Coverage Pointers - Volume XX, No. 17

Volume XX, No. 17 (No. 527)

Friday, February 8, 2019

A Biweekly Electronic Newsletter


Hurwitz & Fine, P.C.

1300 Liberty Building

Buffalo, NY 14202

Phone: 716-849-8900

Fax: 716-855-0874


Long Island Office:

535 Broad Hollow

Melville, New York 11747

Phone: 631-465-0700

Fax: 631-465-0313

© Hurwitz & Fine, P. C. 2019
All rights reserved

As a public service, Hurwitz & Fine, P.C. is pleased to present its biweekly newsletter, providing summaries of and access to the latest insurance law decisions from the New York State appellate courts.  The primary purpose of this newsletter is to provide timely educational information and commentary for our clients and subscribers. 


In some jurisdictions, newsletters such as this may be considered Attorney Advertising.


If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at [email protected] or call 716-849-8900.


You will find back issues of Coverage Pointers on the firm website listed above.


 Dear Coverage Pointers Subscribers:


Do you have a situation?  We love situations.  None of my authors mentioned Valentine’s Day, but an early Happy one to you and yours.  My often repeated history of Valentine’s Day is below.  Peiper usually asks for it, but he forgot this year.


Lots going on.  LOTS going on.


On the coverage side, there is a raging debate (and we are trying to help focus it) over additional insured coverage under commercial liability policies.  In the post-Burlington era when “causation” is now a factor that the Court of Appeals has held is necessary for AI coverage to be triggered, there remains a very important question.  IF the underlying plaintiff does not assert the named insured (often the plaintiff’s employer) caused the accident, should additional insured coverage trigger.  Can the party seeking AI coverage allege itself into coverage by blaming the employer?  If it can, won’t it do so in every case?


There is a First Department case in my column where this issue is considered.  This author says that the appellate court got it wrong.  Look and let me know your thoughts.


Jerry Marti brings you news of state legislation that passed both houses, opening up the statute of limitations in child abuse cases.  That bill has not yet secured final approval from the Governor but has received overwhelming approval from the Legislature.  Jerry is starting a series of articles discussing the statute (again, not yet signed into law) and the implications for insurers when these lawsuits begin to arriving at their doors.


Presidential Biography List – 2019 Version:


Those who know me best (or those who are regular readers of CP) know that my secret passion is U.S. Presidential history.  Some years ago, I decided to read presidential biographies in order and tried to find the best of the best read.  I published that list after my reading was complete. 


Each year, in the issue just before Presidents’ Day, I publish an update on my reading and do so below.  The highlighted titles below are books I’ve read since Presidents’ Day, 2018. I added 20 this year, as compared to 14 the previous year. I do read other genres as well.  I welcome comments and recommendations of other titles.  Numbers identify the Presidents.


P.S. Some of the books (e.g. The Quartet, War of the Roosevelts, Impeachment) focus on more than one president but are only listed once).  Here, in order of Presidents, is my list of completed biographies (actually, I am not quite through with The First Conspiracy – The Secret Plan to Kill George Washington, but close enough):

  1. His Excellency, George Washington (Ellis); First Entrepreneur, How George Washington Built His and the Nation’s Prosperity (Lengel), The First Conspiracy – The Secret Plan to Kill George Washington (Meltzer)

  2. John Adams (McCullough)

  3. Thomas Jefferson, the Art of Power (Meachem); Thomas Jefferson and the Tripoli Pirates: The Forgotten War That Changed American History (Kilmead); America’s Jefferson (Fenster)

  4. James Madison: A Biography (Ketcham); The Quartet (Ellis), The Price of Greatness – Alexander Hamilton, James Madison and the Creation of American Oligarchy, (Cost)

  5. The Last Founding Father: James Monroe and a Nation's Call to Greatness (Unger)

  6. John Quincy Adams (Unger)

  7. Andrew Jackson-- American Lion (Meacham); Andrew Jackson – Miracle of New Orleans, (Kilmead), Avenging the People, Andrew Jackson, The Rule of Law and the American Nation (Opal)

  8. Martin Van Buren (Widmer)

  9. William Henry Harrison (Collins)

  10. John Tyler (May)

  11. A Country of Vast Designs – James Polk (Merry)

  12. Zachary Taylor (John S.D. Eisenhower)

  13. Millard Fillmore (Finkelman)

  14. The Expatriation of Franklin Pierce (Boulard)

  15. James Buchanan (Baker); Worst. President. Ever (Strauss)

  16. Team of Rivals (Goodwin); The Impeachment of Abraham Lincoln (Carter);  Killing Lincoln (O'Reilly), Lincoln and the Abolitionists (Kaplan), Six Encounters with Lincoln (Pryor), Becoming Abraham Lincoln – The Coming of Age of Our Greatest President (Kigel), Lincoln’s Last Trial – the Murder Case that Propelled Him to the Presidency (Abrams)

  17. History of the Impeachment of Andrew Johnson (Ross)

  18. Ulysses S. Grant in War and Peace (Brands); American Ulysses (White), The Presidency of Ulysses S. Grant,  (Kahan)

  19. Fraud of the Century: Rutherford B. Hayes, Samuel Tilden, and the Stolen Election of 1876 (Morris), Grant (Chernow)

  20. Destiny of the Republic: A Tale of Madness, Medicine and the Murder of a President -- Garfield (Millard)

  21. Chester Alan Arthur (Karabell), The Unexpected President – The Life and Times of Chester A. Arthur (Greenberger)

  22. Grover Cleveland (Graff)

  23. A Compilation of Messages and Papers of the President - Benjamin Harrison

  24. Grover Cleveland (Graff)

  25. The President and the Assassin: McKinley, Terror, and Empire at the Dawn of the American Century (Miller); President McKinley, Architect of the American Century (Merry)

  26. Theodore Rex (Morris), Theodore Roosevelt (Autobiography), The Bully Pulpit (Goodwin), Bully Pulpit (Goodwin),  The River of Doubt: Theodore Roosevelt's Darkest Journey (Millard), Forging a President – How the Wild West Created Teddy Roosevelt (Hazelgrove), The War of the Roosevelts (Mann)

  27. The Tea Party President by William Howard Taft; Charles Stanfield Davis

  28. Woodrow Wilson (Brands), The Moralist – Woodrow Wilson and the World He Made, (O’Toole)

  29. Warren Harding (Dean); The President’s Daughter (Britton)

  30. Calvin Coolidge, Man from Vermont (Fuess)

  31. Herbert Hoover (Leuchtenburg); Herbert Hoover in the White House (Rappleyea)

  32. Traitor to His Class -- FDR (Brands); War of the Roosevelts (Mann); His Final Battle (Lelyveld); Commander in Chief (Hamilton); The Last 100 Days – FDR at War and Peace (Woolner)

  33. Citizen Soldier -- Harry Truman (Donald); The General and the President (Brands)

  34. Eisenhower: Soldier and President (Ambrose); Eisenhower, In War and Peace (Smith), Ike and McCarthy (Nichols); The Age of Eisenhower, America and the World in the 1950s (Hitchcock); Ike’s Bluff – President Eisenhower’s Secret Plan to Save the World (Thomas)

  35. < >

    The Path to Power -- LBJ (Caro), The Passage of Power (Caro); Building the Great Society – Inside Lyndon Johnson’s White House (Zeitz)

  36. The Conviction of Richard Nixon (Reston), Nixon, the Triumph of a Politician (Ambrose) Nixon, the Education of a Politician (Ambrose)

  37. Write It When I'm Gone -- Ford  (DeFrank)

  38. Jimmy Carter (Zelizer), President Carter – the White House Years (Eizenstat)

  39. Dutch - Reagan (Morris; Ronald Reagan (Sutherland); Reagan, An American Journey (Spitz)

  40. George Herbert Walker Bush (Wicker); Destiny and Power (Meachem)

  41. First in His Class (Bill Clinton); My Life (Autobiography)

  42. Decision Points -- George W. Bush (Autobiography)

  43. The Bridge – Barach Obama (Remnick)

  44. Understanding Trump (Gengrich), Fire and Fury – Inside the Trump White House (Wolff), Everything Trump Touches, Dies (Wilson)




  • Presidents’ Club  (Gibbs and Duffy)

  • Benjamin FranklinAn American Life, (Isaacson)

  • Rebel Yell, The Violence, Passion and Redemption of Stonewall Jackson, (Gwynne)

  • Dead Presidents: An American Adventure into the Strange Deaths and Surprising Afterlives of Our Nation's Leaders (Carlson)

  • The American Sprit (McCullough)

  • Unusual for their Times – On the Road with America’s First Ladies (Och)

  • Impeachment – An American History (Meacham, Baker, Naftali, Engel)

  • John McCain, The Restless Wave (McCain and Salter),

  • Leadership in Turbulent Times (Goodwin)

  • The Tragedy of Benedict Arnold – An American Life (Malcolm)

  • Without Precedent – Chief Justice John Marshall (Paul)

  • A Higher Loyalty – Truth, Lies and Leadership (Comey)

  • The Soul of America (Meacham)


See you next year with the update.


History of Valentine’s Day – from our February 4, 2010 Edition:


How do you celebrate Valentine's Day?  Do you do it the modern way and send cards, candy, flowers and gifts?  I would hope not. I thought a little history of the holiday would help you recreate a more traditional approach, steeped in history.


During the third century in Rome, Emperor Claudius II who was only emperor for two short years, by the way (August 268 to January 270) was preparing to fight the Goths.  [Editor's note:  who wouldn't fight the Goths, given the opportunity?]  Anyway, he decided that single men would be better soldiers than married ones so he outlawed marriage for young men.  However, one young priest, Valentine, believing that the Emperor's decree was unjust, continued to perform weddings.  Rumor had it that he had a financial interest in a chapel and later moved to Vegas.   Claudius learned of Valentine's defiance, and had him imprisoned.  While in jail, he fell in love with the jailer's daughter and it is said that before his death, he wrote her a love letter, which he signed "From your Valentine." 


Valentine's feast day was set to commemorate his death in February 270, and that was used to make it into a Christian holiday, the pagan Lupercalia Festival, which also celebrated the beginning of spring.  That Festival involved the sacrifice of a goat for fertility and a dog for purification.  The goat hide would be sliced into strips, dipped in sacrificial blood, and taken to the streets by young men who would slap women with the strips, apparently making the women more fertile.  Pope Gelasius, seeking to end the pagan holiday but continue the tradition, declared February 14 as St. Valentine's Day around 496 A.D.  So there you go.  Forget the card, forget the candy, and forget the flowers.  Chase your sweetheart around the room and slap him or her with dried goat strips dipped in blood, and you'll be celebrating the holiday the right way.


Just don't tell the PETA people.


Marry Me, or Else – a Century Ago:


The Evening Sun

Baltimore, Maryland

08 Feb 1919




Miss Kate Mosely Asks $10,000

From Thomas H. Haupt


Claiming that her affections and state of mind have been injured to the extent of $10,000 by the refusal of her fiancé to keep his promise and make her his bride, Miss Kate Mosely filed suit in the Superior court today against her alleged delinquent beau, Thomas H. Haupt.


According to the bill, filed through Attorney Jame Fluegel, the defendant boarded with the plaintiff at her home in West Baltimore.  He asked her to become his wife.  She consented, it was said, but before the wedding date arrived Haupt moved and since then has refused to keep the alleged agreement of marriage. 


John’s Jersey Journal:


Dear Subscribers:


Some of you may have heard that last week, our office closed due to whiteout blizzard conditions. The whiteout made it nearly impossible to drive. In addition, we got over a foot of snow where I live. This was particularly a problem for our dog, Donald due to his short stature. Once again, the snow became too high for him to walk or run through.


So I fired up the snow blower and drove it into the back yard. I then used the snow blower to cut a path in the shape of a large oval—a track—for the Donald. My wife did not believe me (and thought I was a little crazy). The neighbors stopped and stared. But Donald ran circuits around the track with a huge smile on his face. I thought it was fun. Who says you can’t have a little fun when it’s a blizzard? Luckily, the recent snow has not stopped the New Jersey courts from adjudicating insurance cases. 


One of the issues that can arise for insurers is where the named insured purchases the minimum amount of coverage, an accident occurs and the coverage purchased do not sufficiently cover the injuries. Sometimes, the insured then asserts that they had never requested the minimum coverage, but had requested much higher limits or the maximum. Today’s decision from the New Jersey Appellate Division is such a case.


The facts are straightforward. Lynval James purchased auto insurance from State Farm, which was renewed several times. His wife and son were involved in a car accident and sustained injury. Mr. James then claimed that only then had he realized that his policy had only $15,000 in PIP and that he had designated his private health insurance provider as primary for PIP benefits. He further claimed that he had purchased the maximum amount of PIP coverage, $250,000. His wife and son sued State Farm seeking reformation of the policy to amend the PIP Coverage to $250,000.


They faced a few problems however. First, Mr. James’ signature appeared on the Coverage Selection Form electing to purchase the minimum amount of PIP coverage. Second, the Coverage Selection Form also showed that Mr. James selected his personal health insurance policy to be primary for PIP by name and policy number. Third, the policy was renewed several times and the automatic renewal documents clearly stated that the PIP medical expense benefit was $15,000. Fourth, Mr. James did not take any action to correct or modify this information.


To support his claim, Mr. James’ asserted at his deposition that he had purchased the maximum coverage of $250,000. As a matter of law, self-serving assertions are insufficient to overcome a motion for summary judgment.


The Appellate Division ruled that Mr. James had a duty to review his Declarations and correct any alleged errors. The court did not buy Mr. James’ claim that he was not “astute enough” to understand it. Since Mr. James’ policy clearly stated that the PIP limit was $15,000 and had been renewed numerous times, the Appellate Division reaffirmed that insurers are immune from civil liability where the insured’s elects the minimum amount of coverage. Accordingly, State Farm was entitled to summary judgment dismissal of the complaint.



John R. Ewell

[email protected]


#Me Too – a Century Ago:



Pittsburgh Post-Gazette

Pittsburgh, Pennsylvania

08 Feb 1919






ROCHESTER, PA., Feb. 7.—Marched four blocks at the point of a revolver in the hand of Miss Gertrude Miller of Rochester, while hundreds of persons looked on in amazement, then turned over to Night Patrolman George Mickey, charged with “mashing,” was the embarrassing experience of William Ader, aged 40, of East Jackson street, Rochester.  This morning Ader was sentenced to serve 15 days in jail by Burgess R. M. Levis, in default of a fine of $25.


Jen’s Gems:


Maybe next issue.



Jennifer A. Ehman

[email protected]


Fashion Statement, a Century Ago:


The Buffalo Enquirer

Buffalo, New York

08 Feb 1919


Wife Complains Hubby Takes His

Corsets to Bed with Him at Night


(By the International News Service)


CHICAGO, Feb. 8.—Mrs. Michael Verhaag, “just dotes on pink corsets.” So does her fifty-two-year-old husband Michael.


Mrs. Verhaag hinted that she likes to wear ‘em.  She emphatically charged her husband also likes to wear ‘em, even going so far as to wear a pair to bed.


“He bought twenty corset covers and he has ten pink corsets,” Mrs. Verhaag told Judge Gemmill of the court of domestic relations, where Michael’s love for the pink ones landed him.  “He wears them to bed at night,” added the indignant wife, “and he even bought himself lace-trimmed chemises.”


“How about this?” Judge Gemmill asked Verhaag.


“If I do, I should say it was my own business” retorted Michael.


“Guess it is,” Judge Gemmill agreed.


Peiper on Property and Potpourri


With increasing frequency, I sit at my computer contemplating where the previous 14 days have gone.  This past two weeks has been extreme, even for this office.  Last issue, we wrote about how Hurwitz & Fine would never be delayed by a weather related event.  We plan, and Lake Erie laughs…


The office opened, but until today I had not returned. Over the past two weeks, I’ve seen more of Upstate New York than a Grateful Dead Cover Band.  Yesterday’s proceedings had me in Plattsburgh, New York.  That’s Clinton County for those of you wondering.  There are 62 Counties in New York.  I have now appeared in 48.  Cooperstown is still the best, by the way. 


The trust of clients has given me the opportunity to see nearly all that the State has to offer.   While not always grateful for the drive, or the flight, or the ferry ride, or the train ride, please know that I am forever appreciative the opportunity.  That’s it for this week. See you in two more. 



Steven E. Peiper

[email protected]


More Fashion:


The Post-Star

Glens Falls, New York

08 Feb 1919




NEW YORK, Feb. 7—Asserting that designers of women’s evening gowns “have led fashion to the extreme limit of indecency,” which is having “a most demoralizing influence upon the youth of the country,” the New York City Federal of Women’s clubs at a meeting today adopted a resolution calling on women “to dress modestly” and on designers and shopkeepers “to control indecency in dress.”


A Committee was appointed to rush the war on scanty evening gowns. 


Hewitt’s Highlights: 


Dear Subscribers:


February continues with weather going from severe cold to over sixty degrees yesterday, only to swing back to below freezing this weekend. On the personal side, my nephew turns one years’ old very soon; my youngest son is in his first school concert in the music club; and my oldest son is training to be an Altar Server.


On the serious injury front, we have several cases this edition. A five degree range of motion limitation in an ankle was not considered a serious injury. Courts also continue their reluctance to overturn a jury verdict, even in a case where the expert was challenged on cross-examination but no rebutting expert was called.

Have a happy Valentine’s Day.


Until next issue,


Robert Hewitt

[email protected]


Ten Commandments in Court Room – Not a New Issue:


Buffalo Evening News

Buffalo, New York

08 Feb 1919


Post Ten Commandments

In Court Rooms, Is Urged


South Buffalo Community Would Have

Mosaic Law on View to Impress

Offenders Called to Justice


            A copy of the Ten Commandments will be posted in a conspicuous place in every courtroom in Buffalo, if the proposal of the South Buffalo community is favorably received by the presiding judges. At the Community meeting held last night, a resolution was passed authorizing the president of the organization, J. K. Mulroy, to send to each judge the following communication:


The South Buffalo Community, at their regular meeting last evening, authorized me to respectfully submit for your consideration the proposal to post in a conspicuous place in your court room, a copy of the Ten Commandments.


We are informed that this is being done in many cities with general approval.  It is claimed that nowhere would the violators of the law be more impressed with a reminder of the commandments than in the courts of justice.


Should this meeting with your approval we would feel it an honor to be given the privilege of having it done in accordance with the environments.


Wilewicz’ Wide-World of Coverage:


Dear Readers,


Last week saw the City of Buffalo shut down for days as a result of the Polar Vortex and contemporaneous lake effect snow. The schools were shut for three days straight and even City Hall closed for a time. There was a travel ban and the governor came into town to assist in the management efforts. It was not an unprecedented event, but an unusual one. Meanwhile, at our house we hunkered down, played more Minecraft than I care to admit, and got quite a bit of work done in the quiet cold afternoons. It’s not often adults get real “snow days” and it was nice.


And in other news, finally this week we have one coverage case out of the Second Circuit for your reading pleasure. In Harleysville v. Wesco Insurance, the court addressed whether a carrier’s arguments, rose for the first time on appeal, warranted review. There, the two carriers each insured a milk delivery truck company that was sued when they delivered milk contaminated with metal filings and damaged a cheese factory (you can’t make this stuff up). Harleysville, the CGL carrier, picked up the defense and then later sued the auto liability carrier for coverage/contribution. It wasn’t until the appeal that Wesco argued that Harleysville had acted as a volunteer that was not entitled to recovery under an assignment of subrogation. Regardless of the merits of that argument, it was raised for the first time on appeal and therefore waived. Wesco also tried to argue that alleged late notice of the claim precluded coverage, but they failed to point to anything in the defense of the case that could have been done differently had they known and been involved. Thus, that argument was meritless, despite also having been raised for the first time on appeal. Check out the case summary, as attached, along with a link to the brief, but well-written decision therein.


Until next time!



Agnes A. Wilewicz

[email protected]


Riot Insurance:

Democrat and Chronicle

Rochester, New York

08 Feb 1919


New Insurance Covers Riots


The latest form of insurance to make its appearance is known among the insurance men as the riot and civil commotion policy, and affords financial protection against anything in the nature of a Bolshevik uprising.  The new contract covers riot, insurrection, civil commotions, and explosion directly due to any of the foregoing, and explosions resulting from causes other than the above described.  It does not replace fire insurance in any way, because the standard fire insurance policy does not cover loss or damage caused “directly or indirectly by invasion, riot, civil war or commotion, or military or usurped power.”


Barnas on Bad Faith:


Hello again:


It is NBA trade deadline day.  I’m still hoping that my Raptors make another move or two to bolster their playoff chances in an Eastern Conference that is looking more and more competitive by the day.  We’ve already decided to “go for it” this year by dealing for Kawhi Leonard in his walk year.  I hope the ‘Topes push all their chips into the center of the table and make a run at the big names rumored to be available (Anthony Davis?  Mike Conley?  Marc Gasol?). 


I have another New York bad faith case in my column this week.  In Bryant, the Northern District of New York considers whether the Plaintiff’s one cause of action complaint stated a claim for breach of the implied covenant of good faith and fair dealing and consequential damages in addition to breach of contract.  The court concluded it did not.  While the complaint stated a cause of action for breach of contract, there were no plausible allegations that Defendant acted in bad faith that would warrant compensation beyond the policy limits.


Signing off,



Brian D. Barnas

[email protected]


Rabbi’s Wife Drobbed Dead:


Buffalo Courier

Buffalo, New York

08 Feb 1919





Many Mourn Loss of Highly

Esteemed Woman—Burial

in Baltimore


The death of Mrs. Grace Drob, wife of Rabbi Max Drob of Temple Beth-El of Richmond Avenue, occurred yesterday morning after a week’s illness with influenza.  Mrs. Drob was a most estimable woman, actively identified with the affairs of Temple Beth-El and the news of her untimely death will come as a shock and with a sense of personal loss to her many friends in the community, and their sympathy will be extended to her sorrowing husband.  Her loss will be felt deeply by all who knew her.  Two children, Judah, two years old, and Ruth, one year old, survive, besides the husband and father.


Mrs. Drob was twenty-three years old, the daughter of the Rev. Dr. S. Schaffer of Baltimore, who came to this city a short time after the death.  Rabbi Schaffer is in charge of the congregation of Sharith Israel in Baltimore and is prominent in that city.  Dr. Aaron Schaffer, a brother of Mrs. Drob, also is in Buffalo.


The body will be taken from the residence, No. 212 Richmond Avenue, at 8:30 o’clock this evening to Baltimore where the funeral will be held. 

Editor’s Note:  Rabbi Drob did eventually remarry and became a nationally respected clergyman. For the life and times of Rabbi Drob, who lived until age 73, click here.


Off the Mark:


No noteworthy decisions to report on this week.


Until next time …



Brian F. Mark
[email protected]


Mayor Threatened:


Times Herald

Olean, New York

08 Feb 1919





Jamestown, Feb. 8.— In an anonymous letter, full of vile threats, indecent accusations and Bolshevik sentiments received, the life of Mayor Samuel A. Carlson was threatened.


The letter has been turned over to the police.  If the author is found he will face serious charges, not only for making threats upon the life of the mayor, but for sending obscene matter through the mail.  This latter charge might land him in a federal prison.


There seems to have been two causes which prompted the disgruntled citizen to pen the epistle.  One is the mayor’s scheme for a milk plant recently defeated at the polls, and the other the retention of the policewomen in the employ of the city.


Wandering Waters


Welcome to another issue of Wandering Waters. I hope all of you have had a wonderful week.


The NBA trade deadline is this Thursday.  Every year, the trade deadline brings a time of excitement for fans and a time of increased anxiety for NBA players, coaches and general managers.  This year’s trade deadline has been very busy. Recently, the LA Clippers traded Tobias Harris to the Sixers on Tuesday.  This trade gives the Sixers another legitimate scorer, and provides the Sixers with another young budding star.  The Tobias Harris trade puts the rest of the league on notice that the Sixers are intent on winning the Eastern Conference and competing for the NBA championship this season. While this trade gives the Sixers a piece to win this season, the Sixers had to give up their future flexibility. Further, it is unclear whether this trade moves them ahead of the Bucks, Celtics and Raptors in the Eastern Conference. 


While the Sixers were able to orchestrate a deal to elevate their chances this season, the Lakers have not been so lucky.  Since Anthony Davis announced his request for a trade from the New Orleans Pelicans, Lakers have been steadfast on obtaining his services. Despite the Lakers making everyone outside of LeBron on the roster available for trade, the Pelicans have failed to agree to any trades.  In fact, there are growing reports that the Pelicans are “stringing the Lakers on” as payback for alleged tampering with Anthony Davis and his recent trade request.  With all the rumors, the Lakers appear to be in a tail spin as a team. 


With that being said, we have two cases this week from the United States District Court, Western District of New York, and one case from the United States District Court, Southern District of New York.


Until next time…. 



Larry E. Waters

[email protected]


Baseball in the Air – Pitchers and Catchers Waiting to Report:


The Seattle Star

Seattle, Washington

08 Feb. 1919





Umpires in the National League are advised by President Fred Mitchell of the Cubs and Manager John McGraw of the New York Giants to get together before the season opens and come to a definite understanding as to what constitutes a balk.  No two officials on the staff rule alike on the balk, with the result there is much protesting by managers and players on that feature.  The rule is not rigidly enforced in the league and as a consequence base runners are handicapped and are made to look inferior to men in the American league, where the umpires have a uniform understanding and all rule alike, writes a Chicago baseball scribe. 

Boron’s Benchmarks:


Dear Readers:


I hope you are all well and maybe even a little flush with cash from your Super Bowl pool winnings.  If you had the numbers 3-3 you surely are bankrolled for the rest of this week, I’d imagine.  I’m about to board a flight back to warm and sunny Buffalo, New York (in my mind’s eye it is) after a week of out-of-town litigating.  It’s been a very productive week for our side.  I’ve been litigating so hard in fact, there’s just not been time to read through the high court decisions from the 49 states other than New York and craft my column notes on those cases.  I’ll catch you up on these high court decisions in my column two weeks from today.  Until then, be well and treat your valentines to something special.




Eric T. Boron

[email protected]


Not a Lot of Support:


Hartford Courant

Hartford, Connecticut

08 Feb 1919





Asks Court to Increase Allowance

Pending Divorce Proceedings


Bridgeport, Feb. 7.—Claiming that she received only $15 a week from her husband with which to support herself and three minor children, in additional to a small rental of the upstairs of their home, Mary A. Treat, wife of the mayor of Stamford, asked the superior court this morning for a greater allowance from her husband.  The three children are compelled to work but their net earnings amount to only $8.00 a week.  The mayor is plaintiff in a divorce suit filed recently. 


Marti's Legislative and Regulatory Markers:


Dear Subscribers,


This past week, the New York State Legislature passed The Child Victims Act, which would allow thousands of older survivors of child sexual abuse to file civil actions or come forward with criminal charges against their alleged abusers.  Estimates have placed the age as high as 52, on average, before a victim will come to terms with their abuse and proceed with a criminal or civil action.  But, under the current law, the statute of limitations runs by age 23 at most.  Given this relatively short timeframe for victims, the legislature decided it was time for a change.  Under the proposed law, which is presently awaiting the Governor’s signature, survivors up to the age of 55 could bring civil claims.  Moreover, even those older than 55 years of age would still be allowed a one-year window to revive their civil claims.


With thousands of potential lawsuits, many questions will follow.  One of main questions will be the impact of the new law on insurance coverage.  Please join me in the upcoming issues as we start a multi-part series on The Child Victims Act and its effect on insurance coverage for civil claims.  We start this week with a closer look at the bill and its particulars.   



Jerry Marti

[email protected]


Baseball on the Sabbath:


The Evening News

Wilkes-Barre, Pennsylvania

08 Feb 1919





Albany, Feb. 8.—Assemblyman John G. Malone, Republican, of Albany, is to lead the fight in the Lower House of the Legislature for the Passage of the Sunday Local Option Baseball Bill.  At a conference last night of influential men interested in the  national game it was decided to make the Sunday Bill non-partisan by having Malone handle it in the Assembly and Senator James Walker, a democrat, in the Upper House.


Malone introduced an amended bill today making fishing on Sunday legal along with baseball.  Sunday baseball advocates look upon this as a shrewd move, because it means that thousands of fishermen of the State will support the Sunday Baseball Bill in order to permit them to fish on Sundays without fear of arrest. 


Barci’s Basics (On No Fault):


Hello Subscribers!


Last time I wrote in, I told you about the high school mock trial team I coach preparing for their first competition last weekend. Well, unfortunately, with all the snow we saw here in Buffalo last week, they were unable to practice and ultimately lost their first competition. However, it still ended up being a decent match and they only lost by one point. So, we’re hoping this weekend they come in strong and sweep the competition after some tough practices this week!


I want to take the time this edition to talk to you about a no-fault area that recently came up as an issue in one of my cases. Though not new, there was a case several years ago (Gov’t Employees Ins. Co. v. Avangaurd) that discussed office based surgical centers and whether or not they are entitled to reimbursement for their facility fees. Thereafter, arbitration decisions have been continuously issued denying facilities that do not have an Article 28 accreditation reimbursement of any assigned no-fault benefits. Read on below for how this may affect your right to receive or deny payment.


That’s all for now,



Marina A. Barci

[email protected]


Women’s Right to Vote, Front and Center:


The News Journal

Wilmington, Delaware

08 Feb 1919




Will Not Oppose Effort to Vote on

Amendment Monday


Washington, Feb. 8.—The opponents of the Woman Suffrage Amendment to the Constitution made a solemn promise Thursday that no obstacles will be thrown in the way of a prompt vote if the matter is brought up for action next Monday, as announced.  This means that the opponents are absolutely certain they have sufficient votes to defeat the proposition.  Otherwise, many speeches would be made and a vote prevented during the remainder of this session.


Rumors were prevalent yesterday afternoon that the advocates of Suffrage will not bring the amendment in Monday according to schedule.  It is said they realize that the appeals of President Wilson and former Secretary Bryan have fallen on deaf ears and the cause is lost.  This is denied and the declaration made that a vote will be taken, win or lose. 


Headlines from Attached Issue:


Dan D. Kohane
[email protected]


  • Discretionary Change of Venue in Coverage Action Approved

  • An Insurer that Did Not Issue a Policy Covering a Risk Cannot Waive Itself into Coverage

  • While there was no Enforceable Written Contract to Provide Insurance, there May be an Oral Contract.  Once that Question of Fact is Decided, then, and Only then, will the Court Entertain Issue Breadth of Additional Insured Obligations

  • Deductibles May Apply but Policies Need to be in Evidence

  • Whose Allegations Should be Considered when Determining Additional Insured Status?  Burlington Tipped on its Head.  Thousands Flee.

  • A Party is Entitled to a Continuance of a Framed Issue Hearing when Subpoenaed Witnesses Fail to Appear



Robert E.B. Hewitt III

[email protected]


  • Plaintiff’s Neurologist Failed to Compare Plaintiffs’ Range of Motion to a Normal Range of Motion

  • Plaintiff Raised Issue of Fact as to Whether She Sustained Serious Injury

  • Defendant Can Refute Claim of Serious Injury by Demonstrating It Was Pre-Existing

  • Range of Motion Limitation of Only Five Degrees Not Enough for Serious Injury



Steven E. Peiper

[email protected]


  • Statement of Plaintiff Regarding the Usability of the Premises was Insufficient to Establish Carrier’s Burden as Movant

  • After the Fourth Order to Appear at Deposition is Ignored, the Trial Court Providently Exercised its Discretion in Striking the Recalcitrant Party’s Pleading



Agnes A. Wilewicz

[email protected]


  • Second Circuit finds that Auto Liability Carrier’s Arguments Raised for the First Time on Appeal Were Waived, and Without a Showing of What Could Have Been Done Differently in the Defense of the Case Their Late-Notice Prejudice Argument was Meritless



Jennifer A. Ehman

[email protected]


  • Court Denys Motion to Dismiss Premised on Privity Argument and Exterior Insulation and Finish Systems Exclusion



Brian D. Barnas

[email protected]


  • Allegations in the Policy did not Amount to Bad Faith that would Warrant Compensation above the Policy Limits


John R. Ewell

[email protected]


  • New Jersey Appellate Division Reaffirms That Insurance Company is Immune from Liability for Insured’s Election of Minimum PIP Coverage


Marti's Legislative and Regulatory Markers

Jerry Marti

[email protected]


  • The Child Victims Act


Brian F. Mark

[email protected]


  • Nothing on the mark this week.



Larry E. Waters
[email protected]


  • Plaintiff’s Declaratory Judgment Granted Because the Animal Exclusion Applies on its Face as a Bar to Coverage Based Upon the Factual Allegations in the Underlying Complaint

  • Plaintiff’s Motion for Summary Judgment Granted the Extent that its Policy was Excess to the Policy Issued by Admiral

  • Plaintiffs’ Motion For Summary Judgment Denied Because Defendants Timely And Sufficiently Disclaimed Coverage Under New York Law



Eric T. Boron

[email protected]


  • On the road again.



Marina A. Barci

[email protected]


  • Providers that are not an Article 28 Accredited Facility under N.Y. Public Health Law are not Entitled to Reimbursement of Assigned No-Fault Benefits



Earl K. Cantwell
[email protected]


  • Bad Faith Determined by Information Available at the Time of Coverage Decision



All for now. Happy Presidents’ Day and Happy Valentine’s Day.



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

Lee S.  Siegel

Brian D. Barnas

Brian F. Mark

John R. Ewell

Larry E. Waters

Jerry Marti

Eric T. Boron

Larry E. Waters

Marina A. Barci

Diane F. Bosse

Joel R. Appelbaum


Steven E. Peiper, Team Leader
[email protected]


Michael F. Perley

Eric T. Boron

Brian D. Barnas

Larry E. Waters


Jennifer A. Ehman, Team Leader
[email protected]

Jerry Marti

Marina A. Barci


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

John’s Jersey Journal

Marti's Legislative and Regulatory Markers

Off the Mark

Wandering Waters

Boron’s Benchmarks

Barci’s Basics (on No Fault)

Earl’s Pearls


Dan D. Kohane
[email protected]


02/05/19       Country-Wide Insurance Company v. Melia

Appellate Division, First Department

Discretionary Change of Venue in Coverage Action Approved

Defendant met its burden for a discretionary change of venue of this action from New York County to Queens County. While plaintiff insurance company has its principal place of business in New York County, this action arose in Queens County, two related actions based upon the same accident were venued in Queens County, the subject insurance policy was issued in Queens, and the elderly defendant lives in a nursing home there. Under these circumstances, changing venue to Queens County will better promote the ends of justice.


02/05/19       U.S. Specialty Insurance Company v. Navarro

Appellate Division, First Department

An Insurer that Did Not Issue a Policy Covering a Risk Cannot Waive Itself into Coverage

U.S. Specialty commenced this proceeding seeking a permanent stay of an arbitration involving Navarro’s claim for supplementary uninsured/underinsured motorist (hereinafter SUM) benefits under a policy it issued. The parties concede that a police vehicle does not fall within the scope of SUM coverage under the policy.  Instead, Navarro argues that the carrier is estopped from denying coverage because, among other things, the insurer did not deny or disclaim coverage until approximately four years after it first received notice of the claim.


The court properly determined that equitable estoppel may not be invoked to create coverage in this case, since Navarro was not insured under the policy in the first instance.  Moreover, the denial or disclaimer of coverage was not untimely, since a disclaimer is unnecessary where, as here, the claim falls outside of the coverage terms rather than being subject to a policy exclusion.


The insurer’s petitioner's minimal involvement in the arbitration process following service of the demand for arbitration was insufficient to constitute a waiver of its right to seek a judicial determination of the arbitrability of the SUM coverage dispute.


01/31/19       McLaughlin v. Arch Insurance Company

Appellate Division, First Department

While there was no Enforceable Written Contract to Provide Insurance, there May be an Oral Contract.  Once that Question of Fact is Decided, then, and Only then, will the Court Entertain Issue Breadth of Additional Insured Obligations
Plaintiffs were awarded a judgment in 2012 in the underlying personal injury action against Sterling Mets, L.P., after a trial and pursuant to a settlement agreement in which Sterling agreed to partially satisfy the judgment and to assign plaintiffs its rights against the insurers.


The "Press Gate & Mailroom Contract" between Sterling affiliate Mets Development Company (MDC) and contractor Petrocelli was not a "Master Agreement" whose terms and conditions, including Petrocelli's obligation to procure additional insurance coverage on Sterling's behalf, applied to the "Weight Room" project on which plaintiff Michael McLaughlin was working when he was injured. The unambiguous Press Gate & Mailroom Contract does not support the characterization; indeed, it does not suggest that it is anything but a limited vendor acknowledgment agreement on the particular project of the press gate and mailroom renovations.


However, there is a question of fact as to whether Petrocelli and Sterling entered into an oral agreement to proceed with the Weight Room project on the same terms and conditions as the Press Gate & Mailroom Contract, i.e., inter alia, obligating Petrocelli to procure additional insurance coverage for Sterling under the policy issued to it.


An issue of fact also exists as to whether plaintiff's injuries "arose out of" the Weight Room project. The issue whether the insurers were obligated to defend Sterling in the underlying action must await a determination of whether Sterling was an additional insured under the policy in connection with the Weight Room project.


01/31/19       Lexington Insurance Company v. Steadfast Insurance Company Appellate Division, First Department

Deductibles May Apply but Policies Need to be in Evidence
Not a lot of information in this decision to make sense of it.  We reached out to the lawyer who won the appeal but he has not responded. The court held that plaintiff was not obligated to pay any part of Langan's deductible under the Steadfast policy and that Langan owed Steadfast the amount of the deductible without first determining Steadfast's and plaintiff's duties to defend and to indemnify and, if necessary, the priority of coverage. That determination requires consideration of all relevant policies and, with regard to the duty to indemnify, the facts as found in the underlying personal injury action. In addition, we note that the court failed to reduce the disputed deductible by $25,000, as provided for in the Steadfast policy in the event of the resolution of a claim by mediation.


01/29/19       All State Interior Demolition Inc. v. Scottsdale Ins. Co.

Appellate Division, First Department

Whose Allegations Should be Considered when Determining Additional Insured Status?  Burlington Tipped on its Head.  Thousands Flee.

The second part of this case is simply wrong – and least, as a purist, I believe it’s wrong.  Stick with me on this one, I am preparing to mount my soapbox.


It’s the First Department sticking its fingers in its ears and waving them at the Court of Appeals and saying “watch how we dance around Burlington.”


The policy issued by defendant Scottsdale to defendant United Interior provided that an organization would be added as an additional insured on the policy "when [United] and such ... organization have agreed in writing in a contract or agreement that such ... organization be added as an additional insured on your policy." As plaintiff All State Interior Demolition Inc. is the only organization with which United agreed in writing that it be added as an additional insured on the policy, none of the other plaintiffs are entitled to coverage under the policy as additional insureds.


That made perfect sense.  Now, the carrier went after its obligation to defend All State, the party with privity based on Burlington.


Scottsdale contends that it also has no obligation to defend All State because the policy provides that an additional insured will be covered only when the underlying injury or damage was caused, in whole or in part, by United's acts or omissions, and the complaint in the underlying action contains no allegations of negligence against United, which was not even named as a defendant. However, the amended complaint and the bill of particulars allege that on the date of the accident the plaintiff was employed by United, and, when presented with his W-2 payroll records showing that United paid him for all of 2015, including the time that he was working on the subject project, the plaintiff admitted that he was working for United. These pleadings implicate United's demolition actions, alleging, for example, that the plaintiff was injured when he stepped on "construction debris and materials consisting of concrete and demolition remains."


In addition, the third-party complaint brought in the underlying action by plaintiffs herein against United, incorporates the underlying complaint by reference, alleges that United was negligent, and seeks indemnification from United, and is therefore sufficient to trigger Scottsdale's obligation to defend All State.


Editor’s Note:  It’s time to get on my soapbox.  The first part of this decision is undoubtedly correct.  This was a “privity” additional insured endorsement and without privity with the named insured subcontractor, the owner and other parties without a direct contract with the named insured are not entitled to AI coverage.


Mounting soapbox:


I suggest the second part of the decision is simply wrong, or should be wrong.


Let’s review the facts as alleged.  The plaintiff’s complaint does not allege that the named insured subcontractor/employer did anything wrong or caused the accident, in whole or in part.  The amended complaint alleges only that the plaintiff was an employee of the named insured subcontractor. 


With those allegations, there is no reason that the court should find that the additional insured endorsement requiring that the accident was caused in whole or in part by the named insured’s acts or omissions.


Isn’t that what the Court of Appeals said in Burlington?  Simply because the plaintiff was an employee of the named insured is not enough to establish that the accident was proximately cause by the named insured.


So then, what does the court do next?  It looks to the allegations in the third-party complaint – it looks to the claims made by the party who seeks additional insured status.  Oh what a surprise!  That party claims that the employer was negligent (so that it will be granted additional insured status.  What a shocking allegation!  Perhaps a little self-serving?  If you allow the person seeking AI status to allege itself into that status, it will simply look around for someone that has named it as an AI in an endorsement and make an allegation that would bring the claim within the ambit of the policy.


This is simply wrong.  It is the First Department jockeying around the holding in Burlington and embracing the discarded W&W holding – that simply because the plaintiff is an employee, his or her employer’s carrier has to provide a defense. Causation be damned.  If this decision is allowed to become the law of the land – if the allegations in the purported AI’s third party claim against the named insured and the simple fact of an employee injury is enough to trigger coverage – Burlington becomes a meaningless in every case where the named insured’s negligence has not been previously adjudicated.


An insurer's “exceedingly broad” duty to defend is triggered “whenever the four comers of the [underlying] complaint suggest – or the insurer has actual knowledge of facts establishing – a reasonable possibility of coverage.” Continental Cas. Co. v. Rapid-American Corp., 80 N.Y.2d 640, 648 (1993).   


That is consistent with Fitzpatrick:


However, to say that the duty to defend is at least broad enough to apply to actions in which the complaint alleges a covered occurrence is a far cry from saying that the complaint allegations are the sole criteria for measuring the scope of that duty. Indeed, in these circumstances, where the insurer is attempting to shield itself from the responsibility to defend despite its actual knowledge that the lawsuit involves a covered event, wooden application of the "four corners of the complaint" rule would render the duty to defend narrower than the duty to indemnify clearly an unacceptable result. For that reason, courts and commentators have indicated that the insurer must provide a defense if it has knowledge of facts which potentially bring the claim within the policy's indemnity coverage.


What’s a fact?  A fact is not an allegation. In Fitzpatrick, the fact was the identity of the property owner.  It was alleged to be a company identified as CPOA but there was no question that the property was owned by CLI.  It was a fact.  Not an allegation.  A fact.


Consider this Illinois case: National Fire Ins. of Hartford v. Walsh Const. Co., 392 Ill.App.3d 312, 909 N.E.2d 285 (Ill.App. 1 Dist. 2009):


A court's consideration of a third-party complaint is limited, however. In American Economy Insurance Co. v. DePaul University, 383 Ill.App.3d 172, 321 Ill.Dec. 860, 890 N.E.2d 582 (2008), the companion case to Holabird & Root, we considered whether this exception once again applied. As in Holabird & Root, only the third-party complaint by the putative additional insured raised allegations of negligence against Metrick, the named insured. In DePaul University, we rejected consideration of the third-party complaint because it was prepared and filed by the property owner, the party seeking coverage in that case. We declined to allow a putative additional insured to bolster its claim of coverage by referencing its own third-party complaint. 


And this one from Pennsylvania:  Dale Corp. v. Cumberland Mut. Fire Ins. Co. USDC, EDPA, November 30, 2010, 2010 WL 4909600:


 Additionally, the third party complaint cannot be used to bolster the allegations in the original complaint and thereby trigger Cumberland's duty to defend Dale in Francis's original lawsuit. To use the third party complaint in such a way would violate the rule that “the obligation of a casualty insurance company to defend an action brought against the insured is to be determined solely by the allegations of the complaint in the action.” Kvaerner, 908 A.2d at 896 (citing Wilson v. Maryland Cas. Co., 105 A.2d at 304, 307 (Pa.1954) (emphasis in original)); e.g., Colony Ins. Co. v. Peachtree Constr., Ltd., No. 08–135, 2009 WL 3334885, at *4 (N.D.Tex. Oct.14, 2009) (finding that a third party complaint filed by putative additional insured was extrinsic evidence and therefore irrelevant to the analysis of whether the insurer had a duty to defend.


We surely understand that if the plaintiff alleges facts that implicate the named insured, there is no question but that Burlington and Fitzpatrick and other cases trigger the defense obligation.  That has been the standard.  Look to the allegations in the plaintiff’s complaint.


We also understand that Fitzpatrick, if the carrier has knowledge of FACTS that bring the claim within coverage, they too should be considered.


What Fitzpatrick never did, nor has its progeny, is tell us what is meant by knowledge of facts.  There was no question, in the Fitzpatrick case itself, that the carrier had knowledge of undisputed facts – the wrong company was named in the lawsuit and everyone knew the name of the correct company.


Are FACTS the same as OPINIONS or ALLEGATIONS or CONTENTIONS?  And if they are, whose OPINIONS, ALLEGATIONS or CONTENTIONS are “enough” to constitute FACTS sufficient to trigger the defense obligation? 


Taking the leap from KNOWLEDGE OF FACTS to a purported AI alleging itself into coverage is a leap at least this author is  not prepared to accept.

We hope and trust this issue will reach the Court of Appeals.  Likely not in this case, because it is a non-final order, but soon.


Climbing off soapbox.  Would love to hear your opinions.  My thanks to Julian D. Ehrlich, Esq. | Senior Vice President Claims – Construction Services Group, who co-authored a thoughtful article on the aftermath of Burlington in a recent edition of New York Law Journal for allowing me to bend his ear on the subject.


01/29/19       Global Liberty Insurance Company v. Perez
Appellate Division, First Department

A Party is Entitled to a Continuance of a Framed Issue Hearing when Subpoenaed Witnesses Fail to Appear
Global Liberty issued subpoenas to secure the testimony of a police officer and  the testimony of the insured, at a framed issue hearing. They did not appear and Global sought a continuance of the hearing.  The hearing officer refused and ruled against Global on the factual issues.


It is an abuse of discretion to deny a continuance where the application complies with every requirement of the law and is not made merely for delay, where the evidence is material and where the need for a continuance does not result from the failure to exercise due diligence. Here, there is no evidence that petitioner Global Liberty was dilatory in issuing subpoenas to the officer who responded to the scene or to Perez, neither of whom appeared at the framed issue hearing. Nor is there any evidence that petitioner was in any way responsible for these witnesses' failure to appear. The issue about which they would testify, i.e., whether the vehicle involved in the accident, which fled the scene, was a 2003 Subaru or a 2005 Chevrolet, was central to the issue of whether that vehicle was stolen or was driven by Flores's ex-husband who reported it stolen.



Robert E.B. Hewitt III

[email protected]


02/06/19       Sanchez v. L.R.S. Cab Corp.

Appellate Division, Second Department

Plaintiff’s Neurologist Failed to Compare Plaintiffs’ Range of Motion to a Normal Range of Motion

The plaintiffs commenced this action to recover damages for personal injuries that they each allegedly sustained in a motor vehicle accident on August 24, 2011.   The defendants met their prima facie burden of showing that the appellant did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The defendants submitted competent medical evidence establishing, prima facie, that the alleged injuries to the lumbar region of the appellant's spine did not constitute a serious injury under either the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d). In opposition, the appellant failed to raise a triable issue of fact. The affirmed report of the appellant's neurologist was insufficient to raise a triable issue of fact, as it failed to expressly compare the range of motion to a normal range of motion, and it failed to provide any qualitative assessment of the appellant's condition.


02/06/19       Saladino v. Quinteros

Appellate Division, Second Department

Plaintiff Raised Issue of Fact as to Whether She Sustained Serious Injury

The plaintiff commenced this action to recover damages for personal injuries allegedly sustained by her in a motor vehicle accident on January 22, 2012.   The defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the accident. The defendant submitted competent medical evidence establishing, prima facie, that the alleged injuries to the cervical and lumbar regions of the plaintiff's spine did not constitute serious injuries under either the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d). In opposition, however, the plaintiff raised a triable issue of fact as to whether she sustained serious injuries to the cervical and lumbar regions of her spine under the permanent consequential limitation of use and significant limitation of use categories of Insurance Law § 5102(d). No facts were given.


02/01/19       Hoffner v. Nelson

Appellate Division, Fourth Department

Defendant Can Refute Claim of Serious Injury by Demonstrating It Was Pre-Existing

Plaintiff contends that Supreme Court erred in denying her motion for a directed verdict pursuant to CPLR 4401 on the issue of serious injury because the unrefuted expert testimony established that the accident aggravated a preexisting back injury. The appellate division refused to overturn the verdict, finding it is well established that a defendant may overcome an allegation of serious injury by demonstrating that the plaintiff's injury was preexisting. Although the two expert witnesses who testified on behalf of plaintiff each opined that plaintiff's leg pain and weakness were causally related to the accident, the jury was not required to accept their opinions to the exclusion of facts disclosed during cross-examination. Indeed, a jury is at liberty to reject an expert's opinion if it finds the facts to be different from those which formed the basis for the opinion or if, after careful consideration of all the evidence in the case, it disagrees with the opinion. Here, plaintiff's surgeon testified on cross-examination that plaintiff failed to disclose her history of leg pain related to her preexisting back problems and that such information would have been important. Furthermore, the examining physician called by plaintiff as a witness repeatedly testified that he based his opinion in part on the conclusions reached by the surgeon. Based upon the evidence presented, the appellate division concluded that there is a rational process by which the jury could have found in favor of  defendant.


01/29/19       Ampofo v. Key

Appellate Division, First Department

Range of Motion Limitation of Only Five Degrees Not Enough for Serious Injury

Defendants established prima facie that plaintiff's claimed right ankle and foot sprains were not serious injuries within the meaning of Insurance Law § 5102(d) through affirmed reports by their orthopedist, who documented normal range of motion. They also submitted an affirmed report by an orthopedic surgeon who performed a no-fault peer review, which noted that plaintiff's MRI reports showed osteoarthritis and other conditions, and opined that the right ankle arthroscopy performed four months after the collision was not medically necessary or causally related to the accident. In opposition, plaintiff failed to raise a triable issue of material fact. He was never diagnosed with anything more severe than a foot or ankle sprain, and his treating podiatrist measured a limitation of only five degrees in one plane of motion at a recent examination.



Steven E. Peiper

[email protected]


02/05/19       309 Bakery Corp. v. Associated Mut. Ins. Coop.

Appellate Division, First Department

Statement of Plaintiff Regarding the Usability of the Premises was Insufficient to Establish Carrier’s Burden as Movant

Plaintiff’s business was interrupted due to a fire which resulted in the premises being unusable for approximately five months.  Plaintiff submitted a claim for rents it allegedly paid over this five month period.  The carrier denied the claim on the basis that the lease agreement did not obligate rent payments where the premises was “wholly unusable or totally damaged.”  Because the property was allegedly unusable for those five months, as the plaintiff’s president testified, the rental payments were not a justifiable loss. 


In finding an issue of fact, the motion court ruled that question existed as to whether the premises was “totally damaged, or rendered wholly unusable.” The Appellate Division affirmed, and in so doing apparently rejected the theory that plaintiff’s statement that they were unable to use the premises was sufficient proof of total damage.


01/31/19       76th and Broadway, LLC v. Con. Ed. Company of NY, Inc.

Appellate Division, First Department

After the Fourth Order to Appear at Deposition is Ignored, the Trial Court Providently Exercised its Discretion in Striking the Recalcitrant Party’s Pleading

Third-Party Defendant General Glass commenced this appeal after its motion to reconsider was denied.  The motion for reconsideration sought to vacate an earlier Order from the trial court which struck General Glass’ Answer for its failure to appear at a deposition.  Apparently, General Glass had ignored at least four Orders to appear at deposition prior to the striking of its pleading. 


As an initial matter, the Appellate Division noted that the motion was really a motion to reargue under CPLR § 2221.  Motions to Reargue, of course, are not appealable.  Thus, the Court noted that it would not consider whether the trial court’s decision to deny the motion to reargue was appropriate. 

 Nevertheless, as the merits of the issue were argued, the Court noted that it would treat the current appeal as though the trial court had, in fact, granted the reargument motion.  Turning to the merits, the Court noted the General Glass failed to proffer any reasonable explanation for its inability to comply with the previous Court Orders.  The Court went on to note that it was not an inability to appear, but rather General Glass’ willful refusal to comply with the trial court’s mandates. 



Agnes A. Wilewicz

[email protected]


02/01/19       Harleysville Worcester Ins. Co. v. Wesco Insurance Company

United States Court of Appeals, Second Circuit

Second Circuit finds that Auto Liability Carrier’s Arguments Raised for the First Time on Appeal Were Waived, and Without a Showing of What Could Have Been Done Differently in the Defense of the Case Their Late-Notice Prejudice Argument was Meritless

M&T Transport is a milk delivery company. In August 2013, they delivered a shipment of milk that was contaminated with metal filings to a cheese factory. That contamination caused substantial damage to the factory, and thus they sued M&T. The truck company was insured by Harleysville for their general liability coverage and by Wesco for their auto liability coverage. When Wesco disclaimed, Harleysville picked up the defense under a reservation of rights. They ultimately settled for the policy limits, in exchange for an assignment of all rights against Wesco. Harleysville then sued Wesco for recovery of the payments that had been made on behalf of the mutual insured.


At issue in the appeal were two things. First, while Wesco did not contest the lower court’s determination that they should have provided coverage under their policy, they argued instead that Harleysville had acted as a volunteer in their pick-up of the defense and that they could not recover under an assignment or subrogation theory. Unfortunately for Wesco, they only brought up this argument for the first time in their appellate papers. Though the court has discretion to consider such arguments (they are otherwise waived), that discretion was not warranted here. Moreover, even if the argument had not been waived, the appellate court could only review the decision for plain error. Since Wesco was essentially asking the court to make new state law, the underlying disposition could not have been plain error. Therefore, the arguments were not considered.


Second, Wesco argued that it was not provided timely notice by the insured M&T. The parties did not dispute that Wesco must have demonstrated prejudice as well as a lack of notice in order to succeed. As a preliminary matter, Harleysville pointed to a claim note in Wesco’s files that indicated that they did have timely notice. Wesco tried to argue that this note was inadmissible because it was not authenticated and thus inadmissible (again an argument raised for the first time on appeal). However, regardless of evidentiary issues, Wesco never identified anything that could have been done differently in the defense of the case that might have prejudiced them. Without such showing, their late notice defense was meritless.



Jennifer A. Ehman

[email protected]


01/23/19       Liberty Ins. Underwriters Inc. v. Scottsdale Ins. Co.

Supreme Court, New York County

Hon. Arlene P. Bluth

Court Denys Motion to Dismiss Premised on Privity Argument and Exterior Insulation and Finish Systems Exclusion

This decision arises out of a lawsuit alleging damage done to a building due to construction that took place on an adjacent building.  The plaintiff, 519 West 23rd Street Condominiums (“519 West”), brought suit against High Line Park, LLC (“High Line”), the owner of the adjacent property, and T.B. Nickel.   High Line had retained T.G. Nickel, a construction company, to perform work on its property, located at 515 West 23rd Street.  T.G. Nickel then retained Stonebridge to provide labor and equipment for the completion of structural steel work. 


519 West alleged that as a result of the construction work on the adjacent property, its property suffered physical and structural damage. Specifically, 519 West alleged that the removal of a protective scaffolding surrounding the 519 premises and the installation of an Exterior Insulation Finishing System ("EIFS") on the 515 premises caused damage to its property.


Liberty Ins. Underwriters Inc. (“Liberty”) issued a commercial general liability policy to T.G. Nickel and High Line.  It then brought this action seeking defense and indemnity for those entities.  Upon receipt of the complaint, Starr, Stonebridge’s insurer, moved to dismiss. 


The motion was on two grounds.  First, it claimed that the additional insured endorsement on its policy contained a requirement of contractual privity, and Stronebridge was not in contractual privity with High Line.  The Starr policy had the “Additional Insured – Owners, Lessees or Contractors – Automatic Status When Required in Construction Agreement with You” endorsement on its policy. Stonebridge was in contractual privity with T.G. Nickel only.    


Interestingly, it appears that Liberty did not really dispute Star’s position.  Instead, Liberty argued that the work was complete and the completed operations’ additional insured endorsement does not contain a privity requirement.  In deciding the motion, the court did not address Liberty’s opposition, but instead held (I note contrary to a number of decisions in New York finding a privity requirement in this very endorsement) that “[w]hile the owner may not be in contractual privity with the subcontractor, that does not negate the subcontractor’s duty to provide insurance coverage to the owner as an additional insured in applicable situations.”  Accordingly, the court concluded that because plaintiff alleged that Stronebridge was required to provide coverage for T.G. Nickel and High Line pursuant to the relevant subcontractor, Liberty sufficiently stated a cause of action. 


Next, the court considered Starr’s position that no coverage was afforded under its policy pursuant to an Exterior Insulation and Finish Systems exclusion (“EIFS exclusion”).  Liberty asserted that the EIFS exclusion does not apply because the exclusion applies to property damage to a building caused by the installation or application of EIFS to that building and here, there was no EIFS installation or application to the 519 premises. Furthermore, Liberty claimed that at a minimum, issues of fact remained as to the timing and type of damage done to the 519 premises and the extent to which the damage was a result of non-EIFS work.


Considering these arguments, the court denied the motion to dismissed premised on this exclusion finding a question of fact and noting that discovery may shed light on what work caused the alleged property damage.



Brian D. Barnas

[email protected]


01/30/19       Bryant v. General Casualty Company of Wisconsin

United States District Court, Northern District of New York

Allegations in the Policy did not Amount to Bad Faith that would Warrant Compensation above the Policy Limits

Plaintiff owned the building located at 634 Ulster Avenue, Kingston, New York.  Plaintiff purchased a commercial property and casualty insurance policy from Defendant.  On March 24, 2017, while the building was leased to a tenant who operated a restaurant, the building allegedly sustained a covered collapse loss.  Plaintiff alleges that Defendant refuses to pay the claim even though he gave Defendant notice of the loss and cooperated with its investigation.  Plaintiff alleged that his damages included the cost of repairing and replacing the property damage as well as the value of the rental revue from the tenant, who was forced to close the restaurant and relocate.


Plaintiff brought a lawsuit alleging breach of contract.  Plaintiff also asserted that he was entitled to recover consequential, extra-contractual damages.  Defendant moved to dismiss arguing that Plaintiff was seeking damages specifically provided for in the policy terms.


The court’s analysis focused on the question of how to adequately please bad faith in New York.  The court observed that most courts hold that a breach of the implied covenant is not a separate cause of action in a breach of contract case, but is instead one way of establishing a breach.  Then, somewhat confusingly, the court stated that some courts are willing to recognize bad faith as a standalone cause of action, and stated that a distinct bad faith tort cause of action is “lurking” in New York case law.  The court stated this without citing to the Court of Appeals’ decisions in New York University or Rocanova


In the original complaint, Plaintiff had a cause of action for breach of contract and breach of the implied covenant of good faith and fair dealing.  Plaintiff then filed an amended complaint.  The amended complaint only contained a breach of contract cause of action.


The court concluded that the decision to eliminate the second cause of action suggested that Plaintiff was not pursuing a separate bad faith claim.  Further, the single count complaint did not plausibly allege a bad faith claim.  The pleading contained a few paragraphs that could be read as being suggestive of bad faith, but they were conclusory and circular.  While the allegations in the complaint sufficiently alleged that Defendant did not perform its obligations under the policy, they did not amount to bad faith that would warrant compensation beyond the policy’s limits.


John R. Ewell

[email protected]


01/18/19       James v. State Farm Ins. Co.

New Jersey Superior Court, Appellate Division

New Jersey Appellate Division Reaffirms That Insurance Company is Immune from Liability for Insured’s Election of Minimum PIP Coverage

Lynval James purchased auto insurance from his local State Farm Insurance Office. This policy covered Lynval, his wife Lurline, and his adult son Lledon. Lynval gave the insurance agent: (1) a copy of the declarations page from an automobile insurance policy he had with GEICO, which contained $15,000 in PIP coverage and a $2,500 deductible; and (2) his private health insurance card. Lynval's private health insurance did not cover his adult son or his wife. Lurline had her own health insurance through United Healthcare/Oxford; Lledon had health insurance with New Jersey Family Care, otherwise known as Medicaid.


During this initial encounter, Lynval claims he told the State Farm agent that he wanted standard PIP coverage of up to $250,000 and a $2,500 deductible. With respect to the primary coverage for payment of medical expenses, Lynval claims he told the agent he did not want his private health insurance to be the primary medical coverage provider for PIP. According to Lynval, the coverage selection form document was blank when he signed it. He claims he was presented with only the fifth page of the coverage selection form which contained only an area for signatures. He signed the form accordingly. Lynval also claims the remaining pages of the coverage selection form were filled out by the State Farm agent after he signed the form and returned to work. Specifically, Lynval claims the handwriting on the top of the second page of the coverage selection form is not his handwriting; he also did not see this handwriting or the selections contained therein at the time he applied for insurance. Finally, Lynval claims he did not date the document that afternoon and the date reflected at the bottom of page five of the coverage selection form (which is directly beneath his signature) is not in his handwriting.


State Farm disputed these allegations. According to State Farm, its agent provided Lynval with the New Jersey Standard Policy Coverage Selection form that outlines the various types of coverage available for an insured to select. The record shows Lynval signed the coverage selection form and selected $15,000 in PIP coverage with a $2,500 deductible, the same coverage he had previously with GEICO. The coverage selection form also shows Lynval selected his personal health insurance policy as the primary for PIP by name and policy number. Lynval authorized this coverage arrangement, effective October 2012. State Farm emphasized that this policy was automatically renewed several times. The automatic renewal documents stated that the PIP medical expense benefit limit was $15,000 with a $2,500 deductible. The documents also included language instructing insureds that "[i]f the above information is incomplete or inaccurate, or if you want to confirm the information we have in our records please contact your agent." Plaintiffs did not take any action to correct or modify this information.


On September 10, 2014, Lurline and Lledon were both injured in a car accident. Lynval reported the accident to State Farm and submitted a claim for PIP benefits. Although Lynval acknowledged that the policy's declarations page indicated he had selected the option with a $2,500 deductible and a $15,000 PIP limit, he refuted the accuracy of these limitations. Lynval alleged he actually selected $250,000 in PIP coverage. As provided by plaintiffs' automobile policy, State Farm initially referred medical expenses related to the accident to their private health insurance carriers. Later on, a State Farm representative learned that Lledon did not have private health insurance but was covered through New Jersey Family Care, or Medicaid. As required by N.J.S.A. 39:6A-4.3(f), State Farm thereafter provided Lledon with PIP benefits and processed his claims as though he did not have private health insurance at the time of the accident. State Farm applied a deductible of $3,250, comprised of the $2,500 deductible included in the policy and a $750 statutory penalty because Lledon did not have private health insurance.


Plaintiffs, Lurline and Lledon, sued State Farm seeking to reform the State Farm policy to provide the maximum $250,000 PIP benefits. Plaintiffs argued that the insurance policy as written was invalid because Lledon was covered by Medicaid, not by a private health insurance carrier. Plaintiffs also alleged that State Farm's actions were willful, wanton, intentional, grossly negligent and in reckless disregard of their legal rights.


The trial court judge awarded summary judgment to State Farm and dismissed the Plaintiffs complaint with prejudice. The trial court judge found that State Farm was immune from civil liability under N.J.S.A. 17:28-1.9(a) (hereinafter the “Civil Liability Statute”). That statute grants liability to insurers for the named insured’s election level of coverage provided that the coverage limits are at least the minimum coverage required by New Jersey law.  


Plaintiffs appealed to the Appellate Division. On appeal, plaintiffs argued that the trial court erred when it found State Farm immune from liability under the Civil Liability Statute. The Appellate Division affirmed that State Farm was immune from civil liability for the insured’s election of coverage.


The Civil Liability Statute provides in relevant part:

… no … insurer… shall be liable in an action for damages on account of the election of a given level of motor vehicle insurance coverage by a named insured as long as those limits provide at least the minimum coverage required by law or on account of a named insured not electing to purchase underinsured motorist coverage, collision coverage or comprehensive coverage. Nothing in this section shall be deemed to grant immunity to any [insurer] causing damage as the result of [its] willful, wanton or grossly negligent act of commission or omission.

b. The coverage selection form required pursuant to . . . [N.J.S.A. 39:6A-23] shall contain an acknowledgement by the named insured that the limits available to him for uninsured motorist coverage and underinsured motorist coverage have been explained to him and a statement that no . . . insurer . . . shall be liable in an action for damages on account of the election of a given level of motor vehicle insurance coverage by a named insured as long as those limits provide at least the minimum coverage required by law or on account of a named insured not electing to purchase underinsured motorist coverage, collision coverage or comprehensive coverage, except for that [insurer] causing damage as the result of [its] willful, wanton or grossly negligent act of commission or omission.

To obtain immunity under the Civil Liability Statute, an insurer must demonstrate that (1) the named insured had at least the minimum coverage required by law; (2) the insurer did not cause the insured's alleged damages by any willful, wanton or grossly negligent act of commission or omission; and (3) the insurer complied with the coverage selection requirements of N.J.S.A. 17:28-1.9(b). The insurer must also have obtained the insured's acknowledgement that the available coverage limits were explained to him or her, and that the insurer will not be liable for the insured's selection of coverage that was chosen in accordance with subsection (a) of the immunity statute.


The Appellate Division found that: (1) State Farm met the requirements for immunity under the Civil Liability Statute; (2) Plaintiffs received the minimum coverage required by law, which was the same coverage they had with GEICO; and (3) State Farm did not act in a willful, wanton, or grossly negligent manner and complied with the coverage selection requirements of N.J.S.A. 17:28-1.9(b).

Plaintiffs presented only Lynval's assertions in the form of a deposition and certifications as evidence that Lynval chose the maximum PIP coverage available. By contrast, State Farm produced the completed coverage selection form, its insurance application page, the subsequent policy renewal documents of the policies issued from 2012 through 2014, its payment log, and the insurance agent’s certification showing Lynval requested the $15,000 PIP coverage with a $2,500 deductible.

The Court found it significant that Lynval received multiple renewal notices showing that the PIP limit was only $15,000 yet did not contact his insurance agent or insurer about the alleged error. The Court explained that:


Willful blindness is not a defense. Insureds are under a duty to examine their insurance documents and to notify the insurer if there is a discrepancy between what they initially requested and what the insurer has actually provided. …


Lynval had an affirmative duty to review his insurance policy obtained from State Farm. Lynval had multiple opportunities to correct this alleged error long before the 2014 accident by reviewing the automatic renewal pages and other documents State Farm provided to him. These documents were specifically designed to apprise consumers like Lynval about the content of their insurance policy and the coverages available. Stated differently, Lynval was obligated to alert State Farm of the inconsistencies between what he allegedly requested and what the policy provided.


Accordingly, the Appellate Division affirmed the grant of summary judgment to the carrier, holding that the carrier was immune from civil liability for the insured’s election of the minimum PIP coverage.


Marti's Legislative and Regulatory Markers

Jerry Marti

[email protected]


02/04/19       Senate Bill S2440

New York State Senate and Assembly          

The Child Victims Act

State Senator Brad Hoylman from the 27th Senate District sponsored a bill that would raise the civil and criminal statutes of limitations in cases involving child sexual abuse.  Under the bill, the statute of limitations for criminal prosecution of a sexual offense committed against a child would be extended prospectively depending on whether the crime was a felony or misdemeanor.  For felonies, the statute of limitations is extended to the age of 28.  For misdemeanors, the statute of limitations is extended to 25. 


It further provides that victims of sexual abuse can bring a civil action against their alleged abuser up to the age of 55.  Those over the age of 55 would still be allowed to bring a civil action during the revival period.  This revival period would take place during a one year window, which starts six months from the effective date of the Act.  In addition, the revived claims that were previously dismissed due to being time-barred or for failure to file a notice of claim or a notice of intention to file a claim would not be dismissed on those grounds.


The Act also places government entities on equal footing with non-government entities by removing the notice of claim requirements in actions alleging damages arising from the commission of certain sexual offenses.  Furthermore, training would be provided to judges regarding child sexual abuse cases, and the Chief Administrator of the courts would be required to enact rules concerning the timely adjudication of claims revived during the one year period. 


The bill has passed the New York State Senate and Assembly, but has not yet been sent to Governor Cuomo’s for approval.  He has signaled his support of the legislation.


Editor’s Note:  Expect an onslaught of requests for coverage for negligence claims against the employers of those accused of abuse.


Brian F. Mark

[email protected]


Nothing on the mark this week.



Larry E. Waters
[email protected]


02/05/19       Truck Insurance Exchange v. Michael J. Paonessa, Sr., et al.

United States District, Western District of New York

Plaintiff’s Declaratory Judgment Granted Because the Animal Exclusion Applies on its Face as a Bar to Coverage Based Upon the Factual Allegations in the Underlying Complaint

This action stems from an alleged dog bite to defendants Lindsey R. Cortes (“Cortes”) and Jennifer L. Drake (“Drake”) while on Michael J. Paonessa Sr. (“Paonessa Sr.”) property on or about May 5, 2016.  The alleged dog was owned by defendant Michael J. Paonessa Jr. (“Paonessa Jr.”).  Following the alleged dog bite, Cortes and Drake commenced an action in New York State Supreme Court, Niagara County for their alleged personal injuries and damages. 


Prior to the alleged dog bite, Truck Insurance Exchange issued a homeowners policy to defendants Paonessa Jr. and Paonessa Sr. (the “Policy”). The Policy included an “Animal Exclusion,” which excluded coverage for bodily injury caused by any animals or creatures owned by or entrusted to any insured.


Truck Insurance Exchange commenced this action on May 18, 2018, seeking a declaratory judgment that it is not obliged to defend or indemnify any of the defendants in relation to the dog bite incident.


The court concluded that Truck Insurance Exchange was entitled to declaratory judgment.  The court found given the Complaint alleges that Cortes and Drake’s injuries were sustained when they were bitten by a dog on the insured’s property, the Animal Exclusion applied as a clear bar to coverage.


Please email me if you will like a copy of this decision. 


01/29/19       Century Surety Company v. Rukh Enterprises, Inc., et al.

United States District, Southern District of New York

Plaintiff’s Motion for Summary Judgment Granted the the Extent that its Policy was Excess to the Policy Issued by Admiral

Prior to September 2013, defendant Long Island Railroad (“LIRR”) hired defendant Rukh Enterprises Inc. (“Rukh”) to complete a construction project. As part of this agreement Rukh was required to procure insurance covering the project.  Rukh obtained two insurance, policies including an excess policy from Century Surety Company. Thereafter, Rukh entered into an agreement with defendant East Cost Painting (“East Cost”) to complete some work at the construction project.  On September 13, 2013, an employee of East Cost was injured on the job and commenced personal injury lawsuit currently pending in New York Supreme Court.  


Following the personal injury suit, Century Surety and LIRR’s insurer, Admiral Insurance Company (“Admiral”) commenced this declaratory judgment action. Thereafter, the parties to this declaratory judgment action cross-moved for summary judgment. 


In its analysis, the Court noted that the principal dispute among the parties is whether an “independent contractor” exclusion in the Century Surety policy applies.  Further, the Court noted that it is well established that the determination of whether someone is an independent contractor is a fact-specific question.  Despite the court agreeing that the “most of the facts in the record point to the conclusion that the injured worker was indeed an ‘independent contractor’ within the meaning of the Century Surety policy”, the court concluded that there were genuine disputes of material fact that preclude summary judgment for either party on this issue. 


Next, the court considered whether the Century Surety policy qualifies as a true excess policy that may not be invoked until all primary policies are exhausted. In its analysis, the Court noted that the Century Surety policy unambiguously provides that it is “excess over and shall not contribute with any of the other insurance whether primary, excess, contingent or on any other basis . . . .” The Court noted also that the Century Surety policy has no mention of the Admiral policy and does not by statement or endorsement state that the Century Surety policy will apply on a primary basis with respect to any policies that were available to defendant LIRR.  As such, the court concluded that given the Century policy provision, it is plain that such policy was intended to be a true excess insurance. 


Admiral argued that the decision in Indemnity Insurance Co. of North America v. St. Paul Mercury Ins. Co., required a different conclusion. The Court rejected such argument.  The Court found unlike in Indemnity Insurance Co. of North America v. St. Paul Mercury Ins. Co., Century Surety never agreed to defend or indemnify LIRR nor to treat its policy as primary to any insurance that LIRR might obtain. Further, the court concluded even if Rukh failed to comply with the contractual obligation to procure insurance that would provide coverage on primary basis, such failure has no bearing on the terms of the Century Surety policy.  As such, the Court granted Century Surety motion for summary judgment to the extent that Admiral seeks a judgment that its coverage is excess over the insurance provided by Century Surety.  


01/03/19       County of Niagara et al. v. Liberty Mut. Ins. Co. et al.

United States District, Western District Of New York

Plaintiffs’ Motion For Summary Judgment Denied Because Defendants Timely And Sufficiently Disclaimed Coverage Under New York Law

Defendant T.G.R. Enterprises, Inc. (“TGR”) and Plaintiffs entered into a contract.  The contractual agreement required TGR to procure and maintain insurance. Further, the contractual agreement included a “Hold Harmless Clause” which provide that the Contractor agrees to defend and indemnify Niagara County (the “County”) and Niagara County Community College (“NCCC”) (the “Plaintiffs”) and their officers, agents and employees and to “hold them harmless from any and all risks of every kind, nature and description resulting from or arising out of the work and/or service performed by the Contractor, or his subcontractors under the Contract.” 


Abiding by the contract, TGR obtained several insurance policies.  Defendant Netherlands Insurance Company (“Netherlands”) issued a Commercial General Liability policy to TGR as named insured and the County as an additional insured (the “CGL Policy”).  In part, the CGL Policy contained an Aircraft, Auto, or Watercraft Exclusion and a Commercial Auto Part. In addition, defendant Excelsior Insurance Company (“Excelsior”) issued an excess/umbrella policy (the “E/U Policy”), which named TGR as a named insured and the County as an additional insured.  In part, the E/U Policy contained an “Owned-Auto Exclusion.” Defendant Excelsior also issued an owner’s and contractor’s protective liability policy (the “OCP Policy”), which contained an “Owned-Auto Exclusion.”


Following the contract and the procurement of insurance, defendant  Michael Lombardo was allegedly injured on May 27, 2008 while he was performing work for his employer, defendant TGR.  Mr. Lombardo alleges that he was injured when windows located in the stake truck’s cargo bed owned by TGR was caused to fall onto him.  At the time of the alleged injury it is alleged that a co-worker was driving the stake truck while he and Mr. Lombardo were moving windows for installation at NCCC’s Student Center. 


After the alleged incident, Mr. Lombardo served the County with a Notice of Claim on July 18, 2008. On August 7, 2008, the attorney for the County advised Reller Risk Management of the notice of claim, and referenced TGR’s CGL and E/U Policies and demanded indemnification and defense for any loss arising from the alleged accident. After receiving the Notice of the Claim, Peerless disclaimed coverage for the alleged incident under the CGL and E/U policies on August 13, 2008 (the “Disclaimer”). By correspondence dated August 22, 2008, Peerless advise counsel for the County that a claim had been set up under the OCP Policy purchased by TGR and Peerless would defend and indemnify Plaintiffs for the alleged loss.


Following the disclaimer letter, counsel for the Counsel contacted coverage counsel for Excelsior and Netherlands and advised the County demanded coverage under the OCP, CGL, and E/U Policies by correspondence on June 17, 2014.  In addition, the June 17, 2014, correspondence alleged that coverage under “the CGL and the E/U Policies had never been disclaimed, such that the County [was] entitled to the requested coverage.” By correspondence on June 18, 2014, counsel for Peerless/Netherlands/Excelsior/Liberty Mutual relative to the state court action stemming from the alleged incident, advised that the August 13, 2008 Disclaimer Letter clearly informed TGR and Plaintiffs that there was no coverage available under the CGL and  E/U Policies.  


Thereafter, Plaintiffs commenced this action seeking insurance coverage from Netherlands on the CGL Policy and from Excelsior on the E/U Policy.  


The following will discuss the Courts decision regarding Plaintiffs argument for summary judgment based upon whether the Disclaimer Letter was timely and sufficiently disclaimed coverage for the allege accident. Plaintiffs argued that the Disclaimer was not a valid disclaimer of coverage as to the County because the Disclaimer Letter: (1) was not addressed to the County or to the County’s representative; (2) referenced neither the notice given by the County nor the County’s claim for coverage; (3) failed to reference the County’s status as an additional insured; and (4) did not clearly inform any party of the grounds for disclaimer on which Excelsior currently relied.   Specifically, Plaintiffs argued that due to the aforementioned deficiencies, the County never received a proper disclaimer of coverage until the June 18, 2014, correspondence from Peerless/Netherlands/Excelsior/Liberty Mutual. 


The court rejected Plaintiffs’ argument.  In its analysis, the Court first concluded that the Disclaimer Letter was timely.  Next, the Court concluded that there was no merit to Plaintiffs’ argument that the receipt of only a carbon copy of the Disclaimer Letter was insufficient notice.  In support, the Court explained that New York case law was quite clear that “the service of a carbon copy of the letter of disclaimer on the injured plaintiff’s attorney satisfied the statutory requirement under New York Insurance Law § 3420(d).”


Third, the Court concluded the Disclaimer Letter’s subject line specifically referenced the Notice of Clam as “Michael Lombardo v. County of Niagara, et al.”, in contrast to Plaintiff’s assertion.  Specifically, the Court found that “Disclaimer Letter’s subject line logically and reasonably can only be interpreted as referring to the Notice of Claim the County tendered on August 7, 2008 to Reller Risk.  In support, the Court acknowledged that the Disclaimer Letter consistently and repeatedly stated coverage is being denied for the above-captioned matter and the “incident” and not-once referred to the accident  as a generic claim or otherwise.  As such, the Court determined that there was no merit to Plaintiffs’ argument that the Disclaimer Letter was insufficient because the Disclaimer Letter failed to identify its response to Mr. Lombardo’s claims against the County.


Lastly, the Court concluded the Disclaimer Letter’s failure to enclose a copy of the “Owned-Auto Exclusion” in the copy provided to the County was not material as  to whether the Disclaimer letter was timely and sufficient.  In support, the Court noted that the plain reading of the Disclaimer Letter established the full text of the “Owned-Auto Exclusion”, which was printed within the Disclaimer Letter.  Further, the Court recognized New York law has established that the “quoting [of] the text of the exclusion on which a disclaimer of coverage is based has been held sufficient to specify notice of denial of coverage.”  As such, the Court concluded that Defendants sufficiently and timely disclaimed coverage to Plaintiffs under the CGL and E/U Policies. 


Please email me if you want a copy of this decision.  



Eric T. Boron

[email protected]


On the road again.



Marina A. Barci

[email protected]


03/31/16       Government Empls. Ins. Co. v Avanguard Med. Group, PLLC  

New York State Court of Appeals

Providers that are not an Article 28 Accredited Facility under N.Y. Public Health Law are not Entitled to Reimbursement of Assigned No-Fault Benefits

This case set out the NY standard for fee reimbursement of office-based surgical facilities (OBS) that are not licensed by New York State or regulated by the department of health. The court found that because OBS facilities are not regulated by and subject to the strict standards of Article 28 of the NY Public Health law, there is no basis to interpret that they are entitled to reimbursement of their fees. Nowhere in the regulatory schedules are OBS facilities included, so the court concluded that it was up to the legislature to change the statutes if they are meant to be reimbursed.


Arbitrators have been using this case as grounds to deny no-fault benefits to providers that cannot prove they are an Article 28 facility. In a 2017 arbitration decision (Metropolitan Medical and Surgical & Avangaurd v. Geico, AAA No. 17-15-1012-2656), the arbitrator agreed with the carriers argument that the providers were not entitled to payment because they are not accredited Article 28 facilities and therefore, are not certified to perform the services that they billed for under the no-fault law. A provider of healthcare services is ineligible for reimbursement of assigned first-party no-fault benefits "if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service New York."


The takeaway: always ensure that the provider you are dealing with for no-fault reimbursement is an Article 28 accredited facility. If they are not, or do not provide you proof that than are an Article 28 facility, the carrier has a ground to deny payment.



Earl K. Cantwell
[email protected]


11/05/18       Schultz v. Geico Casualty Company

Supreme Court of Colorado

Bad Faith Determined by Information Available at the Time of Coverage Decision

This case, like many others, arises out of a minimal, low value auto claim. The insured alleged that Geico breached its duty of good faith and fair dealing, and violated Colorado statutory obligations, by failing to pay her UM/UIM claim under her Geico policy. The other driver’s insurance company settled with Shultz for its minimal $25,000 policy limit. Shultz then made a demand for uninsured/underinsured motorist benefits under her Geico policy, which also had a $25,000 policy limit. After a period of time and review, Geico in fact offered Shultz its full policy limits without requesting that she undergo an IME. Geico’s claim logs at the time (apparently) revealed that Geico decided to offer Shultz its policy limits because it did not believe that peer review would be necessary, and that there had been a decision made not to request an IME.


The insured then sued Geico asserting claims for bad faith of an insurance contract and under Colorado statutes for unreasonable delay in the payment of covered benefits. Geico denied liability, disputed the extent and cause of her claimed injuries, and now asserted that causation concerning her injuries, which included knee replacement surgeries, was in question and requested an IME. The insured objected arguing that her physical condition was no longer in controversy. Geico argued that causation was again in issue because it was entitled to explore the causation issue via an IME of the insured. The insured countered that the reasonableness of Geico’s conduct had to be evaluated based on the information Geico had at the time it evaluated her claim. The Trial Court agreed with Geico and ordered the insured to undergo the IME. The Supreme Court of Colorado on the basis of original jurisdiction then took up the appeal to review the Trial Court’s Order, which it reversed.


The Court first cited Colorado law that an insurer’s bad faith breach of an insurance contract may give rise to an independent tort liability. To prevail on such a claim, the insured must establish that the insurer acted unreasonably, and with knowledge and reckless disregard for the fact that no reasonable basis existed for denying the claim. The Court then cited prior decisions suggesting that an insurer’s decision to deny benefits to its insured must be evaluated based on the information before the insurer at the time of the coverage decision. Thus, in defending a bad faith claim, an insurer may present and reply on all of the information that it considered at the time it made the decision to delay or deny the claim.


In this case, Geico denied that it acted in bad  faith and asserted that it acted reasonably because the issue of coverage was in question given that the adjustor had identified questions about the cause of the insured’s knee replacements. The question thus was whether the requested IME could provide information that would somehow support or be relevant to the decision that Geico had made over a year before to in fact pay the insured the limits of her UM/UIM. The Court concluded it could not.


First, newly developed medical evidence such as an IME would not be relevant to the question of what Geico knew when it made its coverage decision in this case. Second, the Court did not feel that Geico had explained how the state of the insured’s medical condition today would be relevant to her medical condition over a year ago when Geico made its coverage decision. Therefore, it was held that the Trial Court abused its discretion in ordering the insured to undergo the IME.


This case presents a mixture of both common law and statutory “bad faith” claims which obviously differ from jurisdiction to jurisdiction, both in terms of the case law and  particular statutory penalties or causes of action.


This case also suggests that it is important to be consistent in evaluating a claim. Geico had initially offered its uninsured/underinsured policy limits in the case, but when sued took the position that causation and coverage was “questionable”, in effect trying to revisit its coverage decision and the medical information that supported or did not support it. Normally, courts do not favor this kind of analysis, particularly from an insurance company.


Among the reasons behind this holding is the threshold determination that Geico having in the past made its coverage decision, any further medical discovery such as an IME that might occur in the present was not relevant to that coverage decision made in the past. A coverage decision should be based on the claim file and information known at the time. Do not assume or expect that you will be allowed to augment and rely upon information developed at a late date.


Given the relatively low amount of dollars at stake in this case, and Geico’s initial decision to pay its full policy limits, one has to analyze whether such a minor claim with such a bad factual history was the best case for Geico to take all the way up to the Colorado Supreme Court, possibly setting additional negative anti-carrier case history and precedent. The plaintiff appeared to be sympathetic, had timely submitted her claim, Geico had delayed the claim on several occasions, ultimately agreed to pay its policy limits, but then reneged on that commitment once litigation ensued. This was probably not the best factual record to take up to the Supreme Court on appeal.  


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