Coverage Pointers - Volume XXII, No. 5

Volume XXII, No. 5 (No. 570)
Friday, August 21, 2020

A Biweekly Electronic Newsletter  


As a public service, Hurwitz & Fine, P.C. is pleased to present its biweekly newsletter, providing summaries of and access to the latest insurance law decisions from the New York, New Jersey, 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.

Welcome to our Suffrage Anniversary issue.

We hope that you are surrounded by good health and that you are experiencing some kind of return to normalcy, whatever that might be.  I, for one, am happy to be back in our socially-distant office surroundings, wearing masks in the hallways, gloves when necessary, wiping down surfaces, and doing all we can to remain strong and healthy.

Please note the first case cited in my column. The Fourth Department sustained a liability carrier’s refusal to defend a case where the factual allegations of the complaint spoke to an assault, even though there was a cause of action with conclusions of negligence.  Way to go….  Ain’t no such thing as a negligent assault.


Celebrating 100 Years of Suffrage:

Let me take a moment to reflect of the importance of fighting for our democracy and democratic principles.

With the pandemic leaving so many people fearful for the health and that of their family members, we need to make voting in the upcoming election easier and not harder.  This is an appropriate time to reflect on the right and privilege to vote.  It took two Constitutional Amendments to grant universal suffrage in the United States.

This week marks the 100th anniversary of the ratification of the 19th Amendment, granting women the right to vote.  That came fifty years, six months and 15 days after the ratification of the 15th Amendment, that provided that the right to vote should not be denied on account of race, color or previous condition of servitude.

Elizabeth Cady Stanton, an American suffragist, who did not live to see the adoption of the 19th Amendment, crafted a Declaration of Sentiments, which was presented at the Seneca Falls (New York) Convention held in 1948.  Her closing words were as poignant then as they are now and spoke about the importance of providing access to the right to vote:

Now, in view of this entire disfranchisement of one-half the people of this country, their social and religious degradation—in view of the unjust laws above mentioned, and because women do feel themselves aggrieved, oppressed, and fraudulently deprived of their most sacred rights, we insist that they have immediate admission to all the rights and privileges which belong to them as citizens of these United States. In entering upon the great work before us, we anticipate no small amount of misconception, misrepresentation, and ridicule; but we shall use every instrumentality within our power to affect our object. We shall employ agents, circulate tracts, petition the State and national Legislatures, and endeavor to enlist the pulpit and the press in our behalf…..

Tennessee was 36th state to ratify the Amendment, the number required at the time to amend the constitution.  The remaining 12 states eventually voted for ratification, Mississippi being the last of the states in existence at the time to do so, adopting it on March 22, 1984, after rejecting it on March 29, 1920).

As I promised at the beginning of this year, in every issue of Coverage Pointers  I would include a “hundred years ago story” that had something to do with the fight for suffrage, and I did.  This week, all of my “what happened 100 years ago” articles relate to the adoption of suffrage amendment, including the final adoption by Tennessee (and the legislators escape from the state, thereafter, to avoid a reconsideration of the vote for Amendment’s adoption).

By the way, New York was the 6th State to vote for ratification of the 19th Amendment.  Here are the first 10 – you can see it took a while for states, south of the Mason-Dixon line, to adopt:

  1. Illinois (June 10, 1919)
  2. Wisconsin (June 10, 1919)
  3. Michigan (June 10, 1919)
  4. Kansas (June 16, 1919)
  5. Ohio (June 16, 1919)
  6. New York (June 16, 1919)
  7. Pennsylvania (June 24, 1919)
  8. Massachusetts (June 25, 1919)
  9. Texas (June 28, 1919)
  10. Iowa (July 2, 1919)


Nellie Tayloe Ross - by Robert Tayloe Ross:

See the source image

Editor’s Note:  Robert Tayloe Ross is a fine Virginia-based defense and coverage lawyer and a partner in the firm of Midkiff, Muncie & Ross ([email protected]).  I’ve known him for years and we often speak at PLRB Claims Conference meetings. He was recently admitted into the membership in prestigious Federation of Defense & Corporate Counsel (FDCC).

Robert is also a long-time subscriber of Coverage Pointers, itself a respectable thing to be!

Years ago, he told me of his grandmother, Nellie Tayloe Ross.  Nellie was the first woman in America so be elected governor of a state of our union, in a contested race, and that was the State of Wyoming (in 1924).  I asked Robert if he would be so kind to share his grandmother’s story with our readership on this 100th anniversary of suffrage.  He was kind enough to do so and his grandmother’s story, follows:

Nellie Tayloe Ross was an early pioneer for women’s rights in the United States.  In 1924, only four years after passage of the Nineteenth Amendment granting women the right to vote, she was elected the first woman governor in the United States. She was thrust into politics when her husband, William Bradford Ross, the governor of Wyoming, died in office in 1924. This left Nellie, the mother of three sons, in debt and with no means to support herself and her family. At the time, Nellie, who was intelligent, tactful, and dignified, had limited exposure to politics, solely from her membership in the Cheyenne Women’s club, where political topics were discussed, and from informally advising her husband on political issues. Her only other exposure to government was from her employment as a kindergarten teacher as a young woman.

Despite her inexperience, she was elected governor and was inaugurated on January 5, 1925. During her tenure as governor, she pursued a progressive agenda, which included proposed legislation to increase safety for coal miners, to provide more funding for public education, and to protect women employed in industrial jobs.

Following her term as the Chief Executive in Wyoming, Governor Ross became a well-known national speaker and speechwriter, encouraging women to run for office and to influence public policy through their votes. This drew her into national politics. She campaigned for Democrat Al Smith in his 1928 presidential run, and she implored women to turn out to cast their votes for Smith. At the Democratic Convention, she wrote and delivered a speech seconding Smith’s nomination. Notably, at the convention, Governor Ross received 31 votes for vice-president on the first ballot, from ten different states!

After the 1928 Democratic Convention, Governor Ross became the Vice Chairman of the Democratic National Committee and the Director of the Committee’s Women's Division. In that position, she moved to Washington, D.C., and led the national campaign seeking the women’s vote for Franklin D. Roosevelt. After his victory, President Roosevelt named Governor Ross the Director of the U.S Mint, the first female to hold the position. She held that position for twenty years. As Director, Governor Ross employed a flexible management style, based upon common sense and relationship building. She was a competent and effective executive respected by government leaders and employees alike. She cut costs and increased efficiency as she modernized the Mint, also implementing an incentive program under which employees were rewarded for suggestions to improve efficiency.

While serving as Director of the Mint, Governor Ross continued speaking around the country, promoting the advancement of women. Her story is timeless. She was able to balance her personal and family life with her public life through her strong interpersonal skills and ability to adapt to changing circumstances. Governor Ross died in 1977 at the age of 101. Her remarkable life and career have been an example to women for generations.

Sources used in this article are primarily the author’s personal knowledge, as well as newspaper articles, historical websites, encyclopedias and other resources.

Editor’s note:  Thank you, Robert.


Risk Transfer Training:

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

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


New York Coverage Protocol Training:

Another very popular program is one designed to remind, refresh or instruct claims professionals who handle New York insureds, claims and policies, on the special nuances (and traps) that are part of the New York coverage experience.  Does your staff need it? Here’s the way to find out.  Ask your staff these questions:

  1. Are you sending out reservation of rights letter in NY claims? 

  2. Do you know the “30-day” rule?

  3. Are you certain you know who gets copies of coverage position letters in New York?

  4. If the insured fails to respond to 10 letters seeking cooperation, can you successfully deny coverage for lack of cooperation?

  5. If the insured gives you notice of an accident, five years after it occurred, in violation of notice obligations in the policy, is that enough to sustain a late notice disclaimer?

If the answer to question “1” was “yes” or the answer to any of the remaining questions were “no”, sign up for NY Protocol training.



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

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

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

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

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

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

The Amendment is Adopted:

The Watchman and Southron

Sumter, South Carolina

21 Aug 1920



Tennessee Legislature Ratifies Suffrage Amendment


Seventeen Million Women May Vote

For Presidential Candidates

            Nashville, Aug. 18.—The ratification of the federal suffrage amendment was complete today with the favorable action by the Tennessee house of representatives.

            The vote was 49 to 46.

            The senate had previously ratified the amendment by a vote of 25 to 4.

            Speaker Walker in an attempt to have the action reconsidered changed his vote from nay to aye and moved a reconsideration.  Speaker Walker’s change made the ratification vote 50 to 46.

            The house adjourned until tomorrow when Speaker Walker will be privileged to ask for reconsideration.  The action of Tennessee allows 17,000,000 women to vote in the presidential election, unless the house should rescind its action tomorrow.


Peiper on Property and Potpourri:

Another two weeks, and another quiet docket.  With Fall soon to arrive, decisions will too.  Or so we hope. For this week’s issue, we were able to muster up a decision addressing the timeliness of a Notice of Claim involving an accident on the NYS Thruway.

For those unaware, the New York State Thruway is the main artery running mostly east to west (or west to east) from the Bronx to the Pennsylvania State Line.  It provides interstate access to Buffalo, Rochester, Syracuse, Utica, Schenectady, Albany and a litany of other majestic towns and villages across the State.  Yes, in case you were wondering, this beautiful area of the country is, in fact, still part of New York.  After Albany, the road takes a decidedly southern turn where it ends (or begins) in Metro-New York.  

The Thruway Authority was created in 1949, and the mainline was fully completed by 1956 for a cost of $600 million.  While it was constructed in segments, the first portion of usable roadway opened in 1954 and connected Utica with Rochester.  Providing further proof that Syracuse was, at one point, a focal point of New York State.  Your author does not yet know who or why it was decided that Rochester to Utica required first access, but I’ll endeavor to answer that question before next issue.

Until next time.   


Steven E. Peiper

[email protected]


With the Adoption of the Nineteenth Amendment, Voter Registration Begins:

The Buffalo Enquirer

Buffalo, New York

21 Aug 1920



Philadelphia City Council Plans to Appropriate $165,000 for That Purpose – Massachusetts and Connecticut Getting Ready to Enroll all Females of Voting Age

(By the United Press)

            Philadelphia, Aug. 21.—The city council is expected to appropriate $165,000 for the purpose of assessing and registering women of voting age when it meets Monday.

            House to house assessment of women will probably start the Wednesday following. This work should be completed in five days, city officials said. 


            Boston, Aug. 21.—Work of registered women voters of the State of Massachusetts was being rushed today by state authorities.  Approximately 30,000 women have registered in Boson, where books closed last night.  The Massachusetts Suffrage association has opened an educational campaign with the object of bringing to the women of Massachusetts full realization of their duties as voters.


            Hartford, Conn., Aug. 21.—Plans are being considered here for the handling of the enrollment of the thousands of new women voters.  It is estimated that 20k000 women will be eligible for the ballot in this city.  Politicians contend that a special session of the legislature is necessary to provide machinery for the enrollment.


            Pittsburgh, Aug.  21.—The Allegheny county board for the assessment and revision of taxes plans to start the assessment of new women voters next Tuesday, August 24, sitting from 8 o’clock in the morning until 9 o’clock in the evening, completing the assessment the night of September 1. 


Wilewicz’ Wide-World of Coverage:

Dear Readers,

Summer is winding down on the calendar, but you wouldn’t know it with the 80+ degree days that have stretched now for weeks. We really lucked out this summer, as we often do in Upstate New York, and despite the few heat waves it really has been a lovely season. Now, as we head into the autumn, the school situation remains very much up in the air but otherwise things are slowly but surely returning to “normal”. At our house, my daughter cannot wait to go back to school, in whatever format it is presented. This is not the start of high school that she ever would have expected, but she’s looking forward to getting back into a routine and having something productive to do.

Now, on the insurance coverage front, the Second Circuit again failed to address any cases of note. They seem to be focusing their attentions on criminal and more “essential” matters these days. Thus, from the Eleventh Circuit Court of Appeals (hearing a case from Southern Florida), we bring you one with some fabulous party names: Mama Jo’s v. Sparta Insurance. In that case, one that is particularly timely (by analogy) in the time of Covid-19, a restaurant filed a business interruption claim stemming from their drop in revenue due to road construction outside of their property. Over the course of many months, the roadwork caused the Miami establishment to have to undertake extra cleaning and they estimated that they lost over $300k in sales due to decreased traffic. However, the Court noted, their policy – like many – required “direct physical loss” to trigger coverage. That meant both direct loss to the property and physical loss thereto. Since the restaurant didn’t even shut down during the construction, but just had extra cleaning and a reduction in customers, there simply was no coverage for their claims.

I would be remiss if I didn’t note the fact that this week marks the 100th anniversary of women’s suffrage in the United States. While we were not the first (women could vote in the Kingdom of Hawaii as of 1840, and in South Australia in 1894), nor were we the last (women couldn’t vote in Saudi Arabia until 2015). It does make me proud to think about all the women who paved the way to get us to where we are today.

With that thought, until next time!


Agnes A. Wilewicz

[email protected]


Mississippi Puts Up Barricades to Voting:

Jackson Daily News

Jackson, Mississippi

21 Aug 1920





Supreme Law of State Regulating Registration

Not a Bad One Declares Attorney General


            Women of Mississippi will not be allowed to vote in the November election regardless of the final ratification by the thirty-sixth state of the federal suffrage amendment.  This opinion was rendered today by Fred H. Lotterhos, assistant attorney general, in response to a request from Miss Henrietta Mitchell, national democratic committee woman for Mississippi, as to the status of women voters in this state in the event Tennessee finally ratified the nineteenth amendment.

            Consideration of the constitution of Mississippi, said Mr. Lotterhos, would lead “unerringly to the conclusion” that a citizen, male or female, who may register at this time or later, shall not be entitled to vote at the coming regular election in November.”


Barnas on Bad Faith:

Hello again:

By the time our next issue comes out it will already be September.  Summer seems to be flying by faster than ever.  Usually the disappointment that comes from the end of summer is tempered by the arrival of football season.  Hopefully we have some football to watch this year.

In my column this week I have a nice case from the Ninth Circuit where the court affirmed summary judgment dismissing a bad faith claim.  It did so even though it remanded the case back to the district court to evaluate whether there was coverage under the policy.  The policyholder could only show a possibility of coverage, and the carrier’s decision to deny based on a reasonable question of coverage could not constitute bad faith.

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


Brian D. Barnas

[email protected]


Woman Announces for Congress – 100 Years Ago

The Brooklyn Citizen

Brooklyn, New York

21 Aug 1920



            Muskogee, Okla., presents one of the five women candidates for Congress in the forthcoming election.  Miss Alice Robertson, 66 years old, native, of Indian Territory, formerly postmistress under Theodore Roosevelt, is the person who has the effrontery to run on the Republican ticket in a rock-ribbed Democratic district.

            Despite the usual Democratic margin of four or five thousand, Miss Robertson promises an active campaign and serious opposition to Congressman W. W. Hastings, now running for a fourth term.  To show that she means business, she points to her primary record, when she came near rolling up a majority over three men candidates.

            “I won’t snivel,” declares Miss Robertson, referring to the only woman who ever sat in the halls of Congress—Miss Rankin, of Montana.

            “I’ve done a man’s work and I’ll fight a man’s fight,” says this rugged pioneer and idealist.  “I didn’t want this suffrage business, but now that we have it, let’s see if they really want women in politics—or were they only fooling?”

Editor’s Note:  Alice Robertson did get elected, being on the second woman elected to Congress and the first to defeat an incumbent Congressman. She served one term, and then was defeated by William Hastings, the man she defeated in the 1920 election.  By the way, the first woman to be elected to Congress was Jeannette Pickering Rankin, elected to the House from Montana in 1916 (and then again, in 1940).  Ranking was the only member of Congress who voted against the declaration of war on Germany in 1917 and the only member of Congress who voted against the declaration of war on Japan in 1941.


Off the Mark:

Dear Readers,

All things considered; this summer has been flying by.  We have been going to the beach whenever possible.  Going early and leaving early has helped us avoid the weekend crowds.  It’s also nice to be home before lunch with basically the whole day left to do whatever (usually food shopping and other boring, but necessary chores).

This edition of “Off the Mark” brings you a recent construction defect decision from the United States Court of Appeals for the Ninth Circuit.  In Engineered Structures, Inc. v. Travelers Prop. Cas. Co. of Am., the U.S. Court of Appeals examined the faulty, inadequate, or defective workmanship exclusion, finding same to be unambiguous, and ultimately remanding the case back to the district court as to its applicability.

Until next time …


Brian F. Mark
[email protected]


Far More Republican States Voted for Ratification than Democratic ones:

The Tribune

Scranton, Pennsylvania

21 Aug 1920

Political Parties And the Suffrage

            The indecent haste with which Democratic organs and oracles proceed to claim credit for the ratification of the Woman Suffrage amendment, is discounted by the fact that twenty-six of the thirty-six states necessary to ratify had Republican legislatures, while only seven were Democratic.

            It would seem that with the success of the movement which confers the voting privilege on the women of the United States, all the friends of equal suffrage should be content to rejoice in the result, without endeavoring to distort the record, but the Democrats are so eager for advantage that they place their partisan interests in the forefront regardless of the absurdity of their claims.

            Senator Harding, the Republican candidate for President, has been the consistent and untiring advocate of votes for women, and his efforts in that behalf have been recognized by women leaders of the movement.

            At his home in Marion, this week, Senator Harding received many telegrams of appreciation from suffrage leaders.  One of the first was from the National Woman’s Party, which said:  “On behalf of the National Woman’s Party, representing women in every state in the Union, I wish to express our deep appreciation of your cooperation in the campaign for the ratification of suffrage,” and numerous other messages were to the same effect.

            The Republican record on ratification is decisive, while that of the Democrats is less convincing as shown by the number of Democratic states which opposed and the few that sustained the amendment. 


Boron’s Benchmarks:

I went out for a jog early this morning and the air was delightfully cooler and drier than it has been in weeks.  Perhaps a sign that we’ll have an early fall?  We’ll see.

Despite the Covid-19 pandemic, I have been as busy with work as ever.  Virtual depositions, virtual EUOs, and virtual court appearances are the new normal.  So far, so good.  It is tougher to “read” a witness when you can only see their eyes, due to masking, but overall body language can still be read.  And, as I always told my kids, I can see right through things sometimes.

I hope all is well with you, our dear readers.  I suspect those of you with school-aged kids have some apprehension about schools re-starting in the fall.  Two of my three kids are educators and let me tell you educators likewise have apprehension about schools re-starting in the fall.  Let’s hope it all miraculously works out.

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, reports on a Supreme Court of Pennsylvania Opinion issued August 18, 2020 concerning “Replacement Cost Coverage” on a homeowner’s policy.  The Supreme Court of Pennsylvania affirmed an Order of the Superior Court, which had found the insurer was entitled to withhold from the actual cash value (“ACV”) settlement the General Contractor’s Overhead and Profit (O&P) expenses unless and until the insured undertook repairs of the damaged property.

Until next time, be well.


Eric T. Boron
[email protected]


Electing a Woman President was Not the Initial Goal:

The Washington Herald

Washington, District of Columbia

21 Aug 1920

Woman President Not Initial

Aim of New Voters

            “Election of a woman President of the United States isn’t among the suffrage plans,” said Florence Brewer Boeckel, national press chairman of the Woman’s party.

            “Our first work will be to have repealed the legislation that now discriminates against women voters in different States.  We must do the work at hand; must clear up the mass of little things that still preclude complete justice to the individual woman voter before we think of anything else.

            “But I think that the successful fight for suffrage has brought to the fore women whose mental power and executive mastery are not second to those of any man politician.”


Barci’s Basics (On No Fault):

Hello Subscribers!

I hope you are all still staying healthy and safe! It’s that time of summer where time simultaneously feels like it’s flying by, but also stretching forever when you look back on your week. I am both excited for fall and sad that the days have already started getting shorter. It really feels like summer just started, maybe because I’ve been in my house for most of it, but I think I’m ready for the leaves to change and sweater weather once more.

My answers to last issues topics are as follows: 1) My favorite thing about the area I live in is the access to so many different good restaurants. It’s a problem because I can pretty much get any kind of food I want at all times, so I never want to cook, but it’s also a really amazing perk that I didn’t think about until I moved here. I happened to visit my parents last weekend, who live in a very rural area, and forgot that not everyone lives within a 10-mile radius of good restaurants, so I was surprised when our only options to order in for dinner were pizza or Chinese food. And even that is more than some places have! So it reminded me that I am quite grateful to sometimes deal with the paralysis of choice when deciding what to order in for dinner ; 2) For a summer event, I think that polo would be a pertinent sport to add to the Olympic roster. It’s played in many countries around the world and I think would be very interesting to watch. For the winter games, I feel like sled dog racing would be interesting, but I’m not sure logistically how that would work out. That’s me for this week. For the next two weeks consider these topics:

  • Is there a charitable cause you regularly donate to or volunteer with?

  • If you had the option to become immortal, would you do it?

Keep sending me your best answers and check back next issue for mine!

On the no-fault front, I have one case for you that discusses the need for timely summary judgment motions (if don’t want to go to trial!).

That’s all folks,


Marina A. Barci

[email protected]


The Tennessee Member who Put it Over the Top:

The Tennessean

Nashville, Tennessee

20 Aug 1920



Suffrage Victory Largely Attributed

to Youthful Representative

            Back of the man whose change of vote Wednesday enfranchised the womanhood of America stood a woman—his mother.

            “Vote for suffrage and don’t keep them in doubt,” she wrote him.

            So when perhaps the tensest and most dramatic moment in the history of the many fights which have been waged on Capitol Hill came, Harry T. Burn, Republican, of McMinn county, cast his vote “aye”, and the seventy-year suffrage fight was won.

            As a boy, and he is still that, Harry Burn had learned to revere his mother and to know that her counsel was good.

            “I knew that a mother’s advice is always safest for her boy to follow, and that my mother wanted me to vote for ratification,”  This sentence he incorporated in the written statement of his reasons for changing his vote, which he caused to be spread on the journal of the House yesterday.

            But more than that, Harry Burn changed his vote because he felt that ratification was right and just.

Gave Vote When Needed.

            “I had not talked with all of my constituents,” he said yesterday.  “But those whom I had interviewed were against ratification.  For that reason, I cast my vote ‘No.’  When I arrived , however, I told the women workers that in case my vote  would decide the question, I would cast it according to my own convictions.  That is what I did in the end.”

            And now Harry T. Burn is considered the man who gave 27,000,000 women of America their complete political freedom.

            He has been deluged with telegrams from over the state and nation.  Men and women, big and little in the world’s affairs, have expressed their gratitude to him.

            Among the wires is this one from H. M. Daugherty, director of the Harding campaign:

            “After a conference with Senator Harding, I beg to extend our congratulations upon your support of suffrage and urge you to respectfully request all Republican associates to join in holding your lines, and hope that a unanimous Republican vote may be given to prevent a reconsideration of the resolution.”

            Mr. Burn is only 24 years old.  In this brief life he has accomplished many things, aside from that which has just given him national prominence.

            He owns one of the finest farms in McMinn County, where he and his brother “work.”  In the meantime, he is station agent at Niota, his hometown, for the Southern Railroad, and is the president of the local bank, in addition to being actively interested in several textile mills of the section.


Ryan’s Capital Roundup:

Hello Loyal Coverage Pointers Subscribers:

There is nothing quite like the joy of a three-year-old exploring a playground with his new “friends”. Our son needed to get out of the house and, apparently, kids across our town feel the same way. Wipes and masks are key, but that mask cannot hide the gleeful cries of a trip down the big slide or a game of hide-and-seek. No, my son has not quite mastered “hiding”. “I can see you behind that ladder, kid.”

This week, we have a new mandatory back-seat seatbelt law that is overdue, and an amendment to existing “opioid antagonist” laws to provide protections to places of public accommodation administering assistance to those suspected of opioid overdoses. We also have yet another extension of relaxed licensing requirements for insurance producers until September 6, and measures implemented to assist Tropical Storm Isaias-related insurance claim handling and resolution.

Until next time,


Ryan P. Maxwell

[email protected]


One of the Purposes of the Suffrage Amendment:

Public Opinion

Chambersburg, Pennsylvania

21 Aug 1920


Mrs. Kempter Tells History of Suffrage Work In County

            With the ratification of the suffrage amendment by the Tennessee legislature, giving the ballot to women of the nation, advocates of the suffrage cause in Chambersburg are jubilant, although awaiting further action by the Tennessee legislature.

            Mrs. Grace Guyton Kempter of East Queen Street traces the history and progress of suffrage in the county in the following interesting communication:

            “To the suffragists of Franklin county, who have been active in the campaign for ‘Votes for women’ since 1912, when Miss Lavinia Dock and Dr. Ruth Deeter held the first meeting on Memorial Square, to the ratification of the federal amendment in Tennessee, it seems our efforts, locally, were always generously seconded by those whose cooperation we needed most, the pulpit, the press and the officials, whom it became a real pleasure to approach with the request for the courthouse.  This was always generously given us, after the proper dignified consultation and friendly raillery on our attitude towards suffrage, but with the grave assurance that ‘This is the last time.’ The admonition kept us humble and properly respectful, as was fitting our station in life, but the increasing success of our meetings and the inevitable number of converts, always gave us the courage to return with our request. 


CJ on CVA and USDC(NY):

Hello all,

We’re finally getting to my favorite part of the year in WNY. August and September generally bring with it cool fall-like mornings and evenings with mid-summer feeling afternoons. It’s the perfect weather to enjoy the last few barbeques of the season, go on a hike or a long bike ride, and of course get those final water ski sets in before the boats go into storage in mid-October. As each day passes life begins to feel a little more normal. I can’t tell you whether that is because things are returning more and more to their pre-pandemic state, or I’ve just grown accustomed to wearing a mask every time I go grocery shopping, but either way I think I’ve shaken the COVID doldrums. Hopefully you have too.

All things insurance have been quiet in the District Courts of New York and New York State Courts have not seem many substantive orders or decisions on CVA cases with insurance issues. However, I have written up a case discussing when the failure of an employee to report information related to an alleged abuser falls outside of that employee’s scope of employment. While not an insurance decision, it serves as a good reminder of how a court will determine whether or not an employee is truly acting within the scope of their employment.

Happy Reading!


Charles J. Englert, III

[email protected]       


The Anti-Suffs Try to Reconsider the Vote in Tennessee, but are Foiled:

The Castonia Gazette

Gastonia, North Carolina

21 Aug 1920


NASHVILLE, Tenn., Aug. 21—More than 30 members of the Tennessee house opposed to suffrage were missing from their hotels early today and were reported to have left shortly after midnight for Alabama in an effort to prevent a quorum of the house and delay final action on the woman suffrage amendment.

Leaders of the suffrage forces said it was almost certain there would be no quorum at 10 o’clock this morning when the house was to meet.

At 10:15 o’clock, a quarter of an hour after house was due to meet few members other than the suffragists were in their seats, and lack of a quorum appeared certain.

Sweeping away of the last obstacle in the way of certification to Washington of Tennessee's ratification of the woman suffrage amendment was planned to-day by suffrage leaders of the lower house of the legislature. This was to be accomplished by calling from the house journal a motion that the house reconsider its action in concurring with the senate's adoption of the ratification resolution and defeating it either through a vote on the motion itself or by sending it to the table.

The motion was placed on the journal by Speaker Seth Walker last Wednesday when he changed his vote on ratification from "nay" to "aye". Under the rules the speaker alone had the privilege of calling up the motion for action during the next two legislative days. His failure to do so makes it possible for the suffragists to call it up and this was their intention today. Some parliamentarians held that Walker's failure to act ended the matter but others declared the motion, now recorded as offered but not acted upon, must be disposed of before the suffrage amendment would be ready to go to the enrolling clerk.


Dishing Out Serious Injury Threshold:

 Dear Readers,

It’s already mid-August and 2020 is full steam ahead. We were hit with a bad storm a few weeks ago and lost power for nearly a week. There was a lot of cleanup, and some electrical work, that needed to be done but thankfully everyone was safe and everything that was damaged can be replaced. Looking forward to whatever else 2020 has to throw my way.

In the Serious Injury Threshold world, a case at the trial Court level that abides by current case law that a defense expert need not opine as to the 90/180-day category of Serious Injury for the Court to rule in defendants favor. Here, plaintiff’s own deposition testimony was used by defense counsel to make a prima facie showing that plaintiff did not meet the 90/180-day serious injury threshold criteria.

Stay safe,


Michael J. Dischley

[email protected]  


South Carolina Women Demand Right to Vote in Primary:

The Gaffney Ledger

Gaffney, South Carolina

21 Aug. 1920





Enthusiasm Runs High in Columbia.

Five Women’s Names Stricken from Rolls

            Columbia, Aug. 19.—Ratification of the equal suffrage amendment by Tennessee today created much enthusiasm among Columbia women.  The fire bell was rung for a long time and the leaders are enthusiastic.  Instant action on the part of the State Democratic Convention to amend the party rules so that women can vote in the primary two weeks hence will be demanded.  The question to be determined at once is whether an extra session of the General Assembly will be necessary to amend the statutes relations to the elections.

            Attorney General Sam M. Wolfe today gave an opinion in which he holds that no legislative action will be necessary for the women to vote in the general election in November but as the primary is the chief battle ground in South Carolina politics the women are extremely anxious to participate in the primary August 31.

            The names of five Columbia women were today stricken from the democratic club rolls of Columbia by the Richland County Democratic Executive Committee.  The women enrolled to vote in the August 31 primary in the even the Tennessee legislature ratified the amendment were Mrs. Fred S. Munsell, Mrs. T. I. Weston, Mrs. Frank Broadnax, Mrs. W. C. Cathcart and Miss Jennie Gibbes.

Editor’s note : South Carolina voted against ratification of the 19th Amendment on January 18, 1920.  The state officially ratified it on July 1, 1969.


John’s Jersey Journal:

A blackboard sign on a wall

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Dear Subscribers:

This week we have nothing to report from New Jersey. Sadly. We searched the state and federal court dockets but there were no insurance coverage cases worth noting.

This note comes to you from my backyard where I am enjoying a cool summer day. I have been enjoying the outdoors more this year than past years. Even with the pandemic, there are still so many fun activities to do. This past weekend Erin and I traveled to Syracuse, NY to go to Green Lakes State Park. You may remember Cara wrote about it a few weeks ago (and convinced us to go!). It was probably the most beautiful place in New York that I have ever been. The lakes are a beautiful green color that rivals the look of the Caribbean. We hiked around the lakes, more than 3 miles, and enjoyed a swim. Erin and I kept asking ourselves how we never heard of this place before. Maybe those that know are trying to keep it secret.

The following day we went to Devil’s Hole State Park in Niagara Falls, and hiked the gorge. The gorge overlooks the Niagara River, and is a couple miles downstream from the falls. The river is fast-moving and has white-water rapids. What’s interesting though is that the river takes an abrupt hard-right turn. The speed of the water is too fast to make the bend, causing the water to create a huge whirlpool. You can see the water turning counterclockwise almost as if water is draining down a bathtub. The area is quite popular for “jet boats”—jet-engine propelled boats that take boaters to the whirlpool and along the way dropping them into the rapids causing them to get splashed. Almost like a water rollercoaster. The hike is 5 miles so bring water.

Next weekend, my wife and I are looking forward to a socially distant vacation in the Adirondacks. We’ve picked out a few mountains to hike in the Lake Placid area.  Our hound dog Donald loves hiking. Hopefully the weather will cooperate.

Hope all of you are finding ways to get out and enjoy this beautiful summer.

At work, we’re keeping busy with New York and New Jersey coverage issues. Feel free to reach out if you have coverage questions, we’d love to help work through the issues together.


John R. Ewell

[email protected]


Editor’s note.  New Jersey was the 29th state to ratify the 19th Amendment, on February 9, 1920.


North Carolina Votes to Reject, Even though it was Too Late:

The Watchman and Southron

Sumter, South Carolina

21 Aug 1920


Defeats Suffrage


Raleigh, Aug. 19.—The North Carolina house defeated the woman suffrage amendment today by a vote of 1 to 41.

Editor’s Note:  North Carolina ratified it on May 6, 1971.


Lee’s Connecticut Chronicles: 

Dear Nutmeg Newsies:

As normalcy slowly creeps back to Connecticut, I am trying to make up for lost time. Take last week for example. Monday at the gym, Wednesday at the gym, Friday (you guessed it) at the gym, Friday night competitive sand volleyball (under the lights!), Saturday tennis in the 90° heat, and Sunday back to the gym. If I’m a little behind on any of your matters or walking awkwardly, now you know why.

In this edition of the Connecticut Chronicles, we examine the factors a federal court uses to determine if it should abstain from exercising declaratory judgment jurisdiction in deference to a pending state court action. The result here: a bi-coastal battle.

Don’t be complacent and don’t let your guard down. Wear a mask. If Clint Frazier (Yankee outfielder) can bat .409 while wearing a mask, you can wear one too.

Stay safe.


Lee S. Siegel

[email protected]      

Editor’s note.  Connecticut was the 37th state to ratify the 19th Amendment, the first to ratify after Tennessee’s deciding vote.


Too Noisy, those Celebrations:

The Montclair Times

Montclair, New Jersey

21 Aug 1920

Calls Fireworks Racket Nuisance.

            To the Editor of the Times:  Sir:  I noticed by the evening papers that the women of the United States were granted suffrage, and I am going to take advantage of it and address myself to the authorities of Montclair.

            Can anyone explain why peaceful citizens of Montclair should be disturbed at midnight by the Fourth Ward celebrating the most frightful noises under the sun?  The whole family including two children are wide awake and probably will remain so during most of the night.  If celebrations must go on, why wait until all good folks are asleep?

            The intervals are most maddening.  One thinks one can at last go to sleep when a noise that is worthy of “Black Tom” or Warsaw issues from the Fourth Ward.

            I have telephone the police and am told that a permit has been issued for this nuisance.  If permits of this sort are to be granted, someone among the representatives of the public ought to have sense enough to limit them to not later than 10 o’clock at night.  As a citizen and a voter I protest.  I am no grouch, but a

REASONABLE WOMAN CITIZEN.                                                                                              August 18, 1920.


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

Dear Subscribers,

This past weekend, I went camping near Lake Louise Marie in the Hudson Valley region. Specifically, we were in Rock Hill, New York. Although it was a 5-hour drive, it was well worth it. Within Rock Hill, there are four lakes: Lake Louise Marie, Treasure Lake, Wanaksink Lake, and Wolf Lake. It was a gorgeous weekend filled with warm days and cool nights by the campfire. Places like these are incredible, especially for the vast flora and fauna sightings that can’t be seen in other places of the state. For example, while sitting by the water, we thought we saw a hawk in the distance. However, as the bird fly closer overhead, the unmistakable brown body and white head made it clear it was a bald eagle. Bald eagles inhabit every U.S. state except Hawaii, and throughout Canada. However, despite the bald eagle being the symbol for the United States, it was considered endangered (in danger of extinction throughout all or a significant portion of its range) by the mid-20th century.

Initially, the bald eagles were provided some protections under the Migratory Bird Treaty Act of 1918, which prohibited the taking (i.e. killing, capturing, selling, trading, or transporting) of protected migratory bird species without prior authorization from the Department of Interior U.S. Fish and Wildlife Service. Then, in 1940, the Bald Eagle Protection Act (which is now known as the Bald and Golden Eagle Protection Act after golden eagles were added), expanded protections by prohibiting the killing or possession of bald eagles, or their feathers, eggs, or nests. However, around the same time the Bald Eagle Protection Act was passed, DDT (dichloro-diphenyl-trichloroethane) became one of the first synthetic insecticides. DDT caused a sudden decline in many bird populations because DDT is an endocrine disrupter. DDT would seem into the ground water, which was inhabited by fish that the bald eagles would consume. Thus, the bald eagles and many other animals suffered disruptions to their endocrine system, including reproduction and development. Specifically, one side effect of DDT to bald eagles was thinned eggshells. Accordingly, many eggs did not hatch because the shells were unable to protect the embryos. Thus, a reduction in bald eagle populations. However, by 1972, the U.S. banned the use of DDT and there were various federal laws passed to help with the bald eagle population. By 2007, the bald eagle was removed from the Threatened and Endangered species list. Hopefully, we continue to see their population rise and sightings will be more frequent. As usual, stay safe and remember that the Autumnal Equinox is September 22, so enjoy this last month of summer!

Cara A. Cox

[email protected]


The western heat wave has impacted southern Alberta producing extended, record heat for almost a week. Lovely, to be on our deck late at night without blankets or a heater with the stars overhead and a beverage in hand. Peaceful.

Heather Sanderson

Sanderson Law (Alberta, Canada)

[email protected]


Headlines from this week’s issue, attached:

Dan D. Kohane
[email protected]

  • No Such Thing as a Negligent Assault!  No Duty to Defend for an Assault, Even with Conclusory Allegations of Negligence

  • Passenger in Police Vehicle is Not Entitled to SUM Coverage

  • SUM Endorsement Issued to Corporation Follows Employees who are in Corporation’s Owned Vehicles or Vehicles being Operated on Behalf of Corporation

  • Claims by Creditors Committee Against Directors and Officers Fall within Bankruptcy Exception to “insured v. Insured” Exclusion in D&O Policy, Since the Actions are Not Being Prosecuted by Directors

  • Livery Vehicle Defense Sinks UM Claim

  • Factual Determination at Uninsured Motorist Framed Issue Hearing Upheld on Appeal

  • Carrier’s Motion for Summary Judgment Denied because it Failed to Submit Admissible Proof in Evidentiary Form

  • Auto Carrier’s Cancellation of Tortfeasor’s Policy Struck Down. UM Arbitration Permanently Stayed


Steven E. Peiper

[email protected]

  • Three Year Delay if Filing Notice of Claim Against NYS Results in Dismissal of Action


Michael J. Dischley
[email protected]

  • Plaintiff’s Deposition Testimony Sufficient for Finding of No Serious Injury Under 90/180 Day Requirement


Agnes A. Wilewicz

[email protected]

  • Eleventh Circuit Holds the Cleaning Expenses and Business Income Are Not Covered, Where Restaurant did not Sustain “Direct Physical Loss”


Jennifer A. Ehman

[email protected]

  • Court Finds Claimant Who Operated LLC Out of His Home Was Entitled to UM Benefits Under LLC’s Policy for Injuries related to a Bike Accident


Brian D. Barnas

[email protected]

  • Denial of Coverage in Case of Questionable Coverage Was Not Bad Faith even if Coverage is Eventually Established


John R. Ewell

[email protected]

  • Nothing to report from the Garden State. See in you two weeks!


Lee S. Siegel

[email protected]

  • Carrier to Fight a Two Front Coverage War


Diane L. Bucci
[email protected]

  • All quiet on the Coverage B front.


Brian F. Mark
[email protected]

  • U.S. Court of Appeals Takes Issue with District Court’s Finding that Faulty Workmanship Exclusion was Ambiguous, Ultimately Remanding as to the Exclusion’s Applicability


Eric T. Boron

[email protected]

  • Pennsylvania High Court Rules that Overhead and Profit Expenses May Be Withheld from ACV Payment. Insurer Prevails


Marina A. Barci

[email protected]

  • After All Parties Failed to File Summary Judgment Motions, Trial to be Held Over Allegedly Overdue No-Fault Benefits


Ryan P. Maxwell

[email protected]

Legislative List

  • No Person Sixteen Years or Older Shall Be a Passenger in Any Motor Vehicle Seat Without an Approved Seat-Belt

  • Bill Delivered to Governor Would Extend Liability Protections to Places of Public Accommodations for Administration of Opioid Antagonists to Those Experiencing Opioid-Related Overdose

Regulatory Wrap-Up

  • DFS Further Extends Licensing Accommodations for Insurance Producers considering the Pandemic Governor Cuomo Announces DFS Action to Expedite Tropical Storm Isaias-Related insurance Claims, Including Temporary IIA Permits for Qualified Individuals Out-of-State and Relaxed Proof of Loss Requirements


CJ on CVA and USDC(NY)
Charles J. Englert III

[email protected]

  • Failing to Disclose Information Regarding the Sexual Proclivities of Others Does Not Fall within the Scope of a Priests’ Employment



See you all in two weeks!



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 New Jersey and Connecticut.

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

Dan D. Kohane

[email protected]

Agnes A. Wilewicz

[email protected]

John R. Ewell

[email protected]

Dan D. Kohane, Chair
[email protected]

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

Michael F. Perley

Jennifer A. Ehman

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Diane L. Bucci

Brian D. Barnas

John R. Ewell

Eric T. Boron

Marina A. Barci

Ryan P. Maxwell

Charles J. Englert

Cara A. Cox

Diane F. Bosse

Joel R. Appelbaum


Steven E. Peiper, Team Leader
[email protected]


Michael F. Perley

Eric T. Boron

Brian D. Barnas


Jennifer A. Ehman, Team Leader
[email protected]

Marina A. Barci

Jody E. Briandi, Team Leader
[email protected]

Diane F. Bosse

Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri

Dishing out Serious Injury Threshold

Wilewicz’s Wide World of Coverage

Jen’s Gems

Barnas on Bad Faith

John’s Jersey Journal

Lee’s Connecticut Chronicles

Off the Mark

Boron’s Benchmarks

Barci’s Basics (on No Fault)

Ryan’s Capital Roundup

CJ on CVA and USDC(NY)

Bucci On “B”

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


Dan D. Kohane
[email protected]

08/20/20       Scalzo v. Central Co-Operative Ins. Co.
Appellate Division, Fourth Department

No Such Thing as a Negligent Assault!  No Duty to Defend for an Assault, Even with Conclusory Allegations of Negligence

The underlying tort action arose from an incident in which Scalzo, allegedly in defense of his wife, struck his neighbor, Salerno, once or twice with his fist. The criminal charges against Scalzo were dismissed, Salerno sued Scalzo. The first cause of action in the underlying tort action alleged that plaintiff assaulted Salerno]by seizing him, striking him and punching him in the face and in particular the left eye, among other areas of the body and that those actions were "willful, intentional, unwarranted and without just cause or provocation."

The second cause of action alleged that Scalzo "negligently struck [Salerno] so as to sustain serious injury" and that plaintiff "acted in a reckless, careless and negligent manner toward [Salerno]."

The insurer, Central, denied coverage based on a policy exclusion for intentional actions. The Fourth Department upheld that disclaimer.

While an insurance company's duty to defend is broader than its duty to indemnify, there are limits.

In assessing whether a policy exclusion for injuries " intentionally caused' " by the insured applies, a court must look to the pleadings in the underlying action and "limit [its] examination to the nature of the conduct [of the insured] as it is there described".  The "analysis depends on the facts which are pleaded, not conclusory assertions".

When a complaint alleges in a conclusory manner that an assault was committed negligently, an insurer has no duty to defend where the insured does not provide "evidentiary support for the conclusory characterization of [the] conduct as negligent or provide an explanation of how the intrinsically intentional act[] of assault . . . could be negligently performed" .

Here, the second cause of action in the Salerno complaint contains no more than a conclusory characterization of plaintiff's conduct as negligent without any supporting factual allegations. Thus, the complaint in the underlying action does not contain sufficient allegations of negligence to avoid the policy exclusion . Moreover, even assuming, arguendo, that plaintiff intended only to punch Salerno but not to injure him, the injuries were intentionally caused inasmuch as harm was inherent in the nature of the acts alleged.
Editor’s Note:  Shotgun conclusions of negligence do not change an assault into a negligence claim.  No duty to defend.


08/20/20       Johnson-Neuland v. New York Municipal Reciprocal
Appellate Division, Fourth Department
Passenger in Police Vehicle is Not Entitled to SUM Coverag

Johnson-Neuland (“plaintiff”) was a parking attendant employed by the City of Oswego (“City”), was injured when the City police vehicle she was operating was struck by an underinsured motorist. Plaintiff sought supplementary uninsured/underinsured motorist (“SUM”) coverage from NYMR as the City's insurer, but the NYMR denied coverage to plaintiff because she was driving a police vehicle when the accident occurred.

NYMR won below, summary judgment granted and the Fourth Department affirmed.

The insurance policy did not explicitly provide for SUM coverage for the subject vehicle, and it is well-settled that a police vehicle is not a motor vehicle for purposes of SUM.  There was no proof that NYMR represented to anyone that SUM coverage existed.


08/20/20       New York Schools Ins. Reciprocal v. Kalbfliesh
Appellate Division, Fourth Department
SUM Endorsement Issued to Corporation Follows Employees who are in
Corporation’s Owned Vehicles or Vehicles being Operated on Behalf of Corporation

Kalbfliesh while working as a student monitor/aide, sustained injuries when the van in which she was riding was struck by another motor vehicle. The van in which respondent was riding was operated on behalf of her employer by a separate entity, which owned the van.

Kalbfliesh’s employer had hired that entity to provide transportation in connection with educational activities involving Kalbfliesh  and the students she monitored. Following the accident, she recovered the full policy limit of $100,000 from the insurer of the vehicle that collided with the van. She thereafter submitted a claim for supplemental uninsured/underinsured motorist (SUM) benefits pursuant to a commercial automobile policy issued to Kalbfliesh’s employer by New York Insurance Reciprocal (NYSIR).

NYSIR disclaimed coverage on the ground that the van was not insured for SUM coverage inasmuch as it was not owned Kalbfliesh’s employer, and she did not otherwise qualify as an insured under the policy's SUM endorsement.

The court found that where an auto policy contains a SUM endorsement and the policy is issued to a corporation, the SUM provision does not follow any particular individual, but instead covers any person [injured] while occupying an automobile owned by the corporation or while being operated on behalf of the corporation.


08/20/20       Westchester Fire Ins. Co. v. Schorsch
Appellate Division, First Department
Claims by Creditors Committee Against Directors and Officers Fall within Bankruptcy Exception to “insured v. Insured” Exclusion in D&O Policy, Since the Actions are Not Being Prosecuted by Directors

Westchester Fire Insurance Company (“Westchester” commenced the action claiming that it had no obligation to defend insured, relying upon an “insured v. insured” exclusion (“IvI exclusion”) in a Directors & Officers Liability Policy (“D&O policy) issued to RCS Capital (“RCAP” excluded coverage. The insured relied on a “bankruptcy” exception to the

During the bankruptcy process, negotiations between RCAP and the company's creditors resulted in the bankruptcy court's approval of RCAP's Chapter 11 reorganization plan creating a litigation trust, labeled "Creditor Trust." The Creditor Trust was formed to pursue the bankruptcy estate's legal claims on behalf of the unsecured creditors.  Creditor Trust, post-confirmation, sued RCAP's directors and officers alleging they had breached their fiduciary duties to the company. The directors and officers sought coverage under RCAP's D & O liability policy with Westchester.

The court found, in a matter of first impression, that the exception applied and coverage existed.

As relevant here, the primary policy includes an insured vs. insured exclusion, eliminating coverage for "any Claim made against an Insured Person . . . by, on behalf of, or at the direction of the Company or Insured Person." An "Insured Person" is defined as "any past, present, or future director or officer . . . of the Company" and the term "Insured" includes the Company (RCAP) as the debtor. However, the insured vs. insured exclusion has a bankruptcy trustee exception, which restores coverage excluded under the insured vs. insured exclusion, for claims "brought by the Bankruptcy Trustee or Examiner of the Company or any assignee of such Trustee or Examiner, or any Receiver, Conservator, Rehabilitator, or Liquidator or comparable authority of the Company."

The court found that the exception for "the Bankruptcy Trustee or . . . comparable authority . . ." applies to restore coverage removed by the insured vs. insured exclusion.  The D & O claims here, however, are not prosecuted by the debtor corporation or by individuals acting as proxies for the board or the company. On the contrary, the D & O claims are prosecuted by the post-confirmation Creditor Trust, a separate entity.


08/19/20       Amica Mutual Ins. Co. v. Alexis
Appellate Division, Second Department
Livery Vehicle Defense Sinks UM Claim

On August 27, 2017, a vehicle owned and operated by Alexis was involved in a Brooklyn motor vehicle accident with an uninsured motor vehicle in Brooklyn. Alexis sought uninsured motorist benefits under a policy issued by Amica. Amica disclaimed coverage based on a livery exclusion in its policy. A framed issue hearing was scheduled but when Alexis appeared, he was unprepared to go forward.

His failure to appear on the scheduled hearing date constituted a default.  To vacate the default he had to show a reasonable excuse for that default and a meritorious defense. Alexis's counsel claimed that their office misapprehended the order and didn’t realize that Alexis had to appear at the hearing.  Even if that was a reasonable excuse, Alexis failed to demonstrate a potentially meritorious defense to the petition.

An attorney's affirmation, which referred to Alexis's self-serving, vague, and unsubstantiated denial of the use of his vehicle as a public or livery conveyance, was insufficient to establish a potentially meritorious defense.  


08/19/20       GEICO v. Johnson-McNeil
Appellate Division, Second Department
Factual Determination at Uninsured Motorist Framed Issue Hearing Upheld on Appeal

Another framed issue hearing on a UM Claim. On July 22, 2015, Lucinda was a passenger in a vehicle owned and operated by her sister, Cynthia when the vehicle was involved in a collision with another vehicle. The driver of the other vehicle allegedly drove away from the scene of the accident after he had picked up a broken headlight that had fallen from his vehicle.

However, before the other vehicle drove away, Johnson-Pringle had exited her sister's vehicle and taken photographs of the other vehicle with her cellphone. Subsequently, it was alleged that the other vehicle involved was a 1998 Dodge owned by the Gayles and insured by Maidstone Insurance Company.  The Gayles denied involvement.

So, when Lucinda and Cynthia an uninsured motorist application with their insurer, GEICO. GEICO moved to permanently stay arbitration. The Gayles and Maidstone were joined in the proceeding and a framed issue hearing was held.

The lower court found that the Gayles car was involved in the accident and therefore Maidstone had insurance on the vehicle.  Accordingly, the Uninsured Motorist Arbitration was permanently stayed.

On appeal, the appellate court refused to set that determination aside, as the hearing officer based it on the credibility of the witnesses and the proof offered.


08/12/20       United Specialty Ins. v. Columbia Cas. Co.
Appellate Division, Second Department
Carrier’s Motion for Summary Judgment Denied because it Failed to Submit Admissible Proof in Evidentiary Form

Dry Harbor HRF, Inc. operates a nursing home in Middle Village. From December 3, 2012, until December 3, 2013 (at 12:01 a.m.), the Columbia Casualty Company (“CCC”) insured Dry Harbor pursuant to a claims-made general liability policy.  United Specialty Insurance Company (“USIC”) provided coverage to Dry Harbor upon expiration of CCC's policy on December 3, 2013.

Thereafter, when three residents made certain claims and commenced actions against Dry Harbor in 2014 USIC provided defense and indemnification to Dry Harbor.  USIC, believing that the claims arose during CCC's coverage period and that CCC was provided timely notice, commenced this action seeking judgment declaring that CCC's policy was primary with respect to those claims and, therefore, CCC was required to reimburse the plaintiff for the costs it had expended in defending Dry Harbor to date with respect to the underlying actions.

CCC contended that it had not received notice of the claims in a timely and sufficiently detailed manner from its insured, Dry Harbor, and therefore, had no obligation to either Dry Harbor or the plaintiff with respect to those claims.

The affirmation of CCC's attorney was not based upon personal knowledge and, thus, was of no probative or evidentiary significance.  The submissions by CCC on the motion were not in admissible form. The emails and letters were offered for the truth of their contents and, therefore, constituted hearsay. Since CCC failed to submit admissible evidence or an affidavit by a person having knowledge of the facts, it failed to establish its prima facie entitlement to judgment as a matter of law.

08/12/20       Unitrin Direct Ins. Co. v. GEICO
Appellate Division, Second Department
Auto Carrier’s Cancellation of Tortfeasor’s Policy Struck Down. UM Arbitration Permanently Stayed

GEICO issued an automobile insurance policy to Imtiaz Islam, with a coverage period of December 30, 2016 through June 30, 2017. On May 4, 2017, GEICO sent notices to Islam purporting to cancel his policy effective June 30, 2017 unless he submitted a completed business use questionnaire.

Islam failed to submit the requested questionnaire. GEICO purportedly cancelled the subject policy on June 30, 2017. On July 14, 2017, Islam, while driving, struck the rear of a vehicle in which Barrow, was a passenger. Islam submitted a claim to GEICO, but GEICO disclaimed coverage.

Barrow submitted a claim under the uninsured motorist (UM) endorsement of the liability policy issued to her by the petitioner, Unitrin and sought arbitration.

Unitrin then commenced this proceeding to permanently stay arbitration. The insurer secured a framed issue hearing to determine whether coverage existed under the GEICO policy on the date of the accident. At the hearing, the court determined that the GEICO cancellation was proper, so the arbitration was to proceed.

The initial burden of demonstrating a valid cancellation of an insurance policy is on the insurer.

On appeal the court found that GEICO failed to satisfy its burden of establishing that it validly cancelled Islam's insurance policy. The purported cancellation notice reflected a mere intention to cancel in the future if Islam did not provide a completed business use questionnaire.

In any event, cancellation is permitted only upon specified grounds once a covered policy has been in effect for at least 60 days,  Under the Insurance Law after 60 days, cancellation requires the "discovery of fraud or material misrepresentation in obtaining the policy or in the presentation of a claim thereunder" to cancel an automobile insurance policy during the required policy period of one year.

Since the cancellation notice was ineffective, the GEICO policy remained in full force and effect beyond any stated expiration date until a notice of cancellation was given in accordance with the Insurance Law. Accordingly, that branch of the petition which was to permanently stay arbitration should have been granted.


Steven E. Peiper

[email protected]

08/12/20       Cox v. New York State Thruway Authority
Appellate Division, Second Department
Three Year Delay if Filing Notice of Claim Against NYS Results in Dismissal of Action

Plaintiff was allegedly injured when her vehicle was struck by a snowplow being operated by the New York State Thruway Authority.  Nearly three full years later, plaintiff commenced the instant action seeking leave to serve a late notice of a claim on the Thruway Authority and New York State.  Upon review of the application, the Court of Claims denied the request because plaintiff failed to demonstrate a reasonable excuse for her delay.

In affirming the Court of Claims’ decision, the Appellate Division noted that a court should consider “whether the delay in filing the claim was excusable; whether the State had notice of the essential facts constituting the claim; whether the state had an opportunity to investigate…’whether the claim appears to be meritorious; whether the failure to file or serve upon the attorney general a timely claim or to serve upon the attorney general a notice of intention resulted in substantial prejudice o the state: and, whether the claimant any other available remedy.”   In this case, plaintiff presented no reasonable excuse for her three year delay in seeking a remedy.  Moreover, the merits of the plaintiffs claim were also debatable as she may not have sustained a serious injury  and there was legitimate questions of the snowplow operators negligence.    


Michael J. Dischley
[email protected]


07/27/20       McClean v. Davis
Supreme Court, Kings County
Plaintiff’s Deposition Testimony Sufficient for Finding of No Serious Injury Under 90/180 Day Requirement

Plaintiff Latonya McClean (plaintiff) allegedly sustained injury on November 25, 2015, as a result of a motor vehicle collision which took place on Vandalia Avenue at or near its intersection with Pennsylvania Avenue in Brooklyn, New York. In plaintiff’s verified bill of particulars, plaintiff alleges that she sustained serious injuries including C5-6 cervical bulges, reversal of the cervical lordosis, left shoulder tear and decreased range of motion in her cervical spine.

Defendant moved to dismiss plaintiff’s complaint on the ground that she did not sustain a “serious injury.” In support of their motion, defendants submitted copies of the pleadings, including plaintiff's bill of particulars the transcript of plaintiff's examinations before trial, and the affirmed report, dated February 1, 2017, of defendant's examining orthopedic surgeon, Dana A. Mannor, M.D., who examined the plaintiff on the same date.

Defendants also referred to plaintiff’s deposition testimony in which she testified that immediately after the accident, she made no complaints of pain to the ambulance personnel who came to the scene. Later that evening, plaintiff went to the New York Community Hospital, where she complained of a headache and pain in her left side, left shoulder, and left arm. Plaintiff testified that a couple of weeks later, on December 9, 2015, she began physical therapy to address her complaints of pain in her left side, left shoulder, and left arm. As a result of the subject accident, plaintiff only missed one day of work as a guest service agent.

In opposition to defendants’ motion, the plaintiff argued that the defendants’ expert, Dr. Mannor, in rendering her opinion, only relied upon plaintiff’s verified bill of particulars and failed to review any of her medical history. As such, she argued that Dr. Mannor’s report should be rejected as lacking any foundation. Plaintiff additionally argued that the defendants’ expert failed to address the 90/180-day category of her serious injury allegations. Plaintiff therefore argued that the defendants failed to meet their burden in dismissing her complaint on the ground that she did not sustain a serious injury.

The Court found that the defendants met their prima facie burden of demonstrating that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d) as a result of the subject accident. Contrary to plaintiff's contention, even though Dr. Mannor did not review the plaintiff's medical records, her report was sufficient to satisfy the defendants’ prima facie burden as to the alleged injuries in that her medical opinion was supported by her physical examination of the plaintiff, as well as the objective physical tests she performed showing full range-of-motion in the complained of regions.

In addition, although defendants’ expert failed to relate her findings to the 90/180 category of serious injury for the period of time immediately following the accident, defendants are permitted to use a plaintiff’s deposition testimony to establish that she did not sustain a nonpermanent injury that prevented her from performing substantially all of her material daily activities for at least 90 of the 180 days immediately following the accident. As noted above, plaintiff admitted during her deposition that she only missed one day of work as a result of the accident, and that the only limitations and/or restrictions she experienced after the accident were that she limited her use of her left hand to type at work, and could not pick up her three year-old on her left side anymore. Such testimony sufficiently demonstrates that the plaintiff did not sustain an injury which rendered her unable to perform substantially all of her daily activities for not less than 90 days of the first 180 days after the accident.

In opposition, the plaintiff fails to raise a triable issue of fact. In fact, the plaintiff only refers to her deposition testimony and submits no medical evidence in opposition to the defendants’ motion. Plaintiff's subjective complaints of pain or discomfort in her neck, left shoulder/arm, or her assertions that she is unable to pick up her daughter on her left side or perform her customary daily activities for 90 out of the 180 days immediately following the accident are insufficient to raise any triable issues of fact. Indeed, the plaintiff was required to come forward with objective medical evidence, based upon a recent examination, to verify her subjective complaints of pain and limitations of motion, which she failed to do. Thus, plaintiff has failed to raise an issue of fact rebutting defendants’ prima facie showing that her alleged injuries sustained as a result of the subject accident do not constitute a permanent loss of use of a body organ, member, function or system, a permanent consequential limitation of use of a body organ or member, a significant limitation of use of a body function or system, or a medically determined injury which rendered her unable to perform substantially all of her daily activities for not less than 90 days of the first 180 days thereafter.

Accordingly, defendants’ motion seeking summary judgment dismissing plaintiff’s complaint on the ground that she did not sustain a “serious injury” in the subject accident as defined by Insurance Law § 5102 (d) was granted and plaintiff's Verified Complaint dismissed in its entirety.


Agnes A. Wilewicz

[email protected]

08/18/20       Mama Jo’s Inc. v. Sparta Ins. Co.
United States Court of Appeals, Eleventh Circuit
Eleventh Circuit Holds the Cleaning Expenses and Business Income Are Not Covered, Where Restaurant did not Sustain “Direct Physical Loss”

Mama Jo’s Inc, doing business as “Berries” was a restaurant less than a mile from the ocean. It was partially enclosed by a retractable awning, wall, and roof system. When employed, the restaurant’s interior areas were exposed to the South Florida elements. The front entrance of the restaurant faced SW 27th Avenue in Miami. Between December 2013 and June 2015, there was roadway construction at different locations along SW 27th Avenue in the general vicinity of the restaurant. During that time, dust and debris generated by the construction migrated into the place. Berries undertook daily cleaning as a result, but was otherwise open every day. Although the restaurant maintained the ability to serve the same number of customers as before, customer traffic decreased during the time of the construction. As a result, Berries submitted a business interruption claim under their insurance policy with Sparta Insurance.

The Building and Personal Property Coverage Form contained in the policy provided cover for “direct physical loss of or damage to Covered Property … caused by or resulting from any Covered Cause of Loss”. “Covered Cause of Loss” in turn was defined as “Risks of Direct Physical Loss unless the loss is excluded or limited”. The policy’s Business Income (and Extra Expense) Coverage Form provides that Sparta will pay for “the actual loss of Business Income you sustain due to the necessary ‘suspension’ of your ‘operations’ during the ‘period of restoration.’” The policy provides that the “‘suspension’ must be caused by direct physical loss of or damage to” covered property.

Berries claimed that it had to pay an extra $16,000+ for cleaning and painting the restaurant and experienced nearly $300,000 lower-than-expected sales for 2014. They also claimed that the construction damaged their awning system and their HVAC needed repairs. However, in a detailed and well-reasoned opinion, the Eleventh Circuit concluded that there was no coverage for these claims. In short, the insured failed to show any “direct physical loss or damage” in the case. The plain language of that provision simply required direct and physical loss. The cleaning and loss of income did not suffice. Indeed, the loss must be both direct and physical, and cleaning expenses are not tangible losses, but purely economic ones. Moreover, as for the business income claim, any suspension of operations also had to be caused by a direct physical loss. Here, not only did the restaurant not suspend its operations, but again the lack of a direct physical loss precluded coverage.


Jennifer A. Ehman

[email protected]

08/03/20       State Farm Mut. Auto. Ins. Co. v. Sanchez
Supreme Court, New York County
Hon. Debra A. James
Court Finds Claimant Who Operated LLC Out of His Home Was Entitled to UM Benefits Under LLC’s Policy for Injuries related to a Bike Accident

This is a trial court decision where respondent filed a demand for uninsured motorist arbitration under a policy issued by petitioner to Profit General Contractor & Contracting, LLC (“Profit”).  On October 17, 2018, respondent was struck by an uninsured vehicle.

Petitioner then commenced this action seeking to stay arbitration.  Under the State Farm policy, an insured included “you, as the named insured…your spouse and the relatives of either...”  It also included “any other person while occupying” a motor vehicle insured for SUM under this policy or occupying any other motor vehicle being operated by you or your spouse.

Petitioner took the position that respondent was not expressly named as an insured, and that he did not fall within the other covered categories.  Specifically, “you” and “your” referred only to the insured on the declarations page.  Respondent was not Profit, and he couldn’t be the company’s spouse or relative. He also sustained injury while on a bicycle and not the Ford box truck listed on the policy.

In opposition respondent argued that the language of the policy belied petitioner’s position.  He explained to the court that Profit was an LLC which he owned and operated out of his house.  Responded had signed the policy, and took an accident prevention course which reduced the policy premium.  He also noted the policy included a supplemental spouse coverage option, which could not have been offered to the spouse of the LLC.

Considering this issue, the court began by considering Buckner v. Motor Veh. Acc. Indem. Corp., 66 NY2d 211 (1985), cited by petitioner.  There the Court of Appeals held a family-owned corporation’s automobile insurance policy id not extent to the son of two of its officers, when the son was hurt in a bicycle accident.  the court noted, however, the petition overlooked the fact that Bucker expressly distinguished situations in which a partnership was the policyholder because “partnerships being a combination of individual, who can suffer injuries and do have spouses, households and relatives.  In the court’s view, a limited liability corporation was more akin to a partnership than a corporation.  The court pointed to the option to purchase spouse insurance, the fact that a bike accident was not excluded and the accident prevision course as fact that weighed in favor of treating respondent as an individual covered under the policy.


Brian D. Barnas
[email protected]


08/17/20       Engineered Structures, Inc. v. Travelers
United States Court of Appeals, Ninth Circuit
Denial of Coverage in Case of Questionable Coverage Was Not Bad Faith even if Coverage is Eventually Established

Travelers issued a builders’ risk policy to ESI.  The policy covered risks of loss while ESI built a fueling station for Fred Meyer Stores in Portland, Oregon.  Damages occurred when an underground fuel storage tank “floated” in a “wet” excavation hole before the tank’s complete installation.  Travelers investigated and determined that the damages result from ESI or its subcontractor not placing enough ballast water into the tank to prevent floatation during a period of rainy weather.  Travelers thus denied coverage citing an exclusion for faulty, inadequate or defective workmanship or construction.

ESI commenced an action against Travelers alleging breach of contract, negligence, and bad faith.  The court below granted ESI’s motion for summary judgment on the breach of contract claim.  It granted Travelers’ motion for summary judgment seeking dismissal of the bad faith claim.  Both parties appealed.

The Ninth Circuit reversed the grant of summary judgment to ESI but upheld summary judgment on the bad faith claim.  First, the court disagreed with the district court’s conclusion that the exclusion was ambiguous.  The district court concluded that the term workmanship was ambiguous, but it disregarded the use of the word construction.  The Ninth Circuit remanded for the district court to resolve whether ESI’s losses were caused by faulty, inadequate or defective construction.  The Ninth Circuit also left the issue of resulting loss or damage to the district court to resolve.

In upholding the dismissal of the bad faith claim, the Ninth Circuit found that Travelers submitted evidence to show a reasonable dispute about insurance coverage.  The burden then shifted to ESI to show that there was an issue of material fact that its claim to coverage was not fairly debatable.  While ESI showed there was a question about whether the construction or workmanship was proper, showing the mere existence of a legitimate question or difference of opinion as to coverage was insufficient.  There was no evidence of a clear entitlement to coverage.  In addition, the Ninth Circuit concluded that the bad faith claim would fail even if the district court found coverage.  Denying coverage and litigating the policy’s scope under the circumstances could not constitute bad faith.


Diane L. Bucci

[email protected]

All quiet on the Coverage B front.


John R. Ewell
[email protected]

Nothing to report from the Garden State. See in you two weeks!


Lee S. Siegel

[email protected]


08/10/20       Continental Cas. Co. v. Phoenix Life Ins. Co.
United States District Court, District of Connecticut

Carrier to Fight a Two Front Coverage War

Connecticut District Court Judge Jeffrey Alker Meyer sentenced these carriers to duke out their coverage disputes on both coasts, at the same time. The court refused to abstain from exercising jurisdiction over this declaratory judgment action, denying the defendants’ Brillhart/Wilton abstention motion.

This is an issue we see quite often, especially where the carrier would like the case resolved in federal court but the insured prefers the case be decided in state court. Here, Continental initiated this declaratory judgment action in the District of Connecticut, against Nassau Insurance Group Holdings L.P., Phoenix Life Insurance Company, and PHL Variable Insurance Company. Continental, which provides a $10 million primary Directors & Officers policy to Nassau, seeks to avoid coverage for two class actions filed against Phoenix and PHL (both purchased by Nassau) in the Southern District of New York. Continental asserts that the underlying claims were not first made during its policy period and relate back to prior litigations, presumably either before Continental was on risk or during a period in which Continental exhausted its limits.

PHL, however, wanted its own playground, and days after this suit was filed it commenced an action in California state court, suing Continental for breach of contract, bad faith, and adding its excess carriers as additional defendants. Nassau and Phoenix are not parties to the California action. Continental, doing what insurance companies do, removed the case to federal court, PHL, doing what insureds do, sought remand, and the court, doing what California federal courts are apt to do, remanded the case back to state court. On remand, the California state court denied Continental’s motion to dismiss or stay that action on grounds of forum non conveniens. [It’s odd that Continental lost that motion as, apparently, none of the parties have any relationship with California. Continental is an Illinois company that does business in Connecticut. PHL is a Connecticut corporation, Phoenix is a New York corporation, while the sole general partner of Nassau is a Cayman Islands corporation. All three defendants, however, have their principal places of business in Connecticut.]

The defendants then, pursuant to the Brillhart/Wilton doctrine, brought this motion seeking to dismiss or stay this action in deference to the California state court action. Continental opposed. The court examined the five-factor test established by the Second Circuit, known as the Dow Jones factors, to determine whether to exercise jurisdiction pursuant to the Declaratory Judgment Act. The factors are:

  1. whether a judgment will serve a useful purpose in clarifying or settling the legal issues;

  2. whether a judgment would finalize the controversy and offer relief from uncertainty;

  3. whether the proposed remedy is being used merely for ‘procedural fencing’ or a ‘race to res judicata;

  4. whether the use of a declaratory judgment would increase friction between sovereign legal systems or improperly encroach on the domain of a state or foreign court; and

  5. whether there is a better or more effective remedy

The court easily found the primary first two factors to favor exercising jurisdiction. “There is no doubt that this action will serve a useful purpose by clarifying and settling issues relating to the extent of Continental’s obligations to the defendants under the policy.” The defendants did not think it was so clear, arguing that the resolution of the Connecticut  action would not finalize the controversy because it does not include PHL’s claim for damages or its claims against the excess insurers. The court reasoned that although the contention may be true, “it is beside the point. The first two Dow Jones factors ask whether a declaratory judgment would provide clarity and finality with regard to the issues before the federal court, not the issues before the state court.” Resolution of Continental’s declaratory judgment action would, the court determined, finalize the dispute as to whether Continental must provide coverage.

The court rejected any argument that the third factor, procedural gamesmanship, was in play. “This action was filed before the California action, and Continental’s choice of venue is not surprising in view that all three defendants have their principal places of business in Connecticut. The decision by Continental to sue the defendants in what is essentially their home forum does not smack of improper procedural gamesmanship.”

There would be no injury to the State of California, the court concluded, if the District of Connecticut decides the contract interpretation issue. “Given the far stronger connections that all three defendants have to Connecticut rather than California, as well as the locus of the underlying dispute in New York next door to Connecticut, it is unlikely that California state courts would view it as their prerogative to adjudicate the rights of the three defendants.”

Finally, the court rejected the notion that the state court in California afforded a better remedy than resolution of the declaratory judgment action in Connecticut. Quoting a 2015 decision by Judge Hall, the court wrote “[T]he fifth Dow Jones factor requires a better alternative remedy. A Connecticut state court action is not a better alternative to this action—it is just an alternative.”

In conclusion, the court offered some advice to the defendants. “If what the defendants want is a single forum for the resolution of their insurance coverage disputes, it looks to me that they can have it here in federal court in Connecticut.”

The parties now have to decide if they want to consolidate, as Judge Meyer suggested, the entire dispute in Connecticut, or fight a bi-coastal battle. 


Brian F. Mark
[email protected]

08/17/20       Engineered Structures, Inc. v. Travelers Prop. Cas. Co. of Am.
United States Court of Appeals, Ninth Circuit

U.S. Court of Appeals Takes Issue with District Court’s Finding that Faulty Workmanship Exclusion was Ambiguous, Ultimately Remanding as to the Exclusion’s Applicability

This declaratory-judgment action arises out of an underlying construction defect that occurred during the construction of a fueling station by Engineered Structures, Inc. (“ESI”) for Fred Meyer Stores, Inc.  Damages occurred when an underground fuel storage tank “floated” in a “wet” excavation hole before the tank’s complete installation.  At the time of the damage, ESI was insured under a builders’ risk policy issued by Travelers Property Casualty Company of America (“Travelers”).

After receiving notice of the loss, Travelers investigated and determined that the damages resulted from ESI or its subcontractor not placing enough ballast water into the tank to prevent floatation during a period of rainy weather.  Travelers then denied coverage for ESI's damages, citing an exclusion in the policy barring coverage for "faulty, inadequate or defective . . . workmanship [or] construction" ("the Exclusion").  ESI then sued Travelers for breach of contract, negligence, breach of the implied covenant of good faith and fair dealing (bad faith), and declaratory judgment.

The district court found the Exclusion to be ambiguous based on faulty "workmanship" being susceptible to two reasonable interpretations: (1) excluding only losses caused by a flawed product; or (2) excluding losses caused by a flawed process.  It then construed the Exclusion in favor of coverage, finding that the "product" interpretation governed, and the Exclusion did not apply because ESI's damages did not occur from a flaw in the underground storage tank.  Accordingly, the district court granted summary judgment to ESI on its breach of contract claim.

On appeal, the Court of Appeals examined the Exclusion and reversed the district court’s grant of summary judgment.  The Exclusion states Travelers "will not pay for loss or damage caused by or resulting from faulty, inadequate or defective . . . [d]esign, specifications, workmanship, repair, construction, renovation, remodeling, grading or compaction."  The Court pointed out that the district court focused on "workmanship" in finding that the Exclusion was ambiguous and inapplicable.  However, that focus disregarded the Exclusion's unambiguous, process-oriented use of "construction."  Indeed, the term "construction" appears several times throughout the policy as referring to the process of completing the project rather than a defect in the final product being built.  The policy's section on "covered property," for example, defines "completion of the project" as including "construction activities" like "site preparation . . . fabrication, assembly, installation, erection, alteration, [and] renovation.  Similarly, in another section on coverage, the policy instructs the insured to "see that the following are done in the event of a loss . . . Resuming, as soon as possible, all or any part of the construction or repair; . . . ."  Therefore, the Court found no reason to interpret "construction" in the Exclusion different than the policy's provisions on coverage—as a term referring to the "process" in completing the covered project.

In light of its finding that "construction" carries an unambiguous, process-oriented meaning in the Exclusion, the Court remanded the case to the district court.  The Court went on further to state that the district court merely "assume[d] insufficient ballast was in the [storage tank] at the time of the loss," because that assumption did not affect this case's outcome if the Exclusion were ambiguous.  Further proceedings before the district court were necessary to resolve whether ESI's losses were, in fact, "caused by or result[ed] from faulty, inadequate or defective . . . construction," thus making the Exclusion applicable.


Eric T. Boron
[email protected]


08/18/20       Konrad Kurach v. Truck Ins. Exchange
Supreme Court of Pennsylvania
Pennsylvania High Court Rules that Overhead and Profit Expenses May Be Withheld from ACV Payment. Insurer Prevails

The Supreme Court of Pennsylvania affirmed the Order of the Superior Court, which had found the insurer was entitled, with regard to the “Replacement Cost Coverage” purchased by the plaintiff in conjunction with his homeowner’s insurance, to withhold from the actual cash value (“ACV”) settlement (pre-repairs) of the insured’s water damage claim the General Contractor’s Overhead and Profit (“GCOP”) expenses, unless and until the insured undertook repairs of the damaged property.

Kurach’s homeowner’s insurance policy, marketed as a “Farmers Next Generation” policy, had replacement cost coverage.  Kurach had not yet completed construction repairs at the time he received his ACV payment. The carrier argued that it was not responsible for including GCOP in the ACV payment because the payment was made on an ACV basis and the policy terms specifically excluded GCOP payments for contractors when payments were made on an ACV basis. The insured disagreed and argued that GCOP exclusion language in the policy was ambiguous at best; because of the use of the term “replacement cost” as a component of “actual cash value”.  It was also argued by the insured that such a provision was contrary to Pennsylvania law and was unenforceable.

Supreme Court ruled the law of Pennsylvania does not require payment of GCOP before repairs begin.  Thus, the insurer was permitted to withhold GCOP from its ACV payment.

Note that the majority opinion which we have provided in this edition of Coverage Pointers was signed by only 4 of the 7 justices of the Pennsylvania Supreme Court.  There were also two respective “Concurring and Dissenting” opinions issued, reflecting the respective differing views of the 3 minority judges.

For those of you who deal with first-party property damage claims in New York, you likely know that Mazzocki v State Farm, 1 A.D.3d 9 (3d Dept 2003) held, in contrast to the Pennsylvania Supreme Court’s ruling this week in Kurach v. Truck Insurance Exchange discussed above, that an insurer was obligated to include GCOP in actual cash value settlements when it is reasonably likely a contractor would be need to repair or replace the damaged property.  The takeaway here is that the issue analyzed and decided by the Pennsylvania Supreme Court is by no means a settled issue in the states of our union. 


Marina A. Barci
[email protected]

08/11/20       Doctors United Inc. v. Hereford Ins. Co.
Civil Court of the City of New York, Bronx County
After All Parties Failed to File Summary Judgment Motions, Trial to be Held Over Allegedly Overdue No-Fault Benefits

Plaintiff filed this action seeking allegedly overdue no-fault benefits, plus interest and attorney’s fees, against defendant. As evidence of the overdue benefits, plaintiff submitted a spreadsheet entitled “Details of Disputed Claim.” This spreadsheet included a column identified as "Date Bill Mailed" with numerous rows of noted dates, as well as a column titled "Details of Disputed Claim" but did not indicate what services, if any, were billed to defendant and does not chronicle where defendant allegedly "mailed" the bills. No proof of mailing for those bills and no copies of the bills exist in the record, despite the defendants request for them. Although these are issues that could readily be decided on summary judgment, both parties failed to timely submit motions and thus both motions were dismissed, so the case will move on to trial.


Ryan P. Maxwell
[email protected]

Legislative List

08/11/20       Mandatory Seatbelts For Back-Seat Passengers
New York State Legislature
No Person Sixteen Years or Older Shall Be a Passenger in Any Motor Vehicle Seat Without an Approved Seat-Belt

Chapter 136 of the Laws of 2020 was signed by Governor Cuomo last week, amended Vehicle and Traffic Law § 1229-c, subdivision 3 to remove the phrase “the front seat of” so that it effectively reads as follows:

“3. No person shall operate a motor vehicle unless such person is restrained by a safety belt approved by the commissioner. No person sixteen years of age or over shall be a passenger in a motor vehicle unless such person is restrained by a safety belt approved by the commissioner.”

New York joins nineteen other states who have adopted legislation requiring all rear seat occupants to wear safety restraints, “[r]ecognizing the serious injuries that may be caused to other passengers or the driver of a motor vehicle by an unrestrained occupant of the vehicle in the event of a collision . . . .” (Sponsor Memorandum). Research has shown that even a 60-pound rear seat passenger can exert more than one ton of force into the driver’s seat in a head-on crash at a mere thirty miles per hour. The Legislature and others agree with safety experts that “rear seat belt could prevent over two thirds of fatalities and serious injuries resulting from motor vehicle crashes.” Id.

This law becomes effective November 1st. Buckle up.


08/12/20       Opioid Antagonist Legislation Revises “Entity” Definition
New York State Legislature

Bill Delivered to Governor Would Extend Liability Protections to Places of Public Accommodations For Administration of Opioid Antagonists to Those Experiencing Opioid-Related Overdose

On August 12, Bill No. A07812 was delivered to the Governor which would allow many public accommodations to more freely administer naloxone on their premises under a revised Good Samaritan law.

The current Public Health Law §3309 provides that an “opioid antagonist recipient” is a person or certain specified entity that is at risk of experiencing an opioid-related overdose, including friends, family members, or organizations. Those who qualify as an “opioid antagonist recipient” who act “reasonably and in good faith in compliance with this section, shall not be subject to criminal, civil or administrative liability solely by reason of such action,” which includes the use of an opioid antagonist, deemed first aid or emergency treatment for the purposes of statutory liability.

However, many types of organizations are not listed among the current §3309 expressly. Should the bill become law, it is intended to alleviate the fear of liability that restaurants, retail stores, event centers and hotels have were they to attempt to provide certain assistance to a person at risk of experiencing an opioid-related overdose under Public Health Law §3309. The bill would eliminate language limiting its Good Samaritan principles to “a  school  district,  public library, board of cooperative educational services, county vocational education and  extension  board, charter  school,  non-public  elementary and/or secondary school in this state” in favor of the phrase “any person or entity”, and broadly define “entity” as:

Include[ing], but is not limited to, a  school  district,  public  library,  board of cooperative educational services, county  vocational  education  and  extension  board,  charter school,  non-public  elementary  or  secondary  school, restaurant, bar, retail store, shopping mall, barber shop, beauty parlor, theater, sporting or event center, inn, hotel or motel.

Under the new law, places of public accommodation would be able to provide good faith assistance in administering opioid antagonists without subjecting themselves to liability on account of such action.

The bill would take effect immediately.


Regulatory Wrap-Up

08/06/20       Further Extension of Producer Licensing Requirements

Department of Financial Services
DFS Further Extends Licensing Accommodations for Insurance Producers considering the Pandemic

DFS has issued a further Supplement No. 3 to Insurance Circular Letter No. 9 (2020). We have written about these extensions before. Circular No. 9 was issued by DFS on March 25, and supplemented on May 21 and July 2. In this most recent supplement, recognizing that producers continue to face COVID-19 challenges regarding continuing education in advance of license expiration dates, DFS extends

  • the suspension of the requirement that a monitor be present to complete producer continuing education and pre-licensing course exams online for an additional 90 days, through November 5, 2020.

  • the suspension of the expiration of individual producer licenses for an additional 30 days, through September 6, 2020.

As was previously noted, DFS indicates that any license that would have expired between March 25, 2020 and September 6, 2020, will expire on September 7 unless “the producer completes all necessary continuing education credits, and submits a license renewal application, before September 7, 2020.”

Maxwell’s Minute: Don’t wait. September 7 is approaching quickly.


08/10/20       Expedited Response to Tropical Storm Isaias-Related Claims
Department of Financial Services
Governor Cuomo Announces DFS Action to Expedite Tropical Storm Isaias-Related insurance Claims, Including Temporary IIA Permits for Qualified Individuals Out-of-State and Relaxed Proof of Loss Requirements

Recently, Governor Cuomo announced new action by DFS to expedite the payment of New York insurance claims affected by Tropical Storm Isaias.

To provide support to New York consumers impacted by Tropical Storm Isaias, DFS will allow temporary, expedited permits to be issued to qualified out-of-state independent insurance adjusters working on behalf of authorized insurers under New York Insurance Law. Due to large spikes in the number of storm-related claims being submitted, increasing the number of adjusters available to process these claims is expected to expedite claim settlements paid and property repairs.   Governor Cuomo said:

"We know New Yorkers are tough, but they're also smart enough to ask for help when they need it and in the wake of Tropical Storm Isaias, our friends and neighbors need all the support they can get … With many families and small businesses already experiencing financial hardship from the pandemic, it is critical that New Yorkers impacted by the storm are able to easily submit claims and quickly receive a resolution."

With respect to Tropical Storm Isaias claims, DFS expects insurers to:

  • Promptly process and investigate insurance claims made by claimants;

  • Allow claimants to provide as reasonable proof items such as:

    • photographs or video recordings (without the need for a physical inspection);

    • material samples, if applicable;

    • inventories; and

    • receipts for any repairs to or replacement of property; and

  • Allow claimants to make immediate repairs to damaged property if necessary to protect health or safety.

DFS expects that claims adjusters recognize that affected New York claimants may have limited ability to document claims due to COVID-19, and assist all claimants in procuring emergency aid, as well as providing tips resources for damage mitigation and remediation.

In light of the recent increase in extreme weather and climate events, DFS reminds insurers to maintain adequate New York-licensed independent adjuster staff to respond to these events.  Additionally, insurers should be mindful of NY COVID-19 related travel restrictions when applying for temporary adjuster permits.  


CJ on CVA and USDC(NY)
Charles J. Englert III
[email protected]


08/03/20       A.M. v. Holy Resurrection Greek Orthodox Church Brookville
New York State Supreme Court, New York County

Failing to Disclose Information Regarding the Sexual Proclivities of Others Does Not Fall within the Scope of a Priests’ Employment

This case involves the sexual abuse of two minors by P.K., the son of a priest, Fr. Kehagias, temporarily assigned to the Church. The plaintiffs allege that, inter alia, defendants (including Fr. Kehagias) negligently allowed P.K. to be on church grounds when defendants knew or should have known that P.K. had a propensity for sexual violence. At the onset of the action the parish’s insurance carrier, Nationwide Mutual Insurance Company, disclaimed coverage to Fr. Kehagias based upon the fact that he was not an employee of the parish and therefore not an insured. Fr. Kehagias then filed a petition for Chapter 7 Bankruptcy, which was discharged in his favor. The Archdiocese insurer, Philadelphia Indemnity Company, then disclaimed coverage of Fr. Kehagias based upon the fact that Fr. Kehagias was not an employee of the Archdiocese, and even if he were the Abuse or Molestation Exclusion in the Archdiocese CGL policy would preclude coverage. The parish and the Archdiocese (the “Church”) then moved for summary judgment seeking an order that they could not be held liable for the failing to supervise P.K. or Fr. Kahagias because Church officials did not have knowledge of P.K’s history and propensity for sexual violence. The court granted the Church’s motion holding that “even if Fr. Kehagias knew his son had a predilection for sexual violence, there is no evidence that he disclosed his concerns to Holy Resurrection and to the Archdiocese. And by keeping this alleged knowledge to himself, he was clearly acting outside the scope of his employment.”

The court looked to five factors set forth in Rivello v. Waldron to determine whether or not Fr. Kahagias’s conduct could be found to be within the scope of his employment. 47 N.Y.2d 297 (2000). These factors are:

(1) "the connection between the time, place and occasion for the act,"

(2) "the history of the relationship between employer and employee as spelled out in actual practice,"

(3) "whether the act is one commonly done by such an employee,"

(4) "the extent of departure from normal methods of performance, and

(5) ''whether the specific act was one that the employer could reasonably have anticipated."

The court stated that the most emphasis is placed on the fifth factor. Plaintiffs argued that had Fr. Kahagias actually participated in the assault, e.g. by holding the victims down, the act would clearly fall outside the scope of employment, but Fr. Kahagias’s failure to notify the Church of P.K.’s proclivities is a failure to exercise oversight and supervise in a way to prevent foreseeable injury, therefore within the scope of his employment. The court does not follow plaintiffs’ reasoning and instead holds that an employee’s disclosure or failure to disclose confidential information cannot be seen as within the scope of their employment.  Here, the court relates its reasoning to the adverse interest rule of agency; when an agent intends to defraud her principal, the agent’s personal knowledge is not presumed to be held by the principal. Therefore, the court holds that its prior order should be upheld, as Fr. Kahagias was not acting within the scope of his employment when he withheld information about his son’s, P.K., sexual proclivities and propensity for sexual violence from the Church.

Author’s Impressions and Application to the CVA:

While this is not a “CVA” case per se, the analysis may be helpful in determining whether or not coverage for CVA claims should be afforded to an insured. Many of the complaints that have been filed under the CVA allege that someone, generally a school, church, or organizations administrator or employee, knew or should have known that the alleged abuser was predisposed to that behavior, and it was within that employees scope of employment to report what they knew. This order, and the appellate level cases cited within, give insurers another arrow in their quiver when analyzing these claims. Should it be reasonable to think that the employee who is alleged to have had knowledge of the abuse withheld that knowledge for a personal reason or to protect the alleged abuser, their actions likely fall outside the scope of employment, and very likely outside of coverage.


Cara A. Cox
[email protected]

Heather Sanderson
Sanderson Law (Alberta, Canada)

[email protected]

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