Coverage Pointers - Volume XIII, No. 21

Dear Coverage Pointers Subscribers:

Taxes are done.  Beach House is ready.  Summer is here.  Sort of.

I do hope to meet some of you in Orlando next week for the PLRB Claims Conference.  Please stop by and introduce yourself during one of my presentations.  And, of course, if you hear of any great parties going on in the evening, do let me know.  Hate to miss out on a good time.  Ever.  Who doesn’t like a little entertainment.  Speaking of entertainment …

For the most observant, you’ll notice, for the first time, the little ® next to the name Coverage Pointers on our issue attached.  To fend off the wannabes and the copycats, we have officially trademarked our publication Not quite as popular as Nike’s swoosh, Coverage Pointers is now registered with the USPTO under serial number 85320250 in the category entitled “Education and Entertainment Services.”  We will continue to try to educate and entertain.

 

One Hundred Years Ago
Parties galore, as the crew and passengers on the HMS Titanic enjoyed what was to be their last full day at sea about the luxury cruiser.  The great ship was to strike an iceberg the following night.  Just ask Leonardo.

 

Audrey’s Angle:

In medical necessity cases it cannot be stressed that both sides must have a substantive discussion from the treating and expert physician/chiropractor to support why the treatment, testing or equipment is or is not medically necessary.  What is a substantive discussion?   The physician/chiropractor should engage in an analysis of the eligible injured person’s medical records, including comment on why diagnostic testing or objective findings are important or immaterial.
Then discuss why the records, diagnostic testing, and objective findings or lack thereof result in medical necessity or lack of medical necessity.  If a peer review is involved then the medical standard used in the industry for a particular type of treatment, test, or piece of durable medical equipment must be addressed as well as how the current treatment, test, or equipment deviates from that standard. 

Also, the medical provider is remiss in just submitting a prescription and medical bill in support of an arbitration.  A rebuttal letter or report is necessary.  In addition, the rebuttal letter can generally disagree with the insurer’s expert or reiterate that treatment, testing, or equipment is needed, just because he or she stated so.  Rather, a discussion as to why the treatment, testing, or equipment is necessary for the particular patient is needed together with a specific rebuttal to the conclusions in the insurer’s expert’s report.  Both sides need to be careful not to consistently rely upon boilerplate language, forms and reports to support their case.  One arbitrator commented in a decision this edition that both sides used boilerplate language and the frustration was palpable.

Finally, the New York State Bar Association, Torts Insurance and Compensation Law Section, is holding in Buffalo, on June 13th, a seminar Practice Skills – Basic Tort and Insurance Law Practice.  I will be the local chair of the program and the program is a great seminar for newly admitted attorneys, and for those experienced attorneys needing a refresher, in the basics of insurance coverage, automobile insurance, premises liability, and the lien and medicare issues involved in resolving a civil action.  The Buffalo program will also have a panel discussion with Mike Menard, a local mediator/arbitrator, and two prominent trial attorneys, Richard Weisbeck, Esq. of Lipsitz Green and Thomas Drury, Esq. of Damon Morey to provide practical tips on evaluating, resolving, and mediating a civil action.  If you would like more information on this seminar send me an email at [email protected].

Audrey

 

A Century Ago, Murder She Wrote:

April 13, 1912
New York Times
Page 1

Wealthy Man Slain
Woman is Sought
Body of George E. Marsh, Soap Manufacturer
Of Lynn, Mass, Found on Roadside
--
Tragedy In An Automobile
--
Police Hint that Jealousy and Not Robbery May Have Been Motive for the Crime

Lynn, Mass – George E. Marsh, President of the Goodwill Soap Company of this city, was found dead on the rocky embankment  of the Point of Pines Boulevard today.  He was murdered in an automobile and a woman figured in the tragedy, according to the theory of the police tonight.

They are hunting a woman who was seen riding with Marsh about 6’o’clock tonight by Harold Cummings, who lives at 10 Ireson Avenue, next door to the Marsh residence.  Other, whom the police decline to name, are said to have seen Marsh in the company of a woman …
Editor’s Note:  Marsh was found with five bullets pumped into his body but robbery was unlikely, since his wallet and gold watch were untouched.  A button from a coat was found in the car.

The story made the front page of the New York Times, but then was almost overshadowed by the sinking of the Titanic a day later.  Detectives eventually received tips of a “blue car” being seen near Marsh’s house on the day of the murder and then led them to young man who had been in a boarding house nearby for a few days before the murder.  That man was Willis Dow. A search of Dow’s belongings uncovered a coat, with all the buttons missing.  A thread on the button matched the weave on the coat (the other buttons has been removed by Dow to in a futile attempt to thwart any subsequent investigation).  Eventually, the blue car was located and the California car dealer who sold it to Dow identified him as the purchaser.  Why would Dow travel from California to Massachusetts to kill Marsh?

It turned out that Dow was having an affair with his own aunt, Opra Marsh, who was the foster daughter of George Marsh’s deceased brother James.  She was the heiress to a considerable fortune and Dow knew this and seduced her.  Opra named him as sole beneficiary in her will.

George Marsh was handling the investment of that fortune and gave Opra a monthly stipend of $87.55.  Dow convinced Opra that George was mishandling her finances and that he would confront George on the issue.  In fact, Dow planned on killing George, and did, to hasten the transfer of monies to Opra. 

To shorten a long story, Dow was convicted and sent to the electric chair at Charlestown State Prison on March 24, 1914.  Whether Opra ever was part of the murder plot is unknown.

 

Peiper’s Postulations

Greetings.   I apologize for my absence from last issue’s cover note.  I wrote it at 23,000 feet on my way back from Rego Park, but apparently my ramblings never made it from blackberry to editor before press time.  Alas, if nothing else, my failure resulted in nothing more than sparing you from another installment of poor jokes. 

In any event, at your convenience, please take a moment to peruse the cornucopia of decisions in this week’s edition.  The Neary decision, for those of you who appreciate first party work, is a must read.  The Appellate Division, yet again, has dismissed a first party claim due the insured’s failure to establish that the insured premises was a “residence” at the time of the loss.  A special “shout-out” is due to Max Gershweir’s team who have, almost singlehandedly, developed a very nice body of case law on this issue.  All of which, we might add, is favorable to insurers. 

In addition, we’d also invite you take a moment to review the Court of Appeals’ decision in Hahn v. Zurich.  In a rare 4-3 decision, the Court of Appeals weighs in on the applicable trigger for the statute of limitations governing breach of contract claims.  While we are sympathetic to Hahn, candidly, if I could play Court of Appeals’ judge for a day, I think I would have cast my vote with Judges Read, Smith and Pigott, respectively. 

Lastly, on the training front, if you‘re anywhere near the Western New York area, please consider any one of the number of excellent programs forthcoming.  On April 27, 2012, I will gratefully be participating in an Erie County Bar Association panel discussion on litigating long term disability claims.  Then, on May 8, 2012, Kathie Fijal and myself will be presenting at NBI’s Annual Coverage Update here in Buffalo.  Finally, on May 21, 2012, Dan Kohane and I will be presenting at the New York Bar Association’s Annual Insurance Coverage Update also in Buffalo.  If you’re at any of the above, please stop by and say hello.  If you’re not yet signed up, please do.  We’d love to see you there.

Steven E. Peiper
[email protected]

 

On Hundred Years Ago:  Crying Fire in a Crowded Theatre

April 13, 1912
New York Times
Page 1

Theatre Afire, Crowd Sits
Demands that Exciting Motion Picture Play be Completed

While a fire raged under the roof above their heads last night, wto hundred persons sat calmly in a motion picture theatre at 409 Eighth Ave and demanded that an exciting Western photo-play, which had been interrupted, be completed.

Shortly after 10 o’clock, smoke curled through ventilators in the ceiling and about the heads of the spectators.  Those seated in the gallery under the opening moved to other parts of the theatre.  In a few minutes, a thin haze of smoke had pervaded the building and the crackling of flames was heard in the loft.  The operator of the motion picture machine stopped in, turned off the electric lights in the metal compartment in front of the theatre and hurried to the street.

Miss Florence Belmont, the pianist played a march, thinking the people would immediately leave.  They retained their seats.

“Show the rest of the film,” shouted a boy.  The cry was taken up by others and was interrupted by Phillip Faunstone, the manager, who said that a fire was in progress beneath the roof and requested that spectators leave. 

“The fire apparatus is coming”, he shouted, after his efforts had proved futile.  “Let us see the rest of the film, and we will go,” someone cried.

Faunstone made a gesture of despair and appealed to a policeman who had turned in an alarm. A few minutes later the firemen arrived and armed with ladders, entered the theatre.  The work of ripping away the metal covering of the ceiling was begun.  It was not until then that the spectators left for the street.

 

April 13, 1912 -- One Hundred Years Ago in Baseball – the Beginning of a “Triple Threat”

J. Owen “Chief” Wilson hit his first triple of the season in the second inning of the second game of the season off Cardinal pitcher Bill Steele.  It was the first of 36 triples he hit that season, which eclipsed by five the standing record of 31 set by Dave Orr of the New York Metropolitans some 26 years earlier.  His last triple came on the last day of the season when he was thrown out at the plate trying to stretch a triple into an inside-the-park grand slam home run..  Wilson was a member of the Pittsburgh Pirate franchise and Forbes Field, at that time, was huge, 462’ to the centerfield wall.  Chief Wilson’s record remains today, not only as a major league records but one for all of professional baseball.

Of course, I know you wanted to know about Bill Steele. He had a four-year career in major league baseball (1910 – 1914), compiling a rather mediocre 37-43 record. He died when hit by a streetcar in Overland Missouri at the age of 64.  You can buy his 1912 baseball card on E-Bay, right now, for $104.99.  Don’t all rush there at once.

In this Week’s Edition:

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

• Year Delay in Disclaiming Waives Exclusion
• Failure to Notify Police Within 24 Hours or “As Soon as Reasonably Possible” Leads to Loss of Uninsured Motorist Benefits
• Claim Against State Insurance Fund for Money Damages, Even Denominated as Declaratory Judgment Action, Must be Sued in Court of Claims
• Residency Not Established Under Homeowners Policy so Coverage Not Available
• Court Finds Ambiguity in “Burning Limits” Reduction Clause as to Whether “Expenses” Includes Legal Fee

 

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

• Opinions That Severity of Injuries Is Inconsistent With Severity of Accident Is Insufficient to Meet Burden
• Plaintiff’s Submissions Defeat Defendants’ Motions
• Defendants’ Expert’s Report Defeats Their Motion
• Again, Plaintiff’s Submissions Defeat Defendants’ Motion
• Once Again, on Appeal, Trial Court Is Reversed
• On Appeal, Motion to Set Aside the Verdict Is Granted and Complaint Dismissed
• And Again, on Appeal, Plaintiff Prevails
• And Yet Again, Another Reversal in Favor of Plaintiff
• Plaintiff Fails to Show That Fractured Rib Was Causally Related to the Accident
• Gap in Treatment Is Not Explained by Assertion That Coverage Was “Cut Off” Absent Documentary Evidence
• Defendants Fail to Contradict 90/180-Day Claim but Evidence Supporting Lack of Causation Wins Reversal on Appeal
• Orthopedic Surgeon’s Finding That “Improvement Plateaued” Sufficiently Explained Gap in Treatment
• Motions Dismissed Where Claim Set Forth in Bill of Particulars Is Not Addressed
• On Appeal, Motion Is Granted
• Summary Judgment Affirmed on Appeal

 

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

ARBITRATION

• Failure To Submit Bills In Timely Fashion Because Insurer Advised Claim Closed Reasonable Excuse
• No Reasonable Excuse Proffered For Missing Two IMEs
• Both Treating and Expert Chiropractor Used Boilerplate Language But Lack Of Rebuttal To Peer Fatal
• IME Report’s Failure To Address and Discuss Diagnostic Studies and Medical

 

LITIGATION

• Provider Failed To Appear For Scheduled EUOs Results In Lack of Coverage
• Plaintiff Denied Summary Judgment On Unopposed Motion
• Hearing Held On Admissibility of Peer Review Where Allegation Is Doctor Stamped Signature
• Insurer Established Breach of Policy Condition By Failing To Attend Scheduled IMEs

 

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

 

Property

• Residence Is Not Established Where There Is a Lack of Permanent Physical Presence
• Carrier Must Establish a Viable Alternative for Property Damage Repairs in Order to Establish Summary Judgment

 

Potpourri

• A Party Must Be Aggrieved BEFORE Appellate Rights Ripen
• Receipt of Workers’ Compensation Benefits Precludes Special Employee’s Action Against Special Employer
• Statute of Limitation for Monetary Payments Under a Contract Begins When the Party Possessed the Right to Demand Payment

 

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

• Forced Place Insurance
• Circular Letter No. 8 (2007) Supplement No. 1

 

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

• Applicability of Breach of Contract Exclusion in Copyright Infringement Case

 

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

• Familial Relationship Reasonable Excuse for Late Notice
• Company that Issued Surety Bond Responsible for Default Judgment Even if Never Provided an Opportunity to Defend Action
• Where Insured Represented on Insurance Application that Property Was Owner-Occupied, Insurer Entitled to Rescind Where Statement Was Not True

 

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

COVERAGE FOR CHINESE DRYWALL REJECTED BY “HAZARDOUS MATERIALS” EXCLUSION

 

Hope you enjoy the issue.  We enjoy bringing it to you.

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]

04/12/12       Parkview Owners, Inc v. DF Restoration, Inc.,
Appellate Division, Second Department
Year Delay in Disclaiming Waives Exclusion
Insurer waited more than one year from the date on which it received notice of the claim against its insured to assert a disclaimer based on the policy exclusion for residential projects.  This unexplained delay was unreasonable as a matter of law and could not be used to defeat a claim for coverage.

04/10/12       Matter of GEICO v. Baik
Appellate Division, Second Department
Failure to Notify Police Within 24 Hours or “As Soon as Reasonably Possible” Leads to Loss of Uninsured Motorist Benefits
Baik sought uninsured motorist (“UM”) benefits claiming that she was hurt when rear-ended by a hit-and-run vehicle.  However, she did not report the accident to the police within 24 hours or as soon as reasonably possible as required by UM endorsement.  Accordingly, GEICO was granted an application to permanently stay arbitration because the policy was violated.
Editor’s Note:  A gentle reminder again (offered every few issues) that the UM insurer must move in court, within 20 days of the demand for arbitration, for a permanent stay of arbitration to raise preliminary issues such as timeliness.  Failure to make that application within that short time period leads to a loss of that coverage defense in many instances.

04/03/12       Guideone Spec. Ins. Co. v. State Insurance Fund
Appellate Division, Second Department
Claim Against State Insurance Fund for Money Damages, Even Denominated as Declaratory Judgment Action, Must Be Sued in Court of Claims
While the action against the New York State Insurance Fund, an arm of the State, was couched as a declaratory judgment action, in fact GuideOne was seeking money damages.  Since the SIF is an agency of the State, such an action can only be prosecuted in the Court of Claims, a court set up to handle claims against the State and its agencies.

04/03/12       Neary v. Tower Insurance
Appellate Division, Second Department
Residency Not Established Under Homeowners Policy so Coverage Not Available
The Tower policy provided coverage only for premises where the policyholders resided.  The premises insured were destroyed by fire and Tower took the position that the policyholders did not “reside” at the premises.  The standard for determining residency for purposes of insurance coverage requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain. An intention to reside at certain premises is not sufficient. Tower established an unrebutted prima facie that the policyholder did not reside at the premises.  The term “reside” is not ambiguous.
Editor’s Note:  Attaboy Max (and Joe too)

04/03/12       In re East 51st Street Crane Collapse Litigation
Appellate Division, First Department
Court Finds Ambiguity in “Burning Limits” Reduction Clause as to Whether “Expenses” Include Legal Fees
The "Supplementary Payments" provision of the policy issued to construction management company states that "[w]e will pay, with respect to any claim we investigate or settle, or any suit' against an insured we defend[] . . . [a]ll expenses we incur," and that "[t]hese payments will reduce the limits of insurance." However, the amended Insuring Agreement of the policy provides that insurer’s "duty to defend ends when [carrier has] used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B [i.e., damages]." Court finds that there is an ambiguity as to whether "expenses" include defense costs that results from these conflicting provisions and construes ambiguity against insurer.

 

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

04/12/12       Russell v. Pulga-Nappi
Appellate Division, Third Department
Opinions That Severity of Injuries Is Inconsistent With Severity of Accident Is Insufficient to Meet Burden
Plaintiff, a 45-year-old carpenter, was rear-ended in a chain-reaction collision while he was stopped at the drive-up window of a fast food restaurant.  There were two other vehicles between plaintiff’s truck and the defendants’ vehicle.  Plaintiff alleged numerous injuries including bulging discs with annular tears, radiculopathy and spondylolisthesis in the lumbar spine, right leg pain and numbness, bulges and herniations in the thoracic spine and herniations in the cervical spine.  His bill of particulars noted that the accident “precipitated, triggered and/or accelerated a preexisting and prior condition.” 

Defendants’ experts did not contest the severity of the injuries but challenged the causal relationship.  In support they submitted the IME report of an orthopedic surgeon that noted the minimal damage sustained by plaintiff’s heavy truck and stated that he could not “imagine” that plaintiff’s spondylolisthesis had been asymptomatic.  Defendants’ radiologist stated plaintiff’s complaints of low back and leg pain were consistent with the severity of his preexisting condition but inconsistent with the severity of the accident.  In essence, both experts stated that they found it hard to believe that plaintiff had never had low back pain prior to the accident.  However, the only mention of back pain in all the medical records submitted was in a questionnaire of 60 questions from 3 years before the accident, when plaintiff treated for an injury to his right ring finger, and on which he noted “some back pain.”

The Court agreed with the trial court that neither physician was qualified to offer an opinion as to the biomechanics or physics of the collision, thus rendering their opinions speculative.  In addition, their opinions that plaintiff could not have been asymptomatic prior to the accident were unsupported as plaintiff reported never having prior pain and there was no indication in the record or any prior treatment for back pain or any spinal condition.  As such, on appeal the trial court’s order was affirmed and defendants’ motion denied without need to consider plaintiff’s opposing papers.

04/10/12       Seifeldin v. Braick
Appellate Division, Second Department
Plaintiff’s Submissions Defeat Defendants’ Motions
Defendants’ met their burdens showing that plaintiff did not sustain serious injury to the lumbosacral region of her spine or to her right knee under the permanent consequential and/or significant limitation of use categories.  In opposition, however, plaintiff submitted sufficient competent medical evidence to raise a triable issue of fact and defeat defendants’ motions so defendants’ motions should have been denied.

04/10/12       Starkey v. Curry
Appellate Division, Second Department
Defendants’ Expert’s Report Defeats Their Motion
Defendants’ examining orthopedist examined plaintiff and set forth the shoulder, cervical and lumbar range-of-motion findings but did not compare those findings to what is normal.  Therefore, his report was insufficient and defendants failed to meet their prima facie burden and their motion should have been denied.

04/10/12       Hossan v. Hernandez
Appellate Division, Second Department
Again, Plaintiff’s Submissions Defeat Defendants’ Motion
Defendants submitted competent medical evidence to show that plaintiff did not sustain a serious injury to his cervical spine.  However, because plaintiff proffered sufficient competent medical evidence to raise a triable issue of fact, defendants’ motion should not have been granted.

04/10/12       Orgel v. Kathleen Cab Corp.
Appellate Division, Second Department
Once Again, on Appeal, Trial Court Is Reversed
Although defendants met their burden showing that plaintiff’s alleged injuries to her cervical and lumbosacral spine did not meet threshold, in opposition plaintiff submitted competent medical evidence to raise a triable issue of fact under the permanent consequential and/or significant limitation of use categories.

04/10/12       Parise v. New York City Transit Authority
Appellate Division, Second Department
On Appeal, Motion to Set Aside the Verdict Is Granted and Complaint Dismissed
The jury awarded plaintiff $608,000 and the trial court denied defendant’s motion, pursuant to CPLR 4404(a) to set aside the verdict and for judgment as a matter of law.  On appeal, the Court determined that “no rational jury could have found that the plaintiff sustained a serious injury under the 90/180-day category” as the plaintiff did not present any evidence showing that his injuries curtailed him from performing his usual and customary activities to a great extent for the requisite period of time.

04/10/12       Broughal v. Moss
Appellate Division, Second Department
And Again, on Appeal, Plaintiff Prevails
Defendant’s motion challenged both threshold and causation.  However, in opposition, plaintiff submitted sufficient competent medical evidence to raise a triable issue of fact with regard to the alleged injuries to her cervical spine, as well as the causal relationship of the injuries to the accident.  Therefore, defendant’s motion should not have been granted.

04/10/12       Caracciolo v. Elmont Fire District
Appellate Division, Second Department
And Yet Again, Another Reversal in Favor of Plaintiff
Defendants’ orthopedic surgeon examined plaintiff who alleged injuries to her cervical and lumbosacral spine and brain.  He noted significant range of motion limitations in the spinal regions, and did not address the alleged injuries to the brain.  As defendants did not submit any other competent medical evidence, they failed to meet their burden and summary judgment should not have been granted.

04/10/12       Diliberto v. Barberich
Appellate Division, Second Department
Plaintiff Fails to Show That Fractured Rib Was Causally Related to the Accident
The trial court’s order was modified to grant plaintiff’s cross-motion for summary judgment on the issue of liability.  However, she failed to meet her burden with respect to defendant’s fifth affirmative defense, which alleged that plaintiff did not sustain a serious injury, because, although a fractured rib meets threshold, plaintiff did not establish causal relationship between the injury and the accident.  Therefore, the trial court properly denied that branch of her motion without considering defendant’s opposing papers.

04/10/12       Ramkumar v. Grand Style Transp. Enters. Inc.
Appellate Division, First Department
Gap in Treatment Is Not Explained by Assertion That Coverage Was “Cut Off” Absent Documentary Evidence
Shortly after the accident, plaintiff underwent arthroscopic surgery on his right knee and was referred to physical therapy.  He asserted that he was “cut off” five months prior to his deposition.  As such, there was no indication in the record that he treated during the 24 months before submitting opposing papers to defendants’ motion.  Without some documentary evidence, his assertion that he was “cut off” is insufficient, particularly when he does not show that he was unable to pay for treatment out of his own pocket. 

The one-judge dissent noted that injuries are not always treatable with physical therapy and would have reinstated the complaint, but the majority found the opinion unsupported by the record and speculative.

04/10/12       Barry v. Arias
Appellate Division, First Department
Defendants Fail to Contradict 90/180-Day Claim but Evidence Supporting Lack of Causation Wins Reversal on Appeal
Plaintiffs Barry and Reeves were rear-ended by a cab and alleged serious injuries under the permanent consequential and/or significant limitation of use and the 90/180-day categories. 

In support of their motion, defendants submitted reports of a neurologist and orthopedist who examined plaintiffs and found no neurological deficits or range of motion limitations and concluded that any injuries had resolved.  In addition, a radiologist examined MRI films and found no evidence of recent trauma and only degenerative changes in Barry that were related to her age and body habitus.  Although defendants did not submit evidence to contradict Barry’s testimony with regard to her claim under the 90/180-day category, the findings of the radiologist and Barry’s testimony that she a prior back injury, were sufficient to establish lack of causation.  As plaintiffs failed to raise an issue of fact, on appeal the trial court is reversed and the complaint dismissed.

04/10/12       Jean-Louis v. Gueye
Appellate Division, First Department
Orthopedic Surgeon’s Finding That “Improvement Plateaued” Sufficiently Explained Gap in Treatment
Plaintiff claimed injuries to her cervical and lumbar spine, and right and left hips and knees.  Although defendants met their burden through the submission of an orthopedic surgeon who found normal ranges of motion, plaintiff raised a triable issue of fact by submitting MRI reports showing cervical and lumbar bulges, as well as a tear of her right knee MCL.  Her surgeon further stated that the injuries were caused or exacerbated by the accident and that there was a resultant loss in range of motion. 

Although defendants argued that the orthopedic surgeon’s report was speculative because he failed to reconcile the notations on ER records indicating full cervical range of motion, the ER records were unaffirmed and did not indicated objective instruments or criteria used to arrive at such findings or compare the findings to normal values.  The Court also found that the orthopedic surgeon’s finding that plaintiff’s “improvement plateaued” sufficiently explained the gap in treatment.

However, on appeal the trial court’s order was modified by denying plaintiff’s cross-motion regarding her 90/180-day claim.  Although she submitted evidence that her orthopedic surgeon instructed her to stay out of work and restrict her activities, which her employer’s records corroborated, and she underwent two surgeries during the relevant period, defendants raised an issue of fact as to her restrictions and the causation of her injuries sufficient to defeat plaintiff’s motion.

04/03/12       Glover v. Batista
Appellate Division, Second Department
Motions Dismissed Where Claim Set Forth in Bill of Particulars Is Not Addressed
In his bill of particulars, plaintiff Pritchard claimed injuries under the 90/180-day category.  Neither one of the separate motions brought by plaintiff third party defendant Glover, or defendant third party plaintiff Batista, addressed the claim nor, therefore, they did not meet their prima facie burdens.  As such, their motions should have been denied even without consideration of Pritchard’s opposing papers.

04/03/12       DiMezza v. Matteo
Appellate Division, Second Department
On Appeal, Motion Is Granted
On appeal, the trial court is reversed and defendant’s motion is granted where defendant submitted competent medical evidence establishing that plaintiff did not sustain a serious injury to either the lumbar spine or left shoulder, or under the 90/180-day category.  As plaintiff failed to submit evidence to raise a triable issue of fact, the complaint should have been dismissed.

04/03/12       Anderson v. Clark
Appellate Division, Second Department
Summary Judgment Affirmed on Appeal
In support of their motion, defendants submitted sufficient evidence that plaintiff did no9t sustain a serious injury to the cervical and lumbosacral regions of the spine, left knee, or under the 90/180-day category.  On appeal, the Court found that plaintiff failed to submit evidence in rebuttal and the trial court therefore properly granted defendants’ motion.

 

AUDREY’S ANGLES ON NO-FAULT
Audrey A. Seeley
aas@hurwitzfine.com

ARBITRATION

04/09/12       Applicant v. Preferred Mutual Ins. Co.
Arbitrator Mary Anne Theiss, Onondaga County
Failure to Submit Bills in Timely Fashion Because Insurer Advised Claim Was Closed Is Reasonable Excuse
The Applicant sought reimbursement for surgical bills that the insurer denied based upon failure to timely submit the claim.  The Applicant was involved in an August 10, 1998, motor vehicle accident and underwent three surgeries to his left arm.  On June 8, 2010, the Applicant sought medical treatment after his left arm was hot to the touch and painful.  He was sent for testing and that revealed an infection requiring surgery.  The Applicant contacted the insurer about his bills and was advised that his claim was closed.  As a result, his medical bills were submitted to private health insurance which was denied.  Thereafter, the insurer demanded verification from the primary care physician which was provided.  Then the medical bills were denied.  The assigned arbitrator indicated that the untimely submission of the bills was excusable and awarded the remainder of the policy.

04/09/12       Applicant v. Allstate Ins. Co.
Arbitrator Mary Anne Theiss, Onondaga County
No Reasonable Excuse Proffered for Missing Two IMEs
The insurer denied the Applicant’s no-fault claim based upon failure to appear for two scheduled independent medical examinations (“IMEs”).  The Applicant initially attended a June 23, 2011, IME.  She was rescheduled for a re-examination on August 26, 2011, and the notice was sent to the same address as the initial IME notice was sent to.  The Applicant failed to attend the August IME.  The IME was rescheduled for September 23, 2011.  The insurer called and spoke with the Applicant the day before the IME to confirm her attendance.  The Applicant failed to appear for that examination.  The assigned arbitrator held that the denial was appropriate as the Applicant proffered no excuse for failing to attend.

04/04/12       WJW Med. v. GEICO Ins. Co.
Arbitrator Kent L. Benziger, Erie County
Both Treating and Expert Chiropractor Used Boilerplate Language but Lack of Rebuttal to Peer Review Fatal
The Applicant sought reimbursement for a Wraptor Max lumbosacral orthosis dispensed to the assignor on or about November 24, 2010, as prescribed by Julius Horvath, DC.  The durable medical equipment was prescribed to treat lumbar disc displacement, muscle spasm and a thoracic sprain.

The insurer denied the durable medical equipment based upon the peer review of Kevin Portnoy, DC.  Mr. Portnoy cited to an authoritative source to support his opinion that the purpose of chiropractic care is to mobilize vertebral segments and increase flexibility.  The durable medical equipment prescribed immobilized the spine.

The assigned arbitrator expressed a lack of impression with the treating and expert chiropractor’s opinions stating, “they both contain boilerplate language that this arbitrator has seen numerous times with little variation for the particular claimant.”  Yet, the assigned arbitrator determined the insurer met its burden and there was no rebuttal to the peer reviewer’s contentions.

04/04/12       A. Marc Tetro, MD v. Permanent Gen. Ins. Co.
Arbitrator Kent L. Benziger, Erie County
IME Report’s Failure to Address and Discuss Diagnostic Studies and Medical Records Insufficient to Uphold Denial
The Applicant sought reimbursement for evaluations and right carpel tunnel injections to the assignor as a result of injuries from a November 19, 2010, motor vehicle accident.  On April 28, 2011, the assignor was evaluated by Dr. Marc Tetro who noted positive objective findings.  An earlier EMG/NCV study revealed bilateral carpel tunnel syndrome.

The insurer denied the treatment based upon the IME of Dr. Edward Mills.  Dr. Mills’ examination did not appear to address any bilateral carpel tunnel complaints but focused on examining the cervical and lumbar spine.  The assigned arbitrator determined that the denial was not proper.  It was noted that the IME did not discuss the numerous positive diagnostic studies or incorporate a complete medical history with a discussion of the medical records reviewed.

LITIGATION

04/02/12       Viviane Etienne Med. Care, PC a/a/o Jose Sanchez v. State Farm Mut. Auto. Ins. Co.
Appellate Term, Second Department
Provider’s Failure to Appear for Scheduled EUOs Results in Lack of Coverage
The insurer’s cross-motion for summary judgment was properly granted as the insurer demonstrated the plaintiff’s failure to attend scheduled EUOs.  The insurer submitted affidavits establishing that the EUO notice and denial of claim form were timely issued.  The insurer also submitted an affirmation from the attorney that was responsible for conducting the EUO which established the plaintiff’s failure to appear.  The court held that a provider’s appearance at duly requested EUO is a condition to insurance coverage under the policy.

04/02/12       Complete Radiology, PC a/a/o Robert Bagadasrov v. Progressive Ins. Co.
Appellate Term, Second Department
Plaintiff Denied Summary Judgment on Unopposed Motion
The plaintiff’s unopposed summary judgment motion was properly denied as it did not unequivocally state that the insurer’s denial of claim forms were either untimely or without merit as a matter of law.

04/02/12       Med-Tech Products, Inc. a/a/o Pavel Bezumny v. Statewide Ins. Co.
Appellate Term, Second Department
Hearing Held on Admissibility of Peer Review Where Allegation Is Doctor Stamped Signature
The insurer’s cross-motion for summary judgment was vacated and the case remanded for a hearing under CPLR §2218 on the limited issue of the validity of the peer reviewer’s signature on the peer review report.  The court held that a properly asserted allegation that the insurer’s peer review report was not in admissible form because the signature was a stamped facsimile warranted a limited hearing.

03/28/12       East 75th Street Diag. Imaging, PC a/a/o Carmelo Polanco v. New York Cent. Mut. Fire Ins. Co.
Appellate Term, Second Department
Insurer Established Assignor’s Breach of Policy Condition by Failing to Attend Scheduled IMEs
The insurer established the assignor’s failure to attend two scheduled IMEs.  The insurer submitted affidavits from the company retained to schedule and notice IMEs for the insurer which established that the IME notice was sent to the assignor in accordance with the company’s standard office practices.  The insurer also submitted affidavit and an affirmation from the physicians who were to perform the IMEs indicating the assignor failed to appear.  Further, insurer submitted sufficient evidence that the denials were timely issued in accordance with the insurer’s office practice and procedure.  The plaintiff provided no reasonable excuse for the assignor’s failure to appear and the insurer’s motion for summary judgment was properly granted.

 

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

04/03/2012   Neary v Tower Ins. Group
Appellate Division, Second Department
Residence Is Not Established Where There Is a Lack of Permanent Physical Presence
Plaintiffs commenced this action seeking recovery for damages sustained as a result of a fire loss at premises in Brooklyn.  At the time of the fire, however, it was established that plaintiffs did not use the Brooklyn premises as the couple’s residence.  Accordingly, where first party property coverage under a homeowner’s policy only applies to losses as residences, and where the plaintiffs decidedly did not live at the location on the date of the loss, the Court affirmed Tower’s denial.

In so holding, the Court noted that a “mere intention to reside a certain premises is not a sufficient basis [to establish residency].”  On the other hand, to establish the premises qualifies as a residence the insured must establish “some degree of permanence and intention to remain.” 

Peiper’s Point – Another tip of the cap to Max Gershweir’s office.  For those of you who may not have been following this topic as closely as we do, Max’s office has almost single-handedly developed a body of case law on this subject that is very favorable to insurers. 

04/02/2012   Nadel v. Allstate Ins. Co.
Appellate Term, Second Department
Carrier Must Establish a Viable Alternative for Property Damage Repairs in
Order to Establish Summary Judgment
Plaintiff sustained damage to his vehicle that was insured with Allstate.  Upon receipt of an estimate from Allstate’s appointed adjuster, plaintiff elected to have the vehicle repaired a different garage.  Unfortunately, plaintiff was charged a repair cost that was three (3) times as expensive as the estimate provided by Allstate.  When Allstate refused to pay for entire amount charged by plaintiff’s selected garage, plaintiff commenced the instant action.

The Court started its analysis by noting that disputes regarding first party property damage repairs under an automobile policy is governed by the Unfair Settlement Practices Act.  Under the controlling regulations, an insurer must engage in good faith settlement negotiations to resolve a dispute between the insurer’s estimate and the estimate obtained by the insured. 

If the dispute cannot be resolved through good faith negotiations, the carrier is instructed to issue a “notice of rights” letter to the insured which identifies the offer extended by the insurer, and an opportunity for the insured to request a shop that will repair the subject vehicle to its condition prior to the loss.  As we know, the carrier cannot suggest a repair shop, without the request of the insured, due to “anti-steering” regulations. 

Importantly, a Superintendent of Insurance opinion letter has previously stated that a “good faith” negotiation does not require an ultimate agreement.  However, the carrier must be able to point to a reasonably close and convenient alternative that would be able to undertake the repairs within the estimate offered by the insurer. 

In order for Allstate to establish its motion for summary judgment, the Court noted that it had to establish the existence of “good faith” negotiations.  It follows that “good faith” negotiations cannot be established unless Allstate was able to demonstrate a reasonably close and convenient repair shop.  Having failed to meet this burden, the Appellate Division held that Allstate had not met is evidentiary obligations, and affirmed the dismissal of Allstate’s motion. 

It is noted that the Court stated identifying a reasonable alternative at this stage in the claim would not violate the “anti-steering” regulations. 

Potpourri

04/10/12       Schlecker v Yorktown Elec. & Light Distrib.
Appellate Division, Second Department
A Party Must Be Aggrieved BEFORE Appellate Rights Ripen
Plaintiff commenced the instant appeal where the trial court did not search the Record, and sua sponte grant judgment to the plaintiff.  In dismissing the appeal, the Second Department noted that a party is not aggrieved when it does not receive relief that it did not actually ask for.  Nuff’ said.

04/03/2012   Saunders v. Newmark Construction
Appellate Division, Second Department
Receipt of Workers’ Compensation Benefits Precludes Special Employee’s Action Against Special Employer
Plaintiff was employed by Union Staffing as a laborer on a jobsite located in Jersey City, New Jersey.  Plaintiff reported to, and followed directions and instructions provided by Advanced Contracting Corp.  During the course of his employment, plaintiff sustained personal injuries as a result of a workplace accident.  Thereafter, plaintiff commenced the instant action against, among others, Advanced.

Advanced moved to dismiss the Complaint on the basis that plaintiff was paid workers’ compensation benefits by United Staffing. Thus, as in the instant case, were a special employee is paid workers’ compensation by his or her employer, the injured worker possesses no cause of action against his or her “special employer.” 

It is also worth noting that defendant Newmark moved for contractual indemnification against Advanced.  However, Newmark failed to meets its evidentiary burden by establishing, in admissible form, the terms of the contract.

Peiper’s Point – Repeat after me… “client affidavit, client affidavit, client affidavit”

03/29/2012   Hahn Automotive Warehouse, Inc. v American Zurich Ins. Co.
Court of Appeals
Statute of Limitation for Monetary Payments Under a Contract Begins When the Party Possessed the Right to Demand Payment
In the interest of brevity, plaintiff purchased a series of insurance policies from Zurich as part of a comprehensive and complex insurance program.  All of the policies purchased by plaintiff provided for a review period eighteen months after the inception of the policies to determine if the premium accurately depicted the existing claim structure.  Where the audit revealed that the premium was insufficient, Zurich was provided with an opportunity to demand an increase.  Likewise, if the audit revealed that plaintiff had contributed more premiums than was necessary, Plaintiff was entitled to a reimbursement.

After an internal audit in 2006, Zurich realized that it never availed itself of the contractual right to demand additional fees.  This was the case despite the fact that the policies in question, as well as the contractual relationship with plaintiff, extended into the early 1990’s.  Zurich, thereafter, invoiced plaintiff for $1,123,874 in adjusted fees under a certain category of policies.  In addition, Zurich invoiced plaintiff for an additional $751,514 for adjusted fees in a second category of policies.  Finally, Zurich demanded an adjustment of an additional $71,615 on a third set of categories. 

When plaintiff refused to remit payment, Zurich began drawing from a $400,000 letter of credit that plaintiff had previously deposited with Zurich. Plaintiff, predictably, objected, and the instant action was born.

Plaintiff argued, principally, that Zurich was barred by the statute of limitations for breach of contract from seeking recovery of any claims that ripened more than six years previously.  In support of its position, plaintiff argued that the right to demand the adjustment (and therefore payment) triggered the six year statute of limitations. 

In response, Zurich responded by arguing that the statute of limitations only began to run after there had been a breach of the contract (ie. a refusal to pay).  Where there had been no demand to pay, it follows that there was no refusal.  Accordingly, it wasn’t until 2006 that the statute began to run, after plaintiff refused to pay for the above-referenced invoices. 

Judge Graffeo, writing for the majority of a sharply divided Court, noted that the statute of limitations began to run at the point Zurich possessed a right to demand payment.  To hold otherwise, Judge Graffeo reasoned that Zurich could have impermissibly extended the relevant statute of limitations by simply refusing to make a demand.  Finally, the majority noted that the policies in question contained specific time limits when Zurich was required to calculate adjustments per the terms of the contract.

In a well-considered opinion that was authored for the dissent, Judge Read noted that a right to damages for a breach of contract only accrues after a breach has occurred.  Here, it is argued, that the majority opinion argues that an action for breach of contract must be commenced prior to the breach actually occurring (namely, the refusal of adjustments). 

 

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

Forced Place Insurance

          The Department of Financial Services announced that it will be increasing its investigation into force-placed insurance.  As part of the process, DFS will be holding hearings in May to examine the relationship between the payments to and from insurers, banks, mortgage services and the banks, insurers, reinsurers and brokers who operate in the market.  This is in response to concerns raised by the initial investigation which showed that force-placed insurers charge very high premiums but pay out only a small percentage of those premiums on claims.  As a result, DFS is already requiring additional supporting actuarial documentation regarding how rates and loss rations are calculated as well as other items.

Circular Letter No. 8 (2007) Supplement No. 1

          This Circular Letter is a supplement to a Circular Letter issued in 2007 which explains how the Corporate Emergency Access System works to allow insurance adjusters to gain access to restricted areas following a disaster by using a secure identification card.  This is a voluntary program that allows insurers to purchase the cards that will grant access. 

Originally, the card was available for disasters in the five boroughs of NYC, Nassau and Suffolk counties.  The supplement expands the use of the cards to disasters in Rockland and Erie counties as well. 

Initially, this program was limited to 63 of the largest property/casualty insurers that were selected based upon commercial and personal property exposure in the above enumerated areas.  The Supplement has amended the program to provide access to the largest property/casualty insurers based on exposure in all of the new areas.  The biggest difference is that of the 2000 cards that may be issued, 400 are allocated to automobile insurers.

 

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

04/04/12       Looney Ricks Kiss Architects, Inc. v. State Farm Casualty Co.
Fifth Circuit Court of Appeals –Louisiana Law Applied
Applicability of Breach of Contract Exclusion in Copyright Infringement Case
Looney Ricks Kiss Architects (“LRK”), an architecture firm brought an action for copyright infringement against a former client, Steve Bryan, and his affiliated building companies (“Bryan Defendants”).  Lafayette Insurance Company (“Lafayette”) and State Farm Firm and Casualty Company (“State Farm”), insurers for Bryan’s Cypress Lake Development sought declaratory judgments that they had no obligation to provide coverage or duty to defend in LRK’s suit.

The district court ruled that Lafayette and State Farm had no duty to defend to provide coverage, LRK appealed. Lafayette and State Farm appeal from the district court’s decision that the insurer’s had a duty to defend.

LRK created a design known as Island Park Apartments, which was constructed by companies associated with Steve Bryant.  In October, 1996, LRK and Island Park, LLC, as represented by Steven Bryant, entered into a Standard Form of Agreement Between Owner and Architect (“1996 Agreement”).  LRK registered the Island Park Apartments with the U.S. Copyright Office as an Architectural Work and Technical Drawings.

In 2001, Cypress Lake Development, a Bryan Company, applied for and obtained permits to construct the Cypress Lake Apartments in Baton Rouge, Louisiana.  LRK’s complaint alleges that these apartments infringe on its copyrighted work without LRK’s consent or permission.  The complaint further alleges that the Bryan defendants used depictions of its copyrighted works in promotional and advertising materials in the operation of the Cypress Lake Apartments.

From June 28, 2000 to June 28, 2001, the Cypress Lake Real Estate development was insured by a policy issued to the Bryan defendants by Lafayette.  The policy contained an exclusion which provided that “personal and advertising injury does not apply to Personal and Advertising Injury . . . (6) Arising out of a breach of contract, except an implied contract to use another’s advertising idea in your advertisement.”

From June 28, 2002 to June 28, 2005, Cypress Lakes Apartments was insured by State Farm under three Apartment policies.  From September 6, 2002 to September 6, 2005, Cypress Lakes Apartments was insured by State Farm under three Umbrella policies.  Each of the policies states that the insurance does not apply “to advertising injury arising out of: a. breach of contract other than misappropriation of advertising injuries under an implied contract.”

The issue for determination was whether the breach of contract exclusions of the relevant policies precluded coverage of LRK’s copyright infringement claim. In rendering its decision The Fifth Circuit Court of Appeals (“Court”) noted that the Louisiana Supreme Court had not addressed the issue of whether a breach of contract exclusion applies to preclude liability for a statutory tort which an insured had a contractual obligation not to commit.

The Court stated that, in general, Courts have applied two tests when deciding whether a “breach of contact” exclusion precludes coverage.  The Court noted that several courts have applied the “but for” test.  In states embracing this test, the injury is only considered to have arisen out of the contractual breach if the injury would not have occurred but for the breach of contract.

In other states, which interpret the “arising out of” phrase of the breach of contract exclusion more broadly, courts apply an “incidental relationship” test, such that the exclusion applies to preclude coverage as long as the contract bears some relationship to the dispute.

The Court determined that the “but for” test was the proper test to apply stating that it is well settled that the same acts or omissions may constitute breaches of both general duties and contractual duties and may give rise to both actions in tort and actions in contract.  In order to overcome the breach of contract exclusion, the facts must demonstrate that the negligence claims are separate and distinct and not arising from the breach of contract claim.  The tort claim must rising from a duty other than one imposed by contract.

The Court stated that the reasoning of the cases analyzed in support of its conclusion makes clear that a claim for relief cannot be considered to have “arisen out of” a breach of contract where the legal support for the claim emanates from a source other than contract law. 

In concluding, the Court held that since LRK’s claim for relief under the federal copyright laws would exist even in the absence of its 1996 Agreement with Bryan, the breach of contract provisions of the relevant insurance policies do not apply to preclude coverage for LRK’s claim. 

The Court reversed the district court’s ruling that the insurance policies in this case preclude coverage.  Further, inasmuch as the Court found the policy exclusions inapplicable to preclude coverage it affirmed the district court’s determination that the insurers have a duty to defend.

 

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

04/02/12       Hermitage Ins. Co. v. Zaidman
Supreme Court, New York County
Familial Relationship Reasonable Excuse for Late Notice
This is a late notice case involving a slip and fall by the insureds’ daughter.  The insureds’ daughter allegedly slipped on newspaper flyers left on the steps of a property owned by her parents.  Approximately eight months after the accident, the insureds placed plaintiff on notice of the loss and enclosed a copy of a letter of representation from their daughter’s attorney.  On October 19, 2007, plaintiff disclaimed coverage for the claim based on late notice.  Unfortunately, the letter was not sent to the current address listed on the policy, but, rather, an outdated address. 

In considering this case, the court agreed with plaintiff that the notice was late.  It then considered whether the insureds had a reasonable excuse for the late notice.  While the insureds acknowledged that they knew about the accident and even visited their daughter in the hospital, they attested that due to the familial relationship they did not believe their daughter would bring a lawsuit.  Also, they did not believe they were responsible for the accident because the steps were in good condition and they did not place the newspaper bundle on the stairs nor were they aware of it.  The first time the insureds’ learned of their daughter’s intention to sue was a few weeks before notice was provided to plaintiff when they received the letter of representation.  In considering these facts, the court held that it was arguably reasonable for the insureds not to speculate about unexpressed legal considerations and to hold a good faith belief that they would not face liability for the accident. 

Likewise, the court noted that plaintiff had not met its burden of proving a timely disclaimer as there is no presumption of receipt when a letter is sent to the wrong address. 

03/30/12       Giraldo v. Washington Intl. Ins. Co.
Supreme Court, Queens County
Company That Issued Surety Bond Responsible for Default Judgment Even if Never Provided an Opportunity to Defend Action
This case addresses surety bonds for self-insured New York City taxicab medallion corporations.  The underlying plaintiffs were injured when their vehicle collided with a yellow taxi cab.  They brought an action against the owner and operator of the cab.  The operator defaulted and a judgment was taken. 

With this judgment, plaintiffs brought this action against defendant, Washington International Ins. Co. (“Washington”), who issued a surety bond to Besai Cab Corporation.  Under the terms of the bond, Washington was not obligated to defend the underlying lawsuit because the taxi cab was self-insured; rather, it was obligated to pay each and every unsatisfied judgment against a covered person. 

As an affirmative defense, Washington asserted that as a surety company it was not liable for payment of a claim unless there was an unpaid judgment against the principal self-insured corporation.  Here, as there was no judgment against Besai Cab Corporation, no obligation had been triggered.  The court rejected this argument noting that the bond was issued pursuant to VLT 370(1)(b) thus to the benefit of any person legally operating the motor vehicle in the business of the owner and with his permission. 

Washington also asserted as a defense that it did not receive notice of the underlying action in time to defend it and thus it was not collaterally estopped from litigating the merits of the underlying action.  The court also rejected this argument as, based on the terms of the bond, Washington was merely a guarantor of payment.  It had no defense obligation.  

03/29/12       Bert v. State Farm Fire & Cas. Co.
Supreme Court, Queens County
Where Insured Represented on Insurance Application That Property Was Owner-Occupied, Insurer Entitled to Rescind Where Statement Was Not True
This case arises out of misrepresentation concerning the insured’s residence.  The insured purchased a homeowners’ policy from State Farm.  On the insurance application, she indicated that the subject home was her residence.  Thereafter, a fire broke out and destroyed the home.  When the insured placed a claim, State Farm denied coverage based on the insured’s material misrepresentation and the claims failure to trigger the grant of coverage (i.e., the policy’s grant of coverage only applied to the dwelling on the ‘residence premises,’  but, as the insured did not live at the home, it did not qualify as the ‘residence premises’). 

After receipt of the denial, the insured brought a declaratory judgment action.  Ultimately, State Farm prevailed and the court held that “residence premises” is where you reside.  No coverage existed as the insured did not reside at the insured location. 

While the action brought by the insured for first-party benefits was pending, a firefight who was allegedly injured combating the fire also brought an action.  In reliance on the decision in the first-party claim, State Farm declined to defend the insured in this action.  Thereafter, a default was entered against the insured and a damages trial conducted.  Once the judgment was entered, the injured firefighter brought an action. 

On this motion, the issue before the court was the validity of the rescission of the policy.  Notably, the finding in the prior case did not dispose of this matter because the court’s only finding was that the insured did not reside at the insured premises for purposes of first-party coverage (i.e., in comparison, the liability coverage section does not contain the “residence premises” requirement”). 

So, in considering this matter, the court reiterated that to establish a right to rescind an insurance policy, an insurer must show that its insured made a material misrepresentation of fact when he or she secured the policy.  A misrepresentation is considered material if the insurer would not have issued the policy had it known the facts misrepresented.  Here, in the court’s opinion, State Farm sufficiently established that the premises were not owner-occupied and that, had it know this, it would not have issued a homeowners’ policy to the insured.  The insured’s explanation that she intended to reside at the premises, but then her mother got sick, did not impact the misrepresentation.  Accordingly, State Farm had the right to rescind.  

 

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

COVERAGE FOR CHINESE DRYWALL REJECTED BY “HAZARDOUS MATERIALS” EXCLUSION

 

The case of Colony Insurance Co. v. Total Contracting & Roofing, Inc., 2011 WL 4962351 (S.D. Florida, October 18, 2011) involved a claim of defective Chinese drywall in a Miami Beach home wherein it was held that coverage was barred by a hazardous materials exclusion in a contractor’s CGL policy. 

Total Contracting installed the allegedly defective drywall in the Smith’s Miami Beach home.  The homeowners alleged that the drywall emitted noxious gasses that caused personal injury, and also property damage to appliances, wiring and metal surfaces. 

Total Contracting’s insurance company, Colony Insurance, refused to pay for any damages citing a hazardous material exclusion in the CGL policies.  The exclusion excluded losses caused, in whole or in part, by the release of hazardous materials which were, in turn, defined as “. . . pollutants, lead, asbestos, silica…and any solid, liquid, gaseous or thermal irritant or contaminant.” 

The homeowners filed a product liability lawsuit against Total Contracting.  The insurance company sued Total Contracting and the homeowners in federal court seeking a declaratory judgment with respect to coverage for the defective drywall.  The insurance company and the homeowners each moved for summary judgment.  The federal court ruled that the sulfides and other noxious gasses released by the Chinese-manufactured drywall fell within the policy definition of “hazardous material” and the District Court granted summary judgment to the insurer. 

The homeowners argued, inter alia, that the CGL policies were unconscionable and violated public policy.  They also contended that coverage under the policies was “illusory” because the hazardous material exclusion contradicted and nullified the insurance coverage.  They essentially argued that Colony cited so many exclusions so as to render the coverage essentially illusory. 

The District Court disagreed, ruling that the hazardous materials exclusion precluded coverage because the sulfides and other noxious gasses emitted by the defective drywall clearly qualified as gaseous irritants and contaminants that were defined within and barred by the exclusion.  The Court rejected the homeowners other contentions noting (in a pithy statement) that “…the adjudication of insurance coverage disputes does not lend itself to mathematical computations.” 

 

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

04/03/12       Sanders v. Ahmed
Supreme Court of Missouri
Supreme Court of Missouri Upheld the Application of the Damages Cap
Ronald Sanders sued his late wife’s physician (Dr. Iftekhar Ahmed), among others, for wrongful death, claiming that his wife suffered irreversible brain damage and eventual death due to Dr. Ahmed’s failed to recognize and properly treat her condition. The jury returned a verdict awarding $9.2 million in non-economic damages, which was reduced by the trial court to $1.265 million in accordance with the statutory damages cap. Sanders challenged the constitutionality of the damages cap on appeal. In a 5-2 decision, the Supreme Court of Missouri upheld the application of the damages cap, finding that the remedy available with respect to the statutorily created cause of action for wrongful death was “a matter of law, not fact, and not within the purview of the jury.” The limit on damages did not interfere with the ability of the jury and judge to respectively render a verdict and enter judgment; instead, the damages cap informed those duties. The trial court’s application of the non-economic damages cap was, therefore, appropriate. The Court also found that the trial court erred in denying Defendants’ motion for discovery of the terms of Plaintiff’s settlement agreements with other parties where such discovery prejudiced Defendants’ ability to plead and prove the statutory defense of reduction.
Submitted by: Kathryn M. Metz of Sedgwick LLP

04/03/12       McArthur v. State Farm Mut. Auto. Ins. Co.
Supreme Court of Utah
Exhaustion Clauses That Require Liability Insurer to Pay Out Full Policy Limits Before Permitting Payment of UIM Benefits Are Enforceable in State of Utah
McArthur was hit by a car while riding his motorcycle on the streets of St. George. McArthur subsequently settled with the driver's liability carrier for $90,000 of the driver's $100,000 policy limit. McArthur later demanded $100,000 in UIM coverage under his own State Farm policy to cover the balance of the $200,000 of damage he allegedly sustained. State Farm denied the claim on the ground that McArthur had not exhausted the full $100,000 limit of the driver's liability policy, a precondition for UIM coverage under his policy. The Court found no basis for striking down exhaustion clauses under Utah law. Based on the language of the policy: THERE IS NO COVERAGE UNTIL1. THE LIMITS OF LIABILITY OF ALL BODILY INJURY LIABILITY BONDS AND POLICIES THAT APPLY HAVE BEEN USED UP BY PAYMENT OR JUDGMENTS OR SETTLEMENTS TO OTHER PERSONS; OR 2. SUCH LIMITS OF LIABILITY OR REMAINING PART OF THEM HAVE BEEN OFFERED TO THE INSURED the Court ruled that the exhaustion clause is properly characterized as a condition precedent.
Submitted by: Kay Gaffney Crowe, Barnes, Alford, Stork & Johnson, Columbia SC -

 

Reported Decisions

Guideone Spec. Ins. Co. v. State Insurance Fund

Lewis Johs Avallone Aviles, LLP, Melville, N.Y. (Elizabeth A. Fitzpatrick and Seth M. Weinberg of counsel), for appellant.
Gess Gess & Scanlon, P.C., New York, N.Y. (San P. King of counsel), for respondents.

DECISION & ORDER

Appeal by the defendant State Insurance Fund from an order of the Supreme Court, Kings County (Kramer, J.), dated January 13, 2011, which denied its motion pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against it.

ORDERED that the order is reversed, on the law, with costs, and the motion of the defendant State Insurance Fund to dismiss the complaint insofar as asserted against it is granted.

A claim for money damages against the State must be litigated in the Court of Claims (see Court of Claims Act § 9[2]). "The State Insurance Fund is a state agency, and, consequently, claims against it for money damages must be litigated in the Court of Claims, rather than in the Supreme Court" (D'Angelo v State Ins. Fund, 48 AD3d 400, 402). Although denominated as an action for a declaratory judgment, the complaint in this case shows that this is essentially an action to recover money damages against a state agency, for which the proper forum is the Court of Claims (id.; see Miraglia v State Ins. Fund, 32 Misc 3d 471, 474). Although the plaintiffs correctly note that the appellant raised this issue for the first time in its reply papers (see CPLR 2214; Fenner v County of Nassau, 80 AD3d 555, 556), "a court's lack of subject matter jurisdiction may not be waived and may, in fact, be raised at any time" (D'Angelo v State Ins. Fund, 48 AD3d at 402).

Accordingly, the Supreme Court should have granted the motion of the defendant State Insurance Fund to dismiss the complaint insofar as asserted against it on the ground of lack of subject matter jurisdiction.

In view of the foregoing, we do not address the parties' remaining contentions.

In re East 51st Street Crane Collapse Litigation

Hurwitz & Fine, P.C., Buffalo (Dan D. Kohane of counsel), for AXIS Surplus Insurance Company, appellant-respondent.
Chalos, O'Conner & Duffy, LLP, Port Washington (Alfred C. Constants, III of counsel), for Interstate Fire and Casualty Company, appellant-respondent.
Clyde & Co US LLP, New York (Sarah H. Mitchell of counsel), for East 51st Street Development Company, LLC, and Illinois Union Insurance Company, respondents-appellants.
Schoenfeld Moreland, P.C., New York (Edward F. Rubbery, of the Illinois Bar, admitted pro hac vice, of counsel), for Lincoln General Insurance Company, respondent-appellant.

Order, Supreme Court, New York County (Carol R. Edmead, J.), entered March 4, 2011, which granted plaintiffs' motion for summary judgment declaring that defendant Lincoln General Insurance Company has a duty to defend East 51st Street Development Company, LLC (East 51st Street) and to reimburse Illinois Union Insurance Company for past defense costs in the underlying crane- collapse litigation from the date of the crane collapse (March 15, 2008) to the date that Lincoln General exhausted its policy limits, and so declared, granted plaintiffs' motion for summary judgment declaring that defendant AXIS Surplus Insurance Company has a duty to defend East 51st Street and to reimburse Illinois Union for past defense costs and to pay all future defense costs in the crane-collapse litigation, and so declared, granted Lincoln General's motion for summary judgment declaring that its policy is excess to the AXIS policy and that AXIS owes a primary duty to pay all or a portion of East 51st Street's defense costs, and so declared, granted Lincoln General's motion for summary judgment declaring that defendant Interstate Fire and Casualty Company is obligated to provide primary coverage to East 51st Street, and so declared, denied AXIS's motion for summary judgment declaring that it has no duty to defend, and denied Interstate's motion for summary judgment dismissing the complaint and Lincoln General's cross claims against it, unanimously modified, on the law, to deny Lincoln General's motions for summary judgment declaring that its policy is excess to the AXIS and Interstate policies, to vacate those declarations, and to declare that Lincoln General is obligated to provide primary coverage to East 51st Street, and otherwise affirmed, without costs.

On March 15, 2008, a crane collapsed at a construction site on East 51st Street in Manhattan, causing the deaths of six construction workers and a pedestrian, injury to several other individuals, and extensive damage to property. Multiple claims for bodily injury and property damage were brought against plaintiff East 51st Street, the owner of the property on which the accident occurred, Reliance Construction Ltd., the construction manager on the project, and Joy Contractors, Inc., the superstructure subcontractor, whose employee was operating the crane at the time of the accident.

As is undisputed, the insurance policies issued by AXIS and Interstate to Reliance and the policy issued by Lincoln General to Joy were primary to the policy issued by Illinois Union to East 51st Street. AXIS, Interstate and Lincoln General therefore are obligated to reimburse Illinois Union for defense costs. Although Illinois Union had already taken up East 51st Street's defense, its intent to seek contractual indemnification from Reliance and Joy created a potential conflict between East 51st Street and Lincoln General, giving East 51st Street the right to obtain independent counsel (see 69th St. & 2nd Ave. Garage Assoc. v Ticor Tit. Guar. Co., 207 AD2d 225, 227 [1995], lv denied 87 NY2d 802 [1995]).

The "Supplementary Payments" provision of the AXIS policy issued to Reliance states that "[w]e will pay, with respect to any claim we investigate or settle, or any suit' against an insured we defend[] . . . [a]ll expenses we incur," and that "[t]hese payments will reduce the limits of insurance." However, the amended Insuring Agreement of the policy provides that AXIS's "duty to defend ends when [AXIS has] used up the applicable limit of insurance in the payment of judgments or settlements under Coverages A or B [i.e., damages]." The ambiguity as to whether "expenses" includes defense costs that results from these conflicting provisions must be construed against AXIS (see 242-44 E. 77th St., LLC v Greater N.Y. Mut. Ins. Co., 31 AD3d 100, 105 [2006]). We therefore conclude that the policy does not provide for defense within limits, which undermines AXIS's argument that the policy limits had been eroded, and that AXIS is obligated to share in the costs of the defense of East 51st Street, an "additional insured" on the policy (see Pecker Iron Works of N.Y. v Traveler's Ins. Co., 99 NY2d 391, 393 [2003]).

Interstate's contention that East 51st Street is not listed on the additional insured endorsement or the declarations page of the policy issued to Reliance does not avail it since it admitted in its answer that East 51st Street was an additional insured under that policy. Nor does it avail Interstate that Reliance, the named insured, may not have complied with the policy's conditional coverage endorsement (see Pecker Iron Works, 99 NY2d at 393). Contrary to Interstate's further contention, since East 51st Street never filed any claims against Interstate in the related federal action brought by Reliance's excess liability carrier, and filed all its claims against Interstate in this state action, it did not engage in "claims splitting" (see Emery Roth & Sons v Notional Kinney Corp., 44 NY2d 912 [1978]; 67-25 Dartmouth St. Corp. v Syllman, 29 AD3d 888 [2006]).

We find that, pursuant to the "Other Insurance" provision in the AXIS, Lincoln General and Interstate policies, the insurance provided to East 51st Street, an additional insured on those policies, is primary (see Sport Rock Intl., Inc. v American Cas. Co. of Reading, Pa., 65 AD3d 12, 18 [2009]). Our conclusion is not altered by the "Additional Insured" endorsement in the AXIS policy, which provides that "such insurance as is afforded by this policy for the benefit of [East 51st Street] shall be primary insurance as respects any claim, loss or liability arising out of [Reliance's] operations, and any other insurance maintained by [East 51st Street] shall be excess and non-contributory with the insurance provided hereunder." A reasonable business person would understand the term "insurance maintained by" to refer to insurance actually procured by East 51st Street (the Illinois Union policy), rather than afforded it as an additional insured.

Although, as Interstate points out, a low premium suggests that a policy may not be primary, it is not conclusive (see State Farm Fire & Cas. Co. v LiMauro, 65 NY2d 369, 376 [1985]). The language of the Interstate policy does not establish the policy as a pure excess policy (compare Tishman Constr. Corp. of N.Y. v Great Am. Ins. Co., 53 AD3d 416, 420 [2008]).

Neary v. Tower Insurance

Max W. Gershweir, New York, N.Y. (Joseph S. Wiener of counsel), for appellant.
Mark E. Seitelman Law Offices, P.C., New York, N.Y. (Donald D. Casale of counsel), for respondent.

DECISION & ORDER

In an action, inter alia, to recover damages for breach of an insurance contract, the defendant Tower Insurance appeals, as limited by its notice of appeal and brief, from so much of an order of the Supreme Court, Kings County (F. Rivera, J.), dated September 30, 2010, as denied that branch of its cross motion which was for summary judgment dismissing the complaint insofar as asserted against it.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the cross motion of the defendant Tower Insurance which was for summary judgment dismissing the complaint insofar as asserted against it is granted.

Raymond H. Neary, Sr., and Janet T. Neary (hereinafter together the Nearys) owned a residence in Brooklyn (hereinafter the premises), which they insured under a homeowners' policy (hereinafter the policy) with the defendant Tower Insurance (hereinafter Tower). The policy provided coverage only for premises where the Nearys, as the insureds, resided. On January 18, 2005, the premises were damaged in a fire. Tower disclaimed coverage on the ground that the Nearys did not reside at the premises at the time of the loss.

The Nearys commenced this action, inter alia, to recover damages from Tower for breach of the insurance contract. Subsequently, the Nearys died, and their daughter, Kathleen Neary (hereinafter the plaintiff), was substituted as executrix of their estates.

The Supreme Court erred in denying that branch of Tower's cross motion which was for summary judgment dismissing the complaint insofar as asserted against it. "The standard for determining residency for purposes of insurance coverage requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain" (Vela v Tower Ins. Co. of N.Y., 83 AD3d 1050, 1051, quoting Government Empls. Ins. Co. v Paolicelli, 303 AD2d 633, 633 [internal quotation marks omitted]; see Matter of Allstate Ins. Co. [Rapp], 7 AD3d 302, 303; New York Cent. Mut. Fire Ins. Co. v Kowalski, 195 AD2d 940, 941). Mere intention to reside at certain premises is not sufficient (see Vela v Tower Ins. Co. of N.Y., 83 AD3d at 1051).

Tower established its prima face entitlement to judgment as a matter of law by demonstrating that the Nearys did not reside at the subject premises when the fire occurred (id.). In opposition, the plaintiff failed to raise a triable issue of fact. Contrary to her contention, the term "reside" or "residence" is not ambiguous (id.; see Marshall v Tower Ins. Co. of N.Y., 44 AD3d 1014, 1015), and, therefore, must be accorded its plain and ordinary meaning (see Vela v Tower Ins. Co. of N.Y., 83 AD3d at 1051).

In the Matter of GEICO v. Baik

Steven Louros, New York, N.Y., for appellant.
Gail S. Lauzon (Montfort, Healy, McGuire & Salley, Garden City, N.Y. [Donald S. Neumann, Jr.], of counsel), for respondent.

DECISION & ORDER

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of an uninsured motorist claim, Sinyoung Baik appeals from an order of the Supreme Court, Queens County (Rios, J.), entered April 20, 2011, which granted the petition and denied her motion, inter alia, for certain discovery.

ORDERED that the order is affirmed, with costs.

The appellant sought uninsured motorist benefits, under a policy of insurance issued by the petitioner, for physical injuries she allegedly sustained when an unknown hit-and-run driver rear-ended the vehicle of the insured, in which the appellant was a passenger. The petitioner insurance company commenced this proceeding to permanently stay the arbitration of the appellant's claim on the ground that the appellant failed to report the accident to the police, a peace or judicial officer, or the Commissioner of Motor Vehicles within 24 hours of the accident or as soon as reasonably possible thereafter, as required by the supplementary uninsured/underinsured motorist endorsement of the subject policy.

Contrary to the appellant's contention, the Supreme Court properly granted the petition and denied her motion, inter alia, for certain discovery. The petitioner established that neither the appellant nor the policyholder reported the alleged hit-and-run accident to the police, a peace or judicial officer, or to the Commissioner of Motor Vehicles within 24 hours of the accident or as soon as reasonably possible thereafter. Accordingly, the Supreme Court properly granted a permanent stay of arbitration (see Matter of Eagle Ins. Co. v Brown, 309 AD2d 749, 750; Matter of State Farm Mut. Ins. Co. v Genao, 210 AD2d 340, 340-341; Matter of United States Fire Ins. Co. v Williams, 166 AD2d 538, 539).

The appellant's remaining contentions are either not properly before this Court or without merit

Parkview Owners, Inc v. DF Restoration, Inc.,

Traub Lieberman Straus & Shrewsberry LLP, Hawthorne (Eric D. Suben of counsel), for appellant.
Malapero & Prisco LLP, New York (Andrew L. Klauber of counsel), for Parkview Owners, Inc., Hudson River Property Management Corp. and Philadelphia Indemnity Insurance Company, respondents.
Lester Schwab Katz & Dwyer, LLP, New York (Steven B. Prystowsky of counsel), for DF Restoration, Inc., respondent.

Order, Supreme Court, New York County (Milton A. Tingling, J.), entered August 26, 2011, which denied defendant RSUI Indemnity Company's motion for leave to amend its answer, unanimously affirmed, with costs.

Defendant waited more than one year from the date on which it received notice of the claim against its insured to assert a disclaimer based on the policy exclusion for residential projects. This unexplained delay was unreasonable as a matter of  law (see Insurance Law § 3420[d]; Agoado Realty Corp. v United Intl. Ins. Co., 260 AD2d 112, 118 [1999], mod on other grounds 95 NY2d 141 [2000]).

Thus, although leave to amend a pleading "shall be freely given" (CPLR 3025[b]), the residential project exclusion "[can] not be used as an affirmative defense because of its late assertion and the strictures of Insurance Law § 3420(d)" (Agoado Realty Corp., 95 NY2d at 146 n).

Anderson v. Clark

Michael Joseph Corcoran, Islandia, N.Y., for appellant.
Richard T. Lau & Associates, Jericho, N.Y. (Kathleen E. Fioretti 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, Suffolk County (Mayer, J.), dated March 3, 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 affirmed, with costs.

The defendants met their burden of establishing, prima facie, 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). The defendants submitted evidence establishing that the alleged injuries to the cervical and lumbosacral regions of the plaintiff's spine, and to the plaintiff's left knee, did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Staff v Yshua, 59 AD3d 614; Rodriguez v Huerfano, 46 AD3d 794, 795). The defendants also submitted evidence establishing that the plaintiff did not sustain a serious injury under the 90/180-day category of Insurance Law § 5102(d) (see McIntosh v O'Brien, 69 AD3d 585, 587).

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

DiMezza v. Matteo

Baxter Smith & Shapiro, P.C., White Plains, N.Y. (Kimberley A. Carpenter of counsel), for appellant.
Spain & Spain, P.C., Mahopac, N.Y. (William D. Spain, Jr., of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Putnam County (Nicolai, J.), dated March 21, 2011, which denied her motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).

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

The defendant met her 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 defendant submitted competent medical evidence establishing, prima facie, that the alleged injuries to the lumbar region of the plaintiff's spine and to the plaintiff's left shoulder did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Staff v Yshua, 59 AD3d 614; Rodriguez v Huerfano, 46 AD3d 794, 795). The defendant also submitted evidence establishing, prima facie, that the plaintiff did not sustain a serious injury under the 90/180-day category of Insurance Law § 5102(d) (see McIntosh v O'Brien, 69 AD3d 585, 587).

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

Glover v. Batista

Mallilo & Grossman, Flushing, N.Y. (Francesco Pomara, Jr., of counsel), for plaintiff-appellant.
Gallo Vittucci & Klar LLP, New York, N.Y. (Yolanda L. Ayala of counsel), for plaintiff third-party defendant-respondent.
Cheven Keely & Hatzis, New York, N.Y. (William B. Stock of counsel), for defendant third-party plaintiff-respondent.

DECISION & ORDER

In an action, inter alia, to recover damages for personal injuries, the plaintiff Ronald Pritchard appeals, as limited by his brief, from so much of an order of the Supreme Court, Queens County (Elliot, J.), dated April 29, 2011, as granted the separate motions of the defendant third-party plaintiff, Frances E. Batista, and the plaintiff third-party defendant, Joseph J. Glover, in effect, for summary judgment dismissing the complaint insofar as asserted by him against Frances E. Batista on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident.

ORDERED that the order is reversed insofar as appealed from, on the law, with one bill of costs, and the separate motions of the defendant third-party plaintiff, Frances E. Batista, and the plaintiff third-party defendant, Joseph Glover, for summary judgment dismissing the complaint insofar as asserted by the appellant against Frances E. Batista are denied.

The defendant third-party plaintiff, Frances E. Battista, sued herein as Frances E. Batista, and the plaintiff third-party defendant, Joseph J. Glover, failed to meet their prima facie burdens of demonstrating that the appellant 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, 350; Gaddy v Eyler, 79 NY2d 955, 956-957). Battista's and Glover's motion papers failed to adequately address the appellant's claim, clearly set forth in the bills of particulars, that he sustained a medically-determined injury or impairment of a nonpermanent nature which prevented him from performing substantially all of the material acts which constituted his usual and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (cf. Tinsley v Bah, 50 AD3d 1019, 1019-1020).

Since Battista and Glover failed to meet their prima facie burdens, it is unnecessary to determine whether the papers submitted by the appellant in opposition were sufficient to raise a triable issue of fact (id. at 1020).

Accordingly, the Supreme Court should have denied Battista's and Glover's separate motions for summary judgment dismissing the complaint insofar as asserted by the appellant.

Ramkumar v. Grand Style Transportation Enterprises Inc.

Morrison & Wagner, LLP, New York (Eric H. Morrison of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York (Stacy R. Seldin of counsel), for Grand Style Transportation Enterprises, Inc. and Ibrahim S. Tandia, respondents.
Burke, Gordon & Conway, White Plains (Ashley E. Sproat of counsel), for Bisnath Bissessar and Danish Bissessar, respondents.
Kay & Gray, Westbury (Patricia K. Wilton of counsel), for Georgina D. Castillo, respondent.

Order, Supreme Court, Bronx County (Kenneth L. Thompson, Jr., J.), entered on or about July 1, 2010, which, to the extent appealed from as limited by the briefs, granted defendants' cross motions for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), affirmed, without costs.

Defendants made a prima facie showing of entitlement to judgment as a matter of law. The differences in the defense experts' range-of-motion findings are minor and both doctors concluded that plaintiff's range of motion is normal (see Feliz v Fragosa, 85 AD3d 417, 418 [2011]).

In opposing defendants' motions, plaintiff failed to offer a reasonable explanation for a significant gap in his medical treatment that was raised by the Bissessar defendants when they cross-moved for summary judgment. As the Court of Appeals held in Pommells v Perez (4 NY3d 566 [2005]), "a plaintiff who terminates therapeutic measures following the accident, while claiming serious injury,' must offer some reasonable explanation for having done so" (id. at 574).
Plaintiff's accident occurred on April 8, 2007 and he underwent arthroscopic surgery on his right knee on June 29, 2007. As of July 5, 2007, plaintiff's orthopedic surgeon recommended physical therapy. When asked when he last received physical therapy, plaintiff testified that he was "cut off" five months before his July 2008 deposition. Therefore, the record gives no indication that plaintiff received any medical treatment during the 24-month period before he submitted answering papers to defendants' motions. We assume, as the dissent does, that there are limits to the amount of no-fault coverage for medical services such as physical therapy. The inquiry, however, does not end there. A bare assertion that insurance coverage for medically required treatment was exhausted is unavailing without any documentary evidence of such or, at least, an indication as to whether an injured claimant can afford to pay for the treatment out of his or her own funds (see e.g. Gomez v Ford Motor Credit Co., 10 Misc 3d 900, 903 [Sup Ct Bronx County 2005]; see also Salman v Rosario, 87 AD3d 482 [2011]; Jacobs v Rolon, 76 AD3d 905 [2010]). Plaintiff, who was employed and living with his parents, gave no such indication. Also, the dissent's theory that "[i]njuries are not always treatable by physical therapy" is speculative and finds no support in the record.

All concur except Saxe, J.P. and Freedman, J. who dissent in a memorandum by Saxe, J.P. as follows:

SAXE, J.P. (dissenting)

Although the motion court dismissed plaintiff's serious injury claims on the ground that his physician's measurements of plaintiff's range-of-motion limitations were not made contemporaneously with the accident, the majority affirms the dismissal based on different reasoning, namely, what it deems to be an insufficiently-explained cessation of treatment. In view of plaintiff's assertion that he ceased ongoing therapy when his no-fault benefits for that service ceased, I believe it is error to affirm the dismissal of plaintiff's claims on that ground. I strenuously disagree with the majority's assertion that in order to be entitled to proceed with his serious injury claims, plaintiff had an affirmative obligation to explain why he could not afford to pay out of pocket for his continued therapy after his no-fault benefits stopped covering his therapy.

On April 8, 2007, plaintiff Nandkumar Ramkumar, then 23 years old, was a passenger in an automobile owned by defendant Bisnath Bissessar and operated by co-defendant Danish Bissessar, when their car collided with another automobile owned by defendant Grand Style Transportation Enterprises Inc. and operated by defendant Ibrahim S. Tandia. Plaintiff was taken by ambulance to a nearby hospital emergency room where he was diagnosed with soft tissue injury, prescribed ibuprofen and released.

He sought treatment the next day, April 9, 2007, at Liberty Advanced Medical, P.C., complaining of severe neck pain, lower back pain and pain in his right knee. Dr. William Mejia diagnosed him with cervical and lumbar sprain and strain, and post-traumatic injury to the right knee, and prescribed a course of physical therapy, with MRIs to be performed if the symptoms persisted. On May 25, 2007, an MRI of plaintiff's lumbar spine was performed, and a left foraminal herniation was found at L3-4, and a central disc herniation was found at L4-5. On June 20, 2007, an MRI was performed on his right knee, revealing a tear of the lateral meniscus, involving both the anterior and posterior horns. Arthroscopic surgery was performed on plaintiff's knee by Dr. Mehran Manouel on June 29, 2007. Plaintiff alleges that he was confined to bed for two days in April 2007 and for seven days in June and July 2007 "and intermittently thereafter."

Plaintiff commenced this action on or about July 10, 2007, alleging that the accident resulted in tears to his right meniscus, and injuries to his shoulders, cervical spine and lumbar spine, including herniated discs at L3-4 and L4-5.
Defendants moved for summary judgment, contending that plaintiff cannot establish that he suffered a serious injury as defined by Insurance Law § 5102(d). They relied on the reports of three experts: two orthopedists and a radiologist.

Although their experts' findings satisfied defendants' burden of making a prima facie showing of entitlement to summary judgment (see Feliz v Fragosa, 85 AD3d 417, 418 [2011]), the evidence offered in response by plaintiff created an issue of fact as to whether plaintiff's injuries constituted serious injuries that were causally related to the accident, at the very least, with regard to the injuries to his right knee.

The affirmation by plaintiff's surgeon, Dr. Manouel, emphasized that based on his direct observations of plaintiff's knee during the surgery and the photographs taken at the time of the surgery, the injury —- a large flap and radial shaped tear on the anterior and middle horn — was unmistakable, consistent with the described accident, and explained plaintiff's complaints of recurrent knee pain that began only after the accident and continued consistently since then. He added that causality was apparent since plaintiff was a young man with no history of knee injury or previous complaints of knee pain. He further stated that the torn meniscus "is by definition a permanent injury in that the tear or fissure of the meniscus can never spontaneously heal by itself without surgical intervention. Furthermore, once surgically repaired, the meniscus has permanently lost its pre-injury stability with onset of scar tissue, instability and loss of range of motion and strength, with pain, all of which Mr. Ramkumar now has and will continue to have for the rest of his life" (emphasis added).

He went on to explain the nature of the permanent injury in greater detail:
"Due to the mechanism of trauma he has sustained in this accident, there was a tearing of the right knee muscles, tendons, ligaments, blood vessels and nerves. These structures heal by formation of scar tissue, which is relatively inelastic and permanent in nature and causes significant restriction of motions, limitations of activities and pain."

In addition, in his examination of plaintiff on May 4, 2009, Dr. Manouel found significant limitations in plaintiff's range of motion in flexion in his knee, as well as some continued limitations of motion in his lumbar spine and shoulder.

The motion court granted defendants' cross-motions for summary judgment, concluding that plaintiff failed to satisfy his evidentiary burden of submitting objective medical proof of serious injury causally related to the accident, by failing to offer a contemporaneous examination showing limitations in plaintiff's range of motion, or the necessary objective evidence of the significant limitations resulting from the meniscal tear. It also held that a lack of evidence that plaintiff underwent any therapy or treatment required dismissal. The majority affirms on the ground that plaintiff failed to sufficiently explain his cessation of therapeutic treatment.

I respectfully dissent with regard to plaintiff's serious injury claims (other than his 90/180 claim — as to which I agree that he failed to offer the requisite proof to support the claim).

Serious injury may be established under Insurance Law § 5102(d) by a "permanent consequential limitation of use of a body organ or member" or a "significant limitation of use of a body function or system." Establishing that a plaintiff suffered a torn meniscus, or a bulging or herniated disc, as a result of the occurrence, is not enough. These types of soft-tissue injury may constitute serious injuries within the meaning of the statute, but only if the necessary showing of objective evidence establishing that the injury resulted in significant physical limitations of significant duration is made by the plaintiff (see Bamundo v Fiero, 88 AD3d 831 [2d Dept 2011]; Colon v Vincent Plumbing & Mechanical Co., 85 AD3d 541 [1st Dept 2011]).

In Toure v Avis Rent A Car Systems, Inc. (98 NY2d 345, 350-51 [2002]), the Court of Appeals wrote that, in "order to prove the extent or degree of physical limitation," plaintiff can provide either "an expert's designation of a numeric percentage of a plaintiff's loss of range of motion," or "[a]n expert's qualitative assessment of a plaintiff's condition," provided that such evaluation "has an objective basis and compares the plaintiff's limitations to the normal function, purpose and use of the affected body organ, member, function or system," so that it "can be tested during cross-examination, challenged by another expert and weighed by the trier of fact." While Dr. Manouel did not initially perform quantified range of motion testing, he tendered a "qualitative assessment" of plaintiff's meniscal injuries, reporting that plaintiff experienced pain, buckling and popping of the knee, and that the knee continued to have functional limitations after surgery. Moreover, his assessment was supported by objective evidence, namely the MRI of the knee and the observations during the arthroscopic surgery establishing the existence of the tear, as well as the McMurray test that was performed.

Plaintiff adequately rebutted the assertion by defendants' experts that plaintiff's injuries were degenerative rather than caused by the accident (see Spencer v Golden Eagle, Inc., 82 AD3d 589 [2011]). Plaintiff's radiologist specifically stated that there was no indication of any degenerative condition present when he read the films, and plaintiff's surgeon asserted that in view of plaintiff's age, the absence of any prior complaints, and the nature of the injuries found in MRIs performed weeks after the accident, the subject accident was the sole competent producing cause of plaintiff's injuries.

It was error to reject Dr. Manouel's measurements of plaintiff's limitations in his range of motion in the injured areas simply because those measurements were made in his follow-up examination on May 4, 2009, two years after the accident, and were not "contemporaneous" with the accident. The Court of Appeals explained in Perl v Meher (18 NY3d 208 [2011]), that there is no justification for imposing a requirement of "contemporaneous" quantitative measurements, since while "a contemporaneous doctor's report is important to proof of causation [because] an examination by a doctor years later cannot reliably connect the symptoms with the accident ... where causation is proved, it is not unreasonable to measure the severity of the injuries at a later time" (id. at 217-218). Here, there is strong evidence causally connecting the injuries to the accident, so the measurements of limitations taken two years later are valid evidence that plaintiff experienced continuing significant limitations due to his injuries. The surgeon's quantification of limitations in plaintiff's range of motion of the knee two years after the accident is therefore sufficient.

In my estimation, the majority's reliance on a so-called cessation of treatment is misplaced here. Injuries are not always treatable by physical therapy, but even when therapy might help, sometimes the medical coverage of injured plaintiffs limits them to a set number of weeks or sessions or physical therapy, leaving them no choice but to cease treatment. Here, for instance, plaintiff testified during his July 2008 deposition that he had no medical insurance at the time of the accident, that he obtained treatment at the Liberty Medical clinic after this accident, received therapy three days a week for "more than six months," but in response to the question of when he was last treated at the Liberty Medical clinic, he answered "they cut me off like five months," although he added that he did have a subsequent follow-up appointment with Dr. Manouel, whose orthopedic practice was located elsewhere.

In Pommells v Perez (4 NY3d 566, 574 [2005]), the Court explained that "[w]hile a cessation of treatment is not dispositive —- the law surely does not require a record of needless treatment in order to survive summary judgment —- a plaintiff who terminates therapeutic measures following the accident, while claiming serious injury,' must offer some reasonable explanation for having done so." In the Pommells matter, the Court held that dismissal was proper because neither the plaintiff nor his doctors explained why he did not pursue any treatment for his injuries after the initial six-month period (id.), while in the related matter of Brown v Dunlap, the gap of 2½ years during which that plaintiff received no treatment for his injuries was explained by his doctor, who said he terminated treatment once he determined further medical therapy would be only palliative in nature (id. at 577). Here, the necessary explanation was offered by plaintiff when he said, perhaps inartfully, that his benefits were "cut off" at some point.

The majority suggests that a plaintiff cannot satisfactorily explain the cessation of treatment solely with the information that insurance coverage for continued therapy had ceased. It holds that the plaintiff must offer documentary evidence, "or, at least, an indication as to whether an injured claimant can afford to pay for the treatment out of his or her own funds." This proposal engrafts a new requirement onto our jurisprudence in the area of serious injury under Insurance Law § 5102(d), one that is not justified by the language of Pommells v Perez.
In support of imposing such an obligation on plaintiff, the majority cites Salman v Rosario (87 AD3d 482 [2011]) and Jacobs v Rolon, 76 AD3d 905 [2010]), in which this Court accepted the explanations provided by the plaintiffs that once their no-fault benefits stopped, they could not afford to pay for continued medical care. There is nothing incorrect about these rulings, but they were never intended to establish the minimum acceptable explanation as contemplated in Pommells v Perez.

Also offered in support for the majority's ruling is a lower court decision in Gomez v Ford Motor Credit Co. (10 Misc 3d 900, 903 [Sup Ct Bronx County 2005]). The court in Gomez analyzed the requirements set out in Pommells v Perez and concluded that a plaintiff's burden of explaining a gap or cessation in treatment was not satisfied by the explanation that no-fault benefits had been discontinued. The court there held that the plaintiff was required to submit substantiation for the assertion that no-fault benefits were discontinued, adding that "[a]t the very least, counsel for plaintiff should have provided a letter from the insurance carrier as to when and why the carrier discontinued coverage" (id.). It termed an unsubstantiated claim "conclusory and nonprobative" (id.). It then went even further, blaming the plaintiff for failing to "provide[] an explanation as to why he could not have continued treatment paid out of his own pocket" (id.).

This proposed requirement in Gomez of "substantiation" of the plaintiff's explanation for the cessation of treatment would engraft onto § 5102(d) an unfair and unreasonable standard of proof. Anyone who has ever dealt with no-fault carriers would understand the likely futility of obtaining the suggested letter from them. The onerous nature of the Gomez requirements is highlighted by the companion requirement suggested there — one that seems to be adopted by the majority here — requiring a plaintiff to "explain" why he could not have paid out of pocket to continue his treatment when insurance benefits terminated. If we were to adopt such a requirement, a plaintiff with a substantial, lasting injury that was not healed during the course of the covered therapeutic treatment, would not be entitled to proceed with a lawsuit unless and until the plaintiff either dug deep into savings to pay for continued therapeutic treatment, or explained why his or her financial circumstances did not permit it. Indeed, consistent with Gomez's proposed "substantiation" requirement, proof of the plaintiff's financial condition would be necessary.

The fact of the matter is that for most people, when insurance coverage ends, treatment ends. Very few people have the means to pay the substantial fees that the uninsured are charged for medical care. People who are employed have regular expenses on which they must spend their earnings; even people with savings most often have plans for the use of those funds. The right to sue for a serious injury cannot be predicated on the plaintiff paying those substantial fees out of pocket, assuming that the funds exist.

Pommells v Perez requires only that a plaintiff who claims that an injury remains after terminating treatment for it "must offer some reasonable explanation for having done so" (4 NY3d at 574). It does not treat such an explanation as conclusory or nonprobative in the absence of corroborating documentation. I therefore disagree with the majority's ruling that a reasonable explanation for a gap in treatment due to a cessation of insurance benefits must include documentation or a showing as to whether the plaintiff can afford to pay for the treatment out of pocket.
I would reinstate plaintiff's serious injury claims.

Barry v. Arias

Baker, McEvoy, Morrissey & Moskovits, P.C., New York (Stacy R. Seldin of counsel), for appellants.
Michelle S. Russo, Port Washington, for respondents.
Order, Supreme Court, Bronx County (Fernando Tapia, J.), entered March 24, 2011, which denied defendants' motion for summary judgment dismissing the complaint alleging serious injuries under the "permanent consequential limitation of use," "significant limitation of use," and 90/180-day categories of Insurance Law § 5102(d), unanimously reversed, on the law, without costs, the motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly.

Plaintiffs Danielle Barry and Cherlynn Reeves allege that they sustained serious injuries as a result of their car being rear-ended by defendants' livery cab in July 2008. Defendants made a prima facie showing that neither plaintiff sustained a permanent or significant injury by submitting the affirmed reports of a neurologist and orthopedist who, based upon examinations of plaintiffs in November 2009 and February 2010, found no neurological deficits and full ranges of motion in both plaintiffs' cervical and lumbar spines, and in Barry's right knee, and concluded that any alleged injuries had resolved. Further, the affirmed MRI reports of defendants' radiologist noted an absence of evidence of recent trauma or acute injuries to the spines (see Porter v Bajana, 82 AD3d 488 [2011]; Amamedi v Archibala, 70 AD3d 449, 449 [2010], lv denied 15 NY3d 713 [2010]).

The physicians' failure to review plaintiffs' medical records does not require denial of defendants' motion, as the doctors detailed the objective tests they employed during the examinations to find full ranges of motion, and the radiologist's finding of absence of recent trauma was based on an independent review of the MRI films (see Canelo v Genolg Tr. Inc., 82 AD3d 584 [2011]; Clemmer v Drah Cab Corp., 74 AD3d 660, 660-661 [2010]; DeJesus v Paulino, 61 AD3d 605, 607 [2009]).

Neither plaintiff raised a triable issue of fact to defeat summary judgment, as none of their medical evidence was submitted in admissible form. Their radiologists' and physiatrist's reports were unaffirmed (see CPLR 2106; Lazu v Harlem Group, Inc., 89 AD3d 435 [2011]; Pinkhasov v Weaver, 57 AD3d 334 [2008]). Although their chiropractor affirmed his reports, reports of chiropractors must be subscribed before a notary or other authorized official (see Shinn v Catanzaro, 1 AD3d 195, 197-198 [2003]; see also CPLR 2106).

Defendants did not submit any evidence contradicting plaintiff Barry's allegations and testimony that she was confined to home and was unable to work for three months, or any evidence negating existence of a 90/180-day injury (see Suazo v Brown, 88 AD3d 602 [2011]; Alozie v Tempesta & Son Co., Inc., 83 AD3d 535 [2011]). However, the reports of defendants' radiologist finding only degenerative changes related to Barry's age and body habitus, and Barry's own deposition testimony that she had injured her lower back before the accident, established prima facie lack of causation, and Barry failed to submit any admissible evidence sufficient to raise an issue of fact (Mitrotti v Elia, 91 AD3d 449 [2012]; Jimenez v Polanco, 88 AD3d 604 [2011]).

Jean-Louis v. Gueye

Baker, McEvoy, Morrissey & Moskovits, P.C., New York (Stacy R. Seldin of counsel), for appellants.
Law Office of A. Ali Yusaf & Associates, Richmond Hill (Stephen A. Skor of counsel), for respondent.

Order, Supreme Court, New York County (George J. Silver, J.), entered April 14, 2011, which, in an action for personal injuries, denied defendants' motion for summary judgment dismissing the complaint on the ground that plaintiff did not suffer a serious injury within the meaning of Insurance Law § 5102(d), and granted plaintiff's cross motion for partial summary judgment as to her 90/180-day claim, unanimously modified, on the law, to deny plaintiff's cross motion, and otherwise affirmed, without costs. Appeal from order, same court and Justice, entered October 12, 2011, which, insofar as it granted reargument, adhered to the prior order, unanimously dismissed, without costs, as academic.
Defendants met their prima facie burden with respect to the permanent consequential and significant limitation categories by offering the affirmation of an orthopedic surgeon who found normal ranges of motion for plaintiff's cervical spine, lumbar spine, left and right hips, and left and right knees (see Insurance Law § 5102[d]; Toure v Avis Rent A Car Sys., 98 NY2d 345 [2002]). Plaintiff raised an issue of fact in opposition by submitting the MRI reports of her lumbar spine showing bulges at L4-5 and L5-S1, of her cervical spine showing disc bulges at C5-C6, and a grade II tear of the MCL of plaintiff's right knee, along with the affirmation of her orthopedic surgeon stating that such injuries were caused by the accident or had been exacerbated thereby, and that each of those body parts suffered losses in their range of motion as a result of the accident.

We reject defendants' argument that the affirmation of plaintiff's orthopedic surgeon is rendered speculative because of his failure to reconcile the notation made on plaintiff's emergency room records indicating a full range of motion of her cervical spine. Those records are unaffirmed, fail to indicate any objective instruments or criteria used to make such a finding, and fail to compare normal values (see Pommells v Perez, 4 NY3d 566, 573-574 [2005]; Rosa-Diaz v Maria Auto Corp., 79 AD3d 463, 464 [2010]; DeJesus v Paulino, 61 AD3d 605 [2009]). Further, contrary to defendants' arguments, plaintiff's orthopedic surgeon set forth an adequate basis for relating the accident as the cause of plaintiff's injuries or the exacerbation thereof (see Perl v Meher, 18 NY3d 208 [2011]). We also reject defendants' arguments pertaining to plaintiff's alleged gap in treatment because it is adequately explained by her orthopedic surgeon's finding that her improvement plateaued (see Pommells v Perez, 4 NY3d at 574; Mercado-Arif v Garcia, 74 AD3d 446 [2010]).

As to plaintiff's 90/180-day claim, Supreme Court properly found that plaintiff met her prima facie burden with respect thereto. Plaintiff submitted evidence that her orthopedic surgeon instructed plaintiff to remain out of work and substantially restrict her day to day activities, finding that she was "totally disabled" during the relevant statutory period. Plaintiff testified that she had no choice but to do so given the fact that she underwent two surgeries during the relevant period. This was further corroborated by the affirmation from her employer stating that plaintiff was absent from work from February 12, 2008, the date of the accident, until June 23, 2008. However, defendants raised an issue of fact as to whether plaintiff was actually medically prevented from going to work and whether any injuries she may have experienced were caused by the accident or preexisted the accident. Plaintiff's emergency room records show that she was discharged on the day of the accident with no restrictions and a full range of motion in her neck. Defendants' radiologists opined that plaintiff's MRIs showed no cervical or lumbar spine abnormalities and a preexisting knee condition unrelated to the accident, and their orthopedic surgeon opined that plaintiff suffered no injury to her spine, that the procedure performed on plaintiff's lumbar spine was not medically indicated, and that she had a preexisting knee condition (see
DeJesus, 61 AD3d 605; Black v Regalado, 36 AD3d 437 [2007]).

We have considered the parties' remaining contentions, and find them unavailing.

Broughal v. Moss

Mahon Mahon Kerins & O'Brien, LLC, Garden City, N.Y. (Robert P. O'Brien and Joseph A. Hyland of counsel), for appellant.
Blane Magee, Rockville Centre, N.Y., for respondent.

DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals (1), as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Phelan, J.), entered April 6, 2011, as granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and (2) from a judgment of the same court entered April 25, 2011, which, upon the order, is in favor of the defendant and against her dismissing the complaint.

ORDERED that the appeal from the order is dismissed; and it is further,

ORDERED that the judgment is reversed, on the law, the complaint is reinstated, the defendant's motion for summary judgment dismissing the complaint is denied, and the order is modified accordingly; and it is further,

ORDERED that one bill of costs is awarded to the plaintiff.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).
The defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendant established, prima facie, that the alleged injuries to the cervical region of the plaintiff's spine did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795), and, in any event, were not caused by the subject accident (cf. Jilani v Palmer, 83 AD3d 786, 787; Gentilella v Board of Educ. of Wantagh Union Free School Dist., 60 AD3d 629, 629-630).
However, in opposition, the plaintiff submitted evidence raising a triable issue of fact as to whether the alleged injuries to the cervical region of her spine constituted a serious injury under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 215-218). The plaintiff also submitted evidence raising a triable issue of fact as to whether those alleged injuries were caused by the subject accident (id. at 218-219; see Jaramillo v Lobo, 32 AD3d 417, 418). Accordingly, the Supreme Court should have denied the defendant's motion for summary judgment dismissing the complaint.

Caracciolo v. Elmont Fire District

Elovich & Adell, Long Beach, N.Y. (Mitchell Sommer of counsel), for appellants.
Siler & Ingber, LLP, Mineola, N.Y. (Isaac J. Burker 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, Nassau County (Brandveen, J.), entered June 22, 2011, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff Nina Caracciolo 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 Nina Caracciolo (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 defendants argued that the alleged injuries to the cervical and lumbosacral regions of the injured plaintiff's spine, and to the injured plaintiff's brain, did not constitute serious injuries within the meaning of Insurance Law § 5102(d). However, the defendants' examining orthopedic surgeon recounted, in an affirmed report submitted in support of the defendants' motion for summary judgment dismissing the complaint, that range-of-motion testing performed during the examination revealed significant limitations of motion in the cervical and lumbosacral regions of the injured plaintiff's spine (see Scott v Gresio, 90 AD3d 736, 737; Walter v Walch, 88 AD3d 872, 873). Furthermore, the defendants' examining orthopedic surgeon did not address the alleged injuries to the injured plaintiff's brain, and the defendants failed to submit any other competent medical evidence addressing those alleged injuries (see Safer v Silbersweig, 70 AD3d 921, 922).

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 737; Walter v Walch, 88 AD3d at 873; Safer v Silbersweig, 70 AD3d at 922).

Diliberto v. Barberich

Ginsburg & Misk, Queens Village, N.Y. (Gerard N. Misk of counsel), for appellant.
David J. Sobel, P.C., Smithtown, N.Y., for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Farneti, J.), dated October 17, 2011, which denied her cross motion for summary judgment, in effect, on the issue of liability, and dismissing the fifth affirmative defense alleging the lack of a serious injury within the meaning of Insurance Law § 5102(d).

ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the plaintiff's cross motion which was for summary judgment, in effect, on the issue of liability, and substituting therefor a provision granting that branch of the cross motion; as so modified, the order is affirmed, without costs or disbursements.

The plaintiff established her prima facie entitlement to judgment as a matter of law on the issue of liability (see Franklin v 2 Guys From Long Pond, Inc., 50 AD3d 846, 847; Gregson v Terry, 35 AD3d 358, 361; Russo v Sabella Bus Co., 275 AD2d 660). In opposition, the defendant failed to raise a triable issue of fact as to her liability (Russo v Sabella Bus Co., 275 AD2d at 660-661). Accordingly, the Supreme Court should have granted that branch of the plaintiff's cross motion which was for summary judgment, in effect, on the issue of liability.

The plaintiff, however, failed to establish her prima facie entitlement to judgment as a matter of law dismissing the fifth affirmative defense, which alleged that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. While the plaintiff submitted competent medical evidence establishing, prima facie, that she had a fractured rib, which constitutes a serious injury within the meaning of Insurance Law § 5102(d) (see Bebry v Farkas-Galindez, 276 AD2d 656), she failed to establish, prima facie, that the injury was causally related to the subject accident (see Kapeleris v Riordan, 89 AD3d 903, 904; Elshaarawy v U-Haul Co. of Miss., 72 AD3d 878, 881; Dabbs v Kelly, 245 AD2d 482, 482-483). Accordingly, since the plaintiff failed to meet her prima facie burden, the Supreme Court properly denied that branch of the plaintiff's cross motion which was for summary judgment dismissing the fifth affirmative defense, without considering the sufficiency of the defendant's opposition papers (see Altamura v Onebeacon Ins. Group, 68 AD3d 792; see generally Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).

Hossan v. Hernandez

H. Bruce Fischer, P.C., New York, N.Y., for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Stacy R. Seldin of counsel), for respondents.

DECISION & ORDER

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

ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint 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 defendants submitted competent medical evidence establishing, prima facie, that the alleged injuries to the cervical region of the plaintiff's spine did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795).

However, in opposition, the plaintiff submitted competent medical evidence raising a triable issue of fact as to whether the alleged injuries to the cervical region of his spine constituted a serious injury under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 215-218). Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint.

Orgel v. Kathleen Cab Corp.

Mallilo & Grossman, Flushing, N.Y. (Francesco Pomara, Jr., of counsel), for appellant.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Stacy R. Seldin of counsel), for respondents.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Agate, J.), dated June 1, 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) as a result of the subject accident.
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 defendants submitted competent medical evidence establishing, prima facie, that the alleged injuries to the cervical and lumbosacral regions of the plaintiff's spine did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795).

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 lumbosacral regions of her spine constituted serious injuries under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 215-218). Accordingly, the Supreme Court should have denied the defendants' motion for summary judgment dismissing the complaint.

Parise v. New York City Transit Authority

Wallace D. Gossett (Steve S. Efron, New York, N.Y. [Renee L. Cyr], of counsel), for appellant.
Rosato & Lucciola, P.C., New York, N.Y. (Joseph S. Rosato, Gerard A. Lucciola, and Paul A. Marber of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, the defendant appeals from a judgment of the Supreme Court, Kings County (Kramer, J.), dated July 29, 2010, which, upon a jury verdict in favor of the plaintiff, and upon the denial of its motion pursuant to CPLR 4404(a) to set aside the verdict and for judgment as a matter of law, is in favor of the plaintiff and against it in the principal sum of $608,000.
ORDERED that the judgment is reversed, on the law, with costs, the defendant's motion pursuant to CPLR 4404(a) to set aside the jury verdict and for judgment as a matter of law is granted, and the complaint is dismissed.

Viewing the evidence in the light most favorable to the plaintiffs, no rational jury could have found that the plaintiff sustained a serious injury under the "90/180-day" category of Insurance Law § 5102(d) (see Lanzarone v Goldman, 80 AD3d 667, 669; Nesci v Romanelli, 74 AD3d 765, 766). In order to establish a serious injury under this prong of the statute, the plaintiff must establish that he or she "has been curtailed from performing his [or her] usual activities to a great extent" during 90 of the 180 days immediately following the subject accident (Licari v Elliott, 57 NY2d 230, 236; see Insurance Law § 5102[d]). Here, the plaintiff failed to present evidence showing that the injuries that he suffered as a result of this accident curtailed him from performing his usual and customary activities to a great extent for the requisite period (see Lanzarone v Goldman, 80 AD3d at 669; Nesci v Romanelli, 74 AD3d at 766; Hamilton v Rouse, 46 AD3d 514, 516-517; Rodriguez v Virga, 24 AD3d 650, 652; Mercado v Garbacz, 16 AD3d 631, 632; Berman v General Electric Cap Auto, 300 AD2d 522).

The parties' remaining contentions are without merit or need not be reached in light of our determination.

Seifeldin v. Braick

Arze & Mollica, LLP, Brooklyn, N.Y. (Raymond J. Mollica of counsel), for appellant.
Adams, Hanson, Finder, Hughes, Rego, Kaplan & Fishbein, Lake Success, N.Y. (Justin M. DeLaire of counsel), for respondents Faek M. Braick and Alice Alhalak.

DECISION & ORDER

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Ruchelsman, J.), dated February 15, 2011, which granted the motion of the defendants Faek M. Braick and Alice Alhalak, and the separate motion of the defendants Fatma Youssef and Mohammed S. Abdelghani, for summary judgment dismissing the complaint insofar as asserted against each of them 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 one bill of costs, and the motion of the defendants Faek M. Braick and Alice Alhalak, and the separate motion of the defendants Fatma Youssef and Mohammed S. Abdelghani, for summary judgment dismissing the complaint insofar as asserted against each of them are denied.

The defendants met their respective prima facie burdens 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 lumbosacral region of the plaintiff's spine, and to the plaintiff's right knee, 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 lumbosacral region of her spine, and to her right knee, constituted serious injuries under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 215-218). Accordingly, the Supreme Court should have denied the defendants' separate motions for summary judgment dismissing the complaint insofar as asserted against each of them.

Starkey v. Curry

Pamela Gabiger, Poughkeepsie, N.Y., for appellants.
Adams, Hanson, Finder, Hughes, Rego, Kaplan & Fishbein, Yonkers, N.Y. (E. Richard Vieira of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Dutchess County (Pagones, J.), dated July 29, 2011, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that the plaintiff Walter J. Starkey did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident.

ORDERED that the order is reversed, on the law, with costs, and the defendant's motion for summary judgment dismissing the complaint is denied.
The Supreme Court erred in determining that the defendant made a prima facie showing that the plaintiff Walter J. Starkey (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). In support of his motion, the defendant relied upon, among other things, affirmed medical reports of Dr. Robert C. Hendler, the defendant's examining orthopedist, who set forth in his December 16, 2010, report, based upon his examination of the injured plaintiff on December 14, 2010, the range-of-motion findings with respect to the cervical and lumbar regions of the injured plaintiff's spine and his shoulders, but failed to compare those findings to what is normal (see Ambroselli v Team Massapequa, Inc., 88 AD3d 927, 928; Grisales v City of New York, 85 AD3d 964, 965; Levin v Khan, 73 AD3d 991; Page v Belmonte, 45 AD3d 825).

Since the defendant failed to meet his prima facie burden, it is unnecessary to consider whether the plaintiffs' opposition papers were sufficient to raise a triable issue of fact (see Page v Belmonte, 45 AD3d 825; Coscia v 938 Trading Corp., 283 AD2d 538).

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

Russell v. Pulga-Nappi

Calendar Date: February 6, 2012
Before: Mercure, J.P., Rose, Malone Jr., Garry and Egan Jr., JJ.

McCabe & Mack, L.L.P., Poughkeepsie (Kimberly Hunt Lee of counsel), for appellants.
Goldstein & Metzger, L.L.P., Poughkeepsie (Mark J. Metzger of counsel), for respondent.

MEMORANDUM AND ORDER

Rose, J.

Appeal from an order of the Supreme Court (Cahill, J.), entered January 13, 2011 in Ulster County, which denied defendants' motion for summary judgment dismissing the complaint.

After plaintiff's vehicle was struck from behind in a chain-reaction collision while he was stopped at the drive-up window of a fast food restaurant, he commenced this action alleging that, as a result of the accident, he sustained a serious injury within the meaning of Insurance Law § 5102 (d). Plaintiff alleged injuries including bulging discs with annular tears, radiculopathy and spondylolisthesis in his lumbar spine with right leg pain and numbness, disc bulges and herniations in his thoracic spine and disc herniations in his cervical spine. Plaintiff's verified bill of particulars and amended verified bill of particulars noted his claim that the accident "precipitated, triggered and/or accelerated a preexisting and prior condition." After discovery was complete, defendants moved for summary judgment dismissing the complaint on the ground that plaintiff's injuries were entirely preexisting and not the result of the accident. Supreme Court denied the motion, and we affirm.

Defendants failed to carry their initial burden of establishing the lack of a causal relationship by submitting competent medical evidence sufficient to eliminate any material issues of fact (see D'Auria v Kent, 80 AD3d 956, 957-958 [2011]; Howard v Espinosa, 70 AD3d 1091, 1092 [2010]; McElroy v Sivasubramaniam, 305 AD2d 944, 945 [2003]). In support of their motion, defendants submitted affidavits from an orthopedic surgeon who performed an independent medical examination of plaintiff and a radiologist who reviewed plaintiff's medical records and imaging studies. The orthopedic surgeon did not dispute the seriousness of plaintiff's injuries. Instead, he opined that plaintiff's truck was extremely heavy, it suffered almost no damage and the presence of two other vehicles between plaintiff's truck and defendants' vehicle made it impossible to believe that plaintiff sustained any significant impact. Although he acknowledged that plaintiff, a 45-year-old carpenter at the time of the accident, appeared to be very fit and reported never having had any trouble with his back or leg before the accident, the surgeon could not "imagine" that plaintiff's spondylolisthesis had been asymptomatic. Similarly, the radiologist stated that plaintiff's complaints of low back and right leg pain were consistent with the severity of his preexisting condition but inconsistent with the severity of the accident, which the radiologist referred to as "trivial." The radiologist concluded that, because of the trivial nature of the accident, he had difficulty believing that plaintiff never had any low back complaints prior to the accident. Included among the medical records submitted by defendants was a single comment that plaintiff had noted "some back pain" on a list of 60 questions that he had answered three years before the accident when he was treated by an unrelated physician for a wholly unrelated injury to his right ring finger.

We agree with Supreme Court that neither physician is qualified to offer an opinion regarding the biomechanics or physics of the collision, and their unsupported opinions in this regard are speculative (see Ames v Paquin, 40 AD3d 1379, 1380 [2007]; Garcia v City of New York, 104 AD2d 438, 439 [1984], affd 65 NY2d 805 [1985]; compare Anderson v Persell, 272 AD2d 733, 734-735 [2000]). Further, their opinions that plaintiff could not have been asymptomatic prior to the accident are also unsupported, inasmuch as plaintiff reported never having had any prior complaints, and the medical records submitted with the motion reflect no prior treatment for any back pain or spinal condition (see Gonyou v McLaughlin, 82 AD3d 1626, 1627 [2011]; Colavito v Steyer, 65 AD3d 735, 736 [2009]). In our view, the single, isolated notation that plaintiff answered 60 intake questions in the negative "except for some back pain" three years before the accident is insufficient to meet defendants' initial burden of eliminating a material issue of fact on this point (compare Ashquabe v McConnell, 46 AD3d 1419 [2007], with Howard v Espinosa, 70 AD3d at 1092-1093). Viewing this evidence in a light most favorable to plaintiff and according him every favorable inference (see Gronski v County of Monroe, 18 NY3d 374, 381 [2011]; Secore v Allen, 27 AD3d 825, 828-829 [2006]), we agree with Supreme Court that defendants failed to establish, as a matter of law, that plaintiff did not sustain a causally-related serious injury. Accordingly, we need not consider whether plaintiff's opposition was sufficient to raise a triable issue of fact (see Haack v Kriss, 47 AD3d 1007, 1009 [2008]; Ames v Paquin, 40 AD3d at 1380).
Mercure, J.P., Malone Jr., Garry and Egan Jr., JJ., concur.
ORDERED that the order is affirmed, with costs.

 

Saunders  v Newmark Construction

Catalano Gallardo & Petropoulos, LLP, Jericho, N.Y. (Domingo
R. Gallardo, June D. Reiter, and William L. Schleifer of counsel),
for appellants-respondents.
Mulholland, Minion, Duffy, Davey, McNiff & Beyrer,
Williston Park, N.Y. (Brian M. Martin of
counsel), for respondent-appellant.
Dwyer & Brennan, New York, N.Y. (Gerald P. Dwyer of
counsel), for respondent Advanced
Contracting Corp.


DECISION & ORDER

In a consolidated action to recover damages for personal injuries, (1) the defendants Newmark Construction, Newmark & Company, Ethan Builders, LLC, and Bay Street Associates, LLC, appeal from so much of an order of the Supreme Court, Kings County (Partnow, J.), dated December 20, 2010, as denied those branches of their cross motion which were for summary judgment dismissing the complaint insofar as asserted against them or, in the alternative, for summary judgment on their cross claim for contractual indemnification against the defendant Advanced Contracting Corp., and (2) the plaintiff cross-appeals, as limited by his brief, from so much of the same order as granted that branch of the motion of the defendant Advanced Contracting Corp. which was for summary judgment dismissing the complaint insofar as asserted against it.

ORDERED that the order is affirmed insofar as appealed and cross-appealed from, with one bill of costs to the defendant Advanced Contracting Corp., payable by the plaintiff and the defendants Newmark Construction, Newmark & Company, Ethan Builders, LLC, and Bay Street Associates, LLC, and one bill of costs to the plaintiff payable by the defendants Newmark Construction, Newmark & Company, Ethan Builders, LLC, and Bay Street Associates, LLC.

The defendant Bay Street Associates, LLC (hereinafter Bay Street), owned certain premises located on Bay Street in Jersey City, New Jersey (hereinafter the work site). Bay Street contracted with the defendants Newmark Construction and/or Newmark & Company (hereinafter together Newmark Construction), to be the construction manager for a construction and renovation project at the work site. Bay Street also contracted with Ethan Builders, LLC (hereinafter Ethan Builders), to be the general contractor for the project. Advanced Contracting Corp. (hereinafter Advanced) performed interior demolition for the project. Nonparty United Staffing was one of two companies that Advanced contracted with to supply Advanced with laborers at the work site. The plaintiff, a United Staffing laborer, commenced this action against, among others, Newmark Construction, Ethan Builders, Bay Street, and Advanced to recover damages for personal injuries which he allegedly sustained on the work site.

The Supreme Court properly granted that branch of Advanced's motion which was for summary judgment dismissing the complaint insofar as asserted against it. None of the parties challenge the Supreme Court's application of New York and New Jersey law with respect to the workers' compensation issue raised by Advanced in support of its motion. The court determined that no conflict of law exists with respect to that issue. "[A]n injured person who receives workers' compensation benefits from his or her general employer is barred from maintaining a personal injury action against his or her special employer" (Dulak v Heier, 77 AD3d 787, 787; see Workers' Compensation Law §§ 11, 29[6]; Fung v Japan Airlines Co., Ltd., 9 NY3d 351, 357-359; Thompson v Grumman Aerospace Corp., 78 NY2d 553, 559-560; see also Walrond v County of Somerset, 382 NJ Super 227, 235, 888 A2d 491 [2006]). Under the circumstances of this case, Advanced submitted sufficient evidence demonstrating, as a matter of law, that the plaintiff was its special employee. The plaintiff failed to raise a triable issue of fact in opposition (see Thompson v Grumman Aerospace Corp., 78 NY2d at 557; Navallo v R.P. Brennan Gen. Contrs., 87 AD3d 683, 683; Vanderwerff v Victoria Home, 299 AD2d 345; Kramer v NAB Constr. Corp., 282 AD2d 714, 715; Walrond v County of Somerset, 382 NJ Super at 236-238, 888 A2d 491 [2006]; Kelly v Geriatric & Med. Servs., Inc., 287 NJ Super 567, 575-577, 671 A2d 631 [1996], affd 147 NJ 42, 685 A2d 943; Volb v G.E. Capital Corp., 139 NJ 110, 116-117, 651 A2d 1002 [1995]; Antheunisse v Tiffany & Co., Inc., 229 NJ Super 399, 404, 551 A2d 1006 [1998]; Cameli v Pace Univ., 131 AD2d 419, 420-421).

The Supreme Court properly denied that branch of the cross motion of Newmark Construction, Ethan Builders, and Bay Street (hereinafter collectively the Newmark defendants) which was for summary judgment dismissing the complaint insofar as asserted against them. None of the parties challenge the Supreme Court's application of New Jersey law with respect to the duty of care owed to the plaintiff. There was insufficient evidence submitted regarding the role of the Newmark defendants in the means and methods of the execution of the plaintiff's work (see Olivo v Owens-Illinois, Inc., 186 NJ 394, 407, 895 A2d 1143 [2006]; Muhammad v N.J. Transit, 176 NJ 185, 198-199, 821 A2d 1148 [2003]; Pfenninger v Hunterdon Cent. Reg'l. High School, 167 NJ 230, 252, 770 A2d 1126 [2001]). There also was insufficient evidence submitted regarding Newmark Construction's and Ethan Builders' actual knowledge of alleged dangerous conditions, the relationship between the parties and the connection between their responsibility for work progress and safety concerns, and their opportunity and capacity to have avoided the risk of harm through corrective measures (see Alloway v Bradlees, Inc., 157 NJ 221, 225, 231-233, 723 A2d 960 [1999]).

Therefore, the Newmark defendants failed to establish their entitlement to judgment as a matter of law, and the Supreme Court properly denied this branch of the cross motion regardless of the sufficiency of the plaintiff's opposing papers (see Alvarez v Prospect Hosp., 68 NY2d 320, 324).

Finally, the Supreme Court properly denied the alternative branch of the Newmark defendants' cross motion which was for summary judgment on their cross claim for contractual indemnification against Advanced. The Newmark defendants "failed to tender proof in admissible form establishing the terms of the contract in effect at the time of [the plaintiff's] accident" (Guerra v St. Catherine of Sienna, 79 AD3d 808, 809; see CPLR 3212[b]; Zuckerman v City of New York, 49 NY2d 557; City of New York v Gowanus Indus. Park, Inc., 65 AD3d 1071, 1073). Therefore, the Supreme Court properly denied this branch of the motion regardless of the sufficiency of Advanced's opposing papers (see Alvarez v Prospect Hosp., 68 NY2d at 324).
DILLON, J.P., FLORIO, AUSTIN and ROMAN, JJ., concur.

Schlecker v Yorktown Electrical & Lighting Distributors, Inc.

Feeney & Associates, PLLC, Hauppauge, N.Y. (Rosa M. Feeney
of counsel), for appellant in Action No. 1 and
defendant/counterclaim plaintiff-appellant in Action No. 2.
Sarisohn Law Partners, LLP, Commack, N.Y. (Floyd Sarisohn
and Marvin Waxner of counsel), for
respondent in Action No. 1 and
plaintiff/counterclaim defendant-respondent
Yorktown Distributors, Inc., in Action
No. 2.


DECISION & ORDER

In an action and a related consolidated action, inter alia, for a judgment declaring the rightful beneficiary of the proceeds of a life insurance policy, Rosemarie Schlecker, the plaintiff in Action No. 1 and the defendant/counterclaim plaintiff in Action No. 2, appeals, as limited by her brief, from so much of an order of the Supreme Court, Suffolk County (Pines, J.), dated September 13, 2010, as declined to search the record and sua sponte award her summary judgment on the complaint in Action No. 1, and determined that there had been no sale of a certain business.

ORDERED that the appeal is dismissed, with costs.

The appellant is not aggrieved by so much of the order as declined to search the record and sua sponte award her summary judgment on the complaint in Action No. 1 (see CPLR 5511; Franklin v Allen Health Care Servs., 45 AD3d 637; QDR Consultants & Dev. Corp. v Colonia Ins. Co., 251 AD2d 641). "[A party] is not aggrieved by an order which does not grant relief [he or she] did not request" (QDR Consultants & Dev. Corp. v Colonia Ins. Co., 251 AD2d at 641; cf. Coleman v Hayes, 294 AD2d 458, 459; Rhinebeck Bicycle Shop v Sterling Ins. Co., 151 AD2d 122, 124).

Furthermore, the appellant is not aggrieved by so much of the order as, in reaching a result which was not adverse to her, reasoned that there was not a "sale of the business." "Merely because the order appealed from contains language or reasoning that a party deems adverse to its interests does not furnish a basis for standing to take an appeal'" (Castaldi v 39 Winfield Assoc., LLC, 22 AD3d 780, 781, quoting Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465, 472).

Since the appellant is not aggrieved by the portions of the order from which she appeals, the appeal must be dismissed.
MASTRO, A.P.J., HALL, LOTT and SGROI, JJ., concur.

Neary v Tower Insurance

Max W. Gershweir, New York, N.Y. (Joseph S. Wiener of counsel),
for appellant.
Mark E. Seitelman Law Offices, P.C., New York, N.Y. (Donald
D. Casale of counsel), for respondent.


DECISION & ORDER

In an action, inter alia, to recover damages for breach of an insurance contract, the defendant Tower Insurance appeals, as limited by its notice of appeal and brief, from so much of an order of the Supreme Court, Kings County (F. Rivera, J.), dated September 30, 2010, as denied that branch of its cross motion which was for summary judgment dismissing the complaint insofar as asserted against it.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the cross motion of the defendant Tower Insurance which was for summary judgment dismissing the complaint insofar as asserted against it is granted.

Raymond H. Neary, Sr., and Janet T. Neary (hereinafter together the Nearys) owned a residence in Brooklyn (hereinafter the premises), which they insured under a homeowners' policy (hereinafter the policy) with the defendant Tower Insurance (hereinafter Tower). The policy provided coverage only for premises where the Nearys, as the insureds, resided. On January 18, 2005, the premises were damaged in a fire. Tower disclaimed coverage on the ground that the Nearys did not reside at the premises at the time of the loss.

The Nearys commenced this action, inter alia, to recover damages from Tower for breach of the insurance contract. Subsequently, the Nearys died, and their daughter, Kathleen Neary (hereinafter the plaintiff), was substituted as executrix of their estates.

The Supreme Court erred in denying that branch of Tower's cross motion which was for summary judgment dismissing the complaint insofar as asserted against it. "The standard for determining residency for purposes of insurance coverage requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain" (Vela v Tower Ins. Co. of N.Y., 83 AD3d 1050, 1051, quoting Government Empls. Ins. Co. v Paolicelli, 303 AD2d 633, 633 [internal quotation marks omitted]; see Matter of Allstate Ins. Co. [Rapp], 7 AD3d 302, 303; New York Cent. Mut. Fire Ins. Co. v Kowalski, 195 AD2d 940, 941). Mere intention to reside at certain premises is not sufficient (see Vela v Tower Ins. Co. of N.Y., 83 AD3d at 1051).

Tower established its prima face entitlement to judgment as a matter of law by demonstrating that the Nearys did not reside at the subject premises when the fire occurred (id.). In opposition, the plaintiff failed to raise a triable issue of fact. Contrary to her contention, the term "reside" or "residence" is not ambiguous (id.; see Marshall v Tower Ins. Co. of N.Y., 44 AD3d 1014, 1015), and, therefore, must be accorded its plain and ordinary meaning (see Vela v Tower Ins. Co. of N.Y., 83 AD3d at 1051).
RIVERA, J.P., DICKERSON, CHAMBERS and AUSTIN, JJ., concur.

ENTER:
Aprilanne Agostino

 Nadel v. Allstate Insurance Company

Appeal from an order of the District Court of Nassau County, First District (Fred J. Hirsh, J.), dated January 10, 2011. The order denied defendant's motion for summary judgment.

ORDERED that the order is affirmed, without costs.

Plaintiff filed a claim with defendant, his insurer, for coverage under his automobile insurance policy after his car sustained damage in a motor vehicle accident. His car was inspected by defendant's claims adjuster, who submitted an estimate in the amount of $3,831.94, before the deduction of the applicable deductible. Plaintiff chose to have his car repaired by MVB Collision, Inc. d/b/a Mid-Island Collision, Inc. (Mid-Island), which estimated the repair costs to be $10,428.10. The parties were unable to reach an agreed price, and defendant ultimately sent plaintiff two checks for a total sum of $3,331.94. After plaintiff had Mid-Island repair his car, he commenced this breach of contract action against defendant.

Defendant moved for summary judgment, alleging that it did not breach the insurance policy because it did not have an obligation to pay the excess charges imposed by the repair facility which plaintiff had chosen. Plaintiff opposed the motion, contending that the question of whether defendant was liable for the excess amount was a factual question which must be determined on a "case-by-case" basis. The District Court denied defendant's motion.

Insurance Department Regulations (11 NYCRR) part 216, entitled "Unfair Claims Settlement Practices and Claim Cost Control Measures," governs an insurer's conduct in the auto repair process, and provides specific rules for the processing of first-party motor vehicle physical damage claims and third-party property damage claims arising under motor vehicle liability insurance contracts (see Insurance Department Regulations [11 NYCRR] § 216.0 [a]). Insurance Department Regulations (11 NYCRR) § 216.7 sets forth the standards for prompt, fair and equitable settlement of motor vehicle physical damage claims. The pertinent provision of the regulation states that, where an insurer decides to inspect a car prior to repair, "negotiations shall commence and a good faith offer of settlement, sufficient to repair the vehicle to its condition immediately prior to the loss, shall be made" to the insured's designated representative and may also be made to the insured, if there is no designated representative (see Insurance Department Regulations [11 NYCRR] § 216.7 [b] [1]). The regulation further provides that the negotiations "must be conducted in good faith, with the basic goal of promptly arriving at an agreed price with the insured or the insured's designated representative" (Insurance Department Regulations [11 NYCRR] § 216.7 [b] [7]). If, after negotiations, the parties cannot reach an "agreed price," which is defined as "the amount agreed to by the insurer and the insured, or their representatives, as the reasonable cost to repair damages to the motor vehicle resulting from the loss, without considering any deductible or other deductions" (Insurance Department Regulations [11 NYCRR] § 216.7 [a] [1]), the insurer must furnish the insured with a prescribed notice of rights letter (see Insurance Department Regulations [11 NYCRR] § 216.14 [i]) indicating the insurer's offer, and providing that, upon the insured's request, the insurer can recommend a repair shop that will make the repairs at a cost equal to the insurer's estimate.

The notice of rights letter further states that, if such request has not already been made, the insured must sign an attached disclosure statement in order to enable the insurer to recommend a repair shop (see Insurance Department Regulations [11 NYCRR] § 216.12). The disclosure statement advises the insured that, pursuant to Insurance Law § 2610, the insurer cannot require that the repairs be made at a particular shop. As noted, the notice of rights letter must be furnished to the insured if the parties cannot reach an "agreed price" (see Insurance Department Regulations [11 NYCRR] § 216.7 [b] [14] [i]), and provides the insurer with an opportunity to identify a repair shop that will repair the vehicle at the insurer's estimate and, in conformity with Insurance Law § 2610 (b), to recommend such shop only upon the insured's express request.

On July 16, 2008, the Superintendent of Insurance issued an opinion letter construing what constituted a "good faith negotiation" under Insurance Department Regulations (11 NYCRR) § 216.7 (b) (7). It stated that "a good faith negotiation need not result in an ultimate agreement on a settlement amount provided that a repair shop, reasonably convenient to the claimant, is able to repair the vehicle for the amount the insurer offers in settlement" (Ops Gen Counsel NY Ins Dept No. 08-07-09 [July 2008]). That letter further referred to, and cited with approval, an April 16, 2002 opinion letter which indicated that if an insurer makes a good faith offer to the insured to pay for the cost of repair and identifies a facility that will repair the damage at the cost estimated by the insurer, "the insurer is not obligated to pay for any repair cost that exceeds the amount of the good faith offer required" pursuant to Insurance Department Regulations (11 NYCRR) § 216.7 (b) (1). In such a circumstance, if the insured elects to repair the vehicle at another facility at a higher repair cost,"the insurer is not financially responsible . . . for any repair cost in excess of the cost of the insurer's . . . offer." A December 31, 2008 opinion letter further stated that there was "no requirement that either side move off its respective initial position in a negotiation, and an insurer is not required to alter its initial negotiating position on labor rates, or any other negotiable issue, provided that its position is taken in good faith" (Ops Gen Counsel NY Ins Dept NY Dept No. 08-12-09 [Dec. 2008]).

Giving due deference to the Insurance Department's interpretation of its own regulations as set forth in its opinion letters (see e.g. LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217 [2009]), we find that, in order to establish a prima facie case for summary judgment, defendant was required to comply with the regulatory mandate by demonstrating that it had undertaken good faith negotiations with plaintiff or his designated representative. In doing so, it had to establish, in support of its motion for summary judgment, that a facility "reasonably convenient" (including, e.g., both distance and time required to repair) to defendant existed, and that such facility would be able to repair the vehicle "to its condition immediately prior to the loss" (Insurance Department Regulations [11 NYCRR] § 216.7 [b] [1]) for the amount of its offer (see Ops Gen Counsel NY Ins Dept No. 08-07-09 [July 2008]). We note that while defendant is statutorily prohibited from recommending a repair facility if the insured does not request a recommendation (see Insurance Law § 2610 [b]), it is not barred in this litigation from identifying that facility, since there is no longer an issue as to whether defendant was "steering" plaintiff to a particular facility (see generally Allstate Ins. Co. v Serio, 98 NY2d 198 [2002]).

As defendant failed to meet its initial burden of establishing its entitlement to judgment as a matter of law (see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]), its motion was properly denied, albeit for reasons other than those stated by the District Court. In view of the foregoing, we need not reach plaintiff's remaining contentions.

Accordingly, the order is affirmed.

Hahn Automotive Warehouse, Inc. v  American Zurich Insurance Company

Michael J. Willett, for appellants.
Michael R. Wolford, for respondent.

GRAFFEO, J.:

The issue on this appeal is whether the six-year statute of limitations applicable to the insurers' breach of contract counterclaims began to run when they possessed the legal right to demand payment from the insured or years later after they issued invoices. Under the terms of the insurance contracts in this case, we conclude that the counterclaims accrued when the insurers had the right to demand payment.

Plaintiff Hahn Automotive Warehouse, Inc., an auto parts distributor with operations in multiple states, secured general liability, automotive liability and workers' compensation policies from defendants American Zurich Insurance Company and Zurich American Insurance Company (collectively, Zurich) for annual coverage periods between September 1992 and September 2003. Zurich also acted as the claims agent for automobile damage claims for which Hahn was self-insured from March 1997 until September 2003. The complex insurance arrangements at issue in this litigation can be broken into four general categories: (1) policies subject to retrospective premium agreements; (2) adjustable deductible policies; (3) deductible policies; and (4) claim services contracts.

Under the first category — encompassing several policies tied to retrospective premium plans — Hahn's initial premiums were based on estimated expenses and losses. Zurich was contractually required to recalculate the premiums owed 18 months after the policies' inception, with annual adjustments based on actual claims experience for as long as open claims remained. If an adjusted premium exceeded the initial premium, Zurich was to invoice Hahn for the difference. But if the recalculation resulted in a lesser premium than initially paid, Zurich would owe Hahn a refund. Any amounts owed by Hahn were to be paid "within ten (10) days of receipt of [Zurich's] demand" for payment.

Similarly, the adjustable deductible policies — the second type of insurance plan used by the parties — involved the payment of an initial premium to be adjusted annually by Zurich based on actual claims experience, beginning 18 months after policy inception. These policies further required Hahn to pay deductible losses and claim expenses on a monthly or quarterly basis for 42 months, after which such losses and expenses were to be billed annually as part of the premium adjustment process.

In the third category, the deductible policies, Zurich was to pay the submitted claims but could then seek payment from Hahn on a monthly basis for the amounts that fell below the applicable deductible together with "allocated loss adjustment expenses" and other fees. These policies also required Zurich to perform an initial adjustment 18 months after policy inception, followed by yearly adjustments. The deductible policies specified that Hahn "shall pay to [Zurich] within twenty (20) days of its demand."

Finally, the annual claim services contracts, constituting the fourth category, provided that Zurich would undertake claims handling duties for Hahn with respect to automobile physical damage claims in exchange for a fixed fee per claimant. The contracts also required Hahn to pay estimated fees during the terms of the agreements, with a final reconciliation to be performed by Zurich 12 months after the expiration of each agreement.

Although the contractual relationship between Hahn and Zurich commenced in the early 1990s, it was not until an internal audit of Zurich occurred in 2005 that the insurer discovered that it had not billed Hahn for claim deductibles or allocated loss adjustment expenses in connection with 10 years of claims for two deductible policies (category three policies) issued during the September 1995 to September 1996 policy period. After determining the purported amounts owed, Zurich sent Hahn an invoice in April 2005 seeking payment of $1,123,874. Hahn did not pay the bill.

Almost a year later, on March 2, 2006, Zurich sent Hahn an invoice for an additional $751,514, reflecting annual adjustments it contended were due on a variety of policies subject to the category one retrospective premium agreements and category two adjustable deductible policies. The amount billed covered adjustments on policies from March 1995 through March 2005 [FN1] . On March 27, 2006, Zurich presented Hahn with a third invoice for $71,615 after realizing that it had neglected to bill Hahn for fees owed under the category four claim services contracts beginning in 1997 [FN2] . Because Hahn failed to pay any of the invoices, Zurich drew on a $400,000 letter of credit that Hahn had previously deposited with Zurich and, over Hahn's objection, applied that amount to the oldest of the outstanding bills.

In May 2006, Hahn commenced this action against Zurich alleging four causes of action. The first claim requested a declaration that any of Zurich's bills for debts that arose more than six years before the commencement of the action were time-barred by the relevant statute of limitations. The remaining claims sought damages related to Zurich's allegedly improper use of the letter of credit. Zurich counterclaimed for breach of contract based on Hahn's nonpayment of the amounts billed in the April 2005, March 2, 2006 and March 27, 2006 invoices. Both parties moved for summary judgment.

Supreme Court granted Hahn partial summary judgment on the first cause of action, concluding that "the statute of limitations has run as to all claims for which Zurich had the right to demand payment more than six years prior to the commencement of this action" because the claims accrued when "Zurich had the right to demand payment." Although the court ruled in favor of Zurich on the letter of credit issue, holding that Zurich properly applied the $400,000 to the outstanding bills, the court did not grant Zurich summary judgment dismissing the second through fourth claims.

The Appellate Division, with one Justice dissenting in part, modified, by dismissing the second, third and fourth causes of action, and otherwise affirmed (81 AD3d 1331 [4th Dept 2011]). The majority concurred with Supreme Court that Zurich's "counterclaims for any debt that arose more than six years prior to the commencement of this action were time-barred" (id. at 1333). The majority also agreed that Zurich properly drew on the letter of credit and therefore dismissed the second through fourth claims. The dissenter would have found that all of the amounts billed by Zurich were timely, reasoning that the six-year statute of limitations did not begin to run until Hahn refused to pay the invoices in 2005 and 2006. The Appellate Division granted Zurich leave to appeal on a certified question, and we now affirm.[FN3]

Zurich argues that all of the amounts billed in the three invoices are timely because the six-year statute of limitations did not begin to run until 2005 and 2006, when Zurich demanded payment and Hahn refused to pay. Hahn counters that the courts below properly concluded that Zurich's counterclaims accrued much earlier, when it possessed the right to demand payment for the various amounts owed, such that any debts that arose before May 2000 (six years prior to the commencement of this action) are untimely.

Under CPLR 213 (2), a claim for breach of contract is governed by a six-year statute of limitations. As a general principle, the statute of limitations begins to run when a cause of action accrues (see CPLR 203 [a]), that is, "when all of the facts necessary to the cause of action have occurred so that the party would be entitled to obtain relief in court" (Aetna Life & Cas. Co. v Nelson, 67 NY2d 169, 175 [1986]). In contract actions, we have recognized that a claim generally accrues at the time of the breach (see Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399, 402 [1993]). And, we have explained further that "when the right to final payment is subject to a condition, the obligation to pay arises and the cause of action accrues, only when the condition has been fulfilled" (John J. Kassner & Co. v City of New York, 46 NY2d 544, 550 [1979]).

A consistent line of Appellate Division precedent holds that, where "the claim is for payment of a sum of money allegedly owed pursuant to a contract, the cause of action accrues when the [party making the claim] possesses a legal right to demand payment" (Minskoff Grant Realty & Mgt. Corp. v 211 Mgr. Corp., 71 AD3d 843, 845 [2d Dept 2010]; see also Kuo v Wall St. Mtge. Bankers, Ltd., 65 AD3d 1089, 1090 [2d Dept 2009]; Swift v New York Med. Coll., 25 AD3d 686, 687 [2d Dept 2006]; Kingsley Arms, Inc. v Copake-Taconic Hills Cent. School Dist., 9 AD3d 696, 698 [3d Dept 2004], lv dismissed 3 NY3d 767 [2004]; Albany Specialists v Shenendehowa Cent. School Dist., 307 AD2d 514, 516 [3d Dept 2003]). In other words, the statute of limitations in these cases was triggered when the party that was owed money had the right to demand payment, not when it actually made the demand.

We agree with Hahn and the Appellate Division majority that it is reasonable to apply this accrual principle to the insurance contracts at issue here and therefore conclude that the statute of limitations on Zurich's counterclaims began to run when it acquired the right to demand payment of the various amounts owed under the policies. Zurich acknowledges that it had the right under its contracts to bill Hahn years earlier for many of the sums reflected in the April 2005, March 2, 2006 and March 27, 2006 invoices — in some instances more than a decade earlier — but failed to do so through inadvertence. Hence, the courts below properly determined that any debts for which Zurich had the legal right to demand payment prior to May 2000, i.e., more than six years before the commencement of this action, are time-barred [FN4] . To hold otherwise would allow Zurich to extend the statute of limitations indefinitely "by simply failing to make a demand" (Town of Brookhaven v MIC Prop. & Cas. Ins. Corp., 245 AD2d 365, 365 [2d Dept 1997], lv denied 92 NY2d 806 [1998]; see also State of New York v City of Binghamton, 72 AD2d 870, 871 [3d Dept 1979] ["The Statute of Limitations begins to run when the right to make the demand for payment is complete, and the plaintiff will not be permitted to prolong the Statute of Limitations simply by refusing to make a demand"]).

Finally, we are unpersuaded by Zurich's assertion that, consistent with John J. Kassner & Co., its counterclaims could not have accrued until it sent the three invoices between April 2005 and March 2006 because its right to payment under the policies was subject to a condition precedent — Zurich's issuance of a demand for payment. Unlike John J. Kassner & Co., where the plaintiff's right to payment was expressly conditioned on an audit by a third party, Zurich cannot point to any contract language unambiguously conditioning its right to payment on its own demand (see generally MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640, 645 [2009] [stating that the use of terms like "if," "unless" and "until" would constitute "unmistakable language of condition" (internal quotation marks and citation omitted)]). Furthermore, the contracts contain specific references to the applicable time periods when Zurich was entitled to calculate adjustments and bill Hahn for the amounts owed. Such provisions contradict the open-ended arrangement now proposed by Zurich.[FN5] Accordingly, the order of the Appellate Division, insofar as appealed from, should be affirmed, with costs, and the certified question answered in the affirmative.


READ, J. (DISSENTING):

Plaintiff Hahn Automotive Warehouse, Inc. (Hahn) does not contest the amount of the moneys that it owes defendants American Zurich Insurance Company and Zurich American Insurance Company (collectively, Zurich) under the various insurance contracts at issue in this case, which called for amounts owed to be adjusted upward or downward retrospectively, principally to reflect actual loss and cost experience. Instead, Hahn argues that Zurich may not recover this acknowledged debt, reflected in three invoices issued between April 2005 and March 2006, because of the expiration of CPLR 213 (2)'s six-year statute of limitations for breach of contract claims.

The majority agrees with Hahn, holding that Zurich's claims are time-barred because it "possessed the legal right" under the insurance contracts "to demand payment" from Hahn more than six years before the invoices were actually sent (majority op at 1). But courts have heretofore uniformly concluded (as did the dissenter below) that the statute of limitations for a claim for unpaid premiums calculated on the basis of claims history does not accrue until the insured refuses payment after demand has been made by the insurer. A breach, if any, would only occur when a due date passes without payment being made. To hold otherwise, as the majority does, creates an illogical situation whereby a claim for breach of contract accrues before the insured knows whether it owes the insurer any money at all, much less how much. In other words, the claim for breach accrues before any breach can possibly occur. Accordingly, I respectfully dissent.

Under the policies at issue, Hahn paid premiums to Zurich and, when loss history became known, Zurich adjusted the various amounts owed under the policies to reflect actual losses and costs. In some cases, Hahn would owe additional moneys to Zurich. In others, a refund would be due Hahn. The majority is "unpersuaded by Zurich's assertion that" in light of these contractual arrangements "its counterclaims could not have accrued until it sent the three invoices . . . because its right to payment under the policies was subject to a condition precedent — Zurich's issuance of a demand for payment" (majority op at 9).

The source of the majority's skepticism is the absence of "any contract language unambiguously conditioning [Zurich's] right to payment on its own demand," and the presence in the contracts of "specific references to the applicable time periods when Zurich was entitled to calculate adjustments and bill Hahn for the amounts owed" (id.). As to the first point, Zurich was not in a position under the contracts to demand payment until it determined that Hahn owed additional moneys. And this determination was based on computations carried out by Zurich in conformity with the complex claims adjustment formulae specified in the contracts. By their very nature and structure, then, these contracts conditioned payment upon demand; otherwise, there was no way for Hahn to know whether or how much additional moneys it owed.

Further, the Retrospective Premium Agreement, for example, explicitly provided that

"[b]ased upon the selection of the Annual Policy Period Option . . ., [Zurich] shall compute and [Hahn] shall pay to [Zurich] within ten (10) days of the receipt of its demand therefore, Earned Retrospective Premium based upon Incurred Losses valued as of a date six (6) months after the expiration of each such period, as soon as practicable after such valuation dates, payable within the ten (10) days of receipt of its demand therefor, until such time as [Zurich] shall designate an adjustment as being final."

The majority takes the position, as I understand it, that under this provision, Zurich had "the legal right to demand payment" for losses and expenses as they factored into the adjustment for the year in which the losses were paid and the expenses incurred; therefore, Zurich was foreclosed by the statute of limitations from recovering for such losses or expenses if it waited more than six years before taking them into account.

But the insurance contracts in this case essentially created a running tally of debits and credits, which remained open until such time as all claims or expenses for a particular policy year were resolved — or, in the words of the above-cited provision, until Zurich "designate[d] an adjustment as being final." It was only at this point, when the final amount of a retrospective premium could be calculated, that a claim would accrue under these policies in the absence of a demand for payment (see e.g. 6-35 Appleman on Insurance 2d § 35.3 [with respect to retrospective premiums, "(c)ourts hold that any statute of limitations does not begin to run until a final premium may be calculated under the express terms of the applicable agreement," citing Natl. Union Fire Ins. Co. of Pittsburgh v LSB Indus., 296 F3d 940 (10th Cir 2002)]). No other court considering the accrual of claims arising under insurance contracts that involve a retrospective premium or are otherwise adjustable has taken a position, under New York law or otherwise, comparable to the majority's (see e.g. Continental Ins. Co. v Coyne Int'l. Enter. Corp., 700 Fed Supp 2d 207 [ND NY 2010] [cause of action for recovery of unpaid retrospective insurance premium adjustment accrued when insured refused to pay invoice]; Reliance Ins. Co. v Griffin Dewatering Corp., 2007 WL 1165557 [ND Ind 2007] [same]; Potomac Ins. Co. v Richmond Home Needs Servs., 2006 WL 2521283 [SD NY 2006] [same]; Liberty Mut. Ins. Co. v Precision Valve Corp., 402 F Supp 2d 481 [SD NY 2005] [same]; Transportation Ins. Co. v Star Indus., 2005 WL 1801671 [ED NY 2005] [where workers' compensation policy provided for payment of retrospective premium based on claims experience, cause of action for unpaid premiums accrued at time of adjustment]; Temploy, Inc. v Companion Prop. & Cas. Ins. Co., 2008 WL 4495782 [SD Ala 2008] [in retrospective rated insurance policies, a cause of action for wrongful assessment of a premium accrues on the date the payment is due, but refused]; Brookshire Grocery Co. v Boomer, 959 SW2d 673 [Tex App 1997] [where policy had a retrospective premium endorsement, cause of action accrued when final payment was demanded by the insurer]; cf. Continental Cas. Co. v Stronghold Ins. Co., Ltd., 77 F3d 16, 22 [2d Cir 1996] [where reinsured waited more than six years after settling last of claims before tendering claims to reinsurers, "[its] losses were due and payable, and its causes of action accrued, only after it reported the losses to the reinsurers, and the reinsurers denied coverage"]).

Notably, the majority did not cite a single decision to support its position except Travelers Ins. Co. v Jacob C. Mol, Inc. (898 F Supp 528, 531 ([WD Mich 1995]). But this case addressed when a claim accrued under Michigan law against a corporation's director for unlawfully dissolving the corporation and distributing its assets to shareholders without first paying a corporate debt; in this case, Travelers retrospective insurance premium. The court held that Travelers' claim accrued on the date the director approved the unlawful distribution, noting that "the lawsuit against [the director] is for failure to provide for the obligation as distinguished from a suit on the obligation itself" (id. at 531).

The majority seems troubled at the prospect that an insurer might unduly delay the running of the statute of limitations by failing to perform or bill for adjustments in a timely manner. In this case, Zurich undertook an extensive audit of accounts, which uncovered the previously unbilled losses and expenses accounted for in the three invoices. In addition, Hahn's agent disputed, or at least said that he did not understand, some of the invoices that Zurich forwarded, which held up reconciliation and billing. But as Zurich points out, Hahn does not claim to have been injured by these delays and no longer questions the accuracy of the amounts computed; Hahn was well aware that it owed Zurich money, having been alerted by specific advice from its broker and his periodic reports, which compared paid loss billings to loss runs. For example, for several years these reports showed that Hahn had not been billed for losses under the general liability and automobile liability program for the period 9/30/95 to 9/30/96. As Zurich remarks, a ruling in its favor is unlikely to "encourage parties who are owed money to refrain from sending out bills in the hope of prolonging the statute of limitations."

Finally, the majority cites Town of Brookhaven v MIC Prop. & Cas. Ins. Corp. (245 AD2d 365 [2d Dept 1997]) and State of New York v City of Binghamton (72 AD2d 870 [3d Dept 1979]) for the proposition that Zurich should not be permitted to prolong the statute of limitations by neglecting to make a demand for payment. But these are both construction cases where services were performed and payment was then due at a particular time, not a contractual relationship like this one, which contemplates ongoing reconciliation of credits and debits until such time as all the claims arising in the year covered by a policy have been resolved, and a final adjustment made.
* * * * * * * * * * * * * * * * *
Order, insofar as appealed from, affirmed, with costs, and certified question answered in the affirmative. Opinion by Judge Graffeo. Chief Judge Lippman and Judges Ciparick and Jones concur. Judge Read dissents in an opinion in which Judges Smith and Pigott concur.
Decided March 29, 2012
Footnotes


Footnote 1: Zurich previously sent Hahn adjustment invoices for these policies in 1998, 1999 and 2003, but Hahn did not pay them because it did not understand the complex calculations. Zurich voided those bills when it submitted the March 2, 2006 adjustment invoice.

Footnote 2: In June 2006, Zurich submitted a fourth invoice to Hahn relating to additional adjustments pertaining to policies subject to the category one retrospective premium agreements and category two adjustable deductible polices. This invoice reflected a net refund to Hahn of $262,480, which Zurich refused to credit because Hahn had failed to pay the previous three bills.

Footnote 3: Because Hahn did not cross-appeal, the Appellate Division's dismissal of the second through fourth claims on Zurich's use of the letter of credit is not before us.

Footnote 4: Counterclaims are "deemed interposed when the plaintiff filed the main action" (Siegel, NY Prac § 48, at 67 [5th ed]; see also CPLR 203 [d]).

Footnote 5: We reject Zurich's contention, accepted by the dissent, that we should adopt an accrual-upon-demand rule for the retrospective insurance arrangements at issue. Although the insurance policies and adjustment formulas were complex, Zurich does not dispute that it had the ability to calculate the relevant adjustments and submit invoices years earlier, but failed to do so through its own oversight. In support of an accrual-upon-demand rule, the dissent cites a number of federal district court cases, including Continental Ins. Co. v Coyne Intl. Enter. Corp. (700 F Supp 2d 207 [ND NY 2010]), Potomac Ins. Co. of Illinois v Richmond Home Needs Servs., Inc. (2006 WL 2521283, 2006 US Dist LEXIS 62224 [SD NY 2006]) and Liberty Mut. Ins. Co. v Precision Valve Corp. (402 F Supp 2d 481 [SD NY 2005]). But each of these cases provided little analysis, relying instead on an Appellate Division case that involved neither an insurance agreement nor a sum of money owed by one party to another pursuant to a contract (see Russack v Weinstein, 291 AD2d 439 [2d Dept 2002]). Moreover, the dissent's citation to Continental Cas. Co. v Stronghold Ins. Co., Ltd. (77 F3d 16 [2d Cir 1996]) is misplaced. Continental involved a claim by a reinsured against reinsurers, wherein the Second Circuit held that the reinsured's obligation to give notice to the reinsurers of the underlying claims was a condition precedent to payment, reasoning that such conditions are common in insurance contracts because they "allow[] the insurance company time to investigate and pay the claim" (id. at 20). Here, in contrast, the relevant policies contain no condition precedent and Zurich did not need to give Hahn any time to investigate. Finally, although the case law is sparse, we note that there is precedent contrary to the dissent's accrual-upon-demand rule in the context of retrospective insurance agreements (see Travelers Ins. Co. v Jacob C. Mol, Inc., 898 F Supp 528, 531 [WD Mich 1995] ["Travelers argues that the claim could not accrue until it sent its bill for the premium. However, . . . Travelers conceded that there is no duty on Travelers to send its retrospective premium notice at any fixed point in the future. Thus, theoretically, Travelers could keep an account open for many years before sending its bill and, under its theory, delay indefinitely the accrual of its claim. This would, of course, put the operation of the statute of limitations under the sole control of Travelers"]).