Volume XX, No. 12 (No. 522)
Friday, November 30, 2018

A Biweekly Electronic Newsletter


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.

We bring to greetings from New York City and the DRI Insurance Coverage and Practice Symposium.  There are few better places to get insurance education than this program.  I was delighted to be approached by so many subscribers who acknowledged our team’s labor of love in this publication.

The Third Department’s decision in the Davis case, is an interesting read. An insurer claimed that the parties had “colluded” to amend pleadings, after the deposition, to create coverage when none existed.  The Court acknowledged the collusion claim but ducked the question.  Is collusion permitted to create coverage?  It surely happens but should the courts tolerate it?  Maybe some other court, in the future, will deal with it.  Of course, the duty to defend exists even if the allegations are “groundless, false or fraudulent”.


Lee Siegel Joins the H&F Coverage Team.

We are delighted to welcome Lee Siegel to the Hurwitz & Fine, P.C. Coverage Team.  Many of you know Lee, from his decade plus time at The Hartford.

Lee is an accomplished insurance attorney and skillful negotiator, with extensive experience litigating complex commercial, insurance coverage, insurance defense, class action, and bad faith matters. With a track record of superior results, he has delivered millions of dollars of value to clients by minimizing risk through the delivery of creative, practical, and effective litigation and business advice, improving process, and aggressively seeking cost-effective dispute resolutions.

From 2012 to 2017, Lee was an Assistant Vice President at The Harford  providing nationwide coverage advice and litigation management for all Property & Casualty claim constituencies.  He managed discovery, witness preparation, trial strategy, reserving, mediation, and settlement of claims and litigation as well as drafting and revising coverage letters, motions, and appeals; participated on moot court panels and in mock trials.  He was a member of the Advertising Injury strategy group,  managed the Social Engineering Fraud work group, was a member of Cyber team; worked on development and implementation of Data Breach and Cyber Liability coverages.

As Senior Counsel for several years before that, he was responsible for the nation-wide management of coverage and bad faith litigation for D&O, E&O, EPL, Fidelity and Surety Bond products.

Lee is admitted to practice in Connecticut and New York and will be a welcome addition to our team.


Bite Sized Evidence, 100 Years Ago:

Boston Post

Boston, Massachusetts

30 Nov 1918




Doctor Says Girl Bit Slain

Woman’s Arm


NEW YORK, Nov. 29.—Testimony that marks on the arm of Mrs. Helen Hamel, New York lodging house keeper, who was murdered last February, were in his opinion caused by the teeth of Miss Elizabeth Baksa, 19-year-old Freemansburg, Penn., girl, was offered here today at Miss Baksa’s trial on a charge of murder by Dr. Otto H. Schultze, medical assistant to the district attorney.

Declaring that although no causes of identification by teeth impression are on record, the teeth form a more positive means of identification than fingerprints, Dr. Schultze testified that in his opinion no living person other than Miss Baksa could have inflicted the marks found on Mrs. Hamel’s arm.

Later on, the judge threw out the evidence and the case was proceeding to verdict.  However in a Perry Mason moment, someone else confessed to the crime and the judge threw out the claim against Baksa.


Evening Star

Washington, District of Columbia

06 Dec 1918





Convict’s Confession Released Her,

Thought Jury Expresses Belief

He Committed Perjury.


          NEW YORK, December 6.—Without taking the stand in her own defense, Elizabeth Baksa, the nineteen-year-old Freemansburg, Pa., girl on trial for the murder of her boarding house keeper here, was acquitted yesterday afternoon at the direction of Judge Rosalsky.

          When James Regan, Sing Sing convict, called in rebuttal by the prosecution, persisted in his story as a witness for the defense, that he had killed Mrs. Helen Ramel last February, afterward threatening Miss Baksa's life when she discovered the crime, the court ruled that the evidence need not be presented to the jury.

          "Thank God, they knew I was innocent," the youthful prisoner cried when informed that she was free. After her sobs had subsided the girl declared she would return to her Pennsylvania home, adding that "a country girl has no business in New York."

          Judge Rosalsky created a most unusual situation after Miss Baksa had left the court room by asking the jury for its opinion as to what should be done with Regan, who had "confessed" to the murder of Mrs. Ramel. After a half-hour of conference the jurors returned a "verdict" as follows:

          "We do not believe the statements of Regan on the stand. We do not believe he was ever in the house, nor had he any connection with the murder. We believe he committed perjury."

          The jurors individually ascribed Regan's action to a desire for cheap notoriety.

          Judge Rosalsky announced he would confer with the district attorney concerning what action should be taken.

          Still later, another jury agreed that the confession was a sham, tossed it out and acquitted Regan.  Of course, the alleged biter had been acquitted and the crime remain unsolved.


Jen’s Gems:


Jennifer A. Ehman

[email protected]


Evening Star

Washington, District of Columbia

06 Dec 1918





Convict’s Confession Released Her,

Thought Jury Expresses Belief

He Committed Perjury.


          NEW YORK, December 6.—Without taking the stand in her own defense, Elizabeth Baksa, the nineteen-year-old Freemansburg, Pa., girl on trial for the murder of her boarding house keeper here, was acquitted yesterday afternoon at the direction of Judge Rosalsky.

          When James Hegan, Sing Sing convict, called in rebuttal by the prosecution, persisted in his story as a witness for the defense, that he had killed Mrs. Helen Ramel last February, afterward threatening Miss Baksa's life when she discovered the crime, the court ruled that the evidence need not be presented to the jury.

          "Thank God, they knew I was innocent," the youthful prisoner cried when informed that she was free. After her sobs had subsided the girl declared she would return to her Pennsylvania home, adding that "a country girl has no business in New York."

          Judge Rosalsky created a most unusual situation after Miss Baksa had left the court room by asking the jury for its opinion as to what should be done with Regan, who had "confessed" to the murder of Mrs. Ramel. After a half-hour of conference the jurors returned a "verdict" as follows:

          "We do not believe the statements of Regan on the stand. We do not believe he was ever in the house, nor had he any connection with the murder. We believe he committed perjury."

          The jurors individually ascribed Regan's action to a desire for cheap notoriety.

          Judge Rosalsky announced he would confer with the district attorney concerning what action should be taken.


John’s Jersey Journal:

Dear Subscribers:

The New Jersey state and federal courts have been quiet on insurance. A few decisions on procedural issues like amending complaints, dismissing causes of action, and discovery disputes. Things that do not make for interesting reading for Coverage Pointers subscribers. And we do try to keep it interesting! Alas, we did find one case from the New Jersey Appellate Division explaining what “named insured” means. It means exactly what you’d think it means. The person or business shown in the Declarations.

The claimant was named insured on an auto policy with USAA. Her husband was named insured on an auto policy with New Jersey Manufacturers (NJM). She recovered Underinsured Motorists (“UIM”) benefits under her policy with USAA. She then tried to obtain UIM benefits under her husband’s policy. However, the NJM policy contained a step-down provision. Because claimant was a “named insured” under her personal auto policy and was not a named insured under her husband’s auto policy issued by NJM, her claim for UIM benefits under NJM’s policy was limited by the step-down clause.

To avoid the impact of the step-down clause, she claimed that she was a named insured. The problem with this, however, was that her name was not shown in the Declarations. Therefore, the Appellate Division held that the step-down clause unambiguously applied.

The weather is changing here in Buffalo. Fall abruptly ended and winter hit, a few weeks before I expected. I put my snow tires on the car and a collapsible shovel in the trunk, bought ice melt for the house, and already ran my snow blower this year. Thankfully, the snow blower is self-propelled and has hand warmers.

Stay warm!


John R. Ewell

[email protected]


Wilkes-Barre Times Leader, The Evening News

Wilkes-Barre, Pennsylvania

19 Dec 1918




          The New York court has refused to accept the confession of Regan that he killed Mrs. Helen Hamel.  Regan confessed to free Elizabeth Baksa, 19, on trial for the murder of the New York rooming house proprietor.  Regan is in Sing Sing for burglary.  He says that he had strangled the woman while he and a pal were robbing the house and gave the girl $20 and told her to “beat it”.  A feature of the trial is an attempt to prove teeth marks on Mrs. Hemel’s arm were made by the Baksa girl by comparing them with the prints of the girl’s teeth in an apple. 


Peiper on Property and Potpourri


Steven E. Peiper

[email protected]


Brazil Daily Times

Brazil, Indiana

30 Nov 1918




California Recently Rejected

Compulsory Health Insurance Amendment.


          Recent news items published throughout Indiana announcing the fact that legislators are planning to hold conferences to discuss measures to be considered at the coming Legislature makes the information pertaining to the action taken in California on compulsory health insurance of peculiar interest.  It seems that one of the measures to be considered at these conferences is that of Compulsory Health Insurance for Indiana, and the verdict of the citizens of other states is of vital interest to the citizens of Indiana.

          The following report of the vote on the Compulsory Health Insurance Amendment in California was published in The Christian Science Monitor of November 8:

          "San Francisco, Cal. The compulsory health insurance amendment which, next to prohibition, was the major factor in the recent political campaign in California, has been decisively defeated, although the returns now available do not show the exact vote. Returns from 4,500 out of about 6,000 precincts show a large majority vote against the amendment. Three San Francisco precincts show 22,700 in favor, and 54,000 against it.

          This proposed amendment to the Constitution was to enable the Legislature to put a compulsory health insurance system into effect, it being strongly advocated by the State Social Insurance Commission that was appointed to investigate the matter, the State Federation of Labor, and other bodies, on the ground that it was in harmony with the general movement for social and economic justice.

          "It was widely opposed on the ground that it was un-American in nature, that it invaded many constitutional rights of individuals and was subversive of American Institutions, particularly in connection with its compulsory and medical features. It is believed that another attempt will be made to pass a similar measure."


Hewitt’s Highlights: 

Dear Subscribers:

I hope you had a wonderful Thanksgiving. We went to my mother-in-law’s house. She’s moving to Georgia so it was the last Thanksgiving at my wife’s childhood home, which obviously was emotional for her. In the meantime, we are busy decorating and getting ready for the holiday season. The weather has grown cold down on Long Island, but the lights and decorations bring some cheer.  We have a short column today as the Courts did not issue many decisions with the holiday. The decision we have was a successful summary judgment motion by defendants, as plaintiff’s physicians failed to address plaintiff’s documented prior injuries and the degeneration found by defendant’s experts.

Happy Hanukkah to those who celebrate. See you next edition.

Until next time,

Robert Hewitt

[email protected]


The Atlanta Constitution

Atlanta, Georgia

20 Nov 1918





          Fredericksburg, Va., November 29.  Allie Thompson, a negro, charged with assault upon a white woman, was taken from jail by a mob and lynched in Culpepper county Sunday night, it became known here today.

          Two men went to the jail with a man bound in ropes.  The jailers believed their story that they had a prisoner and opened the jail door.  Fifteen masked men stepped inside, overpowered the jailers, and quietly took the negro from a cell.  At daybreak the body of the negro was found dangling from a tree three miles from town.  The identity of the mob is unknown. 


Wilewicz’ Wide-World of Coverage:

Dear Readers,

While many of our colleagues are attending this week’s DRI Insurance Coverage and Practice Symposium in New York, the rest of us are holding down the fort and looking ahead to other coverage conferences down the road. To that end, registration is now open for the ABA TIPS’s Insurance Coverage Litigation Midyear Conference in Arizona in February. Not only will this conference feature a beautiful (read: warm!) venue at the Biltmore Resort, but will be host to a wide array of panel discussions and the very informative and engaging toolbox lunch sessions. These are distilled, targeted small group meetings (usually around 10 or so) on hot-button and interesting coverage issues of the day. As always, please let us know if you have any interest or questions, and we would be happy to assist, even if you are not an ABA member. There may be sponsorship opportunities.

Now, in the federal coverage realm, the Second Circuit recently dove back into the field and issued one case of interest to us insurance folks. In General Re Life v. Lincoln National, the court actually reviewed an arbitration panel decision. Typically, the doctrine of functo officio rules arbitrations – meaning, the limited power of arbitrators to alter an award once they have decided an issue – but here the court recognized an exception to that rule. Namely, when an arbitration award is ambiguous, the court held that arbitrators retain their authority to clarify that award. It’s not an issue that frequently comes up, but an interesting one to have in your back pocket when undertaking arbs.

Until next time!


Agnes A. Wilewicz

[email protected]


The Butte Miner

Butte, Montana

30 Nov. 1918





          War’s demands necessitate the employment of all kinds of labor by the government, and the civil service commission is advertising examinations for a number of positions that must be filled in the near future.

          Surveyor-draftsmen, who will receive entrance salaries of $1,200 to $1,500 a year; computers at the naval observatory, at salaries ranging up to $1,200; and at the Nautical Almanac office, at $1,000 a year; and chief engineers in the coast and Geodetic survey, at $100 a month, are particular sought at this time.  The maximum age limit has been removed I the chief engineer examination.


Barnas on Bad Faith:

Hello again:

I’m in New York City once again, this time for the DRI Insurance Coverage and Practice Symposium.  We had a great morning of presentations, including an excellent presentation on bad faith failure to settle by Kevin Willging from Travelers and Patrick Winters from Plunkett Cooney.  The Harvey case from Florida that we have featured a couple times in recent issues was discussed in detail.  There were also some great tips on how to handle to bad faith setups.  I’m looking forward to the rest of the program and a great evening of networking.

I have two cases in my column today.  We return to Florida for the Mosley case.  The lesson from Mosley seems to be document your file.  Progressive’s representative testified that she called the insured twice after a request for a financial affidavit that was time-limited.  However, there was no record of the content of the calls and no correspondence was sent to the insured advising of the time limitation or the potential consequences of failing to return the affidavit.  Thus, the insured’s testimony in the subsequent bad faith action that he was not advised of the consequences of not returning the affidavit and that he would have if he had been was able to create an issue of fact.  The court was also not convinced by the fact that the insured had declined to complete the affidavit for moral and religious reasons.  It noted, much like the Florida Supreme Court did in Harvey, that the focus in a bad faith action is on the conduct of the insurer.

We also have a decision from the Delaware Supreme Court in CorVel.  The takeaway here is that while you must demonstrate coverage under the Louisiana bad faith statute at issue to recover, you do not need a judicial declaration that coverage exists in order for a claim to accrue.  Unfortunately for CorVel, it could have brought the bad faith claim in 2011, and the claim was time-barred by 2015 when it was eventually filed.

Have a nice weekend.

Signing off,


Brian D. Barnas

[email protected]


The Buffalo Commercial

Buffalo, New York

30 Nov 1918





          The two men whom Irving Saperston of 86 Bidwell parkway reported held him up last night at Delaware and Cleveland avenues, were still at large this morning.

          Saperston told the police that he was walking down Delaware avenue at 8.30 o’clock, when the pair stopped him, drawing revolvers, relieved him of his watch and $4.  The robbers overlooked a $5 bill in their victims clothes. 


Off the Mark:

Dear Readers,

I hope everyone had an enjoyable Thanksgiving.  As it was my birthday, I took full advantage to get first dibs on the food.  The recent family vacation to Universal Studios went well.  It was expensive, but was well worth it as the kids really had a good time.  The wife and kids had every kind of butterbeer available.  They seemed to like the butterbeer ice cream the best.  Me, I preferred a Duff’s beer from Moe’s in the Simpsons’ section.

The construction defect front continues to remain quiet.  This edition of “Off the Mark” discusses a recent construction defect case from the US District Court for the Eastern District of Pennsylvania.   In First Specialty Ins. Corp. v. Hudson Palmer Homes, Inc., the Court examined the duty to indemnify and held that an insurer's duty to indemnify is not ripe without a determination of the insured's liability.  This ruling should come as no surprise to anyone reading Coverage Pointers.

Until next time …


Brian F. Mark
[email protected]


Buffalo Evening News

Buffalo, New York

30 Nov 1918





          DAYTON, O., Nov. 30.—Former President Taft in an interview given out today declared he would under no circumstances accept the position of baseball commission for the two major leagues for which office he had been suggested. 


Wandering Waters

Welcome to another issue of Wandering Waters.

I hope all of you had a wonderful Thanksgiving.  I can say with confidence that my sister has surpassed my father as the best cook in the family.  Despite years of denial, my father has finally acknowledged my sister as the best cook in the family.  With the prestigious title in hand, my sister, along with her husband, put together a wonderful Thanksgiving dinner. I am the first to admit that I am a terrible cook and, therefore, I am happy my sister has taken over the cooking tradition.   Not only am I guaranteed an excellent meal for years to come, I have no pressure to become an excellent cook anytime soon.

In addition to an excellent meal, the NBA season continues to provide excitement. Jimmy Butler is proving his worth as he continues to produce in the clutch moments for the Sixers.  Prior to Butler, the Sixers struggled to win close games.  Now, the Sixers are winning every close game.  Not only is Butler hitting the game winning shot, but he is also playing stellar defense in the final seconds to secure the victory.

This week we have two cases.  The first case is from the United States District Court, Eastern District of New York. The second case is from the United States District Court, Southern District of New York.

Until next time …


Larry E. Waters

[email protected]


The Washington Post

Washington, District of Columbia

30 Nov 1918




A YOUNG lady, stranger in Washington, wants to get acquainted with a young man; blonde preferred; object matrimony.  Box 599, this office.


Boron’s Benchmarks:

Dear Subscribers:

I hope you are all well.  I am, and should be, after getting five days of vacation in mid-November with my wife to Virginia Beach.  Exactly two weeks ago we were in Norfolk harbor touring the de-commissioned USS Wisconsin battleship.  An amazing experience you should consider if you are ever in that part of the country.

Now, I’m guessing it is unlikely anyone reading this column has a relative they affectionately call “Auntie Subrogation”.  If you do, I’d love to meet her someday, but the bottom line is today’s case write-up has nothing to do with her.  Rather, the Supreme Court of Minnesota’s recent decision I’ve written on in this issue, Depositors Insurance Company v Dollansky, concerns application of the anti-subrogation rule/doctrine. Specifically, Minnesota has an anti-subrogation statute which the court analyzed and applied to bar Depositors’ subrogation action against Dollansky.  Go ahead and read my write-up on the case, keeping in mind not every state has an anti-subrogation statute like Minnesota.

Otherwise, be well friends, until our next issue, and say hi for me to your Auntie Subrogation next time you see her.



Eric T. Boron

[email protected]


New York Herald

New York, New York

30 Nov 1918





Says Husband spent Income

in “Devious Ways.”


          CHICAGO, Nov. 29.—Mme. Amelita M. Galli-Curci, Chicago grand opera prima donna, filed suit to-day for divorce from her husband Luigi C. Curci, alleging extreme and repeated cruelty.

          The complaint recited that as a result of his threats, “malevolence of character and disposition, and violence practiced upon her person,” Mme. Curci was forced to separate from him last August.  The bill further described Curci as having squandered and wrongfully appropriated much of the income of his wife “in ways that are devious, dark and unbecoming a gentleman of character.”

          During their married life, which began in Rome Italy, February 24, 1916, the singer declares she has been the “real support and provider for her husband, though he is qualified to earn a livelihood and support himself and his wife.”


Jerry’s No-Fault Navigation

Dear Subscribers,

What came first – the chicken or the egg?  According to a recent article in USA Today, dated September 5, 2018, some would say both.  This is premised on a theory under quantum mechanics where events can happen without a set order.  Try to wrap your head around that one the next time you sit down for an omelette.

Whatever your views on the chicken-egg conundrum, there is more of a set order when it comes to coverage issues.  In recently reversing the lower court, the Appellate Division, Fourth Department, found that a late denial precluded an EUO defense.  In sum, the Court noted that coverage was separate and, in essence, comes before a breach of a policy condition. As such, an EUO defense does not speak to coverage in the first instance, but to a policy exclusion, with the latter requiring a timely denial in order to preserve that defense.   What does this mean moving forward?  While the First Department has repeatedly allowed for the EUO defense as a condition precedent to coverage, there is now a distinction made in the Fourth Department.

For insurance carriers, best practices would dictate two things – if the claims specialist is going to investigate a no-fault claim, it is best to ensure a timely denial of that claim.  Second, as the case points out, the carrier should make sure to keep a copy of the denial forms as proof of the timely denials.  For more on this important decision, please read below.


Jerry Marti

[email protected]


The New York Times

New York, New York

30 Nov 1918





Hundreds Burned to Death in a

Synagogue or Shot in Flight

—600 houses Burned.


          LONDON, Nov. 29.—Eleven hundred Jews were killed during the recent massacre in Lemberg, according to dispatches in the Berlin newspapers transmitted by the Copenhagen correspondent of the Central News.

          Hundreds of Jews are said to have barricaded themselves in a synagogue, which was set afire.  Those who attempted to escape from this refuge were fired upon.



          STOCKHOLM, Nov. 29.—At the office of the Jewish News Agency it was announced today that in the pogroms last Friday and Sunday in Lemberg, Galicia, the Jewish suburbs and other parts of the city were destroyed.  Bombs were thrown on 600 Jewish houses and several thousand persons were killed, it was asserted.


Liening Tower of Perley

Dear Readers,

A recent case decided in the Supreme Court of Bronx County affords me an opportunity to join with my colleagues in this issue of Coverage Pointers.

The holiday season is traditionally a nostalgic time.  Today, I am watching the installation of the ice boom across Lake Erie at the headwaters of the Niagara River.  As in years past, the installation of the boom signals the start of the winter season in Buffalo.  We all expect that by the middle of January Lake Erie will be covered with ice and the boom will prevent that ice from clogging the intakes to the Niagara Falls Power Projects.

This week’s case also offers a bit of nostalgia.  Considering whether or not it had the authority to approve a lien resolution in a Workers’ Compensation case, the Court harkened back to Kelly v. New York State Insurance Fund.  In 1983, the Court of Appeals in Kelly provided the framework for calculating the responsibility of Workers’ Compensation carriers for the legal fees generated, not only by the recovery of the lien, but by the holiday in benefits afforded pursuant to a personal injury settlement.  Having been visited by the “ghosts of liens past,” I wish you all a Happy Holiday and healthy and prosperous New Year.



Michael F. Perley

[email protected]


Dunkirk Evening Observer

Dunkirk, New York

30 Nov 1918





Postmaster General Gives Notice

That All Parts of the Country

Will Be Served Soon.


          Washington, Nov. 30—Aerial mail service will shortly be extended to San Francisco and many of the large cities of the west, it became known today.

          Denver, St. Louis, Indianapolis and Pittsburgh, are to be included in the air loop.  Eventually practically every large city in the country will receive the benefits of the latest method of mail transportation.

          A telegram from Postmaster General Burleson to Senator Shafroth, Colorado, gives the plans for extending the service to western cities.  It reads:

          “Referring to conferences with you relative to extension aerial mail service to Colorado points, I have directed the extension immediately after the war of aerial mail service to Denver, in connection with the trans-continental route from New York to San Francisco.  I will take up the matter of further extension to your state upon your return to Washington.”

          It also became known that naval hydroplanes are to be utilized for mail service over the larger waterways of the country. 


The Ithaca Journal

Ithaca, New York

30 Nov 1918





Says Dr. Esther Parker, Home

From Year’s Medical Work in France.


          Dr. Esther E. Parker who has just returned from France says her general impression of the people of France was not that of a people broken by war and disaster, but rather a people still gay in spite of all, or at least easily cheered, and always courageous, even when they had lost everything. She spoke of several instances illustrating the popularity of the American in France.


The Ithaca Journal

Ithaca, New York

30 Nov 1918





Figures Mount as Extent of Property

destroyed is Learned – Clarence Merrick,

Proprietor, Had No Insurance – Dozen

Automobiles Total Loss.


          Fighting a stubborn fire from about 2 o'clock until late yesterday afternoon the firemen finally succeeded in controlling a blaze which destroyed the building situated at Cayuga street and Spencer place occupied by Clarence Merrick as a garage and which formerly was known as the Clapp planing mill. The fire which started from an explosion in a car being repaired quickly swept through the three-story wooden structure and the flames shot high into the air, endangering the houses across the street and causing considerable difficulty for the firemen.


Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York

Dan D. Kohane
[email protected]



Agnes A. Wilewicz

[email protected]



Jennifer A. Ehman

[email protected]


Dan D. Kohane, Chair
[email protected]


Steven E. Peiper, Co-Chair

[email protected]

Michael F. Perley

Jennifer A. Ehman

Agnieszka A. Wilewicz

Edward B. Flink

Brian D. Barnas

Brian F. Mark

Eric T. Boron

John R. Ewell

Larry E. Waters

Diane F. Bosse

Joel R. Appelbaum


Steven E. Peiper, Team Leader
[email protected]


Michael F. Perley

Edward B. Flink

Eric T. Boron

Brian D. Barnas

James L. Maswick


Jennifer A. Ehman, Team Leader
[email protected]

Jerry Marti


Jody E. Briandi, Team Leader
[email protected]


Diane F. Bosse

Topical Index

Kohane’s Coverage Corner

Hewitt’s Highlights on Serious Injury

Peiper on Property and Potpourri

Wilewicz’s Wide World of Coverage

Jen’s Gems

Barnas on Bad Faith

Jerry’s No-Fault Navigation
John’s Jersey Journal

Off the Mark

Wandering Waters

Boron’s Benchmarks

Earl’s Pearls


Dan D. Kohane
[email protected]


11/29/18       Davis v. EAB-TAB Enterprises

Appellate Division, Third Department

Question of Fact as Whether Injured Party was Employee or Independent Contractor so as to Trigger Employee Exclusion

Davis, a short-term sheetrock worker employed by Bender, sustained a foot injury when a drill operated by his employer came into contact with him. In July 2015, he sued, alleging various negligence and Labor Law violations. The defendants notified their carrier. Subsequently, defendants notified their insurer, Utica First (“Utica”) Insurance Company, of the claim and Utica denied coverage based primarily on an employee exclusion within the policy.

Then the plaintiffs amended their pleading to remove allegation of Labor Law violations, including averments that Davis was an employee, and only asserted causes of action sounding in negligence. Utica was impled.  Utica moved to dismiss the third-party complaint arguing, as a matter of law, that it had no obligation to defend or indemnify defendants, as the insurance policy clearly excluded employees. Utica First further alleged collusion among the other parties' to "create coverage where none had existed" by amending the pleadings and steering discovery to trigger coverage.

The court found that there was a question of fact as to whether the injured was an employee or independent contractor. The critical inquiry in determining whether an employment relationship exists pertains to the degree of control exercised by the purported employer over the results produced or the means used to achieve the results[,] and the factors relevant to assessing control include whether the worker (1) worked at his or her own convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer's payroll, and (5) was on a fixed schedule.


11/21/18       Wausau Underwriters Ins. Co. v. Gamma USA, Inc.

Appellate Division, Second Department 
Anti-Subrogation Rules Prohibits CCIP Carrier, as Subrogee of CCIP Member from Seeking Indemnity from CCIP Subscriber
The New School (“TNS”) entered into a contract with Tishman for the building of a new facility. Tishman entered into trade contracts with various subcontractors, including the Gamma, FMB and W5 Group, LLC (“defendant subcontractors”). Tishman also contracted with Geller to provide electrical services.

The defendant subcontractors elected to participate in a Contractor Controlled Insurance Program (“CCIP”) implemented by Tishman. Geller did not participate in the CCIP, and instead obtained a policy of insurance issued by the plaintiff, Wausau.  As required by the trade contract, both TNS and Tishman were named as additional insureds under the Wausau policy.

Harripersaud, an employee of Geller, allegedly was injured when he tripped and fell while working at the construction site. He sued TNS and Tishman alleging negligence and violations of the Labor Law. Tishman's insurer tendered the complaint to Wausau (as an AI under Geller’s policy) which accepted the tender and agreed to defend and indemnify Tishman and TNS.

Wausau, as subrogee for Tishman and TNS, commenced this action against the defendant subcontractors.

However, the antisubrogation rule operates to bar Wausau’s causes of action. Under the antisubrogation rule, an insurer has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered. This rule prevents an insurer from passing its losses to its own insured (see id. at 76). Here, the defendant subcontractors were members of the CCIP, and the CCIP imposed a $500,000 retention obligation on Tishman, as to each occurrence under the policy. Accordingly, the antisubrogation rule bars Tishman and TNS from asserting claims against the defendant subcontractors.  As the antisubrogation rule would bar Tishman and TNS from asserting causes of action against the defendant subcontractors, it bars Wausau’s s causes of action as well. A subrogee "is subject to any defenses or claims which may be raised against the subrogor. Thus, a subrogee may not acquire any greater rights than the subrogor".



Robert E.B. Hewitt III

[email protected]


11/27/18       Thompson v. Bronx Merchant Funding Services, LLC

Appellate Division, First Department

Plaintiff’s Physicians Failed to Address Her Prior Injuries or Degeneration Found by Defendant’s Experts

Plaintiff alleges that she sustained serious injuries as a result of an accident that occurred when she was a seat-belted rear passenger in an access-a-ride van that was hit in the rear by a second vehicle. Specifically, she alleges that her right knee sustained injuries leading to a total knee replacement, as well as right shoulder impingement and cervical and lumbar spine disc bulges and herniations.  Defendants demonstrated prima facie through expert medical reports that plaintiff's alleged injuries had resolved and were preexisting degenerative conditions. Their radiologists opined that plaintiff's post-accident MRI films showed osteoarthritis in the knee, osteophyte complex and disc dessication in the spine, and degenerative changes in the shoulder joint. Defendants' neurologist further opined that plaintiff suffered neuropathy related to her diabetes mellitis, not radiculopathy related to any spinal condition.

Defendants also relied on plaintiff's own medical records, which showed that she underwent arthroscopic surgery for her right knee two years before the accident and that her MRI showed "severe osteoarthritis" in that knee. Contrary to plaintiff's argument, defendants were entitled to rely on her unaffirmed medical records produced in discovery.

In opposition, plaintiff failed to raise an issue of fact as to whether any of her claimed injuries were causally related to the accident. Her orthopedic surgeon provided only a conclusory opinion that plaintiff's right knee osteoarthritis was aggravated and exacerbated, without addressing her prior surgery, and failed to explain why the preexisting conditions documented in plaintiff's medical records were not the cause of her symptoms or the extent of any exacerbation. Plaintiff submitted unaffirmed MRI reports of her right shoulder and spine, which could not be considered. Her physicians provided conclusory opinions that her claimed injuries in those parts were causally related to the accident, without adequately addressing the degenerative findings by defendants' radiologists and the findings in plaintiff's own MRI reports, including disc desiccation, osteophytes, and cystic structures, or the impact of plaintiff's diabetes. Furthermore, plaintiff's deposition testimony that she missed only one day of work following the accident and her affidavit in which she said that she missed one week of work defeat her 90/180-day claim.



Steven E. Peiper

[email protected]


11/29/18       Books for Less v. United National Ins. Co.

Appellate Division, First Department

Plain, Unambiguous Language in an Insurance Policy Will Be Enforced

United National (“defendant”) moved for summary judgment declaring that it has no coverage obligation to Books For Less (“plaintiff”) with respect to an underlying property damage claim. The trial court denied defendant’s motion and declared that defendant is obligated to make available in connection with that claim up to the entire limit of $3 million of its excess insurance policy subject to proof of actual business income loss suffered by plaintiff. Appeal was taken.

The plain language of the excess insurance policy issued by defendant unambiguously provided coverage for business interruption loss suffered by plaintiff in excess of $500,000. Therefore, the Appellate Division affirmed the grant of summary judgment to plaintiff.


11/29/18       Litwin v. Tri-State Consumer Ins. Co.

Appellate Division, First Department

Insurer Failed to Show It Complied with Its Policy in Paying Insured’s Claim, Reviving Case Against Insurer

Francine Litwin (“plaintiff”) sustained personal property damage due to a fire and sued her insurer, Tri-State Consumer Insurance Company (“defendant”). Defendant moved for summary judgment dismissing the complaint on the basis that it complied with the terms of the insurance policy in paying plaintiff's claim. The trial court granted defendant’s motion; however, the Appellate Division reversed.

The Appellate Division determined that defendant failed to establish prima facie that it complied with the terms of the insurance policy in paying plaintiff's claim. The policy provided for the submission of an initial claim and, within 180 days, proof of additional liability. For each damaged item, defendant would then pay the "least" of the amounts set forth for six categories of settlement, including 400% of the actual cash value or replacement cost without depreciation or the applicable policy limit for that category. Although defendant submitted a spreadsheet detailing the settlement amounts for each item, it did not indicate how these amounts were calculated or which of the six alternative formulas were relied upon in reaching the amounts. The court ruled that the affidavit by the claims adjuster was insufficient, finding it that it stated in a conclusory fashion that plaintiff was paid the least of the six category amounts for each item in accordance with the policy. The Appellate Division also rejected defendant’s claim that reliance upon an undisclosed algorithm met defendant's burden of establishing that it complied with the policy. The Appellate Division reversed the summary judgment award on the law, reinstated the complaint, and remanded the case for trial.


Agnes A. Wilewicz

[email protected]


11/28/18       General Re Life Corp. v. Lincoln National Life Insurance Co.

United States Court of Appeals, Second Circuit

Second Circuit Determines that While Arbitrators Have Limited Power to Alter Awards Once an Issue is Decided, an Exception Arises When the Award is Ambiguous, and Then Arbitrators Retain Authority to Clarify the Award

General Re entered into an Automatic Self-Administered YRT Reinsurance Agreement with Lincoln effective January 1, 2002. The agreement permitted General Re to increase premiums, but only if such increase was founded on “a change in anticipated mortality”. If General Re exercised its right to raise premiums, the Agreement permitted a “recapture” of its life insurance policies, meaning that Lincoln would no longer have reinsurance after the recapture was effective. Unfortunately, the agreement proved unprofitable and General Re exercised that right to increase premiums. Thereafter, Lincoln elected to arbitrate the rate increase, as provided under the contract.

After a multi-day panel arbitration in 2015, a Final Award was issued. The focus of the arbitration had been on whether there had been a change in the anticipated mortality. The Award ultimately stated that if Lincoln chose to exercise its right to recapture following the arbitration, the recapture would be effective retroactive to April 1, 2014, and in the event of such recapture, “all premium and claim transactions paid by one party to the other following the effective date of the recapture shall be unwound”. It also directed the parties to work together in calculating the amount of monies owed and that “any disagreement over the calculations shall promptly be submitted to the arbitration panel for resolution”, since they retained jurisdiction to the extent necessary to resolve such disputes.

After Lincoln invoked its right to recapture, the parties differed on how to read the unwinding language in the Award. The dispute centered on how to handle premium payments made before the April 1, 2014 recapture date. Lincoln had paid General Re in advance a year of premiums when the underlying life insurance policy renewed, namely each month they paid a year’s worth of policy premiums that for those policies renewing that month. General Re, however, took the position that it was entitled to keep all premiums paid before April 1, 2014, but nothing thereafter, reasoning that since no reference was made to the pre-payment issue in the Award, that was the “end of the discussion”. Lincoln, of course, argued that it was owed all the pre-paid premiums, too.

An arbitrator’s decision can only be reviewed by a court de novo as to legal issues and for clear error as to factual findings, vacating awards only when arbitrators exceed their powers. The party moving to vacate has a heavy burden of showing that an award falls within a very narrow set of circumstances delineated by statute of law (mostly at the level of grievous errors). While General Re argued that Lincoln had waived the right to raise this issue by not bringing it up before the panel in the first instance, the court disagreed. Here, the Award was ambiguous in its interpretation. Typically the rule of functus officio applies – namely the limited power of arbitrators to alter awards once they have been issued – but there is an exception to this rule. In cases where an arbitration award is unclear or ambiguous, i.e. susceptible to more than one interpretation or fails to address a contingency that later arises, it can be reconsidered and the matter remanded back down to the arbitration panel.

“An arbitrator does not become functus officio when it issues a clarification of an ambiguous final award as long as three conditions are satisfied: (1) the final award is ambiguous; (2) the clarification merely clarifies the award rather than substantively modifying it; and (3) the clarification comports with the parties’ intent as set forth in the agreement that gave rise to arbitration. This narrowly drawn rule ensures that in those circumstances where an arbitral body issues an ambiguous award and must issue a clarification, it will do so in keeping with the twin objectives of arbitration: ‘settling disputes efficiently and avoiding long and expensive litigation’”. Here, these conditions were met. Thus, the court remanded the matter and award back down to be clarified by the arbitrators.



Jennifer A. Ehman

[email protected]


At DRI’s Insurance Coverage and Practice Symposium, catch up with you next issue.



Jerry Marti

[email protected]


11/16/18       Nationwide Affinity Ins. Co. of Am. v. Jamaica Wellness Med.      

Appellate Division, Fourth Department    

EUO Defense is Subject to Preclusion on Late Denial

This case arises from the investigation of no-fault claims by the insurance carrier, Nationwide, after Defendant medical corporation had submitted its no-fault bills and assignment of benefits.  In particular, Nationwide had requested that Defendant submit to Examinations under Oath (“EUOs”) to verify the validity of the claims.  Defendant never appeared for the scheduled EUOs.  Thereafter, Nationwide commenced a declaratory judgment alleging that Defendant had “breached a material condition to coverage” under the insurance policies and no-fault regulations.  Consequently, Nationwide moved for summary judgment based on the breach and Defendant cross-moved for summary judgment dismissing the complaint.  The Supreme Court granted the motion and denied the cross-motion, resulting in the appeal.

The Appellate Division, Fourth Department held that an insurer is precluded from asserting a litigation defense based on the non-appearance at an EUO unless there is a timely denial of coverage.  The decision departs from the precedent found in the First Department where the courts have repeatedly held that the failure to appear at a duly requested EUO constitutes a breach of a “condition precedent to coverage” under the no-fault policy.

In particular, the Appellate Division, Fourth Department reasoned that the failure to appear at an EUO was distinguishable from a lack of coverage defense.  Specifically, Defendant had coverage under the no-fault policy, and the EUO defense constituted a breach of an existing policy condition.

Finally, in looking at the facts of this case, an Affidavit from a claims specialist was found insufficient to prove the existence of a timely denial without proof of the actual denial forms.  Accordingly, the Court reversed the lower court, denied the motion, and vacated the declarations.



Brian D. Barnas

[email protected]


11/25/18       Mosley v. Progressive American Insurance Company

United States District Court, Southern District of Florida

Insurer’s Summary Judgment Motion was denied where it never Provided the Claimant with a Financial Affidavit Despite the Fact that the Insured Refused to Execute the Affidavit based upon his Religious Beliefs

This case arises out of an automobile accident that occurred on November 17, 2008, in Fort Lauderdale, Florida.  Wallace Mosley, an 11-year-old boy, was operating a scooter when he entered a roadway and was struck by a vehicle operated by Progressive’s insured Lloyd.  Lloyd’s policy contained limits of $10,000 per person and $20,000 per occurrence.  Progressive was notified of the accident when it was contacted by Rosa Lopez of Flaxman Lopez (“Lopez”), the attorneys retained by Mosley’s Great Aunt on November 26, 2008.

On December 1, 2008, Lopez faxed the accident report to Progressive, which was reviewed by Wyllie, the assigned claims professional.  The accident report indicated that the injured party was an eleven-year-old pedestrian, who had been struck by Lloyd’s vehicle while it was traveling at a high rate of speed.  The report further indicated that the boy was thrown approximately one hundred feet and was thereafter transported to the hospital.  Wyllie recorded in the claim notes that the accident report was not favorable to the insured.

On December 4, 2008, although no demand had been received, Progressive proactively initiated a tender for full bodily injury limits of $10,000.00.  On December 8, 2008, Lloyd contacted Progressive, and Progressive obtained a recorded statement.  He advised that the accident was not his fault and that he believed Mosley was okay.

On December 9, 2008, Lopez sent a counteroffer of settlement to Progressive (the “Flaxman Lopez Letter”).  The Flaxman Lopez Letter required that Mr. Lloyd complete and return a 12-page financial affidavit as a condition of settlement, and stated that suit would be filed if the affidavit was not returned, but that the claim would be settled if Lloyd had no viable assets.  The letter imposed a 14 day time limit for Lloyd to complete the affidavit.

Wyllie received this demand on December 17, 2018.  Wyllie called Lloyd on December 17, 2008, to discuss the request for the affidavit; however, did not document any of the details of what was discussed.  While the Flaxman Lopez Letter was forwarded to Lloyd, he was never sent an excess letter, advised in writing of the deadline for providing the affidavit, or notified that Progressive had determined he was at fault.

Lloyd advised Wyllie multiple times that he would not complete the affidavit due to his moral and religious beliefs and because he was not subject to Florida law because he was a Sovereign Citizen of Moorish descent.  However, there was no log of the content of Wyllie’s conversations with Lloyd.  On January 5, 2009, Lloyd responded to the Flaxman Lopez Letter with his own letter outlining the reasons for his refusal to comply.  Upon receipt of the letter, Progressive did not seek an extension of time, rather it forward the letter to Lopez.

After no affidavit was provided, suit was filed.  Lloyd was initially defended by his own attorney, who filed a dismissal petition based on Lloyd’s claims of immunity and lack of responsibility for the accident.  Progressive eventually retained counsel for Lloyd after it was put on notice of a potential bad faith claim.  At trial, Lloyd was found 30% liable, and a final judgment in the amount of $22,663,058.00 was entered.

A bad faith action was filed against Progressive, and the court concluded there was an issue of fact precluding summary judgment in favor of Progressive.  The court noted that Progressive sent Lloyd no written communication explaining the significance of the affidavit or the potential for an excess judgment during the 14 day deadline.  The court concluded that forwarding the Flaxman Lopez Letter was insufficient to find Progressive satisfied its duty as a matter of law.  The phone calls regarding the affidavit during the time period of the offer were not enough for the court.  The court also concluded that Lloyd’s testimony that the significance of the affidavit was not explained to him and that he did not understand what was happening was sufficient to raise an issue of fact.

The court also was not persuaded by Progressive’s argument that it fulfilled its duty through Wyllie’s communications with Lloyd, and that Progressive ultimately concluded that Lloyd had the right to his personal religious, philosophical, and moral beliefs, in making the decision to forward Lloyd’s response to the Flaxman Lopez Letter.  The court explained that under Florida law the focus in a bad faith is on the actions of the insurer, not on the claimant or insured.


11/20/18       Homeland Insurance Company of New York v. Corvel Corp.

Supreme Court of Delaware

Bad Faith Claim Accrued when the Underlying Action Settled not when it was determined that there was Coverage Available under the Policy

Homeland issued CorVel a claims-made errors and omissions liability policy with limits of $10 million and a policy period of October 31, 2005 to October 31, 2006. Thereafter, Homeland issued renewal policies, which were the same in all material respects.  CorVel is a Delaware company that operates a national Preferred Provider Organization (PPO) network.  CorVel's PPO network included agreements with medical providers in Louisiana. In late 2004 and early 2005, Louisiana medical providers began filing claims (the “PPO claims”) asserting that CorVel had improperly discounted medical payments without providing proper notice in violation of a Louisiana statute.  Litigation ensued in Louisiana which ultimately involved millions of dollars of claims against CorVel.

In July 2005, CorVel filed an action in a federal district court in Louisiana seeking to compel arbitration of the claims.  CorVel notified Homeland in writing of the arbitration proceeding.  However, Homeland denies coverage for all of the PPO claims based upon provisions in the policy that excluded (1) claims made against CorVel prior to the inception date of CorVel's claims-made policy, (2) claims made during the policy period but which were related to claims made prior to the inception date, and (3) claims not reported within 90 days of the end of the policy period.

On June 23, 2011, CorVel entered into a settlement of the litigation.  As part of the settlement consideration, CorVel paid $9 million.  The settlement also included a partial assignment of CorVel’s rights under the Homeland policy.

In 2015, CorVel filed its complaint in this case, alleging that Homeland owed it damages and penalties under Louisiana's Bad Faith Statute.  CorVel alleged that Homeland knowingly misrepresented facts or policy provisions in a complaint that Homeland filed in a declaratory judgment action in Delaware in 2011.  The alleged misrepresentation was an averment that CorVel had not timely reported the PPO claims in accordance with the policy's requirements.  The damages CorVel sought were the $9 million that it paid to settle the Louisiana litigation, penalties, attorneys' fees, and pre-judgment interest.

In the meantime, a declaratory judgment action was being commenced by the plaintiffs who had received the assignment.  On January 21, 2016, the Louisiana trial court granted summary judgment concluding that there was coverage under the Homeland policy.  The decision was affirmed by the Louisiana Court of Appeals on December 29, 2016, and the Louisiana Supreme Court denied certiorari on April 13, 2017.

Homeland argued that CorVel’s bad faith claim was barred by Delaware’s three year statute of limitations.  Where, the plaintiff is the insured party, a prima facie claim for damages under subsection (B)(1) of Louisiana's Bad Faith Statute requires the following elements: (1) the insured has a valid, underlying, substantive claim upon which insurance coverage is based; (2) the insurer knowingly misrepresented pertinent facts or insurance policy provisions relating to that coverage; and (3) the insured suffered damages as a result of” that misrepresentation.  The court concluded that CorVel could have pleaded a valid claim back in June 23, 2011, at the time it settled the arbitration.  Thus, the statute of limitations expired on June 23, 2014, and the claim was time-barred when it was filed on May 8, 2015.

The court rejected CorVel’s argument that it could not have pleaded a claim for bad faith until the Louisiana court concluded that there was coverage under the policy.  While there must be coverage under the policy for such a claim to succeed, there is no requirement that there be a judicial declaration that there is coverage for a claim to accrue.


John R. Ewell

[email protected]


11/15/18       Michel v. New Jersey Manufacturers Ins. Co.

New Jersey Superior Court, Appellate Division

Step-Down Clause Limits UIM Coverage and “Named Insured” Means Exactly What You’d Think

New Jersey Manufacturers Insurance Company (“NJM”) issued an automobile insurance policy to Erich Michel (“Erich”). His wife, Lori-Anne Michel (“Lori-Anne”), was injured while walking in a crosswalk when she was struck by a car. The tortfeasor had a basic policy that did not provide bodily injury liability coverage. Lori-Anne, however, was the named insured on a USAA policy that provided $25,000 in Underinsured Motorist (“UIM”) coverage. After Lori-Anne tendered her claim to USAA, it offered her the full $25,000 policy limit.

Lori-Ann then pursued underinsured motorist coverage under the NJM policy that identified only Erich as the named insured. Lori-Anne notified NJM of the USAA offer and NJM advised that it had no objection to Lori-Ann accepting the offer.

The liability portion of the NJM policy describes "you" and "your" to "refer to the named insured shown in the Declarations" and the named insured's "spouse . . . if a resident of the same household . . . ."

The NJM policy defined an insured for the purposes of UIM coverage as "[y]ou or any family member." A family member is described to include "a person related to you by . . . marriage . . . who is a resident of your household . . . ." The UIM endorsement provided that NJM will pay "compensatory damages which an insured is legally entitled to recover from the owner or operator of an . . . underinsured motor vehicle because of  . . . [b]odily injury sustained by an insured and caused by an accident . . . " up to $300,000.

However, the endorsement contains a step-down provision, identified in bold lettering as "LIMIT OF LIABILITY," which provides:


1. If:


a. An insured is not the named insured, but is a family member under this policy;

b. That insured is a named insured under one or more other policies providing similar coverage; and

c. All such other policies have a limit of liability for similar coverage which is less than the limit of liability for this this coverage; then [NJM's] maximum limit of liability for that insured, for all damages resulting from any one accident, shall not exceed the highest applicable limit of liability under any insurance providing coverage to that insured as a named insured.


NJM determined the step-down language applied because Lori-Anne was an "insured" "family member" under the NJM policy and a named insured under the USAA policy, which provided coverage similar to the NJM policy. Therefore, NJM denied plaintiffs' claim. Lori-Anne and Erich commenced an action against NJM seeking UIM benefits. The Michels alleged NJM breached its contract, claiming Lori-Anne was entitled to the entire $300,000 policy limit because she was a "named insured" under the NJM policy.

Instead of answering the complaint, NJM filed a motion to dismiss. NJM argued that the express language of its policy reduced Lori-Anne's coverage. Plaintiffs opposed the motion and maintained that Lori-Anne was not subject to the step-down provision because she identified as a named insured under the NJM policy and despite being married to Erich was not his family member. The trial court concluded that Lori-Anne Michel is an insured, not a named insured, under the UIM provision of the policy, and thus the “step-down' limitations" applied to limit her recovery to the $25,000 limit of her USAA policy. Therefore, the trial judge granted NJM’s motion to dismiss and dismissed the Michel’s complaint.

On appeal, plaintiffs argued the trial court incorrectly interpreted the NJM policy contrary to their reasonable expectations. Specifically, plaintiffs again maintained that Lori-Anne was a named insured under the NJM policy and was not a family member. On this point, plaintiffs argue that because the NJM policy defines "you and your" to include Erich as the named insured and Lori-Anne as the resident spouse both should be considered named insureds and not subject to the step-down clause.

Separately, plaintiffs noted that the step-down provision applies only to an insured who is not the named insured but who is a family member. Because family member is defined to include a resident of "your" household related to "you" by marriage, plaintiffs alleged the step-down provision is inapplicable to Lori-Anne because she is not a family member as she cannot be related to herself.

The Appellate Division was not persuaded by plaintiffs' argument that Lori-Anne is a named insured under the NJM policy. Rather, the Appellate Division found that she is an insured family member for UIM benefits under the NJM policy.

The Court explained that the term “named insured” “refers only to the names so appearing in the declaration.” Here, the only name appearing on the declaration page is Erich Michel.

The Court found that the NJM policy clearly characterized Erich and Lori-Anne differently for UIM purposes. Erich is indisputably the named insured shown on the Declarations. Lori-Anne is separately described as an insured as she is Erich's spouse and a "resident of the same household."

The Appellate Division also rejected Lori-Anne's claim that she is not a "family member" as she is "related to" Erich by marriage who is a resident of her household. On this point the Court determined that nothing in the NJM policy suggested that an insured is limited to a single designation:

Lori-Anne can be correctly characterized as “you” and also someone who is a “family member” as she is unquestionably related to Erich, the named insured, by marriage, who also resides in her household.

The Appellate Division concluded that Lori-Anne is not a named insured under the NJM policy but is an insured family member, and therefore, subject to the step-down provision in the NJM policy. The dismissal of the complaint was affirmed.

Disclaimer: This is an unpublished decision which has precedential value in only limited circumstances. 


Brian F. Mark

[email protected]


11/14/18       First Specialty Ins. Corp. v. Hudson Palmer Homes, Inc.

U.S. District Court for the Eastern District of Pennsylvania
US District Court Holds that an Insurer’s Duty to Indemnify is Not Ripe Without a Determination of the Insured’s Liability

This declaratory-judgment action arises out of ten underlying construction defect actions filed against Hudson Palmer Homes, Inc. and the Cutler Group, Inc. (collectively, "the Cutler defendants").  The underlying actions alleged damages resulting from the Cutler defendants' "systemic construction defects involving improperly installed stucco on multiple homes.”

The plaintiff, First Specialty Insurance Corporation ("FSIC"), sought a determination of its rights and obligations under a Commercial General Liability Policy issued to the Cutler defendants.  The FSIC policy provided insurance for certain "bodily injuries" and "property damage" if caused by an "occurrence," defined in pertinent part as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions."  The FSIC policy has a $1 million per "occurrence" limit and a $2 million aggregate limit for "products-completed operations."

Specifically, the plaintiff sought a ruling that (1) all damages alleged in the underlying actions arose out of a single occurrence and are subject to a $1 million per occurrence limit of liability in the insurance policy issued by FSIC to the Cutler defendants; (2) the plaintiff's duty to defend and indemnify the Cutler defendants in connection with the underlying actions was extinguished upon exhaustion of the $1 million per occurrence limit of liability; (3) any and all declarations necessary for the resolution of this dispute; and (4) an award of reasonable attorneys' fees and costs.

The Cutler defendants disagreed with plaintiff on whether the construction defects allegedly caused by the defendants constituted a single occurrence under the FSIC policy and on the insurance limits applicable to the underlying actions.

The plaintiff agreed to provide the Cutler defendants with a defense subject to an express reservation of rights in the ten underlying actions.  At the time the declaratory-judgment action was filed, liability had not been established in any of the underlying actions.

The Cutler defendants argued that FSIC's declaratory action should be dismissed because it was not ripe and even if it was ripe, the court should decline to exercise its discretionary declaratory-judgment jurisdiction over this action.  The Cutler defendants also argued that the Court should dismiss the plaintiff's claim for attorneys' fees because the plaintiff provided no statutory or contractual right to such relief.

In analyzing the ripeness claim, the Court looked to the Third Circuit’s three prong test utilized in the declaratory-judgment context.  The test requires courts to examine (1) the adversity of the interest of the parties; (2) the conclusiveness of the judicial judgment; and (3) the practical help, or utility, of that judgment.

With regard to the first step, the Cutler defendants argued that the parties did not have adverse interests because the plaintiff did not contest that it had a duty to defend, and any declaratory-judgment on the plaintiff's indemnification obligations would be premature.  In response, the plaintiff argued that the parties' interests were adverse because they had "each advanced conflicting positions on the number of occurrences and applicable policy limit.”

The Court was not persuaded by the plaintiff's argument.  Although the parties disagreed on the proper interpretation of policy coverage, the Court noted that the plaintiff did not dispute that it had a duty to defend and was, in fact, defending the underlying actions.  Thus, the Court found no adversity over whether plaintiff had an obligation to defend the Cutler defendants in the underlying actions.  Rather, plaintiff sought a declaratory judgment only on the extent of its duty to indemnify.  As such, any potential legal harm resulting from the Court not entering a declaratory judgment on the plaintiff's duty to indemnify is contingent on the Cutler defendants' liability in the underlying actions.  The Court noted that under Pennsylvania law an insurer is required to indemnify only where the insured is held liable for a claim actually covered by the policy.  As such, the Court held that the question of whether an insurer has a duty to indemnify is not ripe until there is an actual need for indemnification, that is, until liability has been determined in the underlying action.  Thus, the Court found that the first factor weighed against finding the declaratory action ripe.

The Court determined that the second factor also weighed against a finding of ripeness because the Court could not provide a conclusive ruling.  The Court noted that the duty to indemnify cannot be determined merely on the basis of whether the factual allegations of the complaint potentially state a claim against the insured.  Rather, actual indemnification depends upon the existence or nonexistence of facts not yet established at the pleading stage.  Because there had been no ruling in the underlying actions on the conduct for which the Cutler defendants were liable, the Court had no way to determine what conduct, if any, would provide for liability under the policy.  Thus, the Court held that the insufficient record rendered this matter inconclusive and inappropriate for judicial resolution by way of a declaratory judgment.

The Court also found that the final factor did not weigh in favor of ripeness.  Practical utility goes to "whether the parties' plans of actions are likely to be affected by a declaratory-judgment," and considers the hardship to the parties of withholding judgment.  The plaintiff argued that "the ruling will have significant utility in guiding FSIC's participation in decisions to defend, settle and/or try multiple underlying actions subject to limited insurance proceeds."  However, because the Court did not have an adequate record for ruling on plaintiff's indemnity obligations, the Court stated that it could not provide a declaratory-judgment of "significant utility."  Thus, considering the three prongs as a whole, the Court concluded that the action is not ripe for adjudication.

With regard to the requested attorneys’ fees, the Cutler defendants moved to dismiss the plaintiff's request for same because the plaintiff failed to identify any statutory or contractual right to such fees.  In response, the plaintiff argued that the Court should award attorneys' fees to the plaintiff because (1) the Cutler defendants acted in bad faith in filing pre-answer motions and (2) the plaintiff's action conferred a substantial benefit on the claimants in the underlying actions.  The Court rejected the plaintiff's arguments, concluding that the filing of the Cutler defendants' motion did not establish bad faith and that the plaintiff's action did not confer a substantial common benefit sufficient to warrant an award of attorneys' fees.  Accordingly, the Court denied the plaintiff's claim for attorneys' fees.

In light of the above, the Court granted the Cutler defendant’s motion to dismiss the declaratory-judgment complaint without prejudice.



Larry E. Waters
[email protected]


11/26/18       Merritt Environmental Consulting v. Great Divide Insurance

United States District Court, Eastern District of New York

Plaintiff’s Objection to the Magistrate’s Report and Recommendation Overruled Because the Magistrate Properly Applied a “But For” Test to Determine Whether the “Arising Out Of” Language of the Radioactive Matter Exclusion Applied as a Bar to Coverage

The current decision stems from Plaintiff’s objections to the Report and Recommendation by the Magistrate Judge dated October 10, 2018.  The Report and Recommendation (“the Report”) recommended the granting of defendants’, Great Divide Insurance Company (“Great Divide”) and Berkley Specialty Underwriting Managers (“Berkley Specialty”), motion to dismiss Plaintiff’s claims pursuant to the Federal Rules of Civil Procedure Rule 12(b)(6) .

Plaintiff’s objections to the Report set forth four arguments.  First, Plaintiff argued that the Magistrate incorrectly interpreted the law governing the application of the Radioactive Matter Exclusion relied upon by defendant Great Divide to deny coverage. Second, Plaintiff argued that the Magistrate mistakenly characterized New York law regarding key language in the Radioactive Matter Exclusion and therefore erroneously found the exclusion applied. Third, Plaintiff argued that the Magistrate erroneously applied an overly broad interpretation of the “but for” causation of the phrase “arising out of.”  Fourth, Plaintiff argued that the Report’s recommendation that the motion to dismiss be granted on the basis that radioactive matter is the “but for” cause of the allegations against Plaintiff was premature at the time.

In its analysis the Court, noted that the phrase “arising out of” is ordinarily understood to mean originating from, incident to, or having connection with” in the context of an insurance policy exclusion. Further, the Court noted that such language in an insurance policy exclusion “requires only there be some causal relationship between the injury and the risk for which coverage is provided.” Based upon the established New York law, the Court found that the Magistrate properly applied a “but for” test to determine based upon the complaints in the Underlying lawsuit and the language of the policy that the Radioactive Matter Exclusion applied as bar to coverage for the underlying lawsuit.

Accordingly, the Court overruled Plaintiff’s objections and accepted the Report in its entirety. Therefore, defendants’ motion to dismiss Plaintiff’s claims against them was granted with prejudice.


11/26/18       Olin Corp. v. Certain Underwriters at Lloyd’s London

United States District Court, Southern District of New York

Defendants Motion for Summary Judgment Granted Because the Settlement Agreement Imposes a Pro Rata Allocation

This action stems from Plaintiff, Olin Corporation (“Olin”), seeking coverage from defendants, Certain Underwriters at Lloyd’s London and London Market Insurance Companies (collectively “London”), for expenditures incurred at Olin-owned manufacturing facility in Morgan Hill, California (“Morgan Hill”). Olin operated a manufacturing facility in Morgan Hill from 1956 until at least 1996.  During that period, London issued excess insurance policies to Olin. In part, the policies contained “Condition C”, which provided that:

It is agreed that if any loss covered hereunder is also covered in whole or in part under any other excess Policy issued to the Assured prior to the inception date hereof the limit of liability hereon ... shall be reduced by any amounts due to the Assured on account of such loss under such prior insurance.

Subject to the foregoing paragraph and to all the other terms and conditions of this Policy in the event that personal injury or property damage arising out of an occurrence covered hereunder is continuing at the time of termination of this Policy [London] will continue to protect the Assured for liability in respect of such personal injury or property damage without payment of additional premium.

Previously, Olin and London entered into a settlement agreement on July 31, 2009 (the “Settlement Agreement”).  The Settlement Agreement provided that for claims Olin did not release against London including the Morgan Hill claim: (1) London would release from liability for any policies that attached below $1.3 million; (2) before seeking coverage from London, Olin would deduct from its remediation expenditures any payments made prior to the execution of the Agreement, as well as an additional $10 million from each claim; and (3)  “terms and conditions of” London’s policies “shall apply as written expect as provided in Section VII, Paragraphs C, D, and E.  Paragraph D stated that:

it is agreed between the Parties or otherwise determined that there is coverage under the London Policies, Olin and London Market Insurers agree that with respect to any future third-party Pollution Claim relating to property damage that is not the subject of a release in this Agreement the following allocation methods shall be used:

  1. For property damage losses relating to Pollution at real property owned at any time by Olin, the property damage relating to any Pollution Claim shall be allocated pro rata equally over the entire period of time that any operations took place on any part or parts of the real property Olin owned.


(ii)      For property damage losses relating to Pollution at real property at which Olin disposed of or arranged for the disposal of any waste that does not otherwise fall within the scope of Section VII Paragraph D. (i) above, the property damage relating to any Pollution Claim shall be allocated pro rata equally over the entire period of time that any waste was disposed of or arranged to be disposed of at any part or parts of the subject real property by, on behalf of, at the direction or request of Olin from the commencement of such activities until their complete cessation.

On December 16, 2016, Olin notified London that it had spent $66.6 million on remediation at Morgan Hill of which $18.9 million was incurred after the execution of the Settlement Agreement.   On January 9, 2017, London responded to Olin stating that Olin’s expenditures were insufficient to trigger coverage under London’s policies.  On September 18, 2018, Olin acknowledged that it was required to deduct $10 million from the expenditures incurred after the execution of the Settlement Agreement but Olin disagreed that the remaining amount should be allocated pro rata.  Rather, Olin argued that the full amount of the remaining expenditures incurred after the Settlement Agreement for the remediation at Morgan Hill was claimable against any London policy that provided coverage during the period that operations took place at Morgan Hill after accounting for London’s release from liability for policies attaching below $1.3 million.

On September 7, 2018, Olin commenced this current action alleging that London breached its policies and the Settlement Agreement by failing to provide coverage for Olin’s remediation costs at Morgan Hill.  London moved for summary judgment on the issues whether Paragraph D of the Settlement Agreement requires Olin’s remediation to be allocated pro rata equal across the period during which operations took place at Morgan Hill.  Olin moved for partial summary judgment on whether the Settlement Agreement’s language that states “the terms and conditions of” London’s policies “shall apply as written except as provided in Section VII, paragraphs C, D, and E,” leaves Condition C of the Policy intact.

London argued that Paragraph D of the Settlement Agreement imposes a pro rata allocation regime including on policies that contain Condition C.  In support, London relied on two main points.  First, London argued that the “express terms of the Settlement Agreement provide that property damages are to be allocated using specific pro rata allocation formula.”  London noted that “if Olin could recover all sums from any London excess policy containing Condition C, there would be no reason for the parties to include a pro rata provision in the Settlement Agreement . . . .” Second, London argued that the pro rata allocation is consistent with the litigation history.  Specifically, the pro rata allocation is consistent with the prior disputes between London and Olin.  London highlighted that the major point of disagreement between the parties over the years was whether property damage should be allocated over a longer or shorter period, and whether it should be allocated equally or by a different method.  According to London, Paragraph D resolves this dispute by answering both questions.

In contrast, Olin argued that the language of the Settlement Agreement makes it clear that “the terms and conditions of” London’s policies “shall apply as written except as provided in Section VII, Paragraphs C, D, and E.”  In addition, Olin argued that since Paragraph D makes no mention of Condition C, London is reduced to arguing that there was some type of repeal by implication.” Further, Olin argued that Paragraph D applies equally to polices that do not contain Condition C and that Paragraph D requires the parties to prove only when operations at a site stopped.

The Court disagreed with Olin’s interpretation of Paragraph D.  The Court reasoned that Olin’s interpretation was problematic because “Olin’s position requires different constructions of Paragraph D depending on whether the underlying London policy contains Condition C. In addition, the Court noted that Olin’s position renders the words “pro rata equally” superfluous when the underlying policy contains Condition C.  As the Court noted, the words “pro rata equally” would be left without force and effect if the Court adopted Olin’s interpretation of Paragraph D.

Further, the Court found that the most natural reading of Paragraph D as “allocating Olin’s losses to each policy period on an equal pro rata basis.” Paragraph D reads no “loss covered” under one policy will “also be covered in whole or in part under any other . . . . Policy.”  As such, the first paragraph of Condition C is rendered inapplicable.  Moreover, the Court found that given the litigation history, “it is hard to understand what the parties could have thought they were doing other than enacting a pro rata allocation regime.”

Therefore, the Court granted London’s motion for summary judgment and denied Olin’s motion for partial summary judgment. Further, the Court dismissed Olin’s complaint with prejudice as Olin did not dispute that its expenditures fail to reach the attachment points of London’s polices when allocated on a pro rata bases.   



Eric T. Boron

[email protected]


11/14/18       Depositors Insurance Company v. Dollansky

Supreme Court of Minnesota

Insurer’s Subrogation Action Barred by Minnesota Anti-Subrogation Statute

The Supreme Court of Minnesota affirmed on appeal this month prior rulings of the district court and court of appeals barring Depositors under Minnesota statutory law from proceeding against Mr. Dollansky in a subrogation action.  Minnesota Statutes §60A.41(a) prohibits an insurance company from proceeding against its insured in a subrogation action where the loss was caused by nonintentional acts of the insured.  Here, there was no evidence the loss was caused by intentional acts.  What was dispositive for the Minnesota Supreme Court was its determination that Mr. Dollansky was an “insured” under the Definitions of the Depositors policy - even though he was never a named insured on the Depositors policy.

The background facts are as follows.  Mr. Dollansky rented a motor home from Karavan Trailers, and it started on fire. The rental agreement said Mr. Dollansky was responsible for all damage, and agreed to indemnify Karavan.  Depositors was Karavan’s insurer.   Depositors submitted the claim, which was in excess of $200,000, to Mr. Dollansky’s carrier, American Family, which in response paid Karavan only a modest amount (the deductible from Karavan’s policy with Depositors), but denied the balance. Depositors then paid Karavan $204,895, and thereafter sued Dollansky in a subrogation action for the $204,895.

The district court granted Mr. Dollansky’s motion for summary judgment, and denied Depositors’ summary judgment motion, thereby dismissing the subrogation action.  In granting Mr. Dollansky summary judgment, district court held Depositors’ suit was prohibited by Minnesota’s §60A.41 anti-subrogation statute. The district court’s basis for this ruling arose from its examination of the policy Depositors issued to Karavan, focusing on that policy's definition of “insured” in “Section V—Definitions”: “any person or organization qualifying as an insured in the Who Is An Insured provision of the applicable coverage.” The district court found that because the “Who Is An Insured” provision contained in Section II of the Depositors policy defines “insured” as including “[a]nyone else while using with your permission a covered ‘auto’ you own, hire or borrow,” Mr. Dollansky was an “insured” for purposes of Minn. Stat. § 60A.41(a) because Karavan permitted Dollansky to use the covered vehicle, in this case, the motor home.  Accordingly, the district court denied Depositors' motion and granted Dollansky's motion, concluding that Depositors was barred by Minn. Stat. § 60A.41(a) from proceeding against Dollansky in a subrogation action. The district court then dismissed all claims against Dollansky.

Depositors appealed, claiming that §60A.41 only prohibited subrogation suits against the carrier’s own named insured, not somebody who might be an “insured” due to language of the insurance contract (i.e., additional insured, etc.). On appeal, the court of appeals affirmed the district court, and now, as I have already indicated, the Minnesota Supreme Court also affirms.

Generally, as our well-above-average readership well knows, subrogation, when applicable, allows an insurer who pays a loss by its insured caused by a third-party to “step into the shoes of its insured” and sue the third-party tortfeasor to recover its claim payments. However, thinking for a moment broader than the Minnesota statute at issue, what is commonly referred to as the anti-subrogation rule or anti-subrogation doctrine can bar subrogation actions by an insurer against its insureds, on the logical premise that if the insurer stands in the shoes of its insured in a subrogation action, and such an action is against its insured, it virtually amounts to a party suing itself.  It is important to note that while some states, like Minnesota, have enacted anti-subrogation statutes, other states, like New York, apply the anti-subrogation rule/doctrine solely through the application of common law (through case decisions establishing legal precedent in such states).

Application of the anti-subrogation rule/doctrine often depends greatly upon the facts of the case, including the status and legal identity of each of the parties involved, and the terms, conditions, or exclusions of the insurance policy involved and any other written or oral agreements which may be involved. Over time, various exceptions to the application of the anti-subrogation rule/doctrine have developed. For example, if an insurer pays on behalf of one insured for damage caused by a second insured, under a policy that does not cover the second insured for the loss, the insurer might be allowed to subrogate against the second insured.

If you ever need advice on whether or not you have a right to pursue a subrogation action, give us a call.  We’d love to help you think through the issues.



Earl K. Cantwell
[email protected]


08/14/18       Beauty Plus Trading Co. v. National Union Fire Ins. Co.

Appellate Division, New Jersey

Insured’s Claim for Theft of Wigs Falls a Hair Short

In November 2014, a shipping container with cartons of wigs (“hair weaves”) left China and was delivered to the insured’s warehouse in New Jersey on a Friday. Rather than immediately unload the goods, the insured’s workers cut the seal on the container, opened the doors and backed the container into the warehouse unloading bay where they left it until they returned to work on Monday. However, when the workers arrived at work on Monday the container was missing because over the weekend someone hooked the container up to a tractor and drove it away. A very hair-raising experience. Plaintiff filed a claim with National Union under its marine cargo policy. The claim value was $285,183. National Union denied coverage under various terms of the policy.

Under the “warehouse to warehouse” clause, there was no coverage because the shipment had reached its final destination at the time of the theft. There was no coverage under the “loading and unloading” clause because the loss occurred more than 24 hours after the insured had knowledge of the arrival of the container at its warehouse. There was also no coverage under the “stored coverage” endorsement, because the goods were not being temporarily stored in the warehouse, but were rather outside of the warehouse when they were stolen (by the expedient of the container being hooked up and driven away). After pulling its hair out upon receiving the denial of coverage, the insured sued, and both sides filed motions for summary judgment.
The Trial Court held for the insurance company and this decision was affirmed. The Appellate Court affirmed “substantially” for the reasons set forth by the Trial Court. The “warehouse to warehouse” clause was not applicable because the goods had arrived at their final destination in New Jersey. The “loading and unloading” clause was precluded by the 24 hours after notice of delivery requirement.

The insured primarily argued that the courts should have applied a “next business day rule” to extend the policy coverage until Monday. Under this rule, New Jersey courts apply the “next business day rule” when the time for a party’s performance under a contract or insurance policy expires on a weekend or holiday. However, the courts rejected this argument because, if the contract does not require a party to act or an event to occur within the designated period, the mere fact that the final day falls within a weekend does not affect the parties’ performance under the contract. Here, the policy did not require the insured to perform any act, such as actually unloading the goods, within 24 hours of coverage being activated. Thus, the insured’s arguments for coverage came up a hair short.

In the aftermath of this case, one of the more interesting factual questions is the observation that, while the shipment apparently contained 487 cartons of wigs from China, 397 cartons were reported missing, leaving one to question what happened to the remaining 90 cartons of hair products. Perhaps the thieves merely overlooked them, or perhaps the miscreants were selective fashionistas and rejected them. In any event, the majority of the shipment was “hair today, gone tomorrow”.



Michael F. Perley
[email protected]


11/23/18       Muhammad Sydur Rahman v. Ray A. Busby (2018 NY Slip Op 28365) http://www.nycourts.gov/reporter/3dseries/2018/2018_28365.htm

Supreme Court, Bronx County

Procedural Issue Prevent Court Adjudication of Workers’ Compensation Lien

This case arises out of a work-related injury wherein the plaintiff, Muhammad Rahman, was injured when struck by an automobile in the course of his employment at Dunkin Donuts.  The automobile had limited coverage, $100,000, of which $90,000 was offered in full settlement of Mr. Rahman’s injury claims that included alleged injuries to his knees, lumbar spine and bilateral carpel tunnel syndrome.  Although the case is unclear on the issue, it appears that the settlement at $90,000 was not based on any liability considerations rather, with limited coverage, and limited ability to recover, the plaintiff’s attorney accepted a slight reduction in the policy limits in order to avoid the expense of a trial.  The sticking point came when Mr. Rahman’s counsel attempted to negotiate a resolution of the Workers’ Compensation lien with The Hartford.  The Hartford’s lien amounted to $151,685.52, which was then reduced by the $50,000 of No-Fault coverage as provided in Workers’ Compensation Law § 29.  Although, again, the case is silent, it appears that this was a passenger automobile and The Hartford had no ability to recover the $50,000 pursuant to Insurance Law § 5105 loss transfer provisions.  With the lien reduced to $101,685.52, the plaintiff’s attorney proposed a resolution of each interested party, the attorney, the plaintiff and The Hartford accepting one-third.  The Hartford balked and insisted upon obtaining recovery of its full lien amount after plaintiff’s attorney was compensated for his attorney’s fees and disbursements.  For purposes of the instant motion, The Hartford proposed that amount, the “cost of litigation” amounted to 34%.  The Hartford proposed that it be allowed a recovery of $59,054.48 on its “adjusted lien.”  While the calculations are unclear, under the best of circumstances, this would have left $350 to the plaintiff.

The attorney for the plaintiff made application to the court under Workers’ Compensation Law § 29(5) for an order compromising the lien.  Judge Higgitt declined to rule on procedural grounds, namely that the application has to be made to the IAS judge to whom the case is assigned and, the plaintiff failed to comply with the procedural requirements of WCL § 29(5), which requires an affidavit from a doctor and a formal petition among other things.  Likewise, Judge Higgitt declined to enforce The Hartford application to have its lien adjusted at $59,054.48 on the basis that there was no appropriate calculation of the cost of litigation, in addition to the other procedural roadblocks.

This case highlights the difficulty in lien negotiations in the current climate.  However, it is worth bearing in mind that if Mr. Rahman’s Workers’ Compensation Benefits were continuing, The Hartford would owe an attorney’s fee on any amount that it was not required to pay on account of the settlement.  There does not appear to be any attempt on the part of the parties to consider that possibility and the procedures that are afforded to claimants by the Court of Appeals in Burns III v. Varriale (9 N.Y.3d 207 (2007)), which allows for annual calculation and payment of accrued attorney’s fees as a mechanism to enforce Workers’ Compensation Law § 29.


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