Coverage Pointers - Volume XXI, No. 6

Volume XXI, No. 6 (No. 545)
Friday, September 6, 2019

A Biweekly Electronic Newsletter  


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

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

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

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

Dear Coverage Pointers Subscribers:

Do you have a situation?  We love situations.

It’s a sad time of the season as the summer comes to an end, at least unofficially.  I love the summer.  In fact, I love the seasons in order.  I love spring, because summer comes next; Summer because it’s summer. Fall, because it’s close to summer and has a lot of summer-like qualities and miserable old winter, last.  I guess I shouldn’t be living in Buffalo, if I don’t like cold, but I just figured that out.

Coverage Pointers Advance:

Don’t forget about Coverage Pointers Advance, on LinkedIn (under my name) if you can’t wait for your bi-weekly issue of Coverage Pointers.

Child Victims Act:

We are starting to see a number of CVA coverage cases coming in the door.  Issues including phantom or unknown policies, suspected policies without policy forms, confirmed policies, without policy forms, confirmed policies with policy forms and all variety of questions on “occurrences” and late notice issues.  There are also interesting exclusions, from assault and battery, to sexual molestation to none!

The late notice issues are interesting because many of the policies were issued prior to January 17, 2009.  For those who don’t recognize that date, that was the effective date of the late-notice/prejudice statute.  For policies issued or renewed before that date, late notice of occurrence, claim or lawsuit can lead to successful coverage denial if the insured knew of the incident, claim or lawsuit but did not report it to the insurer.

It’s a challenge because many of these cases are being sued “anonymously” – John Doe lawsuits.  So, it becomes difficult, without knowing the name of the claimant, to determine whether the policyholder knew about the incident or the potential claim years before.

Also, and PLEASE remember this.  Coverage defenses (exclusions and policy breaches) can be waived if there is not a prompt coverage denial.  In New York, a reservation of rights is not a substitute for a disclaimer.  The message:  watch the clock carefully.  The rule of thumb, in New York, is that coverage denials, partial or total, must be sent within 30 days, or so, of when an active investigation reveals enough information to justify a coverage denial.

Introducing Both a New Lawyer (to be) and a New Column:

Anyway, today we welcome a new lawyer (pending bar results) to the Coverage Pointers team and we’ll do the same thing, next issue.  Please join me in welcoming Ryan Maxwell.  Ryan has worked with us for the past two years, as a clerk.  After graduating Magna cum Laude from the Buffalo Law School, he joined us this week, as a law graduate, awaiting the results of the July Bar Exam. Ryan has co-authored a number of published articles on coverage already, so he comes with a great deal of experience.   Ryan joins our coverage team, where he has been an unofficial member for the past two years.

Ryan has taken over the Albany column, focusing on legislation, regulation, Department of Financial Services opinions and all things from government.  The column is entitled Ryan’s Capital Roundup and we cannot be happier to have him with us.

Next issue, we will be introducing Charles (C.J.) Englert, another fine graduate of the Buffalo Law School class of 2019.

By the way, both of these guys were students in my Buffalo Law School Insurance Law class.  I started teaching again, this semester, this my 34th year of teaching Insurance Law at UB.

27 Attorneys Named to 2019 Upstate New York Super Lawyers List:

We are pleased to announce that 27 attorneys from Hurwitz & Fine, P.C. have been selected to the 2019 Upstate New York Super Lawyers and Rising Stars lists.

The 2019 Upstate New York Super Lawyers list is an exclusive list, recognizing no more than five percent of attorneys in New York. The following Hurwitz & Fine lawyers were selected:

  • David R. Adams – Construction Litigation

  • Diane F. Bosse – Insurance Coverage

  • Jody E. Briandi – Personal Injury General: Defense; Top 50, Top 25 Women

  • Todd C. Bushway – Personal Injury General: Defense

  • Earl K. Cantwell – Business Litigation; 10th Year

  • Patrick B. Curran – Personal Injury Med Mal Defense

  • Ann E. Evanko – Employment & Labor; Top 50, Top 25 Women

  • Robert P. Fine – Business/Corporate

  • Lawrence C. Franco – Business/Corporate

  • Dan D. Kohane – Insurance Coverage; Top 50

  • Steven E. Peiper – Insurance Coverage

  • Michael F. Perley – Personal Injury General: Defense; Top 50

  • V. Christopher Potenza – Personal Injury General: Defense; Top 50

  • Edward C. Robinson – Estate & Probate; 10th Year

  • Lawrence M. Ross – Health Care

  • Roger L. Ross – Real Estate

  • Andrea Schillaci – Business Litigation; Top 50, Top 25 Women

  • Amber E. Storr – Business Litigation

  • Kevin J. Zanner – Business/Corporate

The Rising Stars list recognizes no more than 2.5 percent of attorneys in each state. To be eligible for inclusion in Rising Stars, a candidate must be either 40 years old or younger, or in practice for 10 years or less.

The following Hurwitz & Fine lawyers were included on this year’s Upstate New York Rising Stars list:

  • Brian D. Barnas – Insurance Coverage

  • Evan Y. Bussiere – Real Estate

  • Jennifer A. Ehman – Insurance Coverage

  • John R. Ewell – Insurance Coverage

  • Anastasia M. McCarthy – Personal Injury General: Defense

  • Nicholas A. Pusateri – Business/Corporate

  • Marc A. Schulz – Construction Litigation

  • Katherine L. Wood – Employment & Labor

Best Lawyers:

11 Attorneys Recognized in 2020 Edition of The Best Lawyers in America

Hurwitz & Fine is pleased to announce that 11 of the firm’s attorneys have been selected by their peers for inclusion in the 2020 edition of The Best Lawyers in America®

The attorneys named to the 2020 edition of The Best Lawyers in America and the practice areas they were honored for are as follows:

Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Almost 94,000 industry leading lawyers are eligible to vote. Best Lawyers received over 11 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2020 Edition of The Best Lawyers in America©, 8.3 million votes were analyzed, which resulted in more than 62,000 leading lawyers being included in the new edition. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor. Corporate Counsel magazine has called Best Lawyers "the most respected referral list of attorneys in practice."

For Dave Thompson Fans – and who isn’t?

David Thompson, CPCU, AAI, API, CRIS is an instructor at the Florida Association of Insurance Agents and has done so for 23 years.  He is our favorite Florida foil, a wonderful advocate for insurance agents and a great friend of Coverage Pointers for many years.  He wrote a guest blog for the Merlin Law Group’s Property Insurance Coverage Law Blog (a policyholder firm) entitled “Insurance is Not a Commodity – It’s Not all About the Price”I recommend it for your reading pleasure.  I surely enjoyed it.

Perhaps his most important personal attribute is his ability to smoke vast amounts of meat, create delightful barbecue sauce and wonderful nut mixes.  Dave also has a well-deserved following

In this Issue:

Since the appellate courts are pretty quiet in the summer, the volume of reported decisions drops precipitously through Labor Day, and beyond.  We can expect the floodgates to open up again come the end of September.

We do bring you a couple of interesting risk transfer cases in my column this week, and when you read through the issue attached, you’ll find another couple of unsuccessful attempts by the policyholder bar to hold New York carriers liable for bad faith.

Sexism Rides High, 100 Years Ago:

Elmira, New York

06 Sep 1919




By R. S. Alexander, Associate Editor Boys’ and Girls’ Newspaper Service

          Shipbuilding is work only for the boy of a genuine mechanical turn of mind.  Nothing more complicated than a dreadnaught or a great ocean liner has ever been built.  It is not like an ordinary building:  it is more like “a city that is compact together.”

          If American ships are to be built in competition with foreign yards, then industrious boys, who know how to use their brains as well as their hands, are going to be needed.  They must solve the big problem of building ships cheaper.

          There are two main ways of becoming a shipbuilder.  One is to start work in a shipyard as a mechanic’s helper; the other is to study naval architecture at a university.

          In a shipbuilding plant there are loftsmen, fitters and caulkers, bolters, …


An Expert in Letter Writing

By Elizabeth Mateer

“Helen,” said Mr. Johnson to his daughter in the eighth grade at school, “whatever you learn, learn how to write a letter”.

“Two weeks ago I told my secretary to offer five carloads of steels bars, ‘subject to prior sale.’”  She carelessly left out those four words, and, as a result, we had to buy ten more carloads at a loss of $900 in order to keep up our reputation for always delivering what we offer unconditionally.

“Stenographers are common:  but not one in twenty can write a letter.  We have $25 a week, and quick advancement, for every expert letter writer we can find.”

Helen decided to become an expert in letter writing.  Soon she discovered one of the big secrets “I know what I mean to say,” she explained to her chum, “but the person who gets the letter doesn’t.  All he knows is what I write.  Therefore I must write exactly what I mean.”

Several weeks later Helen showed some of her letters to her father. …  “They are first rate,” he said.  “Clear, direct and brief, but they are about as a dry-goods store without windows.  Can’t you put more life into them …”  [and so it went]

Jen’s Gems:

Hope everyone had a nice Labor Day weekend.  My husband and the kids took a trip down to Harrisburg, PA to visit my college roommate who just had a baby.  To break up the trip, we decided to stop at the Corning Museum of Glass in Corning, NY.  Well, most people that I told about this were confused that I took 4 and 7 year old to a glass museum, but in truth we had a blast.  It was my first time there and they had a bunch of stuff for the kids to do.  I also discovered this really great glassblowing show on Netflix called “Blown Away.”  It is where competitors complete in a series of challenges to be named “Best In Blow” (yes, that is actually the title you win).  It is fascinating and amazing what these artists can make out of glass.  We even got to see the winner work while at the museum (since I don’t want to ruin it for anyone, I won’t tell you who won).

In terms of my column this week, I report on an interesting decision where an injured bicyclists files a claim for no-fault benefits with MVIAC.  The court denies the petition as premature finding that the petitioner had not yet exhausted his efforts of trying to obtain benefits under the offending drivers policy.  A good read.

Jennifer A. Ehman

[email protected]

Unmentionables, a Century Ago:

The Anaconda Standard
Anaconda, Montana

06 Sep 1919

          Charles J. Holden, a retired fireman, yesterday filed a complaint with the city clerk against John Seitz, a fireman, who, Holden declares, called him a number of unmentionable names.  Whether any action will be taken is doubtful since Holden addressed his complaint to the city clerk only without reference to any authority able to act.

Peiper on Property and Potpourri:

This week marks the return of college football, pro football, and blissfully for all of us in Upstate NY the return of the school year.  So far so good, by the way.  No missed buses, no missed homework, and no more payments to Summer Camps.

Tonight also marks the first CP column drafted from the hockey rink...the first for this hockey season. We’ll be dispatching cover notes from Cleveland, Pittsburgh, Toronto, and Detroit over the next few months. As a public service, I’ll also be providing reviews of the best local crafts available at each destination. It is doubtless, my friends, that all good rinks have a good bar located therein. 

While football, school and hockey may be back, the Courts are still a few weeks behind. We’ll have more interesting things to come, but for now we offer an interesting read over what constitutes an ethical conflict for assigned counsel.

See you in two weeks with, hopefully, more to follow.

Steven E. Peiper

[email protected]

Only Ethnic Job Applicants Need Apply:

The Buffalo Enquirer
Buffalo, New York

06 Sep 1919

Wanted: Italian, Polish and American Men and Women for tomato, corn and Catsup packing
Good Wages.
Steady Employment
Burt Olney Canning Company
Albion, N.Y.

Hewitt’s Highlights: 

Hello subscribers. I hope you had a Happy Labor Day. My boys are back to school now and we are all hard at work after a busy and fun summer. Fall soccer and baseball for my boys has already begun and cub scouts and choir for them begin soon. We just had a wonderful visit to the Vanderbilt Mansion and Planetarium, which I recommend to anyone down on Long Island, who has an afternoon to kill. It’s beautiful there.

As for serious injury cases, the Fourth Department got busy right before Labor Day as the other Departments stayed quiet. We have several cases for you this edition. As usual when two experts disagree, the court finds it an issue for the jury to decide what is credible. On the other hand, a plaintiff’s expert’s conclusion that there was pain and range of motion limitations was rejected when not based on objective medical tests, but solely on subjective reports from the plaintiff. The court also noted in one opinion that post concussive syndrome, headaches, and cognitive limitations can fit the significant limitation category.

Until next time,

Robert E.B. Hewitt III

[email protected]

Who Can Argue?

Democrat and Chronicle
Rochester, New York

06 Sep 1919

WANTED—Stenographer in law office, beginner who can spell and punctuate properly; salary to start $10.  E-25, this office.

Wilewicz’ Wide-World of Coverage:

Dear Readers,

The week following an overseas vacation can often negate the regenerative effects of said overseas vacation. Between the jetlag, hundreds of unread emails, the incessantly flashing voicemail light, and the two-foot high stack of mail, it’s almost better not to have gone (or returned?) at all. Almost.

Now, in terms of that overseas trip, Stockholm was a very pleasant surprise. With temperatures in the mid-70s, the highly walkable city of 14 islands was filled with friendly people, amazing sites, and wonderful food. We actually ate Swedish meatballs every single day (and lots of fish, but the meatballs were really to die for). Frankly, we had had no expectations going there, having never been to any Scandinavian country, rather we had just been looking for a jumping off point into Europe before heading to Poland for the Big Day (my grandmother’s 80th birthday party and family reunion). Norwegian Airlines turned out to be comparatively inexpensive for August in Europe, and while Stockholm itself was more expensive than we would have thought, the fact that it was very Prague-like more than made up for it. Then, Poland was boiling hot and exhausting. Herding 20ish family members, most of whom did not have international cell service, for 5 days was a challenge, but enjoyable. And finally, the big shindig was lovely and we have hundreds of wonderful family photos to relive everything in the future. Now we start planning the next European Adventure!

Turning back to the wonderful wide world of insurance coverage (yay!), we bring you a brief Second Circuit decision that came out just the other day. In Federal Insurance v. Metropolitan Transportation Authority, the court addressed whether a broadly-worded arbitration provision mandated that all issues (including arbitrability in the first instance) had to be decided by the arbitrator. In the end, it did. When an arbitration provision is written broadly and expressly states that arbitration is to be used for any and all disputes, then it will be honored. An interesting, albeit brief, decision (link in the attached edition of CP), and a good way to get back into the swing of things for Fall.

Until next time!

Agnes A. Wilewicz

[email protected]

For the Golfers, a Century Ago:

The Wall Street Journal
New York, New York

06 Sep 1919




I have watched the lovely ladies driving golf balls

far and true.

I have seen them make approaches in the way I’d like

to do.

And I’ve come to the conclusion as I’ve gazed upon them


That a pink embroidered sweater is a thing I ought to


I have wondered what’s the matter with my weak and

puny drive.

Wondered why I make a seven on the hole that’s easy five.

But I’ve watched these clever women and I know the

reason now

I might play the game much better with a toque upon

my brow.

I have looked at Frances Hadfield when she hits ‘em out

a mile.

I have studied Mrs. Jackson and I’ve marveled at her


And I make this sad confession, and I’ll tell you that it


Could I play the game as they do I would gladly put on


--Detroit Free Press.

Barnas on Bad Faith:

Hello again:

A brief note from me this week as I’m preparing for an exciting weekend of Buffalo football.  On Saturday, I’m driving south down the 219 to watch the UB Bulls take on Penn State at Beaver Stadium in State College, PA.  At last look the Bulls were 30-point underdogs against the Nittany Lions, so the game might not go so well.  However, I am very excited to see what the atmosphere is like at one of the biggest and most famous venues in college football.  From there, I’m heading across the state of Pennsylvania to East Rutherford, New Jersey, to watch the Bills open the season against the Jets.  Dare I say that I’m optimistic for the Bills outlook this year and think that they’ll pick up a victory against the Jets on the road to open the season?  I’ve still yet to see them win a road game in person, so hopefully that changes on Sunday.

I have some slightly different cases in my column this week.  Three of the cases concern dismissal of claims for extra-contractual claims and causes of action in no fault cases.  I also have a case from Wisconsin concerning bad faith discovery.

That’s all for now.  Have a great weekend.

Brian D. Barnas

[email protected]

The Babe:

The Spokane Chronicle
Spokane, Washington

06 Sep 1919


          Babe Ruth tied the big league home run record yesterday, when he drove out his 25th circuit smash of the season.  The mark equals that of Buck Freeman, made in 1899, when Buck was playing with the Washington team.

The tying homer was made in the second inning of the game against Philadelphia which Boston won 15 to 7.  The Red Sox gathered 25 hits in the contest, five of the total being credited to Ruth.

Editor’s Note:  The Babe hit 29 dingers in 1919, 54 in 1920, 59 in 1929 and 60 in 1927.  That record stood until Roger Maris’ 61 HR’s in 1961 (in the record books with as asterisk because he hit those in 162 games rather than Ruth’s 154).  That record has been passed by Sammy Sosa, three times (63, 64 and 66), Mark McGwire twice (65 and 70) and the all-time record in 73 by Barry Bonds in 2001.  If you want to revisit that one, here it is.

Off the Mark:

Dear Readers,

There are no noteworthy construction defect decisions to report on in this edition.  I’m sure that will change by the next edition now that summer is ending, and the courts are back in full swing.  The family vacation to Myrtle Beach last week went well and we all enjoyed the beach and the relaxation.   

Until next time …

Brian F. Mark

[email protected]

Young Wedded Bliss?

New-York Tribune
New York, New York
06 Sep 1919

Missing Girls of 15 Found On Honeymoon and Arrested.

          YONKERS, N.Y., Sept. 5.—Mrs. Anna Lartke, of 38 Maspeth Avenue, and Mrs. Delia Sondstrom, of 68 North Broadway, each of whom reported a fifteen-year-old daughter missing yesterday, were informed to-day that the girls had been found, spending their honeymoons across the river in Nyack.  They were married there yesterday to sailors from the recruiting ship Winslow, a Nyack constable having been prevailed upon to act as witness to the ceremonies.

          Alice Larke was married to George Lightizer, twenty years old, and Helen Sondstrom to Llewellyn Williams, nineteen years old.  The brides were arrested, charged with juvenile delinquency and the bridegrooms with abduction.

Editor’s note:  of course, we checked.  Both marriages appear to have lasted for some years thereafter.

Wandering Waters:

I hope all of you had a wonderful week and welcome to another edition of Wandering Waters.  

The USA Men’s team continue to steam ahead in group play.  After a scare in the second game of group play, the USA Men’s team responded with a dominant win over the Japan Men’s national team.  Playing with a renewed defensive intensity, the USA Men’s team stopped the Japan Men’s team in its tracks.  Now heading into the second round of Group play, the USA Men’s team must move on without arguably its best defender.  With the competition expected to heat up, the USA Men’s team needs to remain focused and committed to winning games with its elite defensive efforts.

With that said, we have one case from the Southern District of New York. Until next time……

Larry E. Waters

[email protected]

Golf Strike?

New-York Tribune
New York, New York

06 Sep 1919

Golf Links Makers Strike

GREENWICH, Conn., Sept. 5.—Between sixty-five and seventy laborers employed by the Billington Contracting company in Rye in laying out the golf links at the Biltmore Country Club in Harrison, owned by John McE. Bowman, of New York went on a strike to-day.  They were receiving $4 a day and now demand $4.50.  Several policemen are on duty at the club grounds.

Boron’s Benchmarks:

Dear Subscribers:

Apparently, I am more ready for a vacation than I thought (mine starts in two days, woo-hoo!).  This explains the silly, day-dreaming mood I am in as I write this column (though, rest assured, I am providing you, along with this column, a bona fide, notable Pennsylvania Supreme Court coverage case discussed and analyzed in the attached Coverage Pointers pdf for your consideration and professional development).

Just as there is no logical explanation for why Dan Kohane is so absurdly insurance-smart, I have no logical explanation for why I seem to have suddenly fallen head-over-heels in love with parentheses at the end of sentences this morning (crazy, no?).

Anyway, today’s day-dream involves me getting very wealthy.  Perhaps you can relate?  My dream for getting rich involves Everything Auto Insurance.  As in, everything’s covered.  Really.  In my dream, I’m the only auto insurance agent who saw this kind of auto insurance policy coming, thanks to all the insurance coverage analyzing and litigating I do (of course).  So, I entered into visionary ... I said visionary, not mercenary ...  exclusive sale contracts with every insurer on the planet to sell their version of Everything Auto Insurance.  And I get paid a commission on every sale I make.  Everything Auto Insurance of course drives all other varieties of auto insurance out of the market.  On a serious note, I do want you to know that I fully intend to spread my immense wealth around the entire world to make it better for everyone. Right after I pay off my mortgage, and put a new roof on the house, that is.

The principle of wanting everything (or just about everything) to be covered by your auto insurance was sort of the notion considered by the Pennsylvania Supreme Court in the Safe Auto Insurance Company v Oriental-Guillermo case I have selected for your consideration.  Fortunately for the insurance company, the Pennsylvania Supreme Court applied logic and legal precedent in holding that “insurers are not compelled to underwrite unknown and uncompensated risks”, nor provide gratis coverage, while upholding the enforcement of an unlisted resident driver exclusion in a personal automobile insurance policy.

To keep all you readers on the tip-toe of expectation, I will not be revealing my vacation destination until I write my next column.  Until then, arrivederci!

Eric T. Boron

[email protected]

Marital Bliss:

The Buffalo Enquirer
Buffalo, New York

06 Sep 1919


          Arrested on complaint of his wife, George Hamburg, No. 315 Sycamore Street, pleaded guilty of having a revolver in his possession without a permit.  Hamburg is a jeweler, and says that he has had the revolver in his shop for the  past eight years for protection.  He declared that his wife had made the complaint in a fit of anger, resulting from an argument over the discipline of their son.  Sentence was suspended. 

Editor’s Note:  George died in 1921 at age 56 and is buried in Cheektowaga, New York.  His complaining wife, Fannie was 42 at the time of George’s death and went on to marry Lou Markovsky in 1921 and Solomon Dunn in 1950 (when she was 71).  She died in 1960 and is buried in Michigan, near her second husband.

Barci’s Basics (On No Fault):

Hello Subscribers!

It’s been a busy two weeks catching up after vacation! Even with how busy work has been, I did manage to get up to the Adirondacks for Labor Day weekend to visit with some friends. We hiked at Higley Falls State Park, visited a treehouse bookstore, and strolled around Lake Placid for a few hours. I’ve only recently begun to explore the North Country of New York now that I have friends who have lived up there, and I’ve had several EUO’s up that way too. It’s an interesting place to be!

On the no-fault front I have two cases for you. First is a case out of the First Department that discusses why a master arbitrator’s award was found to be arbitrary. Then I have a case from Kings County Supreme Court that discusses the requirements for obtaining benefits from MVAIC.

That’s all folks,

Marina A. Barci

[email protected]

Need Auto Insurance?

The Buffalo Enquirer
Buffalo, New York

06 Sep 1919

Abell, for Automobile Insurance.

          Are you an auto owner without insurance?  Do you realize that in case of an auto accident in which your car has been partly damaged or totally demolished that unless you have insurance covering your machine it may mean a total loss to you; also, figure the other machine which you may have collided with and the blame is fixed upon you, in that case you suffer both ways, your car is damaged as well as the other which means that you will have to pay for the repairs to both machines and in a great many cases persons are made to purchase new cars to make good for the damaged machines which were beyond repairs.  You may be a very careful driver, but wet pavement have caused the wrecking of many cars which have been termed unavoidable accidents, but still you are held responsible.  So why not have automobile insurance issued which protects you from all such unforeseen calamities?

          The C. Lee Abell Co., with offices at No. 637 Chamber of Commerce, makes a specialty of automobile insurance and assumes the responsibility in case of accidents.  The premium is small and you run no risks of losing all your possession in case of a law suit. 

Editor’s Note:  C. Lee died the following year and his son ran the agency until is passing, and the agency’s closing, in 1945.

Ryan’s Capital Roundup

Hello Loyal Coverage Pointers Subscribers:

Longtime “listener,” first time columnist. Welcome to Ryan’s Capital Roundup, where you will be able to gather timely insights into “what’s about town” in the capital city of the great state of New York. From new and pending legislative activity in Albany, to DFS regulations and guidance, and maybe a form filing or two, keep up to date with the latest insurance trends coming out of Albany, the Assembly, and elsewhere.

But enough about my column; let’s talk about me. My name is Ryan Maxwell and I am a recent graduate of the University at Buffalo School of Law. For the past couple years, while not roaming the hallowed halls of UBLaw, I have wandered the 12th Floor of the Liberty Building as a Law Clerk at H&F. In fact, I wandered so much they recently decided to keep me confined to an office not ten steps from the cubical I came to know fondly these past two years. Eagerly awaiting the results of the July 2019 bar exam, I have been put to use on various matters as a member of the H&F Insurance Coverage Practice Group with those names that appear beside mine, both above and below.

The date of publication, September 6, is a special day in my life as it marks four years married to my beautiful wife, Lorraine. When not reminiscing of that beautiful, sunny day on the WNY waterfront all those years ago, Lorraine and I share in the joys of raising our two-year old son, Phillip. Excitedly, we await the arrival of our second child in October of this year! Did I mention my wife, who both put up with me through two years of law school while taking care of a baby/toddler and spent the entirety of my summer of bar review pregnant with our second, was Wonder Woman? Happy Anniversary, Lorraine!

Although I have fallen in love with the legal profession (dare I say Insurance Coverage Situations as well…), it was not always my intention to pursue such an avenue. Originally, having grown up in and around athletics for my entire life, my dream was to be a play-by-play broadcaster and make a living bringing sports to life for others. Despite having friends who have successfully pursued careers in similar roles, it became apparent that my ultimate professional role was elsewhere. However, I have not abandoned my dreams entirely. You can catch-me live streaming on the ECC Network, as the play-by-play broadcaster for the NCAA Div-II Daemen College Wildcats’ Men’s and Women’s Volleyball teams. The women’s team open their home schedule today at 6pm as they square off against Ursuline College. Join us at 6pm for the action here.

Today’s column (the inaugural for those keeping score at home), features two recently enacted pieces of legislation. The first, “Alice’s Law”, added new sections to the New York Penal Law that impose tough criminal penalties on those who engage in staged accidents for the purposes of committing insurance fraud. The second, “Brianna’s Law”, extends the requirements for boating licenses for all navigable state waters of Nassau and Suffolk counties to all eligible individuals over ten years old, removes license exemptions for persons born before April 30, 1996, and requires internet-based boating safety courses to verify attendance.

I look forward to bringing you Ryan’s Capital Roundup bi-weekly and helping to circle the wagons in Albany. Although, “nobody circles the wagons like . . . “

Ryan P. Maxwell
[email protected]

She is So Wealthy, You Need to Send Her a Stamp:
Calgary Herald
Calgary, Alberta, Canada
06 Sep 1919

IF YOU WISH PRETTY, WEALTHY WIFE, write me.  Loose stamp for reply.  Lillian Sproul, Station H, Cleveland, O.

Editor’s Note:  Lillian Sproul first placed a want ad for a husband in January 1918.  She advertised all of the country and in Canada.  Her last add appeared in 1925.  I’m a little suspicious.

John’s Jersey Journal:

I hope all of you enjoyed your Labor Day Weekend. Today was my first day back in the office after a brief vacation. Erin and I went to Antigua to celebrate our one-year anniversary. Antigua is located in the West Indies and is southeast of the Dominican Republic and Puerto Rico. When we booked the trip, we enjoyed the steep discount due to hurricane season. However, with Hurricane Dorian, we now understand why rates are so discounted and appreciate a little bit better just how serious hurricanes are.

We flew around Dorian on the flight down. We stayed at a Sandals. The beach was the most beautiful I’ve seen. Crystal clear water. No seaweed. We spent a lot of time floating in the ocean. Often with an island drink. I enjoyed a variety of rum-based drinks, with varying types of fruit juices or liquors.

The highlight of the trip was jet skiing around the coast. I had never jet skied before so it was interesting to learn in the Atlantic ocean with the tide. My wife rode on the back which meant I had to be careful not to flip the jet ski. Although I came close once, I did not flip the jet ski. We saw Giorgio Armani’s estate, a shipwreck from 1905, and miles of beaches. In Antigua, they say there are 365 beaches—one for each day of the year. There certainly were a lot and I would have loved to spend more time there.

We had a tour guide lead us on the trip. Our guide liked to drive 50 mph so it was a fast tour. As I drove, my wife held on for dear life. The jet skis were her idea, and I, of course, had no objection. We both had a great time and the views of the island were worth it. Even if the tour guide had a lead foot, so to speak.

Glad to be back home. No New Jersey cases to report on this week. We will be back in two weeks to report on New Jersey insurance issues.

Until then,

John R. Ewell

[email protected]

School’s Back in Session:

The Akron Beacon Journal
Akron, Ohio

06 Sep 1919


Probably Due to Fact That Kiddies Are Back in School

          The week just closing has been the most quiet in the history of the Summit county juvenile court, according to Chief Probation Officer Keim. "It is the first week of school,'' he exclaimed, "and all the children are supposed to be under the immediate jurisdiction and supervision of their teachers. Since school opened Monday morning we haven't had a case of complaint or an arrest to make of juvenile offenders.

"It only goes to show that long vacations are a detriment to many children. We notice that as soon as the summer vacation has gone half its length the children begin to show signs of restlessness. They become impatient or the long period of idleness and for the want of something better to do they fall into mischief and become 'juvenile delinquents.’

Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies,

Sadly, there is no Connecticut history lesson for you this edition. And, with all the Benedict Arnold controversy we generated last time, it’s not entirely a bad fortnight to take a break. Yours truly has been diligently preparing a presentation on Social Media Liability and Coverage. I hope you’ll join us next week in Minneapolis, or Charlotte later in the fall, for the PLRB Regional Adjusters Conference.

This edition’s Connecticut case of note comes from the Second Circuit and deals with nonmutual offensive collateral estoppel which is a type of collateral estoppel that precludes a defendant from relitigating an issue it litigated and lost to another plaintiff. If you deal with products liability cases, or want to, you’ll need to read our analysis of this decision.

Lee S. Siegel

[email protected]

Don’t Forget to Subscribe to our Other Publications:

  • Labor Law Pointers:  Hurwitz & Fine, P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at [email protected]    to subscribeHere is a link to the most recent edition, published on September 4th.

  • Premises Pointers:  This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!).  Contact Jody Briandi at [email protected]  to be added to the mailing list.  Here is a link to the most recent edition, August 15.


Headlines from this week’s issue, attached:

Dan D. Kohane
[email protected]

  • Each Insured or Additional Insured has a Separate Obligation to Give Notice of Occurrence, Claim or Lawsuit to an Insurer, unless the Insureds are United in Interest or Free from Conflict

  • Horizontal v. Vertical – Right Decision, Wrong Reason


Robert E.B. Hewitt III

[email protected]

  • Battle of Experts on Summary Judgment Results in Issue of Fact

  • Defendant’s Own Experts Found Limitations In Range of Motion and Radiculopathy

  • Plaintiff’s Expert’s Conclusion that the Accident Exacerbated  Plaintiff’s Symptoms and Caused Decreased Range of Motion Rejected Because It Was Based on Plaintiff’s Subjective Complaints and Not Objective Medical Evidence

  • Postconcussive Syndrome Headaches and Cognitive Dysfunction Can Constitute a Significant Limitation

  • Plaintiff Failed to Present Competent Evidence in Admissible Form that Addressed How Plaintiff’s Injuries Were Causally Related to the Subject Accident in Light of Her Medical History


Steven E. Peiper

[email protected]

  • Court Holds Prior Representation of a Trustee to Plaintiff for an Unrelated Matter is an Insufficient Reason Attorney Disqualification

Agnes A. Wilewicz

[email protected]

  • Second Circuit holds that Broadly-Worded Arbitration Provision Expressly States that All Issues, including Arbitrability in the First Instance, Must be Decided by the Arbitrator, Not the Court

Jennifer A. Ehman

[email protected]


  • Petition Filed Against MVAIC Seeking to Compel Payment of No-Fault Benefits Denied as Premature



Brian D. Barnas

[email protected]

  • Motion for a Protective Order on Bad Faith Discovery Granted

  • Cause of Action against Insurer for Prima Facie Tort Failed

  • Cause of Action against Insurer for Negligent Hiring and Prima Facie Tort in No Fault Case Failed

  • Cause of Action against Insurer for Negligent Hiring and Prima Facie Tort in No Fault Case Failed, Take Two


John R. Ewell

[email protected]

  • All’s quiet in Jersey as summer winds down.


Lee S. Siegel

[email protected]

  • Nonmutual Offensive Collateral Estoppel Can Be Proven Through a Remedy


Brian F. Mark
[email protected]

  • The construction defect front remains quiet this week as the summer winds down.


Larry E. Waters

[email protected]

  • Plaintiff’s Claims for a Declaratory Judgment Denied as Plaintiff Failed to Satisfy the Heavy Burden to Disclaim Defense Coverage in the Pending State Court Action and Denied as the Court Found a Determination on the Duty to Indemnify was Premature


Eric T. Boron

[email protected]

  • Affirmance of Trial Court and Appellate Court Decisions Granting Insurer Summary Judgment, Upholding Unlisted Resident Driver Exclusion in Personal Automobile Insurance Liability Policy


Marina A. Barci

[email protected]

  • Arbitrator’s Award Deemed Arbitrary

  • Petition for Benefits from MVAIC Denied as Premature Since Petitioner Failed to Exhaust All Remedies Against Alleged Uninsured Driver  


Ryan P. Maxwell

[email protected]

  • Governor Signed into Law New Legislation Creating the Crime of Staging a Motor Vehicle Accident

  • Governor Signed into Law New Legislation Requiring Individuals to Take a Boating Safety Course in order to Operate a Motor Boat on Navigable Waters


Earl K. Cantwell

[email protected]

  • Pennsylvania Courts Enforce Policy Suit Limitations Clauses

  • Pennsylvania Courts Interpret Water Damage Claim Provision

That’s all she wrote.  Best wishes for a great September.

Feel free to call about any of the case on which we’ve reported OR to discuss a “situation”


Hurwitz & Fine, P.C. is a full-service law firm providing legal services throughout the State of New York and provide insurance coverage advice and counsel in New Jersey and Connecticut.

In addition, Dan D. Kohane is a Foreign Legal Consultant, permit no. 000241, issued by the Law Society of Upper Canada, and authorized to provide legal advice in the Province of Ontario on matters of New York State and federal law.

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

Eric T. Boron

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]

Marina A. Barci

Jody E. Briandi, Team Leader
[email protected]

Diane F. Bosse

Topical Index

Kohane’ 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

Lee’s Connecticut Chronicles

Off the Mark

Wandering Waters

Boron’s Benchmarks

Barci’s Basics (on No Fault)

Ryan’s Capital Roundup

Earl’s Pearls


Dan D. Kohane
[email protected]

08/28/19       Allen v. Leon D. DeMatteis Construction Corp.
Appellate Division, Second Department
Each Insured or Additional Insured has a Separate Obligation to Give Notice of Occurrence, Claim or Lawsuit to an Insurer, unless the Insureds are United in Interest or Free from Conflict
Leon D. DeMatteis Construction Corp. (”DeMatteis”), was hired as a general contractor. DeMatteis then subcontracted portions of the work to RJR Mechanical, Inc. (“RJR”). The contract between DeMatteis and RJR contained an indemnity/hold harmless clause and required RJR and its subcontractors to procure an insurance policy that named DeMatteis as an additional insured. The contract between DeMatteis and RJR provided that "[t]he provisions of this Contract shall apply to all such changes, modifications, omissions and additions (collectively, Changes'), as required by DeMatteis, with the same effect as if they were embodied in the original Plans." Thus, the insurance provisions of the contract applied to change orders.

RJR subcontracted Anron Sheet Metal Corp. (“Anron”). That subcontract was made "subject to the terms and conditions of the contract documents." Peerless Insurance Company (“Peerless”) issued a commercial general liability policy to Anron.

On January 5, 2009, an Anron employee, Allen, was injured while working on a change order. In March 2010, Allen sued DeMatteis and RJR alleging Labor Law violations. In October 2010, Peerless disclaimed coverage to RJR on the basis that RJR was not entitled to coverage as an insured under the policy, as well as on the basis that each claimant under the policy had an independent duty to provide timely notice of the loss, and RJR provided a late notice of claim.

In January 2011, RJR commenced a second third-party action against, among others, Anron and Peerless, seeking, inter alia, enforcement of a contractual duty to defend and indemnify, and alleging that Peerless acted in bad faith in refusing to comply with its contractual obligations.

In February 2016, Peerless moved, inter alia, for summary judgment dismissing the second third-party complaint insofar as asserted against it on the basis, inter alia, that the injured plaintiff's accident did not occur during covered, contracted-for work, and that neither RJR nor DeMatteis provided it with timely notice of the claim.

The Peerless policy required its insureds, including any additional insureds, to provide Peerless with notice "as soon as practicable" of both (1) an "occurrence," i.e., an accident, which might result in a "claim," and (2) a "claim" or "suit" brought against any insured or additional insured. RJR and DeMatteis, as additional insureds, had a duty, independent of Anron, to provide Peerless with the notices required under the policy.  The fact that an insurer may have received notice of the claim from the primary insured, or from another source, does not excuse an additional insured's failure to provide notice, unless the parties are united in interest or are not in conflict.  There was a question of fact whether the parties are united in interest.

The breach of contract claims remain but the bad faith claims are dismissed without opposition.

08/27/19       Arch Ins. Co. v. Nationwide Property & Casualty Ins. Co.
Appellate Division, First Department
Horizontal v. Vertical – Right Decision, Wrong Reason

S & J Industrial Co. (S & J) was the plumbing, sprinkler, and HVAC subcontractor on the project. S & J was required to clean up rubbish and waste caused by its operations and deposit it in designated locations or containers from which Criterion, the general contractor, would remove it. S & J's subcontract also required it to indemnify Owners "[t]o the fullest extent permitted by law" against claims, damages, etc. for personal injury or property damage "caused in whole or in part by [S & J's] negligent acts or omissions." Additionally, S & J was required to procure insurance naming Owners as additional insureds.  Arch insured the owner and GC.

Nationwide had issued to S & J a primary commercial general liability insurance policy with a $1 million per occurrence limit. The Nationwide primary policy provided additional insured coverage to any organization that S & J agreed to add as an additional insured but only for liability "caused, in whole or in part," by S & J's acts or omissions in the performance of such work. In addition, Nationwide issued to S & J an umbrella policy with an additional $5 million limit in excess of the underlying CGL policy limits and "any other collectible insurance."

In 2009, an S & J employee, Jan Tolpa, commenced an action (Tolpa action) against Owners alleging, inter alia, common-law negligence and violations of Labor Law §§ 200 and 241(6) after he was allegedly injured on the job. Arch assigned counsel to represent Owners in the Tolpa action.

Arch tendered the defense and indemnification of Owners to S & J under both the primary and umbrella policies. On August 3, 2010, Nationwide accepted tender by letter, without a reservation of rights. After the Tolpa action settled, with Nationwide contributing the $1 million limits of its primary policy and Arch contributing $950,000, Arch commenced this action seeking to recover from Nationwide the amounts Arch had contributed.

After trial, Supreme Court properly found that the additional insured coverage available to Owners included both the $1 million primary policy "and the $5 million excess limits with respect to contractual liability which S & J had pursuant to" S & J's contractual obligation to indemnify Owners.

Only S&J was negligent.  The Owners were not negligent and were only vicariously liable.

Since Owners were entitled to contractual indemnification from S & J and a complete pass through of liability, the Nationwide umbrella policy issued to S & J must respond before the Arch primary policy issued to Owners.

Editor’s Note:  We agree with the result, but for a different reason.  Arch’s policy for the owners comes before the umbrella policy issued to S&J but then, pursuant to the hold harmless agreement, the payments made by Arch for the Owners would be reimbursed through the excess policy.  See Harleysville Insurance Company v Travelers, 38 AD3d 1364 (4th Dept. 2007)

By the way, the court cited to a 2010 decision as precedent and that was a case that suggested cognac and cigars:

4/22/10           Indemnity Insurance Co. v. St. Paul Mercury Ins.
Appellate Division, First Department
Court Dissects Additional Insured and Indemnity Relationships in Well-Reasoned Decision.  For Those Who Love Complex Indemnity/Additional Insured Decisions, This One’s a Winner.  Enjoy.
Indemnity Insurance Company of North America (IICNA) sought reimbursement from St. Paul and Yonkers Contracting Company (Yonkers) for a $2 million payment IICNA made to settle a personal injury case involving an employee of Yonkers named Flood.  Yonkers and Flood were working on a restoration project on the Manhattan Bridge when Flood was hurt. Yonkers was the General Contractor on the job hired by the City of New York.  Yonkers retained a subcontractor, Romano, to paint portions of the bridge. Romano hung some cables for tarps.

Two days before the accident, a Yonkers superintendent asked a Romano foreman to remove a cable that was interfering with Yonkers’ work. The Romano foreman assured Yonkers it would be done, but failed to remove the cable. When Yonkers employees were thereafter working in the area, lifting a beam, the beam became stuck on the offending cable. Flood was injured as a result.

Romano had agreed to hold the City and Yonkers harmless from any claims arising from or in connection with any acts or omissions in the performance of Romano's work and procure insurance coverage naming the City and Yonkers as an additional insured. Romano secured a $1,000,000 primary policy with Royal and a $10,000,000 excess policy with IICNA.  Each policy named both the City and Yonkers.  St. Paul was Yonkers’ carrier (and that policy named the City as well.

So, the set up was this: 

  • Yonkers had purchased a policy with St. Paul, naming the City as an AI

  • Romano had secured a primary policy with Royal ($1 million) and an excess policy with IICNA ($10 million) naming the City and Yonkers as AI’s

    Flood sued the City and Romano, the City tendered to St. Paul which assigned counsel.  Royal provided counsel to Romano.  St, Paul tendered to Romano under the indemnity agreement. Romano asked Royal to assume the City’s defense and Royal agreed. 

    When the trial started. Royal tendered the defense of the City and Romano to IICNA since it appeared that Flood's claim would exceed Royal's policy limits. The court directed a verdict against the City, as owner, under the Labor Law. IICNA then settled the case for $3 million ($1 million of Royal’s money and $2 million of IICNA’s money). St. Paul paid nothing. St. Paul’s position was that it would not participate because its insured would be entitled to reimbursement from Romano under the indemnity agreement in the trade contract.

    IICNA then brought this action to recoup the amounts it paid from St. Paul arguing that St. Paul was the City’s primary carrier and should be paying. It argued that since IICNA was an excess carrier, St. Paul should pay first. IICNA argued that since it paid its $2 million on behalf of the City, and since the City had an indemnity agreement in its favor from Yonkers, the Yonkers’ carrier, St. Paul, should was responsible under subrogation principles. 

    The appellate court denied IICNA’s claims on several grounds:

  • St. Paul neither participated in the settlement negotiations nor agreed to the amount of the settlement, so it was not bound by to contribute to it;

  • IICNA, which orchestrated the underlying settlement, did not have the authority to bind St. Paul

  • St. Paul never abandoned its insured, it assumed the defense and successfully tendered to Romano and Royal

  • City was able to successfully transfer its liability to Romano since Romano was responsible for the accident.  It was required to indemnify the City from any claims "arising from or in connection with any acts or omissions"

  • Even though IICNA was an excess carrier, and St. Paul a primary carrier, St. Paul was entitled to secure reimbursement from Romano, under the indemnity agreement and therefore its carriers, including IICNA were ultimately liable to pay the judgment.

  • The subrogation argument advanced by IICNA fails (IICNA’s claim for reimbursement on behalf of the City against Yonkers) because IICNA cannot subrogate against its own insured.

Editor’s Note:  This one’s decided for the right reasons and deserves being read while drinking a cognac and smoking a good cigar.  See, Coverage Pointers, Volume XI. No. 22.


Robert E.B. Hewitt III
[email protected]

08/22/19       Cline v. Code
Appellate Division, Fourth Department
Battle of Experts on Summary Judgment Results in Issue of Fact

The lower court erred in entirely discounting the opinion of plaintiff’s treating chiropractor, inasmuch as the perceived deficiencies therein raised matters of credibility that were not amenable to resolution on a motion for summary judgment. Nonetheless, although the affidavit of plaintiff's chiropractor provides support for the conclusion that plaintiff sustained a serious injury to her cervical spine, plaintiff's own submissions also included medical records that raise triable issues of fact whether the injuries to her cervical spine constituted a permanent consequential limitation of use or a significant limitation of use, and therefore plaintiff failed to establish her entitlement to summary judgment on the issue of serious injury. In any event, even if plaintiff satisfied her prima facie burden, defendant's submissions were sufficient to raise a triable issue of fact.

Defendant's orthopedic medical expert opined that there were no disc herniations to plaintiff's spine, and that her range of motion was actually higher than normal in four directions and only negligibly limited in two directions. Those views were essentially repeated in the affirmed statements of two other physicians that were submitted by defendant. The parties presented conflicting expert opinions on the issue of serious injury requiring denial of both plaintiff's cross motion and defendant's motion.

08/22/19       Cuyler v. Allstate Ins. Co.
Appellate Division, Fourth Department
Defendant’s Own Experts Found Limitations In Range of Motion and Radiculopathy

The defendant failed to meet its initial burden with respect to the significant limitation of use and permanent consequential limitation of use categories inasmuch as defendant's own submissions raise triable issues of fact whether plaintiff's alleged limitations and injuries are significant or consequential. One of defendant's experts examined plaintiff and acknowledged that he exhibited radiculopathy, and defendant's other expert measured limitations in the range of motion in plaintiff's cervical spine.  Although the latter expert opined that plaintiff was feigning those limitations, the expert provided no factual basis for that opinion. As such there was an issue of fact.

08/22/19       Roger v. Soos
Appellate Division, Fourth Department
Plaintiff’s Expert’s Conclusion that the Accident Exacerbated  Plaintiff’s Symptoms and Caused Decreased Range of Motion Rejected Because It Was Based on Plaintiff’s Subjective Complaints and Not Objective Medical Evidence

Defendant met his initial burden of establishing that plaintiff did not have any serious injury following the second accident that arose from aggravation or exacerbation of her preexisting injuries and/or conditions. Specifically, defendant submitted plaintiff's medical records from before and after the second accident and affirmations from two experts. Both experts, after comparing pre-accident and post-accident magnetic resonance imaging (MRI) films, concluded that there was no change to plaintiff's lumbar and cervical spine and no showing of an acute injury. One of defendant's experts opined that all of the findings regarding the MRI films were compatible with only degenerative disc disease and that there was no evidence of posttraumatic injury attributable to the second accident. Additionally, the medical records submitted by defendant included a report from plaintiff's own expert in which plaintiff's expert determined that there was no change in plaintiff's MRI films after the second accident.

Although in that report plaintiff's expert also concluded that the second accident exacerbated plaintiff's symptoms and resulted in a decreased cervical range of motion, that conclusion was based upon plaintiff's subjective complaints of pain and was unsupported by objective medical proof. Thus, defendant's submission of the report of plaintiff's expert did not raise issues of fact precluding summary judgment. Plaintiff failed to raise a triable issue of fact sufficient to defeat summary judgment. In opposition, plaintiff submitted the affirmation of her expert and certain medical records and referenced the MRI of her cervical spine that was taken eight months after the second accident, which showed a new disc herniation at C6-7 on her right side and a progression of the previous C6-7 herniation. Plaintiff's expert, however, failed to explain how those changes were caused by the second accident, rather than by the ongoing degenerative process and his conclusion that the second accident exacerbated plaintiff's injuries did not raise a triable issue of fact because it was unsupported by objective medical evidence.

08/22/19       Synyder v. Daw
Appellate Division, Fourth Department
Postconcussive Syndrome Headaches and Cognitive Dysfunction Can Constitute a Significant Limitation

The  Defendants submitted, in support of their motion, plaintiff's deposition testimony, in which she testified, inter alia, that she lost consciousness during the accident and thereafter began to experience frequent, severe headaches, occasionally accompanied by double vision and lightheadedness, in addition to memory loss, which had persisted for more than two years. Defendants also submitted plaintiff's hospital records, which established that a CT scan performed at the hospital after the accident revealed "[h]yperattenuation within the posterior left frontal lobe" of plaintiff's brain. Due to the treating doctor's concern "for parenchymal hemorrhage," plaintiff was transferred to another hospital so that she could receive a higher level of care. Plaintiff's imaging studies at the second hospital revealed "a small amount of traumatic subarachnoid blood in the left frontal [lobe] area." Thus, contrary to defendants' contention, her claims of serious injury were not premised entirely on  subjective complaints of pain devoid of any independent objective medical evidence of a serious injury. Furthermore, defendants also submitted a report from plaintiff's primary care physician indicating that plaintiff had complained of frequent headaches accompanied by double vision since the accident and that, following an examination, plaintiff's physician treated plaintiff for a concussion. Defendant’s own submissions raised questions of fact and that, consequently, defendants failed to meet their initial burden of presenting competent evidence establishing that the injuries do not meet the serious injury threshold.

The court also rejected defendants' contention that they met their initial burden of establishing that plaintiff's injuries did not limit her in any significant or consequential manner. Although plaintiff testified at her deposition that she was able to perform her job as a cashier without restriction, plaintiff also testified that she was unable to sit through college classes and had continued to experience "[v]ery bad migraines" that lingered for hours and caused dizziness and lightheadedness. In addition testified that she experienced memory loss. It is well settled that postconcussion syndrome, posttraumatic headaches, and cognitive dysfunction as a result of a collision can constitute a significant limitation. Moreover, plaintiff testified that she continued to suffer from her accident-related injuries two years after the accident. Thus, there was an issue of fact.

08/22/19       Woodward v. Ciamaricone
Appellate Division, Fourth Department
Plaintiff Failed to Present Competent Evidence in Admissible Form that Addressed How Plaintiff’s Injuries Were Causally Related to the Subject Accident in Light of Her Medical History

The Appellate Division rejected plaintiff's contention that defendants failed to meet their initial burdens of establishing that plaintiff did not sustain a serious injury that was causally related to the accident. Here, defendants met that burden by establishing, through the affirmed reports of their experts who examined plaintiff and reviewed her medical records and imaging studies, that plaintiff's injuries to her lumbar and cervical spine were related to a preexisting condition and that she did not sustain a serious injury that was causally related to the subject accident. The expert orthopedic physician determined that plaintiff had "multiple levels of degeneration, both in the cervical and lumbar spine" that were "consistent with age-related degenerative changes." He thus opined that plaintiff's "chronic neck and back pain [were] due to a pre-existing degenerative condition and were not traumatically induced." Likewise, the other expert orthopedic surgeon determined that plaintiff's imaging studies showed "significant degenerative disease at the L4-5 level" and "degenerative disease . . . at the C5-6 and C6-7 levels with associated disc bulges and facet joint arthritis," and concluded that the "bony changes" in plaintiff's spine were "obviously chronic and longstanding." The expert orthopedic surgeon diagnosed plaintiff with only cervical and thoracic strains, and opined that surgery was not necessary and that plaintiff was capable of working without restrictions.

Because defendants met their respective initial burdens on their motion and cross motion, the burden shifted to plaintiff. Plaintiff, however, failed to present competent evidence in admissible form that adequately addressed how plaintiff's alleged injuries, in light of her past medical history were causally related to the subject accident and therefore failed to raise a triable issue of fact in opposition. Contrary to her contention that she had no complaints related to her cervical spine until after the accident, plaintiff's own submissions in opposition to defendants' motion and cross motion established that, prior to the accident, she treated with a chiropractor more than 50 times for complaints of low back and neck pain. Furthermore, although plaintiff's orthopedic expert concluded that she had "40% permanent loss of use of the spine as a result of the automobile accident," he did not reject the opinions of defendants' experts, nor did he dispute the medical records or imaging studies that established the degenerative condition of plaintiff's cervical and lumbar spine, and he " failed to specify how plaintiff's conditions were caused or further exacerbated' by the subject accident.

Steven E. Peiper

[email protected]

08/22/19       Benevolent & Protective Order of Elks v. Creative Comfort Sys.
Appellate Division, Fourth Department
Court Holds Prior Representation of a Trustee to Plaintiff for an Unrelated Matter is an Insufficient Reason Attorney Disqualification

The instant case has its origins in a fire that occurred at an Elks Lodge due to a malfunctioning boiler.  Creative Comfort allegedly installed the boiler, and the Elks claims that it was Creative’s negligence which caused the fire.  After nearly three years of litigation, Creative attempted to switch counsel to the Rupp Baase law firm. 

Plaintiff objected  on the basis that Rupp Baase had previously (and perhaps still did) represented a Trustee in this particular Elks Lodge.  The trial court granted the Elks application to disqualify the Rupp Baase firm, and the Appellate Division reversed. 

In reaching its conclusion, the Court first noted that Plaintiff, as movant, had to establish the existence of a prior attorney/client relationship, that the interests of the Creative and the Trustee were materially adverse, and that the matters involved in both registrations were “substantially related.”  With regard to the third prong, the Court held that the Elks had to establish that in addition to being “substantially related” the movant must also establish that the Trustee would have passed specific and confidential information about the present case. 

Here, plaintiff made no showing of what information Rupp Baase may have received in representing the Trustee which would be relevant to the instant lawsuit. In addition, the Appellate Division also noted that the movant had failed to establish that interests of the Trustee were materially adverse.  The mere fact the Trustee may have indicated that the Lodge had sustained a fire due to the work of Creative does not, without more, create a conflict which requires disqualification. 

The Court also rejected plaintiff’s alternative argument that Rupp Baase was still actively representing a Trustee of the plaintiff.  In so holding, the Court noted that there was no evidence that Rupp Baase would be representing differing interests, nor was there evidence that the firm’s professional judgment would be impacted by the representation of both parties. 

In a concurring opinion, Justice Curran noted that he believed that the Elks lacked standing to bring this challenge in the first place.  Rather, a judiciable controversy does not exist until the actual represented party is named in the litigation.  As the Trustee is not the same “entity” as the Elks, it follows that he is not active in this litigation.  The Elks cannot raise the conflict on the Trustee’s behalf. 


Agnes A. Wilewicz

[email protected]

08/30/19       Federal Ins. Co. v. Metropolitan Transportation Authority
United States Court of Appeals, Second Circuit
Second Circuit holds that Broadly-Worded Arbitration Provision Expressly States that All Issues, including Arbitrability in the First Instance, Must be Decided by the Arbitrator, Not the Court

In a decision scant of facts, the court here addressed whether an arbitration clause bound the parties to arbitrate all questions concerning the contract at issue, including the “gateway question” of arbitrability in the first instance. Federal Insurance was a surety of a performance bond on behalf of principal Lanmark Group and Lanmark had a contract with the New York City Transit Authority (NYCTA) that contained a broad arbitration provision. In its analysis, the court cited well-established precedent that “a broadly-worded arbitration clause which is not restricted to the immediate parties may be effectively incorporated by reference into another agreement”.

“Here, the bond expressly incorporated by reference all terms of the Contract. And the arbitration provision within the Contract states, in pertinent part, “[t]he parties to this Contract hereby authorize and agree to the resolution of all Disputes arising out of, under, or in connection with, the Contract in accordance with the [arbitration procedures described later in the provision].” The provision defines “disputes” as “any . . . challenge or assertion” by Lanmark having anything to do with the Contract. That language is sufficiently broad to bind Federal despite it being a nonsignatory to the Contract.”

Moreover, the provision used the very broad “any and all” language when it stated that the parties would arbitrate “all disputes arising out of, under, or in connection with, the Contract”. This language clearly and unmistakably required the issue of arbitrability to be decided by an arbitrator, not the court.

Jennifer A. Ehman
[email protected]

08/30/19       Matter of Haskins v. Motor Veh. Acc. Indem. Corp.
Supreme Court, Kings County
Hon. Francois A. Rivera
Petition Filed Against MVAIC Seeking to Compel Payment of No-Fault Benefits Denied as Premature

This action was filed by order to show cause and petition.  Petitioner sought to compel respondent Motor Vehicle Accident Indemnification Corp. (MVAIC) to provide payment of no-fault benefits.  In considering the petition, the court clarified the issue noting that petitioner was seeking a judgment declaration that he is a “qualified person” as defined in Insurance Law § 5202(b).

On August 17, 2018, petitioner was riding his bicycle when he was struck and injured by a vehicle which fled and then returned to the scene.  The police arrived, interviewed the petitioner and the driver of the offending vehicle and completed an accident report.

In compliance with Insurance Law § 5208 (a) (1), the petitioner timely filed a notice of claim with MVAIC dated September 4, 2019.  By letter dated March 19, 2019, MVAIC advised petitioner that he had not yet complied with the requirements of Article 52 of the Insurance Law.  In particular, MVAIC stated that it could not provide liability or no-fault benefits until it received proof of lack of insurance and a default judgment against the operator and owner of the offending vehicle.

Insurance Law article 52 is intended to provide, inter alia, no-fault benefits for qualified persons for basic economic loss arising out of the use and operation of uninsured motor vehicles (see Insurance Law § 5201).

Insurance Law § 5221 then requires that respondent provide for the payment of first-party benefits to a "qualified person" for basic economic loss arising out of the use or operation in New York of an uninsured motor vehicle.  "Qualified person" is defined as "a resident of this state, other than an insured or the owner of an uninsured motor vehicle and his spouse when a passenger in such vehicle, or his legal representative"

In the court’s opinion, when the petitioner knows the identity of the driver or the owner of the offending vehicle, the petitioner must first exhaust remedies against those individuals before seeking relief from MVAIC.

In the event that proceedings against the operator and owner should result in a judgment finding that neither the owner or operator or their insurer is liable for petitioner’s injuries, the petitioner may then assert a claim against MVAIC pursuant to Insurance Law § 5218 (c).


Brian D. Barnas
[email protected]

08/30/19       Christopherson v. American Strategic Insurance Corporation
United States District Court, Eastern District of Wisconsin
Motion for a Protective Order on Bad Faith Discovery Granted

Plaintiff had a homeowners’ policy with Defendant. Two trees fell on Plaintiff’s house in the summer of 2018, rendering the home uninhabitable. Plaintiff made claims on his policy for each instance of damage, but he asserted that Defendant wrongfully delayed its investigation and, as of the time of the filing of the complaint, had refused to pay the claims.  Plaintiff sought consequential damages, extra-contractual damages, and attorney’s fees.

Defendant filed a motion for a protective order, seeking to avoid responses to Plaintiff’s discovery requests relating to his bad faith claim.  Defendant argued that it had paid Plaintiff various amounts prior to the filing of this action.  After filing, Plaintiff’s counsel provided Defendant a figure comprising Plaintiff’s “undisputed losses in the case.”  Soon afterward, Defendant paid that amount.  Defendant contended that this payment fully resolved Plaintiff’s breach of contract claim, thereby precluding discovery on the bad faith claim.

In Wisconsin, courts limit access to discovery on bad faith claims to cases where the court is satisfied that the claimed breach of contract is well founded and can be proved.  Defendant argued that by paying Plaintiff the full and undisputed value of his loss, the Plaintiff could no longer establish breach of contract.  Plaintiff presented no argument to the contrary.  As such, the court granted Defendant’s motion for a protective order.

08/22/19       Greater Buffalo Accident & Injury Chiro. v. Geico Cas. Co.
Appellate Division, Fourth Department
Cause of Action against Insurer for Prima Facie Tort Failed

Plaintiff, as the assignee of certain claims for no-fault benefits, commenced this action asserting a single cause of action for prima facie tort and seeking punitive damages. Defendant moved to dismiss the complaint.  Geico argued that the court below erred in denying its motion in part because plaintiff's prima facie tort cause of action, which, in essence, alleges that defendant engaged in conduct violating 11 NYCRR 65-3.2, was really a cause of action under the unfair claim settlement practices statute, i.e., Insurance Law § 2601, or the corresponding regulations (11 NYCRR 216.0 et seq.), none of which give rise to a private cause of action.

The court concluded that the complaint failed to state a cause of action for prima facie tort.  In New York, prima facie tort affords a remedy for the infliction of intentional harm, resulting in damage, without excuse or justification, by an act or a series of acts which would otherwise be lawful.  Here, the prima facie tort cause of action failed because it did not allege that Geico’s sole motivation was disinterested malevolence.  In addition, the complaint failed to allege special damages as required and was not sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences plaintiff intended to prove.  The complaint was devoid of relevant facts, including the time period at issue, the number of forms that defendant requested plaintiff to resubmit, and the number of claims involved.

In light of the dismissal of the prima facie tort claim, Geico’s other arguments were rendered academic.

08/22/19       Medical Care of Western New York v. Allstate Ins. Co.
Appellate Division, Fourth Department
Cause of Action against Insurer for Negligent Hiring and Prima Facie Tort in No Fault Case Failed

Plaintiff, as the assignee of claims for no fault benefits of individuals who had received health care services from plaintiff for injuries sustained in motor vehicle accidents, commenced this action against defendant, the issuer of the assignors' no-fault policies. Plaintiff alleged that defendant violated the no-fault regulations by requesting verifications and examinations under oath and delaying the payment of claims for treatment rendered by plaintiff to the assignors.

Although the no-fault claims were adjudicated and paid by defendant after arbitration, plaintiff sought further damages from defendant for the manner in which those claims were processed.  First, the court concluded that there was no evidence of breach of contract.  The contracts had specific remedies available to Plaintiff and all such were applied.

Next, the claim for negligent hiring was also dismissed.  Plaintiff alleged that defendant's employees delayed the payment of plaintiff's claims and sent plaintiff requests for verification and examinations under oath, that defendant was aware of its employees' propensity to commit those acts, and that defendant nevertheless continued to employ them.  The court found no allegations supporting a theory that Defendant’s employees committed any acts of negligence.  Thus, the negligent hiring cause of action failed.

In addition, the cause of action for prima facie tort based on the Defendant’s “bad faith” failed.  Plaintiff offered only conclusory allegations that failed to state that Defendant had a malicious motive exclusively directed to the injury and damage of Plaintiff.  The cause of action also failed because Plaintiff failed to allege specific and measurable loss.

06/28/19       Walden Bailey Chiropractic, P.C. v. Geico Casualty Company
Appellate Division, Fourth Department
Cause of Action against Insurer for Negligent Hiring and Prima Facie Tort in No Fault Case Failed, Take Two

Plaintiff commenced this action seeking damages arising from defendant's alleged failure to pay hundreds of insurance claims submitted to it by plaintiff for health care services that plaintiff rendered to defendant's insureds.

Plaintiff failed to allege facts constituting negligent hiring, supervision, or retention sufficient to survive defendant's motion to dismiss.  Here, plaintiff's cause of action for negligent hiring, supervision, or retention is based on the factual allegations that defendant's employees denied or delayed the payment of claims to plaintiff and sent repetitive verification demands, and that defendant was aware of what its employees were doing and continued to employ them.  Plaintiff failed to allege that those acts were committed outside the scope of the employees' employment.  Plaintiff also failed to allege how the employees' alleged acts of denying claims and sending verification demands constituted acts of negligence.

Plaintiff also failed to allege facts sufficient to establish the elements of a cause of action for prima facie tort.  Plaintiff alleged that defendant acted in "bad faith" and intended harm by repeatedly sending plaintiff duplicitous requests for verification forms to be completed.  Those conclusory statements failed to allege a malicious act unmixed with any other and exclusively directed to the injury and damage of another.  Furthermore, the injuries alleged by plaintiff were couched in broad and conclusory terms and did not constitute specific and measurable loss stated with particularity.


John R. Ewell
[email protected]

All’s quiet in Jersey as summer winds down.

Lee S. Siegel

[email protected]

08/22/19       Bifolck v. Philip Morris USA Inc.
United States Court of Appeals, Second Circuit
Nonmutual Offensive Collateral Estoppel Can Be Proven Through a Remedy

Nonmutual offensive collateral estoppel is a type of collateral estoppel that precludes a defendant from relitigating an issue it litigated and lost to another plaintiff. For those of you who handle products liability matters, especially on behalf of product manufacturers, it’s a big deal. If the XYZ Company’s widget is found defective at a trial in Mississippi, that product may be found defective in Connecticut (and everywhere else) by operation of nonmutual offensive collateral estoppel. And, that’s what the plaintiff here attempted to do.

Jeanette Bifolck smoked Marlboro cigarettes from the early 1970s until shortly before her lung cancer death in 2000. Her husband sued Philip Morris under the Connecticut Products Liability Act, alleging that the “toxic ingredients” in the Marlboros caused his wife’s death. He alleged that Philip Morris manipulated the nicotine content of cigarettes, and that the cigarettes were negligently designed and were unreasonably dangerous. If these allegations sound familiar, you’re right – they track the 2006 findings from the RICO litigation against the major American tobacco companies.

Bifolck sought preclusive effect of the findings made in the RICO case. But, the district court denied the motion, concluding that the issues in a single-plaintiff state product’s liability action were different from a massive, multi‐defendant civil RICO case. The trial court also, it seems, threw up its hands at attempting to determine which findings were material to the holding in the RICO case. “The district court… reasoned that the thousands of findings in DOJ made it ‘literally impossible’ to determine which finding(s), if any, were necessary to the court’s judgment.”

Trial proceeded and the jury found against Bifolck.

The Court of Appeals found that the trial court erred and remanded for a determination as to whether the application of nonmutual offensive collateral estoppel would be unfair to Philip Morris. There are four elements that must be established for nonmutual offensive collateral estoppel to apply (in addition to fairness):

(1) the issues must be identical;

(2) the issue must have been actually litigated and decided;

(3) there must have been a full and fair opportunity for litigation in the prior proceeding; and

(4) the issue previously litigated must have been necessary to support a valid and final judgment on the merits.

Philip Morris argued that the two cases are not identical because the RICO matter covered 50 years of conduct and made no findings about Marlboro. The Second Circuit rejected that argument and dismissed the trial court’s theory that the magnitude of the two cases rendered them non-identical. “[W]e have previously observed, the identicality standard does not require either that the two cases have the same scope or that they involve the same causes of action.”

Where the appellate court broke new ground, however, was in the finding on the fourth prong – necessity. The panel agreed with the district court that, with 148 predicate RICO findings, it is virtually impossible to determine which, if any, factual findings were necessary to the RICO holding. The court, agreeing with the plaintiff, held that it can look to the remedy imposed in the preceding case for evidence of necessity. Bifolck argued that Philip Morris made a corrective statement to the media, as per the RICO judgment, that was nearly identical to the order of preclusion he sought. “The necessity requirement is met where, as here, the issue is essential to the remedy imposed, even if the issue is not essential to a finding of liability...A remedy is, therefore, part of the “final outcome” of a case and is necessary to its judgment.”

Recognizing the judicial wariness of the application of the nonmutual offensive collateral estoppel doctrine, the panel remanded the case to the trial court to undertake a fairness evaluation. A non-exhaustive list of factors includes determining whether there are inconsistent prior liability judgments, are there procedural opportunities available to the defendant in the current action that were not available in the preclusive action that could lead to a different result, a comparison of the defendant’s incentives to litigate the cases, the scope and complexity of the two actions, and whether they involve different causes of action.  The appeals court also highlighted as particularly relevant whether application of the doctrine would have made the proceeding more efficient.

The remand is surely to be closely watched and itself appealed. We will follow and report.


Brian F. Mark
[email protected]

The construction defect front remains quiet this week as the summer winds down.


Larry E. Waters
[email protected]

08/27/19       Gemini Ins. Co. v. Titan Construction Services, LLC et al.
United States District Court, Southern District of New York
Plaintiff’s Claims for a Declaratory Judgment Denied as Plaintiff Failed to Satisfy the Heavy Burden to Disclaim Defense Coverage in the Pending State Court Action and Denied as the Court Found a Determination on the Duty to Indemnify was Premature

This matter stems from state court lawsuit brought by Santos Mejia, a construction worker, inured at a Hudson View renovation project in November 2016.

In early May 2016, Hudson View and Titan executed a contract, which required Titan to purchase insurance in New York State (the “Hudson View Contract”). Such insurance was required to provide coverage for “[c]laims for damages because of bodily injury. . . to the Contractor’s employee [or] . . . any person other than the Contractor’s employees.” The Hudson View Contract also required that the insurance policy include “[a]n endorsement naming . . . Hudson View Gardens, Inc. . . . as [an] additional insured[]. . . .”

Pursuant to the Hudson View Contract, Titan procured liability insurance from Gemini Insurance Company (the “Gemini Policy”). The Gemini Policy included in relevant part a “Designated Ongoing and Completed Operations” exclusion. The Exclusion Provision defined “excluded operations” as “[a]ny and all work performed by any insured except for the work below: [t]he executive supervision of work performed by others.” Further, the Exclusion Provision explained that the Gemini Policy does not apply to . . . [b]odily injury arising out of or the resulted operations described in the schedule of the endorsement. . . .” Further, under the Gemini Policy’s “Additional Insured Endorsement”, Hudson View qualified as an “additional insured.”

In addition to procuring insurance, Titan hired several subcontractors including JME, an asbestos removal company, Brenmac, a sidewalk shed installer, and Siplast, a roofing company.  The subcontractors began work on the project in September 2016 and was scheduled for completion in September 2019.

Santos Mejia began working on demolition and brick replacement at the Hudson View Site between August and September 2016. On November 10, 2016, Santos Mejia was allegedly injured while working at the Hudson View site.  On January 12, 2017, Mejia sued Hudson View in New York State Court, seeking to recover damages for his injuries and alleging that Hudson View’s negligence and/or New York Labor Law violations caused the accident. The Complaint did not identify nor name Titan as a defendant.

At or near the time of the State Court filing, Santos Mejia submitted a claim for workers’ compensation benefits under an insurance policy issued to Titan by the New York State Insurance Fund.  On June 9, 2017, Santo Mejia was awarded workers’ compensation benefits.

After receiving notice of the claim, Gemini undertook an investigation. During its investigation Gemini was informed that Santos Mejia was an employee of Garcia Contractor. Further, Gemini was informed that Garcia Contractor had its own insurance carrier--Hudson Specialty Insurance Carrier (“Hudson Specialty).

On May 16, 2017, Hudson View impleaded Titan to into the underlying state action, for which Gemini agreed to cover Titan’s defenses.

Thereafter, Gemini learned that Santos Mejia’s Verified Bill of Particulars stated Mejia was a Titan employee. Further, Gemini learned that the New York State Workers’ Compensation Board found that Santos Mejia was an employee of Titan.  Subsequently, Gemini officially disclaimed coverage pursuant to the Exclusion Provision in the Gemini policy, and commenced the current declaratory judgment action.

The court began its analysis discussing whether Santos Mejia was an employee of Titan or an employee of Garcia Contractor.  The Court noted that this question turned on whether Garcia Contractor may be considered a subcontractor distinct from Titan, or whether the two entities were one and the same. Gemini argued that the Curt should look to the 2010 Construction Industry Fair Play Act (“CIFPA”), which set forth 12 criteria that must be satisfied for a business entity that maybe a subcontractor for consideration as a separate business entity from the general contractor.

Looking to the CIFPA as a guidepost, the Court found that the documentary evidence produced at trial failed to demonstrate an occasion on which Garcia Contractor performed work at Hudson View under its own name. Further, the Court noted that the evidence available failed to meet the CIFPA factor which requires that the “contractor does not represent the [subcontractor] as an employee of the contractor to its customers.” In support the Court highlighted that Titan made no efforts to correct designation in meeting notes and correspondence that Garcia Contractor was a separate entity from Titan.  Therefore, the Court found that the “preponderance of the evidence demonstrated that (1) Garcia Contractor never performed services at the site under its own name, and (2) that Titan frequently represented Garcia Contractor employees as its own employees to Hudson View personnel.”  Since the failure to satisfy any component of the 12 factors of the CIFPA criteria is dispositive, the Court concluded that Garcia Contractor was not a subcontractor and Santos Mejia was a Titan employee.

Next, the Court considered whether Gemini had a duty to defend the allegations in the underlying action. The court began by noticing that it must determine how to interpret the operative phrases “executive supervision” and “others” as neither of which are expressly defined in the Gemini Policy. Looking to the “plain meaning”, the Court found that “executive” is defined as “having administrative or managerial responsibility. The Court found that “others” is afforded its common-sense interpretation of meaning someone other than the insured.  As such, the Court determined that the Exclusion Provision in the Gemini Policy concerns situations where Titan is overseeing or directing the work of non-Titan employees.

Further, the Court noted that contrary to Gemini’s interpretation, the connection phrase “arising out of or the result of. . . . has border significance and are ordinarily understood to mean originating from, incident to, or having a connection with.” As such, the Court concluded that the Exclusion Provision required that a covered injury need only result in some way from Titan’s high-level supervision of others at the worksite, not that the injured worker be a non-titan employee or himself engaged in executive supervision.

Thereafter, the Court looked to whether the allegations in the State Action cast the pleadings wholly within the exclusion. The Court found that the pleadings did not. In support, the Court highlighted that there was no allegation regarding what caused Mejia’s accident and therefore leaves open the possibility that regardless of who employed Santos Mejia or what he was doing at the time, his injury may have been casually connected to Titan’s work as an executive supervisor. Therefore, the Court concluded that it could not determine there was no possible factual or legal basis upon which the insurer may eventually be held obligated indemnify Titan under any policy provision.  Accordingly, the Court ruled that Gemini did not meet its heavy burden to disclaim coverage and was obligated to continue defending defendants in the State Action.

Next, the Court considered Gemini’s duty to indemnify. The Court concluded that such a determination was premature as what caused Santos Mejia’s accident, as who was responsible for the alleged injury had yet been established in the State Court action.  As such, the court dismissed all parties’ claims for declaratory judgment on the duty to indemnify as premature.

In sum, the Court denied Gemini’s claims for a declaratory judgment and granted Defendants’ counterclaims for a declaratory judgment on the duty to defend. Further, the Court denied Defendant’s all other claims.

Eric T. Boron
[email protected]

08/20/19       Safe Auto Insurance Company v. Oriental-Guillermo
Supreme Court of Pennsylvania
Affirmance of Trial Court and Appellate Court Decisions Granting Insurer Summary Judgment, Upholding Unlisted Resident Driver Exclusion in Personal Automobile Insurance Liability Policy

In a unanimous decision the Pennsylvania Supreme Court recently concluded in a declaratory judgment action that an unlisted resident driver exclusion (“URDE”) in a personal auto insurance policy was enforceable.  The URDE at issue in the case did not violate public policy, and it did not violate the Pennsylvania Motor Vehicle Financial Responsibility Law (“MVFRL”), per the Court’s decision.

The background facts are as follows.  Ms. Dixon was driving a car owned by her boyfriend, Mr. Oriental-Guillermo (the “policyholder”), when she was involved in an accident with another vehicle. At the time of the accident, Ms. Dixon resided with the policyholder who had purchased a personal automobile insurance policy (the “policy”) for his vehicle through Safe Auto Insurance Company (“Safe Auto”). The policy contains an URDE, which excludes from coverage any individuals who live with, but are not related to, the policyholder, and whom the policyholder does not specifically list as an additional driver on the policy.  The Supreme Court’s decision recited that the URDE at issue provides:




1. That occurs while your covered auto is being operated by a resident of your household or by a regular user of your covered auto, unless that person is listed as an additional driver on the Declarations Page.

It was undisputed Ms. Dixon was not listed as an additional driver on the policy.

A passenger in the other vehicle sued Ms. Dixon among others in a personal injury action.  Safe Auto then commenced this action seeking a declaratory judgment upholding the enforceability of the URDE with respect to Ms. Dixon.

The trial court granted Safe Auto summary judgment, finding the URDE unambiguous, valid and enforceable.  As such, Safe Auto had no duty under the policy to defend or indemnify Ms. Dixon in the underlying personal injury suit.

On appeal, the Superior Court affirmed the trial court’s order, in a divided, published opinion (Safe Auto Ins. Co. v Oriental-Guillermo, 170 A.3d 1170 (Pa. Super. 2017)).  The Superior Court majority agreed with the trial court that the policy was unambiguous, the exclusion applied, and Safe Auto had no obligation to defend or indemnify Ms. Dixon.  However, a dissenting judge wrote an opinion concluding the URDE to be contrary to Pennsylvania’s MVFRL, and, “very possibly contrary to public policy”.  Ms. Dixon petitioned for, and was granted, allowance of an appeal to the Pennsylvania Supreme Court for consideration of two discrete issues:

  1. Did the Superior Court err as a matter of law in finding that the [URDE] in a Personal Auto Policy is valid and enforceable and not violative of the terms and provisions of the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa.C.S.A. § 1701, et seq.?

  2. Did the Superior Court err as a matter of law in finding that the [URDE] in a Personal Auto Policy is valid and enforceable and not violative of the public policy of the Commonwealth of Pennsylvania as embodied in § 1786 of the [MVFRL], 75 Pa.C.S.A. § 1786, which implicitly directs that all permissive users of an insured vehicle be insured under the owner's insurance policy?

The Pennsylvania Supreme Court held that the URDE of liability coverage as it pertained to the policyholder’s live-in girlfriend Ms. Dixon was not contrary to the underlying public policy of Pennsylvania’s MVFRL, and as such it was enforceable.  Supreme Court determined the policy contained a clear and unambiguous URDE, and took note of the fact that the policyholder had permitted his vehicle to be operated by his girlfriend Ms. Dixon, who, under the express terms of URDE, was not covered by the policy.  The Supreme Court further noted the policyholder had the option of adding his girlfriend to the policy but chose not to do so, and this choice undoubtedly resulted in reduced insurance premiums.  In the absence of provisions in the MVFRL to the contrary, Safe Auto was not compelled, ruled Supreme Court, to underwrite unknown and uncompensated risks, stating the policyholder is not entitled to receive gratis coverage. Moreover, in the absence of provisions in the MVFRL to the contrary, insurers are not compelled to underwrite unknown and uncompensated risks. Thus, Supreme Court declined to hold that the URDE in this case is contrary to public policy.

So, the law in Pennsylvania continues to be that your roommate or significant other will not be covered by your Safe Auto personal auto insurance policy containing an URDE  if he or she is involved in an accident and is not specifically listed as an insured driver on your auto insurance policy.  The Pennsylvania Supreme Court was asked by the appellant here to extend insurance coverage to these household members, who are permissive users, but are not resident relatives or named insureds on the vehicle owner’s insurance policy, but the Court declined, unanimously, to do so.

Marina A. Barci

[email protected]

09/03/19       Matter of Global Liberty Ins. Co. of N.Y. v. Top Q, Inc.
Appellate Division, First Department
Arbitrator’s Award Deemed Arbitrary

The assignor to Top Q failed to attend independent medical examinations duly scheduled by Global. Apparently, the master arbitrator did not take this into consideration when they awarded Top Q some amount after arbitration. Global petitioned Bronx County Supreme Court to vacate the master arbitrator’s award, but the petition was denied. Thereafter, Global appealed to the First Department, which reversed the lower court and granted Global’s petition to vacate the award. The Court found that the arbitrator’s award was arbitrary because it irrationally ignored the controlling law that the assignor’s failure to appear for the IME’s rendered the provider’s ability to collect no-fault benefits void under the policy.

08/30/19       Matter of Haskins v. MVAIC
Supreme Court, Kings County
Petition for Benefits from MVAIC Denied as Premature Since Petitioner Failed to Exhaust All Remedies Against Alleged Uninsured Driver  

Haskins was riding his bicycle on Atlantic Avenue in Brooklyn around 2:20am when he was hit by a vehicle from Texas. The driver initially fled, but returned to the scene after a witness followed him. The police arrived on scene shortly thereafter and made a report of the investigation. Haskins then filed a timely notice of claim with MVAIC.

MVAIC informed Haskins that he had not yet complied with the requirements of Insurance Law Article 52 to be considered a covered person. In particular, MVAIC said that it could not provide no-fault benefits until it received proof of lack of insurance and a default judgment against the operator and owner of the vehicle who hit him.

The point of Insurance Law Article 52 is to provide no-fault benefits to qualified persons for basic economic loss arising out of the use and operation of an uninsured vehicle. The problem that Haskins had here was that he knew the identity of the driver and did not exhaust all remedies against that driver before seeking benefits from MVAIC. The only attempts Haskins made to determine whether the driver had insurance was to search Texas vehicle records and insurance department information.

When an injured party knows who the driver or owner of the offending vehicle is, they must first exhaust against those individuals before seeking relief from MVAIC. Until all options against the driver or owner have been exhausted, any claims for relief against MVAIC are premature. Thus, Haskins petition was denied.

Ryan P. Maxwell
[email protected]

08/08/19       “Alice’s Law”, Chapter 151 of the Laws of 2019
New York State Assembly
Governor Signed into Law New Legislation Creating the Crime of Staging a Motor Vehicle Accident
On August 8, 2019, Governor Andrew Cuomo signed bill number A03985 into law, which added new sections to the New York Penal Law that impose tough criminal penalties on those who engage in staged accidents for the purposes of committing insurance fraud.

Sponsored by Assemblyman David Weprin, the bill seeks to deter individuals from engaging in insurance fraud, thereby making the roads safer while simultaneously reducing insurance premiums for all policyholders. To that end, Assemblyman Weprin’s sponsor memorandum (“Sponsor Memo”) asserted that “New York State drivers should not have to drive down the road wondering whether someone might purposefully drive into them for the purpose of engaging in insurance fraud.”

The title of this act, “Alice’s Law”, highlights the importance of the above aims and, as explained during the Assemblyman Weprin’s Assembly vote on May 6, 2019, “pay[s] tribute to the memory of Alice Ross.” Ms. Ross was a 71-year-old grandmother who was killed as a result of a staged accident that occurred on March 22, 2003. The Sponsor Memo notes that

“[t]hese ‘accidents’ are arranged and intentionally committed by criminals who then file fraudulent insurance claims for fake crash injuries and rob insurance companies and their policyholders. While the economic cost of such activity is staggering with no-fault insurance fraud estimated to cost insurance companies and their policyholders $1 billion per year, staged accidents also pose a serious public safety risk, as is demonstrated by the untimely death of Alice Ross. Women and elderly drivers are in particular danger because they are often targeted for these accidents because they are less likely to be confrontational after an accident, thereby making it easier for criminals to engage in this activity.”

The newly enacted NY Penal Law § 176.75 creates the crime of staging a motor vehicle accident in the second degree, which is a class E felony. “A person is guilty of staging a motor vehicle accident in the second degree when, with intent to commit and in furtherance of a fraudulent insurance act, he or she operates a motor vehicle and intentionally causes a collision involving a motor vehicle.”

Where injuries are caused by the conduct described above in § 176.75, the newly enacted NY Penal Law § 176.80 creates the crime of staging a motor vehicle accident in the first degree, which is a class D felony. “A person is guilty of staging a motor vehicle accident in the first degree when he or she commits the offense of staging a motor vehicle accident in the second degree and thereby causes serious physical injury or death to another person, other than a participant in such offense.”

The act will take effect in November of this year.

08/06/19       “Brianna’s Law”, Chapter 147 of the Laws of 2019
New York State Assembly
Governor Signed into Law New Legislation Requiring Individuals to Take a Boating Safety Course in order to Operate a Motor Boat on Navigable Waters

On August 6, 2019, Governor Andrew Cuomo signed bill number A03985 into law, which extends the requirements for boating licenses for all navigable state waters of Nassau and Suffolk county to all eligible individuals over ten years old, removes license exemptions for persons born before April 30th, 1996, and requires internet-based boating safety courses to verify attendance.

According to Assemblywoman Kimberly Jean-Pierre’s sponsor memorandum (“Sponsor Memo”),

“12% of accidents between 2005 and 2015, the individuals were required by law to wear personal floatation devices, but were not. In 2016, there were 22 boating fatalities. In 11 of these fatalities, alcohol or drugs were present. Despite the myriad of laws prohibiting drug and alcohol use while boating, individuals are driving these vessels while under the influence.”

Further outlining the seriousness of the topic, Assemblyman Montesano emphasized during the New York State Assembly’s vote on June 4 that

“the law enforcement personnel from all the towns, the Bay constables from Huntington, Oyster Bay, Glen Cove, Hempstead, the Coast Guard, the Nassau County Police, they will tell you the way people operate these boats with reckless abandon. Or they don't even understand the concept of operating a boat. They don't know the rules of the water, who has the right-of-way. Speed, the weight they carried. And a lot of people just don't basically realize boats don't have any brakes on them.”

The act pays tribute to Brianna “Breezy” Lieneck, who was eleven years-old when she was killed in a boating collision off the coast of Long Island that also left her parents critically injured. With the Sponsor Memo estimating roughly 450,000 registered powerboats in New York, Assemblywoman Jean-Pierre noted that “[r]egardless of whether you have operated a boat in the past, informed vessel operators will result in safer waterways.” Ms. Jean-Pierre credited the steadfast tenacity of Brianna’s mother, Gina, with this “positive change that is going to truly save lives.” Assemblyman Stern embraced that sentiment himself during the vote, thanking Gina Lieneck for her “unwavering commitment to make Breezy's legacy one of safer waterways for all of us, and to help ensure that a day on the water with family and friends are enjoyable and memorable and not one that ends in tragedy.”

Simplifying New York Navigation Law § 49(1), the act amends that subsection’s language to state that “[n]o person shall operate a mechanically propelled vessel on the navigable waters . . . unless the operator is at least ten years old and is the holder of a boating safety certificate issued to him or her upon completion of a boating safety course [approved by the commissioner pursuant to sections 75 and 79 of this article] . . . .”

Unchanged by the act, New York Navigation Law § 75 provides that “the commissioner shall initiate and put into effect a comprehensive educational program designed to advance boating safety, which provides for the training of all boat operators in the safe operation of vessels . . . .” However, the act modifies existing internet-based boating safety courses under New York Navigation Law § 79(2) by requiring that “[a]ll approved internet-based boating safety courses [] employ methods to ensure attendance of the student throughout the course.”

This act took effect immediately.

Earl K. Cantwell

[email protected]

05/23/19       Mail Quip Inc. v. Allstate Insurance Co.
United States District Court, Eastern District of Pennsylvania
Pennsylvania Courts Enforce Policy Suit Limitations Clauses

This case arises from, of all things, an ink cartridge refill machine allegedly “misappropriated” from the plaintiff’s business. Plaintiff alleged that the machine was insured by Allstate through a Commercial Property Insurance policy which included coverage for theft of machinery and equipment. Plaintiff alleged that it discovered the misappropriation on April 16, 2017, when it saw the machine listed for sale on E-bay. Plaintiff alleged that the machine had a value of $10,429 at the time of the theft. The Plaintiff alleged two counts against Allstate-breach of contract and bad faith. The District Court dismissed the Complaint.

The Court first applied normal federal court legal standards that, to survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is “plausible on its face”.

Allstate moved to dismiss the breach of contract claim based on a two-year suit limitation period in the policy, and the bad faith claim based on a two-year statute of limitation under Pennsylvania law. The policy language stated that any claim had to be brought within two years after the date on which the direct physical loss or damages occurred. Therefore, Allstate argued, since the Amended Complaint alleged that the date of loss was on or about March 17, 2015, the Plaintiff was required to file suit by March 17, 2017 at the latest. Allstate also argued that the contractual suit limitation period runs from the date of loss and not necessarily from a date of “discovery”. Allstate also argued that the bad faith claim was subject to a two-year statute of limitations and was thus untimely as the denial of coverage occurred in February 2016.

Plaintiff responded that Allstate could not enforce the suit limitation period in the policy absent a showing of prejudice under Pennsylvania court precedent. Plaintiff also argued for a four-year statute of limitations on the bad faith claim.

The District Court noted that, under Pennsylvania Law, the contractual limitations period is enforceable if it is reasonable. The District Court argued that the Pennsylvania courts would not require a showing of prejudice to apply a limitation of suit clause since such clauses were completely acceptable and enforceable at common law without any demonstration of prejudice. The Court followed Pennsylvania legal precedent holding that an insurance company did not have to demonstrate prejudice to enforce the suit limitation clause. Therefore, the breach of contract claim was dismissed as untimely.

Allstate also moved to dismiss the bad faith claim because it denied the claim on February 3, 2016 more than two years before the Plaintiff filed its original Complaint. The District Court held that such a claim was governed by a two-year statute of limitations, and since the original Complaint was not filed until January 2019 the bad faith claim was untimely and was also dismissed. The time to sue the statutory bad faith claim was measured from the denial of benefits (2 years), so the bad faith claim was also  untimely and dismissed.

This case is a good example of a federal District Court attempting to apply and predict how state law applies to diversity cases before it. The Court generally ruled that a contractual (policy) limitation period is usually enforceable absent a state law or regulation restricting them. In particular, the bad faith claim was entirely statutory, and was therefore even more strictly bound by any statutory language and restrictions.

05/02/19       Pratts v. State Farm Fire & Casualty Co.
United States District Court, Middle District of Pennsylvania
Pennsylvania Courts Interpret Water Damage Claim Provision

This case involved application of Pennsylvania law to a water damage claim which resulted in a breach of contract action and a statutory bad faith claim against the carrier. The breach of contract claim alleged that the carrier failed to honor a claim for water damage. The carrier argued on summary judgment that the cause of action was barred because the Plaintiff failed to commence litigation within the contractual one-year limitation period. One of the claimant’s defenses was to argue that the policy was ambiguous as to whether the one-year statutory period commenced on the actual date of damage or the date the damage/loss was discovered. Citing Pennsylvania precedent, the District Court ruled that the loss occurs whether or not the insured knows about it, and the date of the loss triggers the limitations period, and, therefore, the breach of contract claim was time barred. The limitations period commenced on the date of loss, not when the insured (allegedly) discovered or became aware of the loss.

The insurance company also sought summary judgment on damages claims for an alleged lost sale of the property and other damage to the property. The Court essentially ruled that it had already removed those damages from the case on the basis that any “compensatory and/or consequential damages” could not be recovered on the bad faith claim because they are not provided for by the Pennsylvania statute. Therefore, no compensatory or consequential damages could be awarded on the statutory bad faith claim. However, the District Court did leave “open” a possible claim under the statutory bad faith argument for recovery of punitive damages, interest, and costs since those are (apparently) provided for by the statute. The latter decision is somewhat puzzling because the breach of contract claim was dismissed. Also, according to the Court, no other compensatory or consequential damages could be awarded. It is therefore difficult to discern what could be the basis for a “punitive damages” award, and what “interest” could run or accrue on a non-existent award?

The first lesson of this case is that, again, a Pennsylvania federal court enforced the contractual policy limitations period. The second lesson of this case is that the courts strictly construe “bath faith” statutes, and for example, here did not allow claims for compensatory or consequential damages on the simple premise that they are not allowed under the statutory language.

However, as previously noted, given the dismissal of the breach of contract claim, and the dismissal of claims for compensatory and consequential damages, it is difficult to fathom to what claim or damages any additional “punitive damages” or interest would attach. 

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