Coverage Pointers - Volume XXII, No. 13

Volume XXII, No. 13 (No. 578)
Friday, December 11, 2020
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 and Connecticut appellate courts and Canadian 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. 

Happy Chanukah, to those who celebrate.  We need the bright light of the candles to light the upcoming year.

We’re so happy that 2020 is nearly behind us.  Frankly, like the rest of the world, we’re pleased that we’ll be starting with a fresh slate of opportunities for good will and better health and peace and all good things.

I know we have great things happening at the firm, and we’ll be including a series of personnel announcements, as we continue to expand our footprint and our depth.  We are always looking for talent and we’re proud to report on our success.


Mirna Martinez Santiago has Joined our Coverage Team

[email protected]

We are so delighted to announce that Mirna Martinez Santiago has joined the H&F Coverage team.  Mirna is so well-known in New York coverage, state bar and diversity and inclusion and empowerment circles, we’d be surprised if you didn’t know her already.  Reach out to her for representation, counsel and advice.

Mirna has more than 25 years of legal experience, handling a range of matters from torts to professional liability to insurance coverage to regulatory affairs. Her practice now focuses on insurance coverage analysis.  Mirna lectures on an array of topics (with a focus on insurance and diversity, equity, inclusion and the elimination of bias) and has been published on legal, as well as non-legal subjects.  Ms. Santiago has been featured in Latina Magazine and on NBC News speaking about the Afro-Latina experience.

In 2010, Ms. Santiago was awarded the prestigious Sheldon Hurwitz Young Lawyer of the Year Award in recognition of her contributions to the field by the Torts, Insurance and Compensation Law Section of the New York State Bar Association. The award is named for the co-founder of Hurwitz & Fine, P.C.

Mirna is a member of the New York State Bar Association, where she is currently the Chair of the Committee on Diversity and Inclusion and serves as a member of the Executive Committee. She has previously served as Chair of the Torts, Insurance and Compensation Law Section and Chair of the Diversity Sub-Committee of the Continuing Legal Education Committee.

She currently is a Director on the Board of the New York State Bar Foundation.

Mirna is also the founder of Girls Rule the Law, Inc., a non-profit pipeline organization designed to introduce underprivileged middle and high school girls to the law and to provide them the opportunity to interact with mentors in the legal, judiciary and legislative fields.

She earned her B.A. from New York University and her J.D. from the State University of New York at Buffalo School of Law, where she was awarded the Robert J. Connelly award for excellence in trial advocacy.

Mirna will join the CP editorial staff in due course with her own column!


We Welcome Patricia A. Rauh to the CP Editorial Team as Assistant Editor and Columnist:

Photo of Patricia A. Rauh

Speaking of columns, we have a new one this week, Rauh’s Ramblings.  As Agnes reports in greater detail below, Patty, who has one foot in our Estates and Elder Care Department and the other stepping into the coverage arena, will be writing on the ever-increasing diversity of litigation surrounding life insurance, ERISA and related claims.  This is a first for us, in the two-decades plus that we’ve published this newsletter, we have not had a column that focused on this very important area.  We’re pleased to have Patty’s contributions.

Patty is taking on the role as Assistant Editor as well, working with Agnes and me to make certain that our newsletter is ready to hit the streets on Thursday evenings so that they can warming in your mailbox first thing on alternating Fridays.


Kohane Providing State Bar Webinar on New York Coverage Basics:


We had such a huge turnout for our most recent program in November, we’re doing it again.

I was asked by the New York State Bar Association to present a primer on New York coverage basics.  Co-sponsored by our good friends at NYSBA’s TICL Section (that’s Torts, Insurance and Compensation Law) Section, I am pleased to present a webinar on the subject on Tuesday, January 12, 2021, at noon, EST.            



New York Liability Insurance Basics: Learning What You Need to Know

A Claim by or Against Your Client – Now What?

Whether one represents plaintiffs or defendants, every practitioner needs to appreciate the fundamentals of New York liability insurance, whether it be homeowners, auto or commercial coverage. This program is designed to demystify insurance policies, outline the critical importance of statutory protocols, help secure, preserve and protect coverage and demonstrate how to properly evaluate insurance company communications.  

I asked the State Bar to find a way to make the program available for insurance professionals.  The Bar responded with generosity and created a coupon code for non-attorneys (insurance professionals) for $25 registration INSJZ11.


Risk Transfer Training:

So much of my casualty coverage work, these days, focuses on risk transfer – additional insured questions, contractual hold-harmless agreements and how the interrelationship between them impacts on the ultimate resolution of complex cases.  We are conducting, via Microsoft Teams, a regional training program on risk transfer next week for a good client.  If your shop can benefit from that training, let me know and we can arrange a date and time to help train your staff.

We have now scheduled or are in the process of finalizing the scheduling of five private sessions of this program, each one specially modified and crafted to meet the particular needs of the companies who have asked for the training.  If interested, let me know.



We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:

  • Employment & Business Pointers aims to provide our clients and subscribers with timely information and practical, business-oriented solutions to the latest employment and general business law developments.  Contact Joseph S. Brown  [email protected] to subscribe.

  • 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!).  Please drop a note to Jody Briandi at [email protected] to be added to the mailing list.

  • 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 subscribe.

  • Products Liability Pointers:  Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving.  Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up-to-date with the latest developments and trends, and providing useful practice tips and litigation strategies.  This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework and governmental agencies.  Contact Brian F. Mark at [email protected] to subscribe.

  • Medical & Nursing Home Liability Pointers.  Hurwitz & Fine, P.C.’s newest legal alerts contain timely news on the impact of COVID-19 on medical and nursing home liability claims.  Contact Chris Potenza at [email protected] to subscribe.


Burning of Cork – 100th Anniversary

The Burning of Cork by British forces took place on the night of 11–12 December 1920, during the Irish War of Independence. It followed an Irish Republican Army (IRA) ambush of a British Auxiliary patrol in the city, which wounded twelve Auxiliaries, one fatally. In retaliation, the Auxiliaries, Black and Tans and British soldiers looted and burnt numerous buildings in Cork city Centre. Many civilians reported being beaten, shot at, and robbed by British forces. Firefighters testified that British forces hindered their attempts to tackle the blazes through intimidation, cutting their hoses and shooting at them.

More than 40 business premises, 300 residential properties, the City Hall and Carnegie Library were destroyed by the fire. The economic loss was estimated as including over £3 million (equivalent to €155 million in 2019) worth of damage, while 2,000 were left jobless and many more became homeless. Two unarmed IRA volunteers were shot dead in the north of the city.

British forces carried out other reprisals on Irish civilians during the war, but the burning of Cork was one of the most significant. The British government at first denied that its forces had started the fires, and blamed the IRA. Later, a British Army inquiry concluded that a company of Auxiliaries were responsible.


Peiper on Property and Potpourri:

Over 2,500 years ago, Heraclitus mused that “change is the only constant in life.”  I trust that someone probably came to that fairly obvious statement earlier than the famed Greek philosopher, but he is the guy most credited with the observation.  In 2020, his word’s ring as true as they did in 500 B.C.  Change has come to the H&F coverage team and, resultingly, the H&F Coverage Pointers team. 

Having worked closely with Jen Ehman and John Ewell, we will miss their sharp eye for coverage issues.  With change, however, comes renewed energy and opportunity.  I join my colleagues in welcoming Mirna to the firm and the team.  Like change, progress also never stops, and we look forward to what lies ahead.

Speaking of what lies ahead, please be forewarned that Christmas Eve is exactly two weeks away.  If you haven’t started your shopping just yet, you might wish to get on with it.  Celebrations will be limited, of course, to the same faces we’ve seen for the last eight months, but I doubt much that the “COVID-19 excuse” will get you far with empty stockings on the mantle.  While Heraclitus never had to worry about holiday gifts, if he did he would doubtless agree with the fact that procrastination doesn’t lend itself to good gift giving. 

With that said, let us be among the first to wish you a Happy Hanukah, Merry Christmas and Happy Holidays. 


Steven E. Peiper

[email protected]


They Found Spouses Differently, a Century Ago:

The Los Angeles Times

Los Angeles, California

11 Dec 1920


Maid With a Million Asks Mayor to Furnish Husband


LONG BEACH, Dec. 10.—Miss Edna Drulucy, 125 West Twelfth Street, Pueblo, Colo., a marriageable maid with a million, has written Mayor W. T. Lisenby of this city in search of a handsome bachelor with the avowed object of matrimony.

There was a mad scramble in City Hall circles among the unattached when the Mayor made public the request.

“But wait,” cautioned the Mayor, “you must be over 50 and possess a million yourself, or you are not eligible.”

Miss Drulucy, who admits in her letter to the Mayor that she is pretty, says she wants the most handsome bachelor Long Beach has.  She stated that she had heard that this was a city of handsome men.  There were none that suited her in Pueblo, she added.

More than a score of men have already recommended themselves very highly to the Mayor as to their looks, but they failed to quality as to the possession of the necessary million.


Wilewicz’ Wide-World of Coverage:

Dear Readers,

This week, I’m thrilled to report about the newest, latest additions to the Hurwitz & Fine Coverage Department. First, as you will find below, our third-year associate Patty Rauh recently expanded her practice from trust and estates, to insurance coverage and litigation. She’s been with the Firm a few years now, and has particular interest in the overlap between the two seemingly disparate practice areas. Thus, she will be writing on life insurance, Medicare/Medicaid, ERISA, and such, in her biweekly Rauh’s Ramblings. Her first column is below, and her first write-up case summary is in the attached pdf.

Second, I’m equally excited to welcome Mirna Santiago to the team. Mirna comes to us with decades of coverage and litigation experience. She, like me, runs her own girls empowerment and networking non-profit, and I am very much looking forward to collaborating with her both at work, and in the non-profit sphere. She brings a wealth of experience with her to the Firm, and we are currently brainstorming about what her Coverage Pointers column topic (and name) will be; stay tuned.

Welcome Patty and Mirna!

Until next time, stay safe everyone,


Agnes A. Wilewicz

[email protected]


Dodge Dies – 100 Years Ago:

St. Louis Post-Dispatch

St. Louis, Missouri

11 Dec 1920



Head of Dodge Bros. Motor Car  Interests Succumbs at Winter Home in Florida.

By the Associated Press

PALM BEACH, Fla., Dec. 10.—Horace E. Dodge, millionaire automobile manufacturer, dies here last night at his winter home.

Dodge had been in ill health since he suffered an attack of influenza a year ago at the time his older brother, John Dodge, died in New York, but it was said the immediate cause of his death was cirrhosis of the liver.  He was 52 years old.

After his arrival here 10 days ago Dodge appeared to be regaining his health and was able to drive about in his automobile.  Specialists were sent for last night when his condition again become serious.

It was announced that the body will be sent to Detroit, leaving here Saturday night, according to present plans. 


Barnas on Bad Faith:


We have another New York bad faith case for your reading enjoyment this week in my column.  The decision is light on analysis, but a review of the underlying decision, which can be found here, is slightly more revealing.  Geico’s insured was involved in a three-car accident on the Sagtikos State Parkway.  Maccarone and Fruendt were also involved in the collision.  Freundt was injured and commenced a lawsuit.

A jury eventually determined that both Waters and Maccarone were negligent and apportioned 85% of the fault to Waters.  Waters had policy limits of $100,000 and Maccarone obtained judgment for contribution of Waters in the amount of $323,000 for the excess amount paid beyond Maccarone’s proportionate share.

Waters commenced a bad faith action against Geico and assigned defense counsel.  Waters argued that Geico and counsel did not make timely good faith settlement offers and failed to properly apprise of his rights during the litigation.

Defendants, in contrast, argued that Waters contended he was not responsible for the accident throughout the litigation, and they tried the case accordingly.  In addition, plaintiffs never offered to settle the case within the policy limits, and plaintiffs’ counsel admitted he would not have done so.  Accordingly, the court properly concluded that Waters could not establish bad faith against Geico or assigned counsel.

That’s all for now.


Brian D. Barnas

[email protected]


The Electoral College Explained – a Century Ago:

Fall River Daily Evening News

Fall river, Massachusetts

11 Dec 1920


Nobody Voted for Harding


Although Warren G. Harding has been elected president by a tremendous majority, he did not get a single vote.  Neither did Mr. Coolidge.

All votes cast were for members of the Electoral College who will meet on January 10th and go through the ceremony of casting their votes for President.  Of course everybody knows how they will vote.

Should there be a constitutional amendment making it possible for people to vote directly for their President?

This is a good question for debate.


Off the Mark:

Dear Readers,

Now that the cold weather has arrived, there are even less places to go and less things to do.  We are lucky to have hiking trails and bike paths in the preserve across the street from our house.  While the trails are nothing like those my upstate colleagues have access to, it’s great to be out in nature and very convenient.  As long as it isn’t raining or snowing, I try to take the kids there as much as possible.  Any break from their electronic devices is a good thing. 

This edition of “Off the Mark” brings you a recent construction defect decision from the United States District Court for the Western District of Louisiana, Alexandria Division.  In Pilgrim Missionary Baptist Church v. Church Mut. Ins. Co., the U.S. District Court examined competing expert theories as to the cause of the property damage, and found that no coverage obligation was owed based on policy exclusions for losses resulting from deterioration and losses attributable to faulty design and construction and the quality of materials used in construction.  The Court found the carrier’s expert’s theory to be more fact-based and more reliable.   

Stay safe everyone …



Brian F. Mark
[email protected]


More on the Electoral College from 100 Years Ago:

The Berkshire Eagle

Pittsfield, Massachusetts

11 Dec 1920



A Berkshire citizen recently wrote to a man prominent in public life for the purpose of ascertaining how the founders came to adopt the cumbersome method of choosing a president—the indirect method of presidential electorsand received the following reply:—

“This plan of the farmers of the constitution was to have the president chosen by the electoral colleges of the various states and the choice was to be genuinely made by the electors.  They believed that a better result could be obtained by a secondary election, the people choosing the electors, than by a direct vote.  As you are well aware, this part of that plan of election never really was operative and for nearly all our history has been entirely abandoned.  That the votes should be by states, whether taken by popular vote or electoral colleges, is a different matter and is essential to our constitutional system.  However, the vote is taken, whether by direct popular vote or through electors, in my opinion, it must always be taken by the states and note by a universal plebiscite throughout the country.”

Elections in some form date back to the earliest empires—in Germany, for example, to the time when the great princes had the right of electing the emperor or king.  The method employed at one time in the Roman empire was nearer an approximation of our own.  Here and there in history the electoral system has an ecclesiastical tinge. 

Indirect voting seems to have had its origin in jealousy of power—in disinclination to place elective authority directly in the hands of the masses.  It has taken years to convince people of different states that they themselves should make their selections to the American house of lords.  The largest element of unfairness in the arrangement for presidential electors lies in the fact that a man might have a majority of the popular vote and yet be defeated.

It is an open question which system would place in office the better men, on the average.  The electoral college has given us several men who were equipped for the presidency.


Boron’s Benchmarks:

So, while in retrospect I am not particularly proud of the Xmas gift I gave my sister in 1979, I’ve decided to share it with you all, in hopes of possibly brightening your day.  Or to warn you against making the same mistake I did.  Or both.

For Christmas 1979, the one and only gift I gave my sister was a bright orange alarm clock I bought at our neighborhood drug store thirty seconds before the drug store closed on Xmas Eve.  I had entered the store with just forty-five seconds left until it closed, so I did well, I think, to grab the clock and get to the spot where you paid for items before the store closed. This was, literally, last-minute shopping. And imagine my joy and relief when I found out at the register that the clock was not only for sale, but moreover was on sale!  Now, mind you, all of my sister’s bedroom decorations at the time were baby blue in color. The orange vs baby blue color clash was something I had failed to take into consideration.  But, hey, it’s the thought that counts, right? That is, unless there’s so little thought put into your gift that you end up giving someone an orange clock for their baby blue bedroom.  In self-defense, I was only a poor college student at the time and was (presumably) very busy in the days leading up to Christmas (celebrating the end of the University of Buffalo’s fall semester, which had occurred about a week earlier).  I also occasionally suffered from color-blindness back in those days, if I drank too much…orange juice…or eggnog.  My sister, as you may imagine, does not hesitate to bring this story up every Christmas season. In fact, the telling of the story has become one of our Christmas traditions.  And I have never since gifted her, or anyone else, anything colored orange.

For this edition of Boron’s Benchmarks, the Coverage Pointers beat monitoring and reporting on insurance coverage decisions of the high courts of the 49 states not named New York, I’ve selected for your consideration an Opinion issued on December 3, 2020, by the Supreme Court of Illinois in State Farm vs. Elmore.  The Court analyzed and considered the enforceability of a “mechanical device” exclusion in an automobile policy barring coverage for damages resulting from the movement of property by means of a mechanical device other than a hand truck that is not attached to the insured vehicle.  Happy reading, and happy shopping.  And by all means don’t wait until the last minute.   

Until next time, be well.


Eric T. Boron
[email protected]


Even Criminals were Kinder a Century Ago:

Buffalo Morning Express and

Illustrated Buffalo Express

Buffalo, New York

11 Dec 1920


“Keep your watch,”

Says bandit, “I’ve one of my own”


Peter McCormick of No. 312 East Delavan avenue on his way home last night was held up by a man with a revolver in Humboldt Parkway, between Eastwood and Loring avenues, and robbed of $27.  When the thief got McCormick’s money, the victim, thinking he was to hand over everything, began to unfasten his watch from his vest.

“Keep it,” said the footpad. “I have one of my own.”

The police were notified and given a description of the robber.  He is still at large.


Barci’s Basics (On No Fault):

Hello Subscribers!

I hope you are all still staying healthy and safe! Last time I asked you to share your best Christmas dessert recipe, which should have included all holiday *desserts*, so if you’ve got any good ones send them my way! Every year for Christmas I make cut-outs, peanut butter blossoms, and Italian rainbow cookies as my staples. Some years I make Oreo truffles, Mexican wedding cakes, peppermint bark, or white trash depending on how ambitious I’m feeling.

White trash, although a terrible name, is a delicious treat that is easy for gifting and eating. My recipe is just 6 cups of Chex cereal (corn or rice, but I like corn best), 6 cups of pretzels (I use twists usually), 1 jar of dry roasted peanuts, and 1 bag of M&M’s (I try to get the holiday bag with green and red ones only, but it’s not necessary) combined in a bowl. Then melt 4 cups of white chocolate chips (usually 2 regular sized bags) and pour over the other combined ingredients. Mix well, then spread over a wax or parchment paper covered surface (like a baking sheet, but sometimes I just do it on my covered table) to cool. Once cooled, break apart, bag it and enjoy! Some people like putting raisins in or changing up the flavor of Chex or type of nut, so it’s fully customizable! Just remember to increase the amount of white chocolate used if using more ingredients. Let me know how it goes if you try to make it!

Sticking with the holiday theme for the last time this year, for next time consider: What is the best or one of the most memorable gifts you’ve either given or received?

On the no-fault front, I’ve got two cases for you. First, from the EDNY, a preliminary injunction by GEICO against a medical laboratory for fraudulent billing. It’s a well written decision that lays out a lot of the common billing problems seen by insurers, so if you’d like a copy of the decision, please let me know. Then out of the First Department a decision affirming a nonjury trial’s verdict that the treating doctors were independent contractors, not employees, of the provider, so the provider was not entitled to no-fault benefits. Enjoy!

That’s all folks,


Marina A. Barci

[email protected]


Old Maids Counted Following WW I:

Oklahoma Daily Live Stock News

Oklahoma City, Oklahoma

11 Dec 1920


World War Made Many Old Maids


Because 35,000,000 men lost their lives in Europe in Asia during the World War 15,000,000 European women will die old maids.  These figures are given by Doctor Schweishelmer of Germany.


Ryan’s Capital Roundup:

Hello Loyal Coverage Pointers Subscribers:

Well, the Buffalo Bills are going to the Super Bowl. Its official this time. I promise. Cole Beasley is always open. Stefon Diggs is digging in. John Brown is just resting. Josh Allen is doing Josh Allen things. And the defense is coming around. Join #BillsMafia this Sunday night for the ride. I promise you won’t regret it. Although, we’ve been let down before. Did I mention the Bills are going to the Super Bowl?

In this issue, we have a pair of Executive vetoes. First, a bill that would have created a workers’ compensation fee schedule for massage therapy coverage was nixed. Next, a bill that would permit operation of an autobot—err, autocycle—with a mere Class D license was discarded. Finally, we explore a proposed reinsurance regulatory update that would comport with NAIC’s Model provisions and simultaneously avoid federal preemption. Funny how that works?

Until next time,


Ryan P. Maxwell

[email protected]


Class President Resigns in Favor of Ministry:

St. Louis Post-Dispatch

St. Louis, Missouri

11 Dec 1920




Youth, 17, Tells High School

Classmates He “Must Practice Humility.”


By the Associated Press.

CHICAGO, Dec. 11.—Because of the decision of Albert Graves, president of the senior class of the Waukegan High School, to “give himself to God,” a meeting of the class will be held tomorrow to elect a new class president, capable of “enjoying pomp and prominence which has no particular relation to godliness.”  In an eloquent address to the class at the high school yesterday the Graves boy, who is 17, explained he has made all arrangements to enter a theological seminary, and in view of his decision he had decided to forsake such worldly interests as absorb a youth who properly attends to a class presidency.

“I must thank you heartily for the honor you have done me,” he said, “but I cannot be swerved from my decision to give up this honor and to give up the somewhat vain circumstance which surrounds a class leader.  I do not want to lead the promenade in the spring or to take the lead and feature myself in the remaining class activities.  Briefly, I have given myself to God and in view of that must practice humility.

Graves was applauded at the conclusion of his address.

Editor’s note:  I spent considerable time trying to track down how this honorable young man fared, later in life, but with no success.


CJ on CVA and USDC(NY):

Hello all,

December is in full swing and my wife and I have made it our mission to enjoy as many holiday movies, television shows, and specials as possible. Last night we watched “Christmas with the Kranks”, which, up until last Sunday, I was unaware was based on a short novel by John Grisham called “Skipping Christmas”. I picked up the book while at my in-laws and in a couple hours I’d zipped through it. If you’re looking for a lighthearted holiday read, I whole heartedly recommend it.

In this week’s column we return to the world of the CVA. I discuss a recent order allowing a plaintiff to proceed anonymously. Close readers may remember I discussed a case in our November 13th issue that denied a plaintiff’s application to proceed in a CVA action anonymously. I’ve saved my analysis and comparison of these two cases for the end of my column – see if you can spot the differences.

Happy Reading!


Charles J. Englert, III

[email protected]       


More Fallout from the Black Sox Scandal:

The Tampa Tribune

Tampa, Florida

11 Dec 1920





            CHICAGO, Dec. 10.—Judge K. M. Landis and his supreme head of baseball will have entire authority to rid baseball of the gambling evil, according to a statement here following his conference with ban Johnson, president of the American League.  After a two-hour talk in the judge’s Federal court room, both men agreed the cases against athletes indicted by the Cook county grand jury a short time ago should be pushed to the limit.

President Johnson suggested to Judge Landis that the latter write into the new agreement that is to be drawn up all the powers he thinks he ought to have for the good of the sport and for his own protection.

President Johnson advised Judge Landis to take immediate possession of the baseball leadership that he might assume responsibility for banishing players from the sport who have the inclination to be crooked. Attorneys representing the National and American Leagues will surround Judge Landis with advice in the interest of baseball.

President Johnson today announced the date of the annual American League meeting as December 15 in New York, due to the joint gathering of the drafting committees.

The question of what may be done with the "spit ball" is scheduled for discussion at the club owners' meeting, together with certain rules of the game. The American League meeting is set for December 14, also in New York.


Dishing Out Serious Injury Threshold:

Dear Readers,

              I hope everyone had a happy and healthy Thanksgiving, whether you were able to enjoy it in person or from afar. With the holiday season now coming up, I hope everyone is able to enjoy the season in a safe manner with friends and family.

In the Serious Injury Threshold world, we have two First Department cases. Both cases deal with plaintiff’s expert’s failure to account for plaintiff’s medical records. The first deals with an expert who ignores plaintiff’s prior range of motion testing. The second deals with a speculative and conclusory opinion as to plaintiff’s degenerative condition.

Stay safe,


Michael J. Dischley

[email protected]  


A Woman Should Convey the Votes to the Electoral College:


Sioux Falls, South Dakota

11 Dec 1920



(From Lead Daily Call)

            The presidential electors from South Dakota will soon be selecting from their number one to convey the official returns to the electoral college.  It has been suggested that it would be a very graceful thing to name Mrs. John L. Pyle of Huron, for that honor.  It will be the first-time women have been privileged to cast the vote of a state for president.  Mrs. Pyle was the first on the ballot among the presidential electors of South Dakota and would be a worthy representative of the republican party and of the state in the electoral college.  Let South Dakota be among the first to thus recognize its capable new voters. 

Editor’s note:  And she did!


Bucci on “B”: 

Hello subscribers!  It’s been a long time since I’ve darkened your doorway but there is an interesting advertising injury case to present this week.  It involves the potential application of an exclusion that precludes coverage, inter alia, for injury arising out of the insured’s computer software creations in a policy issued to a computer software creator.  Check out my column. 

What is everyone doing to both stay safe and celebrate this year?  It’s such a weird one…but even the holidays don’t make up for the coming cold, dull winter.  I can never warm up unless I wear bundles of clothing, which is uncomfortable.  I’ve been staying home for the most part.  Between the cold and Covid, I am a certified hermit.  As a shut in, I started watching the Handmaid’s Tale.  It’s a striking story and the series is well done.   But it’s scary, especially now where there appears to be such division among us. 

On a happier note, we have some great new attorneys starting here at H&F including Mirna Santiago, a fabulous coverage attorney with years of coverage experience.  I’m thrilled that we were able to get her.  Thanks, of course, to Dan Kohane! 

Also, despite me writing about the cold, today is sunny and beautiful.  I need to practice staying in the moment instead of projecting how cold and dull a day will be before it happens!  


Diane L. Bucci

[email protected]


Christmas Sales:

The Tampa Tribune

Tampa, Florida

11 Dec 1920

For Discriminating Men

SHIRTS—Percale, Madras,

Silk Mixture and Silk. . . $2.00 to $12.00


NECKWEAR—Newest Patterns . . . . 50c to $4.00

UNDERWEAR – Union or 2 piece Suits . . . .  $2.00

SHOES—Famous Crawford Brand . . . $7.00 to $11.50


Do Your Christmas Shopping Early

Harris Clothing Co.

713 Franklin St. Phone 3274

Tampa, Fla.

Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

Well, the Connecticut courts once again are on an insurance holiday, with no major decisions having come down over the last several weeks. Instead, this edition we look at a federal court’s examination of the enforceability of an arbitration agreement in the context of a putative class action alleging the miscategorization of employees as independent contractors – an area of employment practices litigation that seems to be ever expanding.

Wishing you all health and safety this holiday season.


Lee S. Siegel

[email protected]


Why did Immigrants Come to the US – a Century Ago”?

The Buffalo Times

Buffalo, New York

11 Dec 1920



            Tracy W. Redding, member of the Sociology Class of Columbia University, has been making inquiries among the immigrants at Ellis Island, as to why they left Europe.

            Dread of Bolshevism and of similar radical propaganda, occupies a conspicuous place among the reasons why the new arrivals in the United States have come to this country.

This is particularly true of immigrants from Poland, Spain and Holland. Poland, compelled to fight for its national existence, against the aggressions of Soviet Russia, has a detestation of Bolshevism, of which we are now getting first-hand expression in the statements of Polish immigrants.

The unrest in Spain, which is closely related to anarchism, has driven not a few Spaniards to seek our shores. Much of the same motive is manifest in the disclosures by Hollanders who have come to America.

The anti-foreign agitation in the United States has given rise to a more or less prevalent suspicion that many immigrants are coming here as emissaries of radicalism. But the exact opposite appears to be the case. Not only is there an increasing mass of proof that only a meager minority of the strangers arriving in this country are radicals in any sense of the word, but large numbers of them are seeking to make the soil of American liberty their home ground, for the express purpose of getting away from Bolshevism and its radical kindred in Europe.

If it were possible for Russians to make their escape from the Soviet despotism which has put its blight on all Russian freedom of movement, beyond a question the testimony of thousands of Russian immigrants would be added to the evidence of the repudiators of radicalism from Poland, Holland and Spain.

The immigrant in the aspect, not of a sower of radicalism, but a fugitive from it, presents a new and notable angle of vision from which to survey the immigration problem. Aliens of demonstrated undesirability should be kept out of the country, but it would be an unforgivable injustice to fall into the error of assuming that foreigners are radicals merely because they are foreigners. By jumping at any such precipitate conclusion, we would lose many good citizens, and would be deprived of valuable accessions to the working forces and the development resources of the nation.          


Cara’s Canadian and Cross-Border Connections (with Heather Sanderson):

Dear Subscribers,

It’s early December and Western New York hasn’t seen much snowfall yet. Although most years I am grateful for temperate winters, I am looking forward to some snow this year so Jim and I can do activities we may have passed up on in the past to go out with friends and family. However, we are still laying low and I am already looking for a sled for when snow hits the area. We are still working on the house, but any outdoor break is welcomed to avoid cabin fever this winter. Another way I am safely getting out of the house, albeit briefly, is by doing a food exchange with a friend. My friend and I are doing porch drop offs of our most recent kitchen creations because we can’t get together like we used to. So far, I’ve received ginger soup, momos (Nepali dumplings), and chicken noodle soup and I’ve dropped off lemon orzo soup, Ribollita soup, and tortilla soup. It’s a nice way of staying connected and getting a homecooked meal from a safe distance.

Until next time, stay safe and healthy!


Cara A. Cox

[email protected]



Heather Sanderson

Sanderson Law (Alberta, Canada)

[email protected]


Motorcycle and House Collide – House is Responsible:

The Wichita Daily Eagle

Wichita, Kansas

11 Dec 1920



Man Whose Motorcycle Strike House

In Street Accepts $1,000

            Settlement was reached in the case of Francis Swearingen, who claimed $10,500 damages from the city of Wichita and E. C. Baker, when Swearingen agreed to accept $1,000 for injuries received the night of August 27, 1919 when his motorcycle ran into a house left standing on North Market street.  Baker was moving the house, and it was claimed by Swearingen that no danger signal had been left on the house.


Rauh’s Ramblings:

Hi all!

I am very excited to be the newest contributor to Coverage Pointers!  I joined Hurwitz & Fine in September 2018 as a first-year associate practicing trusts, estates, and elder law (Medicaid planning, Article 81 guardianships, etc.).  About six months ago, I started also doing coverage work, as well as litigation.  I am hoping that my Coverage Pointers column will draw a connection between two of my seemingly unrelated practice areas – elder law and insurance coverage.  I plan to report on recent court decisions that deal with issues that tend to come up in the elder law and estates realm – life insurance, Medicaid/Medicare, ERISA, etc

My case today comes out of the Second Circuit and deals with Plaintiffs who sued their life insurance carrier for breach of contract and other New York tort claims when they were wrongfully designated as tobacco users and subsequently charged higher insurance premiums.

Until next time!


Patricia A. Rauh

[email protected]


A Thursday Evening Moment of Zen (from outside my office window):

Image may contain: sky, cloud, twilight and outdoor

Headlines from this week’s issue, attached:

Dan D. Kohane

[email protected]

  • Filing of MVAIC Claim Measured from Receipt of Letter Disclaiming Coverage

  • While Exclusion May be Effective to Deny Coverage to an Insured who Fails to have its Subcontractor’s Provide it with Additional Insured Status, Carrier Failed to Establish the Facts Supporting the Applicability of the Exclusion in a Pre-Action Motion to Dismiss

  • Trade Contract Indemnity Claims Enforced with Indemnitor’s Employee is Injured.  Producing Only Certificate of Insurance did not Establish that Indemnitor Complied with Obligations to Procure

  • Additional Insured Coverage Found under “Arising out of Language” in AI Endorsement.  Disclaimer Letter Sent to Tendering Carrier Did not Comply with Statutory Requisites under Insurance Law Section 3420(d)(2)

  • Question of Fact whether Coverage Provided for Construction Project Met Contract Requirements, where Labor Law Exclusion was Included

  • Issues of Fact on Insurance Broker Liability

  • Insurance Agency May be on the Hook for Failing to Secure Policy for Client without Employee or Independent Contractor Exclusions



Steven E. Peiper

[email protected]

  • Waiver of Subrogation Clause in Policy Precludes Subrogation Against Negligent Condo Owner
  • Overly Broad Discovery Demands Seeking Irrelevant Information Rejected and Vacated



  • Reliance on Broker to Forward Suit Papers to Insurer was Insufficient to Overcome Defendant’s Default


Michael J. Dischley

[email protected]

  • Plaintiff’s Expert Failure to Reconcile Range of Motion Findings with Prior Range of Motion Testing as well as Lack of Contemporaneous Treatment Fatal to Threshold Claim
  • Plaintiff’s Expert Speculative Opinion as to Degenerative Condition Fatal to Threshold Claim



Agnes A. Wilewicz

[email protected]

  • Finding No Coverage (Decisions) in the Second Circuit



Brian D. Barnas

[email protected]

  • Insured Failed to Establish Bad Faith by Insurer and Assigned Counsel in Failing to Settle the Underlying Action within Policy Limits



Lee S. Siegel

[email protected]

  • Court Refuses to Compel Arbitration of Wage & Hour Class Action



Diane L. Bucci

[email protected]

  • Motion for Reconsideration Granted, But the Song Remains the Same


Brian F. Mark

[email protected]

  • U.S. District Court Finds No Coverage for Roof Damage due to Policy Exclusions for Deterioration, Faulty Design and Construction and the Quality of Materials used in Construction



Eric T. Boron

[email protected]

  • Auto Insurance – Reversal of Appellate Court – Farm Equipment Injury -Mechanical Device Exclusion



Marina A. Barci

[email protected]

  • GEICO Granted Preliminary Injunction to Stay All No-Fault Arbitrations Commenced by Advanced Labs
  • Treating Doctors Found to Be Independent Contractors, Not Employees of the Provider, Thus Precluding the Provider from No-Fault Reimbursement


Ryan P. Maxwell

[email protected]

Legislative List

  • Bill That Permitted the Establishment of a Fee Schedule for Massage Therapy for Injured Employees Vetoed Due to Administrative Costs Outweighing Benefits
  • Bill That Permitted Operation of Autocycle With Class D License Vetoed Due to Ambiguity and Safety Concerns


Regulatory Wrap-Up

  • DFS Proposes Amendment to Existing Requirements for Reinsurers Located in Reciprocal Jurisdictions to Avoid Federal Preemption


CJ on CVA and USDC(NY)

Charles J. Englert III

[email protected]

  • When a Claimant Provides a Detailed Affidavit Describing Potential Harms, He may Suffer a Request to Proceed Anonymously Should be Granted


Cara A. Cox

[email protected]


Heather Sanderson

Sanderson Law (Alberta, Canada)

[email protected]

  • Two Lefts Don’t Make a Right: Insured Loses Appeal Where Miracle Feeds’ Factors Favor and (Partially) Excuse Carrier’s Failure to File an Answer




Patricia A. Rauh

[email protected]

  • New York’s Continuing-Violation Doctrine Did Not Apply to Toll the Statute of Limitations in Plaintiffs’ Breach of Contract Claims Against Defendant



Please do what is necessary to try to keep yourself, your family, your colleagues and all others, healthy.  There will be a light at the end of this dark tunnel, I am sure of it.



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


ASSISTANT EDITOR - Newly appointed
Patricia A. Rauh

[email protected]


Dan D. Kohane, Chair
[email protected]


Steven E. Peiper, Co-Chair
[email protected]


Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Diane L. Bucci

Mirna Martinez Santiago

Brian D. Barnas

Eric T. Boron

Marina A. Barci

Ryan P. Maxwell

Charles J. Englert

Cara A. Cox

Patricia A. Rauh

Diane F. Bosse

Joel R. Appelbaum


Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley

Eric T. Boron

Brian D. Barnas


Dan D. Kohane
[email protected]

Marina A. Barci

Jody E. Briandi, Team Leader
[email protected]

Diane F. Bosse

Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri

Dishing out Serious Injury Threshold

Wilewicz’s Wide World of Coverage

Barnas on Bad Faith

Lee’s Connecticut Chronicles

Off the Mark

Boron’s Benchmarks

Bucci on “B”

Barci’s Basics (on No Fault)

Ryan’s Capital Roundup

CJ on CVA and USDC(NY)

Cara’s Canadian and Cross-Border Connections (with Heather Sanderson)

Rauh’s Ramblings


Dan D. Kohane
[email protected]

12/10/20       Robinson v. Lowman

Appellate Division, First Department

Filing of MVAIC Claim Measured from Receipt of Letter Disclaiming Coverage
Robinson timely filed a notice of intention to make a claim with MVAIC (see Insurance Law § 5208[a][3]). It is undisputed that plaintiff was struck by a vehicle operated by defendant Lowman on August 9, 2017, and on August 16, 2017 completed MVAIC's notice of intention to make a claim.

The vehicle, owned by Howley, had been reported stolen the day before the accident. By letter dated September 22, 2017, and addressed to the law firm representing plaintiff, Howley's insurance carrier, GEICO, disclaimed all liability or obligation to plaintiff in connection with the accident on the ground that Lowman did not have permission to drive the vehicle.

The letter was faxed by GEICO to plaintiff's counsel on April 25, 2018. Plaintiff's counsel asserts that his office never received the letter disclaiming coverage before April 25, 2018. Plaintiff filed the notice of claim on May 9, 2018, 14 days after the fax was received. Contrary to MVAIC's contention, the 180-day period in which plaintiff's notice of claim was required to be filed commenced not on the date of the letter disclaiming coverage but on the date on which the letter was received.


12/09/20       Edward Horton Builders, Inc., v. Arch Specialty Insurance Co.

Appellate Division, Second Department

While Exclusion May be Effective to Deny Coverage to an Insured who Fails to have its Subcontractor’s Provide it with Additional Insured Status, Carrier Failed to Establish the Facts Supporting the Applicability of the Exclusion in a Pre-Action Motion to Dismiss
Edward Horton Builders, Inc. (“Builders”) sought an order compelling Arch to defend and indemnify it in an underlying personal injury action.  Arch filed a pre-answer motion to dismiss claiming that a policy exclusion applied. The exclusion removed coverage for claims for bodily injury arising from work performed on the plaintiff's behalf by a subcontractor, unless that subcontractor had in force at the time of the injury, a commercial general liability policy that, inter alia, named the plaintiff as an additional insured and provided coverage to the plaintiff.

In support of the pre-answer motion Arch submitted, the Builders’ insurance policy, a subcontract agreement between the plaintiff and its subcontractor, and the summons and complaint in the underlying action. However, these submissions did not establish that the underlying action arose from work performed by the plaintiff's subcontractor, or that the subcontractor failed to maintain a commercial general liability policy that provided coverage to the Builders for the underlying lawsuit.

Editor’s Note – Arch may eventually prevail here, but proof was wanting.


12/08/20       Rudnitsky v. Macy's Real Estate, LLC,

Appellate Division, First Department

Trade Contract Indemnity Claims Enforced with Indemnitor’s Employee is Injured.  Producing Only Certificate of Insurance did not Establish that Indemnitor Complied with Obligations to Procure

Rudnitsky commenced this action seeking damages stemming from personal injuries allegedly sustained when he tripped over a two-by-four piece of lumber wrapped in orange construction netting at the top of a staircase he was approaching during the renovation of Macy's Herald Square department store. He was employed by an electrical contractor, Shorr.

His motion for partial summary judgment on the Labor Law § 241(6) claim based on Industrial Code (12 NYCRR) § 23-1.7(e)(2) was denied. This Industrial Code provision requires work areas to be kept free of debris and scattered tools and materials "insofar as may be consistent with the work being performed," and thus is not violated when the condition that caused the plaintiff to trip or slip was integral to the work being performed, such as the presence of materials placed in the work area intentionally. The staircase that plaintiff was approaching was installed by the ironworkers, and there is testimony that it was not opened for use until days after plaintiff's accident. Under the circumstances, issues of fact exist as to whether the two-by-four over which plaintiff tripped was part of the barricade blocking the staircase opening in the floor and therefore integral to the work.

However, Shorr's duty to indemnify Structure Tone pursuant to the Blanket Insurance/Indemnity Agreement incorporated into its subcontract "was triggered by the fact that the accident arose from plaintiff's performance of his work as an employee of" Shorr.  Because Shorr's indemnification obligation under the agreement required it to indemnify Structure Tone for legal fees, Structure Tone's claim against Shorr for attorneys' fees should not be dismissed. Similarly, the claim that Shorr breached its contract to procure insurance should not be dismissed because all Shorr produced to prove it provided insurance was a certificate of insurance.


12/03/20       POFI Construction Corp. v. Rutgers Casualty Insurance Co.
Appellate Division, First Department

Additional Insured Coverage Found under “Arising out of Language” in AI Endorsement.  Disclaimer Letter Sent to Tendering Carrier Did not Comply with Statutory Requisites under Insurance Law Section 3420(d)(2)
Pofi, the general contractor, sought additional insured coverage for bodily injuries, under a policy issued by defendant Rutgers Casualty Insurance Company (“Rutgers”) to Pofi's subcontractor, Sky VL.  The plaintiff in the underlying personal injury action was injured while performing work for his employer, Sky VL.

This appears to have been a decision under the “arising out of” exclusion rather than the more modern “caused by exclusion”.

The plaintiff in the underlying personal injury action alleged that he was injured while performing work on the premises; thus, his injury arose out of the subcontractor's ongoing operations on the construction project.

While the policy had exclusions, Rutgers waived any reliance on the asserted coverage exclusions, as it sent notice only to plaintiff's insurer and not directly to plaintiff, the additional insured. The obligation imposed by the Insurance Law is to give timely notice to the mutual insureds . . . not to . . . another insurer.


12/03/20       Edw Drywall Construction v. U.W. Marx, Inc.

Appellate Division, Third Department

Question of Fact whether Coverage Provided for Construction Project Met Contract Requirements, where Labor Law Exclusion was Included

On July 7, 2016, U.W. Marx, Inc., (“Marx”) a general contractor, entered into a subcontract for Edw Drywall (“Drywall”) to furnish and install sheetrock in connection with the renovation of a 126-unit apartment complex located in the Town of Liberty. Drywall was required to provide U.W. Marx with certificates of insurance demonstrating that it had procured, as relevant here, commercial general liability insurance (hereinafter CGLI) naming, among others, Marx as an additional insured.

Following receipt of plaintiff's insurance certificates, U.W. Marx discovered that plaintiff's CGLI did not provide coverage for bodily injury claims related to Labor Law §§ 240 and 241. In an effort to avoid a dispute and/or delay on the project, on July 20, 2016, Marx agreed to pay, on plaintiff's behalf, the $52,678.03 premium associated with obtaining a replacement CGLI policy that provided coverage for bodily injury for Labor Law liability. In October 2016, the insurance carrier unilaterally cancelled this replacement policy for reasons unrelated to this case. As a result, U.W. Marx informed Drywall that it could not remain on the job site without proper CGLI and demanded that it provide a current insurance certificate demonstrating that it had procured a policy providing for bodily injury coverage under the Labor Law.

Drywall did not thereafter obtain a compliant CGLI policy and, instead, again provided U.W. Marx with certificates of insurance for policies that expressly excluded coverage for Labor Law liability. With no resolution to the parties' insurance dispute forthcoming, Marx informed Drywall that, given its continued failure to procure a CGLI policy that covered bodily injury under the Labor Law, it was hiring third-party subcontractors to complete plaintiff's scope of work under the subcontract. In February 2017, Marx provided Drywall with a final recap and reconciliation, itemizing the associated costs and charges for the project, indicating that plaintiff owed it $7,415.92.

Drywall then sued Marx and its surety, alleging causes of action for, as relevant here, wrongful termination, breach of contract, mechanic's lien foreclosure and recovery against a surety bond.

It is not clear from the four corners of the subcontract whether the requirement that plaintiff procure CGLI covering "bodily injury" encompassed the specific requirement that it procure bodily-injury coverage for Labor Law liability.


12/03/20       Gibraltar Contracting, Inc. v. P.F. Northeast Brokerage, Inc.

Appellate Division, First Department

Issues of Fact on Insurance Broker Liability

To set forth a case for negligence or breach of contract against an insurance broker, a plaintiff must establish that a specific request was made to the broker for the coverage that was not provided in the policy  Issues of fact are presented by the parties' conflicting testimony as to their expectations with respect to obtaining insurance coverage, the contents of the parties' October 14, 2015 recorded telephone conversation, in which plaintiff sought clarity that the heights limitation constituted a limitation on exterior work, and the exclusion contained in the insurance proposal, which was not the full exclusion. The policies, which did contain the full exclusion precluding the use of any scaffold, were not forwarded to plaintiff until four months after renewal. While the failure to read the policy may provide a basis for comparative negligence the facts of this case preclude summary judgment.


12/02/20       Broecker v. Conklin Property, LLC

Appellate Division, Second Department

Insurance Agency May be on the Hook for Failing to Secure Policy for Client without Employee or Independent Contractor Exclusions

Conklin Property, LLC (“Conklin”), purchased certain real property and entered into a contract with JJC Contracting, Inc. (“JJC)”, for construction and renovation of the property in order to lease it to the defendant Gurwin Home Care Agency, Inc. (“Gurwin” ). Conklin retained the Lande and his insurance agency, Total Management Corp. (“TMC”), to procure insurance for the construction phase of the renovation project. TMC and Lande, its principal (“Agency”) negotiated and procured the subject policy for Conklin.

During the renovation, an employee of JJC was injured at the property and died. Subsequently, the employee's estate commenced the instant action against Conklin. US Underwriters, the insurer, disclaimed coverage pursuant to an exclusion for bodily injury to contractors and subcontractors and their workers.

Conklin then sued the Agency claiming that it failed to procure coverage for injury to contractors, subcontractors, and their workers, and were negligent in failing to exercise due care in procuring coverage that satisfied Conklin's insurance needs.

An insurance agent or broker has a common-law duty to obtain requested coverage for a client within a reasonable amount of time, or to inform the client of the inability to do so. Thus, the duty is defined by the nature of the client's request. Here, the complaint against the Agency alleged negligence and claims that the Agency failed to comply with its customer’s request.

The elements of a cause of action sounding in negligent misrepresentation are (1) a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance on the information. The allegations against the Agency regarding its involvement in assessing Conklin's insurance needs based on their review of the construction contract with JJC and the lease agreement with Gurwin, together with allegations regarding Conklin's reliance on the appellants' expertise, were sufficient to plead the existence of a special relationship necessary to sustain a negligent misrepresentation cause of action.

Here, the causes of action alleging negligence and negligent misrepresentation are governed by a three-year statute of limitations period. Conklin's injury was sustained on the date of the worker's injury. Since this action was commenced on August 9, 2017, it was within the three-year statute of limitations.

Editor’s Note:  We’re seeing more and more of these suits against insurance agents and brokers and the trend is to broaden agent/broker liability, it appears as you can see from these two cases.



Steven E. Peiper

[email protected]

12/03/20       Admiral Indemn. Co a/s/o Lennox Condominium v. Johnson

Appellate Division, First Department

Waiver of Subrogation Clause in Policy Precludes Subrogation Against Negligent Condo Owner

Admiral’s insured, Lennox, sustained fire damage to its building which arose from a fire that originated in a unit owned by Mr. Johnson.  After Admiral paid the loss, it sought recovery from Mr. Johnson via subrogation.

Admiral’s action was dismissed on motion, however, where the Admiral policy indicated it waived subrogation against any “unit-owner…shown in the Declarations.”  Here, Mr. Johnson was listed in on the Admiral declarations and, as such, Admiral’s claims were contractually barred.   


12/02/20       Bennett v. State Farm Fire & Cas. Co.

Appellate Division, Second Department

Overly Broad Discovery Demands Seeking Irrelevant Information Rejected and Vacated

This dispute has its origins in a first party loss arising out of contamination at the Bennetts’ property insured by State Farm.  As part of the adjustment process, State Farm retained the engineering firm H2M to inspect and evaluate the damage.  In addition, either State Farm and/or H2M recommended Milro to perform the remediation work.  It is alleged that Milro’s work was substandard, and that Milro abandoned the project prior to completion.

The Bennetts commenced this action against State Farm, H2M and MIlro seeking damages which arose from the allegedly botched remediation.  The issue on appeal was the Bennetts’ demand for production of documents and interrogatories.  Among other things, the demands sought production of the prior business dealings among and between the defendants and records relating to prior remediation projects performed by MIlro.  When the defendants objected, the Bennetts moved to compel. 

In affirming the trial court’s denial of plaintiff’s motion, the Appellate Division noted that a litigant is not compelled to respond to demands which were “irrelevant, overly broad or burdensome.”  Here, demands related prior remediation projects and business dealings between the parties were, in fact, irrelevant.  The Court went on to advise that when discovery demands are overbroad, it is not the Court’s responsibility to “prune” the document; in effect determining which demands were appropriate and which were overly broad.  Rather, the entire demand is rejected and the party from whom discovery is sought is absolved from responding.



12/09/20       Uceta v. Sherwood, LLC

Appellate Division, Second Department

Reliance on Broker to Forward Suit Papers to Insurer was Insufficient to Overcome Defendant’s Default

Plaintiff sustained injury resulting from a fall at a building owned by defendant Sherwood.  She commenced the instant lawsuit in January of 2015, and perfected service on January 26, 2015.  When Sherwood failed to interpose an Answer, plaintiff moved for a default and was granted relief on September 4, 2015.   Nearly two years later, an inquest was held wherein plaintiff was awarded $400,000 in damages.

In January of 2018, Sherwood finally acknowledged the matter by moving to vacate the default and inquest award.  That motion was denied by the trial court on the basis that Sherwood failed to proffer a reasonable excuse for its default.  In affirming the trial court, the Appellate Division noted that Sherwood’s excuse, that it thought its insurance broker was “handling” the matter, was insufficient as a matter of law.  Indeed, Sherwood’s reasoning did not explain why it did not inquire into the status of its defense upon receiving the default judgment motion and the notice of inquest. 

Where, as here, there was no reasonable excuse offered for the delay, there was no reason for the Court to explore the merits of any possible defense that Sherwood may have possessed.  


Michael J. Dischley

[email protected]

12/03/20       Dellino v. Puello, et. al.

Appellate Division, First Department

Plaintiff’s Expert Failure to Reconcile Range of Motion Findings with Prior Range of Motion Testing as well as Lack of Contemporaneous Treatment Fatal to Threshold Claim

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Bronx County (John R. Higgitt, J.), entered July 26, 2019, which granted defendants' motion for summary judgment dismissing the complaint based on plaintiff's inability to demonstrate that she suffered a serious injury within the meaning of Insurance Law § 5102(d).

The Appellate Court found that defendants satisfied their prima facie burden by submitting the reports of their neurologist and orthopedist, who found only slight limitations in plaintiff's right knee, and opined that plaintiff's examination was objectively normal with no objective evidence of any deficits, and that plaintiff's claimed injury was not causally related to the subject accident. Defendants also relied on plaintiff's own medical records, which showed that within a week after the subject accident plaintiff sought treatment from a doctor for various other injuries allegedly sustained in a prior accident, but made no complaints concerning her right knee, and that another doctor treating her in connection with the prior injuries found her right knee had no signs of injury and normal range of motion about three weeks after the accident.

In opposition, the Appellate Court found that plaintiff failed to raise an issue of fact. Her expert failed to reconcile his findings of restricted range of motion four months after the subject accident with the earlier finding of full range of motion by plaintiff's emergency pain physician three days after the accident. The lack of any evidence of contemporaneous treatment of her right knee also undermines plaintiff's claim that she sustained a causally related injury.

As such, the Court affirmed the lower court decision and found that the defendants are entitled to dismissal of the 90/180-day claim in the absence of a causal connection between plaintiff's right knee condition and the subject accident, as well as, according to plaintiff's testimony, she was confined to home for only three days after the accident.


12/01/20       Cabrera v. Ahmed

Appellate Division, First Department

Plaintiff’s Expert Speculative Opinion as to Degenerative Condition Fatal to Threshold Claim

In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Bronx County (John R. Higgitt, J.), entered on or about January 15, 2020, which granted defendant's motion for summary judgment dismissing plaintiff's claims of serious injury to his right knee under Insurance Law § 5102(d).

The Appellate Court found that Defendant met his prima facie burden by demonstrating that plaintiff's claimed right knee injury was not causally related to the subject accident, based on the orthopedist's review of plaintiff's own medical records, including an MRI report, which contained findings of degeneration, and the report of a radiologist, who reviewed the MRI scans and opined that they showed tricompartmental osteoarthritis, reflecting a degenerative breakdown of structural components of the right knee. Accordingly, the burden shifted to plaintiff to explain why the degeneration shown in his medical records was not the cause of his knee conditions for which he underwent arthroscopic surgery.

In opposition, the Appellate Court found that plaintiff failed to raise a triable issue of fact. The opinion of his medical expert that the degeneration shown in plaintiff's MRI was noncontributory was conclusory and speculative. The expert first examined plaintiff over two and half years after the accident, and the only medical records he reviewed were those following the accident. His opinion was based only on plaintiff's self-reported history of no prior injuries, which is not the same as no prior symptoms. It was not based on any objective evidence or medical records.

As such, the Court affirmed the lower court decision and found the objective evidence fails to support a finding of serious injury, as the medical records from a few weeks after the accident revealed only mild limitations in right knee flexion and normal range of motion in extension.



Agnes A. Wilewicz

[email protected]

Finding no coverage (decisions) in the Second Circuit.



Brian D. Barnas

[email protected]

12/02/20       Waters v. Geico Insurance Agency, Inc.

Appellate Division, Second Department

Insured Failed to Establish Bad Faith by Insurer and Assigned Counsel in Failing to Settle the Underlying Action within Policy Limits

In April 2010, the plaintiff Waters was involved in a three-car accident on the Sagtikos State Parkway, when Waters' vehicle came into contact with a vehicle driven by Derek Fruendt, who sustained personal injuries as a result thereof. Thereafter, Fruendt, and his wife suing derivatively, commenced a personal injury action against Louis J. Maccarone and Maccarone Leasing, the driver/owner of the other vehicle involved in the accident, and Waters, alleging negligence.

Waters had an insurance policy with the Geico with a liability limit of $100,000. Geico undertook Waters' defense in the Freundts' personal injury action, appointing Russo as counsel for Waters.  At the conclusion of the liability portion of the trial, the jury found both Waters and Maccarone liable and apportioned 85% of the fault to Waters and 15% of the fault to Maccarone. Subsequently, a judgment was entered in favor of the Freundts and against Waters and Maccarone awarding damages, and Maccarone obtained a judgment for contribution against Waters in the amount of $323,000 for the excess amount Maccarone paid beyond Maccarone's proportionate share of the judgment obtained by the plaintiffs in the underlying action.

In June 2017, Waters, and his wife suing derivatively, commenced this action against Geico and Russo alleging they breached the implied covenant of good faith and fair dealing by not settling the underlying action for the policy limit. Defendants separately moved for summary judgment dismissing the complaint.

The court granted the motions.  The defendants established that they did not engage in conduct that constituted a "gross disregard" by Geico of the plaintiffs' interests. In opposition, the plaintiffs failed to raise a triable issue of fact.



Lee S. Siegel

[email protected]

11/30/20       Green v. XPO Last Mile, Inc.

United States District Court, Connecticut

Court Refuses to Compel Arbitration of Wage & Hour Class Action

The court turned back the defendant’s effort to compel the arbitration of this employee classification class action.

XPO, the court reports, is an $8 billion a year national logistics company and freight forwarder for merchandise companies like Lowe’s, Ikea, and Amazon. It contracts with the big box stores to deliver goods, by contracting with motor carriers to ship the goods to customers. Plaintiffs Green and Tejada are drives who XPO qualified as independent contractors. They complained that XPO exercises such a high degree of oversight and control over their daily work activities that they should be deemed employees, with the benefits that employees enjoy under Connecticut’s statutory wage payment law. For example, they alleged that XPO deducts expenses from their compensation for insurance and uniforms, among other things, while also compelling drivers to assume other expenses, such as vehicle maintenance and fuel costs. Plaintiffs argue that XPO as their employer should assume these costs rather than imposing them on its employees.

XPO moved to compel arbitration, relying on arbitration clauses in the Delivery Service Agreements it entered into in connection with the delivery services furnished by Green and Tejada. The court examined three identical Delivery Service Agreements between XPO and Green and Tejada’s LLCs. The agreements explicitly disavow the existence of any employer-employee relationship between XPO and the LLCs or the employees of the LLCs. Additionally, each agreement includes an arbitration provision:

These clauses state in relevant part that: “[t]he parties agree that any demand, assertion, or claim or cause of action for money, property, enforcement of a right, or equitable relief, including but not limited to allegations of misclassification or wage and hour violations ... arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association (‘AAA’) under its Commercial Arbitration Rules.”

Because the plaintiffs are transportation workers (and therefore are exempted from the federal arbitration act), the arbitration agreement must be construed under the Connecticut Arbitration Act.  Initially, XPO argued that it is for an arbitrator to decide if the parties agreed to arbitration, because the Delivery Service Agreements expressly delegate to the arbitrator “exclusive authority to resolve any dispute relating to the formation” of the arbitration agreement. The court disagreed. “As the Connecticut Supreme Court has made clear, “because an arbitrator’s jurisdiction is rooted in the agreement of the parties ... a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an agreement to arbitrate. Only a court can make that decision.” The court contrasted this holding with caselaw discussing the scope of arbitrable disputes. This is because “[a]n agreement that has not been properly formed is not merely an unenforceable contract; it is not a contract at all,” and “[t]o take the question of contract formation away from the courts would essentially force parties into arbitration when the parties dispute whether they ever consented to arbitrate anything in the first place.”

The court also determined that it was within its purview to determine if Green and Tejada are, individually, bound by the Agreements. The court found that they are not. The court concluded that they each signed the Agreement with XPO on behalf of the LLCs and not individually or in their personal capacities. “It is hornbook law that the fact that a corporate owner or agent may sign a contract on a company’s behalf does not mean—without more—that the owner or agent is personally a party to the contract. Unless otherwise agreed, a person making or purporting to make a contract with another as agent for a disclosed principal does not become a party to the contract.” (Citations omitted).

The plaintiffs, as agents for the LLCs, did not agree to be personally bound by the Agreements, the court concluded. However, this was not the end of the court’s analysis. The Second Circuit recognizes five theories for binding nonsignatories to arbitration agreements: 1) incorporation by reference; 2) assumption; 3) agency; 4) veil-piercing/alter ego; and 5) estoppel. The court concluded that none of these theories were applicable to the plaintiffs, and XPO only urged a ‘direct benefits estoppel’ theory.

This theory allows a party to invoke arbitration against a non-party to the agreement if the non-party directly benefited from the agreement in a manner that makes it unfair for the non-party to be able to enjoy the fruits of the agreement without sharing in its obligation to arbitrate disputes. “One enjoying rights is estopped from repudiating dependent obligations which he has assumed; parties cannot accept benefits under a contract fairly made and at the same time question its validity.”

The record, the court concluded, did not show a direct benefit to Green or Tejada flowing from the terms of Agreements distinct from the indirect benefits they received from their general business dealings with XPO. The court notes that the First Circuit rejected a direct benefits estoppel argument on similar facts. See Ouadani v. TF Final Mile LLC, 876 F.3d 31 (1st Cir. 2017). There, rejecting arbitration, the Circuit Court found that the contractual benefits flowed to the LLCs and not the individua drivers.

Likewise, the court here determined that there is no evidence of direct benefits paid under the Agreements to Green and Tejada personally, “Notwithstanding the general benefit that Green and Tejada may have derived from working for XPO, the very theory of their complaint in this action is that XPO wrongfully treated them as independent contractors rather than employees. To the extent that the Agreements in turn serve as legal window dressing for XPO to perpetrate this miscategorization of Green and Tejada as independent contractors rather than as employees, then the record suggests that the Agreements not only failed to directly benefit Green and Tejada but actually deprived them of benefits by means of contract terms that were calculated to nullify any rights of Green and Tejada to be treated as employees rather than independent contractors.”

As nonparties to the Agreements, the plaintiffs were not bound by the arbitration clauses.

BUCCI on “B”
Diane L. Bucci

[email protected]

11/10/20       Superior Integrated Solutions v. Mercer Ins. Co. of NJ

New Jersey Superior Court, Appellate Division

Motion for Reconsideration Granted, But the Song Remains the Same

This decision did not make it into Coverage Pointers last month, but we had to bring it to you today to supplement our discussion of the appeals court’s previous decision in this case in H&F’s 07/24/20 Coverage Pointers Newsletter. 

Mercer Insurance Company of New Jersey, Inc. (Mercer), brought this motion seeking reconsideration of the court’s decision holding that Mercer had a duty to defend its insured Superior Integrated Solutions, Inc. (Superior) in a lawsuit brought Reynolds & Reynolds Company (Reynolds) alleging copyright infringement, contributory copyright infringement, tortious interference with contract, and violation of the Computer Fraud and Abuse Act. 

Superior coordinates and integrates software applications for car dealers’ use in managing their financial and customer information. Reynolds alleged that Superior infringed upon its copyright to its automobile dealer management system, ERA, which provides a hosted server connected with car dealerships’ computers.  Another program, ERAccess, was necessary to operated ERA and it was provided by Reynolds to the dealerships. 

Superior allegedly created a software program that could access ERA, sysdiagx.exe, by copying a previous version of ERAccess to solicit Reynolds’s customers and persuade them to use Superior’s services.

Mercer refused to defend Superior against Reynolds’s claims arguing that the complaint did not allege an advertising injury and that even if it did, the intentional acts and prior publication exclusions as well as a “Computer Software Professional Activities” (“CSPA”) exclusion precluded coverage for Reynolds’s claims.   

The policy insured against: 

1.        Advertising Injury arising out of an offense committed in the course of advertising goods, products, or services of your business/operations covered by this policy.

Under the policy, “[a]dvertising injury” is defined as:

1.        Infringement of copyright, slogan, title or trade dress.

2.        Misappropriation of advertising ideas or style of doing business.

3.        Oral or written publication of material that: slanders or libels a person or organization; disparages a person's or organization's goods, products, or services.

4.        Oral or written publication of material that violates a person's right of privacy.

Mercer relied on Information Spectrum, Inc. v. Hartford, 182 N.J. 34 (2004) for its proposition that there was no advertising injury.  In Information Spectrum, the New Jersey Supreme Court held that “advertising” involves not merely the sale of an item or service, but also the drawing of the public’s attention to the service or product for the purpose of attracting customers. Mercer argued that Reynolds’s allegations against Superior involved the sale of a service, not the advertising of the service.   

The court distinguished Information Spectrum because there, the insured was accused of the sale of infringing software but not of advertising infringing software whereas here, the allegation that Superior solicited Reynolds’s customers satisfied the advertising requirement.  According to the court, the advertising has to cause the injury.  The test is whether the relationship between the advertising activity and the copyright holder’s injury is causal or incidental. If it is causal, there is coverage; if the advertising activity is only incidental, then there is no coverage. According to the court, Reynolds alleged that Superior profited from its theft of Reynold’s intellectual property and was able to sell its integration services “only by its copyright infringement and unauthorized and contractually prohibited hostile integration.” This, according to the court, met the causation requirement.  

Mercer also argued that the CSPA precluded coverage.  The CSPA states: 

Under Part II B, the Contractual Supplemental Coverage and the Personal Injury/Advertising Injury Supplemental Coverages do not apply to damages arising out of the rendering of, or failure to render, any professional advice, product or service by you or on your behalf in connection with the selling, licensing, franchising, creation of, modification of, integration of, or furnishing of internet access, website design, or computer software including electronic data processing programs, downloadable programs, designs, specifications, manuals and instructions.

The court held that the CSPA only applied to Superior’s rendering of service or advice to its customers or other covered persons. It did not apply to a claim made by a third party for injuries caused by Superior where Superior was not selling computer software programs to that party.  The court went on to hold that the trial judge was also correct in concluding that the exclusion’s application would render the advertising injury coverage illusory, presumably because a computer software developer would likely only be advertising its computer software products.  Neither the parties nor the court questioned why the CSPA was included in the policy of a computer software creator in the first instance. 

The court also rejected Mercer’s prior publication and intentional acts exclusions arguments as well.  Although labeled by the court and/or parties the intentional act exclusion, the exclusion at issue precluded coverage for “[i]njury arising out of oral or written publication of material, done by or at the direction of any insured with knowledge that such is false or such would violate the rights of another and would inflict the injury.”  Thus, the question was not whether the act was intentional but instead whether the injury was intentional, which, according to the court, was analyzed under a subjective standard that did not allow a disclaimer of the duty to defend.  Superior argued that the allegations of intentional copyright infringement involved an intentional act.  The court countered that Reynolds could recover under a copyright infringement claim without a showing of intent. 

The court rejected the prior publication exclusion argument because there was no allegation or indication that publications of the insured that occurred prior to the policy’s inception were publications that caused the injuries complained of.    

Mercer’s motion was only for reconsideration of the appellate court’s previous decision but its doggedness in arguing its position could result in an appeal to the New Jersey Supreme Court.  We’ll keep you posted. 

Please contact me for a full copy of the decision.


Brian F. Mark

[email protected]


11/24/20       Pilgrim Missionary Baptist Church v. Church Mut. Ins. Co.

United States District Court for the Western District of Louisiana, Alexandria Division
U.S. District Court Finds No Coverage for Roof Damage due to Policy Exclusions for Deterioration, Faulty Design and Construction and the Quality of Materials used in Construction

The plaintiff, Pilgrim Missionary Baptist Church (“Pilgrim”), commenced this declaratory-judgment action seeking damages incurred in the demolition of one of its buildings, the fellowship hall. 

Church Mutual Insurance Company (“CMIC”) issued an all risk policy insuring Pilgrim's several church buildings.  On or about September 6, 2017, Pilgrim reported a claim for roof damage to its fellowship hall.  Specifically, Pilgrim reported that portions of the fellowship hall roofs rafter system appeared to be "rotten."  CMIC assigned the claim to both a structural engineer and an independent claims adjuster.

The engineer retained by CMIC found that several support trusses were broken in the area where knots were observed in the wood.  Based on his observations, the engineer concluded that: (1) the fellowship hall was not safe for use at that time due to the severity of the hazard presented by the roof truss failure; (2) the roof truss system failed because of an unduly heavy dead load consisting of building materials and a suspended ceiling installed in 2006; and (3) in order for the fellowship hall to be returned to habitable status, the entire roof - including its shingles, felt, decking, trusses, insulation, ceiling framing and all electrical and plumbing would need to be removed, redesigned and rebuilt.  He also recommended immediate shoring of the roof.

CMIC denied any coverage obligation for Pilgrim’s claim based on the policy exclusion for loss or damage caused by … rust, corrosion, fungus, decay, deterioration, hidden or latent defect or any quality in property that causes it to damage or destroy itself.  CMIC also denied coverage based on the policy exclusion for faulty, inadequate, or defective: (1) Planning, zoning, development, surveying, siting; (2) Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction; (3) Materials used in repair, construction, renovation, or remodeling; or (4) Maintenance; of part or all of any property on or off the described premises ...

As the shoring work recommended was never completed, Pilgrim eventually paid a contractor to demolish the fellowship hall.

To avoid application of the latent defects exclusions, Pilgrim claimed that the roof truss system of its former fellowship hall sustained damage during a windstorm in August of 2016.  Both sides submitted expert testimony as to the cause of the roof damage. 

Pilgrim’s expert testified that the damage was due to a weather event in August of 2016.  Notably, he also concluded that the configuration of the fellowship hall and its adjoining building created a stress point that prevented wind from circulating around the fellowship hall without creating stress overload points in the roof, which he testified resulted in the rafter failures at issue.

CMIC’s expert testified that he fellowship hall's roof truss system failed due to faulty design and construction using defective materials.  The expert also reasoned that as the building did not sustain damage during Hurricane Katrina in 2005, far lesser winds in August of 2016 would not be a reasonable cause of the substantial damages observed in the truss system.

The Court found that the losses at issue were excluded from coverage under the policy by operation of the exclusion for losses resulting from deterioration and the policy language excluding coverage for losses attributable to faulty design and construction and the quality of materials used in construction.

In finding that no coverage was owed for the Pilgrim claim, the Court noted that Pilgrim failed to meet its initial burden of establishing that the damage to its fellowship hall roof truss system was caused by a covered loss under the terms of the policy.  The Court found CMIC’s expert testimony to be the more credible evidence of causation.  The Court pointed out that there was no mention of a weather event made in the initial claim for coverage and that Pilgrim’s expert failed to explain how he reached his conclusion that the August 2016 weather event caused the damage.  The Court also noted, that Pilgrim’s expert report also concluded that the fellowship hall was the subject of faulty construction in that the way it was attached to its adjacent building which created stress points subject to wind.  When CMIC’s expert’s theory of causation was applied to the facts, CMIC’s expert analysis was found to be more fact-based and more reliable.



Eric T. Boron

[email protected]


12/03/20       State Farm vs. Elmore

Supreme Court of Illinois

Auto Insurance – Reversal of Appellate Court – Farm Equipment Injury -Mechanical Device Exclusion

The issue before the Supreme Court of Illinois in this declaratory judgment action was the enforceability of a “mechanical device” exclusion in the automobile policy issued by plaintiff, State Farm Mutual Automobile Insurance Company (State Farm) to the owner of a truck owned by the injured claimant’s father.   State Farm had been granted summary judgment at the circuit court level, but a state appellate court had held that the exclusion was ambiguous, and therefore construed it against State Farm and in favor of coverage. However, that ruling was itself reversed by the Supreme Court of Illinois’ Opinion filed December 3, 2020, which held the exclusion was neither ambiguous nor void as against public policy, and therefore affirmed the circuit court’s entry of summary judgment for State Farm.

The unfortunate background facts are as follows.  Kent Elmore (Kent) was injured while unloading grain from a truck owned by his father Ardith Sheldon Elmore (Sheldon).  Sheldon possessed or leased farm property, and on October 16, 2013, Kent was assisting Sheldon in his grain farming operation. Kent backed up a grain truck to an auger that was being used to move grain from the grain truck to a transport truck. A tractor powered the auger by means of a power take-off (PTO) shaft. The auger had a hopper that received grain from the grain truck. The hopper was located beneath the grain truck’s dumping chute. As the auger turned, it moved grain up and dumped it into the transport truck. Kent was attempting to open the grain truck’s gate to let grain into the auger. He wanted to get extra leverage, so he stepped onto the auger. Because the auger’s protective shield had been removed, Kent’s foot was exposed to the turning shaft. In the accident, Kent lost his right leg below the knee. Surgery was later required to amputate the leg just above the knee.

Kent settled a negligence action against Sheldon, receiving $1.9 million from insurers, and reserving his right to pursue additional coverage under Sheldon’s auto policy with State Farm that covered the truck. State Farm sought a declaratory judgment that no coverage was provided under the auto policy because an auger is neither a “car” nor a “trailer,” as defined in the policy but fell under the policy’s “mechanical device” exclusion for damages resulting from "the movement of property by means of a mechanical device, other than a hand truck, that is not attached to the vehicle.”

As recited by the Illinois Supreme Court’s Opinion, the State Farm auto policy at issue sets forth its liability coverage as follows:


* * *

Additional Definition

Insured means:

1. you and resident relatives for:

a. the ownership, maintenance, or use of:

(1) your car;

* * *

3. any other person for his or her use of:

a. your car:

* * *

Such vehicle must be used within the scope of your consent;

* * *

Insuring Agreement

1. We will pay:

a. damages an insured becomes legally liable to pay because of:

(1) bodily injury to others; and

(2) damage to property

caused by an accident that involves a vehicle for which that insured is provided Liability Coverage by this policy[.]” (Emphases in original.)

The policy contains a Commercial Vehicle endorsement. The “mechanical device” exclusion is contained in this endorsement. This exclusion provides as follows:


* * *

b. Exclusions

* * *


* * *


In reversing the state appellate court, the Illinois Supreme Court held the “mechanical device” exclusion was not ambiguous because the auger is a machine or tool designed to move grain from one place to another and is a device that was “operated by a machine or tool” (a tractor) that is not a small hand-propelled truck or wheelbarrow, and further, was not attached to the insured vehicle.


BARCI’S BASICS (on No Fault)

Marina A. Barci

[email protected]

12/01/20       GEICO v. Advanced Labs, et al.

United States District Court, Eastern District of New York

GEICO Granted Preliminary Injunction To Stay All No-Fault Arbitrations Commenced By Advanced Labs

GEICO moved to stay and enjoin Advanced Labs no-fault collection proceedings. GEICO alleges that the defendant-providers have submitted more than $10 million in fraudulent laboratory toxicology bills since 2018 and seeks recovery of almost $1 million that the defendants received, as well as a declaration that it is not obligated to reimburse the provider for more than $8.8 million in pending no-fault claims. Since the commencement of this action alone, the provider has served approximately 125 arbitrations on GEICO, in additional to the more than 2,430 arbitrations already pending. GEICO's motion to stay all pending no-fault arbitrations before AAA involving Advanced Labs, and to enjoin any future arbitrations by Advanced Labs, pending resolution of the instant federal action, was granted.

GEICO established (1) that it would suffer irreparable harm if it was required to waste time defending numerous no-fault actions when those same proceedings could be resolved globally in the single, pending declaratory judgment action, plus the risk of inconsistent judgments with the arbitrations; (2) when viewing the record collectively, including the doctor’s declarations and underlying treatment records, the heightened “likelihood of success” standard may have been satisfied, and, at a minimum, raised a serious question going to the merits as to whether defendants were providing medically necessary drug screenings; and (3) the hardships were balanced since, at worst, if GEICO fails to prove its claims after the injunction is granted, the defendants recovery of the no-fault benefits they are entitled to will be delayed, with the ability to collect interest on the delay, and there is no prejudice the defendants will suffer if their right to collect the pending bills is determined in a single matter as it will in fact save them time and resources, but if the injunction isn’t granted GEICO will suffer irreparable harm.


12/03/20       Lumbermens Mut. Cas. Co. v. A B Med. Servs., PLLC

Appellate Division, First Department

Treating Doctors Found to Be Independent Contractors, Not Employees of the Provider, Thus Precluding the Provider From No-Fault Reimbursement

In September 2019, after a nonjury trial, it was declared that the plaintiff-insurers have no duty to pray no-fault benefits to the defendant-doctors as they are independent contractors and not employees of the defendant-provider, who improperly billed for their services in violation of 11 NYCRR 65-3.11(a), which limits no-fault medical billing to employees of the provider that submits the claim for benefits. Factors relevant to assessing control include whether the worker (1) worked at his or her convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer's payroll, and (5) was on a fixed schedule. The factors at trial in this case that showed the treating providers were not employees included testimony that: the defendant could not monitor the quality of the work billed because its principal was not qualified in these fields of medicine; defendant used staffing services to find professionals; defendant's principal could not recall giving the professionals health insurance and required them to provide their own malpractice insurance and he could not recall providing the professionals with certain nerve conduction equipment; the professionals were all part-time and free to take on other jobs; and although the principal provided the professionals with W-2 forms, he did so only because he thought he was required to do so by insurers.


Ryan P. Maxwell
[email protected]

Legislative List

11/27/20       VETO: Bill Amending Workers’ Compensation Law To Cover Massage Therapy Nixed

New York State Executive

Bill That Permitted The Establishment of a Fee Schedule For Massage Therapy For Injured Employees Vetoed Due To Administrative Costs Outweighing Benefits

On November 27, Governor Cuomo vetoed a bill that would have permitted the chair of the Workers’ Compensation Board to set a fee schedule for massage therapy services provided to injured employees.

The bill, if it were enacted into law, would have established a fee schedule for massage therapy similar to those provided for physical and occupational therapy, allowing for an injured employee to receive reimbursement for massage therapy services in similar fashion. However, in vetoing the bill, Governor Cuomo indicated:

Medical treatment and care under the Workers' Compensation Law is strictly evidence based, requiring documentation of demonstrable functional improvement in order to be compensable. Massage provides short-term relief and has therapeutic value, but it is very difficult to measure the impact of a course of massage on an injured worker's functional ability. Massage therapy codes, when part of a treatment plan, are available for physicians and limited other health care providers providing treatment to injured workers. However, massage therapy is not recommended in the majority of the Workers' Compensation Board's medical treatment guidelines and absent the ability to quantify the benefits to individuals, this expansion has the potential to greatly increase administrative costs to ensure it is properly compensated. . . .


11/27/20       VETO: Bill Regulating 3-Wheeled Autocycles Vanquished

New York State Executive

Bill That Permitted Operation of Autocycle With Class D License Vetoed Due to Ambiguity and Safety Concerns

Two weeks ago, Governor Cuomo vetoed a bill delivered from the Legislature that would have would allowed for the operation of an autocycle by a person

holding a Class D license.

A standard autocycle carries two wheels situated in the front and one wheel in the rear. Under New York law, as well as the law of forty-eight (48) other states, operators of autocycles are required to carry a Class M motorcycle license. In vetoing the bill, Governor Cuomo first took issue with an ambiguous definition of “autocycle”:

“In the bill, an ‘autocycle’ is defined as a ‘three-wheeled vehicle’ without reference to the placement of the wheels. As such, the bill fails to make a proper distinction between a standard autocycle, with

two wheels situated in the front and one wheel in the rear, and a three-wheeled motorcycle, with one wheel situated in the front and two in the rear. This flaw would allow persons operating three-wheeled motorcycles to do so with a Class D automobile license, rather than the more appropriate Class M motorcycle license.”

Outside of this ambiguity, Governor Cuomo took issue with the reduced licensing requirement for standard autocycle’s to begin with:

“an autocycle is inherently less safe to operate, and its open air design provides far less crash protection, than a standard automobile. Forty-eight other states require a motorcycle license or special endorsement to operate because an autocycle does not handle like an automobile. An operator would benefit from the increased instruction and testing necessary to pass a driver's test for a Class M motorcycle license.”

As Ray Charles would say, “hit the road Jack, and don’t you come back.”

Regulatory Wrap-Up

12/9/20         Proposed Amendments To Reinsurance Regulations

Department of Financial Services

DFS Proposes Amendment To Existing Requirements For Reinsurers Located In Reciprocal Jurisdictions To Avoid Federal Preemption

On Wednesday, DFS published a proposed rule making to the State Register that would amend certain regulations under 11 NYCRR 125 in order to avoid federal preemption under the Federal Insurance Office and maintain New York’s NAIC-accredited status. The changes proposed would eliminate reinsurance collateral requirements and local presence requirements for certain E.U. domiciled and U.K.-domiciled assuming insurers, while also providing reciprocal jurisdiction status for accredited U.S. jurisdictions and qualified jurisdictions if they meet certain requirements.

On September 22, 2017 and December 19, 2018, the U.S. federal government entered into separate agreements with the E.U. and the U.K. (collectively, the “covered agreements”).  Under the covered agreements, once certain regulatory requirements are met by reciprocal jurisdiction assuming insurers, credit for reinsurance is afforded and collateral requirements on certain E.U.-domiciled and U.K.-domiciled assuming insurers that reinsure business from U.S.-domiciled ceding insurers are to be eliminated.

Given the above, the NAIC adopted a pair of Models (i.e., a revised Credit for Reinsurance Model Law and a revised Credit for Reinsurance Model Regulation) to conform to the covered agreements. The proposed regulation implements those necessary changes in New York law and regulation to conform to the covered agreements.

Specifically, the amendment would a “reciprocal jurisdiction” category eliminating reinsurance collateral requirements and local presence requirements for certain E.U.-domiciled and U.K.-domiciled assuming insurers. Additionally, the proposed amendment would provide reciprocal jurisdiction status for accredited U.S. jurisdictions and qualified jurisdictions if they meet certain requirements in the Models. In other words, domestic ceding insurers, including fraternal benefit societies, would be enabled to take credit as an asset or a deduction from loss and unearned premium reserves for reinsurance recoverable from assuming  insurers headquartered or domiciled in the E.U., U.K., or other reciprocal jurisdictions.

Those states who fail to amend their laws and regulations to conform with the covered agreements face federal preemption at the hands of the FIO. The FIO is scheduled to begin evaluating possible federal preemption of state laws and regulations by March 1, 2021. DFS contends that a failure to adopt this proposed amendment would authorize federal law to impose the covered agreement language directly upon New York insurers.

With respect to actual changes to 11 NYCRR 125, Section 125.1 would be amended to add a preamble articulating much of the above. Additionally, and particularly of note, a new Section 125.4(i) would be added that DFS summarized as follows:

“A new Section 125.4(i) is added to provide an alternative method for allowing ceding insurers balance sheet credit for cessions to unauthorized assuming insurers.  This section eliminates the requirement for the posting of collateral by reinsurers domiciled or headquartered in “reciprocal jurisdictions”, which includes the United Kingdom, member nations of the European Union, National Association of Insurance Commissioners (“NAIC”)-accredited jurisdictions, and any other jurisdiction that is a qualified jurisdiction pursuant to Section 125.4(h)(8) and that the Superintendent of Financial Services (“Superintendent”) determines meets certain  additional requirements.  In order for the ceding insurer to take full credit for the reinsurance without the  assuming insurer posting 100% collateral, the assuming insurer must also meet certain requirements, such as  being licensed to transact reinsurance by, and have its head office or be domiciled in, a reciprocal jurisdiction,  and maintaining a minimum capital and surplus of at least $250 million.”

Public comment for this proposed amendment expires on February 8, 2021.


CJ on CVA and USDC(NY)

Charles J. Englert III

[email protected]

11/24/20       John Doe HK v. The Roman Catholic Archdiocese of New York

New York State Supreme Court, County of Kings

When a Claimant Provides a Detailed Affidavit Describing Potential Harms, he may Suffer a Request to Proceed Anonymously Should be Granted

Plaintiffs initiated this action seeking damages related to childhood sexual abuse allegedly caused by defendants or their agents. Plaintiff also filed an Order to Show Cause for permission to proceed in the matter anonymously. Plaintiff claims that this matter is likely to draw the attention from the media and id he is not allowed to proceed under a pseudonym, the media attention may lead to a chilling effect that may inhibit plaintiff and other victims of childhood sexual abuse from coming forward.

In support of his application, plaintiff annexed a detailed personal affidavit. This affidavit outlined the mental and emotional harm that was likely to befall plaintiff if he were required to proceed under his own name. Plaintiff submitted that reliving the events in question has led plaintiff to endure nightmares, loss of sleep, and suicidal ideations, among other things. Plaintiff further highlighted that plaintiff’s family, friends, and co-workers are unaware of the details of plaintiff’s alleged abuse. Plaintiff also states that publication of plaintiff’s name would potentially inhibit plaintiff’s ability to continue with this lawsuit.

Defendants, Franciscan Brothers of Brooklyn, opposed this application and argued that this is not an “exceptional” circumstance where the plaintiff should be granted the ability to proceed under a pseudonym, and that plaintiff’s application has no statutory basis.

The court held that the right of the public, and the press, to access judicial proceedings is not absolute or unfettered, and involves judicial discretion and that access to judicial proceedings may be maintained even when sensitive information—e.g. a claimants name—is kept from the public. The court cited Civil Rights Law §50-b, which allows victims of sexual offenses to remain anonymous, and was enacted to spare victims of sexual assault the embarrassment of being publicly identified in the news media and to encourage such victims to cooperate in the prosecution of sexual offenses (see New York Bill Jacket, 1999 S.B. 5539, Ch. 643). Furthermore, the court cited Cole v. Mandell Food Stores, Inc., which stated “[i]t is elementary that the primary function of a pleading is to apprise an adverse party of the pleader's claim” the same does not necessarily apply to a pleader’s name. (93 NY2d 34, 40 [1999]).

The court ruled in favor of plaintiff, allowing plaintiff to proceed anonymously in this matter. The court based its decision not only on the caselaw surrounding applications to proceed anonymously in cases related to sexual assault and Civil Rights Law §50-b, but also the plaintiff’s detailed affidavit included with the Order to Show Cause. Furthermore, the court noted that the opposing defendants failed to advance any legitimate reason why plaintiff should be prevented from proceeding anonymously.

CJ’s Note: In my November 13th edition of CP I outlined a decision on an Order to Show Cause in A.S. v. Adirondack Camp, where the plaintiff application to proceed anonymously was denied. In A.S., plaintiff accompanied the application with what the court described as a “threadbare” affirmation from plaintiff’s attorney stating that plaintiff feared further phycological injury should plaintiff’s identify be made known. The above decision differs significantly as the court was able to assess the application along with an affidavit of plaintiff himself. It is my opinion that courts will be likely to grant anonymity orders going forward provided that the plaintiff includes a detailed personal affidavit with the application.


Cara A. Cox
[email protected]

Heather Sanderson
Sanderson Law (Alberta, Canada)

[email protected]

11/30/20       Forgotten Treasures Int’l Inc. v. Lloyd’s Underwriters

Court of Appeal for British Columbia

Two Lefts Don’t Make a Right: Insured Loses Appeal Where Miracle Feeds’ Factors Favor and (Partially) Excuse Carrier’s Failure to File an Answer

Vacating Default: British Columbia

The insured established and operated an international treasure hunt to raise money for cancer research. The main prize in the treasure hunt was an 18-pound, solid gold diamond encrusted sculpture of an eagle and the other prizes were of smaller silver eagles. The insured was insured by Lloyd’s Underwriters.

Prior to the treasure hunt, Mr. Shore, the founder and president of the insured, had taken to eagles to a church in Delta, B.C. to promote the treasure hunt. In May of 2016, while leaving the church, Mr. Shore carried the eagles in a backpack and escorted a Ms. Merx to her vehicle. Then, Mr. Shore crossed the street to go to his vehicle. While Mr. Shore was placing the eagles into his vehicle, Mr. Shore was attacked by unknown assailants and robbed. The eagles have not been recovered. There was a dispute as to whether Mr. Merx was present at the scene of the alleged robbery. This was relevant to Lloyd’s because the policy required the insured eagles to be in the close personal custody and control of the insured and an officer or representative of the insured at all times, except when deposited in a bank safe or vault. However, there were questions as to whether Ms. Merx was an officer or representative, and even if she was present at the time of the robbery.

After Mr. Shore submitted the claim to Lloyd’s, Lloyd’s denied the claim. Thereafter, at the end of May 2018, the insured commenced an action against Lloyd’s. By early June 2018, Lloyd’s had requested various particulars from the insured and confirmation that the insured would not request default judgment without reasonable notice. At the end of June, the insured responded to Lloyd’s and asserted that the particulars being sought were not appropriate or necessary for Lloyd’s to file an answer. Further, the insured continued to assert that the information Lloyd’s sought should be obtained during the course of discovery and if needed, Lloyd’s could amend its answer.

For the next couple months, the insured and Lloyd’s went back and forth about the additional information. Lloyd’s also repeated asked for confirmation the insured would not request default without notice. This continued until by December 6, 2018, when after requests for default had been denied twice, default was finally entered against Lloyd’s and Lloyd’s was ordered to pay out the claim for the stolen eagles. However, four days after learning of the default, Lloyd’s moved to vacate the default judgment and compel the insured to serve “further and better particulars of the allegations contained” in the complaint.

In April 2019, the Supreme Court of British Columbia vacated the default but denied Lloyd’s request for the insured to provide further information. The default was vacated, pursuant to the following factors laid out in Miracle Feeds v. D & H Enterprises Ltd. (1979) 10 B.C.L.R. 58 (Co. Ct.):

When considering an application to set aside a default judgment, a judge must consider whether the defendant a) willfully or deliberately failed to respond, b) applied as soon as reasonably possible after learning of the default, c) has a defence worthy of investigation, and d) has established these elements through affidavit material.

The B.C. Supreme Court judge noted that default should not have been sought or taken and:

[c]ommunications between the parties had made it perfectly clear that there was an active, ongoing dispute between the parties with a substantial defence forthcoming, and not one that was merely worthy of investigation, but one which had been communicated clearly and precisely with the concomitant disclosure of substantiating evidence in the form of [Ms.] Merx’s statement… [Lloyd’s] cannot be said to have willfully or deliberately failed to respond to the [notice of civil claim].

Thereafter, the insured appealed the order vacating the default. The Court of Appeal for British Columbia dismissed the insured’s appeal. The Court of Appeal started off by citing to the commentary of the Code of Professional Conduct where it states: “A lawyer who knows that another lawyer has been consulted in a matter must not proceed by default in the matter without inquiry and reasonable notice.” Additionally, per the Supreme Court Civil Rules, the court may set aside or modify a default judgment.

The insured argued that Lloyd’s willfully and deliberately failed to respond to the complaint and Lloyd’s did not have a defense worthy of investigation. However, the Court then referred back to the factors laid out in Miracle Feeds and emphasized, contrary to the insured’s position, that the factors are not mandatory or exhaustive, rather, they are discretionary. The Court of Appeal also highlighted that the discretionary nature of the Miracle Feeds factors requires deference be afforded to the lower court’s decision in vacating the default judgment.

Interestingly, the Court explained that a demand for particulars does not stay proceedings but may permit a defendant to request for an extension to file an answer where the party cannot answer the original pleading until particulars are provided. In this case, although the insured provided two extensions for Lloyd’s to file an answer, Lloyd’s requests for particulars either went unanswered or were unsuccessful. Accordingly, although Lloyd’s “conduct was both purposeful and unreasonable[…] it might, in different circumstances, constitute ‘blameworthy’ or willful’ conduct”.

In regards to whether Lloyd’s had a defense worthy of investigation, the Court outlined that a defendant must submit some evidence supporting a defense it wishes to advance. However, the necessary evidence that a judge considers does not need to be examined extensively or in great detail. Lloyd’s raised various policy provision, including Territorial Limits, a Two Person Accompanying Warranty, Personal Conveyance Clause, and Baggage Warranty. The Court disregarded the insured’s attempt to argue contractual interpretation and various findings of fact, and instead, was satisfied that Lloyd’s did have defense(s) worthy of investigation.  Accordingly, the Court affirmed the lower court’s application of the Miracle Feeds framework and there was no error in principle. Thus, the Court dismissed the insured’s appeal.

Vacating Default: New York

Although there are four factors outlined in Miracle Feeds, it is different when seeking to vacate default judgment in New York. In New York, a party seeking to vacate a default judgment must show that the default was excusable and there exists a potentially meritorious claim or defense. Notably, unlike our Canadian counterparts, a moving party in New York must satisfy both a reasonable excuse for default and potentially meritorious defense in its request to vacate default, unless a defendant raises a jurisdictional objection such as improper service. However, it is at the discretion of the trial court to determine what constitutes a reasonable excuse for the default and as noted in Forgotten Treasures, the discretion of the lower court will be upheld on appeal, absent gross abuse by the lower court.


Patricia A. Rauh

[email protected]

10/29/20       Miller v. Metropolitan Life Insurance Co.

United States Court of Appeals, Second Circuit

New York’s Continuing-Violation Doctrine Did Not Apply to Toll the Statute of Limitations in Plaintiffs’ Breach of Contract Claims Against Defendant

Plaintiffs enrolled in a Group Variable Universal Life Insurance (GVUL) policy offered by Defendant in 2000.  During the enrollment process, Plaintiffs declined to answer the question about whether they smoked tobacco, but Defendant nevertheless designated them as tobacco smokers, which resulted in higher premiums.  Plaintiffs allege that they have never used tobacco products. The Plaintiffs did not discover that they were being charged higher premiums until sixteen years later.  When Defendant refused to refund a portion of the premium payments, Plaintiffs filed this action in United States District Court for the Southern District of New York alleging breach of contract, contractual breach of the implied covenant of good faith and fair dealing, tortious breach of the duty of good faith and fair dealing, and negligence.

The District Court held that the Plaintiffs’ claims were time barred under New York’s applicable statutes of limitations and the Second Circuit affirmed.  The Court reasoned that in New York, an action upon a contractual obligation or liability, express or implied, must be commenced within six years of the alleged contractual breach. In this case, the breach first occurred in 2000, so the statute of limitations expired in 2006.  Plaintiffs’ argued that the statute of limitations was tolled due to New York’s continuing-violation doctrine.  However, the Court dismissed this argument and reasoned that tolling based on that doctrine “may only be predicated on continuing unlawful acts and not on the continuing effects of earlier unlawful conduct.”  In other words, Defendant’s initial wrongful designation of Plaintiffs as smokers was a single event and any subsequent premium charged represented the consequences of the allegedly wrongful act in the form of continuing damages, and was not an independent wrong in itself.

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