
According to U.S. Bank, less than two years after the transaction closed, approximately $530 million worth of the loans had been completely charged off as a total loss, or were severely delinquent. U.S. Bank now acts for the benefit of the noteholders and the insurers, which have been making payments to the noteholders.
The Litigation
U.S. Bank, by summons and complaint dated February 5, 2009, brought this action against GreenPoint for what it alleged were "gross violations" of the representations and warranties regarding the attributes of the loans and the policies and practices under which the loans were originated, underwritten and serviced. U.S. Bank further alleged that in its original agreement to sell the loans, GreenPoint promised it would cure any breaches of its representations and warranties that materially and adversely affected the value of the loans by repurchasing and replacing the non-complying loans at agreed-to prices. U.S. Bank also alleged that GreenPoint agreed that if the breaches were severe enough, GreenPoint would buy back all 30,000 mortgages.[FN1]
Discovery Motion
Concurrently with its original complaint in February 2009, U.S. Bank served its first request for the production of documents. In response, GreenPoint did not produce documents, but rather, on April 28, 2009, submitted a letter to the court pursuant to rules 11, 14 and 24 of the Rules of the Commercial Division of the Supreme Court (22 NYCRR § 202.70), as well as CPLR 3214(b) and 3103, seeking a ruling on whether discovery should be stayed pending the motion to dismiss, whether or not a protective order should issue governing the confidentiality and scope of disclosure, and whether production should be conditioned on U.S. Bank's confirmation it would pay the cost of production. GreenPoint advised the court that it had attempted to resolve these issues with U.S. Bank, but to no avail. U.S. Bank did not respond to GreenPoint's letter.
By notice of motion dated December 11, 2009, GreenPoint moved to stay discovery and for a protective order conditioning production of discovery on compliance with a proposed discovery protocol that provided, among other things, that each party would pay for its own discovery requests (i.e., U.S. Bank would pay the costs associated with its requests to GreenPoint and GreenPoint would pay the costs associated with its request to U.S. Bank) and that U.S. Bank would pay for GreenPoint's pre-production attorney review time for the purposes of privilege and confidentiality assertions.
In opposition, U.S. Bank argued that the merits of its allegations in this action, the relevance of its document request, and the likely asymmetry between GreenPoint's document production to it and U.S. Bank's likely document production to Greenpoint militated in favor of denying the motion. U.S. Bank contended that because it was injured by a widespread pattern of GreenPoint's misrepresentations and warranties and its violations of its underwriting guidelines and practices concerning the 30,000 underlying loans, the anticipated document discovery from GreenPoint was expected to be vast, as were the resulting costs. U.S. Bank noted that the costs of production could run into the millions of dollars.
Orders on Appeal
In an order entered April 13, 2010, the motion court denied GreenPoint's request for a protective order approving its discovery protocol. However, in so doing, it endorsed GreenPoint's contention that "the well-settled rule in New York State" was that the "party seeking discovery bears the costs incurred in its production" and stated that it would not deviate from this rule in the instant action. The court, however, rejected GreenPoint's request that the party seeking discovery also bear the cost of compensating the attorneys engaged by the producing party to determine whether the demanded documents are responsive and not privileged.
Subsequently, U.S. Bank's counsel wrote to the court seeking clarification of the April 13 order, seeking an order that specifically directed the requesting party to pay the reasonable
costs of the producing party (excluding attorneys' fees) — counsel wanted to make sure that for purposes of pursuing an appeal, it was deemed an aggrieved party. The court held a conference on September 28, 2010, wherein it reiterated that in this state, the party requesting discovery bears the costs incurred in its production and that the parties were not required to pay each other's attorneys' fees. The court noted that its ruling did not preclude either party from making any further application regarding the allocation of discovery costs at such later date if it becomes clear that such application is meritorious.
We disagree with the motion court's conclusion that the requesting party bears the cost of discovery that is responsive to its document requests. Rather, it is the producing party that is to bear the cost of the searching for, retrieving, and producing documents, including electronically stored information.
Analysis
The question of which party is responsible for the cost of searching for, retrieving and producing discovery has become unsettled because of the high cost of locating and producing electronically stored information (ESI). The CPLR is silent on the topic. Moreover, while our courts have attempted to provide working guidelines directing how parties and counsel should prepare for discovery, including ESI, these guidelines generally abstain from recommendations concerning the issue of cost allocation. Even the Rules of the Commercial Division for Supreme Court, Nassau County, previously recognized by this Court as the most sophisticated rules concerning discovery, including ESI, in the state (see, Tener v Cremer, 89 AD3d 75[2011]), are largely silent on the issue of cost allocation, merely noting that the law in New York on cost shifting is "still developing" and referring counsel to decisions of the Nassau County Commercial Division (Commercial Division, Nassau County, Guidelines for Discovery of ESI, Section V, Costs).
Indeed, the courts that have spoken on the issue of cost allocation have not done so with one voice. For example, at least one court has held that the requesting party should bear the entire cost of searching for, retrieving and producing discovery that included ESI (see e.g. Lipco Elec Corp. v ASG Consulting Corp., 4 Misc 3d 1019[A], 2004 NY Slip Op 50967[u] [2004]). This Court has previously acknowledged the requestor's obligation to pay for discovery and ESI costs (see e.g. Response Personnel, Inc. v Aschenbrenner, 77 AD3d 518 [2010]), but has allowed for an exception requiring the producer to pay where the cost of ESI production is less significant, such as where the ESI is readily available (Waltzer v Tradescape, LLC, 31 AD3d 302, 304 [2006]).
By contrast, there has been a movement among other courts, where the cost of discovery production is significant, to adopt the standards articulated by the United States District Court in Zubulake v UBS Warburg, LLC (217 FRD 309, 317-318 [SD NY 2003]), and to place the cost of discovery, including searching for, retrieving and producing ESI, at least initially, on the producing party (see e.g. MBIA Ins Corp. v Countrywide Home Loans, Inc., 27 Misc 3d 1061, 1075-76 [2010]; see also Silverman v Shaoul, 30 Misc 3d 491, 496 [2010]; T.D. Bank, N.A. v J & T Hobby, LLC, 2010 NY Slip Op 32481[U][2010]; cf. Clarendon Natl. Ins. Co. v Atlantic Risk Mgt, Inc., 59 AD3d 284, 286 [2009] [the general rule is that "during the course of the action, each party should bear the expenses it incurs in responding to discovery requests"]).
We are now persuaded that the courts adopting the Zubulake standard are moving discovery, in all contexts, in the proper direction. Zubulake presents the most practical framework for allocating all costs in discovery, including document production and searching for, retrieving and producing ESI. As noted, Zubulake requires, consistent with the Federal Rules of Civil Procedure, the producing party to bear the initial cost of searching for, retrieving and producing discovery, but permits the shifting of costs between the parties. When evaluating whether costs should be shifted, the IAS courts, in the exercise of their broad discretion under article 31 of the CPLR (see e.g. Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]), may follow the seven factors set forth in Zubulake:
"(1) [t]he extent to which the request is specifically tailored to discover relevant information; (2) [t]he availability of such information from other sources; (3) [t]he total cost of production, compared to the amount in controversy; (4) [t]he total cost of production, compared to the resources available to each party; (5) [t]he relative ability of each party to control costs and its incentive to do so; (6) [t]he importance of the issues at stake in the litigation; and, (7) [t]he relative benefits to the parties of obtaining the information" (Zubulake, 217 FRD at 322).

The motion courts should not follow these factors as a checklist, but rather, should use them as a guide to the exercise of their discretion in determining whether or not the request constitutes an undue burden or expense on the responding party (id. at 322-23).
Defendant argues against adopting the Zubulake standard, contending that requiring the requesting party to pay all costs associated with discovery is a sounder judicial practice and policy. Defendant contends that it "encourages parties to self-regulate the scope of their discovery demands and discourages parties from placing unnecessary and oppressive (even prohibitive) costs upon an opponent," quoting T. A. Ahern Contrs. Corp. v Dormitory Auth. of State of N.Y. (24 Misc 3d 416, 423 [2009]). Defendant asserts that the rule promotes judicial efficiency by removing the court from determining whether the information being sought is worth the cost of the search and would help the courts of this state avoid the "discovery wrangles" notoriously common in federal courts.
We find these arguments unavailing. First, requiring the producing party to bear its own cost of discovery, including the searching, retrieving and producing of ESI, supports "the strong public policy favoring resolving disputes on their merits" (Zubulake, 217 FRD at 318). The alternative of having the requestor pay "may ultimately deter the filing of potentially meritorious claims" particularly in circumstances where the requesting party is an individual (Zubulake at 318).
Second, we note, with some concern, that commentators and courts have called into question the underpinning of the requestor pays rule (see e.g. MBIA Insurance Corp. v Countrywide Home Loans, Inc. 27 Misc 3d 1061 [2010], supra and Connors, Which Party Pays the Cost of Document Disclosure? 29 Pace L. Rev. 441, 450 [2009]). In Countrywide, for example, the motion court examined the holding of Lipco Electrical Corp. v ASG Consulting Corp. (4 Misc 3d 1019[A], 2004 NY Slip Op 50967 [U][2004], supra), the leading "requestor pays" case, and found it to be
unsupported by the precedent it cited.
Finally, the adoption of the Zubulake standard is consistent with the long-standing rule in New York that the expenses incurred in connection with disclosure are to be paid by the respective producing parties and said expenses may be taxed as disbursements by the prevailing litigant (see Wiseman v American Motors Sales Corp., 103 AD2d 230, 241 [1984]; see also Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3108:5, p 379; C3103:5, p 301).
Applying these standards to the instant motion for a protective order, we find that the motion by defendant was premature. The more prudent course of action would have been for defendant to first make a motion to limit or strike the discovery requests initiated by plaintiff that it found to be overbroad, irrelevant, or unduly burdensome. If, following the resolution of that motion, defendant still believed the costs associated with searching for, retrieving, and producing ESI to be prohibitive, defendant could then file a motion for the costs to be shifted to plaintiff.
There is no occasion, however, for us to opine on the propriety of shifting costs in this matter. There is simply no
evidence in the record supporting the fee structure proposed by defendant. There is no indication, for example, as to what experts, if any, will be used to restore deleted or missing documents, or even if there are deleted or missing documents that need to be restored. Indeed, it is unclear how defendant arrived at the retrieval costs it cited. While it may be, as the motion court noted, that defendant demonstrates a reason for either limiting or narrowing plaintiff's discovery requests and shifting some or all of the cost to plaintiff, it has simply not done so on the record to date.
Accordingly, the order of the Supreme Court, New York County (Bernard J. Fried, J.), entered October 13, 2010, which, insofar as appealed from, required plaintiff to bear the cost incurred in the production of discovery, should be reversed, on the law, without costs, and defendant is directed to bear its own discovery costs, subject to the reallocation on a proper showing, and the matter is remanded to the Supreme Court for further proceedings consistent with this opinion. The appeal from the
order of the same court and Justice, entered April 13, 2010, should be dismissed, without costs, as superseded by the order entered October 13, 2010.
All concur.
Order, Supreme Court, New York County (Bernard J. Fried, J.), entered October 13, 2010, reversed, on the law, without costs, to direct defendant to bear its own discovery costs, subject to reallocation on a proper showing, and the matter is remanded to the Supreme Court for further proceedings consistent with this opinion. Appeal from order, same court and Justice, entered April 13, 2010, dismissed, without costs, as superseded by the order entered October 13, 2010.
Opinion by Acosta, J. All concur.
Saxe, J.P., Sweeny, Acosta, DeGrasse, Abdus-Salaam, JJ.