Volume XVII, No. 15 (No. 445)
Friday, January 15, 2016
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:
535 Broad Hollow
Melville, New York 11747
Phone: 631-465-0700
Fax: 631-465-0313
www.hurwitzfine.com
© Hurwitz & Fine, P. C. 2016
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:
Do you have a situation? We love situations. They come in all shapes, sizes and complexities. Call us. We’ll have you dissolve them.
Again, I send greetings from Scottsdale, AZ. I am enjoying the last days of sunshine before returning to Lake Effect snow.
There is will be a vacation, somewhere, someday, when I am disconnected from the cyber-universe but it hasn’t happened yet. I would rather talk with you from the pool anyway!
We wish the best to Beth Fitzpatrick who has decided to go in-house with a Long Island manufacturing concern.
Labor Law Pointers:
If you do not subscribe to our sister publication, Labor Law Pointers, you would have missed the spotlight story in this month’s issue:
CAN AN UNDOCUMENTED ALIEN PLAINTIFF ASSERT A FUTURE LOST WAGE CLAIM IN A LABOR LAW CASE IF PLAINTIFF SUBMITED FRAUDULENT DOCUMENTS TO THE EMPLOYER?
Interested in the answer? Contact Dave Adams for a subscription and he’ll send you the most recent issue: [email protected] Actually, you can find past issues to all our newsletter in our newly revised website, www.hurwitzfine.com. Just click on the NEWSLETTER button at the top of the page.
A New Year and New Coverage Team Members:
Hurwitz & Fine, P.C. is pleased to introduce the two newest members of our Coverage Team and I asked them to send me a few autobiographical lines. Each will be joining the Coverage Pointers editorial staff in the coming weeks:
Jennifer J. Phillips ([email protected])
I was recently released from a seven-year court appearance: four years in the United States District Court for the Western District of New York and three years with the Appellate Division of the New York State Supreme Court. After graduating magna cum laude from Syracuse University, I clerked for the Honorable Jerome Gorski at the Fourth Department. When his Honor retired, I made the switch to the federal courts and served as a confidential law clerk to the then-Chief Judge of the Western District, the Honorable William M. Skretny. I also serve on the Board of Directors for Neighborhood Legal Services. I am pleased and proud to have found my new home here at Hurwitz & Fine, where I will be able to utilize my past experience in the state and federal systems from the other side of the podium.
Brian D. Barnas ([email protected])
Hello Coverage Pointers subscribers.
My name is Brian Barnas, and I have recently joined Hurwitz and Fine as an Associate working with the firm’s Insurance Coverage Practice Team. I’m happy to say that not only is today my first day in Coverage Pointers, but it is also my first day as an attorney, having been admitted to the New York State Bar in a wonderful ceremony in Rochester, New York yesterday. I was born and raised in Western New York, and I received my undergraduate degree and law degree from the University at Buffalo. I’m looking forward to contributing to Coverage Pointers moving forward in a still to be determined role. Talk to you soon.
Return of the Litigated No Fault Column (under a new name):
We are pleased to return our litigated No Fault column to our august publication. Tessa Scott, under the caption of Tessa’s Tutelage, had occasionally substituted and now is the author of a column where she will be discussing appellate and arbitration decisions dealing with substantive No Fault issues. Rob Hewitt will continue to provide his sterling insight into “Serious Injury” Threshold issues.
Federation of Defense & Corporate Counsel Litigation Management College:
I was delighted to be invited, again, to teach the insurance course at the FDCC Litigation Management College, this year, being held at Emory University from June 7 – 11, 2016. For insurers seeking to provide claims professional education at the highest level, this program is for you. If you need to see the full brochure or secure an application for enrollment, let me know and I’ll get one to you pronto.
Jen’s Gems:
As mentioned above, we are very excited to welcome Brian and Jen to our team. Now, you can let them know if you “got a situation.”
This week I report on a few new trial court decisions. Again, in New York, the Supreme Court is our trial level court, and the Court of Appeals is our highest court. The two decisions I report on are from New York County and Suffolk County. In American Empire Surplus Lines Ins. Co. v. Endurance Am. Specialty Ins. Co., the court considered whether a property owner was entitled to additional insured status under a subcontractor’s primary policy. The decision is fairly fact specific, but still of interest since it examines the subcontractor’s insurer’s obligations to provide coverage based on the General Conditions of an AIA Document A201-2007, which were purportedly incorporated into the main agreement. The court held that the referenced AIA document did not constitute a written agreement as required by the additional insured endorsement contained in the subcontractor’s policy.
I also report on Hartard v. State Farm Auto. Ins. Co. This is a decision with a fact pattern straight out of a Dan Kohane Insurance Law exam. To give you a taste, the named insured on the State Farm policy rented a car, not for herself, but for her fiancé whose vehicle was out of service. The fiancé then apparently uses the car to intentionally run down one of his passengers as she exits the car. The court provides an interesting discussion of whether State Farm insures the vehicle and who qualifies as an additional insured until its policy. It also touches on the requirement that the injury be caused by an accident. Worth a read.
Hope everyone has a nice weekend, and stays warm. Until next issue…
Jen
Jennifer A. Ehman
FDCC LMC:
FDCC 21st Annual Litigation Management College
June 7-11, 2015
Emory University
Atlanta, GA
"LMC is perfect for claims adjusters looking to hone their litigation management skills. I valued my time at the conference, and look forward to applying the lessons learned to improve my day to day claims handling."
- 2014 LMC participant
More than a conference, the FDCC's Annual Litigation Management College (LMC) is an intensive “hands-on” program that is simply the best way for claims and litigation management professionals with five to 15 years of experience to develop their full potential. Students work together in teams and groups led by experienced claims managers and trial counsel. They learn about how to become more successful in their jobs but most importantly, they learn about themselves. Our process, perfected over two decades of experience, includes a variety of learning approaches from individual coaching through a video-taped mock deposition to a multi-day team exercise to resolve a complex case most favorably. All aspects of high-level claims management are included: communication, analysis, budgeting, preparing litigation case plans, experts, negotiations, coverage mediation and working with defense and coverage counsel.
More seasoned claims professionals should consider enrolling in the Graduate Program, which emphasizes the thorough understanding of coverage in an environment with hands-on coaching from veteran claims and coverage counsel. If you have a client or colleague who would benefit from being a part of this “Best in Class” program, please have him or her contact David Governo, Dean of Admissions, at 617.737.9047 or [email protected].
HEWITT’S HIGHLIGHTS:
Dear Subscribers:
The holidays are over and the lights have gone away. We have entered the colder, bleaker part of winter. Down on Long Island, we still wait our first snowfall. Have your New Year resolutions made it intact these first few weeks? I hope they have. There is only a handful of serious injury cases issued this time around. In one case, try as he might, a plaintiff could not get a jury’s verdict overturned. The Appellate Court basically ruled that since there were credibility issues with the plaintiff, and competing experts, it was in the jury’s power to make the determination as to which expert to believe, and whether to give credit to plaintiff’s testimony or not. In another case, the court found issues of fact were raised by a plaintiff who submitted a chiropractor’s report that detailed how her range of motion had been limited just after the accident, and how it remained limited four years later.
Stay warm out there!
Until next time,
Rob
Robert Hewitt
Verdict for the People – 100 Year Ago
The Kingston Daily Freeman
Kingston, New York
15 Jan 1916
Verdict For Ten Dollars.
Ten dollars damages were awarded Frank Briganti Friday in county court for his false arrest by Harold Ford of Highland on the charge of stealing a half ton of grapes from the latter’s vineyard in October, 1914. The jury could not agree until they had deliberated for an hour and a half on the verdict, which was returned at 5:30. This was a test case of four similar suits brought against the defendant by as many Italians, who were alleged to have been arrested on false charges by Ford, whose haste in issuing warrants for the arrest of the men appears to have caused him much regret since court opened.
Peiper’s Presentation:
Our first venture into the New Year brings us a brush with an old friend. Please take a moment to review the Hunter Yes decision from the Third Department reviewed below. The Court, rightly, describes what GOL 5-321 requires. Then, inexplicably, appears to create a requirement that coverage actually be in place.
On one hand, we can appreciate the need for coverage. Indeed, courts have long stated that where a desire to transfer the risk of loss related to a commercial lease is at arm’s length, the GOL prohibition doesn’t apply. As such, with no coverage in place, how can it be presumed the point of the indemnity agreement was to shift the risk of exposure.
On the other hand, is it right that a party be able to avoid its contractual exposure (negotiated at arm’s length between sophisticated parties) because it ignored its obligations to procure coverage? Breaching one part of an agreement should not lead to a windfall under another part of the agreement. Perhaps that is not what the Appellate Division has done, but it sure bears asking the question.
Last issue we welcomed Brian Barnas to the team. This issue, we add Jennifer Phillips. Delighted to have her, and I’m sure you will be delighted to work with her in future endeavors.
Finally, we bid Godspeed to Beth Fitzpatrick who has taken on a new challenge in life, moving inside with a corporate client. She is an exemplary attorney, and even better person. I am much better lawyer for having collaborated with her for the past two years. Thanks and best wishes, Beth.
Steve
Steven E. Peiper
The Death of the Federal League:
Baseball enthusiasts and we have many readers who so qualify, will know that for two years, 1914-1915, an upstart, rogue baseball league competed with the American and National Leagues. The Federal League folded at the end of that season and then negotiations started to reincorporate its star players into the more traditional teams:
The New York Times
New York, New York
15 Jan 1916
PLAYERS HARD TO SELL
Major Leagues Backward About
Buying Contract Jumpers
The most important conference which has been held between representatives of the Federal league and organized baseball relative to the disposition of the Federal League players who are under contract took place yesterday at the office of President John K. Tener of the National League. Harry F. Sinclair, who has at his disposal all the valuable players in the independent circuit, was closeted with President Tener for several hours, and the third party of the conference was William F. Baker, owner of the Philadelphia National Club.
The question of the disposal of the Federal League players has developed into one of the most important matters of the peace settlement between the warring factions. The attitude of the club owners of organized baseball toward the Federal League contract jumpers is favorable enough, but they have a well-grounded fear that if contract jumpers are taken back and placed on teams with players who ignored the Federal League offers in the past the loyal players will be prejudiced against the men who are taken back. It is the fear of this prejudice which is retarding organized baseball club owners from signing the Federal League players.
President Tener and Mr. Sinclair went over the subject thoroughly yesterday afternoon. Mr. Sinclair is the agent of some of the best of the Federal League players, and he will dispose of them to the highest bidders.
Planned Parenthood (Founder) Under Attack, a Century Ago:
The New York Times
New York, New York
15 Jan 1916
WANT WOMEN TO TRY HER
Friends Petition Court for Mixed
Jury in Mrs. Sanger’s Case
A number of prominent New York women interested in the case of Mrs. Margaret Sanger, who was arrested because of her article on birth control in The Woman Rebel, have drawn a petition to present to Judge Clayton of the United States District Court saying they feel that Mrs. Sanger cannot have a fair trial unless half of the jurors are women. Among the women whose names were signed to the petition were Mrs. Lewis A. Delafield, Mrs. Mary Beard, Mrs. William L. Colt, Mrs. Harriot Stanton Blatch, Mrs. O. H. P. Belmont, Miss Helen Todd and Mrs. Marcus M. Marks. The letter, which was sent yesterday, read:
We, the undersigned, are interested in the case of Margaret Sanger, who will come before you for having advocated birth control in her paper, the Woman Rebel. We believe that a jury of men only cannot justly pass on a case of this character, and that women should have a voice in deciding what is and what is not obscene in regard to matters concerning motherhood. We urge that Margaret Sanger be tried before a jury composed of six women and six men.
The Government dropped the charges in February after several times adjourning the trial. They were concerned about making her a martyr for free speech. Sanger was charged with distributing indecent literature – birth control information – through the mails.
Highlights of the Summaries in This Week’s Issue, Attached:
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
- Policy Trumps Certificate of Insurance
- Classification Limitation is Not an Exclusion so Failure to Raise it Timely Not Fatal to Denial of Coverage
HEWITT’s HIGHLIGHTS ON SERIOUS INJURY UNDER NO-FAULT LAW
Robert E.B. Hewitt III
- Defendant Failed to Adequately Address Plaintiff’s Claims in Her Bill of Particulars That She Suffered a 90/180-day Category of Injury
- Defendant Made A Prima Facie Case By Submitting Medical Evidence That The Injuries To Plaintiff’s Lumbar Region of the Spine Did Not Constitute Serious Injuries But Plaintiff Raised An Issue of Fact In Response
- Pre-Existing Injury Was the Cause of Plaintiff’s Right Knee Injury Based on Plaintiff’s Testimony and the Opinion of Defendants’ Expert
- The Jury’s Verdict Would Stand Where It Properly Weighed Issues of Credibility and There Was a Rational Reason for the Conclusion It Reached
TESSA’S TUTELAGE
Tessa R. Scott
[email protected]
Litigation
- Consequences of Assignor’s failure to appear for IME
PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper
Property
- Question of Fact Precludes Summary Judgment Denial of “Stolen” Items
Potpourri
- Third Department Requires Evidence of Actual Insurance before Avoiding Application of GOL 5-321
WILEWICZ’S WIDE WORLD OF COVERAGE
Agnes A. Wilewicz
- Rocking the air miles this week.
KEEPING THE FAITH WITH JEN’S GEMS
Jennifer A. Ehman
- Conditions Contained in Another Form Referenced in the Subcontract Did Not Constitute a “Written Contract” for Purposes of Additional Insured Coverage
- Auto Policy did not Provide Coverage to Named Insured’s Fiancé for Accident that Occurred while the Fiancé was using a Vehicle the Named Insured rented for the Fiancé’s use while Fiancé’s Vehicle was Out of Service
EARL’S PEARLS
Earl K. Cantwell
[email protected]
- Claim for Lost Business Income Goes Down The Sewer
Thanks for your support.
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
Audrey A. Seeley
Steven E. Peiper
Jennifer A. Ehman
Agnieszka A. Wilewicz
Jennifer J. Phillips
Brian D. Barnas
Diane F. Bosse
Joel R. Appelbaum
FIRE, FIRST-PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
[email protected]
Jennifer J. Phillips
NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Jennifer A. Ehman
APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Diane F. Bosse
Topical Index
Hewitt’s Highlights on Serious Injury
Tessa’s Tutelage
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]
01/05/15 Five Towns Nissan, LLC v. Universal Underwriters Ins. Co.
Appellate Division, First Department
Policy Trumps Certificate of Insurance
The unlimited aggregate deductible set forth in policy endorsement was applied, not the limited deductible set forth in the certificate insurance. The certificate was not proof of insurance and contained a broad disclaimer that it was a contract or conferred any rights on the certificate. The insurer is not estopped from denying the effectiveness of the deductible set forth in the certificate, as the disclaimer renders plaintiff's claimed reliance on the certificate unreasonable.
01/05/16 Black Bull Contracting, LLC v. Indian Harbor Insurance Co.
Appellate Division, First Department
Classification Limitation is Not an Exclusion so Failure to Raise it Timely Not Fatal to Denial of Coverage
Black Bull is the named insured under a commercial general liability (CGL) policy issued by Indian Harbor for the period from March 2011 to March 2012. The CGL coverage form used in the policy states that the insured is covered for liability for " bodily injury' or property damage' to which this insurance applies." An endorsement to the CGL coverage form (denominated "Endorsement #003") provides: "This insurance applies only to operations that are classified or shown on the Declarations or specifically added by endorsement to this Policy." The declarations page sets forth four classifications, with associated code numbers: (1) "Carpentry — interior" (91341); (2) "Dry Wall or Wallboard Installation" (92338); (3) "Contractors — subcontracted work — in connection with construction, reconstruction, repair or erection of buildings — Not Otherwise Classified" (91585); and (4) "Contractors — subcontracted work — in connection with construction, reconstruction, repair or erection of buildings — Not Otherwise Classified — uninsured/underinsured" (91585c). It is evident from the declarations page that the specified classifications were the basis on which the premium was calculated.
Black Bull was engaged by nonparties United to perform certain work on a building in Long Island City owned by United. On August 26, 2011, an employee of Black Bull named Mora, while using a jackhammer to demolish a chimney in the United building, was injured when he was struck by a piece of concrete from the chimney. Mora commenced an action against United and United commenced a third-party action against Black Bull. Black Bull tendered to Indian Harbor its defense in the Mora action, as well as the defense of United, an additional insured under Black Bull's Indian Harbor policy.
After a delay of more than two months from its receipt of the notice of claim, Indian Harbor disclaimed coverage on the ground that demolition work by Black Bull, the activity that gave rise to Mora's injury, was not within any of the four classifications of work covered by the policy. Black Bull challenged the denial.
The subject policy's classification limitations of coverage merely define the activities that were included within the scope of coverage "in the first instance") and do not constitute exclusions from coverage that would otherwise exist. Stated otherwise, the relevant policy language of Endorsement #003 and the declarations page states the activities that are covered. If the loss in question did not arise from activities within the classifications set forth on the declarations page, then coverage is lacking "by reason of lack of inclusion" .
Editor’s Note: Rightly decided, we suggest. Had the reason for denial of coverage been the reliance upon an exclusion, the lateness of the dislclaimers would have been fatal for the carrier. Under Insurance Law Section 3420(d)(2), an insurer loses its right to rely upon policy conditions and policy exclusions if it does not deny coverage timely (generally within 30 days of notice).
Here, however, there was no coverage in the first instance because the classification endorsement was part of the grant of coverage and not an exclusionary provision. The courts will not create coverage where none exists in the first place.
HEWITT’s HIGHLIGHTS ON SERIOUS INJURY UNDER NO-FAULT LAW
Robert E.B. Hewitt III
01/13/15 Gray v. Nyunt
Appellate Division, Second Department
Defendant Failed to Adequately Address Plaintiff’s Claims In Her Bill of Particulars That She Suffered a 90/180-day Category of Injury
Plaintiff appealed from the lower court’s grant of summary judgment to defendants. The Appellate Division reversed the decision and denied the motion. It held, without detail, that the 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. It found that the papers submitted by the defendants failed to adequately address the plaintiff's claim, set forth in the bill of particulars, that she sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d). In light of the defendants' failure to meet their prima facie burden, it was unnecessary for the Appellate Court to determine whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact. No details of the case were given.
01/13/15 Farina v. Rafferty
Appellate Division, Second Department
Defendant Made A Prima Facie Case By Submitting Medical Evidence That The InjuriesTo Plaintiff’s Lumbar Region of the Spine Did Not Constitute Serious Injuries But Plaintiff Raised An Issue of Fact In Response
The Appellate Division affirmed the lower court’s denial of defendant’s summary judgment motion. It found that 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 lumbar region of the plaintiff's spine did not constitute a serious injury under either the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d) and that, in any event, the alleged injury was not caused by the subject accident. In opposition, however, the plaintiff raised a triable issue of fact as to whether he sustained a serious injury to the lumbar region of his spine under the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d), and as to whether the alleged injury was caused by the accident. Thus, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint. The case unfortunately gives no details.
01/12/15 Blocker v. Sung
Appellate Division, First Department
Pre-Existing Injury Was the Cause of Plaintiff’s Right Knee Injury Based On Plaintiff’s Testimony and the Opinion of Defendants’ Expert
The Appellate Division modified the trial court’s dismissal of the complaint in favor of the defendants to deny defendants' motion with respect to the claim of serious injury to the lumbar spine, and to grant plaintiff's cross motion, and otherwise affirm. The Appellate Division found that defendants established prima facie that plaintiff did not suffer a serious injury within the meaning of Insurance Law § 5102(d) by submitting an affirmed report by their medical expert, who determined, after examining her, that plaintiff had full range of motion and negative clinical test results in each body part and that any injuries had been resolved. As to plaintiff's claimed right knee injury, defendants also relied on plaintiff's testimony that she had previously sustained a workplace injury to that knee that required surgery, and on their expert's opinion, following review of plaintiff's MRI and operative reports, that any mild tenderness in the knee was due to that preexisting injury.
In opposition, however, the Appellate Division found that plaintiff raised a triable issue of fact as to whether she sustained a serious injury to her lumbar spine by submitting a report by her chiropractor, who found restricted range of motion after the accident and limitations in range of motion, which he expressed as a percentage of normal, four years later. The chiropractor's opinion as to causation and the permanence of plaintiff's lower back injury, based upon his examinations and review of MRI reports done before and after the accident, was sufficient to raise a triable issue of fact. The MRI reports were relied upon and not disputed by defendants' expert in preparing his report, and are therefore properly considered by the court.
As for the claimed cervical spine injury, the Appellate Division found plaintiff did not submit sufficient medical evidence to raise an issue of fact since she neglected to include the relevant MRI report in the record, and the record contains admissions that her neck injury had resolved. However, if she establishes a serious injury to her lumbar spine at trial, plaintiff will be entitled to recover damages for any other injuries caused by the accident, even those that do not meet the serious injury threshold.
With respect to the 90/180-day claim, the Appellate Division found defendants showed that plaintiff was not prevented from performing all her usual and customary daily activities for more than 90 days during the 180 days immediately following the accident, by submitting her own deposition testimony and affidavit, in which she admitted that she was only confined to her home for one week following surgery and did not miss any work until some 99 days after the accident.
In her cross motion, which was no longer moot, plaintiff established prima facie that she is entitled to summary judgment on the issue of liability by submitting evidence demonstrating that defendant Yun Baek Sung changed lanes improperly, striking her vehicle in the side. In opposition, defendants failed to raise a triable issue of fact as to defendant Sung's responsibility or plaintiff's comparative negligence.
12/31/15 Dennis v. Massey
Appellate Division, Fourth Department
The Jury’s Verdict Would Stand Where It Properly Weighed Issues of Credibility and There Was a Rational Reason for the Conclusion It Reached
The Appellate Division denied plaintiff’s appeal of the trial court’s denial of a direct verdict, to set aside the verdict, and for judgment notwithstanding the verdict. The jury found that the defendant’s negligence was not a substantial factor in causing plaintiff’s injuries. The Appellate Court found that with respect to plaintiff's first two contentions, given the conflicting testimony of plaintiff’s experts and defendants' expert both on the issues of serious injury and causation, that this was not an instance in which plaintiff was entitled to judgment as a matter of law, because it cannot be said that there is simply no valid line of reasoning and permissible inferences which could possibly lead rational persons to the conclusion reached by the jury on the basis of the evidence presented at trial.
The Appellate division also found the lower court properly denied plaintiff's motion to set aside the verdict as against the weight of the evidence. Plaintiff failed to establish that the evidence so preponderated in his favor that the verdict could not have been reached on any fair interpretation of the evidence, which is the standard. Although plaintiff presented evidence that he sustained a serious injury with respect to his neck and lumbar spine, the Appellate Division noted that the conflicting medical expert testimony raised issues of credibility for the jury to determine. Furthermore, plaintiff presented only his testimony on the issue whether he sustained a serious injury within the meaning of the 90/180-day category, and plaintiff's credibility was also an issue for the jury. The Appellate Division held that a plaintiff be impeached by his or her own testimony and, based on the factors negatively impacting plaintiff's credibility, concluded that the verdict was not contrary to the weight of the evidence.
Contrary to plaintiff's final contention, the Appellate Division held that the lower court properly denied his motion to set aside the verdict and for a new trial in the interest of justice where, as here, there was no evidence that substantial justice has not been done. In his motion to set aside the verdict and on appeal, plaintiff contended that he was deprived of a fair trial by statements made by defendants' attorney during summations, and by the court's failure to give a PJI 2:305 instruction to the jury. The Appellate Division held that assuming, arguendo, that plaintiff preserved for our review his contention with respect to the statements of defendants' attorney on summation, the majority of the statements were proper, and any impropriety that may have occurred was not so prejudicial as to deprive plaintiff of a fair trial. In addition, it found the lower court properly rejected the plaintiff’s request to charge the jury that the defendants were liable for any subsequent aggravation of the injuries due to subsequent medical treatment, or even subsequent medical since there was no factual basis for such a charge.
TESSA’S TUTELAGE
Tessa R. Scott
[email protected]
Litigation
12/18/15 Alfa Med. Supplies, Inc. v Praetorian Ins. Co.
Appellate Term, First Department
Consequences of Assignor’s failure to appear for IME
The Defendant-insured was entitled to summary judgment with a showing that it properly mailed notices for the independent medical examination (“IME”) and that the plaintiff’s assignor failed to appear. Defendant also submitted two sworn affidavits of the scheduled examiner and the third- party examiner which provided competent evidence of the assignor’s repeated failure to appear for the IME. Plaintiff failed to raise a triable question of fact regarding the reasonableness of the notices or the non-appearance of the assignor. As such, summary judgment was granted.
Based on the assignor’s failure to appear, the Defendant had the right to deny all claims retroactively to the date of loss. This right is maintained regardless of the fact that defendants initially denied coverage on different grounds or timeliness of denials.
PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper
Property
01/07/16 Ilico Jewelry, Inc. v The Hanover Ins. Co.
Appellate Division, First Department
Question of Fact Precludes Summary Judgment Denial of “Stolen” Items
The Appellate Division affirmed the trial court’s denial of Hanover’s motion for summary judgment based upon a question of fact. In a very limited opinion, the Court noted that a question existed as to the meaning of terms found within a “Personal Conveyance Clause” located within the policy. Accordingly, plaintiff’s claims for stolen jewelry survived for another day.
Potpourri
01/14/15 Ruetzel v Hunter Yes, Inc.
Appellate Division, Third Department
Third Department Requires Evidence of Actual Insurance Before Avoiding Application of GOL 5-321
Hunter Yes leased a portion of its building to Paraco. Plaintiff, an employee of Paraco, was injured when he fell down a flight of stairs in the rear of the premises. Upon being named as a defendant in the main-party action, Hunter Yes then commenced a third-party action against Paraco seeking contractual indemnification pursuant to the terms of the lease.
Prior to trial, the bodily injury action was settled by Hunter Yes. When the settlement was placed on the Record, counsel to plaintiff acknowledged that his client bore some percentage of fault for the fall. Nonetheless, Hunter Yes agreed to the settlement with the full understanding that it would pursue its claim for indemnity against Paraco. The instant decision arose after Hunter Yes moved for summary judgment.
Paraco opposed the motion by arguing, first, that the settlement was void because it constituted an unenforceable “Mary Carter” agreement. Paraco also argued that the indemnity clause was void because it violated GOL 5-321.
The clause at issue was broadly worded to encompass loss that “grows out of the occupation of the demised premises or of the streets, sidewalks or vaults adjacent thereto.” Not surprisingly, the Court had no problems finding that plaintiff’s incident fell within the scope of the clause at issue.
The Court also rejected plaintiff’s claims that a settlement, in open court, on the eve of trial, was an impermissible Mary Carter agreement. Indeed, as the Court noted, a hallmark of a Mary Carter is secrecy. Here, with the terms of the settlement are declared in open court, there was no basis for such an objection.
With regard to GOL 5-321, the Court noted that the provision does not prohibit a party from being indemnified for its own negligence. Rather, it only precludes a party from seeking to absolve itself for responsibility to the injured party. Where, as here, it is a contract negotiated by sophisticated parties, at arm’s length, the clause will generally survive. However, the Court goes on to state that evidence of an insurance procurement is vital to avoiding application of GOL 5-321. In addition, not only must the insurance procurement be in place, but the movant must establish that the insurance, itself, also is available. Where, as here, Hunter Yes did not establish the existence of coverage for Paraco, it failed to meet its burden as the movant.
Peiper’s Point – Ohhh so close. The Court absolutely nails the meaning behind GOL 5-321; a point, as readers of the column know, is often missed. However, at least in the Third Department, the Court appears to create a requirement that insurance for the proposed indemnitor must actually be in place.
We are aware of no other Appellate Division that follows this logic, and it seems to run counter to the spirit of the statute. In addition, should a party be able to avoid indemnity exposure because it ignores its obligation to procure adequate insurance coverage? We would answer no; the Third Department appears to have a different take.
WILEWICZ’S WIDE WORLD OF COVERAGE
Agnes A. Wilewicz
Rocking the air miles this week.
KEEPING THE FAITH WITH JEN’S GEMS
Jennifer A. Ehman
01/07/16 American Empire Surplus Lines Ins. Co. v. Endurance Am. Specialty Ins. Co.
Supreme Court, New York County - Judge Cynthia S. Kern
Conditions Contained in Another Form Referenced in the Subcontract Did Not Constitute a “Written Contract” for Purposes of Additional Insured Coverage
Maros Rene Sosa (“Sosa”) was injured while working in the course of his employment with All Day Restoration (“All Day”) when he slipped and fell due to ice and snow on a construction site. Prior to the incident, the owner contracted with Skyline Restoration to serve as the general contractor for the project, and Skyline then retained All Day to perform restoration work on the exterior facades.
Following the incident, Sosa brought an action against the owner. Plaintiff as insurer for Skyline assumed the defense of the owner and then attempted to tender it to defendant, All Day’s primary insurer. When defendant failed to respond, this action resulted.
The question examined by Judge Kern was whether the owner qualified as an additional insured on defendant’s policy (again, the policy issued to the employer, All Day). Pursuant to defendant’s policy, additional insured coverage was provided to entities as “required by written contract.” The parties did not dispute that Skyline entered into a written contract with All Day pursuant to which All Day explicitly and expressly agreed to provide additional insured coverage to Skyline.
The dispute arose over whether All Day had any obligations in favor of the owner. Specifically, the parties disputed the impact of a provision within the subcontract which provided:
Except to the extent of a conflict with a specific term or condition contained in the Subcontract Documents, the General Conditions governing this Subcontract shall be the edition of AIA Document A201, General Conditions of the Contract of Construction, current as of the date of this agreement.
Plaintiff argued that section 11.1.4 of the standard for AIA Document A201 – 2007 General conditions provides that the “Contractor Shall cause the commercial general liability coverage required by the Contract Documents to include (1) the Owner…as additional insureds for claims caused in whole or in part by the Contractor’s negligent acts or omissions…”
The court found that such reliance on this language was misplaced as the AIA Document A201 is not a “written contract” requiring the owner to be named as an insured.
12/22/15 Hartard v. State Farm Auto. Ins. Co.
Supreme Court, Suffolk County – Judge Paul J. Baisley
Auto Policy did not Provide Coverage to Named Insured’s Fiancé for Accident that Occurred while the Fiancé was using a Vehicle the Named Insured rented for the Fiance’s use while Fiance’s Vehicle was Out of Service
Jeannine Haskins rented a vehicle for the use of her fiancé, Kevin Harker, whose vehicle was out of service. On April 17, 2007, while operating the rented vehicle, Harker caused serious physical injury to plaintiff by hitting her with the car just after she exited it. Harker subsequently pled guilty to assault in the first degree, reckless endangerment and leaving the scene of a crime.
Upon receipt of notice of the claim, State Farm, Haskins’ automobile insurer, denied coverage to both Haskins and Harker. In considering this motion for summary judgment, the court separately considered the two claims for coverage.
With regard to Harker, the court examined the portion of the policy relating to who qualifies as an insured with respect to “your car, a newly acquired car or a temporary substitute car” and the separate section which addressed who qualifies as an insured for a “non-owned car.”
Specifically, the policy stated that “[w]hen we refer to your car, a newly acquired car or a temporary substitute car, insured means: 1) you, 2) your spouse, 3) the relatived of the first person named in the declarations; 4) any other person while using such a car if its use is within the scope of consent of you or your spouse; and 5) any other person or organization liable for the use of such a car by one of the above insureds.”
In considering his definition, the court held that Harker did not qualify as an insured. The vehicle at issued was not Harkins’ car, a newly acquired car or a temporary substitute. In this policy, “temporary substitute” was defined as “a car not owned or leased by you or your spouse, if it replaces your car for a short time…Your car has to be out of use due to its breakdown, repair, servicing, damage or loss…” Here, the court explained that the car was not rented to replace the vehicle described in the declarations’ page, but rather it was rented to as a substitute for Harker’s vehicle.
With regard to a non-owned car, the court found that Harker again did not fit within any category of insured. For this type of automobile, an insured included the first person named in the declarations, his or her spouse, their relatives and any person or organization which does not own or hire the car but is liable for its use by one of the above persons. With regard to this portion, there was no dispute that Harker was not the named insured, spouse or relative of the named insured. In addition, the court found that the final category related to vicarious liability only, and here, in light of the facts before it, State Farm was correct in its assessment that Harker was not vicariously liable.
However, with regard to Harkins, the court did find coverage. State Farm conceded that Harskin was an insured, but submitted that the claim was not “caused by an accident” as required in the grant of coverage. The court disagreed citing the proposition that “[i]n deciding whether a loss is the result of an accident, it must be determined, from the point of view of the insured, whether the loss was unexpected, unusual and unforeseen.” Here, there was nothing in the record to indicate that the assault was anything but “unexpected, unusual and unforeseen” from the point of view of Haskins.
EARL’S PEARLS
Earl K. Cantwell
[email protected]
01/30/15 Yar-lo Inc. v. Travelers Indemnity Co.
Third Department
Claim For Lost Business Income Goes Down The Sewer
In December 2004, sewage backed up into a Merle Norman store operated by Yar-Lo. Yar-Lo sued Travelers for failing to pay more than $180,000.00 in lost business income, and $6 Million in alleged consequential damages. Yar-Lo claimed it had to terminate its lease and vacate the store after portions of the property suffered substantial damage due to the sewer backup. The insured also claimed that the property damage forced it to close and suspend operations in April 2005.
The Trial Court granted Travelers summary judgment concluding that the policy only provided coverage for lost business income if the business stoppage was directly related to the covered loss. The Court also found that Yar-Lo failed to establish any causal connection between its alleged consequential damages and any purported breach of the insurance contract.
Any suspension of business operations had to be related to the hazard which was insured in order to recover lost business income. The Court found that Travelers presented evidence that the store was never actually forced to close due to the sewage system malfunction, which was repaired before the end of 2004.
The problem having been remediated, Travelers argued that Yar-Lo made a unilateral business decision to terminate the lease and cease business operations in April 2005. The Court found that the insured failed to present evidence demonstrating that any lost business income, or the closure of the business, were the result of the covered loss.
This claim demonstrates the advisability of asking simple basic questions and analysis even on the largest claims. In this case, the argument was that the cessation of business was not related to the sewer backup which was apparently fixed relatively quickly. Likewise, any alleged “consequential damages” were not causally connected to the alleged covered cause of loss. This case also presents a reminder that it is important to establish and delineate what exactly is the covered loss event and to focus any claims and recovery as arising from that event as opposed to other extraneous causes.
