Coverage Pointers - Volume XXII, No. 23

Volume XXII, No. 23 (No. 588)
Friday, April 30, 2021

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.  Attached is this week’s issue, our 558th (but who’s counting) – Volume XXII, No. 22.

We are delighted to offer a new column in this week’s issue.  Nicholas Heintzman, the newest member of our coverage team (who was recently admitted to the Bar), has taken over the column formerly known as “Jen’s Gems”, covering selected and interesting coverage cases from the lower courts, the plenary courts (in New York, the lowest state court is called the Supreme Court).  Please see Heintzman’s Hideouts, in today’s issue and welcome Nick to our team.

Delighted to be back with you again, my friends.  We’re looking forward to the second Insurance Coverage 101 presentation this afternoon.  Sorry, we had to close it out because of Zoom limitations.  While John Trimble and I expected 50 attendees, we were delighted to welcome over 200, with several companies scheduling individual regional and national presentations.  Always reach out for training.

We are hoping that April showers, and a little snow, bring May flowers.  I am craving warm weather along with a vacation, somewhere.  For a guy who flew 75+ flights in 2019 and had his last jet flight in March 2020, I’m ready to travel.  Thank you Moderna.


Other programming opportunities abound, including training in:

  • How to Write a Coverage Letter
  • Risk Transfer
  • New York Coverage Protocols
  • SUM (Supplementary Uninsured/Underinsured Motorist):

Your organization has a coverage topic you want presented, just let me know. 

This week’s issue has the usual array of fascinating cases. 


AI Coverage Alert:

See the 4/29/21 WDF decision in my column to note the generosity of the First Department in giving away additional insured coverage.  No allegation of named insured negligence in the pleading, indemnity claim dismissed yet court found that the named insured’s carrier has “actual knowledge of facts that suggested reasonable possibility of coverage” – that is, that it’s insured cause the accident.


What Do You Think of This Endorsement (focusing on the Schedule, of Course)?


This endorsement modifies insurance provided under the following:




Description of Designated Ongoing Operation(s):

Any/All construction operations by or on behalf of the “Insured”. Construction operations under this endorsement include but are not limited to interior and exterior renovations, interior and exterior structural improvements, structural alterations, demolition, and additions to the existing structure.

Specified Location (If Applicable):

Any and all work issued under a project related policy. 

(If no entry appears above, information required to complete this endorsement will be shown in the Declarations as applicable to this endorsement.)

The following Exclusions is added to paragraph 2. Exclusions of COVERAGE A – Bodily INJURY AND PROPERTY DAMAGE LIABILITY (Section I – Coverages):

This insurance does not apply to “bodily injury” or “property damage” arising out of the ongoing operations described in the Schedule of this endorsement, regardless of whether such operations are conducted by you or on your behalf or whether the operations are conducted for yourself or for others.

Unless a “location” is specified in the Schedule, this exclusion applies regardless of where such operations are conducted by you or on your behalf. If a specific “location” is designated in the Schedule of this endorsement, this exclusion applies only to the described ongoing operations conducted at the “location”

For the purpose of this endorsement, “location” means premises involving the same or connecting lots, or premises whose connection is interrupted only by a street, roadway, waterway or right-of-way of a railroad.


This Week’s Challenge:

My favorite this week comes out of the First Department, decided on Tuesday.  Construction worker is working on a new build which will be in excess of three-stories tall.  He falls from an elevated height, but while working on the first floor. Labor Law claims are in dispute.

The policy excluded coverage for certain activities, including "[a]ny exterior work over [two] stories, any ground up construction over [two] stories while the insured is operating in the capacity of a general contractor, or any project that involves adding stories to an existing structure, whether done by an insured or by subcontractors on an insured's behalf."  Does the exclusion apply to bar coverage or does the fact that the worker is on the first floor render the exclusion inapplicable?  You’ll have to read the attached issue to find out!



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.  Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Chris Potenza at [email protected]  to subscribe.



I have often spoken about being born in Honduras into what can only be described as abject poverty. My family lived in a village with literal thatched huts for homes. We had a communal field where the families in the village planted crops. My grandmother planted avocado, mango, cotton, coconut and lemons. She would barter some of the yield (which was small) for other crops (yucca, bananas, plantains, corn, beans) or food items that she could not grow (rice, flour). My siblings and I would sell the rest throughout the village.

I speak about my grandmother because my parents immigrated to the United States in search of a better life when I was 10 months old. Because they were undocumented, we did not see them again until I was almost 6 years old.

My humble origins obviously inform who I am today and why I fight so zealously for equity and inclusion in all aspects of our society. Had my parents not immigrated, I would not be here, trying to make a difference. And had I not had mentors and champions who took an interest in me and nurtured my love for the law, I would not be a partner at a law firm today or the Founder of my non-profit, Girls Rule the Law, Inc. Clearly, opportunities are important; yet, too many families in this amazing country lack opportunities and live in poverty and in areas that are considered financial deserts. The lack of financial inclusion leads to a cycle of poverty for those children and their families.

In this edition of Coverage Pointers, I speak about financial exclusion and income inequality and what the insurance and financial service industries can do to help.

Mirna M. Santiago

[email protected]


Word for the Wise, 100 Years Ago, Take a Vacation:

The Buffalo Times

Buffalo, New York

30 Apr 1921

Why You Ought to Take a Vacation Once in a While


Commissioner of Health, New York City

            In the dictionary are found many big words.  One of them is “obsession.”  A few examples will make clear exactly what this word means.

            It seems a common desire on the part of many married women never to remove the wedding ring. There is an indefinite fear of some sort of domestic calamity, should the ring slip off by accident or intent.  This feeling is a worthy sentiment, but it may often become an obsession.

            A child is fortunate enough for a year or two, by reason of good health and good luck, not to be absent or tardy in his school attendance.  He then becomes obsessed with the desire never to be late or absent.  He is in a fever of fear that something will delay him.  When school time approaches he becomes cross, irritable, insistent, domineering.  The whole family is in a terror of anxiety for fear Willie may be late.  Punctuality has become an obsession with Willie.

            I know of a great institution where one of the female employees has not been absent or tardy for over 30 years.


Peiper on Property and Potpourri:

We have a great case for your perusal this week.  Although it is probably better found in Dan’s column, he graciously gave me a case upon which to report during an otherwise quiet first party week.  The Granite State case involves litigation over the duties and obligations of a Employers’ Liability Policy.  Granite State’s insured, Daffodil, was named in two suits involving injuries to its employees.  The main-party portion of the lawsuit eventually spawned a third-party action which asserted both common law and contractual indemnification against Daffodil. 

Daffodil, we trust, tendered the matter to both its CGL carrier and its Employers’ Liability carrier.  Absent a lack of coverage for “insured contracts,” both would have had a defense obligation. The contractual liability claim falling within the confines of a traditional CGL policy (again, assuming there was not language removing insured contract coverage), and the common law indemnity claim falling with the scope of the Employers’ Liability policy (i.e., the 1[b]). 

Granite State defended its insured, Daffodil, based upon the allegation a common law indemnity exposure.  At that same time, however, Daffodil started an action seeking to prove that the common law claim really should have been barred by application of Section 11.  The action by Granite State was necessary as defense counsel would be hard pressed to move to dismiss a cause of action which provided coverage (in the form of  defense) to Daffodil.  As such, the only way Granite State could pursue a defense to the common law indemnity claim was by challenging the grave injury in a separate forum. 

The Court agreed that there was no grave injury, and thus no basis for common law indemnity.  On that basis, the Court ruled that Granite State’s obligation to defend was extinguished. 

This is good claims handling at Granite State, and good work by counsel. 

A point of caution, and an attaboy to Granite State too.  An Employers’ Liability policy will exclude coverage for contractual indemnification.  If, however, the carrier does not promptly disclaim the contractual indemnification portion of the tender, it may lose the right to do so by operation of Insurance Law 3420(d)(2).  Here, because Granite State was absolved from any defense moving forward, it means that it properly denied the contractual indemnity claim and proved the lack of viability on the common law claim.  The result was a defense exposure, and potential indemnity exposure, expunged, and a happy claims manager. 

Steven E. Peiper

[email protected]


Huge Cost of Divorce Saves Marriages:

The Bend Bulletin

Bend, Oregon

30 Apr 1921



Keeps Home Intact – Minimum Fee

For Smashing Tie Is $135,

Set By Illinois Lawyers.

(By United Press to The Bend Bulletin.)


            CHICAGO, April 30.  – The world’s “fed up” on H.C. stories, but here’s one with a pleasant refrain and a beneficial reaction.

            Court and attorney’s costs are getting so high as to discourage divorce.  The condition is becoming a factor in keeping intact American homes. 

            Under the new schedule which probably will be adopted by Illinois lawyers, the minimum fee for smashing ties of the home is $135.

            Alexander D. King, chairman of an Illinois Bar association committee, suggested this charge in questionnaires to members.

            Added to the minimum would be the per diem attorney’s charge and the court cost.  Considering everything one is lucky to get out under $200 on a divorce proceeding.


Wilewicz’ Wide-World of Coverage:

Dear Readers,

Not much to report this week, as things grow increasingly busy and the world continues to slowly reopen. I do have one bit of news to share that I am particularly proud of – my daughter’s high school Mock Trial team recently became Erie County Champions! After months of competitions and many late nights of Zoom practices, they fought their way against 14 schools to win the title. Their coach, an Erie County Supreme Court Judge, put in an incredible number of hours with them and it paid off. They are now on to regionals this week, where they will compete with a chance for a seat at the State-wide competitions.

It reminds me of my time in high school, where I was on the Mock Trial team all four years (captain for two, if I do say so myself). My last year, we lost at the finals of the county level, so my daughter has been particularly happy to say that her team got farther than I did. Her gloating aside, I could not be more proud.

Until next time,

Agnes A. Wilewicz

[email protected]


Harems Going out of Style:

The New-Palladium

Benton Harbor, Michigan

30 Apr 1921





(By Associated Press)


CONSTANTINOPLE, April 30—The Turkish harem is quickly passing as a part of the Turkish home.  Poverty and the need for house room are the causes.

The Turkish pashas, effendis, boys and all the well-to-do of other days whose homes were divided into the harem and the haremlik, that is, one half of a mansion or palace for the women and the other for the men, are parting with this luxury as they have parted with their carriages, horses, jewels and lands.  The peasants still keep a division of their houses for the privacy of their wives and daughters and children.

Many Turkish women deplore the necessity which compels them to live like the “poor European.”  They declare that they were happier when living apart, that the home was easier to manage and their husbands too.

In Constantinople the majority of private houses show this division, but the chance to rent one side of the house, or else the requisitions of Allied troops, has caused families to live together in only one half of their home.


Barnas on Bad Faith:

Hello again:

This week in my column you will find a fairly interesting decision from the Supreme Court of Georgia.  Geico’s insured was involved in an accident when she struck a bicyclist.  The injured biker retained counsel who demanded the $30,000 liability limits of the Geico Policy in a time limited demand.  He had approximately $15,000 in medical bills at the time and the expectation was that there would be more treatment.  Geico responded with a counteroffer for less than the policy limits, which the Plaintiff never responded to.

After the counteroffer was made, the case was put into suit  Geico’s insured never sent the lawsuit to Geico, and eventually defaulted.  An excess judgment of almost $3 million was taken on default.  The insured testified that she did not send the lawsuit to Geico because she thought they were already handling it based on her prior communications.  The jury in the eventual bad faith claim concluded that Geico was at least partially responsible for the insured’s failure to report the suit.

A bad faith failure to settle the action was eventually brought against Geico.  Geico argued that it was not liable for bad faith because the insured breached the policy conditions and there was no coverage, and the loss of coverage occurred before the excess judgment.  The Supreme Court of Georgia disagreed.  It concluded that the breach of the policy conditions extinguished a claim for defense and indemnity by the insured; it did not preclude a bad faith claim sounding in tort.  The court also concluded that Geico had breached its duty to settle when it rejected the policy limits offer.  The insured’s failure to comply with the Policy’s notice condition thereafter did not break the causal chain between the breach and the eventual damages.

That’s all for now.  Stay healthy and stay safe.

Brian D. Barnas

[email protected]


Locked Lips, Sink Ships:

Los Angeles Evening Post-Record

Los Angeles, California

30 Apr 1921


DON SMITH had better stay away from Pennsylvania.  There they limit the length of a kiss on the screen to 10 seconds.  If this rule is likewise applied to osculations off the screen, the Chicago man would soon get into jail in that state.

Smith has just been sued by his friend, Edmund Odlaski, of 3710 Wrightwood Avenue, because, it is charged, he bestowed a kiss lasting 3 minutes and 10 seconds upon Mrs. Odlaski.

Dr. William Hobart, New York heart specialist, said that a kiss lasting so long is dangerous from a pathological point of view.


Off the Mark:

Dear Readers,

The weather continues to improve in the Metro NYC area, with the temperature reaching the mid-70s today.  My family and I have been doing our best to take full advantage of the nice weather.  Two weeks ago, we took a bike ride from our house to Bethpage State Park.  There is an entrance to the bike path across the street from our house, making it very convenient.  The kids had so much fun, they requested a repeat this past weekend with a picnic at the park.  This time around, we brought one of the kids’ friends and her parents met us at the park for the picnic.  The kids were pretty spent after riding 15 miles there and back, but they had a great time.  Can’t wait to do it again.  Maybe next time we take the other local bike path to the beach.

Despite an exhaustive search for interesting construction defect cases, I came up empty again.  There seems to be cases out there, just no recent decisions to report on.  I remain hopeful that we will have better luck in the next two weeks.

Until then …

Brian F. Mark

[email protected]


Long Court Delays Save Marriage:

Daily News

New York, New York

30 Apr 1921

Court’s Delay Lasted

Longer Than Love Spat;

They Kiss and Go Home

Filipo Catalano and his wife, formerly Captain Jane Harveux, French aviatrix, “made-up” yesterday after spending a whole day in Magistrate Jesse Silberman’s court waiting for their case to be called.

Wednesday, the aviatrix, who can handle an airplane but not a husband, complained to Magistrate Silberman that her husband, Filipo, beat her.  Magistrate Silberman issued a summons, charging disorderly conduct and returnable yesterday.

Husband and wife obeyed the summons.  Hey sat on opposite sides of the courtroom. The long morning passed.  Their case had not been reached.  They came back for the afternoon session.  They again sat on opposite sides of the courtroom.  The cases were slowly sifted through, but theirs again was not called.  Madamoiselle came over and sat on the bench with her husband.  They talked. They smiled.  They walked out together.

Five minutes later the clerk called their case.  No one answered.

“Dismissed,” said Magistrate Silberman with a twinkle in his eye.

Editor’s note:  Jane Harveux, who taught Amelia Earhart how to fly, was the first woman to fly solo in an airplane.  She and Mr. Catalano, who were married earlier in 1921, remained together until her death 34 years later, at age 65.


Boron’s Benchmarks:

As I write this note, I am at exactly two weeks beyond receiving my second of two Moderna COVID-19 Vaccine shots.  It’s a great feeling.  Making it all that much better is that so many others are at or nearing this point as well.  For me, with both of my siblings, their spouses, my spouse and 2 of my 3 kids fully vaccinated, things are really looking up.  And COVID-19 risk stress issues are really going down.  I hope the same is true for you.

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, this column is now on a run of reporting on Supreme Court of Texas decisions.  For the second column in a row, I’ve selected for your consideration an Opinion issued by the Supreme Court of Texas.  This time, it is a decision issued on April 23, 2021, In Re Farmers Texas County Mutual Insurance Company.  The case considers an insured’s allegations of breach of contract and negligent failure to settle, where the insured relies upon the “Stowers doctrine” named for a seminal 1929 Texas case addressing common-law insurer duties.  The Stowers doctrine requires an insurer to consider third-party liability settlement demands within policy limits with a “degree of care and diligence which an ordinarily prudent person would exercise in the management of his own business”.  An interesting case, limited to Texas law and claims, though.

Have a healthy and happy next two weeks, folks.

Eric T. Boron

[email protected]


Perfumed Kisses Forbidden:

The Kansas City Times

Kansas City, Missouri

30 Apr 1921


Girls’ Lips, in Future, May Produce

Terrible Kick.

From the Louisville Courier-Journal.

            Washington—Elimination of the “perfumed kiss” is the latest result of prohibition.

            It has been blacklisted by the dry chiefs who warn maidens against scenting their lips with violet or rose flavors.  Those familiar with the kiss say that hereafter it will be followed by a chemical reaction.

            Two things will put the jinx on the “perfumed kiss.”  Dimethoystrichnine is one.  The other is brucine sulphate.

            These are the two chemicals which government officials have ruled must go into all perfumes and toilet waters to render them unfit for beverage purposes.  Perfumed lips bearing a dose of either of these drugs will give a “kick” second only to that of strychnine, said officials.


Ryan’s Capital Roundup:

Hello Loyal Coverage Pointers Subscribers:

Well, my oldest celebrated his fourth birthday and (what seems like) tomorrow I’ll be taking him to get his learners permit. They grow up so fast these days. Now, if I can get rid of all of these toys he has outgrown while he’s not looking…

This week, I discuss a bill delivered to the Governor that would amend the Labor Law to require implementation of model prevention standards for airborne infectious diseases.

Until next time,

Ryan P. Maxwell

[email protected]


The Dangers of Being a Single Man:

The Bend Bulletin

Bend, Oregon

30 Apr 1921



But More Married Women Look

Out From Behind Bars Than

Single; Divorcee Seems Immune

(By United Press to The Bend Bulletin.)

MILWAUKEE, Wis., April 30.— Single men get into more trouble than married, but married women are more likely to run afoul of the law than single ones, according to the annual report of H.G. Momsen, superintendent of the Milwaukee house of corrections.

Also, widowers and divorced husbands stand a good chance of looking out from behind the bars, while the much maligned divorcee is perfection, as far as law violations are concerned, according to the report.

There were 734 guests of Milwaukee county last year, the report shows, 683 men and 51 women.  Of these 500 were single men, 169 married, six widowers and eight divorced men.  Of the women 28 were married, 22 single and one a widow, but not a divorcee.

The report indicates most of those caught in the law’s dragnet are between the ages of 20 and 30.  The next most dangerous period is between 30 and 40.


CJ on CVA and USDC(NY):

Hello all,

I cannot believe that another two weeks have already gone by. Between work, the weather finally breaking, and watching Charlie grow up (much too fast for our liking), time flies. We just planned our first family vacation for the end of July, when we’ll be jetting off to Hilton Head for some time at the beach, and (hopefully) on the links. If anyone has recommendations on the island, or on flying with infants, please send those along.

This week I have found a decision in a CVA case venue in Kings County New York. Here the defendants (the Diocese of Brooklyn and a Parish) first argue, unsuccessfully, that because they did not actually abuse the plaintiff, the look back period provided by the CVA does not apply to claims for vicarious liability. However, interestingly, the Church was successful on having a claim for breach of duty in loco parentis dismissed – read on to see how.

See you in two weeks,

Charles J. Englert, III

[email protected]


All But Killed is Not Killed:

The News-Palladium

Benton Harbor, Michigan

30 Apr 1921




Special to The News-Palladium.

            BANGOR.  April 30—Mrs. Dalton M. Carpp, wife of the local canner, was saved from death under her auto when rescuers working feverishly, succeeded in extricating her.  Driving with a friend, Mrs. Carpp came to a bad spot in the road.  She got out and the friend, becoming frightened, steered the machine to the edge of the road.  The big car rested on the edge of a ditch and Mrs. Carpp sought to keep it from plunging over by bracing herself against the side of the car.  The machine tipped and she was thrown into the ditch, beneath the auto.  Water in the ditch came up to her face and was slowly rising when rescuers succeeded in dragging her out.

Editor’s Note : While her marriage to Mr. Carpp did not last very long, she lived a good long life.  We checked it out.


Dishing Out Serious Injury Threshold:

Dear Readers,

Thanks to the nicer weather we have been experiencing, I’ve been able to get out of the house a bit and enjoy the outdoors. We put the boat in the water yesterday and am looking forward to some good weather so we can enjoy some time out on the water. Hope everyone has some outdoor activities planned to get out of the house after this winter and our isolation.

In the Serious Injury Threshold world, we have a case from the First Department. The case addresses a plaintiff’s expert report, from an examination six years following the subject accident, and its failing to address issues of causation.

Be well,

Michael J. Dischley

[email protected]

Daredevil Dies in Bed:

Times Herald

Olean, New York

30 Apr 1921

Mrs. Anna Edson Taylor Made Trip

Over Niagara in 1901 –

Died in Lockport

(By The Associated Press)

            LOCKPORT, N.Y., April 30.— Anna Edson Taylor, the only woman who ever navigated Niagara Falls in a barrel and lived, died in the Niagara County infirmary today.

            Mrs. Taylor made the trip over the Falls on October 24, 1901, in a crudely constructed wooden barrel as a cast at fortune, but ill fortune pursued her from the time of her adventure to the time of her death.  She was 58 years old.

            Mrs. Taylor was towed out from La Salle, two miles above the falls by rivermen into the Canadian Channel, so that her barrel would pass over the Horseshoe Fall, where the water was deepest.

            Her barrel passed safely through the upper rapids, made the plunge near the middle of the Horseshoe, and reappeared in the spume below the Falls within half an hour.  Mrs. Taylor was severely injured and it was necessary to cut the barrel in halves to get her out.  While she was receiving medical attention her barrel was stolen.

            She recovered from her injuries and made a lecture tour of the west but met with little success.


Bucci on “B”: 

Hello readers:

There were no really great Coverage B cases this issue, but I reported on one that includes a Coverage B discussion.  But enough about the law.  What about the fact that the weather is showing signs of spring, signs we sometimes don’t get to see in New York.  It is making me feel like I can with these crazy times if the sunshine keeps coming. 

For the first time in forever, I got together with five other fully vaccinated friends for the weekend in Rockport, Massachusetts, which is on Cape Ann.  It was wonderful!  There were people out walking around, talking to each other, taking in the beauty, and we so enjoyed being unmasked for some of the time.  Hopefully, one day at a time, we will get back to normalcy, or find a new normal. 

Once again, shoutout to Mirna Santiago for her good works in addressing inequality in America. 

Diane L. Bucci

[email protected]

Epidemics in 1921:

The Buffalo Enquirer

Buffalo, New York

30 Apr 1921



            Since the beginning of the year, 1,275 cases of whooping cough have been reported to the department of health.  Forty-seven deaths from the disease were reported.

            During 1920, 1,432 cases of whooping cough and 45 deaths were reported.

            According to the health department, this shows an exceedingly dangerous mortality rate and it also shows the severity of the disease in Buffalo at the present time.


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

The courts let us down this edition—nothing new to write about. Instead, we revisited our soccer war case to find an interesting motion to reconsider. In short, the losing carrier argues to the court that there is a different standard in evaluating an occurrence, the trigger of coverage, from an analysis of intended or expected injury exclusion. You’ll have to read the case evaluation for my rant on the topic. Suffice to say, Vermont makes a good argument—but good enough to get a federal judge to admit a mistake, I don’t think so.

Finally, fully vaccinated! Looking forward to a post-COVID world. Get the shot and help make that happen.

Lee S. Siegel

[email protected]


Cleaning Up Baseball:

Nashville Banner

Nashville, Tennessee

30 Apr 1921


            Baseball is a game and baseball is a great business, but far more than either it is a national institution, and as such it needs exactly what it is getting under the regime of Judge Landis of Chicago, a very thorough probing and housecleaning.  The greatest scandal the game ever knew came last summer with the indictment of several members of the Chicago American League team on charges of crookedness in connection with the world’s series games of 1919, and the public should welcome the news that a speedy trial will come to them after the lapse of these months.

            The reaction of the public and the baseball associations of the United States has been very gratifying, and even more comprehensive than could have been expected by the most sanguine.  Judge Landis and organized baseball have no authority over the independent teams of the country, and therefore the judge’s appeal to them to blacklist any organization that contained as members one of the suspected players was watched with interest.  The response was quick and satisfactory.  The disgraced players planned to play independent teams around Chicago, and one of them agreed to such a contest.  Protest immediately arose from all over the city and the game had to be called off. 

            Shortly afterward, in Cleveland, the National Federation, the governing body of amateur and semi-professional teams, forbade any of the associations under its control to engage in games in which any one of the suspected players took part.  Such action is what the country should expect and want until the players in question are finally judged innocent or guilty, for they should be taught to see the enormity of the offense with which they are charged.


Rauh’s Ramblings:

Dear Readers,

It’s almost May 1st, which means summer is just around the corner!  Winter felt extra long this year, so I can’t wait for the warm, sunny days.  Last summer was the first time I really made an effort to plant flowers and have a nice garden.  Unfortunately, last summer is also when I realized that I don’t have much of a green thumb, so I am hoping to redeem myself this year!

I searched far and wide to find a case to report on this week, but came up short.  I even ventured outside of New York to see if other states had any noteworthy life insurance decisions.  That being said, I think my Coverage Pointers column may need to undergo some renovations.  Check back in two weeks to see if I found a new coverage topic to report on!

Stay safe and healthy!

Patricia A. Rauh

[email protected]


Sadly, Lynching Still Part of the US Life, 100 Years Ago:

The Huntington Herald

Huntington, Indiana

30 Apr 1921



(By International News Service)

            Jefferson City, Mo., April 30.—A sweeping investigation of the lynching at Bowling Green, Pike county, last night, of Roy Hammond, negro, was begun today by Attorney General Barrett under orders of Governor Hyde.

            Hammond was hanged to a tree a mile west of Bowling Green, by a mob of about 30 white men, who overpowered Sheriff Charles P. Moore and six deputies, and seized the negro, who was in custody at the railroad station en route to the penitentiary.

            Hammond pleaded guilty in circuit court here late yesterday to attempted criminal assault upon a fourteen-year-old white girl.  He was sentenced to ten years imprisonment.

            While Hammond’s body dangled from a tree, a “knight of the road,” weary and foot-sore, came along and helped himself to the shoes worn by the black.


Storm’s SIU Examen:

Hi everyone:

This week in the Examen I have included a federal Pennsylvania decision precluding a public adjuster under Federal Rule of Evidence 702 from testifying at trial as to the cause of loss. 

We will examine seven pandemic first-party property business income insurer wins in a little over a two-week period of time:  one in New York and six in Pennsylvania.  Check out this COVID coverage litigation tracker,, and their blog  Very impressive!

If you and I are not yet friends on LinkedIn, please send me a connection request. 

This edition’s encouraging word: “I can't change the direction of the wind, but I can adjust my sails to always reach my destination.” ~ Jimmy Dean

I look forward to speaking with you regarding any challenging coverage issues you are evaluating.  Call me anytime at (716) 220-1478.  Talk to you soon!

Scott D. Storm

[email protected]


Crippled?  Huge 1921 Verdict:

The Standard Union

Brooklyn, New York

30 Apr 1920



            A jury before Justice Benedict, in the Supreme Court yesterday awarded a verdict of $15,000 to Martin J. Plumb of 462 Ninth street, for injuries received while a passenger on a Staten Island trolley car July 3 last.  Plumb was standing on the running board of the car when he was struck by an auto truck belong to Joseph J. Philips, of 114 Duffield street.  He sustained a triple fracture of the left leg, which resulted in shortening the leg three inches.

            Francis X. Carmody represented Plumb.  The defendants were the Richmond Light and Railroad Company and Philips.


Heintzman’s Hideout:

Dear Readers:

I am thrilled to be contributing to Coverage Pointers for the first time. By way of introduction, I am a Canadian-American dual-citizen. I was born in Durham, North Carolina, but grew up in Canada as my family is Canadian. My hometown is Waterloo, Ontario, an hour west of Toronto. For law school, I returned to my North Carolina roots and attended Duke University. I am practicing in Buffalo now, and I love my new city. Once the border reopens, I hope to take advantage of the two-hour drive from Buffalo to Waterloo.

I am penning a column that roundup coverage cases from lower courts. Today’s column features two cases:  in the first, an insurer tries to argue that a “computer glitch” constituted mutual mistake, and, in the second, the Supreme Court of New York County finds an important (and poorly defined) distinction between material misrepresentation and fraud for timely disclaimer purposes.

Best Wishes,

Nicholas J. Heintzman

[email protected]


Headlines from this week’s issue, attached:

Dan D. Kohane

[email protected]

  • Despite Absence of Negligence Claims Against Named Insured in Plaintiff’s Complaint, Duty to Defend Additional Insured Existed if Named Insured’s Carrier  had Actual Knowledge of Facts Establishing a Reasonable Possibility of Coverage

  • Exclusion for “Exterior Work Over Two Stories” Inapplicable to Accident that Occurred in Construction of Three-Story Building, where Accident Occurred on First Floor

  • Extrinsic Evidence Does Not Obviate the Need to Defend, Even if the Allegations are Groundless, False or Fraudulent

  • While There were “Shotgun Allegations” of Professional Malpractice, Requests for Relief Did Not Seek Recovery Under those Claims, so No Obligation of Error and Omissions Carrier to Defend



Steven E. Peiper

[email protected]

  • Employer’s Liability Carrier Extinguishes Defense Obligation by Establishing the Lack of a Grave Injury


Michael J. Dischley

[email protected]

  • Plaintiff Only Provided Expert Report of Examination Six Years After Accident and Failed to Address Issues of Causation



Agnes A. Wilewicz

[email protected]

  • All quiet on the Second Circuit Coverage Front.



Brian D. Barnas

[email protected]

  • Bad Faith Claim was not Barred by the Insured’s Failure to Provide Notice of Suit Filed Against Her Where Insurer Breached Duty to Settle Prior to the Breach of the Policy Conditions



Lee S. Siegel

[email protected]

  • Motion to Reconsider: Self-Defense is Not Subjectively Evaluated



Diane L. Bucci

[email protected]

  • A Petition to Cancel a Trademark Before the Trademark Trial and Appeal Board is Not a Suit Involving Advertising Injury


Brian F. Mark

[email protected]

  • No interesting construction defect cases to report on.



Eric T. Boron

[email protected]

  • Auto Insurance – Third-Party Liability Settlement – Stowers Doctrine Inapplicable Where Insured’s Ultimate Liability is Within Policy Limits


Ryan P. Maxwell

[email protected]

Legislative List

  • Proposed Amendment to New York Labor Law Implementing Model Infectious Disease Exposure Prevention Standards


CJ on CVA and USDC(NY)

Charles J. Englert III

[email protected]

  • CVA Claims Brought Against an Institution are Not Time Barred, Even if that Institution Did Not Participate in Alleged Abuse



Patricia A. Rauh

[email protected]

  • Nothing new to report on this week – check back next time!



Mirna. M. Santiago

[email protected]

  • Financial Exclusion and Income Inequality and What the Insurance and Financial Service Industries Can do to Help



Scott D. Storm

[email protected]

  • Public Adjuster Precluded Under Federal Rule of Evidence 702 from Testifying at Trial as to the Cause of Loss.
  • A Review of Seven Pandemic First-Party Property Business Income Insurer Wins in a Little Over a Two-Week Period of Time:  One in New York and Six in Pennsylvania. 



Nicholas J. Heintzman

[email protected]

  • Insurer Raises Mutual Mistake Argument Premised on Computer “Glitch”
  • Insurer’s Denial of No-Fault Payments on Material Misrepresentation Grounds Denied by Court for Lack of Timeliness


Stay well, get vaccinated.  Write often.




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]



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

Scott D. Storm

Brian D. Barnas

Eric T. Boron

Ryan P. Maxwell

Charles J. Englert

Patricia A. Rauh

Nicholas J. Heintzman

Diane F. Bosse

Joel R. Appelbaum


Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley

Scott D. Storm

Eric T. Boron

Brian D. Barnas


Dan D. Kohane

[email protected]


Jody E. Briandi, Team Leader
[email protected]


Mirna Martinez Santiago

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”

Ryan’s Capital Roundup

CJ on CVA and USDC(NY)

Rauh’s Ramblings


Storm’s SIU Examen

Heintzman’s Hideout


Dan D. Kohane
[email protected]


04/29/21       WDF Inc. v. Harleysville Insurance Company of New York

Appellate Division, First Department

Despite Absence of Negligence Claims Against Named Insured in Plaintiff’s Complain, Duty to Defend Additional Insured Existed if Named Insured’s Carrier  had Actual Knowledge of Facts Establishing a Reasonable Possibility of Coverage
The dismissal of WDF's indemnification claims against Harleysville's named insured, Vamco Sheet Metal Inc., in the underlying personal injury action did not necessarily determine whether the Harleysville policy covered WDF as an additional insured. Vamco's contractual indemnification obligation was separate and distinct from Harleysville's duty to defend and indemnify under the additional insured endorsement of its policy.  Here, WDF submitted evidence that demonstrates that the acts or omissions of Vamco, which directed and controlled the underlying injured plaintiff's work, were a proximate cause of the plaintiff's injuries.

Harleysville had a duty to defend WDF even though the underlying personal injury complaint contained no allegations that Vamco was negligent, because Harleysville had actual knowledge of facts establishing a reasonable possibility of coverage.

Where, as here, there has been no determination of negligence in the underlying action, and therefore no adjudication whether the loss falls within the policy, the motion court was required to resolve the issue through further proceedings in this declaratory action. Here, WDF submitted evidence that demonstrates that the acts or omissions of Vamco, which directed and controlled the underlying injured plaintiff's work, were a proximate cause of the plaintiff's injuries

Furthermore, the policy issued to Vamco by Harleysville, and including WDF as an additional insured, was primary to WDF's other insurance.

Editor’s Note: The First Department is most generous to potential additional insureds.


04/27/21       Damon G. Douglas Co. v. Mt. Hawley Insurance Co.
Appellate Division, First Department

Exclusion for “Exterior Work Over Two Stories” Inapplicable to Accident that Occurred in Construction of Three-Story Building, where Accident Occurred on First Floor

Adelphi University (“Adelphi”) retained Damon G. Douglas Company (“DGDC”) as a general contractor on a construction job, the erection of a three-story building. DGDC retained Pravco, Inc. to act as the structural steel and iron work subcontractor. Pravco, Inc. then hired defendant Island Structures Inc. (“Island) as the subcontractor for a portion of its work. Island subcontracted a portion of its work to defendant Iron Inc. (“Iron”).

So, the order is:

Adelphi - Owner


Pravco – Structural Steel Subcontractor

Island – Pravco’s sub

Iron – Island’s sub and plaintiff’s employer

Giattino was hurt and sued Adelphia and DGDC.

The injured plaintiff in the underlying action, an employee of Iron, Frank Giattino, alleged that he was seriously injured when he was performing metal work and fell from the first floor to the ground level. The height from where he fell was about 15 feet. Adelphi and DGDC filed third-party actions against Island for indemnification, contribution, and breach of contract. In turn, Island filed a third-party action against Iron for negligence, indemnification, contribution, and breach of contract.

Labor Law liability was established by motion, Adelphi and DGDC secured indemnity from Island and Island secured indemnity from Iron.

Mt. Hawley issued an excess liability policy to defendant Iron, the employer of the injured plaintiff in the underlying action. National Union's named insured, Island, is an additional insured under the policy issued by Mt. Hawley. The policy excluded coverage for certain activities, including "[a]ny exterior work over [two] stories, any ground up construction over [two] stories while the insured is operating in the capacity of a general contractor, or any project that involves adding stories to an existing structure, whether done by an insured or by subcontractors on an insured's behalf."

Mt. Hawley denied coverage on the basis of the "exterior work over [two] stories" exclusion.

To begin, National Union has standing to seek a declaration concerning the coverage owed by a coinsurer. 

Here, the language in the exclusion provision, which is unambiguous, states that the policy at issue does not apply to bodily injury arising out of ongoing operations concerning the "exterior work over [two] stories." Although the construction of the building contemplated multiple floors, at the time of the accident, the injury did not arise out of exterior work over two stories.

Since, at the time of the accident, injured plaintiff was not working over two stories, but on the first floor, Mt. Hawley’s exclusion does not apply.


04/27/21       American States Insurance Co. v. Graphic Arts Mutual Ins. Co.
Appellate Division, First Department
Extrinsic Evidence Does Not Obviate the Need to Defend, Even if the Allegations are Groundless, False or Fraudulent

The duty of an insurer to provide a defense for its insured is exceedingly broad, arising whenever the allegations of the complaint suggest a reasonable possibility of coverage,  Accordingly, a liability insurer has a duty to defend its insured in a pending lawsuit if the pleadings allege a covered occurrence," even if "facts outside the four corners of those pleadings indicate that the claim may be meritless or not covered".

The allegations of the amended complaint in the underlying action alleged that "illegal discharges" causing property damage and other injuries, "were caused, in part, by Commercial Concrete and Ready Mix concrete mixing trucks [being] washed out at or near their facilities," which gave rise to a reasonable possibility that the claim involves autos owned, hired, or borrowed by Commercial Concrete and/or Ready Mix or that Ready Mix was a permissive user of these vehicles). Even if the extrinsic evidence presented by Nova refutes any allegation that Ready Mix was an owner or permissive user of the subject trucks the amended complaint in the underlying action nonetheless alleged that the "process of washing out concrete mixing trucks at or near the facilities of Commercial Concrete and NY Ready Mix" created a mixture of water and concrete which flowed into catch basins or manholes, and Commercial Concrete's discovery response asserted that "the truck (wash) out areas are not part of Commercial Concrete Corp's facilities, but are part of New York Ready Mix, Inc., facilities,'" which were sufficient to trigger Nova's duty to defend based on Ready.

Editor’s Note – the insurer will have to make a motion for summary judgment establishing that the is no possibility of indemnity, if it wants to end the obligation to defend.


04/27/21       Napoli Shkolnik, PLLC v. Greenwich Insurance Company

Appellate Division, First Department

While There were “Shotgun Allegations” of Professional Malpractice, Requests for Relief Did Not Seek Recovery Under those Claims, so No Obligation of Error and Omissions Carrier to Defend

Plaintiff claims that under the terms of its professional liability insurance policies, defendants were required to defend and indemnify it in a federal action brought against it and related law firms and attorneys by Keyes. Keyes asserted causes of action for an accounting, declaratory judgment, breach of contract, unjust enrichment, a constructive trust, and negligence, seeking to recover contingency fees withheld in violation of fee-sharing joint representation agreements between Keyes and plaintiff's predecessor firm, Napoli Bern Ripka Shkolnik, LLP (NBRS).

Keyes' negligence cause of action was premised on alleged false representations made by Napoli, Bern, and NBRS to Keyes.

Review of the complaints in the Keyes action and the relevant policies reveals that there was no possible factual or legal basis on which Greenwich Insurance Company and Hudson Excess Insurance Company could have eventually been obligated to indemnify plaintiff in the Keyes action.  The Keyes action was premised on actions taken by plaintiff as a business, not in its professional capacity as a law firm.

To the extent that the first and second amended complaints alleged that plaintiff committed malpractice or fraud in its handling of clients' cases, those "shotgun" allegations were insufficient as no cause of action was premised on those facts. Although the first and second amended complaint asserted a negligence cause of action, that theory of recovery was not based on the allegations relating to malpractice or fraud. Because the declaratory action was resolved on the merits, the proper course was to declare in favor of defendants, not discuss.



Steven E. Peiper

[email protected]

04/27/21       Granite State Ins. Co. v. Moklam Enterprises, Inc.

Appellate Division, First Department

Employer’s Liability Carrier Extinguishes Defense Obligation by Establishing the Lack of a Grave Injury

Granite State appears to have issued an Employers’ Liability/Workers’ Compensation policy to Daffodil General Contracting.  Daffodil was named as a third-party defendant in two suits involving bodily injuries sustained by Daffodil employees.  Both third-paction actions contained claims for common law indemnification and contractual indemnification. 

It is unclear whether Granite State provided a defense to Daffodil to either, or both, of the underlying actions.  It is clear, however, that Granite State commenced this proceeding seeking a declaration that there was not a viable third-party claim for common law indemnification/contribution in either action.  Granite State argued that the common law claim was barred by Section 11 of the Workers’ Compensation Law, and adduced proof of the plaintiffs’ injuries in the form of their underlying Bills of Particulars.  Where neither plaintiff sustained a “grave injury” as that term is defined, it followed that the common law indemnity claim was precluded.

Having established the lack of a viable common law indemnity claim, Granite State was then absolved from any obligation to defend the lawsuit.  In so holding, the Court noted that Granite State met its burden on the “grave injury” argument and thus relief could be afforded even though the claim was technically still alive in the underlying proceedings.


Michael J. Dischley

[email protected]

04/20/21       Mohammed Chawdhury v. 3511 Systems Inc., et al

Appellate Division, First Department

Plaintiff Only Provided Expert Report of Examination Six Years After Accident and Failed to Address Issues of Causation

In an action to recover damages for personal injuries, the defendant appeals from an Order of the Supreme Court, Bronx County (Donna Mills, J.), entered on or about August 29, 2017, which denied defendants' motion for summary judgment dismissing the complaint based on the threshold issue of serious injury under Insurance Law § 5102(d).

The Appellate Court found that, defendants established prima facie entitlement to summary judgment through the affirmed reports of their medical experts. Specifically, that defendants' neurologist found normal ranges of motion in plaintiff's lumbar and cervical spine, and negative results on other tests, and concluded that the examination was normal. In addition, defendants' radiologist opined that the MRI of plaintiff's cervical spine performed shortly after the accident revealed disc desiccation and other findings that were degenerative, nontraumatic and not causally-related to the accident.

In opposition, plaintiff submitted only the report of a physician who examined him six years after the accident and found limitations in range of motion of his cervical and lumbar spine. The Appellate Court found that this examination, without any admissible evidence of plaintiff's condition and treatment contemporaneous with the accident, was too remote to raise an inference that the limitations found six years later were causally-related to the accident. Although plaintiff testified that he went to the emergency room and started physical therapy shortly after the accident, he failed to submit any of those records, and his physician's affirmed report describing radiological reports and other medical records not included in the record cannot be used to "bootstrap" those records into evidence.

The Appellate Court also found that plaintiff failed to raise a triable issue of fact with respect to his lumbar spine claim, as he presented no objective evidence of injury and the record is bereft of any evidence that plaintiff ever received treatment for his lumbar spine.

As for plaintiff's 90/180-day claim, the Appellate Court found that defendants established entitlement to summary judgment by demonstrating a lack of causation and by submitting plaintiff's deposition testimony stating that he was never confined to his bed or his home following the accident. Plaintiff failed to raise a triable issue of fact, as he did not submit any evidence to show causation or showing that he was "curtailed from performing his usual activities to a great extent rather than some slight curtailment".

In light of the above, the Appellate Court unanimously reversed, on the law, without costs, and the motion granted.



Agnes A. Wilewicz

[email protected]

All quiet on the Second Circuit Coverage Front.



Brian D. Barnas

[email protected] 

04/19/21       GEICO Indemnity Co. v. Whiteside

Supreme Court of Georgia

Bad Faith Claim was not Barred by the Insured’s Failure to Provide Notice of Suit Filed Against Her Where Insurer Breached Duty to Settle Prior to the Breach of the Policy Conditions

On February 26, 2012, while driving Karen Griffis' Ford Explorer, Winslett struck Guthrie, who was riding a bicycle.  It is undisputed that Winslett was at fault.  Guthrie received emergency medical treatment for his injuries.  When his pain persisted, Guthrie returned to the hospital for further treatment.

When the accident occurred, Griffis's Ford Explorer was insured by GEICO, and Winslett was a permissive driver and thus an “insured” covered by the policy.  The policy provided $30,000 of coverage per person of bodily injury liability coverage. GEICO notified Winslett in a letter that, “[b]ased on the evidence we have gathered, we are responsible for the accident.  Mr. Guthrie was injured in this accident and we will be handling this injury directly with” his attorney.

On May 15, 2012, Guthrie's lawyer sent GEICO a letter demanding that GEICO tender the policy limits within 30 days.  The letter informed GEICO that, as of May 15, Guthrie's medical expenses exceeded $10,000 and that he would require additional treatment.  On May 23, GEICO rejected the demand and made a counteroffer of $12,409. When GEICO made the counteroffer, it had been informed that Guthrie's medical expenses were closer to $15,000.  Guthrie's attorney did not respond to the counteroffer.

GEICO's claims adjuster continued her efforts to contact Guthrie's attorney about a settlement.  She first followed up on GEICO's counteroffer about a week after it was made, calling Guthrie's attorney and leaving a voicemail when she got no answer.  About a month later, the adjuster called again and left another voicemail.  A few weeks later, the adjuster once more called the attorney's office and was told that both the attorney and his paralegal were unavailable. Guthrie's attorney did not respond to those calls and letters.

On May 29, six days after GEICO had rejected the settlement demand, Guthrie filed suit. Guthrie's attorney did not inform GEICO of the suit.  Although Winslett received the summons and complaint, she did not inform GEICO or forward the suit papers to it. Instead, she called Guthrie's law firm, and a paralegal instructed her to contact GEICO.  Rather than doing as instructed, Winslett discarded the summons and complaint.  She later explained that she did not notify GEICO of the suit because she thought that GEICO was already handling it based on its communication with her.  Winslett did not answer the complaint or appear in court.

On August 1, following a hearing, the Superior Court of Muscogee County entered a default judgment of $2,916,204 against Winslett.  Winslett eventually declared bankruptcy.  The bankruptcy trustee brought an action against Geico for negligent or bad faith failure to settle.  The jury found in favor of Winslett. 

Geico moved for judgment notwithstanding the verdict, arguing that it could not be held liable for bad faith based on the Winslett’s failure to comply with the notice provision in the policy.  Geico also argued that it could not be liable on the bad faith claim because Winslett had lost coverage prior to the excess judgment.  Finally, Geico argued that it was not bound by the excess judgment since it had no notice of or participation in the suit.

The case eventually made its way to the Supreme Court of Georgia from the Eleventh Circuit.  The court concluded that the jury properly found Geico liable for failure to settle even though the insured failed to provide notice of the suit and had lost coverage before the excess judgment.

First, the court found that the failure to provide notice did not preclude the bad faith claim.  An insured’s breach of the notice and cooperation duties relieve the insurer of its defense and indemnity obligations under the contract.  However, the court concluded it does not relieve the insurer from liability for tort claims that arise out of the contractual relationship.  The court noted that failure of the insured to provide notice of a suit may defeat an essential element of a bad faith claim in a case where the failure to provide notice results in the excess judgment.  However, in this case, the jury had found that Winslett’s breach of the notice provision was not a break in the causal chain between Geico’s rejection of the settlement demand and the excess judgment entered against Winslett.

The court also concluded that Geico was liable for bad faith even though Winslett had lost coverage by breaching the notice and cooperation conditions before the excess judgment was entered.  The court reasoned that record showed that before Guthrie sent Geico his settlement demand, Geico had accepted responsibility for the accident and had determined that Winslett was insured under the policy. Given that Winslett was covered under the policy at that time, GEICO's duty to settle arose as soon as Geico received Guthrie's time-limited, policy-limits settlement demand.  Geico then breached its duty to settle when it unreasonably rejected the time limited demand.  The jury concluded that Geico was partially at fault for Winslett’s failure to provide notice.

Finally, the court concluded that Geico was bound by the amount of the excess judgment.  In Georgia, after an insurer's liability for wrongful refusal to settle a claim against its insured is established, the insured or its assignee is entitled as a matter of law to recover damages equal to the amount by which the judgment exceeds policy coverage.



Lee S. Siegel

[email protected]

04/20/21       Konferowicz v. Vermont Mutual Insurance Co.

United States District Court, District of Connecticut

Motion to Reconsider: Self-Defense is Not Subjectively Evaluated
The Connecticut courts didn’t give us anything new to work with, so I thought I’d check-in on our Polish soccer bar fight. And, lo and behold, Vermont filed a lengthy motion to reconsider. For those who missed last week’s episode, New Britain is the heart of the Polish American community in Connecticut, one of the larger Polish communities outside of Chicago. Belvedere Bar & Restaurant is one of our top locations, which transforms into a hot spot at night. In June 2016, the restaurant hosted a European soccer viewing party. Mariusz Lempicki started a fight inside the bar. As Lempicki was leaving, Elzbieta Konferowicz tried to stop Lempicki; but Lempicki punched Konferowicz, breaking her nose and causing other injuries.

Following a jury verdict in her favor, Konferowicz tried to collect from Vermont, Lempicki’s HO carrier—and she won. The district court ruled that it is clear under Connecticut law that the proper inquiry for determining whether insurance coverage is available under the Vermont HO policy—for both whether an “occurrence” took place and whether the intentional injury exclusion applies—focuses on the insured's subjective intent and expectation; i.e. did the insured subjectively believe he acted in self-defense? Since the underlying jury's verdict did not determine whether the insured acted in subjective self-defense, Vermont’s defenses were futile.

Vermont, unhappy with the court’s ruling, argues that the district court misconstrued Connecticut law. Vermont claims that while the Connecticut Supreme Court established a subjectivity requirement for application of the intentional injury exclusion, it did no such thing for the initial analysis of a coverage triggering occurrence. [Of course, few courts, if any, ever properly separate the evaluation of an accidental, fortuitous occurrence, from the expected or intended injury exclusion. They form an unholy unification in the eyes of most judges. Perhaps this stems from the fact that in the way back world, the definition of an occurrence included an act that was neither expected nor intended to cause injury. Let no judge unify that which the ISO has separated. cf Mark 10:9]

Returning to whether self-defense / assault is an occurrence, Vermont points out that the Supreme Court focused on the acts of self-defense and not the effects of the acts in evaluating whether there was an occurrence. As the Supreme Court, quoting Prodder, noted, “Self-defense, in the law of torts, is a privilege ‘conditioned upon a proper motive and reasonable behavior....’ W. Prosser, Torts (4th Ed. 1971) § 16, p. 99.

See that the Court talked about a “proper” and “reasonable” motive – these are clearly words of objectivity.  Vermont argues this focus on the event itself, rather than the consequences, is consistent with Connecticut law in other contexts: “The ‘accident’ is ‘the event causing injury, not the cause of that event.” Therefore, in determining whether an ‘occurrence’ has taken place, Connecticut

courts look to the last event in the causal chain causing injury.


BUCCI on “B”

Diane L. Bucci

[email protected]

04/08/21       Broughton v. Ohio Casualty Ins. Co.
United States District Court, Northern District of California

A Petition to Cancel a Trademark Before the Trademark Trial and Appeal Board is Not a Suit Involving Advertising Injury

Two furniture manufacturers attempted to register trademarks that were allegedly confusingly similar: FYRN and FERN.  Broughton, FYRN’s chief designer, registered the FYRN trademark for use in the sale of furniture and component parts before incorporating FYRN, and through a series of transactions, Broughton became an employee of FYRN. 

FSL was a New York furniture manufacturer using FERN as its mark.  After FYRN was granted a trademark, it was contacted by FSL and asked to stop using the mark because the two names were likely to cause confusion in the market.  FYRN declined.  FSL filed a petition with the Trademark Trial and Appeal Board (“TTAB”) requesting that it cancel the FYRN trademark grant because its precluded FERN from registering its own trademark, because of the similarity between FERN and FYRN. 

Ohio Casualty, FYRN’s insurer, denied coverage.  Ultimately, FSL’s petition was denied and the two entities entered into an agreement where they could both use their marks in the marketplace.  FYRN was not seeking indemnity payments because none were made. Instead, FYRN sought to be reimbursed for Boughton’s defense.

With respect to Coverage A, coverage attached for sums the insured is legally obligated to pay as damages.  One question before the court was whether defense costs are damages under the policy.  The court held that defense costs did not qualify as damages unless they fell within the purview of the contractual liability exclusion’s exception for an “insured contract” because the insured contract definition qualifies defense costs as damages if the named insured agreed to assume the tort liability of Boughton in an “insured contract.” Boughton argued that its agreement with FYRN was an insured contract but the court disagreed, presumably because whatever contract existed did not qualify as an “insured contract.” 

Also, under Coverage A, the court held that even if defense costs could qualify as damages, Ohio Casualty had no duty to indemnify FYRN because the money FYRN paid to Broughton was not “ordered by a court,” which is required to satisfy the “all sums that the insured becomes legally obligated to pay as damages,” language.  The court also noted that the petition did not allege property damage or bodily injury caused by an occurrence as necessary to trigger Coverage A in the first instance. 

Under Coverage B, Boughton argued that the TTAB proceeding was a suit seeking damages resulting from the personal and advertising offense of use of another’s idea in your advertising. 

FYRN argued that FSL stated that it was damaged by FYRN’s use of the FYRN trademark, which it used to advertise.  The court recognized that FYRN’s use of its own mark was not the use of its FSL’s advertising idea.  An “advertisement” is “a notice that is broadcast or published to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters.” Instead, the petition alleged that FSL would suffer damages if the FYRN mark was not cancelled.  Also, the petition alleged that FSL’s trademark application was refused because of its similarity to the FYRN mark.   Consequently, the injury was the act of  registering FYRN with the Trademark Office which resulted in the denial of FSL’s own trademark application, as opposed to the use of an advertising idea.

Lastly, the court held that the TTAB proceeding was not a suit seeking damages.  The court noted that no damages were demanded in the TTAB proceeding and, even if they were, the TTAB was not authorized to grant that type of relief.  Ohio Casualty’s Motion to Dismiss was granted. 


Brian F. Mark

[email protected]

No interesting construction defect cases to report on.



Eric T. Boron

[email protected]

04/23/21       In Re Farmers Texas County Mutual Insurance Company

Supreme Court of Texas

Auto Insurance – Third-Party Liability Settlement – Stowers Doctrine Inapplicable Where Insured’s Ultimate Liability is Within Policy Limits

In an auto injury litigation, plaintiff’s counsel agreed at a mediation to accept $350,000 to settle the case against Farmers’ insured, who had a $500,000 liability limit on her Farmers’ auto insurance policy and was alleged to have rear-ended the underlying action’s plaintiff.  Farmers, having the right under the policy to settle or defend the claim as it considered appropriate, offered $250,000 to settle the case at a mediation two months before the scheduled trial date.  When the plaintiff rejected Farmers’ offer, the insured then agreed to pay the extra $100,000 herself to mitigate the risk of a higher judgment amount at trial, and without waiving her right to seek recovery of that payment from her insurer, Farmers.  The auto injury litigation case settled when plaintiff accepted the combined settlement payments tendered by the insurer and the insured. 

The insured then sued Farmers to recover her personal contribution of $100,000 into the settlement pot, alleging breach of contract and negligent failure to settle, asserting Farmers “failed to act as a reasonably prudent insurer”.  Farmers moved in the trial court to dismiss each of the two respective causes of action as having no basis in law.  Farmers argued, among other things, that Farmers had no contractual duty to pay damages because the insured had never been held legally responsible for any damages, and that Farmers had a right under the policy to settle or defend “as we consider appropriate”.  Farmers further argued that its only duty to settle would arise extra-contractually, under the “Stowers” doctrine, named for the 1929 Texas case of G.A. Stowers Furniture Co. v. American Indem. Co.,15 S.W.2d 544, which Farmers said only became applicable when the insured had a judgment taken against her in an amount in excess of policy limits.  In opposition, the insured argued the Stowers doctrine – which places a common-law duty upon a liability insurer to settle a third-party claim within policy limits when a reasonable settlement offer is made, and, if it refuses to, makes the insurer liable for not only the policy limits but any extra money awarded in excess of limits – should be extended to apply to the facts of this matter, notwithstanding the fact that here there was no excess liability found against the insured, and never could be due to the settlement total being an amount under the policy limit.

At the Texas court of appeals, it was held that Farmers' failure to pay the full amount of the settlement was not a breach of contract, because Farmers fulfilled its contractual obligation to “settle or defend” by electing to settle.  However, a majority of the court of appeals held that the trial court properly denied Farmers' motion to dismiss Longoria's claim for negligent failure to settle, rejecting Farmers’ argument that the Stowers doctrine only applied when the insurer fails to agree to pay a settlement demand amount that is within policy limits, and thereafter a judgment against the insured in excess of policy limits is obtained. 

On April 23, 2021, the Texas Supreme Court declined to extend Stowers to cases like this one – where there is no liability found against the insured in excess of policy limits, thus essentially agreeing with Farmers’ argument.   Supreme court clarified that the Stowers doctrine requires that an insured be liable in excess of policy limits – whether the result of a judgment or a settlement – before a Stowers claim may be brought by an insured against the insurer.  Thus, under the facts of this matter the trial court abused its discretion by denying Farmers’ motion to dismiss that claim. 

Supreme Court upheld the insured’s right to pursue her breach of contract claim against Farmers.  Supreme Court noted that the insured had alleged facts sufficient to pursue an alleged breach of the indemnity provision of the policy, thereby finding the court of appeals erred in ordering the trial court to dismiss the insured’s claim for breach of the contractual obligation to indemnify, and holding that claim may proceed in the trail court.

Declining to extend the Stowers doctrine is the major takeaway from this case.  If Supreme Court had taken the insured’s side here, it would have likely led to a seismic shift in the dynamics of third-party settlement negotiations in Texas liability claims going forward.

Our subscribers who deal with third-party liability claims in New York and states other than Texas are reminded the ramifications of this Texas Supreme Court decision are limited to Texas claims.  New York courts consider a number of factors in determining whether an insurer has satisfied its good-faith obligations in settling a liability claim.  Factors considered in New York include the likelihood of an adverse judgment against the insured, the potential magnitude of the damages, and the financial burden that will be borne by both the insurer and the insured should an adverse judgment be rendered. The ultimate question in New York boils down to whether the liability insurer’s behavior relative to settlement negotiations was in “gross disregard” of the interests of its insureds, “that is, a deliberate or reckless failure to place on equal footing the interests of its insured with its own interests when considering a settlement offer”  See Pavia v. State Farm Mut. Auto. Ins. Co., 82 N.Y.2d 445, 453-454 (1993) (holding that State Farm’s failure to abide by a settlement deadline unilaterally established by plaintiff’s counsel at a relatively early point in the litigation and its delay in ultimately offering policy limits in settlement did not evidence a gross disregard for the insured’s rights, particularly where there remained at the time of the demand made for the policy limits in settlement several significant questions about the insured’s liability). 


Ryan P. Maxwell
[email protected]

Legislative List

04/23/21       Occupational Exposure to Airborne Infectious Disease

New York State Legislature

Proposed Amendment to New York Labor Law Implementing Model Infectious Disease Exposure Prevention Standards

Last Friday, a bill (Bill No. A026818) was delivered to the governor that would amend the New York Labor Law to assist in preventing occupational exposure to airborne infectious disease by implementing model infectious disease exposure prevention standards. If passed, the bill would require employers to implement the model prevention standard or a similar plan.

Currently, no state or federal law protects workers from exposure to airborne infectious disease at work. COVID-19 has prompted action from the Legislature to curb workplace transmissions, which the bill’s sponsor contends “plays a significant role in community spread” and constitutes “a significant public health threat.” Further, the sponsor contends that “employers and employees are best positioned to identify and evaluate risks in the workplace” and advises that the bill would “create[] joint employer-employee health and safety committees.”

The bill would add a new Labor Law §218-b, requiring that the Commissioner of Labor, in consultation with the Department of Health, implement an airborne infectious disease standard for private employers.

Additionally, the bill would add a new Labor Law §27-D to permit the creation of joint employer-employee workplace health and safety committee for employers employ ten or more employees.

Further, the bill provides protections from retaliation for exercising and reporting violations of these new provisions, as well as potential civil penalties, injunctive relief and up to $20,000 liquidated damages for failure to implement the airborne infectious disease exposure prevention plan.


CJ on CVA and USDC(NY)

Charles J. Englert III

[email protected]

04/22/21       Peter DiGiorgio v. The Roman Catholic Diocese of Brooklyn

New York State Supreme Court, County of Kings

CVA Claims Brought Against an Institution are Not Time Barred, Even if that Institution Did Not Participate in Alleged Abuse

Plaintiff brought this action alleging that sometime in 1974, when he was a minor, he was sexually abused by non-party Roman J. Ferrara (“Fr. Ferrara”). The abuse allegedly occurred when Fr. Ferrara was assigned to defendant St. Rose of Lima Church (the “Parish”). The Diocese brought a motion to dismiss the complaint and argued that insofar as plaintiff's cause of action for negligence alleges that it is vicariously liable for Fr. Ferrara's alleged intentional torts, that cause of action is not revived by the Child Victims Act. The Diocese argued that the legislature only revived claims based on the Diocese's intentional or negligent acts. As such, the Diocese stated that plaintiff's cause of action for negligence/gross negligence is time-barred.

The Diocese contended that Count I, for negligent supervision, monitoring, training, and retention, should be dismissed because the complaint did not allege facts sufficient to show that the Diocese had actual or constructive notice of Fr. Ferrara's alleged propensity to commit sexual abuse at any point in time until shortly before news articles were published thirty years after the alleged abuse. Additionally, the Diocese argued that Count I should be dismissed to the extent that it is duplicative of Count II. The Diocese also contended that Count II, for negligence, should be dismissed to the extent that it is improperly predicated on vicarious liability and that it asserts that Fr. Ferrara was "a dangerous condition on the property." The Diocese argued that Count III, for breach of fiduciary duty, should be dismissed because it is not pleaded with particularity, and in any event, the Diocese owed plaintiff no such duty. As to Count IV, the Diocese argued that dismissal is warranted because New York law does not recognize breach of non-delegable duty as a cognizable cause of action, but even if it did, any such cause of action is not revived by the CVA. The Diocese went on to argue that NIED, Count V, should be dismissed as duplicative of the plaintiff's other negligence claims., the Diocese argued that Count IV should be dismissed as it owed no special or "in loco parentis" duty to plaintiff and even if it did, a duty is not enough to state a cause of action, especially where it is duplicative of a claim for negligent supervision. Finally, the Diocese argued that Count VII should be dismissed because the Diocese is not recognized as a mandated reporter under the New York Social Services Law, and plaintiff's claim predicated on a failure to report is not adequately alleged.

In support of its separate motion, the Parish argued that Count I of plaintiff's complaint is pleaded in a conclusory fashion. The Parish further stated that Count II is a restatement of Count I insofar as plaintiff argues that Fr. Ferrara was carelessly hired and that as a result, plaintiff was not adequately protected from harm. To the extent that plaintiff attempts to assert a claim for vicarious liability under the theory of respondeat superior, the Parish argued that Count II must be dismissed because acts of sexual abuse are never considered to be acts committed within the scope of employment. The Parish argued that Count III, for breach of fiduciary duty, is improperly plead insofar as plaintiff asserts a duty that is no different from a common law duty rather than attempting to assert a separate and distinct duty based upon a special relationship between the student and the school. The Parish further suggested that parents' entrustment of children to the care and supervision of a school does not set forth a claim for breach of fiduciary duty and does not establish any special relationship. Rather, it simply states a claim for negligent supervision, which plaintiff has already set forth in Count I.

The Parish goes onto argue that Count IV, breach of a non-delegable duty, is once again duplicative and redundant of Count I. They argued that plaintiff improperly repeats the same allegations set forth in Count I in Count IV - namely that while he was a minor, he was placed into the care of defendants who had a duty to provide a safe environment. The Parish contends that calling the duty "non-delegable" simply defines the duty set forth in Count I. They further asserted that plaintiff makes no reference to a potential statutory cause of action which imposes a non-delegable duty upon them. In addition, the Parish observed that there is no third-party or subcontractor involved here to whom defendants may attempt to shift the burden. Therefore, they argued that Count IV has no application to the facts and circumstances of this case. With respect to Count V for NIED, the Parish argues once again that Count V is duplicative of Count I. Furthermore, the Parish states that such causes of action are routinely dismissed as they fall within the ambit of traditional tort claims asserted by plaintiff.

The Parish next argued that Count VI, breach of duty in loco parentis, is not a separate and distinct cause of action insofar as the term in loco parentis is merely used to describe the standard of care owed by the school in determining whether the school is negligent in its supervision of the students. Lastly, the Parish argued that any breach of duty pursuant to Social Services Law§§ 413 and 420 for failure to report the abuse to child protective services has no application to the facts and circumstances of this case. The Parish argued that these statutes are a means to further the Family Court Act in its scheme of child safety in the home. The purpose of reporting child abuse to child protective services is so that the home can be investigated and if needs be the child can be removed and placed into foster care. Child protective services does not perform investigations of schools to determine whether a student should be placed in a foster school. Furthermore, the Parish contended that there is no allegation that the accused, Fr. Ferrara, acted as the functional equivalent of a parent. Consequently, the Parish asks the court to grant their cross-motion to dismiss the second, third, fourth, fifth, sixth and seventh causes of action in their entirety.

In addition to arguing that the defendants’ motion is premature as discovery has yet to be completed, plaintiff argued that with respect to Count I, the court may take judicial notice of the allegations regarding the routine practice of the Catholic Church, including the Diocese, of negligently hiring, supervising, retaining and covering up for abusive priests and other personnel. Plaintiff contended that Count II must stand because plaintiff has stated a claim directly against the Diocese and Parish for their own complicity and involvement, and gross negligence, in the actions that damaged plaintiff, not one sounding in vicarious liability. With respect to Counts III, IV, V, and VI, all of which are predicated duties breached by defendants and the nature of defendants as religious and educational organizations, plaintiff argued that defendants occupy a unique position of trust within society insofar as a parent or guardian entrusting his or her child to an institution affiliated with the Roman Catholic Church does so with the expectation that the institution will uphold the values of the Church. As to Count VII, plaintiff argued the duty to report abuse contained within New York Social Services Law §§ 413, 420 does not only apply to protect minors from abuse by parents or guardians and emphasized that a school district may be liable for failing to report abuse by its own employees.

With regard to the argument that CPLR §214-g (the CVA) does not expand the statute of limitations for bringing an action against the Diocese and the Parish, the court disagreed with the defendants. The argument that the CVA did not revive claims based upon the acts and omissions of an employee or agent acting within the scope of his or her authority or any other claim against a party alleging intentional or negligent acts as a result of child sexual abuse ignores the revival statute's careful delineation between those whom a cause of action is brought against, and those alleged to have committed an act. As other courts have observed, the use of different words to describe (1) against whom a cause of action is brought or liability is sought (that is, a "party"), and (2) by whom the tortious act was committed (that is, a "person") is telling (see Koeneke v. Holy Family Roman Catholic Church, Index No. 900004/2019 [Nassau Cnty 2020]). In discussing the CVA the court states “[t]he statute clearly differentiates between two different nouns ("party" and "person") and two different prepositions respectively ("against" and "by"). In doing so, the Legislature recognized that in some instances the "party" held liable, such as the Diocese, and the "person" committing the negligent or intentional tort, such as an employee or agent, would be different.” The court further found that CPLR §214-g also revives claims alleging negligence/gross negligence and breach of non-delegable duty. A finding to the contrary would run athwart of the Legislature's intent when adopting CPLR §214-g.

In discussing the specific allegations, the court denied defendants’ motions as to the dismissal of the causes of action grounded in negligent hiring, retention, and supervision. Here, plaintiff alleges that the Diocese and the Parish had a duty to protect plaintiff from alleged sexual abuse. In this respect, plaintiff has alleged in more than a generalized manner that the Diocese and Parish overtly knew or should have known of Fr. Ferrara's propensity to commit such conduct, and therefore, this allegation was sufficiently plead.

The court denied defendants’ motion as to the dismissal of the cause of action grounded in negligence as the defendants failed to conclusively establish their lack of knowledge of the abuse as matter of law. The court determined that discovery will be necessary to resolve any dispute on this issue.

With regard to the cause of action asserting a breach of fiduciary duty, the court granted dismissal of this claim. The court held that, while a fiduciary duty can be established against a church, the plaintiff must show that his relationship with the church entity resulted in "de facto control and dominance" when the congregant was "vulnerable and incapable of self-protection regarding the matter at issue.

The court further found that the causes of action rooted in a breach of non-delegable duty, negligent infliction of emotional distress, and breach of duty in loco parentis were duplicative of claims for negligence.

Lastly, the court dismissed the claims of a breach of a statutory duty to report child abuse against the Diocese as the Diocese's status as a church does not presuppose that it is recognized as a mandated reporter under the New York Social Services Law. However, the church denies the Parish’s request to dismiss this claim against it as the Parish is actively involved in the education of boys and young men. Therefore, the Social Services Law does apply to it.



Patricia A. Rauh

[email protected]

Nothing new to report on this week – check back next time!



Mirna M. Santiago

[email protected]

In 2018, fully 38 million Americans lived in poverty. The reasons for poverty, ongoing financial exclusion and income inequality are myriad, but one reason that has been identified is the financial desert that many low-income Americans find themselves in.

People who live in rural areas or inner cities tend to be of lower income. When banks refuse to set up shop in those areas, it leaves residents vulnerable to check-cashing places, payday lenders and other predatory businesses. Id.

In 2020, Governor Cuomo directed the creation of a Statewide Office of Financial Inclusion and Empowerment to meet the financial services needs of low- and middle-income New Yorkers. As I mentioned in my last Coverage Pointers article, former NYS Assemblymember Tremaine Wright has been tapped to lead the newly-created office.

The Statewide Office of Financial Inclusion and Empowerment will focus on community wealth building. “The office will work with stakeholders across the state to identify and develop strategies to increase household and community wealth, particularly for historically underserved populations, and to help connect consumers with local services.”

To meet its goal, the office will maintain a centralized list of financial services counseling providers (for housing, student loans, debt and general financial literacy) throughout the State. It will assist the provision of high-quality, but low-cost financial products. And most importantly, it will “[i]ncubate new programs to expand access to safe and affordable banking services, credit and financial education and coordinate [partnerships between the public and private sectors.]” Id.

While the fact that New York—one of the more populous states—is making addressing financial disempowerment and income inequality a priority is a great start, I look forward to seeing a network of these types of governmental agencies throughout the United States tackling this issue. It is true that New York tops the list when it comes to income inequality; however, income inequality has risen in every state since the 1970s and the gap has increased regardless of whether a Republican or Democrat was in office. 

(“Income Inequality” refers to the gap in wealth between the top 1% of earners in the country and the bottom 99%. For instance, in 2013, the top 1 percent of families nationally made 25.3 times as much as the bottom 99 percent. In New York, the multiple was 40—the top 1% made 40 times what the bottom 99% did.) Id.

It is time we addressed not just income inequality, but the structures that are in place to perpetuate the existing system where the “haves” (the people who can afford to set up these predatory lending outfits in low-income communities) get more and the “have nots” (those people who have no choice but to enter into payday loans and utilize check cashing places because they are living paycheck to paycheck) are left perpetually treading financial water.



Scott D. Storm

[email protected]

04/15/21       Ravi Balu v. The Cincinnati Ins. Co.

United States District Court, Eastern District of Pennsylvania

Public Adjuster Precluded Under Federal Rule of Evidence 702 from Testifying at Trial as to the Cause of Loss

Insured Balu brought this breach of contract action against his homeowner's insurance carrier, The Cincinnati Ins. Co. for denying a claim for water damage to the roof and ceiling of this home.  Before the court was the Motion in Limine of Cincinnati to Preclude the testimony of the public adjuster, Jason Cortazzo, as inadmissible expert testimony under Rule 702 of the Federal Rules of Evidence as to the cause of the loss.   The Court granted the motion. 

Cincinnati retained forensic engineer Scott E. Wasson who determined that the loss was caused by the improper construction of plaintiffs' roof, including improper sealing of the skylights and plumbing and fireplace vents, as well as an inadequate slope to the roof. Based on these findings, Cincinnati partially denied plaintiff’s claim under a policy exclusion for "faulty, inadequate or defective . . . design, specifications, workmanship, repair, construction, renovation, remolding, grading, compaction; . . . ."

Plaintiff engaged a public adjuster, Jason J. Cortazzo, a senior claims adjuster and HAAG Certified Roof Inspector employed by Metro Public Adjustment, Inc., who noted in his repair estimate that the damage was due to "[d]irect physical damage from wind, snow, and ice." Cortazzo identified the "Type of Loss" as "Weight of Ice & Snow."  Cortazzo engaged an engineer, Joseph F. Boward, on behalf of plaintiff to perform an inspection. Boward concluded that wind caused the shingles to fold upward and crack impairing the ability of the shingles to hold back water. According to Boward, the damage to the decking was caused by ice which "uplifted and distressed the flashing about the skylights." He determined the cause of the water damage to plaintiffs' roof and interior to be water infiltration resulting from the damaged shingles and decking.

Plaintiffs identify both Cortazzo and Boward as witnesses who will testify at trial on the "cause and scope of loss." Cincinnati sought to preclude Cortazzo from offering expert testimony as to the cause of the water damage.  The Court noted that as a PA Cortazzo submits insurance claims on behalf of property owners, prepares claim estimates, negotiates settlements, and hires, trains, and manages new hires. He had a bachelor's degree in business administration. There was no evidence that he is or has any experience as a structural engineer.

Rule 702 of the Federal Rules of Evidence provides that:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert has reliably applied the principles and methods to the facts of the case.

The Court has the role of "gatekeeper" in connection with the admission of expert testimony.  Rule 702 has "three major requirements: (1) the proffered witness must be an expert, i.e., must be qualified; (2) the expert must testify about matters requiring scientific, technical or specialized knowledge; and (3) the expert's testimony must assist the trier of fact."   The Court of Appeals has explained these three requirements embody "a trilogy of restrictions on expert testimony: qualification, reliability and fit."  The party seeking to introduce expert testimony has the burden to show by a preponderance of the evidence that the three requirements for the admissibility of expert testimony under Rule 702 are met.

To meet the qualification requirement under Rule 702, the witness must possess "specialized expertise."  This requirement is interpreted liberally as "a broad range of knowledge, skills, and training qualify an expert."  Nonetheless, an expert wishing to testify as to a cause of damage must have expertise on causation as it relates to the relevant subject matter.

The Court said that as a PA Cortazzo is capable at expertly identifying roof damage and the cost to repair it. However, expertise at identifying and estimating the cost to repair damage is not expertise at identifying the cause of the damage. Cortazzo is not an engineer. Plaintiffs had not provided any evidence that he has any expertise by education or experience in opining on the cause of water damage to plaintiff’s roof and interior.

Accordingly, the Court granted the motion in limine of Cincinnati to preclude the witness testimony of the PA as to the cause of the water damage.

More 1st Party Property Pandemic Insurer Wins:

In a little over a two-week period of time, here are one New York and six Pennsylvania pandemic first-party property business income insurer wins:


04/15/21       Mohawk Gaming Enterprises, LLC v. Affiliated FM Ins. Co.

United States District Court, Northern District of New York

This is a contract dispute between plaintiff Mohawk Gaming Enterprises, LLC and Affiliated FM Insurance Company over coverage for loss caused by a business interruption at the Akwesasne Mohawk Casino Resort.  In early March of 2020, the Saint Regis Mohawk Tribe closed the Casino to the public following news of a COVID-19 exposure incident at St. Lawrence College, which is located just a few miles away across the Canadian border in Kingston, Ontario.  Thereafter, Mohawk Gaming sought coverage for the business interruption from Affiliated FM.  Mohawk Gaming filed this four-count complaint alleging claims for declaratory judgment (Count One), breach of contract (Count Two), a violation of New York General Business Law § 349 (Count Three), and fraud (Count Four).  Mohawk Gaming moved under Fed. R. Civ. P. 56 for partial summary judgment on the question of whether a "contamination exclusion" in the policy barred coverage for the business income loss.  Affiliated FM opposed and cross-moved under Rule 12(c) for a judgment on the pleadings that the Tribe's closure order did not trigger coverage under the "civil authority provision" of the policy.

Mohawk Gaming "seeks a declaration that it is legally entitled to insurance coverage under the ‘Business Interruption—Civil Authority’ section of its all-risk property insurance policy." Affiliated FM responds that the Civil Authority provision does not apply because Mohawk Gaming has not plausibly alleged the requisite "physical loss or damage" necessary to trigger coverage. It also identifies two policy exclusions that, in its telling, independently bar coverage for the claim: the Contamination Exclusion and the Loss of Use Exclusion.  Affiliated FM acknowledges that the Policy does include some manner of coverage for "Property Damage" and "Business Interruption" that is caused by "Communicable Disease."

The Court said that indeed, numerous courts around the country—including those that have applied New York law—have routinely held that the mere presence or spread of the novel coronavirus is insufficient to trigger coverage when the policy's language requires physical loss or physical damage.  To avoid dismissal on this basis, Mohawk Gaming argues that coverage is triggered because the presence of the novel coronavirus qualifies as "physical damage" for the purpose of the Communicable Disease provisions. Plaintiff also invites the Court to consider extrinsic evidence, including some of Affiliated FM's prior regulatory filings. 

The Court said that these arguments must also be rejected. As an initial matter, Mohawk Gaming cannot rely on extrinsic evidence to create an ambiguity in what is otherwise a clear, unambiguous contract.  The plain language of the Communicable Disease provisions requires the "actual not suspected presence of communicable disease" at a "described location."

The presence of the novel coronavirus at the Casino would still not qualify as "physical damage."  The great majority of courts that have addressed this issue of insurance coverage for business losses sustained as a result of COVID-19 restrictions have held that a complaint which only alleges loss of use of the insured property fails to satisfy the requirement for physical damage or loss." 

In regard to the claim under General Business Law § 349, New York law makes it unlawful to engage in "[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service[.]" To state a claim under § 349, a plaintiff must show that (1) the defendants' conduct is consumer-oriented; (2) the act or practice was misleading in a material way; and (3) that the plaintiff suffered an injury as a result.  New York courts have recognized that private contract disputes between the parties do not fall within the ambit of the statue.  The facts alleged establish that this litigation involves a dispute over a private insurance contract between two sophisticated parties who reached an arms' length agreement. In short, there is no plausible allegation that Affiliated FM's alleged conduct involved "injury or potential injury to the public." 

03/29/21       J.B.'s Variety Inc., D/B/A New Wave  Café v. Axis Ins. Co.

United States District Court, E.D. Pennsylvania

J.B.'s Variety, Inc. d/b/a New Wave Café is a restaurant and bar forced to close and modify its operations due to the COVID-19 pandemic and consequent Shutdown Orders. Plaintiff suffered business income losses and sought indemnity from its insurance provider, Axis Insurance Company under its all-risk commercial property policy. Axis denied Plaintiff's claim and the Plaintiff then filed suit for breach of contract and seeking a declaratory judgment that its losses are indeed covered. The Court granted Defendant's motion confirming the Plaintiff's claims are not covered by the terms of its policy.


03/30/21       Tria WS LLC v. American Automobile Ins. Co.  

United States District Court, E.D. Pennsylvania

This insurance dispute, like many these days, arises from losses sustained by Tria WS LLC during government shutdowns brought on by the COVID-19 pandemic. Plaintiffs sue their insurer, American Automobile Ins. Co. on behalf of themselves and three putative classes, asserting claims for declaratory judgment, breach of contract, and bad faith. AAIC moved to dismiss this action in its entirety pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure.  AAIC's Motion to Dismiss was granted dismissing the complaint with prejudice. 


03/30/21       Chester County Sports Arena v. The Cincinnati Specialty Underwriters Insurance Company

United States District Court, E.D. Pennsylvania

This is a decision on four cases in which plaintiffs filed Complaints against the same insurer alleging that it wrongfully denied coverage for Plaintiffs' business losses related to the COVID-19 pandemic.  The Cincinnati Insurance Company filed a Motion to Dismiss the Plaintiff's Complaint under Rule 12(b)(6) in each of four cases.  The fundamental question for the Court to consider was whether a physical loss or damage constituting a "Covered Cause of Loss" occurred under Cincinnati's Insurance Policies.  The Court concluded it did not, dismissing all of the complaints.


03/30/21       Eric R. Shantzer, DDS, v. Travlers Casualty Ins. Co. of America

United States District Court, E.D. Pennsylvania

Eric R. Shantzer, DDS d/b/a Richboro Dental Excellence brings this declaratory judgment action against Travelers Casualty Insurance Company of America asking the Court to declare he is entitled to insurance coverage for business income losses resulting from the coronavirus (COVID-19) pandemic and state government orders closing nonessential businesses. Travelers moves to dismiss the Amended Complaint arguing Shantzer has not pleaded facts sufficient to establish insurance coverage under the policy.  The Court granted Travelers' motion and dismiss the Amended Complaint with prejudice.


03/30/21       Paul Glat MD, P.C., v. Nationwide Mutual Insurance Company and Harleysville Preferred Insurance Company

United States District Court, E.D. Pennsylvania

This is another of many cases brought by businesses seeking indemnity from their insurers for business interruption losses arising out of government ordered shutdowns in response to the COVID-19 pandemic. Plaintiff Paul Glat MD, P.C. was forced to close or severely limit its plastic surgery medical practice in March 2020 due to the shutdown orders issued by the Governor of Pennsylvania and Secretary of the Pennsylvania Department of Health. As a result, it suffered business losses and sought indemnity from its insurance carriers, Nationwide Mutual Insurance Company and Harleysville Preferred Insurance Company, under its commercial lines policy. Harleysville denied the claims.  Glat then brought this action for breach of contract. It claims that its losses are covered under the civil authority, business income and extra expenses provisions of the policy. Harleysville argues that Glat has not alleged facts establishing coverage under any of the provisions, and if it did, its claims are barred by the virus exclusion.  The Court concluded that the alleged facts, accepted as true and from which we draw all reasonable inferences in favor of Glat, establish that Glat's losses are not covered. Even if they were, the virus exclusion bars coverage.


04/08/21       SSN Hotel Management, LLC v. Hartford Mut. Ins. Co.

United States District Court, E.D. Pennsylvania

SSN Hotel Management, LLC and the hotel properties it operates in Delaware, New Jersey, Pennsylvania, and Virginia modified their operations because of the COVID-19 pandemic and consequent Shutdown Orders. Plaintiffs suffered business income losses and sought indemnity from Harford under an all-risk commercial property policy. The defendant denied the hotels' claims and then Plaintiffs brought this action for breach of contract and seeking a declaration that its losses are covered. Defendant moves to dismiss the amended complaint for failure to state a claim, arguing Plaintiffs' losses are not covered by the terms of its Policy. The Court granted Defendant's motion.  



Nicholas J. Heintzman

[email protected]

04/16/21       Mazariego v Hunterfly Holdings, LLC

Supreme Court, Kings County

Insurer Raises Mutual Mistake Argument Premised on Computer “Glitch”

Here, third-party defendant, Metropolitan Property and Casualty Insurance (“Metropolitan”) sought to disclaim coverage from its insured, Richmond Construction, Inc. (“Richmond”). Richmond was sued by the plaintiff in the underlying action, Ivan Mazariego, an employee of Richmond’s who suffered a fall on the job.

The basis for Metropolitan’s disclaimer was an endorsement to its policy with Richmond which excluded coverage for claims of “bodily injury to any employee of any insured.” The issue Metropolitan encountered was that this endorsement (along with several others) was removed from the declarations page of the insurance policy following its issuance.

Metropolitan argued that the removal was a mutual mistake made by Metropolitan and Richmond. It maintained that the policy was amended at Richmond’s request to remove an unrelated endorsement, and, when that amendment happened, the subject endorsement was inadvertently deleted by a “computer glitch.” Metropolitan further argued that because neither party intended for the endorsement to be removed, the policy should be reformed to include the endorsement.

Unfortunately, the Court did not address Metropolitan’s arguments in-depth. Instead, it granted Metropolitan’s motion to sever the coverage dispute from the main action, and it held that Metropolitan’s arguments could be re-heard on summary judgment in the new action after completion of discovery. Further updates on this case will be provided should they arise. 


04/19/21       State Farm Fire & Cas. Co. v. Alfa Rehab PT, P.C.

Supreme Court, New York County

Insurer’s Denial of No-Fault Payments on Material Misrepresentation Grounds Denied by Court for Lack of Timeliness

Here, plaintiff State Farm moved for summary judgment against defendant Nova Medical Diagnostic, P.C. (“Nova”) on the grounds that State Farm was not required to make no-fault payments to its insureds, Anderson Joseph and Melissa Boucher, arising from a motor vehicle accident in Brooklyn, New York.

State Farm alleged that Mr. Joseph, prior to the accident, misrepresented to State Farm that he resided in Douglasville, Georgia, to procure a Georgia state personal automobile insurance policy. State Farm contended that Mr. Joseph resided in Brooklyn. State Farm argued that Mr. Joseph made a material misrepresentation when he procured the policy, as differences in premiums between New York and Georgia meant that State Farm would not have issued the same policy had it known that Mr. Joseph resided in New York and not in Georgia.

By affidavit, State Farm’s claim specialist averred that her ISO search revealed that Mr. Brown likely resided in Brooklyn, that the insured vehicle was parked in front of Mr. Brown’s Brooklyn address upon a State Farm inspection, that the owner of Mr. Joseph’s supposed Douglasville property denied that Mr. Joseph ever lived there, and that, in the year of the accident, the insured vehicle was sighted in Brooklyn 27 times and was never sighted outside Brooklyn.

Nova argued that the alleged misrepresentation was immaterial as a matter of law, as State Farm did not assert that it would not have issued the policy but only that it would not have issued a higher premium, that State Farm failed to establish an intent to defraud, and State Farm failed to preserve the material misrepresentation defense because it did not issue timely and proper denials of coverage. State Farm replied that the significant differences in premiums between Douglasville and Brooklyn established the misrepresentation’s materiality and that it had no obligation to timely deny coverage because its misrepresentation defense is premised on fraud.

The Court focused on the timeliness issue. It denied State Farm’s summary judgment claim on the ground that State Farm failed to establish that it issued a timely denial. It held that, although fraud defenses may be excluded from timeliness requirements, material misrepresentation defenses are subject to preclusion if not timely raised. It found that Mr. Joseph’s acts were nothing more than misrepresentation and that a showing of fraud would have required a showing of more untoward behavior, such as staging a motor vehicle accident. Sadly, the Court did not elaborate further on the distinction between material misrepresentation and fraud.

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