Volume XVII, No. 12 (No. 442)
Friday, December 4, 2015
A Biweekly Electronic Newsletter
Hurwitz & Fine, P.C.
1300 Liberty Building
Buffalo, NY 14202
Phone: 716-849-8900
Fax: 716-855-0874
Long Island Office:
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Melville, New York 11747
Phone: 631-465-0700
Fax: 631-465-0313
www.hurwitzfine.com
© Hurwitz & Fine, P. C. 2015
All rights reserved
As a public service, Hurwitz & Fine, P.C. is pleased to present its biweekly newsletter, providing summaries of and access to the latest insurance law decisions from the New York State appellate courts. The primary purpose of this newsletter is to provide timely educational information and commentary for our clients and subscribers.
In some jurisdictions, newsletters such as this may be considered Attorney Advertising.
If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at [email protected] or call 716-849-8900.
You will find back issues of Coverage Pointers on the firm website listed above.
Dear Coverage Pointers Subscribers:
Situations are us. If you need strategic advice or help in unraveling a conundrum wrapped in an enigma, call us. We love situations.
Greetings from NYC, where I’m attending the DRI Insurance Coverage and Practice Symposium. Kudos to Audrey Seeley, Chair of the DRI Insurance Law Committee, for her leadership in that Committee.
In my column, there are a series of very interesting and diverse decisions from the NY appellate courts, handed down over the last couple of weeks. See the highlights below and then read the attached issue.
Mediation of Coverage Disputes:
There was a great presentation at this conference on the mediation of coverage disputes, something we’ve been discussion in this newsletter for about 10 years. If you are currently facing a complex insurance coverage conflict and need some help in mediating, I provide mediation services as a proponent or as a mediator. Let me know if we can help.
Happy Anniversary Mom and Dad:
My parents were married in Palestine on December 4, 1941, 74 years ago today. They immigrated to the United States in August of 1952. Dad passed in 1980; Mom is flourishing at the tender young age of 94+ and living on her own in New Jersey.
Speaking of Weddings – a US President to Marry, 100 Years Ago:
The Wichita Beacon
Wichita, Kansas
4 Dec 1915
WILSON TO MARRY
SATURDAY, DEC. 18
Ceremony to Be Witnessed Only by
Members of the Two Families.
It Will Be at the House of Mrs. Galt in Afternoon.
Washington, Dec. 4.—President Wilson and Mrs. Norman Galt will be married on Saturday, December 18, at Mrs. Galt's home here, according to a formal announcement made today at the White House.
It was also announced that the only guests will be Mrs. Galt's mother, her brothers and sisters, the President's brother and sister, his daughters and the members of his immediate household. No invitations will be issued.
No announcement was made regarding plans for a honeymoon, but it was expected that the President and his bride will leave Washington soon after the ceremony for somewhere in the South.
In the Afternoon.
While no announcement was made of the hour of the ceremony it was understood it will be late in the afternoon. The Rev. Sylvester Beach, the President's pastor in Princeton, and the Rev. Herbert Scott Smith, rector of Mrs. Galt's church here, are expected to officiate.
The formal announcement of the wedding plans was written out by the President himself this morning. Immediately afterward he left the White House to visit Mrs. Galt. Both have agreed that all the details shall be as simple as possible.
More about presidential weddings in a bit.
Peiper’s Pickings:
Today I saw my chair, at my desk, in my office, at my firm. After a month long trial in the 718, it was nice to back in the 716. I am off to the 518 tomorrow, but back to home base much of next week. To those of you to whom I owe a call, I’ll be with your shortly. To those of you who wish to give me a call, please do. Always nice to hear a friendly voice.
Happy December.
Steve
Steven E. Peiper
“I Do” (or “They Did”):
I know you’re curious about the Wilson-Galt wedding. By the way, Woodrow Wilson was the last US President to get married during his term of office. He was not, however, the first.
Three US Presidents married during their terms of office, John Tyler, Grover Cleveland and Woodrow Wilson. For Tyler, it was his first marriage, for Cleveland and Wilson, their second. There is one noticeable pattern, age differences.
Fifty-four year old widower President John Tyler marries 24-year-old Julia Gardiner (born May 4, 1820) on June 26. 1844. It was his second marriage. At the time, Julia was the youngest First Lady in history. She was 30 years his junior
President Grover Cleveland becomes the first and only sitting president to marry in the White House on June 2, 1886. He married Frances Folsom (born July 26, 1854) his ward. When she was 11, Frances’ father died and Cleveland became her legal guardian, remaining close friends with her mother. His pet name for Frances was Frank. Observers thought Cleveland would marry his friend’s widow and were completely surprised when, instead, he married Frances as soon as she turned 21. He was 48. There was a 27-year difference in age. She took over the title as the youngest First Lady in history. They had a daughter, Ruth, born between Cleveland’s two terms in the White House and the namesake of the Baby Ruth candy bar. Baby Ruth died at age 12 of Diphtheria.
On December 18, 1915, President Woodrow Wilson marries Edith Bolling Galt, a widow, (born October 15, 1872) in Washington, D.C. The bride was 43 and the groom was 59. There was a 16-year difference in age. It was the second marriage for Wilson, whose first wife died the year before from a kidney ailment. Edith, who claimed to be directly descended from Pocahontas, was the wealthy widow of a jewelry-store owner and a member of Washington high society.
According to the National First Ladies’ Library, the couple was introduced by his cousin and a mutual friend. Unlike Wilson’s first wife, who was shy and avoided politics, Edith shared Wilson’s passion for the subject. Wilson proposed three months later and they married at her Washington, D.C. home. As the 1916 presidential campaign heated up, many of Wilson’s advisors worried that his whirlwind courtship and marriage to Edith so soon after his first wife’s death would become a political liability. By the time of his second inaugural in March 1917, though, Americans soon had more serious matters to think about: America’s entry into World War I.
Throughout the war and the rest of Wilson’s second term, Edith was constantly at her husband’s side and her presence irritated and frustrated his advisors. Wilson enjoyed having her sit in the Oval Office while he conducted business, which led to accusations that she had undue influence over who was allowed access to the president. This was exacerbated when Wilson suffered a stroke in October 1919 while touring the nation to promote his plan for the League of Nations, an international organization designed to prevent further conflicts like World War I. During his recovery, Edith assumed the role of “steward” for Wilson, screening his mail and official papers. In some cases, she was accused of signing Wilson’s signature without consulting him, though she insisted this was not the case and blamed the accusations on her husband’s political opponents.
Wilson recovered from the stroke, but remained partially paralyzed on one side. Though his plan for the League of Nations was never ratified by Congress, Wilson won the Nobel Peace Prize in 1920 for his work on it and in brokering the treaty that ended World War I. At the conclusion of his second term in 1921, he retired, though he and Edith continued to live in Washington, D.C. Wilson passed away three years later; after his death, Edith dedicated herself to compiling her husband’s presidential papers. She died in 1961 at the age of 89.
By the way, who was the third youngest First Lady of the United States? Jacqueline Bouvier Kennedy, who was 31 at the time she became First Lady. She was 24 when she married 36 year old JFK., only a 12-year difference.
Wilewicz’ Wide World of Coverage:
Dear Readers,
We bring you this edition from the DRI Insurance Coverage and Practice Symposium in New York City. The presentations have been excellent thus far and it has been wonderful to meet so many great practitioners and industry representatives. I have had to miss a few hours to run to Islip for a Federal Court appearance, but so it goes.
Further, I am happy to announce that I was recently anointed the Chair of the Long Tail and Toxic Torts Substantive Law Subcommittee of DRI’s Insurance Law Committee. It is truly an honor, and I am very much looking forward to a year of networking, authorship opportunities, and getting to know even more people in the field. If you are interested, please join my Subcommittee by logging into your DRI account.
In other news, this week in the Wide World of Coverage, I bring you but one case out of the Southern District. A wild one, indeed, but it deals with an argument that seems to come up with some frequency – how many “occurrences” exist for coverage purposes when related events take place in a relatively short period of time? In Verlus v Liberty Mutual, two pit bulls attacked two women in White Plains. Since one dog attacked one woman, a second dog attacked another, then both dogs attacked, the plaintiffs argued that three separate occurrences had taken place. Though it was factually a matter of first impression, the Southern District held that this series of events was one “occurrence”, in light of the policy’s aggregating language defining an occurrence as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions”. The plaintiffs could not get three times the policy limits. Always fun stuff.
See you in two weeks!
P.S. In response to Dan’s comment in last issue, I did make it back from New York and out of Terminal 4 that night (if 3:00 a.m. is still considered night, and not early morning), after driving through the night with Labor Law Adams so that I could get to Court in Rochester the next day. All in the line of duty.
Agnes
Agnes A. Wilewicz
In Support of Assimilating Immigrants – Two Articles – 100 Years Ago:
New Castle News
New Castle, Pennsylvania
4 Dec 1915
Move to Educate
The Alien Element
A movement is going forward in scores of cities to educate the alien element. Whether the immigrant stream is to lessen in future on account of the European war, as some believe, or otherwise, the problem remains a vital one. But if our alien population has nearly reached its limit, say, for a generation; the prospect is one to stimulate hope that the task may be accomplished. With a million newcomers added every year, but little impression could be made on the mass. With only a couple of hundred thousand to assimilate each year, the task cannot be so difficult.
It is the experience of many who have tried it that very little headway can be made in teaching grownup aliens a new language and new modes of thought. Where the young are anxious to qualify on the American standard the elders are reluctant to confess ignorance and inability—to go at lessons like children. If adults cease to come in streams to glut the field, educators will have a better chance to bring the growing generation into shape by the time they reach manhood and womanhood. The pride of adult aliens in seeing their offspring Americanize is helpful and can usually be counted upon, so it is common sense for educators and philanthropists to follow the line of least resistance and concentrate effort as far as possible upon promising material.
The Winnipeg Tribune
Winnipeg, Manitoba, Canada
4 Dec 1915
DISCUSS IMMIGRANTS
Recognizing that lack of sympathy with our immigrant races is due to lack of first-hand knowledge of their problems and ideals, Grace Church Men's club has secured for its Sunday afternoon meetings during December, prominent representatives of incoming races to give addresses from their own standpoints.
Arthur O. Rose, B.A., who resided for several years in and around the western war zone, will speak on the "Slavic peoples" tomorrow at 3 p.m.
HEWITT’S HIGHLIGHTS:
Dear Subscribers:
The Second Department issued a number of serious injury cases right before Thanksgiving. Unfortunately, most of the cases were not too detailed this time around. There were a number of serious injury cases this time around. In one case, the Court found a defendant failed to make out a prima facie case because defendant’s own doctor found significant range of motion limitations and did not articulate the basis for his belief that the plaintiff was faking the limitations. In several cases, the defendants failed to address the claim in the bill of particulars of a 90/180-day category of injury. Two cases remind us that if the plaintiff meets the threshold for one injury, he can collect damages for all injuries whether or not those other injuries meet the threshold if they were caused by the accident.
I hope you all had a wonderful Thanksgiving. For those that celebrate, I wish you a Happy Hanukkah. Stay warm as you enjoy the winter.
Until next time,
Rob
Robert Hewitt
[email protected]
Dying to Marry Again – A Century Ago:
The New York Times
New York, New York
4 Dec 1915
ACCUSED OF POISONING WIFE
Barken Arrested After Collecting
Insurance and Marrying Again.
Harry Barken, 29 years old, a tailor, of 786 Myrtle Avenue, Brooklyn, was held without bail yesterday by Magistrate Nash in the Gates Avenue court on a charge of homicide in connection with the death of his wife, Bessie, who died from poisoning six months ago. Since that time, according to the police, he has collected $785 in life insurance, and was married on Oct. 22 to Miss Annie Goldberg.
After the death of his first wife on May 23, an inquest was held by Coroner Senior and resulted in the verdict that the woman had died of poisoning and included the phrase "method of giving poison unknown."
Coroner Senior yesterday said that at the time of the inquest he suspected something was wrong, but could get no evidence to warrant an arrest, so he had simply kept the case open, hoping that some new evidence might turn up. In September, Miss Lizzie Zalkin, a sister of the dead woman, went to District Attorney Cropsey and is said to have told him that Barken gave this wife tablets which burned her stomach.
I wondered what happened to the alleged murderer. I found out and it only took six days to resolve the problem:
The New York Times
New York, New York
10 Dec 1915
Homicide Charge Dismissed.
Harry Barken, a tailor, who was arrested several days ago on a charge of homicide in connection with the death of his wife more than six months ago, was dismissed from custody yesterday by Magistrate Howard Nash in the Gates Avenue Court, Brooklyn. The Magistrate said that there was nothing in the evidence to warrant holding Barken.
Jen’s Gems
Greetings! I am writing this week from New York City where I am attending DRI’s Insurance Coverage & Practice Symposium. Like always, it has been a very informative and interesting seminar. Also, it is always a special treat to be in the city during Christmas time. I am planning on walking by the tree in Rockefeller Center tonight, and will definitely check out Macy’s tomorrow.
In terms of my column, this week I report on an interesting decision out of New York County Supreme Court. Again, in New York, the Supreme Court is our trial court. In Elshazly v. Castlepoint Ins. Co., the court was presented a situation whereby the insurer denied coverage for a house fire submitting that the premises did not qualify as a “residence premises” since it was composed of three separate dwellings. The court agreed focusing on the presence of separate bedrooms, bathrooms, and kitchens (or kitchenettes) and separate entrances for each space. What is interesting about this decision, and why it is one of those to make a mental note of, is it provides specific facts to consider when determining the number of dwellings in a home.
Until next issue…
Jen
Jennifer A. Ehman
This Week’s Headlines (Full Case Summaries and Links to Cases in Attached Edition):
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
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Doctrine of Judicial Estoppel Precludes Defendant from Taking Inconsistent Factual and Legal Positions
Tort and Coverage Cases Arising Out of Same Facts can be Joined for Disposition but Not Consolidated -
Primary Carrier, Who Paid Monies in Excess of Policy Limits, has No Claim and No Standing to Bring Claim against Excess Carrier who Denied Coverage for Underlying Claim
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Unsworn Statement of Insured Taken by Claim Examiner Cannot be Used in Motion for Summary Judgment Seeking Summary Judgment against Parties Other than Insured
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Policy Did Not Permit Other Insurance to Fund Self-Insured Retention without Permission and No Permission was Obtained
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Unclear Whether Named Insured on SUM Policy is Individual or Corporation so Pre-Arbitration Discovery Properly Obtained by Motion
HEWITT’s HIGHLIGHTS ON SERIOUS INJURY UNDER NO-FAULT LAW
Robert E.B. Hewitt III
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Issue of Fact As to Whether or Not Plaintiff Suffered A Serious Injury to His Cervical Spine
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No Issue of Fact In Response To Defendant’s Medical Evidence Which Established That Plaintiff’s Right Shoulder Did Not Constitute a Serious Injury
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Defendants Fail To Address the 90/180-Day Category of Injury That Was Set Forth In the Bill of Particulars
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The Defendants Expert Found Significant Range of Motion Limitation and Failed To Explain His Belief that the Limitation of Motion Was Self-Imposed
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Defendants’ Motion Denied For Failure to Establish That Plaintiff Did Not Sustain a Serious Injury
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Plaintiff Met The Serious Injury Threshold As to His Cervical Spine And Therefore There Was No Need To Determine Whether He Met the Threshold As To His Other Injuries
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Defendants Failed to Address the 90/180-Day Category of Damages
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Defendant Can Rely on Uncertified Medical Records To Demonstrate A Lack of Serious Injury If They Are The Records of the Plaintiff’s Treating Physician
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Plaintiff’s Cross-motion For Summary Judgment Was Untimely As It Was Made More Than 120 Days Beyond The Filing of the Note of Issue and Did Not Relate Back to Defendants’ Motion For Summary Judgment
.
PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper
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By Accepting Premium for Months After Denying Coverage for Material Misrepresentation and After Commencing DJ Action and Then Renewing Policy, Insurer Waived Right to Rescind
FITZ’S BITS
Elizabeth A. Fitzpatrick
-
Not this week..
WILEWICZ’S WIDE WORLD OF COVERAGE
Agnes A. Wilewicz
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Southern District Holds That Multi-Dog, Multi-Victim Attack Is One “Occurrence” In Light Of Policy’s Aggregating Language In “Occurrence” Definition
KEEPING THE FAITH WITH JEN’S GEMS
Jennifer A. Ehman
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No Coverage Under Homeowners Policy for Three Family Dwelling
EARL’S PEARLS
Earl K. Cantwell
[email protected]
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A New Twist on Construction Defects: Misrepresentation
That’s all for now. Happy Chanukah to those who celebrate. Peace be with you all
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
Twitter: @kohane
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
ASSISTANT EDITOR
Jennifer A. Ehman
INSURANCE COVERAGE TEAM
Dan D. Kohane, Team Leader
[email protected]
Michael F. Perley
Elizabeth A. Fitzpatrick
Audrey A. Seeley
Steven E. Peiper
Jennifer A. Ehman
Agnieszka A. Wilewicz
Diane F. Bosse
Joel R. Appelbaum
FIRE, FIRST-PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
[email protected]
Elizabeth A. Fitzpatrick
NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Jennifer A. Ehman
APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Elizabeth A. Fitzpatrick
Diane F. Bosse
Topical Index
Hewitt’s Highlights on Serious Injury
Peiper on Property and Potpourri
Wilewicz’s Wide World of Coverage
Keeping the Faith with Jen’s Gems
Earl’s Pearls
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
11/25/15 Cobenas v. Ginsburg Development Companies, LLC
Appellate Division, Second Department
Doctrine of Judicial Estoppel Precludes Defendant from Taking Inconsistent Factual and Legal Positions
Cobenas, the plaintiff, was struck by a piece of wood, blown by the wind, when he was working at a construction site. He sued Ginsburg Development Companies, LLC, Ginsburg Development Corp., GDC Construction & Development Corp., and Fairways Wallkill, LLC (collectively “Ginsburg”), the owners of the property and against Leopard Framing Corp. (hereinafter Leopard), a contractor hired by Ginsburg to do the framing work on the construction project.
The complaint alleged that the plaintiff was employed by a subcontractor named Sarango. At his nonparty deposition, Sarango testified that someone from Leopard had provided him with paperwork to run a business under the name of Soares, which included obtaining a general liability insurance policy under that name with Preferred Mutual (“Preferred”). After discovery was completed in the main action, Leopard commenced third-party actions for indemnification and contribution against both Soares and Sarango. Ginsburg did the same. Sarango was served with process, but Ginsburg and Leopard were unable to locate Soares. The Supreme Court granted their application to serve Soares via Preferred. Thereafter, counsel, appointed by Preferred, served answers on behalf of Soares.
Ginsburg and Leopard sought to depose Soares. After Soares repeatedly failed to appear, they moved to strike Soares' answer. The Supreme Court granted the motion, and Soares appealed, arguing that Sarango's deposition testimony established that Sarango and Soares were the same person and, therefore, Ginsburg and Leopard had already had the opportunity to depose Soares, as Sarango had been twice deposed. In an earlier ruling, this Court held that the Supreme Court should not have stricken the answer, and that the appropriate remedy was to preclude Soares from testifying at trial.
Following discovery, Soares moved for summary judgment, arguing, in essence, that Ginsburg and Leopard were not entitled to indemnification because Soares and Sarango were not the same person; there was no evidence that Soares was present at the site on the day of the accident and, therefore, he did not cause the accident.
The court found that under the doctrine of judicial estoppel, or estoppel against inconsistent positions, a party is precluded from inequitably adopting a position directly contrary to or inconsistent with an earlier assumed position in the same proceeding. In this case, Soares' claim that he and Sarango were not the same person is manifestly at odds with his representations in his prior appeal before this Court that he and Sarango were the same person. Accordingly, applying the doctrine of judicial estoppel, the Supreme Court properly denied Soares' motion for summary judgment dismissing the third-party complaint and second third-party complaint.
11/25/15 Bermejo v. New York City Health and Hospitals Corporation
Tort and Coverage Cases Arising out of Same Facts can be Joined for Disposition but Not Consolidated
There are two lawsuits. In the first, a Labor Law claim, Bermejo, allegedly sustained injuries when he fell from a scaffold at a construction site located at premises owned by Amsterdam. IBEX was the general contractor and it retained, for the subject construction project. IBEX retained a masonry contractor, Marble Techniques and Bermejo was employed by Marble & Tile Corp., a nonparty subcontractor, which was hired by Marble Techniques to perform specified construction work at the subject premises. Everest was Marble Technique’s insurance carrier. In Action No. 1 to recover damages for personal injuries against Amsterdam and IBE and IBEX commenced a third-party action against Marble Techniques.
Everest disclaimed any obligation to defend or indemnify Marble Techniques in connection with the third-party action,
Marble Techniques commenced Action No. 2 against Everest, seeking a judgment declaring that Everest was obligated to defend and indemnify it in connection with the third-party action in Action No. 1. IBEX moved to consolidate the two lawsuits.
It was appropriate for the lower court to transfer the cases to the same Individual Assignment Part for disposition without consolidating them.
11/25/15 GEICO v. RLI Insurance Company
Appellate Division, Second Department
Primary Carrier, Who Paid Monies in Excess of Policy Limits, has No Claim and No Standing to Bring Claim against Excess Carrier who Denied Coverage for Underlying Claim
In 2007, Rachel E. Freier was involved in an automobile accident, in which Bi Bo Chiu, a passenger in another vehicle, was injured. Bi Bo Chiu subsequently commenced the underlying action against Rachel E. Freier and the defendant Tzvi Freier, the owner of the car Rachel was operating, to recover damages for personal injuries. The Freiers had primary insurance coverage from GEICO and an umbrella policy from the defendant RLI. GEICO undertook the defense and RLI disclaimed on late notice. GEICO then commenced an action declaring that RLI was required to indemnify the Freiers in the underlying action.
GEICO did not have standing to seek that relief. A party has standing where it has an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request. The RLI policy was excess to GEICO's policy and, thus, RLI's duty to indemnify the Freiers was not triggered until coverage under GEICO's policy was exhausted
GEICO did not stand to benefit from the RLI policy, depriving it of standing to seek a declaration of RLI's duty to indemnify under that policy,
The Supreme Court also properly denied GEICO's cross motion for summary judgment on an unpleaded cause of action for a judgment declaring, inter alia, that RLI was required to reimburse it for $200,000 it paid above its policy limits to settle the underlying action, because GEICO's proof did not support such a cause of action. Specifically, GEICO failed to demonstrate the existence of any duty running from RLI, the excess carrier, to GEICO, the primary insurer, with respect to RLI's coverage determination
Contrary to GEICO's contention, the doctrine of equitable subrogation cannot be invoked where, as here, the payments sought to be recovered were voluntary. 526).
11/25/15 Tower Insurance Company of New York v. Einhorn
Appellate Division, Second Department
Unsworn Statement of Insured Taken by Claim Examiner Cannot be Used in Motion for Summary Judgment Seeking Summary Judgment against Parties Other than Insured
Ehrenfeld was hurt when he fell on property owned by Tower’s insured, Einhorn.
Ehrenfeld sued Einhorn and the neighboring landowner, the defendant Beth Jacob Day School (“Beth Jacob”).
Tower disclaimed coverage on the ground that its investigation revealed that Einhorn did not reside at the property at the time of the accident and, therefore, the property was not an "insured location" as defined in the insurance policy that it issued to Einhorn. Tower then commenced the instant action against Einhorn, the Ehrenfelds, and Beth Jacob, seeking a judgment declaring that it is not obligated to defend or indemnify any of the defendants in the underlying personal injury action. Einhorn failed to appear or answer the complaint.
Tower moved for leave to enter a default judgment against Einhorn and for summary judgment against the Ehrenfelds and Beth Jacob declaring that it is not obligated to defend any of the defendants in the underlying personal injury action. Tower submitted excerpts from a telephone conversation between one of its liability examiners and a woman who identified herself as the insured, Einhorn. In which Einhorn admitted that she was not residing at the subject premises at the time of the accident, a condition precedent to coverage for claims alleging bodily injury.
With respect to the remaining defendants, i.e., the Ehrenfelds, the plaintiff failed to establish a right to summary judgment based on the hearsay statements allegedly attributed to Einhorn. The default judgment against the insured, will have no preclusive effect to deprive the non-defaulting defendants of their right to litigate the issues pertaining to coverage as permitted by law in the appropriate forum.
Tower then had a right to discontinue its action, absence a showing of prejudice.
Editor’s Note: Would it have made a difference in the statement given by Einhorn was under oath? Perhaps it would have then had an evidentiary quality.
.
11/20/15 Travelers Insurance Co. v. Benderson Development Co., LLC
Appellate Division, Fourth Department
Policy Did Not Permit Other Insurance to Fund Self-Insured Retention without Permission and No Permission was Obtained
You need to read this one slowly. I’ll type it slowly so you can. The back-story is complicated but important for the message.
Travelers commenced an action seeking to recover over $190,000 under a policy it issue to Benderson. The policyholder is in the business of owning, leasing, managing, and maintaining commercial properties. For the policy period of March 31, 2003 through March 31, 2004, Benderson was covered by a Travelers excess CGL policy. The policy included a $100,000 Self-Insured Retention (SIR) Endorsement and a $100,000 Insured's Contribution (IC) Endorsement. Before the policy limits would be applied toward any covered event, Benderson was obligated to pay $100,000 under each of the endorsements, for a total of $200,000.
In July 2002, defendants retained Lancer Glass (Lancer) as a contractor, and Benderson was added as an additional insured on a Lancer policy. The Lancer policy provided $1,000,000 in primary coverage as well as additional, excess coverage. In 2003, a Lancer employee was injured and brought an action against Benderson (Lancer litigation), which settled for $1,800,000.
Lancer's primary coverage was $1,000,000 and its excess coverage was $400,000. Travelers paid the remaining $400,000, and then demanded that Benderson reimburse it $190,068.79, which represented the $100,000 obligation under each endorsement minus a credit owed to Benderson. Benderson refused, contending that the additional insured coverage provided by the Lancer policy satisfied its obligations under the SIR and IC endorsements.
Similarly, in 2003 Benderson was an additional insured on a liability insurance policy owned by a tenant in one of defendants' properties, Sally Beauty Systems Group (Sally Beauty). In 2003, a Sally Beauty employee was injured on that property and brought an action against Benderson (Sally litigation). That action settled for $1,600,000, and the Sally Beauty policy paid $1,000,000. Plaintiff paid $400,000 of the $600,000 balance, but refused to pay the remaining $200,000, citing Benderson’s obligations under the endorsements.
Travelers then commenced this action against defendants for the outstanding $190,068.79 from the Lancer litigation, and Benderson counterclaimed for the $200,000 they paid as a result of the Sally litigation.
Travelers was granted judgment below and the Fourth Department affirmed.
Pursuant to the plain and unambiguous language of the SIR endorsement, Benderson defendants agreed "not to insure the self-insured retention' without Travelers knowledge and permission," and Travelers submitted proof establishing that no such permission was requested. Benderson failed even to contend that permission was granted in regard to either the Lancer or Sally litigation. Likewise, the terms of the IC endorsement, as plainly stated in the policy, applies to the policy limits. Because the policy is an excess rather than a primary insurance policy, the policy limits are not applied until all additional insured coverage has been exhausted. Consequently, any additional insured coverage would necessarily be exhausted before Benderson’s obligation under the IC endorsement was triggered.
11/20/15 Matter of Progressive v. Beardsley
Appellate Division, Fourth Department
Unclear Whether Named Insured on SUM Policy is Individual or Corporation so Pre-Arbitration Discovery Properly Obtained by Motion
Beardsley was struck by a vehicle while walking across a parking lot, and he subsequently recovered the full $25,000 policy limit from the insurer of that vehicle. He then submitted a claim for supplemental uninsured/underinsured motorist (SUM) benefits pursuant to a personal automobile policy issued by Progressive to his father, Jeffrey F. Beardsley (“Dad”), which listed Beardsley as an insured driver and household resident.
Beardsley also submitted a claim for SUM benefits under a commercial automobile policy issued by Merchants Mutual (Merchants) with respect to certain vehicles associated with Dad’s excavation business. Merchants disclaimed coverage on the ground that Beardsley was "insured as a corporation," and the SUM coverage provided in its policy did not extend to Beardsley because he was not a member of Dad’s excavation business and was not occupying an insured vehicle at the time of the incident.
Beardsley demanded arbitration with respect to his claims for SUM coverage under each policy. Progressive commenced this proceeding pursuant to CPLR article 75 seeking a temporary stay of arbitration pending the completion of discovery. In addition, Progressive sought an order determining that Merchants is a coinsurer for purposes of the SUM claims and that any SUM award be paid in proportion to each insurer's policy limit.
Merchants claimed that its policy was issued to Dad "as a corporation' engaged in excavation operations," and that Beardsley did not qualify as an insured because a policy issued to a corporation does not provide SUM coverage for family members of its officers or shareholders. Progressive asserted that the named insured on Merchants' policy was Dad as an individual, and that there was no indication that Dad was a corporation.
Where an automobile insurance policy contains a SUM provision and is issued to an individual, that individual and others in his or her family may be afforded SUM coverage under the policy when such person is injured in any vehicle, including a vehicle owned and insured by a third party. However, when issued to a corporation, the SUM provision does not follow any particular individual, but instead covers any person injured while occupying an automobile owned by the corporation or while being operated on behalf of the corporation.
Here, the declarations page of Merchants' commercial automobile policy states that the policy was issued to "Jeffrey F Beardsly [sic]" as the named insured, but the term "corporation" is listed on the "form of business" line. Inasmuch as the insurers do not contend that the Merchants' policy is ambiguous but, rather, they dispute whether it was issued to an individual or a corporation, and the record does not establish whether "Jeffrey F Beardsly [sic]" is a corporation.
Discovery is needed.
HEWITT’s HIGHLIGHTS ON SERIOUS INJURY UNDER NO-FAULT LAW
Robert E.B. Hewitt III
11/25/15 Bakis v. Cummings
Appellate Division, Second Department
Issue of Fact as to Whether or Not Plaintiff Suffered a Serious Injury to His Cervical Spine
The Appellate Division affirmed the Supreme Court’s denial of defendant’s summary judgment motion, which had been made on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The Appellate Court found that the defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident, holding that the defendant submitted competent medical evidence establishing, prima facie, that the alleged injury to the plaintiff's cervical spine did not constitute a serious injury under the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d). In opposition, however, the Appellate Division found that plaintiff raised a triable issue of fact as to whether he sustained a serious injury to his cervical spine as a result of the subject accident. Unfortunately, the case provides no details.
11/25/15 Kim v. Mehta
Appellate Division, Second Department
No Issue of Fact in Response to Defendant’s Medical Evidence Which Established That Plaintiff’s Right Shoulder Did Not Constitute a Serious Injury
The Appellate Division affirmed the trial court’s grant of summary judgment to the defendant on the issue of serious injury. The Appellate Division held that in support of their motion for summary judgment dismissing the complaint, the defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The defendants submitted competent medical evidence establishing, prima facie, that the alleged injury to the plaintiff's right shoulder did not constitute a serious injury under the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d). In opposition, the Appellate Court found that plaintiff failed to raise a triable issue of fact. Unfortunately, yet again the court provided no details as to the specifics that led to its determination.
11/25/15 Kwasniak v. Cabone
Appellate Division, Second Department
Defendants Fail To Address the 90/180-Day Category of Injury That Was Set Forth In the Bill of Particulars
The Appellate Division reversed the grant of summary judgment to the defendants. The Appellate Division found that defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The papers submitted by the defendants failed to adequately address the plaintiff's claim, set forth in the bill of particulars, that he sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d). As is typical, in light of the defendants' failure to meet their prima facie burden, it was unnecessary to determine whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact.
11/25/15 Mercado v. Mendoza
Appellate Division, Second Department
The Defendants Expert Found Significant Range of Motion Limitation and Failed To Explain His Belief that the Limitation of Motion Was Self-Imposed
The Appellate Division reversed the Supreme Court’s grant of summary judgment to the defendants. The Appellate Court found that the defendants failed to meet their prima facie burden of demonstrating that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident, as the defendants' expert found significant limitations in the range of motion in the lumbar region of the plaintiff's spine. The defendants' expert failed to adequately explain and substantiate his belief that the limitation of motion in the lumbar region of the plaintiff's spine was self-imposed.
11/25/15 Ortiz v. Lewkowics
Appellate Division, Second Department
Defendants’ Motion Denied For Failure to Establish That Plaintiff Did Not Sustain a Serious Injury
In this bare boned opinion, the Appellate Division affirmed the trial court’s denial of summary judgment to the defendants on the grounds that the defendants failed to establish, prima facie, that the plaintiffs did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. No details at all were given.
11/25/15 Rivera v. Sloane
Appellate Division, Second Department
Plaintiff Met the Serious Injury Threshold as to His Cervical Spine and Therefore There Was No Need to Determine Whether He Met the Threshold as To His Other Injuries
The Appellate Division reversed the grant of summary judgment to defendants and the dismissal of the claims of plaintiff Alberto Rivera. The Appellate Division found that the defendants met their prima facie burden of showing that the plaintiff Alberto J. Rivera did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The defendants submitted competent medical evidence establishing, prima facie, that the alleged injury to the lumbar region of Rivera's spine did not constitute a serious injury under the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d). In opposition, however, Rivera raised a triable issue of fact as to whether he sustained a serious injury to the lumbar region of his spine. Since Rivera raised a triable issue of fact with respect to the injury to the lumbar region of his spine, it was not necessary to determine whether the evidence he submitted raised a triable issue of fact as to whether his other alleged injuries meet the "no fault" threshold Although not specifically discussed in this case, case law is clear that having met the threshold on one injury, plaintiff can collect damages for all his injuries sustained in the accident whether or not they meet the threshold.
11/25/15 Kim v. Aluf
Appellate Division, Second Department
Defendants Failed to Address the 90/180-Day Category of Damages
The Appellate Division reversed the Supreme Court’s grant of summary judgment to the defendants. The Appellate Division found defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The papers submitted by the defendants failed to adequately address the plaintiff's claim, set forth in the bill of particulars, that he sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d). No details are given.
11/25/15 Uribe v. Jimenez
Appellate Division, Second Department
Defendant Can Rely on Uncertified Medical Records to Demonstrate a Lack of Serious Injury If They Are the Records of the Plaintiff’s Treating Physician
The Appellate Division reversed the grant of summary judgment to defendants by the trial court. The Appellate Division found that the defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury to her ribs within the meaning of Insurance Law § 5102(d) as a result of the subject accident. In support of his motion, the defendant submitted the plaintiff's medical records from Elmhurst Hospital, which indicated that a chest x ray did not reveal any rib fractures. While these medical records were not certified, the defendant could rely on them in order to demonstrate a lack of serious injury, as they were the records of the plaintiff's treating physicians. However, in opposition to the defendant's motion, the Appellate Division found plaintiff submitted competent medical evidence raising a triable issue of fact as to whether she sustained a fracture of her eighth right rib as a result of the subject accident. Specifically, the plaintiff submitted certified medical records, wherein her treating physician documented a plan of treatment for the plaintiff's rib fracture that had been revealed in an X ray taken shortly after the subject accident but subsequent to the X ray submitted by the defendant on his motion, along with an affirmation from another treating physician who concluded that the plaintiff's injuries, including her rib fracture, were caused by the subject accident. Since the plaintiff raised a triable issue with respect to the rib fracture, it was not necessary to determine whether her other claimed injuries meet the threshold.
11/20/15 Caracciola v. Sausner
Appellate Division, Fourth Department
Plaintiff’s Cross-motion For Summary Judgment Was Untimely as It Was Made More Than 120 Days beyond the Filing of the Note of Issue and Did Not Relate Back to Defendants’ Motion for Summary Judgment
The Appellate Division reversed the grant of summary judgment to plaintiffs. Plaintiffs commenced this action seeking damages for injuries allegedly sustained by Steven J. Cracchiola (plaintiff) when the vehicle he was driving was rear-ended by a vehicle driven by defendant Bryan Sausner and owned by Sausner's employer, defendant John W. Danforth Company. Defendants moved for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury in the accident (see Insurance Law § 5102 [d]), and plaintiffs cross-moved for partial summary judgment on the issue of negligence. Supreme Court granted defendants' motion only in part, denying the motion with respect to two categories of serious injury, and the court granted plaintiffs' cross motion. Plaintiffs did not cross-appeal from the order insofar as it granted defendants' motion in part. The Appellate Division also agreed with defendants that plaintiffs' cross motion was untimely, inasmuch as it was made more than 120 days after the note of issue was filed, and plaintiffs did not seek leave to file a late motion or show good cause for their delay pursuant to CPLR 3212 (a). Contrary to plaintiffs' contention, the Appellate Division found the cross motion was not made on nearly identical grounds' as defendants' timely motion," and thus the cross motion was not properly before the court.
The Appellate Division agreed with plaintiffs, however, that the court properly denied defendants' motion with respect to the two remaining categories of serious injury, i.e., permanent consequential limitation of use and significant limitation of use, because defendants failed to establish their entitlement to judgment as a matter of law. Although defendants submitted medical reports from defendants' examining physicians concluding that plaintiff's injuries were inconsequential, transient, and attributable to preexisting degenerative conditions, they also submitted medical reports from plaintiff's treating physician and an examining chiropractor concluding that plaintiff's injuries were significant, permanent, and causally related to the accident.
PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper
11/24/15 Tower Insurance Company of New York v. Anderson
Appellate Division, First Department
By Accepting Premium for Months after Denying Coverage for Material Misrepresentation and After Commencing DJ Action and Then Renewing Policy, Insurer Waived Right to Rescind
The issue on the appeal is, as of what date did Tower have "sufficient knowledge of potential material misrepresentations" by its insured, Anderson in their policy or renewal applications, to rescind the policy. Tower's examiner conducted a recorded interview of Anderson on February 14, 2012. On March 5, 2012, plaintiff disclaimed coverage, and it commenced this declaratory action on June 4, 2012. Thus, by March 5, 2012, plaintiff suspected a material misrepresentation.
However, Tower continued to accept the Andersons' premium payments, and it renewed the policy on December 8, 2012. By accepting the premium payments after learning of the Andersons' material misrepresentation, plaintiff waived its right to rescind the policy. This is so even if its reason for accepting the payments was to " protect'" its insureds pending a determination of this action.
Elizabeth A. Fitzpatrick
Not this week.
WILEWICZ’S WIDE WORLD OF COVERAGE
Agnes A. Wilewicz
11/12/15 Jean Verlus, Joanne Verlus, & Pauline Verlus v. Liberty Mutual Ins.
United States District Court, Southern District of New York
Southern District Holds That Multi-Dog, Multi-Victim Attack Is One “Occurrence” In Light Of Policy’s Aggregating Language In “Occurrence” Definition
Plaintiffs Jean and Joanne Verlus were walking down the street in White Plains, no more than a few feet from each other, and having a conversation in normal voices. Suddenly, two American Put Bull Terriers named Doom and Diva started running toward them. Both dogs approached the plaintiffs from the same direction and attacked. First, Doom attacked Jean and jumped at her face. The women ran in opposite directions in an attempt to escape the dogs. Diva then attacked Joanne and bit her buttocks and middle finger. Joanne fell, crawled to higher ground, and was able to get out of Diva’s reach. Diva barked at Joanne for a time then left to join Doom’s attack of Jean. Diva then bit Jean’s groin and feet. The entire attack on Joanne lasted less than a minute. The attack on Joanne lasted three to four minutes.
In their case, the women argued that the attacks were three separate “occurrences” under the dog owners’ policy – first the attack on Jean by doom; second the attack on Joanne by Diva; and third the attack on Jean by Diva. Liberty Mutual, in response, argued that the entire series of events was one continuous act that should be considered one occurrence under its policy.
The Southern District agreed with the carrier on this one. While acknowledging that New York generally applies the “unfortunate event test to determine whether there are one or more occurrences within the meaning of an insurance clause limiting coverage to a certain amount per occurrence”, the Court stated that this test does not apply if the policy language indicates an intent to aggregate incidents into a separate occurrence. Here, like many policies, the definition of an occurrence was “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period” in bodily injury or property damage. The policy further limited liability with the language:
Our total liability under Coverage E for all damages resulting from any one “occurrence” will not be more than the limit of liability for Coverage E as shown in the Declarations. This limit is the same regardless of the number of “insureds”, claims made or persons injured. All “bodily injury” and “property damage” resulting from any one accident or from continuous or repeated exposure to substantially the same general harmful conditions shall be considered the result of one occurrence.
Thus, the “unfortunate event test” did not apply. The attacks lasted no more than three or four minutes. In a matter of first impression (oddly, no multi-dog, multi-victim coverage cases were found in New York), the Southern District held that it should be guided by the Second Circuit’s understanding of the law on this issue – “that such provisions should be interpreted to ‘at most combine exposures emanating from the same location at a substantially similar time’”. The attacks constituted a continuous or repeated exposure to the same general harmful conditions. They were only one occurrence.
KEEPING THE FAITH WITH JEN’S GEMS
Jennifer A. Ehman
11/16/15 Elshazly v. Castlepoint Ins. Co.
Supreme Court, New York County
No Coverage Under Homeowners Policy for Three Family Dwelling
Plaintiff was insured under a homeowers policy issued by Castlepoint when he suffered a fire at the insured premises. At the time of the loss, plaintiff and his daughter occupied the first and third floors of the premises, while a tenant occupied an apartment in the rear of the premises on the first floor and another tenant and her son occupied the second floor.
Castlepoint denied the claim citing the definition of “residence premises,” which was defined to mean, in relevant part, “a two family dwelling where you reside in at least one of the family units and which is shown as the residence premises’ in the Declarations.”
The court affirmed the denial finding that there were “three separate living units,” each with its own bedroom, bathroom, kitchen (or kitchenette) and separate entrance. The court declined to accept plaintiff’s argument that there were no formal partitions between the second floor and other levels and that the kitchen on the second floor was nothing more than a “very small kitchenette.”
The court found that the evidence submitted was sufficient to establish as a matter of law that the structural configuration of the premises was arranged to consist of three dwelling units. Whether the second floor had an exterior entry/exit was inconsequential. Of importance, the court rejected the argument that in order to be considered a separate dwelling it needed to constitute an “apartment” as defined by the Administrative Code of the City of New York.
EARL’S PEARLS
Earl K. Cantwell
[email protected]
06/18/15 Monier Inc. v American Home Insurance Co.
California Court of Appeals
A New Twist on Construction Defects: Misrepresentation
California homeowners brought a class action against Monier, a manufacturer of roof tiles, and the state court action claimed that roof tiles deteriorated well before expiration of a 50 year warranty. American Home and several other companies denied coverage due to the lack of a defined accidental occurence. Monier then sued a number of insurers seeking a declaration that they had an obligation to provide defense and indemnification in the class action.
After a bifurcated bench trial, the trial court concluded that the insurance companies did not have a duty to defend because the class action did not allege a covered “occurrence”. On appeal, this decision was affirmed.
The essential basis for the ruling was that the claims alleged arose from claimed misrepresentations regarding the roof tiles which were intentional, non-accidental actions outside the scope of potential coverage.
Monier argued that the complaint included a claim under the California Consumers Legal Remedies Act which could be based on unintentional conduct. However, this theory was rejected by the appellate court because the class action was essentially based upon misrepresentations, which are intentional acts whether made knowingly or negligently.
Monier also raised the argument that, while “misrepresentation” may have been a stated legal theory, the class action claims and damages really arose from an unintentional product defect in the roofing tiles. The appellate court also rejected this analysis holding that the factual allegations in the complaint were that class members were damaged by misrepresentations concerning the tiles, not due to some defect in manufacturing or application.
This case presents an interesting development in the construction defect analysis since the underlying claim was primarily based on misrepresentation and not negligence, defective installation, breach of warranty, and other usual theories. The courts applied an initial test of whether the claim included a covered accidental “occurrence”, as they frequently do in assessing construction defect claims.
It is also interesting that the trial court decision arose from a bifurcated bench trial, and in cases where the core of the dispute is whether there is coverage, such a bifurcated proceeding seems a logical and efficient to mechanism to present, analyze, and get a declaratory judicial coverage opinion.
