Coverage Pointers - Volume XVI, No. 21

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. Where are we?  We’re in  Buffalo, Albany, Long Island and the mid-Hudson Valley.  We are New York State Coverage Counsel.

We’re a little short-staffed on the editorial pages this week, with Jen awaiting the stork, Audrey otherwise engaged and Beth on a short but well-deserved vacation.  But that doesn’t prevent a banner issue, attached.

We did spend a couple of drizzly innings watching the Buffalo Bison’s home opener (that’s our Triple A baseball team, Toronto’s franchise).  Nothing like opening day.

 

PLRB Claims Conference:

A special welcome to our two dozen new Coverage Pointers subscribers, all of whom were kind enough to sit through the Claim Conference presentation on Additional Insured and Contractual Liability analysis and tenders.  Thanks again to my co-presenter, Kipper Burke, from Great American Insurance Company.

By way of introduction to our new subscribers, note that this cover letter gives you an overview of the news in the insurance world, highlights of the issue and cover notes and commentary from our terrific staff.  The actual issue is attached.  Past issues can be found on our website, www.hurwitzfine.com.  Just click on Newsletters.

Besides a summary of what’s inside the issue, the cover note generally contains a  little historical trivia: stories from the newspapers that were published exactly 100 years before the publication date of the issue before you.

This issue contains a few of those but contains stories on the end of the Civil War (the surrender was on April 9, 1865 (150 years ago, yesterday) and the assassination of Abraham Lincoln, six days later. 

We even offer you a century old baseball debut with an insurance angle.  I do love baseball lore.

 

Baby Watch:

We’re still on it for Jen.  Anytime now!

 

Resources – FDCC Hot Cases:

This issue has a boatload of interesting coverage decisions, handed down by New York appellate courts and others in the past couple of weeks.  For those who don’t know, there’s another great national source of hot cases, and that’s the Federation of Defense & Corporate Counsel (FDCC) website, www.thefederation.org. I was a co-founder of that website back in the last century and was Hot Case editor for eight years.  I also served as FDCC President in 2006-07.  Each day, the FDCC website posts hot cases from around the country, in a format similar to the cases posted in our newsletter.  You’ll find those posted in the bottom right-hand quadrant of the website and they cover insurance law as well as other areas of law of interest to the defense community.

 

Labor Law Pointers:

We have a sister publication, Labor Law Pointers, a monthly missive published by Dave Adams and his team of construction law aficionados.  For those who are involved in scaffolding, ladder and workplace employment accident cases, it’s a must read.

This past week, the team released a Special Edition because of two Court of Appeals cases dealing with Labor Law issues.  I asked Associate Editor Marc Schulz , [email protected], to provide a brief summary of those cases and he advised:’

 

In this issue, I bring you two Labor Law Court of Appeals decisions issued on the same day; a rare treat for us labor law geeks.  In Nicometi v Vineyards of Fredonia, LLC, the plaintiff was wearing stilts to hammer insulation on the ceiling rafters of a building when he slipped on ice that he knew was present.  The Court of Appeals granted the property owner summary judgment because the injury was caused by “an ordinary construction site danger”; ice, and not an elevation-related risk.  In Saint v Syracuse Supply Co., the plaintiff was replacing an advertisement on a billboard when he fell ten feet.  Here, the Court of Appeals held the plaintiff was engaged in alteration and construction work because his work required “a significant physical change” to the structure of the sign.  Now it’s back to analyzing more labor law cases for (what seems like) my never-ending Industrial Code regulation chart for Labor Law § 241(6) claims, and hoping for warmer weather!     

For a link to the Special Edition, click here.

To subscribe, drop a note to Dave Adams, [email protected] and tell him that Marc sent you.

Marc
Marc A. Schulz
[email protected]

 

Happy Birthday Col. Potter:

Harry Morgan born as Harry Bratsburg, was born 100 years ago today.  He was well known as an American actor, and two major roles that will forever define him.  He served as Colonel Sherman T. Potter in the long-running M*A*S*H TV series and as Officer Bill Gannon in Dragnet.  Morgan died on December 7, 2011, at age 96, in Los Angeles, from pneumonia.

 

150 Years Ago:  A Week to End All Weeks – the Civil War Ends and a President is Assassinated:

While we usually focus on events that occurred 100 years ago, we’ll make a special exception in this issue, since I wasn’t writing this column in 1965 and I doubt I’ll be writing it 50 years from now, in 2065 (at age 112).

The Civil War (or as some of my Southern friends call it, “The War of Northern Aggression”) ended 150 years ago this week, when the articles of surrender were signed by the combatants.  How many died in that horrible conflict?  It has been gospel that the number was approximately 620,000 but at least one historian places the number at 750,000.  The lower number reflected 2% of the entire population of the country.  Think about that; if we lost 2% of the population now, it would be about 6,500,000 souls.

Could the War have been avoided?  Perhaps so, if there had been stronger leadership in the White House between the time Andrew Jackson left office and Abraham Lincoln became President.  Look at the list, with the exception of James Polk (who is responsible for the annexation of Texas and California), there were some of the weakest Presidents in American history.  What else do you note when looking at their terms?  Not one President was reelected during that entire period between 1837 – 1861), all one term Presidents.

Martin Van Buren   (1837-1841)
William Henry Harrison   (1841)
John Tyler   (1841-1845)
James K. Polk   (1845-1849)
Zachary Taylor   (1849-1850)
Millard Fillmore   (1850-1853)
Franklin Pierce   (1853-1857)
James Buchanan   (1857-1861)

Fillmore, Pierce and Buchanan were particularly weak and ignored the slavery issue, or stuck their heads in the sand.  So when Lincoln was elected and the southern states seceded (believing that Liincoln would address the issue directly), the War to bring the states back into the Union was inevitable.

What many do not remember is that General Lee surrendered his Army of Northern Virginia on April 9, 1865, at Appomattox Court House. Abraham Lincoln was assassinated at Ford’s Theatre on April 15, 1965, only six days later. 

In this issue, I include newspaper articles written at the time, covering both events. Stay tuned.

 

Book Review Time:

 

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

Authors: Randy Maniloff and Jeffrey Stempel

Publisher: Matthew Bender and Company

If you liked the first edition – and I surely did – and if you loved the second edition (and I found and still find it one of the most valuable desk references we have), you will surely want to secure the updated and expanded third edition of this industry standard.

Randy Maniloff and Jeffrey Stempel have just published a third edition of their tremendously useful and practical state-by-state summary of insurance coverage issues.  I praised the first edition in a March 2011 issue of Coverage Pointers and the second edition a year later.  I have reviewed the newest version and commend it to your bookshelf.

The easiest way to show you the importance of this publication is to summarize 22 chapter headings of the volume, each one with a 50 state survey of the law on the subject:

• Commercial General Liability Insurance – an Overview
• Choice of Law for Coverage Disputes
• Late Notice Defense under Occurrence Policies – Is Prejudice Required
• Coverage for Pretender Defense Costs
• Duty to Defend Standard
• Right to Independent Counsel
• Insurer’s Right to Recoupment
• Recovery of Legal Fees in Coverage Actions
• Number of Occurrences
• Coverage for Innocent Co-Insureds and Severability
• Is Emotional Injury a “Bodily Injury”
• Is Faulty Workmanship an ”Occurrence”?
• Permissible Scope of Indemnification and Construction Contracts
• Qualified Pollution Exclusion
• “Absolute” Pollution Exclusion
• Trigger of Coverage for Latent Injury and Damage Claims
• Trigger of Coverage for Construction Defect Claims
• Allocation of Latent Injury and Damage Claims
• Coverage for Privacy Claims and Cyber Risks
• Insurability of Punitive Damages
• First and Third Party Bad Faith Standards
• The Reasonable Expectations Approach To Insurance Policy Interpretation

 

In the immortal words of Prof. Kingsfield from “Paper Chase”, if you hadn’t had to consider one of these issues in one of these chapters in the past 30 days, “here is a dime, call your mother and tell her that you’re not a real coverage lawyer or coverage professional.”

We receive calls all the time on these questions, not only about the law in our home state, but about the law in other jurisdictions.  This publication makes it really easy to get started on that research and show responsiveness to those who seek your advice.

Volume I had about 490 pages of material, Volume II had 640 pages and this tome is chock-full of 784 case-law filled pages and well worth the price of $184.61.  It’s available on Amazon.

Think of the cost of legal research – less than an hour’s investment gives you a universe of useful case law.  It’s a winner.

 

Peiper’s Pontifications:

First things, first.  We have no baby news to report this issue, though we surely miss Jen already.  We have confirmed, however, that Ella remains amazing.

Now, on to the less important news of the issue.  We’d recommend you stash the In re. InsCorp case for your future needs.  That case reiterates the well-established rule that a judgment creditor, under Insurance Law 3420(b), inherits no greater rights than the named insured from whom a judgment was obtained.  Thus, if a denial is valid as against the insured, the same denial will preclude coverage to the judgment creditor.  This includes instances where, as here, the coverage was lost due to inaction (late notice) on the part of the named insured.

Take note, however, that while the judgment creditor may be bound by the insured’s misdeeds, it is not precluded from challenging the validity of denial.  Rather, it is only prevented from arguing that the denial to the named insured does not apply to it, as a judgment creditor. 

We close out by welcoming back the start of baseball season.  I, like many others of my generation, lost all interest in the game for much of the past 20 years.  Maybe it was the joy of taking kids to the park of the first time to rekindled my interest.  That, or on second thought, maybe it was the serenity of eating a hot dog at a later game with no kids.  Either way, there is no better way to spend a warm summer night.  There are, however, better ways to spend a rainy 40 degree day in April (ahem, Dan).  Get your tickets now, but go in June.  You’ll be glad you did.

I quit…for now.  See you in two weeks. 

Steve
Steven E. Peiper
[email protected]

 

The Confederate Army Surrenders, 150 Years Ago Yesterday:

The Sun
New York, New York 
10 Apr 1865

The Terms of Surrender Offered
by General Grant

Appomattox Court House, April 9, 1865.

 

General R. E. LEE, Commanding C.S.A.

            In accordance with the substance of my letter to you of the 8th inst.  I propose to receive the surrender of the Army of Northern Virginia, on the following terms, to wit: 

            Rolls of all the officers and men to be made in duplicate, one copy to be given to an officer designated by me, the other to be retained by such officers as you may designate.

            The officers to give their individual paroles not to take arms against the Government of the United States until properly exchanged, and each company or regimental commander sign a like parole for the men of their commands.

            The arms, artillery and public property to be packed and stacked and turned over to the officers appointed by me to receive them.

            This will not embrace the side-arms of the officers, nor their private horses or baggage.

            This done – each officer and man will be allowed to return to their homes, not to be disturbed by United States authority so long as they observe their parole and the laws in force where they may reside.

                                                                        Very Respectfully,
                                               
                                                                        U. S. GRANT,

                                                                        Lieutenant General
____________

THE SURRENDER.

GENERAL LEE TO GENERAL GRANT.

Headquarters Army of
Northern Virginia, April 9, 1865.

Lieutenant General U.S. GRANT, Commanding U.S.A.

General: -- I have received your letter of this date containing the terms of surrender of the Army of Northern Virginia as proposed by you.  As they are substantially the same as those expressed in your letter of the 8th inst., they are accepted.  I will proceed to designate the proper officers to carry the stipulations into effect.

                                                                        Very Respectfully,

                                                                        Your Obedient Servant,

                                                                        R. E. LEE, General.

 

President Lincoln Assassinated – 150 Years Ago this Week:

 

The New York Times
New York, New York
15 Apr 1865

AWFUL EVENT.

President Lincoln Shot by an Assassin.

The Deed Done at Ford’s
Theatre Last Night.

THE ACT OF A DESPERATE REBEL

The President Still Alive at
Last Accounts.

No Hopes Entertained of His Recovery.

Attempted Assassination of
Secretary Seward.

DETAILS OF THE DREADFUL TRAGEDY.

[Official]

War Department,
Washington, April 15—1:30 AM

Maj. Gen. Dix:

            This evening at about 9:30 P.M., at Ford’s Theatre, the President, while sitting in his private box with Mrs. Lincoln, Mrs. Harris, and Major Rathburn, was shot by an assassin, who suddenly entered the box and approached behind the President.

            The assassin then leaped upon the stage, brandishing a large dagger or knife, and made his escape in the rear of the theatre.

            The pistol ball entered the back of the President’s head and penetrated nearly through the head.  The wound is mortal.  The President has been insensible ever since it was inflicted, and is now dying...

 

HEWITT’S HIGHLIGHTS:

Dear Subscribers:

The Appellate Departments were busy the last two weeks issuing decisions, and some of them involve situations that are a bit different than we usually find. In one case the Appellate Division took the rare action of setting aside a jury verdict that awarded zero dollars for future pain and suffering, finding that based on the evidence that there was at least some permanent injury, such a verdict of no future damages could not be justified by the evidence. In another case, the Appellate Division reversed a grant of summary judgment to defendants because even though the plaintiff’s expert had his medical license revoked, and could no longer practice medicine in New York, the license  was in effect at the time the doctor had opined on the seriousness of the injuries. Therefore, the Court said the issue of the revocation of the license was a credibility issue to be determined by the jury, and could not be a basis for the court to ignore the medical opinion.

In yet another unusual case, at least here on Long Island where farms are harder to come by, a Plaintiff sued when defendants’ tractor with attached plow crossed the center line of the highway and collided with plaintiff’s vehicle.  Of note, the Appellate Court held that the serious injury threshold does not apply here because defendants' farm tractor and field plow are not "motor vehicles" under the Insurance Law and defendants therefore do not qualify as "covered persons" under Insurance Law § 5102 (j). It found that plaintiff was correct that, because there is no dispute that defendants' farm tractor and the attached field plow were being used exclusively for agricultural purposes, the serious injury threshold requirement is not applicable and plaintiff did not have to establish a serious injury. 

Until next time,

Rob
Robert Hewitt
[email protected]

 

Emil Huhn – Baseball, 100 Years Ago Today – With an Insurance Angle

Baseball has so many great stories with so many interesting footnotes.  I doubt you’ve ever heard of Emil Huhn, but let me tell you what role he had in baseball lore.  He had two.

Emil Huhn, had his major league debut on April 10, 1915, 100 years today.  He went 1 for 4 for the Newark Peppers as they beat the Baltimore Terrapins on the opening day of the second (and last) Federal League season.  The Federal League was the third Major League and existed for two years.  Huhn moved to the Reds when the Federal league folded, stayed with them until 1917 and that last year, caught only 15 games for the team.

On May 2, 1917, Emil “Hap” Huhn was catching one of those games for the Cincinnati Reds.  It was the bottom of the first at Chicago’s Weeghman Park and Fred Toney was pitching. James “Hippo” Vaughn was the hurler for the Cubs. Nine innings later the game remained scoreless and, for the first time in major-league baseball, hitless. The Reds took the lead in the tenth with the run batted in by Native-American and Olympic legend Jim Thorpe.   Toney, with Huhn still catching flawlessly in the midst of an 0-for-3 day at bat, retired the side to claim both a no-hitter and a 1-0 victory in a game witnessed by only about 2,500 fans.  For those who want the box score of the game, and somebody will, it’s here.  You’ll find that Fred “Bonehead” Merkle was in CF for the Cubs.  I’ve written about him before and his base running mistake is credited for being the reason the Cubs lost the pennant in 1908.  A great story.

In 1948, National Baseball Hall of Fame historian Lee Allen labeled the duel between Toney and Vaughn “the greatest pitching battle of all time.” In 1976 a poll conducted by SABR seeking to identify the sport’s “Outstanding Game” ranked the contest number 3.  A decade later author Bert Sugar listed it 17th on his list of baseball’s greatest games.

In 1925, Huhn was back down in minors, still playing his beloved game in Single A ball, now as a player-manager. On September 5 of that year, the Tygers (sic) were in third place.  Hugh doubled and went one for five, playing first base.

According to Rich Huhn, who wrote a biography of Emil as part of the SABR baseball biography project, after the game Huhn drove six of his players back to Augusta in a large touring car.  When Huhn’s vehicle was about 14 miles from Camden, South Carolina, it entered a “blind” curve in the road and went out of control, overturning and landing in a deep ditch. Emil, age 33., was killed instantly. His front-seat passenger, 30-year-old catcher Frank Reiger, died in an ambulance on the way to the hospital
Huhn was survived by his wife and three young children.

The insurance angle?  In 1928, the Georgia Supreme Court upheld a workers compensation award of $3,825 to Huhn’s family. A similar award was made to the beneficiaries of Frank Reiger. In doing so over the protestations of the Augusta ball club and its insurers, the Supreme Court determined professional baseball was a business and not merely a sport:

In this case the baseball player who was killed was person “in the service of another under any contract of hire,” and therefore was an “employee” under section 2(b).
Metro. Cas. Ins. Co. of N.Y. v. Huhn, 165 Ga. 667, 142 S.E. 121, 125 (1928)

Despite an early death, Emil “Hap” Huhn’s professional career spanned 16 seasons, including 2½ seasons in the “Bigs”. When asked in 1921 for his career highlights, he had not hesitated as to one of them. In Emil’s own words he had “caught a world’s record game.”

 

Highlights of This Week’s Issue, Attached:

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

• Rescission Effective on Misrepresentation on Number of Dwelling Units
• Insurer Failed to Conclusively Establish, with Documentary Evidence, That it Validly Issued a Lead Paint Exclusion Requiring the Insured to Conduct Lead Testing
• Plaintiff’s Lawyer in Underlying Lawsuit Cannot be His Lawyer in Bad Faith Case, Because He Will – and Should – Be a Witness.  Document discovery and Summary Judgment Premature
• Business Enterprise Exclusion in Legal Malpractice Policy Excludes Claim for Hybrid Work
• Insurance Broker Not Liable of Insufficient Property Coverage, Without Proof of Promises or Special Relationship
• Insurer Entitled to Hearing on Residence of SUM Claimant
• Underwriting Guidelines Support Conclusion That Policy Would Not Have Been Issued, Despite Retention of Premiums
• Pennsylvania Uninsured Motorists Exclusions Ineffective in New York
• Where Insurer Needs Copy of Trade Contract Before Disclaiming, Delay in Disclaiming Until Trade Contract Received is Excused
• Where New Auto Carrier Provides Coverage, Retiring Auto Carrier’s Failures to Follow Rules Are Not That Important

 

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

• Plaintiff Cannot Rebut Defendant’s Expert By Submission of Treating Physician’s Report That Was Based In Part on Inaccurate or Incomplete Information
• Positive MRI Reports Indicating Significant Limitations Of Motion and Muscle Spasms Could Be Considered Even Though Not Affirmed As It Was Referred To and Not Disputed By Defendants’ Experts
• Defendants Fail To Submit Evidence Refuting Plaintiff’s Treating Physician’s Medical Reports Indicating Bulging Discs and Decreased Range of Motion
• Defendants Cannot Succeed On Summary Judgment If It Fails To Address All Claims Made In Plaintiff’s Bill Of Particulars.
• Plaintiff Could Raise Issue of Fact With Affirmation From Doctor Who Subsequently After Submitting Affidavit Had His Medical License Revoked As Revocation Of License Was Credibility Issue Best Left To A Jury To Decide
• Jury Verdict of No Award For Future Pain And Suffering Overturned Where Plaintiff Provided Unrefuted Evidence of Some Permanence Of Injury
• Plaintiff Could Raise Issue of Fact With Affirmation From Doctor Who Subsequently After Submitting Affidavit Had His Medical License Revoked As Revocation Of License Was Credibility Issue Best Left To A Jury To Decide
• Even With Documented Preexisting Degeneration Plaintiff Can Defeat Summary Judgment By Submitting Medical Evidence That The Accident Aggravated The Prior Conditions
• When Presented By Two Conflicting Expert’s Opinions As To Whether Plaintiff Suffered A Serious Injury The Jury Is Entitled to Accept One Expert’s Opinion and Reject the Other
• Summary Judgment In Favor Of Defendants Will Be Reversed When the Defendants Fail to Adequately Address All Claims In Plaintiff’s Bill of Particulars and Therefore Fail to Meet Their Prima Facie Burden
• The Serious Injury Threshold Does Not Apply In the Case of Vehicles Such As Farm Tractors That Are Used Primarily For Agricultural Purposes
• Defendants Unwittingly Caused An Issue Of Fact To Be Found By Submitting A Report From Plaintiff’s Internist Which Found That The Injuries Were Causally Related to the Accident

 

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

Arbitration

• Peer Review That Addresses QST Testing Rather Than PF-NCS Testing Is Insufficient to Support Denial
• Office Visit Immediately Prior to Administration of Trigger Point Injections Is Included in the “Listed Value for the Surgical Procedure”
• No Facility Fee Reimbursement Owed for Facility Accredited Under Public Health Law 230-d

 

Litigation

• Attorney’s Fees in Consolidated Action Are Limited to $850
• Medical Provider Not Entitled to Notice of EIP’s IME
• PIP Endorsement Obligates EIP’s Assignee or Representative to Submit to EUO

 

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

Property

• Where No Evidence of O&C of Fire Presented, Negligence Claim against Owner is Dismissed

 

Potpourri

• Judgment Creditor Cannot Overcome Appropriate Denial to Named Insured
• Unearned Premium is Calculated from Date of Cancellation
• Title Company’s Denial on Late Notice Overturned Where Notice was Provided at the Time of Title Claim

 

FITZ’ BITS
Elizabeth A. Fitzpatrick
[email protected]

• On a short vacation.

 

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

• Not this week.

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

• S4280            Proposed Legislation Related to Transportation Network Companies

 

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

• On maternity leave.

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

• Florida Multi-District Auto Repair Litigation

 

Thanks for visiting with us.  We’ll be back in two weeks.  We open our Canadian home in just a week, the official start of summer.

Dan
Dan D. Kohane
Hurwitz & Fine, P.C.
1300 Liberty Building
Buffalo, NY 14202    
Office: 716.849.8942
Cell: 716-445-2258
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
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]

04/09/15       Tower Insurance Company of New York v. Atuana
Appellate Division, First Department
Rescission Effective on Misrepresentation on Number of Dwelling Units
Despite the requirement in his policy and his representation in the application that his premises is a two-family dwelling, the insured provided a statement and deposition testimony which sufficiently demonstrated that the building was a three-family dwelling. That there was a deed and City document indicating that the building was a two-family dwelling were irrelevant and the insurers' underwriter affidavit and guidelines established that the misrepresentation in the application was material.
Editor’s note: Attaboys Max and Joe.

04/08/15       25-01 Newkirk Avenue, LLC v. Everest National Ins. Co.
Appellate Division, Second Department
Insurer Failed to Conclusively Establish, with Documentary Evidence, That it Validly Issued a Lead Paint Exclusion Requiring the Insured to Conduct Lead Testing
Everest issued a CGL policy covering an apartment building owned by the plaintiff, Newkirk.  In an underlying action, Newkirk was sued by a former tenant who claimed injury from lead exposure while residing at the premises. Everese denied coverage invoking a lead exclusion it had added to the policy after the Newkirk failed to perform lead testing at the premises pursuant to an alleged agreement between the parties.  Newkirk commenced a declaratory judgment action arguing that the addition of the lead exclusion was invalid.  Everest claimed that it had documentary evidence supporting the denial.

Letters, emails, and affidavits fail to meet the requirements for documentary evidence .The evidence offered by Everest did not constitute documentary evidence or failed to utterly refute the plaintiff's claims particularly with regard to whether the plaintiff was obligated to perform lead testing at the premises and whether the lead exclusion was validly added to the policy.  So, the case goes forward.

04/08/15       VanNostrand v. New York Central Mutual Fire Insurance Co.
Appellate Division, Second Department
Plaintiff’s Lawyer in Underlying Lawsuit Cannot be His Lawyer in Bad Faith Case, Because He Will – and Should – Be a Witness.  Document discovery and Summary Judgment Premature
VanNostrand commenced an action against Froehlich to recover damages for personal injuries arising from an automobile accident. VanNostrand ultimately obtained a judgment against Froehlich in the principal sum of $300,000, an award that was greater than the $100,000 bodily injury limit of Froehlich's liability insurance policy with New York Central Mutual (“NYCM”).

Froehlich assigned to VanNostrand any "bad faith" claim that he may have against NYCM and this “bad faith” action was commenced.

The lower court properly disqualified plaintiffs’ attorney in this action on the ground that the same lawyer represented VanNostrand in the underlying action and will be an essential witness in this action.  His testimony can be taken as a fact witness.

However, the lower court providently exercised its discretion in granting that branch of the plaintiffs' motion which was for a protective order quashing so much of the subpoena as sought the production of documents, while granting NYCM leave to renew its request for the production of documents, if appropriate, after testimony is given pursuant to the subpoena. 

Finally, the Supreme Court properly, in effect, denied, as premature, that branch of the plaintiffs' motion which was for summary judgment on the complaint insofar as asserted by VanNostrand, with leave to renew within 45 days, on the ground that the plaintiffs' attorney had not yet given deposition testimony .

04/07/15       Lee & Amtzis, LLP v. American Guar. & Liability Ins. Co.
Appellate Division, First Department
Business Enterprise Exclusion in Legal Malpractice Policy Excludes Claim for Hybrid Work
Shades of K2 Industries.

This declaratory judgment action involves the issue of whether certain transactions among the plaintiffs and Kurtin fall within the "insured's status" and "business enterprise" exclusions to coverage in plaintiffs lawyers' professional liability insurance policy (policy) issued by American Guarantee (“AGLIC”) Broadly stated, these exclusions apply where a lawyer is sued for malpractice and the claim also arises in whole or in part from the lawyer's status as the manager of a business enterprise in which the lawyer has a controlling interest.  This is the same kind of policy and same issue that arose in the famous K2 Industries case

Kurtin was a client of plaintiff Lee & Amtzis, LLP (law firm). She sued the firm and two partners in New Jersey claiming breach of contract, non-payment of two promissory and legal malpractice.  Kurtin alleged that when she entered into these loans, Lee was not only the "managing member" of Astoria Station, he was also a practicing attorney and partner of the law firm, which had the same address as Astoria Station. Kurtin claimed that the attorneys had induced her to proceed with certain financial transactions in which they had a financial interest, etc.

She won her case in New Jersey on the notes.  The law firm and partners moved to dismiss the remaining malpractice claims in the New Jersey action, but that motion was denied. Subsequently the parties in the New Jersey action stipulated to stay the malpractice claims pending resolution of this declaratory judgment action.

In this action, plaintiffs seek a declaration that AGLIC has a contractual duty to defend them against the malpractice/negligence claims asserted by Kurtin in the New Jersey action.

Section III of the policy (Exclusions) provides as follows:

"This policy shall not apply to any Claim based upon or arising out of, in whole or in part: . . .

"D the Insured's capacity or status as:

1.       an officer, director, partner, trustee, shareholder, manager or employee of a business enterprise . . .

"E       the alleged acts or omissions by any Insured, with or without any compensation, for any business enterprise . . . in which any Insured has a Controlling Interest" (boldface omitted).

In interpreting this identical policy language in the K2 case, the Court of Appeals found that these exclusions would apply to hybrid malpractice claims that arise partly out of an attorney's law practice and partly out of a business enterprise in which the attorney has a controlling interest.

Here, the well-developed record shows that plaintiffs' activities on Kurtin's behalf are of a hybrid nature and, therefore, excluded from coverage. It is undisputed that plaintiffs prepared the legal documents necessary to effectuate the loans, including the promissory notes.

Lee was simultaneously serving two masters, Kurtin, his client, and a company of which he was a principal. This is precisely the situation that the policy's Insured Status and Business Enterprise Exclusions exclude from coverage.

04/07/15       Kaufman v. BWD Group LLC
Appellate Division, First Department
Insurance Broker Not Liable of Insufficient Property Coverage, Without Proof of Promises or Special Relationship
An insured brought an action against an insurance broker for failing to procure sufficient insurance coverage to fully compensate her for her loss of personal property after a fire damaged her Massachusetts home in June 2009.

The broker established that the insured never requested a certain amount of contents coverage or that there was a special relationship between the two requiring the broker to obtain appropriate coverage.  That the insured’s husband believed that the policy provided full compensation does not change the outcome.  The insured never paid for an evaluation of the contests and there is no proof that any representations were made that there would be full compensation if an insurable loss occurred.  The length of time of the relationship is of no moment, either.

04/02/15       Preferred Mutual Ins. Co. v. Fisher
Appellate Division, Third Department
Insurer Entitled to Hearing on Residence of SUM Claimant
In September 2012, Fisher was struck by a vehicle while crossing a street in Brooklyn. In August 2013, she submitted a request to petitioner, her parents' automobile liability insurance company, for arbitration of her potential supplemental uninsured/underinsured motorist (SUM) insurance coverage under her parents' policy. The parties entered into a stipulation to temporarily stay arbitration to enable discovery. Shortly thereafter, petitioner moved for a permanent stay of arbitration on the basis that Fisher was not a resident of her parents' home at the time of the accident and was therefore excluded from SUM coverage under the terms of her parents' insurance policy.

The parties' stipulation did not waive the issue of Fisher’s entitlement to SUM coverage. Although the stipulation stated that, "[u]pon the completion of [certain] discovery set forth [in the stipulation, petitioner] agrees to proceed to arbitration," a stipulation cannot create coverage of an individual, nor the obligation to arbitrate the issue of coverage, where the individual does not meet the relevant contractual prerequisites for coverage.

The insurer claims that  because Fisher  was not a resident of her parents' household at the time of the accident, she is not entitled to SUM coverage. The documents in the record — consisting of a short affidavit of respondent, certain bank statements, communications from her medical providers and mailing labels — are insufficient to determine this issue, necessitating that a hearing be held.

04/02/15       Castlepoint Insurance Company v. Jaipersaud
Appellate Division, First Department
Underwriting Guidelines Support Conclusion That Policy Would Not Have Been Issued, Despite Retention of Premiums
Castlepoint demonstrated through the insured's admission in a statement to plaintiff's investigator and the investigator's conclusion upon inspection of the premises regarding its structural configuration that his home was a three-family dwelling, rather than a two-family dwelling as covered by the subject policy and as represented in the application for insurance.  The insureds failed to explain why the premises had separate entrances, and their explanation that the premises were always a two-family dwelling was conclusory, and failed to raise an issue of fact. The court found no duty to defend or indemnify the insureds, in the personal injury action brought against them even though Castleepoint accepted and retained premiums.

The underwriting guidelines and the underwriter affidavit that the policy would not have been written had plaintiff known the true status of the premises sufficed for this purpose.

 

04/02/15       Braithewaite v. Progressive Casualty Insurance Company
Appellate Division, Second Department
Pennsylvania Uninsured Motorists Exclusions Ineffective in New York
Braithwaite lived in New York and was hurt when in a car owned by Pennsylvania resident Wilkes and operated by Bright.  The accident occurred when Bright crossed over the double yellow lines on the center of a highway into oncoming traffic in an effort to pass another vehicle. Wilkes's vehicle was insured by the Progressive written in Pennsylvania, which contained an endorsement for uninsured motorist coverage with a liability limit of $300,000. Bright did not have Wilkes's permission to operate the vehicle, the plaintiff was not entitled to coverage under the liability portion of the policy.

Progressive was obligated to pay up to the $300,000 policy limit for damages that an "insured person" was legally entitled to recover by reason of bodily injury caused by an accident, and arising out of the ownership, maintenance, or use of an "uninsured motor vehicle." Braithwaite was a passenger in such a vehicle. However, under the Pennsylvania policy issued by Progressive, the term "uninsured motor vehicle" excluded both a vehicle owned by the named insured and a covered auto which formed the basis for Progressive’s disclaimer.

Plaintiff argued that the exclusion was invalid under New York law which did not provide for such exclusionary language.

The court found that the exclusions contained in the uninsured motorist coverage endorsement of Progressive's Pennsylvania policy are not permitted by New York law. "Insurance Law § 3420(f)(1) requires that every automobile insurance policy contain an uninsured motor vehicle endorsement. Neither that statute nor any regulations applicable to it mentions any exclusions and were therefore unenforceable.

03/31/15  Endurance American Ins. Co. v. Utica First Insurance Company
Appellate Division, First Department
Where Insurer Needs Copy of Trade Contract Before Disclaiming, Delay in Disclaiming Until Trade Contract Received is Excused
Utica's disclaimer of liability for coverage by letter dated November 21, 2011 to its named insured, defendant CFC Contractor Group, Inc., did not constitute notice to additional insured plaintiff Adelphi Restoration Corp. However, its January 29, 2013 disclaimer of liability to Adelphi was not unreasonably late in light of its uncontroverted statement in the disclaimer letter that it did not receive the written contract between CFC and Adelphi until January 28,

The contention that the disclaimer was unreasonably late because the exclusion for employees of an insured on which it was based was apparent from the face of multiple earlier tenders failed. Adelphi's additional insured status was conferred by a blanket additional insured endorsement, i.e., for any entity that CFC was required by a written contract to name as an additional insured; Adelphi was not named in the policy, and was required to prove its status by providing a copy of its written contract with CFC. Plaintiffs acknowledge that Utica "conducted an investigation as to Adelphi's status as an additional insured on its policy, and only when it confirmed that Adelphi was an additional insured did it issue its coverage position for Adelphi's tender." Indeed, Utica issued its disclaimer the day after it received the CFC/Adelphi contract.

03/31/15       MVAIC v. American Country Insurance Company
Appellate Division, First Department
Where New Auto Carrier Provides Coverage, Retiring Auto Carrier’s Failures to Follow Rules Are Not That Important
American made a prima facie showing that the offending vehicle in this no-fault arbitration was insured by Global Liberty Insurance of New York, by submitting a Department of Motor Vehicle expansion, indicating that Global had insured the vehicle after American’s coverage.  Under Vehicle and Traffic Law § 313(1)(a), the subsequent coverage terminated respondent's coverage of the same vehicle as of the effective date and hour of Global's coverage even if the previous carrier did not comply with the cancellation requirements of the Vehicle and Traffic Law.

 

 

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

Robert E.B. Hewitt III
[email protected]

04/09/15                 Cross  v. Labombard
Appellate Division, First Department
Plaintiff Cannot Rebut Defendant’s Expert By Submission of Treating Physician’s Report That Was Based In Part on Inaccurate or Incomplete Information
Defendant was entitled to summary judgment dismissing plaintiff’s significant limitation of use and permanent consequential limitation of use categories. Defendant met his initial burden as to plaintiff Helene Cross’ cervical spine and left shoulder injuries in the significant limitation of use and permanent consequential limitations of use categories. Defendant submitted the affidavit and report of a physician who conducted an independent medical examination of each plaintiff, who concluded that Cross’ injuries were mild and related to a 2002 snowmobiling accident and 2003 spinal fusion surgery in 2003, and a one vehicle accident in 2010, two weeks after the subject accident.

Plaintiff, however, submitted the affidavit and records of her treating orthopedic surgeon who provided a through and qualitative assessment of the current condition of her neck and shoulder, and how these parts of her body are limited from otherwise normal use. He distinguished her current symptoms from those attributable to the 2002 accident and related surgery by noting she had returned to her normal daily activities without pain in the neck and shoulder for several years following the earlier accident, but she currently suffers from pain in those areas that prevents her from performing many typical daily functions.  As for the January 2010 accident, he opined that the force of the accident would have propelled her in a different direction such that she would have been less likely to receive the type of injuries that would be sustained in a forceful rear impact collision like the subject accident. He also noted she complained of neck and shoulder pain during visits to a chiropractor between accidents. However, the appellate court was unimpressed with his attempts to distinguish the 2010 accident. The physician did not have all of the accurate or necessary information to make his claims as to the true mechanisms of injury, such that he could conclude the subject accident and not the later 2010 accident caused the injury. Furthermore, the chiropractic records he relied on do not contain any qualitative or quantitative testing results and only plaintiff’s subjective indications of pain. As his information relied upon was inaccurate or incomplete, he did not have a sufficient basis for reaching his conclusion that her injuries were causally related to the subject accident, rather than the later accident.

The Appellate Court found the lower court properly found an issue of fact regarding the significant disfigurement category as to plaintiff’s surgical scars on her left shoulder. A scar falls into this category if a reasonable person would deem it unattractive or objectionable or feel that it could subject the injured person to pity or scorn. While the defendants’ expert found the one half inch and three inch scars  not readily visible and not a significant disfigurement, plaintiff’s treating physician disagreed. Plaintiff averred that the location of the scars was uncomfortable because of straps from dresses, swimsuits, and bras rubbing in that area. If she wore clothing to expose her shoulders, her scars would be exposed. The scars were different in color from the surrounding skin and one is slightly puckered, as shown in photographs. The photos were not of great quality but were enough to raise an issue of fact.

As to the 90/190-day category the Appellate Court found that the lower court correctly determined that defendant failed to meet its burden. Defendant relied on the lack of outright restrictions imposed by medical professionals in their medical records, but ignored deposition testimony by plaintiff’s that they could not perform many daily activities or were restricted in their abilities, as well as evidence that they were told by medical professional to limit certain tasks or engage in other tasks only when they were able to do so. Thus they failed to meet their burden.

04/09/15                 Reyes v. Park
Appellate Division, First Department
Positive MRI Reports Indicating Significant Limitations Of Motion and Muscle Spasms Could Be Considered Even Though Not Affirmed As It Was Referred To and Not Disputed By Defendants’ Experts
Appellate Division reversed in part the lower court’s grant of summary judgment as to the lack of permanent or significant limitation of use of plaintiff’s spine, but granted the motion to the extent the motions are based on lack of liability for the non-negligent driver that was rear ended.

Plaintiff contended he suffered serious injury to his cervical, thoracic, and lumbar spine following a motor vehicle accident that occurred when he was a passenger in a vehicle, which was rear ended by another vehicle. The defendants made a prima facie showing of the lack of a permanent or significant limitation to plaintiff’s spine through the reports of their neurological and orthopedic experts who found normal range of motion and no evidence of orthopedic or neurological injury caused by the accident. Although one of their medical experts found some minor limitations in plaintiff’s spinal range of motion, those findings did not undermine the expert’s conclusion that plaintiff suffered only resolved sprains and that his injuries did not amount to a permanent or significant limitation of use of his spine.

In opposition plaintiff raised an issue of fact through the affirmation of his treating physician who opined that plaintiff suffered permanent and significant injuries to his spine that were caused by the accident. The physician’s findings, upon examination shortly after the accident and more recently, included significant limitations in range of motion, muscle spasms, and positive straight leg raising tests. Those findings, together with reports of positive MRI findings and EMG/NGV studies, provided objective evidence of injury. The MRI reports were not annexed or affirmed but could be considered in opposition since the positive MRI findings were referred to and set forth by defendants’ experts, were not disputed by defendants’ experts, and were not the only objective evidence relied upon by plaintiff’s doctor in support of his opinion.

The 90/180 –day claims were dismissed because plaintiff’s deposition testimony was that he returned to work immediately after the accident, missed about two and one half months from work after returning, and was not directed by his physicians to restrict his activities. Plaintiff failed to raise an issue of fact by claiming limitations of not being able to clean his house or play dominoes as they were not substantially all of his usual and customary daily activities.

The driver of the vehicle that plaintiff was riding in was able to escape liability in this matter because the testimony showed that the vehicle was rear ended while it was stopped at an intersection and the testimony that the stop at the intersection was abrupt was insufficient to rebut the presumption of negligence for rear end collisions.

Plaintiff’s speculation that further discovery might support a finding of liability as to either defendants is an insufficient basis for denying their summary judgment motions on liability.

04/08/15                 Balram v. CJ Transportation, LLC
Appellate Division, Second Department
Defendants Fail To Submit Evidence Refuting Plaintiff’s Treating Physician’s Medical Reports Indicating Bulging Discs and Decreased Range of Motion
The Appellate Court affirmed the  lower court’s denial of the defendants’ summary judgment motion. The Appellate Court found that the defendants failed to meet their prima facie burden to demonstrate neither plaintiff sustained a serious injury. Defendants relied on the unsworn medical reports of the plaintiffs’ treating physicians. Those reports stated that each plaintiff sustained a bulging disc or a disc herniation as a result of the accident, accompanied by a specified decrease in cervical and lumbar ranges of motion. Those findings were supported by objective tests, including magnetic resonance imaging reports as to each plaintiff. These submissions failed to eliminate all triable issues of fact as to whether the plaintiffs sustained serious injuries as a result of the subject accident.

04/08/15                 Bess v. Bruno
Appellate Division, Second Department
Defendants Cannot Succeed On Summary Judgment If It Fails To Address All Claims Made In Plaintiff’s Bill Of Particulars.
The Appellate Court reversed the lower court’s grant of summary judgment to defendants. The Appellate Court found that the defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury as a result of the accident. The papers submitted failed to adequately address the plaintiff’s claims set forth in the bill of particulars that she sustained a serious injury under the 90/180 day—category of the Insurance Law.

04/08/15                Goveau v. Lesende
Appellate Division, Second Department
Plaintiff Could Raise Issue of Fact With Affirmation From Doctor Who Subsequently After Submitting Affidavit Had His Medical License Revoked As Revocation Of License Was Credibility Issue Best Left To A Jury To Decide
Appellate Division unanimously reversed the grant of summary judgment to defendants. The Appellate Division found that the defendants met their prima facie burden of showing that plaintiff did not suffer a serious injury. The defendants submitted the affirmed medical reports and an affirmation from an orthopedic surgeon, who opined that, based upon his review of the plaintiff’s magnetic imaging films,that the alleged injuries to the cervical and lumbar regions of her spine were degenerative in nature and not caused by the accident. However, in opposition, without stating how, the Appellate Court determined the plaintiff raised triable issues of fact as to whether the alleged injuries to the cervical and lumbar regions of her spine were caused by the accident.

04/02/15                 Richards v. Fairfield
Appellate Division, Third Department
Jury Verdict of No Award For Future Pain And Suffering Overturned Where Plaintiff Provided Unrefuted Evidence of Some Permanence Of Injury
Plaintiff commenced this action to recover damages when her vehicle was hit from behind by a tractor trailer. Liability was conceded and a jury awarded $15,000 in damages for past pain and suffering and zero for future pain and suffering under the significant limitation of use category. Plaintiff made a motion to set aside the jury verdict which was denied by the trial court. On appeal, the third-department reversed. The appellate court noted that an award of damages for pain and suffering can be set aside on the grounds of inadequacy when it deviates materially from reasonable compensation for the injury sustained.  Determination of whether an award is adequate requires consideration of comparable cases and “the nature, extent and permanency of the injuries, the extent of past present and future pain and the long term effects of the injury.”  Although the court noted that it would set aside a jury verdict sparingly, and a jury does not to take into account a plaintiff’s subjective complaints of severe pain, the court noted there was objective evidence of some limited permanency of injury, which rendered an award of no future pain and suffering inadequate.

Plaintiff testified that she could not sleep on her left side following shoulder surgery to repair a tear, and that although she could engage in her normal activities, they caused her pain. The IME orthopedist did not dispute her complaints of pain.  Plaintiffs treating orthopedist indicated she would continue to experience some permanent restrictions as she had some limitations in her range of motion. The defendants’ IME orthopedist did not unequivocally refute the findings of plaintiff’s treating orthopedist with respect to her ongoing, permanent restrictions. Rather, he opined that her labrum tear was not traumatically induced and qualified his opinion that the condition of plaintiff’s shoulder was ‘essentially’ normal. The Appellate Court held that the award of no damages for future pain and suffering could not have been reached on any fair interpretation of the evidence. Based on the record evidence, and plaintiff’s estimated life span of 53.4 years, the Appellate Court awarded $25,000 for future pain and suffering.

04/02/15                Ocean v. Hossain
Appellate Division, First Department
Plaintiff Could Raise Issue of Fact With Affirmation From Doctor Who Subsequently After Submitting Affidavit Had His Medical License Revoked As Revocation Of License Was Credibility Issue Best Left To A Jury To Decide
Appellate Division unanimously reversed the grant of summary judgment to defendants which dismissed the claims of permanent consequential and significant limitations of use of the knee pursuant to Insurance Law §5102. The Appellate Court found that the Defendants established prima facie that plaintiff did not sustain a serious injury to his knees by submitting their radiologist’s and orthopedist’s reports finding that the injuries in both knees were degenerative changes that existed before the motor vehicle accident and were consistent with plaintiff’s weight and age. Defendants also relied on plaintiff’s radiologist’s MRI report, which found degenerative conditions in both knees.

The Appellate Division found that the affirmations of plaintiff’s treating physicians failed to address defendants’ proof of preexisting degenerative conditions related to his age and weight or the evidence of degeneration noted in his own radiologist’s MRI reports. However, the affirmation of plaintiff’s orthopedic surgeon, Dr. Harshad Bhatt, was sufficient to raise an issue of fact as to whether plaintiff suffered a serious injury causally related to the accident. Dr. Bhatt reviewed defendant’s radiologist’s report and completely disagreed with the doctor’s opinion that the injuries to the knees were due to degeneration. Rather, based on his own personal observation, the lack of any previous knee complaints, and the acute onset of pain directly after the subject accident, Dr. Bhatt affirmed that the injuries were causally related to the accident. The interesting twist in this case is that the lower court refused to consider Dr. Bhatt’s opinion because his license to practice medicine in New York had been revoked between the time he issued his opinion and when the motion for summary judgment was renewed. The Appellate Division noted that he was licensed to practice medicine when the affirmation was subscribed and submitted to the court, and the revocation of his license raised issues of credibility which are left to the jury. Thus the motion was denied.

 

04/02/15                Clausi v. Hall
Appellate Division, Third Department
Even With Documented Preexisting Degeneration Plaintiff Can Defeat Summary Judgment By Submitting Medical Evidence That The Accident Aggravated The Prior Conditions
The Appellate Division unanimously reversed the lower court’s grant of summary judgment to the defendants on the significant limitation of use category.  Defendants met their burden of demonstrating a prima facie entitlement to summary judgment. Defendants submitted plaintiff’s deposition testimony and the affirmed reports of orthopedic surgeon Harvey Siegel and neurologist Ira Neustadt, both of whom reviewed plaintiff’s medical records and performed an independent medical examination of her in 2013. Siegel concluded that other than a strain of the lumber spine that has since been resolved, no objective medical evidence existed establishing that the injuries were caused by the accident. Rather, he opined that the injuries depicted in the post-accident MRIS as well as the positive findings he documented upon examination, were the result of preexisting and previously symptomatic degenerative changes to plaintiff’s spine. He noted she complained of lower back pain on two prior occasions, including six months prior to the accident. The neurologist opined the MRI showed preexisting degenerative disc disease, and he found no evidence of any neurological disability of residual effects from the disability.

Plaintiff submitted the affirmation of her primary care physician with whom she treated both prior to and after the accident. He provided objective quantitative evidence of plaintiff’s limitations based upon recent testing. He documented range of motion limitations and muscle spasms that had only been evident shortly after the accident. He disputed the prior disc degeneration, which he stated was asymptomatic prior to the accident, as being the sole cause of her injury. He noted her prior complaints of back pain resolved within a short period. He opined the new symptoms aggravated her preexisting condition.

The Court found his opinion, based upon objective medical findings of her current injury and rendered after specifically considering the effects of her preexisting condition, adequately attributed plaintiff’s injuries to the accident. Furthermore, plaintiff adequately addressed a gap in treatment by submitting an affidavit asserting that she stopped treatment for approximately 15 months because she could not afford to bear the cost after her no fault benefits expired. Therefore, dismissal of her claim under the significant limitation of use category was not warranted.

With respect to the 90/180 day category, the Appellate Division granted summary judgment. None of plaintiff’s medical records from within the initial 180-day period following the accident referenced any limitations on her usual daily activities and, absent any objective medical evidence to substantiate her claims, plaintiff’s self-serving assertions that she was unable to perform substantially all of her regular activities for the required period of time are insufficient to raise an issue of fact.

04/01/15                Samouelian v. Amroan
Appellate Division, Second Department
When Presented By Two Conflicting Expert’s Opinions As To Whether Plaintiff Suffered A Serious Injury The Jury Is Entitled to Accept One Expert’s Opinion and Reject the Other
The Appellate Division affirmed the denial of plaintiff’s motion to set aside a jury verdict in favor of defendants which found she did not suffer a serious injury.  The Appellate Court found that plaintiff’s contention that the jury verdict finding that she did not sustain a serious injury was not based on legally sufficient evidence was unpreserved for appellate review as the appellate did not raise the issue before the trial court. Furthermore, the Appellate Court found that the verdict was not contrary to the weight of the evidence. When conflicting expert testimony is presented, the jurors are entitled to accept one expert’s opinion and reject the other expert’s opinion.

04/01/15                Joseph v. Rockland Coaches, Inc.
Appellate Division, Second Department
Summary Judgment In Favor Of Defendants Will Be Reversed When the Defendants Fail to Adequately Address All Claims In Plaintiff’s Bill of Particulars and Therefore Fail to Meet Their Prima Facie Burden
The Appellate Division reversed the grant of summary judgment to the defendants which had found that plaintiff did not suffer a serious injury as a matter of law. The defendants did not even meet their prima facie burden of showing that the plaintiff did not sustain a serious injury under the Insurance Law. The papers submitted by defendants failed to adequately address plaintiff’s claims as set forth in the bill of particulars that he sustained a serious injury to the cervical region of his spine under either the permanent consequential or significant limitation of use categories of the Insurance Law. It was unnecessary to determine whether plaintiff raised an issue of fact with his papers.

03/27/15                Graham v. Gerow
Appellate Division, Fourth Department
The Serious Injury Threshold Does Not Apply In the Case of Vehicles Such As Farm Tractors That Are Used Primarily For Agricultural Purposes
In an unusual case, the Appellate Division reversed the denial of summary judgment to plaintiff. Plaintiff sued when defendants’ tractor with attached plow crossed the center line of the highway and collided with plaintiff’s vehicle. Plaintiffs met their initial burden by establishing that defendants' field plow crossed the center line of the highway and struck vehicle.  In opposition, defendants failed to meet their burden of providing a

Of note, the Appellate Court held that the serious injury threshold does not apply here because defendants' farm tractor and field plow are not "motor vehicles" under the Insurance Law and defendants therefore do not qualify as "covered persons" under Insurance Law § 5102 (j). It found that plaintiff was correct that, because there is no dispute that defendants' farm tractor and the attached field plow were being used exclusively for agricultural purposes, the serious injury threshold requirement is not applicable.

03/26/15                Fedorova v. Kirkland
Appellate Division, First Department
Defendants Unwittingly Caused An Issue Of Fact To Be Found By Submitting A Report From Plaintiff’s Internist Which Found That The Injuries Were Causally Related to the Accident
The Appellate Division reversed the grant of summary judgment to the defendants which had found that plaintiff did not suffer a serious injury as a matter of law.

Defendants submitted an expert report from an orthopedist who reviewed plaintiff’s medical records and conducted a physical examination of plaintiff two years after the accident. He concluded that plaintiff had malignant and degenerative arthritis in both knees, consistent with her obesity and age. However, he rendered his opinion without the benefit of the medical records from the time of the accident or from the arthroscopic surgery performed six weeks later. Defendants also submitted plaintiff’s medical records showing she had been diagnosed with arthritis in both knees before the accident.

Defendants submitted a report from the radiologist who failed to indicate his area of medical specialization which states that the MRI films taken after plaintiff’s accident show pre-existing, degenerative conditions in all body parts, and no evidence of injury caused by the accident. Neither the radiologist nor defendants’ orthopedist referenced the medical report, also submitted by defendants, from plaintiff’s internist, who performed a complete medical examination less than one week after the accident, indicating that plaintiff was complaining of pain to the same areas that she was not seeking compensation. This report, submitted by defendants, raised an issue of summary judgment and precluded summary judgment as the internist concluded based on plaintiff’s complaints and history that the accident was the causative factor of plaintiff’s symptomatology.

The Appellate Division found that even if defendants established that none of plaintiff’s injuries were caused by the accident, dismissal would still not be warranted. Plaintiff has met her burden of establishing that there are material issues of fact requiring a trial. She submitted a postoperative report from the arthroscopic surgeon performed on her left knee which provides a diagnosis of a tear of the medial meniscus and the lateral meniscus, as well as degenerative changes to the medial and lateral femoral condyles and multiple loose bodies. Plaintiff also provided a more recent affirmation from her orthopedic surgeon which indicates that at the time of the surgery, the diagnosis was a torn medial meniscus that was causally related to the accident. Defendants argue the second narrative report contradicts the postsurgical report, both reports indicate that the torn meniscus was surgically repaired, with postsurgical report distinguishing between the degenerative conditions and the tear, and the narrative report stating explicitly that the tear was not degenerative but the result of trauma. This was sufficient to raise an issue as to the nature and cause of plaintiff’s knee injury.

Because plaintiff sufficiently established that at least some of her injuries met the “no fault” threshold, the court found it did not need to examine her proof with respect to the other injuries. If the jury determines plaintiff suffered serious injuries, it may award damages for all her injuries causally related to the accident, even those that do not meet the serious injury threshold.

MARGO’S MUSINGS ON NO FAULT

Margo M. Lagueras
[email protected]

Arbitration

03/26/15       Upstate MUA Chiropractic, PLLC v Geico Insurance Co.
Erie County, Arbitrator Michelle Murphy-Louden
Peer Review That Addresses QST Testing Rather Than PF-NCS Testing Is Insufficient to Support Denial
The 22 year old EIP was involved in a motor vehicle accident in July 2013.  Following consultations with various medical providers and thoracic and lumbar MRIs which revealed a small protrusion at T6-7 and a small annular tear and disc protrusion at L5-S1, the EIP underwent pain nerve conduction studies (PF-NCS) of the upper and lower extremities in June 2014.  Two peer reviews, one for the upper and one for the lower extremities were performed.  The peer reviewer opined that the testing had no direct impact on the EIP’s care or management and were not medically necessary.  Based on the peer reviews, reimbursement was denied.

The Arbitrator disagreed as the peer review never reviewed any post-testing medical records and therefore the allegation that the testing had no impact on the EIPs care was completely unsupported.  In addition, the peer reviewer considered the PF-NCS testing to be a form of Quantitative Sensory Testing (QST) whereas according to the American Association of Sensory Electrodiagnostic Medicine guidelines the two are distinct.  Therefore, the peer reviewer did not address the specific test in dispute and the denial was not upheld.

However, with respect to the amount to be reimbursed, the Arbitrator found that the ‘by report’ code 95999 was not appropriate.  In fact, in his letter justifying the use of a ‘by report’ code, Applicant stated that the “nature, extent and need for the procedure, as well as the time, skill and equipment necessary” was identical to that of a standard NCS (code 95904) and that, therefore, it was appropriate to assign an RVU of 12.60 for each nerve tested.  For some reason, however, when multiplying 12.60 by 4.65 (the conversion code for a Region II provider), Applicant’s result was $85.68 rather the $58.59, the correct amount.  Given that Applicant tested 32 nerves, the Arbitrator awarded $1,874.88, rather than the $2,741.76 demanded.

03/25/15       Jerry J. Tracy, Physician PLLC v State Farm Fire and Cas. Co.
Erie County, Arbitrator Mona Bargnesi
Office Visit Immediately Prior to Administration of Trigger Point Injections Is Included in the “Listed Value for the Surgical Procedure”
At issue was the charge for an office visit.  The EIP was in an accident in June 2012 and alleged injuries to her neck and low back.  Applicant performed MUA on the EIP in January 2014.  Applicant again saw the EIP in March and labeled his report a “Followup Report.”  Respondent partially denied reimbursement alleging that the office visit, code 99214, is considered part of the global surgical package pursuant to the Fee Schedule Surgery Ground Rule 1.  Therefore, Respondent paid that portion of the March bill corresponding to the trigger point injections performed that day, and denied the portion for the followup to the MUA.
Following review of Surgery Ground Rules 1, 2 and 6, the Arbitrator concluded that the office visit in March was beyond the time period allowed for a follow up for the January MUA and, therefore, that office visit would not be considered part of the global surgical package for the MUA procedure.  However, Surgery Ground Rule 2 addresses immediate preoperative visits.  The trigger point injections administered during the March visit are also listed in the fee schedule as a surgery code.  Therefore, the office visit on the same day as the injections would be included as part of the global value for the surgical procedure, namely, the trigger point injections.  Accordingly, the denial for the office visit was upheld.

03/24/15       Jerry J. Tracy, Physician PLLC v Liberty Mut. Fire Ins. Co.
Erie County, Arbitrator Michelle Murphy-Louden
No Facility Fee Reimbursement Owed for Facility Accredited Under Public Health Law 230-d
The 45 year old EIP was injured in February 2013, when her vehicle was rear-ended.  In May 2014, Applicant performed MUA in an ambulatory surgery facility which he owns and which is an accredited office-based surgery center.  The Arbitrator noted that in February 2015, the Second Department of the New York State Appellate Division held that there is no provision in the No-Fault Law that allows the recovery of a facility fee for the performance of “office-based surgery” performed in facility accredited under Public health Law 230-d (Government Employees Ins. Co. v Avanguard Med. Group, 2015 NY Slip Op 01413).  Therefore, absent express statutory or regulatory authorization, a no-fault carrier is not required to pay a facility fee and, as such, the denial was upheld.

Litigation

03/23/15       EMA Acupuncture P.C. v Allstate Ins. Co.
Appellate Term, First Department
Attorney’s Fees in Consolidated Action Are Limited to $850
The trial court’s ruling limiting attorneys’ fees in four consolidated actions to $850 is affirmed on appeal.  11 NYCRR 65-4.6(e) provides that attorneys’ fees are to be calculated on the “aggregate of all bills for each insured” disputed in any action up to a maximum of $850.  Therefore, where claims involve the same parties and assignor, arise from the same accident, and are thus consolidated, the attorneys’ fee is capped at $850.

03/23/15       V.S. Care Acupuncture P.C. v MVAIC
Appellate Term, First Department
Medical Provider Not Entitled to Notice of EIP’s IME
On appeal, the trial court’s denial of Defendant’s motion for summary judgment dismissing the complaint is reversed.  Defendant made a prima facie showing of entitlement to summary judgment by establishing through its IME report that the EIP’s injuries were resolved.  The trial judge erred in declining to consider that report on the ground that the Plaintiff provider was not copied on the scheduling notice.  There is no requirement that a medical provider be copied on the IME scheduling notice sent to an EIP.  Furthermore, Plaintiff’s opposition to the motion, consisting of only an attorney affirmation without any medical evidence, was insufficient to raise a triable issue.

03/02/15       Stracar Med. Servs., P.C. v State Farm Mut. Auto. Ins. Co.
Appellate Term, Second Department
PIP Endorsement Obligates EIP’s Assignee or Representative to Submit to EUO
Here Plaintiff argued that, at the time Defendant noticed it for an EUO, it had an “authorization to pay” and not an assignment of benefits (AOB).  Therefore, Plaintiff argued it was not the EIP’s assignee at the time it submitted the NF-3 forms.  The Appellate Term affirmed the trial court’s ruling holding that both the recipient of an authorization to pay and the recipient of an AOB are required to submit to a duly scheduled EUO because both forms require the signatures of the EIP and the provider and nothing in the prescribed authorization or AOB differentiates between the two with respect to the EIP’s obligations such as the obligation to submit to an EUO.  Pursuant to 11 NYCRR 65-3.11, an insurer is required to pay benefits directly to a provider “upon assignment by the applicant.”  The word “assignment” is not limited to an AOB but also includes a prescribed authorization since such “assignment” is demonstrated by submitting either a properly executed authorization or AOB. The court further reasoned that even if an authorization did not fall within the umbrella of the word “assignment”, the recipient of an authorization would still be required to submit to an EUO because the PIP endorsement requires the EIP’s representative to do so.  Therefore, the recipient of an authorization who submits a proof of claim is acting as the EIP’s representative and, consequently, is obligated to submit to an EUO.

 

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

04/01/15       Harleysville Worcester Ins.  Co. v Duane Reade, Inc.
Appellate Division, Second Department
Where No Evidence of O&C of Fire Presented, Negligence Claim against Owner is Dismissed
This matter has its origins in a 2007 fire loss located at a strip mall owned by Junction Boulevard.  The fire, which began in a Duane Reade store, caused extensive damage to several stores at the location.  Those stores, in turn, commenced a claim against Junction Boulevard (and Junction’s real estate manager). 

Junction moved for summary judgment seeking dismissal of the claim because plaintiff could not establish how the fire started.  Where, as here, plaintiffs could not point to a cause for the fire, there was no evidence for the jury to “rationally infer that [Junction Boulevard] negligently caused the fire.”  Junction Boulevard’s motion for summary judgment was granted accordingly.

Potpourri

04/07/15       In re. Insurance Corporation of New York
Appellate Division, First Department
Judgment Creditor Cannot Overcome Appropriate Denial to Named Insured
First Financial obtained a judgment against InsCorp’s named insured, and commenced the instant case under Insurance Law 3420(b).  Despite that status, InsCorp argued that First Financial could not overcome the late notice denial of liability that was issued to InsCorp’s insured in 2005.  In holding that the judgment creditor has no greater rights than the insured, the Court ruled that First Financial could not revive coverage that had been lost due to late notice from a decade earlier.

04/01/15       Goldstone Amber St. Realty v New York Marine & Gen. Ins. Co.
Appellate Division, Second Department
Unearned Premium is Calculated from Date of Cancellation
Plaintiff purchased a Commercial General Liability policy from NYMAGIC which was scheduled to be effective from June 6, 2008 through December 6, 2010.  To finance the policy, plaintiff sought the assistance of its broker, GNP Brokerage. Essentially, plaintiff paid a finance company, who, in turn, forwarded payments to GNP Brokerage.  GNP Brokerage forwarded the premium payments to Program Brokerage (NYMAGIC’s broker). 

NYMAGIC cancelled the policy effective August 3, 2010 after plaintiff defaulted in payments to another premium finance company, AFCO.  NYMAGIC returned $16,411.38 in unearned premium as part of the cancellation process.  Plaintiff, however, commenced the instant action alleging that it voluntarily cancelled the policy in June of 2009, and as such the unearned premium was $90,000. 

In its answer, GNP Brokerage asserted a cross claim against NYMAGIC alleging that NYMAGIC violated Insurance Law 3428(e) when it failed to return unearned premiums to GNP. 

Eventually, all parties moved for summary judgment.  NYMAGIC argued that the unearned premium should be calculated from the time the policy was incepted until it was cancelled approximately 2 years and 2 months later.  GNP and plaintiff argued, however, that the unearned premium should be calculated after an audit confirmed the actual project cost at the time of cancellation.  The Court ruled that the unearned premium was to be calculated from the time of cancellation, per the terms of the policy.  An audit, on the hand, was to be calculated only where the policy expired.    

03/31/15       Emigrant Mtge. Co. v Commonwealth Land Tit. Ins. Co.
Appellate Division, First Department
Title Company’s Denial on Late Notice Overturned Where Notice was Provided at the Time of Title Claim
Emigrant moved for summary judgment against Commonwealth on the basis that it, as the title company, failed to properly investigate the chain of title.  Commonwealth opposed on the basis that Emigrant breached its obligation to provide timely notice of the claim.  Where Emigrant established that notice was provided at the time the title claim process began, it followed that Emigrant had established its rights to coverage under the policy.

 

FITZ’ BITS

Elizabeth A. Fitzpatrick
[email protected]

On a short vacation.

AUDREY’S ALL THINGS PERSONAL

Audrey A. Seeley
[email protected]

Not this week.
CASSIE’S CAPITAL CONNECTION
Cassandra A. Kazukenus
[email protected]

S4280 Proposed Legislation Related to Transportation Network Companies

This is the proposed legislation advanced by the ride sharing industry, and it contains numerous new provisions to various sections of New York State laws.  As such, I will try to provide a brief summary with highlights of the more notable provisions.

Per the Sponsor’s Memorandum, the bill would amend §5106 of the Insurance Law to provide for payment of first party benefits under a transportation network company’s (“TNC”) insurance policy in those instances where there is more than one policy involved.  This provision would also allow the TNC insurer to seek recourse form the insurer issuing the other applicable policy.  The proposed legislation specifically states that this recovery is only allowed to the extent “that the loss arose from the use and operation of the insured motor vehicle other than as a transportation network vehicle.”  Disputes are to be resolved in accordance with the arbitration procedures.

This bill also seeks to add a new section, Insurance Law §3455, to allow group insurance policies for TNCs and TNC drivers.  Of note is the definition of “transportation network company group policy” which is defined as a “group policy, including certificate issued to the group members, where the group policyholder is a transportation network company and the policy provides insurance to the transportation network company and to group members.”  This coverage includes SUM coverage.  The group policy must provide per occurrence limits of coverage for each group member in an amount not less than that required by the VTL.  Further, the insurer must mail or deliver a certificate of insurance to each group member insured under the TNC group policy.  The certificate must contain all material terms and conditions of the coverage provided to the group members.  However, if the TNC group policy accompanies the certificate, the certificate may incorporate the terms by reference.  There are also proposed limitations on the circumstances under which an insurer may terminate a group policy or certificate. 

Additionally, the bill seeks to amend various sections of the VTL, General Municipal, and Transportation Laws in an effort to make it clear that TNCs are not livery or for-hire carriers.  The bill would then create a new provision under the VTL which specifically applies to registration and licensing requirements for TNCs and their drivers.

 

KEEPING THE FAITH WITH JEN’S GEMS

Jennifer A. Ehman
[email protected] 

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

 

01/21/15       A&E Auto Body, Inc. v. 21st Century Centennial Insurance Co.
Middle District of Florida
Florida Multi-District Auto Repair Litigation
Several cases initially filed in various states alleging that insurance companies illegally sought to control and depress auto repair costs have been consolidated in the Middle District of Florida under the title “In re: Auto Body Shop Anti-Trust Litigation”.  U.S. District Court Judge Gregory A. Presnell recently issued an important ruling dismissing a majority of the claims.  A&E Auto Body, Inc. v. 21st Century Centennial Insurance Co., 2015 WL 304048 (M.D. Fla. January 21, 2015).  These cases accuse State Farm and some 40 other carriers of conspiring to suppress reimbursement rates for vehicle damage repair costs.  Approximately 22 other cases have been consolidated and are currently pending in the Middle District of Florida for coordinated pre-trial proceedings.  The plaintiffs allege that the insurance companies exercised control over labor and repair costs by entering into “Direct Repair Program Agreements” (or DRP’s) with auto body shops, and in return the insurance companies list the shops as their  “preferred providers”.  The body shops allege that the insurance companies “conspired” to use DRP’s as a mechanism to set price limits on repair costs.  They further allege that failure to comply with the insurance companies’ demands results in removal of body shops from the “Preferred Provider Program”, and “steering” customers away from non-conforming body shops.

In the first part of the ruling, the Court ruled that the plaintiffs insufficiently alleged how the insurance companies engaged in a concerted course of action to illegally control and artificially depress repair costs in violation of the Anti-Trust Laws.  For example, the Court noted that there were no details pleaded as to how and when insurers allegedly entered into a price-fixing agreement.  Plaintiffs failed to adequately allege and explain any actual agreement to fix prices.  Parties making independent decisions on what to pay or to “match” prices is not an illegal antitrust conspiracy.  The Court rejected a key part of the plaintiffs’ allegations in ruling that it is not per se illegal for a party to decide it is unwilling to pay a higher hourly rate for repair costs than its competitors, and the fact that certain carriers made such “statements” did not presumptively indicate illegality. 

The Court then ruled that the plaintiffs also failed to adequately plead that there was illegal boycotting or steering activity away from non-compliant auto body shops.  There was no allegation that any insurance company refused to allow an insured to obtain a repair from a non-compliant shop, or refused to pay for repairs performed at such a body shop. 

The Court also rejected claims for “tortious interference with business relations” because there was a financial interest between the insureds and the insurance company, and for a tortious interference claim to exist there must be unjustified interference by a third-party who is a stranger to and not involved in the business relationship.

For the moment, however, the Court did not dismiss the plaintiffs’ claims for “conversion” alleging that insurance companies failed to make full payment for certain labor and material costs. 

From a procedural perspective, this case is indicative of the higher level of pleading requirements in Federal Court which are often applied as a preliminary matter by the District Courts and can represent a hurdle for claims against insurance companies.   Federal pleading requirements are heightened, particular for claims arising from securities actions, antitrust, fraud, bad faith, and the like.
Substantively, in an anti-trust context the plaintiffs had to show an unlawful agreement or conspiracy in restraint of trade, and the fact that insurance companies may have been proceeding on parallel purposes, or establishing similar programs, did not necessarily show an “agreement” to do so, or that the insurance companies had entered into any kind of conspiracy to fix prices or control relationships with the auto body shops.  Independent actions along parallel lines without evidence of agreement or conspiracy are not necessarily illegal or presumptively in violation of the Anti-Trust Laws. 

The risk industry will be closely watching other rulings and developments in this master anti-trust litigation in Florida which involves most of the major automotive insurance carriers.