Dear Coverage Pointers Subscribers:

If you have a situation, we love situations.  Call us and we’ll try to put you on the straight and narrow.

Barbara Currie:

Barbara Currie passed away unexpectedly this week.  Many of you knew her or know her husband, Jackson, Mississippi friend and lawyer, Ned Currie.  Barb was full of life, exemplified generosity of spirit and was a treasure to all who knew her.  Please say a prayer for her family.  Do remember, please remember, every day you have on Earth is gift.

Greetings:

Greetings from Chicago and the DRI Insurance Coverage and Claims Institute.  I was pleased to join Kelly Dalmass from Harleysville Insurance (Nationwide) and David Zizik (Zizik Powers) on a panel entitled “Ethics:  You Have Been Retained to Represent the Carrier Against Allegations of Bad Faith – Now What” .  I am on my way to the PLRB Claims Conference where I will be joining Kipper Burke from Great American Insurance Company for two presentations on Additional Insured and Contractual Indemnity and related tenders.

Jen’s a Gem:

A splendid hug to Jen Ehman who is ready to deliver her second child!  We’ll see her in a few months but wish her our very best wishes.
Happy spring – it’s a glorious 40 degrees in Buffalo, shorts weather. 

Just a Thought about Mediation of Coverage Disputes:
Insurance Coverage Arbitration & Mediation
Resolving the Complex without the Substantial Costs of Litigation or the Risk of Adverse Precedent

There are times, more often recently than not, when insurers wish to resolve complex insurance coverage disputes without the expense and costs of trial and without the risk of potentially adverse judicial precedent.  We have encouraged the mediation and/or arbitration of complex insurance coverage claims and our office can assist insurers and insureds in bringing reasoned resolution to coverage disputes.

Hurwitz & Fine, P.C. offers both mediation and arbitration services through attorney Dan D. Kohane.  Why spend the money and the time to litigate these questions when resolution by mediation or arbitration can bring closure to hotly contested matters in relatively short order for substantially reduced costs.

Dan D. Kohane has been handling complex insurance coverage matters for over 35 years.  For over 28 years, he has served as an Adjunct Professor of Insurance Law at the Buffalo Law School and is frequently retained as an expert witness in insurance coverage matters throughout the United States, Canada and in the London market.  He is well-schooled as an arbitrator and mediator and lectures regionally, nationally and internationally on insurance coverage issues. Mr. Kohane served as President of the Federation of Defense & Corporate Counsel, an international organization of over 1300 merit-selected lawyers and regional and national insurance claims professionals and is the past chair of the FDCC's Insurance Coverage Section.

Mr. Kohane is also an experienced trial lawyer, handling insurance coverage and extra-contractual matters of behalf of insurers and policyholders. He brings years of experience, scholarship, practicality and common sense to the table.

For information, contact Dan Kohane at [email protected] or 716.849.8942.

Hewitt’s Highlights:

Dear Subscribers:

Spring has finally sprung and though the weather is still inconsistent in terms of temperature and March isn’t quite going out like a lamb, birds are singing, flowers are starting to grow, and the sun has started to shine on Long Island.

Meanwhile, the cases in the column this week provide more detail than has been typical lately. We have several cases in which plaintiffs successfully had summary judgment overturned on appeal because they had submitted reports that from treating physicians that directly challenged findings made by defendant’s experts. In one case involving an infant plaintiff, The Appellate Court reminded us if she were to establish a serious injury to her left knee at trial; she would be entitled to recover damages for all injuries incurred as a result of the accident, even those that do not meet the serious injury threshold. On the other hand, her 90/180-day claim was dismissed, as evidence that the infant plaintiff doctors directed her to refrain from participating in gym class, taking stairs, running, or jumping was insufficient to raise an issue of fact as to whether she was prevented from performing “substantially all of the material acts which constitute her usual and customary daily activities” for the relevant period when she was only confined to bed for two weeks.

Until next time,

Rob
Robert Hewitt

[email protected]

Typhoid Mary’s Last Quarantine (March 27, 1915):

It was on this date, March 27, 1915, that Mary Mallon, the Irish-born food service worker who became notorious as “Typhoid Mary” – the first healthy carrier of disease ever identified in the United States – was put into her final quarantine. It is not true, as the urban legends debunking site Snopes points out, that Typhoid Mary caused the deaths of thousands of people. In fact, Mary infected only thirty-three people, and only three of them died. …

What could have defeated Typhoid Mary, and many of the epidemics of the past and near-present, was simple sanitation. It was only in the 19th century that Louis Pasteur discovered the germ theory of disease. While great plagues and pestilences were known to the ancient world, as A.D. White points out in his Warfare of Science with Theology,* the new religion latched onto the supernatural explanation of the ancients, rather than the science of sanitation, with great fervor:

Among many examples and intimations of this in our sacred literature, we have the epidemic which carried off fourteen thousand seven hundred of the children of Israel, and which was only stayed by the prayers and offerings of Aaron, the high priest; the destruction of seventy thousand men in the pestilence by which King David was punished for the numbering of Israel, and which was only stopped when the wrath of Jahveh was averted by burnt-offerings; the plague threatened by the prophet Zechariah, and that delineated in the Apocalypse. From these sources this current of ideas was poured into the early Christian Church, and hence it has been that during nearly twenty centuries since the rise of Christianity, and down to a period within living memory, at the appearance of any pestilence the Church authorities, instead of devising sanitary measures, have very generally preached the necessity of immediate atonement for offences against the Almighty.

“The main cause of this immense sacrifice of life,” writes White “is now known to have been the want of hygienic precaution…” And what prevented the humankind, from antiquity to the modern, skeptical age, from saving lives through sanitation? It was religion, and its reliance on superstition, as opposed to science, with its reliance on the scientific method and the reproducibility of results. And what stopped science from developing when it was most needed? The answer is not irreducibly complex: there was more profit in the prophets, more cash in creeds, more salvation in sickness than in health, and more truth than poetry in the statement that “pestilences are the harvests of the ministers of God”** – regardless of the harm to humanity.

***
So Typhoid Mary’s belief in Providence rather than prevention had a long, dreadful pedigree. What made things worse was the attitude, typical among believers and the deliberately unschooled and ignorant among us, that if they can’t conceive it, they won’t believe it. Mary Mallon earned her living, from 1900 to 1906, as a successful private cook. It was not until members of a household on Long Island where she worked took ill with typhoid that the health authorities, such as they were at the time, began to investigate. Mary had disappeared and it developed that this feisty cook had a history of leaving households with a bellyful of more than just tasty food.

When Mary was finally located and asked for urine and stool samples, she refused. It was not a stretch to say that anti-immigrant, anti-Irish and class-based prejudice might have played a part, but even though bacteria is not bigoted, Mary rebuffed two more attempts to test her for infection. And why not? She was not sick, even if she was making others sick, and it was little known at the time that a carrier could be asymptomatic. In 1907, the New York City Health Department arrived at her place of employment with police officers. The Health Inspector pronounced her a carrier of infection and Mallon was held in isolation on North Brother Island, quarantined, for three years.

But some thought the isolation of this apparently healthy woman was cruel and unusual punishment. Believing she had learned her lesson about good sanitary practice, in 1910 Mary was released with the understanding that the field of food handling was closed to her. The trust in her good sense did not take into account her contrary beliefs: by 1915, Mary Mallon had changed her name to Mary Brown and succeeded in infecting 25 more people, and causing one death, while working as a cook at New York’s Sloane Hospital for Women. This time public health officials confined her to North Brother Island for the rest of her 69-year life. She died of pneumonia on November 11, 1938, and her body was cremated. Typhoid Mary’s story is not only an argument in favor of good sanitation, something unknown in the Bible, the Qu’ran or any other holy book – it is also an answer to the question, what’s the harm in a little superstition?

*A.D. White, A History of the Warfare of Science with Theology in Christendom, 1896, Vol. 2, Chapter 14, “From Fetich To Hygiene”; available in print and online at this link. **The quote is found in White, Warfare, and comes from the French Jesuit Pierre François Xavier de Charlevoix (1682-1761).

"Originally published in the Freethought Almanac www.freethoughtalmanac.wordpress.com  © 2015 Ronald Bruce Meyer, used by permission."

Peiper’s Pontification:

We start out Spring with an interesting first party offering this week.  As reviewed below, the First Department dismissed an insured’s suit on the basis that it was in violation of the policy’s one year suit limitation clause.  Courts have routinely enforced two year suit limitation clauses, but one year clauses, at least under NY law, are much rarer.  On the topic of suit limitation clauses, we have one of our first references to the Court of Appeals’ decision in Executive Plaza, LLC v Peerless Ins. Co.  As you may recall, in the Executive Plaza decision the Court refused to enforce the suit limitation clause in the Peerless policy because repairs could not be completed within the timeframe established under the policy.  In a recent decision from the Fourth Department reviewed below, the Court denied NY Central’s motion for summary judgment where it found a question of fact over the feasibility of repairs during the suit limitation time period.  Henceforth, the wise practitioner would be well advised to address the feasibility of repairs as part of the application for relief.  Gone are the days were a carrier can successfully move by simply showing that the time between the loss date and the Summons date are more than the suit limitation clause permits.

We also remind you, as Beth Fitzpatrick has already been doing, of the annual NY Bar Association Insurance Coverage Update.  This is always a banner program, and this year’s collection of speakers is once again top notch. I’ll be speaking at the Buffalo location on May 15th.  Dan and Beth are both speaking at the Melville version on May 15th, and Dan is pulling double duty as he is also speaking in Syracuse on May 8th.   We hope to see you at one of our stops along the way.

Finally, we close out this week with a temporary farewell to Ms. Ehman who, as you all now know, is going on temporary hiatus.  Though your author will miss having her around the office, I assure all of you that may be wondering that I will continue to provide timely updates from Ella.  You’re welcome. 

Steve
Steven E. Peiper
[email protected]

Sickening Courts – One Hundred Years Ago:

The Brooklyn Daily Eagle
Brooklyn, New York 
27 Mar 1915

INSANITARY STATE OF COURT IGNORED

Summer Will Increase Disease
Menace in Eastern District Chambers.

NEW QUARTERS REMAIN IDLE.

Williamsburg Trust Building Authorized,
But No Move Made to Equip It

Although authorized by the Board of Aldermen, the new building for the Fifth District Magistrate’s Court , formerly the Williamsburgh Trust Company building, is lying idle, and the congestion and general unsanitary conditions of the old building at Manhattan avenue and Powers street are becoming worse daily.  Magistrates, court clerks, lawyers and the police are dreading another summer in the old building.  The court room is crowded daily, and the lack of ventilation already has affected the health of several court attendants.

The Fifth District enjoys the distinction of being the busiest court in the city and the most unsanitary, most inconvenient and most crowded.  After any heavy storm the sewer overflows into the cellar, where the furnace is, and twice during the winter flooded the boiler room and extinguished the fires.  The building is infested by rats.  Stationery, documents and the property of the employees are ruined by them. 

Obamacare Through the Crystal Ball?  A Century Ago:

The Brooklyn Daily Eagle
Brooklyn, New York
27 Mar 1915

COMPULSORY HEALTH LAW.

Professor Barnes Says It Will Be in
Force in Twenty Years.

That within twenty years we will have compulsory health insurance in the United States in some form, such as has existed for years in Germany and has lately been adopted in England was a prophecy made by Professor Earl Barnes in his Brooklyn Institute lecture on “The State as Guardian of Health,” last evening.

We have the beginnings of such reform in this country now, said Professor Barnes, citing in illustration the Workingmen’s Compensation Act which now exists in several States, and the Wisconsin Eugenic law.

Fitz’ Bits:

Dear Subscribers:

Spring has finally sprung and we are delighted here on Long Island after the brutal winter we experienced.  Hello to all of my colleagues who are presently attending the DRI Insurance Claims Institute in Chicago.  It is always a spectacular program and we applaud our own Audrey Seeley, who serves as Chair of the Insurance Committee of DRI and Dan Kohan, who was a speaker addressing bad faith claims at today’s program.

Here in New York, we are looking forward to the New York State Bar Association Advanced Insurance Coverage update, which will be held in New York City and Syracuse on May 8, 2015 and on Long Island and Buffalo on May 15, 2015.  The program will address emerging claims, including cybercrimes, drones and ride sharing, discovery issues in declaratory judgment actions, additional insured coverage, as well as the top 20 coverage decisions of 2014.  For information, please visit the New York State Bar Association website or feel free to e-mail me.

Today I bring you two decisions, both from the State of California, addressing coverage disputes arising from construction defect claims.  In one Arch prevailed, while in the other, on motions to dismiss, the court found the insured had stated claims tor breach of contract and bad faith.

Til next time,

Beth
Elizabeth A. Fitzpatrick
[email protected]

Protecting Women: 100 Years Ago:

The New York Times
New York, New York
27 Mar 1915

UPHOLDS LABOR LAW
TO PROTECT WOMEN

Court of Appeals Finds That Prohibition of Night
Employment is Legal.

HEALTH MUST BE GUARDED

Finds That Legislature Acted
Within its Rights in the Interest
of the General Welfare

Special to The New York Times

ALBANY, March 26.—The Court of Appeals today upheld the constitutionality of the law passed in 1913 prohibiting work by women in factories between the hours of 10 o’clock at night and 6 o’clock in the morning.  The opinion was written by Judge Hiscock.

To test the constitutionality of the law, the Charles Schweinler Press, a corporation of New York City, employed May Cashal and other women during the prohibited hours in its printing house and book bindery.  It was convicted of violation of the labor law.  This particular provision of the law as the outcome of the investigation of the Wagner Factory Commission. …

Jen’s Gems:

I will begin my note by letting everyone know that after this issue I will be out of the office on maternity leave for a few months.  I am expecting my second child, another little girl, the first week of April.  So, for all of those readers who really enjoy my tidbits about Ella, you are in for a real treat as upon my return I will start sharing stories of my newest arrival as well.  I foresee that most of the early stories will likely address sleep deprivation and the “ins and outs” of proper swaddling.  Get ready. 

Beyond that news, in terms of my column, I report on a trial court decision out of New York County, HRH Constr., LLC v QBE Ins. Co.  The decision arises out of a labor law case.  What I think is particularly interesting about the decision is that it illustrates a trend we are starting to see more and more in these types of cases.  The courts are becoming more willing to determine that the additional insured is entitled to a defense, but leave indemnity to await the findings of the underlying action.  Very helpful case law when dealing with a named insured with questionable liability. 

Well, until mid-summer…

Jen
Jennifer A. Ehman

[email protected]

Huge Wrongful Death Verdict, A Century Ago:

Harrisburg Daily Independent
Harrisburg, Pennsylvania
27 Mar 1915

BIG VERDICT TO WIDOW

Get $23,666 for Death of Husband at
A Westinghouse Plant

Pittsburgh, Pa., March 27.— A jury yesterday gave Mrs. Adeline Johnston $23,666.75 as compensation for the loss of her husband, Walter T. Johnston, who died from injuries received while in the employ of the Westinghouse Electric and Manufacturing Company.  The verdict is the largest ever given for death in Allegheny county.

Johnston while employed at the Westinghouse Electric and Manufacturing Company, on March 26, 1913, was preparing a test under the direction of the chemist.  While Johnston was at work at the tank there was an explosion, which burned him so severely that he died the following day.

 

 

Highlights of this week’s issue, attached:

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

  • Exclusivity of Workers Compensation Bars Lawsuit – Even if Employee Works Off the Books
  • Late Notice Defense Upheld Where Additional Insured Knew Claimant Was Airlifted From Accident Scene
  • Another Pre-Prejudice, Late Notice Victory for an Insurer

 

HEWITT’S HIGHLIGHTS ON SERIOUS INJURY UNDER NO-FAULT LAW
Robert E.B. Hewitt III
[email protected]

  • Plaintiff Can Rebut Prima Facie Case for Summary Judgment by Submitting Detailed Report from Treating Doctor That Her Back Injuries Were Caused By the Accident and Permanent Thereby Contradicting Defendants’ Expert Report
  • Infant Plaintiff Demonstrated Issue of Fact by Submitted Reports Finding Limitations of Motion and Evidence of A Tear and If Serious Injury Established At Trial She Would Be Entitled To All Damages from the Accident Even Those That Do Not Meet the Serious Injury Threshold
  • Range Of Motion Limitations Were Sufficient To Raise an Issue for the Jury to Decide Where Plaintiff Had Undergone Lengthy Post Accident Treatment and Surgery Which Revealed a Torn Ligament
  • Orthopedic Surgeons Findings of Minor Limitations in Range of Motion in Two Planes Did Not Defeat Defendants’ Showing That Plaintiff Did Not Have Significant or Permanent Limitation in Use of Her Back and Any Strain Had Resolved

 

MARGO’S MUSINGS ON NO FAULT
Margo M. Lagueras
[email protected]

Arbitration

  • Another Dispute Over Proper Fee Schedule Reimbursement for Spinal Decompression
  • Following Denial for Lost Wages, Burden of Proof Regarding Disability Rests Solely on Individual Seeking Benefits
  • Chiropractic Care Not Providing Any Curative or Significant Palliative Benefits Is Not Medically Necessary under Hobby v CAN

 

Litigation

  • Failure of No-Fault Arbitrator to Give Any Weight to IME Merely Because It Was Not Notarized Was Arbitrary
  • Entry of Default Bars Subsequent Motion for Summary Judgment

 

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

Property

  • One Year Suit Limitation Clause Enforced
  • Suit Limitation Clause Not Enforceable Where Repairs Cannot is Completed Within the Timeframe Established by the Policy.
  • Lender/Loss Payee Does Not Qualify as an Insured, Where Loss Payee Clause Provides No Protection against Improper Acts of Named Insured

 

FITZ’ BITS
Elizabeth A. Fitzpatrick
[email protected]

  • Court Finds Questions of Fact
  • Arch Prevails – No Bad Faith

.
AUDREY’S ALL THINGS PERSONAL
Audrey A. Seeley
[email protected]

  • Doing the DRI thing.

 

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

  • S4108 – Insurance Requirements for Transportation Network Companies Such As Uber
  • A453 – DFS to Review Treatment of Concurrent Causation under HO Policies

 

KEEPING THE FAITH WITH JEN’S GEMS
Jennifer A. Ehman
[email protected] 

  • Agreement to Provide Coverage for Owner’s “Agents” Triggers Additional Insured Status

 

EARL’S PEARLS
Earl K. Cantwell

[email protected]

 

  • Issues to Consider With Respect To Diversity

See you in a couple of weeks. 
Dan
Dan D. Kohane
Hurwitz & Fine, P.C
.
1300 Liberty Building
Buffalo, NY 14202    

Office:      716.849.8942
Mobile:     716.445.2258
Fax:          716.855.0874
E-Mail:     [email protected]
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
Jennifer A. Ehman
[email protected]

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

Michael F. Perley
Elizabeth A. Fitzpatrick
Audrey A. Seeley
Steven E. Peiper
Margo M. Lagueras
Cassandra Kazukenus
Jennifer A. Ehman

Taylor F. Gabryel
Diane F. Bosse
Joel R. Appelbaum

FIRE, FIRST-PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
[email protected]

Elizabeth A. Fitzpatrick
Cassandra Kazukenus

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

Margo M. Lagueras
Cassandra Kazukenus
Jennifer A. Ehman

Taylor F. Gabryel

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

 Elizabeth A. Fitzpatrick
Diane F. Bosse

Index to Special Columns

Kohane’s Coverage Corner
Hewitt’s Highlights on Serious Injury
Margo’s Musings on No Fault
Peiper on Property and Potpourri
Fitz’ Bits
Audrey’s All Things Personal
Cassie’s Capital Connection
Keeping the Faith with Jen’s Gems
Earl’s Pearls

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

03/18/15       De Los Santos v. Butkovich
Appellate Division, Second Department
Exclusivity of Workers Compensation Bars Lawsuit – Even if Employee Works Off the Books
Workers' compensation benefits are the sole and exclusive remedy of an employee against his employer for injuries in the course of employment which precludes suits against an employer for injuries in the course of employment.  When it appears from pleadings, a bill of particular or otherwise that the plaintiff was an employee of the defendant and where the employer establishes that it has secured a policy of Workers Compensation insurance, the obligation of alleging and, in any event, of proving noncoverage falls on the plaintiff.

Here, the defendants presented evidence that the plaintiff was an employee of the defendant N.B. Painting and was injured in the course of his employment.  It was also established that N.B Painting maintained a Workers' Compensation policy. Accordingly, the exclusivity provisions of Workers' Compensation Law § 11 barred the plaintiff from seeking a recovery in tort against N.B. Painting

In opposition, the plaintiff failed to raise a triable issue of fact. All employees of an employer are deemed covered by the employer's workers' compensation policy, regardless of whether an employee may have been working off the books', where the employer has secured a policy of insurance coverage.

03/17/15       Turner Construction Co. v. Harleysville Worcester Ins. Co.
Appellate Division, First Department 
Late Notice Defense Upheld Where Additional Insured Knew Claimant Was Airlifted From Accident Scene
Even if all the plaintiffs in this action had additional insured status under the insurance policy issued by defendant Harleysville, they would not be entitled to coverage because they failed to give Harleysville notice of the occurrence as soon as practicable, as required by the policy.  This was a pre-prejudice case where the insurer did not need to demonstrate material prejudice.  Turner and the others did not notify Harleysville of the injured worker's accident until June 25, 2008, nine months after the accident occurred and more than two months after the personal injury action was commenced, on April 15, 2008. Plaintiffs' belief that no claim would be asserted against them was not reasonable when they were aware that the injured claimant was airlifted from the construction site on the day of the accident.

03/17/15       Sky Materials Corp. v. Everest Reinsurance Company
Appellate Division, First Department
Another Pre-Prejudice, Late Notice Victory for an Insurer
Even if Sky’s coverage should be reinstated under Insurance Law § 2121, and if issues of fact exist as to whether the injured claimant's accident resulted from plaintiff's covered operation, Sky's failure to provide notice of the accident vitiated any coverage available under the Everest Indemnity Policy for the claims at issue. Sky learned of the accident, at the latest, four days after it occurred, and thought that the Everest Indemnity Policy was still in effect. Despite this awareness, Sky failed to provide Everest with timely notice of the December 18, 2008 accident and the subsequent litigation stemming from that accident until serving its complaint in this declaratory judgment action on or after June 23, 2011, more than 2 ½ years after the accident occurred. This delay constituted a breach of the Everest Indemnity Policy's notice condition, which requires Sky to provide notice "as soon as practicable" of any occurrence which may result in a claim or upon the commencement of any lawsuit, and Sky's thirty month delay in providing notice was unreasonable as a matter of law

The affidavit that by habit and practice, it was likely that its former employee would have contacted its broker, as well as Everest, to notify them of the occurrence, was insufficient to rebut defendants' prima facie entitlement to summary judgment.
Editor’s Note:  “Atta-lawyer” kudos to Ann Odelson, coverage lawyer extraordinaire, from Carroll, McNulty & Kull, LLC 

HEWITT’S HIGHLIGHTS ON SERIOUS INJURY UNDER NO-FAULT LAW

Robert E.B. Hewitt III
[email protected]

03/25/15       Greenberg v. Macagnone
Appellate Division, Second Department
Plaintiff Can Rebut Prima Facie Case for Summary Judgment by Submitting Detailed Report from Treating Doctor That Her Back Injuries Were Caused By the Accident and Permanent Thereby Contradicting Defendants’ Expert Report
The Appellate Division reversed the lower court’s granting of summary judgment to defendants, and denied the motion for summary judgment. The Appellate Court agreed that defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102.  Defendants submitted the affirmed medical report of Dr. Cohen, who had examined the plaintiff and reviewed the plaintiff’s medical records, including MRI films of the plaintiff’s lumbar spine. Dr. Cohen opined that the MRI films demonstrated a preexisting degenerative disc disease that was not caused by the subject accident.

The Appellate Division, however, unlike the lower court, found the plaintiff raised a triable issue of fact in response. Plaintiff submitted an affirmation from the physician who had treated the plaintiff for her back condition shortly after the accident, Dr. Salomon. Dr. Salomon opined with a “reasonable degree of medical certainty” that the motor vehicle accident was the cause of plaintiff’s right lateral recess disc herniation at L5-S1, with compression of the right S1 nerve root. Dr. Salomon concluded that these injuries to the lumbar spine were causing the plaintiff’s back pain and diminished range of motion and were permanent.  Dr. Salomon based this on the plaintiff’s medical history, a review of plaintiff’s medical records, his own physical examination of the plaintiff, and his continuing treatment of the plaintiff.  The Appellate Court found this was sufficient to rebut defendants’ prima facie showing.

03/19/15       Macdelinne F., an infant  v. Jiminez
Appellate Division, First Department
Infant Plaintiff Demonstrated Issue of Fact by Submitted Reports Finding Limitations of Motion and Evidence of A Tear and If Serious Injury Established At Trial She Would Be Entitled To All Damages from the Accident Even Those That Do Not Meet the Serious Injury Threshold
Appellate Division modified the grant of summary judgment to defendants to deny the motions as to the infant plaintiff’s claims of “permanent consequential” and “significant” limitations of use of her left knee and otherwise affirm the rest.  As for whether she suffered a serious injury, defendants established prima face that the infant plaintiff did not suffer a serious injury by submitting  an orthopedist report finding full range of motion and negative clinical test results upon examination of the left knee and a radiologist’s report finding that the MRI performed on that knee were normal.

However, plaintiff raised an issue of fact as to the existence of a “significant” or “permanent consequential” limitation of use by submitting affirmations by a radiologist who found that the MRI showed evidence of a tear in the posterior horn of the medial meniscus. The infant plaintiff also submitted a report of her treating physicians who fund limitations in range of motion at a recent examination and opined that the knee injury was caused by the accident. Unaffirmed medical reports prepared by her physicians during the period following the accident were properly considered because defendants’ orthopedist relied on them in forming his opinion.  The Appellate Court also noted that if she were to establish a serious injury to her left knee at trial, she will be entitled to recover damages for all injuries incurred as a result of the accident, even those that do not meet the serious injury threshold.

As to her 90/180—day claim, the infant plaintiff met her burden to show through plaintiff’s own testimony that she was confined to bed and home for only one or two weeks after the accident. The evidence that the doctors directed her to refrain from participating in gym class, taking stairs, running, or jumping was insufficient to raise an issue of fact as to whether she was prevented from performing “substantially all of the material acts which constitute her usual and customary daily activities.

As for the plaintiff Carmen Zapata, defendants established prima facie that she suffered no “permanent consequential” or “significant” limitation of use through their radiologist’s opinion that the MRIs performed on her cervical spine, lumbar spine, and shoulders showed changes (disc desiccation, osteophytes, and tendinois) that were degenerative in nature, with no evidence of traumatic injury. They also submitted a report by an orthopedist that found full range of motion in the cervical spine and voluntary or exaggerated limitations in the lumbar spine and shoulders that did not correlate with objective evidence of injury. Plaintiff Zapata failed to raise an issue of fact as although she submitted medical evidence of persisting limitations in range of motion in all parts, she did not submit any medical evidence at all addressing the cause of the injuries and in fact her own medical evidence acknowledged degenerative changes in the cervical spine.

03/19/15       Neil v. Tidani
Appellate Division, First Department
Range Of Motion Limitations Were Sufficient To Raise an Issue for the Jury to Decide Where Plaintiff Had Undergone Lengthy Post Accident Treatment and Surgery Which Revealed a Torn Ligament
The Appellate Division unanimously reversed the lower court’s grant of summary judgment to the defendants. The Appellate Division found an issue of fact as to whether plaintiff suffered “permanent consequential” and “significant” limitation injuries to his right knee.  The Appellate Court agreed with the lower court that defendants had made a prima facie showing of entitlement to summary judgment based on their medical expert’s examination and review of the medical records, which found plaintiff to have normal range of motion and that the MRI of plaintiff’s right knee showed no evidence of traumatic injury.

However, plaintiff was able to raise an issue of fact in opposition. Plaintiff submitted an affirmed report of his physician and surgeon, who found deficits in the range of motion of plaintiff’s right knee during examinations, and a torn ligament in the right knee during surgery. The Appellate Court noted plaintiff had undergone a lengthy course of physical therapy, and his pain had persisted to the point of needing surgery which revealed the torn ligament. Therefore, the range of motion limitations was sufficient to raise an issue for the jury as to whether the deficits were “significant” or “permanent consequential.”

03/12/15       Stephanie N., Infant v. Davis
Appellate Division, First Department
Orthopedic Surgeons Findings of Minor Limitations in Range of Motion in Two Planes Did Not Defeat Defendants’ Showing That Plaintiff Did Not Have Significant or Permanent Limitation in Use of Her Back and Any Strain Had Resolved
The Appellate Division unanimously affirmed the trial court’s grant of summary judgment. Defendants established their entitlement to summary judgment as a matter of law by showing that plaintiff Stephanie N. did not sustain “permanent consequential” or “significant limitation” injuries to her back as a result of the accident. Defendants submitted the affirmed report of an orthopedic surgeon who reviewed an MRI report indicating no findings of bulging or herniated discs, and who examined plaintiff, finding normal results on the orthopedic tests he performed, and recording normal range of motion. The orthopedic surgeons findings of minor limitations in range of motion in two planes did not defeat defendants’ showing that plaintiff did not have significant or permanent limitation in use of her back and that any sprain/strain had resolved

Plaintiff failed to raise an issue of fact in opposition. Plaintiff’s physician did find limitations in some ranges of motion but failed to provide any objective medical evidence of injury to her back. Furthermore, plaintiff failed to submit any medical records or other evidence reflecting that she made complaints or received treatment for claimed back injuries contemporaneous to or soon after the accident. The affirmation of plaintiff’s physician that showed some limitations in range of motion when  he first examined her three months after the accident was insufficient to raise an issue of fact as to causation without competent evidence in the record of any prior complaints or treatments.

MARGO’S MUSINGS ON NO FAULT

Margo M. Lagueras
[email protected]

Arbitration

03/13/15       Munroe Chiropractic PC v Progressive Insurance Co.
Erie County, Arbitrator Gillian Brown
Another Dispute Over Proper Fee Schedule Reimbursement for Spinal Decompression
Applicant provided treatment using a spinal decompression table and billed with a “by report” code given that the fee schedule does not contain a code specifically for mechanical traction with a device known as the “Integrity Spinal Decompression System”.  As often happens with by-report billing, respondent partially paid the submitted bills by re-coding the bills as mechanical traction limited to 8 units, as contemplated in the fee schedule.  In support, respondent submitted the affidavit of a certified medical coder who stated that the method of billing and the partial payments were correct.  In opposition, applicant submitted a memorandum decision from the Workers’ Compensation Board of Appeals awarding $195.00 per session.

The Arbitrator concluded that the choice to re-code was respondent’s but that he did not agree that the treatment was “mechanical traction” “within the meaning of that phrase.”  Applicant properly submitted a detailed report with each bill as required when bills are submitted “by report.”  The Arbitrator also noted that respondent could have requested verification rather than re-coding and making partial reimbursement.  Applicant was awarded the amount demanded which, although the award does not specifically state the amount per treatment, would seem to infer that the amount was consistent with the WC Board of Appeal’s decision awarding $195 per session.
Note:  By report codes are always difficult issues to resolve.  In this long, on-going debate over traditional “mechanical traction” versus the decompression tables employed by some practitioners, it seems an amendment to the fee schedule would be appropriate to incorporate a code to address this specific treatment given that it really can no longer be considered a recent development.

03/06/15       Applicant v USAA Insurance C0,
Erie County, Arbitrator Gillian Brown
Following Denial for Lost Wages, Burden of Proof Regarding Disability Rests Solely on Individual Seeking Benefits
The claimant was a passenger involved in an accident in August 2012.  He underwent several months of chiropractic treatment and ultimately underwent a spinal fusion.  He was paid wage loss up until April 2013, when he was examined by Dr. Leddy who concluded that while claimant had some residual symptoms, he had no persisting objective orthopedic or neurologic deficits.  Further wage loss benefits were then denied.

The Arbitrator noted that the burden is on the claimant to prove that he was disabled during the period for which benefits are sought.  Here, only after the hearing did claimant’s attorney submit documentation regarding the amount respondent had been previously paying, the amount actually lost, verification of disability and other significant documents that should have been submitted in support of the claim.  The Arbitrator denied the claim without prejudice observing that the late submission deprived respondent of the ability to effectively cross-examine claimant during the hearing.  Claimant is free to bring the claim again, next time submitting the appropriate evidence to meet his burden.

03/04 15       Geoffrey Gerow DC v MVAIC
Erie County, Arbitrator Michelle Murphy-Louden
Chiropractic Care Not Providing Any Curative or Significant Palliative Benefits Is Not Medically Necessary under Hobby v CAN
The EIP was allegedly injured in a motor vehicle accident in December 2008 and began receiving chiropractic treatment.  Respondent denied reimbursement for treatment from July 1, 2009 to November 11, 2009, and November 15, 2010 to July 30, 2011, all were denied more than three years before applicant commenced arbitration on August 12, 2014, and thus the claim was denied in its entirety.  However, as regards dates of service September 18, 2010 to November 3, 2010, even though respondent’s NF-10 indicates these claims were received on August 15, 2014 and denied on August 25, 2014, because respondent did not include page four of the NF-10 it is unknown whether the denial was based upon untimely submission of proof of claim or the chiropractic IMR.  Therefore, the Arbitrator deemed the billing for those dates was not barred by the statute of limitations.

With respect to the chiropractic IME, the Arbitrator noted that the EIP had reported that she had not noticed improvement with chiropractic care and actually felt somewhat worse that she initially did after the accident.  Based upon the conclusion in the IME report, respondent denied claims for dates of service from August 13, 2011 to December 24, 2011.  The Arbitrator agreed that the records for that time period unequivocally showed that the treatment was not providing any curative or significant palliative benefit.  Therefore, respondent’s denials for those dates were upheld and applicant was awarded reimbursement only for dates of service from September 18, 2010 to November 3, 2010 given that the reason for those denials was unknown.

Litigation

03/03/15       Auto One Ins. Co. v Hillside Chiropractic, PC
Appellate Division, First Department
Failure of No-Fault Arbitrator to Give Any Weight to IME Merely Because It Was Not Notarized Was Arbitrary
The arbitrator in this case refused to give any weight to an IME report by a chiropractor and instead decided to adhere, with strict conformity, to the evidentiary rule in CPLR 2106 even though, in arbitration, such conformity is not required.  The Master Arbitrator deferred, as is usually the case, to the no-fault arbitrator’s decision.  The lower court did the same.  However, on appeal to the First Department, the court determined that both the Master Arbitrator and the IAS court erred in deferring to the no-fault arbitrator’s decision and vacated the award.  The court found the decision to not consider the IME report because it was not notarized was arbitrary and resulted in no substantive determination as to its weight being made.  Therefore, the matter was remanded for a hearing before a new arbitrator.

02/24/15       Vital Meridian Acupuncture, PC v Republic W. Ins. Co.
Appellate Term, Second Department (posted 03/13/15)
Entry of Default Bars Subsequent Motion for Summary Judgment
Defendant commenced a declaratory judgment action against numerous medical providers and their assignors, including plaintiff, seeking to recover for services allegedly rendered arising out of a February 2011 motor vehicle accident.  By order dated July 31, 2012, Supreme Court granted, on default, defendant’s motion for entry of a declaration that defendant had no duty to pay no-fault benefits to plaintiffs and their assignors arising out of said collision. 

In October 2012, plaintiff moved for summary judgment and defendant cross-moved to dismiss the complaint on the ground that the action was barred by the doctrines of res judicata and collateral estoppel.  Supreme Court denied plaintiff’s motion and granted defendant’s cross-motion by order dated May 13, 2013.  On appeal, the court affirmed holding that the July 31, 2012 order barred plaintiff’s action, and that, notwithstanding that it was entered on default, it was a conclusive final determination.

PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]

Property

03/25/15       D’Angelo v Allstate Ins. Co.
Appellate Division, Second Department
One Year Suit Limitation Clause Enforced
Plaintiff commenced the instant lawsuit more than one year after the date of loss upon which the claim was based.  Given its one year suit limitation clause, Allstate immediately moved to dismiss the suit as untimely.  The Court agreed, and in so holding reiterated that the time period for suit limitation clauses is measured from the “date of the catastrophe insured against.”  

03/20/15       Baluk v New York Cent. Mut. Fire Ins. Co.
Appellate Division, Fourth Department
Suit Limitation Clause Not Enforceable Where Repairs Cannot be Completed Within the Timeframe Established by the Policy.
Plaintiff’s premises sustained damage from a “puff back” of their furnace.  NY Central adjusted the claim, and correctly advanced the ACV portion of the loss to the plaintiffs.  Because the repairs had not been finished, NY Central held back the remaining Replacement Cost payments until completion of the repairs. 

Plaintiff eventually commenced the instant case, and therein demanded RC payments. However, the suit was not filed until after two years after the loss at issue, and thus in violation of the policy’s two year suit limitation clause. Accordingly, NY Central sought summary judgment on the basis of that clause. 

In finding a question of fact, the Appellate Division noted that suit limitation clauses are enforceable. However, the Court also advised that the clause will not void coverage where the repairs at issue could not be concluded within two years.  On the record before the Court, it was unclear if the repairs at issue could have been completed within two years of the original date of loss. Accordingly, NY Central’s motion was denied on a question of fact.

03/17/15       Stairway Capital Mgt. II, LP v Ironshore Spec. Ins. Co.
Appellate Division, First Department
Lender/Loss Payee Does Not Qualify as an Insured, Where Loss Payee Clause Provides No Protection against Improper Acts of Named Insured
Plaintiff qualified as a lender and loss payee to Ironshore’s named insured, Eidos.  However, plaintiff did not qualify as an “insured” under Eido’s policy.  Rather, the loss payee clause of the policy did not contain a provision securing plaintiff’s rights despite any actions undertaken by Eidos.  As such, plaintiff only qualified as a person to whom a loss should be paid. 

FITZ’ BITS

Elizabeth A. Fitzpatrick
[email protected]

02/19/15       Nordby Construction, Inc. v. American Safety Indemnity Co.,  2015 WL 1263389
United States District Court, Northern District of California
Court Finds Questions of Fact
The plaintiff, Nordby Construction, Inc., brought the action for breach of contract against American Safety Indemnity Co., American International Specialty Lines Insurance and ACE.  The relevant facts were as follows.  Plaintiff, Nordby, was hired by Summit State Bank as a general contractor to construct the Summit State project.  Plaintiff thereafter subcontracted with Kenyon Construction Inc. to furnish and install a complete weather-tight and water-tight EIFS system on the exterior of the project.  Kenyon was obligated pursuant to the contract to procure insurance, including completed operations coverage, identifying plaintiff as an additional insured, and further providing that such coverage would be primary and non-contributory to any other policy available to the plaintiff or Summit State.

The project was constructed primarily in 2002 and following the completion of construction, Summit observed water intrusion and filed suit against the plaintiff and its subcontractors.  It was later determined that the water intrusion was related to the EIFS exterior installed by Kenyon and that the entire system had to be removed and replaced.  Plaintiff tendered its defense to Kenyon and also filed a cross-claim seeking indemnification.

The action was subsequently settled for $3.4 million, with plaintiff responsible for $649,000, Kenyon $285,000, and the other subcontractors contributing the balance.

In or about August 2012, Nordby and Kenyon entered into a partial settlement agreement in which Kenyon assigned its rights against all of its liability insurers to Nordby.  American Safety insured Kenyon under two primary policies of insurance effective July 1, 2002 to July 1, 2003 and July 1, 2003 to July 1, 2004.  Plaintiff tendered its defense to American Safety under those policies but American Safety declined the tender.  AIG allegedly insured Kenyon under policies effective 2004 to 2005.  AIG Specialty also allegedly insured Kenyon under polices of Umbrella Insurance effective July 1, 2002 to July 1, 2005. 

Following the commencement of the declaratory judgment action, motions to dismiss were made.  American Safety claimed that plaintiff had no right to recover because its limits were exhausted and that the insured failed to allege facts supporting a bad faith claim.  The American Safety policy included a cross-claim exclusion which American Safety alleged was applicable. 
On the motion to dismiss, the court found that plaintiff had sufficiently alleged a breach of contract claim as an additional insured under the policy. Discussing the bad faith claim, the court found that the plaintiff had sufficiently alleged that benefits due under the policy were withheld and found questions of fact as to whether American Safety acted unreasonably.  The court denied AIG’s motion to dismiss the breach of contract claim, finding questions of fact existed.

03/18/15       American Western Door & Trim v. Arch Specialty Insurance Co.,  2015 WL 1266787
United States District Court, Central District of California
Arch Prevails – No Bad Faith
The plaintiff, American Western Door & Trim, a California corporation in the construction industry, purchased five Commercial General Liability policies from defendant Arch spanning 2003 through 2008.  The policies include, of course, a duty to defend.  Interestingly, plaintiff’s claim in the action was that Arch does not hire counsel for its insured to afford the duty, but rather has their claims adjusters negotiate settlements.  Plaintiff alleged that defendant consistently overpaid  claims in an attempt to exhaust plaintiff’s insurance policy prematurely.

The plaintiff had tendered their defense to the defendant in ten litigated actions.  In seven of the actions, defendant decided not to retain counsel but communicated directly with opposing counsel to settle the claims with no formal appearance.  Defendant then refused to pay plaintiff any post-tender defense fees that the insured incurred up until the point defendant settled the matter with opposing counsel.  They alleged that defendant typically engaged in this practice on behalf of other builders and contractors and their complaint on behalf of the putative class included three causes of action, to wit, breach of contract, bad faith and a violation of California Unfair Competition Law. 

Arch moved to dismiss the claims and the court, applying California law, agreed with defendant’s position that it was within Arch’s right to settle the claims without plaintiff’s consent.  They thus dismissed the breach of contract and bad faith claims and further found that Arch was not liable for defense expenses voluntarily incurred by plaintiff.  Finally, the court found that plaintiff failed to allege any unlawful or unfair conduct that could form the basis of the plaintiff’s unfair claims act.

AUDREY’S ALL THINGS PERSONAL

Audrey A. Seeley
[email protected]

Doing the DRI thing.

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

S4108 – Insurance Requirements for Transportation Network Companies Such As Uber
This proposed legislation would add a new provision to the Insurance Law and is applicable to “transportation network companies.”  A transportation network company (“company”) is defined in the bill as “an organization…or any other entity, operating in this state that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using a personal vehicle.”  In other words, it applies to companies like uber.  Also relevant is the definition of “transportation network company insurance” which his defined as “an insurance policy that specifically covers a driver’s use of a vehicle in connection with a transportation network company’s online-enabled application or platform.” 

The proposed legislation would require the transportation network company to disclose, in writing, to those drivers which participate in the program the insurance coverage and limits of liability that the company provides when the driver uses a vehicle in connection with the company’s online-enabled application or platform.  The company must also notify the driver, in writing, that his or her personal auto policy may not provide any required or optional coverage.

Further, the company and any participating driver must maintain transportation company insurance.  The following requirements must apply to transportation network company insurance from the moment a participating driver accepts a ride request on the online-enabled application or platform until the driver completes the transaction on the same or until the ride is complete, whichever is later:

  • It must provide primary liability coverage in the amount of 1 million for death, bodily injury and property damage;
  • The coverage must satisfy the financial responsibility requirements set forth under Insurance Law §3420 and any regulations promulgated pursuant to such;

 

The coverage requirements may be satisfied by a transportation network company insurance maintained by a participating driver, maintained by a company; or through any combination.  If the company is meeting its insurance obligations through the participating driver’s coverage, the company must verify the policy is specifically written to cover the driver’s use of a vehicle in connection with the company’s online-enabled application or platform, and the company must also maintain insurance that provides coverage in the event the driver’s coverage is cancelled or otherwise does not have transportation network company insurance.

The proposed legislation also states transportation network company insurance is NOT dependent on a personal auto policy first denying a claim nor shall it require a personal auto policy be required to first deny a claim.

Notably, this bill specifically includes a provision stating that this provision shall not “be construed to require a private passenger automobile insurance policy to provide primary or excess coverage during the period of time from the moment a participating driver in a transportation network company logs on to the transportation network company’s online-enabled application or platform until the driver logs off the online-enabled application or platform or the passenger exits the vehicle, whichever is later.”  Moreover, during this timeframe, the following applies:

  • The driver or owner’s personal auto policy does not provide coverage unless the policy expressly provides for coverage during this period of time or the policy contains an amendment or endorsement to provide that coverage.  A separate premium may be charged.
  • The driver or owner’s personal auto policy does not have the duty to defend or indemnify for the driver’s activities in connection with the company unless the policy expressly provides otherwise.

 

A personal auto insurer may, at its discretion, offer an auto liability policy, or an amendment or endorsement to an existing policy that coverages the private passenger vehicle while used in connection with a company’s online-enabled application or platform.  The policy must expressly state the coverage. 

A453 – DFS to Review Treatment of Concurrent Causation under HO Policies
This bill was reported out of the Assembly Insurance Committee to Ways and Means, and there is a companion Senate bill which remains in the Senate Insurance Committee at this time.  This bill would require the Superintendent of DFS to examine and make recommendations concerning the treatment of concurrent causation in relation to sewer backup claims under homeowners’ policies.  Specifically, DFS is to analyze the potential premium impact and the impact on coverage if anti-concurrent causation clauses do not apply to this coverage.  The report is due to the Legislature on or before January 1, 2017.

KEEPING THE FAITH WITH JEN’S GEMS

Jennifer A. Ehman
[email protected] 

03/09/15       HRH Constr., LLC v. QBE Ins. Co.
Supreme Court, New York County
Agreement to Provide Coverage for Owner’s “Agents” Triggers Additional Insured Status
The underlying plaintiff claimed that he was injured when he fell on a staircase while employed by Empire City Electric, Inc.  At the time of the incident, CRM Electric Corp. was hired as an electrical subcontractor, and it subcontracted electrical work to Empire City.  The project’s owner retained HRH as its “Owner’s Representative” and retained Phoenix as it construction manager on the project. 

The owner’s written contract with Phoenix required Phoenix to procure additional insured coverage for “[o]wner, its subsidiaries and affiliates, its agents and Architect.”  Phoenix obtained a policy of CGL insurance coverage with QBE.  The QBE policy contained a blanket additional insured endorsement which included those parties as additional insureds as required by written contract. 

When the underlying lawsuit was presented, QBE acknowledged its obligation to Phoenix, but denied any obligation to defend HRH as an additional insured.

In this decision, the court found that HRH established a prima facie right to declaratory judgment.  It was undisputed that there was a written contract (i.e., the contract between the owner and Phoenix), whereby Phoenix agreed to provide additional insured coverage to the owner’s agents, which would include HRH as the owner’s representative.  The court determined it was irrelevant that HRH was not specifically named in the written contract as the written contract specifically included agents of the owner of the project.  The court also rejected any argument that the additional insured endorsement required a direct contract between HRH and Phoenix emphasizing that the schedule merely stated “[a]s required by written contract.”

However, while the court did determine that QBE had an obligation to defend HRH, it held that any finding on indemnity from QBE before a determination of liability in the underlying action was premature.   

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

12/22/14       Plunkett v. Nationwide Mutual Insurance Co.
Eastern District of Pennsylvania
Issues to Consider With Respect To Diversity Jurisdiction
Removing a case to Federal Court is often a good strategy for an insurance company facing a coverage or bad faith claim, but sometimes the strategy does not work.  This was the case in Plunkett v. Nationwide Mutual Insurance Co.,2014 WL 7271380 (E.D. Pa. December 22, 2014).  This case arose innocently enough when a policyholder obtained chiropractic care after a car accident in November 2011.  The chiropractor submitted a no-fault claim for treatment to Nationwide which denied coverage claiming the treatment was not medically necessary.  The policyholder and chiropractor sued Nationwide in Pennsylvania State Courts.  The chiropractor asserted a claim for breach of contract for payment of approximately $11,000.00 in unpaid medical bills, and the policyholder asserted a separate claim for bad faith.  Both claimants also alleged unspecified damages for attorneys’ fees and punitive damages.  Nationwide removed the case to Federal Court contending that the amount in controversy exceeded the $75,000.00 jurisdictional threshold.

However, the Court remanded the case back to the Pennsylvania State Courts because Nationwide had not established that the claim of at least one Plaintiff actually satisfied the $75,000.00 jurisdictional threshold.  The Court also rejected Nationwide’s argument that the respective Plaintiffs’ claims could be “aggregated” in calculating and satisfying the amount in controversy.  Generally, multiple plaintiffs may not aggregate separate and distinct claims to satisfy the diversity jurisdiction threshold.  In this case, the Court ruled that the Plaintiffs’ claims were distinct because they could each have filed independent actions against Nationwide for the respective relief sought.  Accordingly, the case was remanded back to the Pennsylvania State Courts for hearing and determination.
The first lesson of this case is that attempting to remove coverage and bad faith litigation to the Federal Courts is usually a good strategy, even if for some reason it fails in the end.

It appears that this case was indeed light on the monetary damages claimed, although one wonders if some argument could have been made combining alleged future medical expenses, attorneys’ fees, and punitive damages, to reach the $75,000.00 threshold.  Likely not.

In any event, in reviewing a lawsuit for coverage, bad faith and similar claims, care must be taken to determine if a basis exists for diversity of citizenship, and whether the amount of the loss or damages in  controversy satisfy the $75,000.00 jurisdictional threshold required by federal law.