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Coverage Pointers - Volume XXII, No. 6

Volume XXII, No. 6 (No. 571)
Friday, September 4, 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.

Diane Bosse – A Salute to a True Professional:
We are so honored to have Diane Bosse as a Special Counsel to our law firm. We salute her for her service to the New York State Board of Law Examiners, that organization that writes, grades and administers the Bar Examination in the State of New York.

Bosse has been affiliated with the Board of Law Examiners for more than 41 years—19 of which she was an assistant. She spent another 22 years as a member of the Board and led it for 19 of those years as its chair.

Diane has been providing other tireless and critically important services over the years in the area of law school accreditation and related activities.  She is also a member of the American Law Institute, and beloved, wherever she goes and with whatever she does.

After 41 years with the Board, after 19 years as Board Chair, she has stepped down from those positions.  She is an extraordinary and brilliant lawyer, a true professional and one of the most engaging and unassuming people one can ever encounter.  Diane, we are so proud of all you have done for the lawyers and for the legal profession.  I am especially honored to call you a friend.

Suffrage Issue:
We really appreciated all the comments we received on our special 19th Amendment Suffrage issue.  We try to educate and entertain.

The CP Team welcomes your feedback, comments and situations.  We love hearing from you.

For our friends in the US, we hope you have a fabulous Labor Day weekend and for our Canadian friends celebrating Labour Day, we wish you the same.  I don’t mind an extra day off.  It’s been so very busy in the office as clients do their level best to get files off their desks before the long weekend sets in.  We have found, over the years, that the week before Labor Day, Thanksgiving and Christmas are the weeks where we get lots of calls, especially as deadlines are approaching.  That’s fine with us.

Law School Teaching:
I think it’s my 34th year of teaching Insurance Law at the Buffalo Law School.  Steve Peiper teaches the property law section of the class. The semester started today; I teach Tuesday and Thursday mornings from 8:00 – 9:30. It’s a little challenging to wear a mask for 90 minutes.  Three students were on Zoom, the rest in the classroom, socially distanced.  I am hoping this doesn’t turn into an all Zoom class, but we will preserve.  Today’s topic:

See the source image

Peer Review Time:
30 H&F Attorneys Named to 2020 Update New York Super Lawyers List:

We are honored to be recognized by our peers and salute the entire staff at H&F for its support and dedication.  Hurwitz & Fine, P.C. is pleased to announce that 30 attorneys from Hurwitz & Fine, P.C. have been selected to the 2020 Upstate New York Super Lawyers and Rising Stars lists.

The 2020 Upstate New York Super Lawyers list is an exclusive list, recognizing no more than five percent of attorneys in New York. The following Hurwitz & Fine lawyers were selected to these lists:


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

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

Super Lawyers, part of Thomson Reuters, is a research-driven, peer influenced rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. Attorneys are selected from more than 70 practice areas and all firm sizes, assuring a credible and relevant annual list.

The annual selections are made using a patented multiphase process that includes:

  • Peer nominations

  • Independent research by Super Lawyers

  • Evaluations from a highly credentialed panel of attorneys


For more information about Super Lawyers, visit SuperLawyers.com.

Best Lawyers In America
Hurwitz & Fine is delighted to announce, as well, that 14 of the firm’s attorneys have been selected by their peers for inclusion in the 2021 edition of The Best Lawyers in America©.  In addition, two of the firm’s attorneys were named the Best Lawyers "Lawyer of the Year" in Buffalo in their respective practice areas. Seven additional Hurwitz & Fine attorneys were included in the inaugural edition of the Best Lawyers: Ones to Watch.

The attorneys named to the 2021 edition of The Best Lawyers in America and the practice areas they were honored for are as follows:

  • Jody E. Briandi (*)

    • Litigation – Insurance; Product Liability Litigation – Defendants

  • Todd Bushway (2020)

    • Product Liability Litigation – Defendants

  • Patrick B. Curran (2011) [10]

    • Personal Injury Litigation – Defendants

  • Ann E. Evanko (2008) [10]

    • Corporate Law; Employment Law – Management; Litigation – Labor and Employment; Mediation

  • Robert P. Fine (2008) [10]

    • Corporate Law; Health Care Law; Mergers and Acquisitions Law; Tax Law; Trusts and Estates

  • Lawrence C. Franco (2009) [10]

    • Corporate Law; Tax Law; Trusts and Estates

  • Dan D. Kohane (2009) [10]

    • Commercial Litigation; Insurance Law; Litigation – Insurance

  • Steven E. Peiper (*)

    • Litigation – Insurance

  • Michael F. Perley (2011) [10]

    • Litigation - Municipal; Personal Injury Litigation – Defendants

  • Edward C. Robinson (2013) [5]

    • Elder Law

  • Lawrence M. Ross (2010) [10]

    • Corporate Law; Health Care Law; Tax Law

  • Roger L. Ross (2009) [10]

    • Real Estate Law

  • Andrea Schillaci (2015) [5]

    • Product Liability Litigation – Defendants

  • Kevin J. Zanner (*)

  • Corporate Law

    (Year) First year the lawyer was listed in the published practice area.
    (*) Lawyers who are listed for the first time in Best Lawyers.
    [#] Anniversary for which lawyer is eligible (5, 10, 15, 20, 25, or 30 years).

     

In addition, two Hurwitz & Fine attorneys have been honored as “Lawyer of the Year” in Buffalo in their respective areas:

New this year, seven Hurwitz & Fine attorneys were named to the “Ones to Watch” list:

Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. Almost 108,000 industry leading lawyers are eligible to vote (from around the world), and we have received over 13 million evaluations on the legal abilities of other lawyers based on their specific practice areas around the world. For the 2021 Edition of The Best Lawyers in America©, 9.4 million votes were analyzed, which resulted in more than 67,000 leading lawyers being included in the new edition. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honor.

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:

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

  • Do you know the “30-day” rule?

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

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

  • 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.

Newsletters:     
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.

     

Peiper on Property and Potpourri:

This week’s edition brings an interesting case out of the Fourth Department.  The decision involved a loss which arose out of the collapse of a silo at the policyholder’s farm.  As best we can tell, the insured argued the loss was caused by strong, gusty winds.  The insurer, however, argued that the silo fell due to a deteriorated structural condition within the silo.

Notably, the policy specifically provided coverage for windstorm damage.  In attempt to avoid a question of fact, we infer from the decision that the carrier argued that even if a gust of wind precipitated the collapse the specified windstorm peril did not apply. 

In essence, the carrier appears to have argued the quite logical position that not every wind is a windstorm.  The term “windstorm” was not defined, however, which left the term up for interpretation by the Court.  Where, as here, the Court was provided with two plausible interpretations, the provision was deemed to be ambiguous.

Notice from the decision that the Court indicates neither party submitted extrinsic evidence explaining what constitutes a windstorm.  Where, as here, the language at issue is not an exclusion, the term is not immediately construed against the drafter.  It is, rather, open for interpretation where extrinsic evidence can be submitted for a court’s consideration.

The practice point to take out of this case is when confronted with an argument that a policy term is ambiguous the smart practitioner will look to any and all available sources to bolster her or his interpretation.

That’s it for this week.  Best wishes on a healthy Labor Day Weekend.

Steve
Steven E. Peiper

[email protected]

 

Women’s Suffrage Not Being Repealed:

Democrat and Chronicle
Rochester, New York

04 Sep 1920

CASE RECEIVES ANOTHER SLAP

Court Rejects Plan to Hasten Action of Supreme Court

            Washington, Sept. 3.—Opponents of woman suffrage received a temporary setback to-day in their efforts to expedite appeal from the decision of Justice Bailey of the District of Columbia Supreme court refusing an injunction to prevent Secretary of State Colby from promulgating the suffrage amendment.

            Chief Justice Smyth, of the District of Columbia Court of Appeals, denied the petition of suffrage opponents as represented in the American Constitutional League for certification of the case to the United States Supreme court without waiting for a decision by the appellate tribunal.

            The chief justice held that he lacked authority to certify under a decision of the United States Supreme Court which held that such certification could be made only where the decision of the local appellate tribunal was final.  As there is a constitutional question involved in the suffrage case there would be a right of appeal from a decision of the Court of Appeals to the United States Supreme Court.

            Counsel for the anti-suffragists, however, have not abandoned hope of getting the case into the highest court in the land before election day and when the Court of Appeals convenes October 4th will made a motion to advance the case on the calendar and probably request that their contention be overruled in order that they may appeal at once to the United States Supreme Court. 

 

Wilewicz’ Wide-World of Coverage:

Dear Readers,

Finally, a decision on the schools has been made, at least temporarily. Our district has decided to reopen as regularly scheduled, on Tuesday, September 8th, but fully remote for the time being. They are going to reassess in four to six weeks’ time, and take it from there. From what I’m hearing, even if they do reopen at that time, it will be a hybrid (not in person every day) approach and subject to closure if the virus ramps up again. Hopefully everything works out and we can all go back to “normal” soon.

For the most part, schooling from home in the Spring worked out fairly well. For the Fall though, we have stepped up our game and set up a whole classroom in our spare room complete with a Zoom-friendly backdrop accent wall and new bookcases, filing cabinets, and a mini-fridge to keep things going. School supply shopping was certainly a different experience this year. There was more of an emphasis on gadget accessories (extra-long cords, spare batteries) and unusual wardrobe choices (less dressy, and far more shirts than pants). I’ll report back in the coming weeks how everything comes together.

Now, as summer winds down, the Circuit Courts appear to be taking a break, which frankly is something we should all consider. Now, very few cases in any of the Circuits were published in the last two weeks, let alone in our Second Circuit. Coming up, I will again scour the Courts nationally and be back in a fortnight with more

Until then,

Agnes
Agnes A. Wilewicz

[email protected]

 

Prohibition Secrets Revealed:

Daily News
New York, New York

04 Sep 1920

 

ECKERT’S WIDOW REVEALS SECRETS OF “LIQUOR RING”

She Assists Police in Hunt For Auto Thieves

            Details of Staten Island’s liquor traffic and the innermost secrets of the island’s bootlegging band were revealed by Mrs. Florence Eckert, widow of Arthur Eckert, at a conference with Federal Prosecutor Ross          in Brooklyn yesterday.

            Before answering a summons to appear before Mr. Ross the widow of the victim of bootleggers and auto thieves came to Manhattan and had a long talk with a “high official,” whose name she refused to reveal.

            It is said on good authority that the “high official” is Chief Prohibition Enforcement Agent Shevlin.

            Mrs. Eckert is also assisting the police in running down a band of alleged auto thieves with whom her husband was said to have been associated.  After she left police headquarters several members of the police auto squad left the building and returned in a short time with an eight-cylinder car alleged to have been stolen by Eckert and his gang previous to the finding of Eckert’s body on the lonely road on Staten Island on the morning of August 21. 

 

Barnas on Bad Faith:

Hello again:

The morning air is crisp, the calendar has flipped to September, and fantasy drafts are on the calendar.  It can only mean one thing: football season is upon us.  It’s weird not having the typical buildup of training camp and four preseason games, but by the time of our next issue the NFL season will have kicked off.  Bring it on and Go Bills.

In my column this week you will find a Pennsylvania Supreme Court decision in a bad faith case.  Ultimately, the decision by the appellate court to vacate a $21 million judgment against Nationwide stood.  However, the Pennsylvania Supreme Court was divided and could not reach a majority disposition.  As such, the actual Order of the court consists of only three sentences.  The decisions in support of affirmance and reversal are linked within the body of the case write up, and provide the factual background and reasoning, which ultimately was not adopted by the Court.

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

Brian
Brian D. Barnas

[email protected]

 

Government Cheaters Prosecuted – a Century Ago:

The Buffalo Enquirer
Buffalo, New York

04 Sep 1920

GOOD WORK.

            WASHINGTON reports that prosecution of 324 war contractors has been ordered by the department of justice.  The proceedings “will include both criminal and civil actions and will involve millions of dollars.”

            The same reasons which command the punishment of slackers order the punishment of contractors who may have taken advantage of the war situation to cheat the government.  Such offenders have earned punishment quite as much as dodgers of military service.  Their offense is even more ignominious.  Skinning a people engaged in war is less justifiable than saving one’s skin.  It is essential, too, that robbing the government on war contracts be punished that it may not be repeated if war comes again.

            The government should spare none from prosecution and juries and judges should cast off the restraints of mercy. 

 

Off the Mark:

Dear Readers,

There were no noteworthy construction defect cases to report on in this edition.  It seems the usual end of summer lull in decisions was not affected by the pandemic.

Happy Labor Day!

Brian
Brian F. Mark

[email protected]

 

Falling Off Mount Olympus:

The Buffalo Times
Buffalo, New York

04 Sep 1920

Win at Olympics But Loses Wife

            CHICAGO, Sept. 4.—“Silk unmentionables,” a “baby” letter, an assortment of hairpins, a box of rouge and a lip-stick figured with telling effect at the hearing of the suit for divorce of Mrs. Frances Laroque Loomis against Frank Farmer Loomis, Jr., winner of the world’s championship 440-meter hurdle at the 1920 Olympic games.  Superior Judge Cooper indicated that he would grant a decree to Mrs. Loomis.

            Loomis was not present, having not yet returned from Europe, whither he went to break a world’s hurdle record.

            Mrs. Loomis’ attorney offered in evidence a collection of hairpins, a box of rouge and a lip-stick, which the complaining wife said she had found in their home.  The following letter, addressed to the hurdle champion, also was introduced:

            “Dear, call me by ‘phone.  Mamma and papa have gone to California, and I do not expect them to return for some time.  Dearest, don’t worry about your wife.  You know I want you oh, ever so much.  Call me, dearest.  I’m sure you won’t fail me.

            “Paid $95 for the silk ‘unmentionables.’ You must have paid the rest, didn’t you?  You must have, because I never received a bill for them.  Love you.  Yours forever.  BABY.”

 

Boron’s Benchmarks:

I am looking forward to the fast-approaching Labor Day weekend, as I am sure you are, too.  I have some nice memories of Labor Day weekends past.  During my teenage years – which I will vaguely refer to as “several years ago” – my family annually traveled to the Triple Cities of Broome County, NY, in south-central New York State to spend the last weekend of summer with my grandparents on my mother’s side.  My grandparents lived on East Main Street in the Village of Endicott, NY.  I loved spending each Labor Day with my grandparents, enjoying my grandmother’s culinary specialties and talking baseball history with my grandfather.  Icing on the cake for the trip each year was spending part of a day as a spectator at the B.C. Open PGA golf tournament held at the En-Joie Golf Course down the road from my grandparents’ house.  At the B.C. Open, I watched and cheered for local favorites, Richie Karl and Joey Sindelar, each of whom won a title, as well as other well-known pros of the era, such as Hubert Green, Dr. Gil Morgan, and Tom Kite, who were also winners of the tournament.  Great memories.

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 Vermont Opinion issued August 28, 2020, considering the setoff provision of Uninsured/Underinsured Motorist Bodily Injury coverage in a motorcycle policy.  The Supreme Court of Vermont affirmed the Order of the Superior Court granting the insurer summary judgment, and specifically determining the set off provision was not ambiguous, and moreover, that the combined single limit amount of the insureds’ UM/UIM policy is the maximum the insurer is required to pay, regardless of the number of claims.

Until next time, be well.

Eric
Eric T. Boron

[email protected]

 

The Nation of Lebanon Established:

Press and Sun-Bulletin
Binghamton, New York
04 Sep 1920

 

NEW STATE OF LEBANON ON PALESTINE FRONTIER

            Paris, Sept. 4.—Proclamation of the new state of Lebanon was made at Beirut on Sept. 1 by General Gouraud, French High Commissioner for Syria.

            The new state will be bounded on the North by the River Kebir from which it will extend Southward to the Frontier of Palestine and its eastern boundary is fixed along the hills to the east of Lebanon.  Beirut, the chief city of the Country, is named seat of the government which has been granted administrative autonomy.  The national flag will be the French colors, with the Cedar of Lebanon on the white part of the banner. 

 

Barci’s Basics (On No Fault):

Hello Subscribers!

I hope you are all still staying healthy and safe! Although I was hesitant to return to the office, I will say it is nice to see coworkers in person and to feel the hustle and bustle of being in the office again. However, I did not realize how many door handles, railings, copiers, etc., that I touch while in the office, so I feel like I am sanitizing constantly, which requires moisturizing that I do not do nearly as often.

My answers to last issues topics are as follows: 1) Charitable cause may be a bit ambiguous, because when I think of places to support, I tend to think of those that give back to a community. My regular donations go to the United Way and to 4H Camp Bristol Hills, the summer camp I attended/worked at for many years. My volunteer work tends to focus on advancing educational opportunities for local students, so it’s less traditional than a typical charity; 2) I had the opportunity to be immortal, I’m not sure if I would take it. It depends on the logistics – for example, do I get to choose when I stop aging? Overall, I lean towards not wanting to be immortal. At some point you’ve just got to be over it and want to die and then you can’t, and that would be terrible in my opinion.

That’s me for this week. For the next two weeks consider this topic:

  • What is something you use every day that you could live without?
     

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

On the no-fault front, I have two cases for you that discuss the effect of a default judgment on a pre-default assignee’s right to obtain no-fault benefits.

That’s all folks,

Marina
Marina A. Barci

[email protected]

 

Editorial – 100 Years Ago – Women’s Suffrage Won’t Change the World:

Star Tribune
Minneapolis, Minnesota

04 Sep 1920

 

THE NEW CITIZENS

            The new women citizens are finding that the clock runs, the sun rises and sets, darkness follows daylight and the world runs along pretty much the same as it did before the Nineteenth Constitutional amendment.  There have been no indications in Indiana that the new citizens are going to have their heads turned by their recently granted privileges.  Here and there, throughout the country, something spectacular happens to emphasize the change, but these incidents are isolated.  Juries composed wholly of women will be a novelty for a time.  They can use their intuition to determine whether or not a witness has told the truth and they should be as expert at sifting conflicting testimony as are men.

            A few women will run for office and as time goes on that will cease to be a novelty.  There are many offices that women can fill as acceptably as men.  Some offices, it would seem, call for the peculiar qualifications that women possess.  But things will move along pretty much as they have in the past.  The moral tone of politics should be raised and the private life of public candidates may be subjected to more careful scrutiny than has been customary.  The entrance of women into politics is a good omen and the best sign noticed is that they are not at all foolish about their new privileges.—Indianapolis News.

         

Ryan’s Capital Roundup:

Hello Loyal Coverage Pointers Subscribers.

I can smell it, can’t you? Ahhh, football season is upon us. By this time next issue, we will have NFL games once again. And I got to tell you that I feel good about it. Great. Grand. Wonderful. And I’m a Bills fan. So you know how that usually goes by week eight. We do it to ourselves. But how about that Josh Allen long ball?

This issue, we have a guest post by our friends at Bullivant Houser Bailey PC regarding a California Business Interruption that implemented a rebuttable presumption that COVID-19 causes property damage—and its good news. In New York, a couple DFS matters are outlined including a Statement of Charges filed by DFS against a pair of opioid manufacturers for alleged fraudulent conduct in a scheme that increased insurance costs for consumers. In the second, DFS settled with an insurance producer providing coverage for wireless communication equipment without proper disclosures under New York law and regulations.

Until next time,

Ryan
Ryan P. Maxwell

[email protected]

 

Poisoned Herself Over Love:

Trenton Evening Times
Trenton, New Jersey

04 Sep 1920

 

JILTED BY LOVER, GIRL TAKES POISON

Prisoner Admits Witnessing Sweetheart Drain

Deadly Poison.  She May Recover.

            CHESTER, Pa., Sept 4—When her boy lover told her did not want to have anything more to do with her, Miss Elsie Miller, 16 years old, wanted to die, according to the girl’s statement to the police.  Miss Miller is in the Chester Hospital hovering between life and death, as the result of having drunk a quantity of poison, and Felix Linski aged 18 who is the cause of it all, Elsie says, was held without bail in police court.

            “When I told him what had happened he said he did not want to have anything more to do with me,” sobbed the girl in a statement to Captain Robinson, of the Chester police department.  “So I decided to end it all.  I went to my boarding house, got a bottle of poison, and drank some of it in front of Felix when he refused to marry me.”

            Linski told the police that Elsie went motoring with him and another young man, and when they returned home and she threatened to kill herself he thought she was joking.  She invited him into the house to discuss the situation.  When she lifted the glass of poison to her lips, the boy says he realized the girl was desperate and probably meant to carry out her threat, and he knocked the class out of her hand.  He was too late, however, as she had swallowed the contents.

            According to the Miller girl, she ran away from her home in Philadelphia on July 4 and has been living and working in this city ever since.  She refused to tell the name of her people, declaring she will not disgrace them.  She has a sister living in Tacony, whose identity she says she will guard.

            Linski’s father is engaged in business in this city and is well to do. 

 

CJ on CVA and USDC(NY):

Hello all,

I don’t have much news to report from Buffalo. Having been back in the office more frequently over the past two months, things around here are seeming almost normal. Although, I think my dog may be suffering some separation anxiety with me out of the house so much. With Labor Day Weekend nearing, and the unofficial end of summer upon us, I hope that everyone is able to have a relaxing and safe weekend. I will likely be spending some time on a boat and by the pool just trying to soak in the last little bits of summer.

It appears that the District Courts of New York are taking a last summer vacation. I was only able to report on one insurance case this issue discussing a motion to dismiss based upon provisions in an Owner Controlled Insurance Program and a Subcontract. Hopefully we’ll return from the holiday with a bevy of cases to report in the next issue.

Happy Reading!

CJ
Charles J. Englert, III
[email protected]       

 

The Babe – 45th Homer:

Albany Democrat-Herald
Albany, Oregon

04 Sep 1920

BABE RUTH MAKES GOOD ON DAY SET IN HIS HONOR

            Boston, Sept. 4.—“Babe” Ruth made his forty-fifth home run of the season in the first game of the Yankee-Red Sox double header today.  Jones was the Boston pitcher.

            It was “Babe Ruth Day” at Fenway park.  The Knights of Columbus were well represented in honor of Ruth, who is a member of that order.  The biggest crowd of the season was present. 

 

Dishing Out Serious Injury Threshold:

Dear Readers,

Hope you weren’t too upset without this column in our last newsletter. We had some rough weather on Long Island and while that normally wouldn’t stop this column, the lack of power that came along with it, unfortunately, did.  Nonetheless, we made it to September and Labor Day, the unofficial end of summer, is nearly upon us. I hope everyone is able to soak up the last bits of summer and enjoy the long weekend ahead.

In the Serious Injury Threshold world, we have a couple cases from the Appellate Division. One pertains to plaintiff’s failure to properly submit reports from a medical expert sufficient to raise a triable issue of fact. The other pertains to defense expert failure to review imaging records in order to properly opine as to plaintiff’s pre- and post-accident condition.

Stay safe,

Michael
Michael J. Dischley
[email protected]  

 

Household Hints a Hundred Years Ago:

The Buffalo Enquirer
Buffalo, New York

04 Sep 1920

HOUSEHOLD HINTS

            Here are varied uses for the lemon:

            A little lemon juice in the washboiler whitens the clothes.

            Attacks of indigestion are relieved by lemon juice.

            Paste made of Sulphur and lemon juice cleanses straw hats.  Let paste dry and brush off after twelve hours.

            Lemon juice removes burn stains from fine textures.

            Slices of lemon rubbed along temples will relieve bad headache.

            Half a lemon, eaten several times a day, breaks up a cold.

            Lemon removes grease stains on wood and marble surfaces.

            Magnesia and lemon, made into a paste, is excellent to whiten the hands.

            A little lemon juice rubbed on the skin at night will soften and whiten its texture.

            Lemon juice and water will loosen the tarter that forms on the teeth.  It also makes the breath sweet.

            Lemon is excellent in cleaning tan shoes.  To remove black stains, rub with a soft cloth.

            Washing the hair with a solution of lemon juice will free it from fatty secretions.  Also will keep it clean and bright and will prevent falling out.

            Lemon juice will cure slight wounds in the hands and is excellent for chilblains.

            Lemon juice will clean silver, glass and brass.  Also scours dirty pots and pans.

Interesting Facts About the Lemon

            Fifty-six per cent of the lemons consumed are used in the preparation of foods.

            Nineteen per cent are used about the household.

            Sixteen per cent go for toilet uses.

            Nine per cent are used for medical purposes.

 

Bucci on “B”:

Check back next edition for more Coverage B cases.

Diane
Diane L. Bucci

[email protected]

 

Auto Runs Wild:

Buffalo Courier
Buffalo, New York

04 Sep 1920

AUTO RUNS WILD, INJURES OLD MAN

            Frank Korda, sixty-eight years old, a street sweeper of No. 55 Warren Avenue, suffered a severe laceration of the scalp and a possible fracture of the skull yesterday when he was struck by a runaway automobile, which traveled unoccupied down the incline of the Elk Street viaduct.  After knocking down the man the machine crashed into a telegraph pole.

            Korda was taken to Emergency hospital, where surgeons last night said that he was in a semi-conscious condition.  Police said they learned that the car was parked on the viaduct by David Diamond of Niagara Falls.

 

John’s Jersey Journal:

A blackboard sign on a wall

Description automatically generated

Dear Subscribers:

Welcome back to another edition of Coverage Pointers! The Covid ruined a lot of folks’ vacation plans, but I hope you all are finding ways to relax and recharge. I am back to work and feeling refreshed after a few days away in the Adirondacks. We drove up to Elizabethtown, NY, which is in the Adirondack High Peaks area. We climbed a few mountains including Baxter Mountain and Owl Head Lookout. All in the same day. 7.5 miles total, which is the farthest I have ever walked in my life. The views at the top of the mountain, however, were worth the distance despite the rain bands. We also enjoyed kayaking a few lakes and enjoying quite a few evening bonfires. The time went by way too fast.

In today’s issue of John’s Jersey Journal, we have a case interpreting an assault and battery exclusion. Two patrons at a bar got into a disagreement. One drew a concealed pistol and shot the other three times, killing him. The estate of the decedent sued, among others, the bar. The claims against the bar were negligence, negligent hiring, training, and supervision. The bar’s general liability insurer disclaimed coverage, and the bar ultimately settled the claim. The bar then sued its carrier seeking reimbursement for its defense costs and the settlement. The trial court and appellate court agreed with the carrier, that the assault and battery exclusion precluded coverage. The appellate court further found that the assault and battery exclusion was so broadly written that it encompasses the negligent hiring, training, and supervision claims since these claims arose out of the battery.

The subject policy provides an excellent templar for any carrier considering upgrading their assault and battery exclusion.

John
John R. Ewell

[email protected]

 

Thinking About a Peace Bridge between Buffalo and Fort Erie Ontario – It Took Another Seven Years to Build:

The Buffalo Times
Buffalo, New York

04 Sep 1920

Likely To Abandon Memorial Bridge

            BRIDGEBURG, Ont., Sept. 4.—The peace memorial bridge planned to be built at Fort Erie may be abandoned judging from the context of a letter received from Evan E. Fraser, member of parliament for this district, in which he says:  “I do not think it possible to have the government build a peace bridge at Fort Erie.  I have been doing my utmost to have it widen the present international bridge.”

            Mr. Fraser recently informed Captain H. A. Cozzens of Fort Erie that he would use his influence at Ottawa to have a commission appointed to co-operate with the United States commission inquiring into the feasibility of building a bridge between Buffalo and the Canadian shore.

            Since then, Dr. J. D. Reid, minister of railways in the Dominion cabinet, and G. D. Robertson, minister of labor, have visited Bridgeburg.  According to Fraser, they are interested in the project of widening the international bridge.

            “I believe that engineers will be on the job very shortly,” says Fraser.

            A meeting of the committee representing the American veterans of all wars will be held at Erie Beach on Saturday, September 11th, at which prominent American and Canadian public men will be asked to speak.  The committee is seeking to achieve a peace memorial bridge.

 

Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

Summer, suddenly, is over. Where did it go? It’s hard to say, but rest assured we have our best people looking into this. Even though the calendar has turned to September, things just don’t feel right – especially since, as I write this, both of my college-aged children are sitting in the family room together and not in on their respective campuses with their friends, doing what college kids do.

In the Connecticut Chronicles this edition, we look at a seldom employed judicial tool, the piercing of the pleadings. I won’t spoil it for you, so you’ll have to read on.

Keep staying safe.

Lee
Lee S. Siegel

[email protected]       

 

Fur Bathing Suits?  Nah:

The Buffalo Times
Buffalo, New York

04 Sep 1920

Fur lined Suits May Make Winter Bather Popular

            LONG BEACH, N. Y., Sept. 4.—Winter bathing may become more popular after Sunday.  On that day a dozen models will demonstrate the latest styles in bathing suits here. 

 

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

Dear Subscribers,

And just like that, it’s September! Although I have fully enjoyed the warm weather and the Fall Equinox isn’t until September 22nd, I always enjoy the transition between summer and fall. Having grown up in Central New York and spent a lot of time in the Adirondacks, seeing the changing leaves is always lovely. Additionally, even though I enjoy going to parks throughout the year, I also like keeping track of the foliage transition through this website: https://www.iloveny.com/things-to-do/fall/foliage-report/. It is updated weekly and it covers the whole state. So, if you’re in New York and looking to take a local vacation this fall, I suggest following the report to know when some of the most robust colors nature has to offer can be seen. In the meantime, get all the Vitamin D you can!

Cara A. Cox
[email protected]

 

Maybe it’s just me but when the calendar rolled from August 31 to September 1 there seemed to be a different tone in the air – it’s darker and cooler in the mornings … there are faint dots and lines of yellow on the green willow leaves … and there is stress, #stresstember is on us. I’m remembering the dark days of junior high, Grades 8 and 9 … who will have the lockers beside me … will I get the awful math teacher or the good one … will I make the cut for the basketball team … But this year is the year of the pandemic … the usual start school stress has an additional edge … not since the 1918 Spanish Flu have kids gone to school in the middle of a pandemic … Alberta’s K-12 schools are back in person … no sports, no gym, no music, mandatory masks, sanitizing everything as much as is possible, distancing as much as is possible, and staying with your assigned grade cohort. Parents had the option to enroll their kids in online learning but once selected, there is no opting for in person classes. About 17% of the students in the Calgary Public School Board opted for online learning. The rest opted to live as normal a life as is possible by putting one foot in front of the other and moving forward. Fingers crossed that the inevitable outbreaks are manageable.

Heather Sanderson
Sanderson Law (Alberta, Canada)

[email protected]

 

Back to School Concerns, a Century Ago:

The Sandusky Star-Journal
Sandusky, Ohio

04 Sep 1920

ZUERCHER SAYS AGE LAW TO BE ENFORCED

            Boys and girls who are figuring on not returning to school Tuesday are warned by Truant Officer Zuercher that all boys under 15 and girls under 16 must attend the schools.  The school law states that all boys under the age of 15 and who have not finished the fifth grade must attend.  Girls under 16 and who have not finished the sixth grade work must also go to school.

            Strict orders have been received by Officer Zuercher that all boys and girls not complying with the law must be returned to school at once. 

 

Jen’s Gems:

Greetings,

It is amazing that we are already closing out Summer and (where we are) school starts next week.  My girls are so excited about the start of school they are playing pretend school all this time.  Yesterday, my 8-year-old walked up to me out of the blue to show me the multiplication tables she was working on.  I guess it is true that absence makes the heart grow fonder. 

This issue I report on a good additional insured decision from the trial court in New York County.  I say it is a good decision because it exemplifies where the New York courts stand on additional insured coverage in Labor Law cases and the way the courts are interpreting the Burlington decision.  For those that do not practice much in New York, Burlington is a decision issued by our highest court finding that the “caused, in whole or in part, by” language in the current ISO additional insured endorsements should be read to mean that coverage is afforded where the named insured’s acts or omissions were a proximate cause of the loss.  Since that decision was issued, we have struggled to apply the finding to new situations.  What we have seen practically is that the new standard has had little effect on the defense obligation, and that courts still apply the duty to defend liberally and basically in the same manner as they were when the policy endorsement had the “arising out of” trigger.  So, the question now has increasingly become how Burlington impacts indemnity.

In American Empire Surplus Lines Ins. Co. v. Federal Ins. Co., which I report on, the underlying plaintiff was injured when he fell through the floor of a fire escape.  American Empire issued a liability policy to the general contractor.  It agreed to afford a defense to the owner and its agent but took the position that it didn’t owe indemnity because the general contractor’s work was not a proximate cause of the loss.  It argued to the judge that the fire escape collapsed because of long-term corrosion and rust build up, damage which had nothing to do with its work.  Thus, the argument being that the owner (i.e., the party seeking coverage) was responsible for the condition of the building, and, in turn, the general contractor’s work did not cause the loss.  Makes sense.  But the trial court concluded the situation was not that simple.  It found that a question of fact existed as to indemnity because a trier of fact could conclude that the general contractor had a duty to make sure the places upon which subcontractors were working were safe and not susceptible to collapse.  The court further reasoned that a jury might find that the general contractor had constructive notice and should have conducted some investigation into the fire escape while the façade work was performed. Plaintiff’s motion was accordingly denied.

This decision really shows how, despite the Court of Appeals purportedly narrowing the coverage afforded to additional insureds, when the decision is applied to actual facts it can be very difficult for the carrier to establish a lack of coverage.  What this decision leaves open in my mind is whether the outcome would have been different if the motion had been made after the §200 claim was dismissed (assuming it would be) against the general contractor in the underlying.  That would have established that the general contractor wasn’t negligent.  But, again, as those readers who are familiar with the Burlington decision know, the Court of Appeals was clear that it wasn’t creating a negligence standard and that there could be a non-negligent proximate cause.  So, could indemnity still be owned in this case if the general contractor wasn’t negligent?  Would the court’s position still be relevant?  And, if the general contractor wasn’t negligent, how would a trier of fact ever be put in the position to answer the questions and resolve the uncertainties identified by the court?

A good read.  Happy Labor Day.  Until next issue...

Jen
Jennifer A. Ehman

[email protected]

 

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]

  • While Police Report Identifying, Through Hearsay, the Identity of the Vehicle Involved in a Hit-and-Run was Not Admissible, Testimony of Witness who Observed that Vehicle was Admissible.  Uninsured Motorist Proceeding Stayed

  • In a Peculiar Appeal, Claimant Seeking Uninsured Motorists Benefits, who Successfully Fended off Challenge by UM Carrier Seeking to Stay Arbitration, Filed an Appeal!  Appellate Court Found he was not Aggrieved

  • Without Sufficient Proof of a Report to the Police within 24 Hours of Accident, Uninsured Motorist Claim Dismissed

     

PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]

  • Winds of Change: Windstorm Endorsement Deemed Ambiguous

 

DISHING OUT SERIOUS INJURY THRESHOLD
Michael J. Dischley
[email protected]

  • Plaintiff’s Unaffirmed Expert Reports Were Not in Admissible Form and, Thus, Insufficient to Raise a Triable Issue of Fact

  • Defendant’s Expert Physician Did Not Review Plaintiff’s Imaging Studies, and Therefore, Speculated as to No Change in Plaintiff’s Spine Pre- and Post-Accident

 

WILEWICZ’S WIDE WORLD OF COVERAGE
Agnes A. Wilewicz

[email protected]

  • Circuit Courts not covering coverage in the last throes of summer

 

JEN’S GEMS
Jennifer A. Ehman

  • Court Finds Question of Fact on Obligation of Insurer to Afford Indemnity to an Alleged Additional Insured

 

BARNAS ON BAD FAITH
Brian D. Barnas

[email protected]

  • Divided Supreme Court in Pennsylvania Dismissed Appeal of Superior Court Decision Vacating Trial Court Finding of Bad Faith

     

JOHN’S JERSEY JOURNAL
John R. Ewell

[email protected]

  • New Jersey Appellate Court Confirms Broadly Written Assault & Battery Exclusion applies to “Bar” Negligent Hiring and Training Claims against Bar

     

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel

[email protected]

  • Court Pierces the Pleading Veil, Orders Plaintiff to Amend Complaint

     

BUCCI ON “B”
Diane L. Bucci
[email protected]

  • Come back next time for more on Coverage B

     

OFF THE MARK
Brian F. Mark
[email protected]

  • No interesting decisions this edition

     

BORON’S BENCHMARKS
Eric T. Boron

[email protected]

  • Underinsured Motorist Coverage – Vermont Supreme Court Affirms Combined Single Limit of UM/UIM Policy is Maximum Insurer Required to Pay Regardless of Number of Claims

     

BARCI’S BASICS (ON NO FAULT)
Marina A. Barci

[email protected]

  • Default Judgment Has No Effect on Provider’s Right to Claim No-Fault Benefits if Assigned Those Benefits Before the Default Happens

     

RYAN’S CAPITAL ROUNDUP
Ryan P. Maxwell

[email protected]

  • Bill to Create Statutory Presumption of Direct Physical Loss for COVID-19 Business Income Claims Dies in California Legislature

  • Assurant Subsidiary Pays $2.8M Settlement After Failing to Comply with New York Insurance Laws and DFS Circular Letter Advising of Duties

  • DFS Files Administrative Charges Against Teva and Allergan in Connection with the Opioid Crisis Alleging Fraudulent Marketing and Promotional Campaigns Misrepresenting the Safety and Efficacy of Opioid Drugs

 

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

[email protected]

  • A Court May Cite an Exclusionary Provision of a Policy When That Provision is Used in Concert with Contract Language. Failing to Provide Sufficient Evidence a Party Will Defeat a Motion to Dismiss Will Halt an Effort to Amend One’s Complaint

 

CARA’S CANADIAN AND CROSS-BORDER CONNECTIONS (WITH HEATHER SANDERSON)
Cara A. Cox

[email protected]

Heather Sanderson
Sanderson Law (Alberta, Canada)

[email protected]

  • Assault and Battery Claims During Protests/Counter-Protests

  • Does the Duty to Defend under a CGL Policy That is Part of a Commercial Package Policy Extend to Other Forms in That Policy?

 

Have a glorious weekend.  Do stay healthy.  With health, you have everything.

 

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.


NEWSLETTER EDITOR
Dan D. Kohane

[email protected]

ASSOCIATE EDITOR
Agnes A. Wilewicz

[email protected]

ASSISTANT EDITOR
John R. Ewell

[email protected]

 

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
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

 

FIRE, FIRST-PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley

Eric T. Boron

Brian D. Barnas

NO-FAULT/UM/SUM TEAM
Jennifer A. Ehman, Team Leader
[email protected]

Marina A. Barci
 

APPELLATE TEAM
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)

 

KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]

09/02/20       Country-Wide Ins. Co. v. Lobello
Appellate Division, Second Department
While Police Report Identifying, Through Hearsay, the Identity of the Vehicle Involved in a Hit-and-Run was Not Admissible, Testimony of Witness who Observed that Vehicle was Admissible.  Uninsured Motorist Proceeding Stayed


On January 17, 2016, a vehicle owned and operated Welker, in which Anthony Lobello was a passenger, was struck by a Hyundai sedan. The driver of the Hyundai then fled the scene, but Welker was able to write down the license plate number of the Hyundai and provide it to the police officer who responded to the accident. The license plate number that Welker provided to the police officer appeared in a subsequent police accident report, and was found to correspond to a Hyundai that was owned by Zeno and insured by Allstate. Zeno denied involvement in the accident. Welker and Lobello filed separate uninsured motorist claims against Country-Wide Insurance Company (hereinafter Country-Wide), which insured Welker's vehicle, and demanded arbitration of the claims.

Country-Wide then commenced a proceeding to permanently stay arbitration claiming that Allstate insured the vehicle so a claim for UM benefits could not proceed.

The proceedings were joined for a framed-issue hearing on the issue of whether Zeno's vehicle was involved in the accident. During the hearing, Country-Wide sought to admit into evidence the uncertified police accident report. The police report identified Zeno's vehicle by its license plate number as the hit-and-run vehicle, and was admitted into evidence over objection.

The hearing court determined that Zeno's vehicle was involved in the accident and granted the petition to permanently stay arbitration of the UM claims.

"Facts stated in a police report that are hearsay are not admissible unless they constitute an exception to the hearsay rule".  A police accident report is admissible as a business record so long as the report is made based upon the officer's personal observations and while carrying out police duties. Where information in a police accident report is not based on the personal observations of a police officer, "it may nevertheless be admissible as a business record if the person giving the police officer the information contained in the report was under a business duty to relate the facts to him [or her],

Here, the information in the police report was not derived from the personal observations of the police officer, who did not observe the accident. Because the source of the information in the police report regarding the license plate number of the Hyundai cannot be identified, the police report was inadmissible. However, since the result would have been the same had the police report not been admitted, this error was harmless.

Welker testified that he clearly observed the color, make, style, and license plate number of the offending vehicle, recorded the license plate number, and provided that information to the police officer who responded to the accident. Welker also testified that the license plate number that corresponded to Zeno's vehicle was identical to the license plate number he provided to the police officer While Zeno stated that there was no pre-existing damage to his vehicle prior to the accident and that no repairs were made to the front of the vehicle, photographs of his vehicle that were admitted at the hearing show that, when compared to the front of the vehicle on the passenger's side, the front of the vehicle on the driver's side has different, replacement, or missing parts.

 

08/26/20       Allstate Ins. Co. v. Dewar
Appellate Division, Second Department
In a Peculiar Appeal, Claimant Seeking Uninsured Motorists Benefits, who Successfully Fended off Challenge by UM Carrier Seeking to Stay Arbitration, Filed an Appeal!  Appellate Court Found he was not Aggrieved

On March 13, 2016, Dewar allegedly was injured when he was struck by a vehicle operated by Ashley and owned by the Johnsons.  The Johnson vehicle was insured by Ameriprise. Ameriprise disclaimed coverage on the ground that Ashley did not have the Johnsons' permission to operate the vehicle.

Dewar served a demand upon his insurer, Allstate, to arbitrate his claim for uninsured motorist benefits. Allstate moved to stay arbitration  The lower court determined  that Dewar was "entitled to make a claim" to the petitioner and that "[t]his matter will now proceed to arbitration." Dewar appealed.

Here, the order appealed from granted relief to Ameriprise and the Johnsons, against Allstate but not against Dewar. Dewar is not aggrieved simply because he "disagrees with the particular findings, rationale or the opinion supporting the . . . order" so his appeal was dismissed.

 

08/26/20       Nationwide Ins. Co. v. Aquilla
Appellate Division, Second Department
Without Sufficient Proof of a Report to the Police within 24 Hours of Accident, Uninsured Motorist Claim Dismissed

Nationwide commenced this proceeding to permanently stay arbitration of a claim for uninsured motorist benefits on the ground that its insured, the respondent Olga Aquilla, failed to report the alleged hit-and-run accident within 24 hours or as soon as reasonably possible to a police officer, peace officer, or judicial officer, or to the Commissioner of Motor Vehicles, as required by the insurance policy.

Here, contrary to Aquilla's contention, the testimony presented at the framed-issue hearing did not support her claim that she orally reported the accident to a police officer on the evening of the accident. While an oral report to a police officer, if established by credible evidence, may satisfy the 24-hour reporting requirement under the terms of the policy notwithstanding the absence of a written police report, Aquilla's unspecific and unsubstantiated testimony was insufficient to establish that any such oral report was made.

 

PEIPER ON PROPERTY (and POTPOURRI
Steven E. Peiper

[email protected]

08/20/20       Pick v. Midrox Ins. Co.
Appellate Division, Fourth Department

Winds of Change: Windstorm Endorsement Deemed Ambiguous

Plaintiff’s property sustained damage when a silo collapsed.  Plaintiff’s policy with Midrox specifically provided coverage for losses occasioned due to windstorms.  Here, plaintiff maintained that the property was damaged by a windstorm, and thus coverage should be confirmed.  Upon review of the property, Midrox determined that the silo in question actually collapsed due to structural deficiencies.  While not explicitly addressed by the Court, it appears that Midrox relied on the “wear and tear” exclusion as its basis for declination. 

In reversing the trial court, the Appellate Division confirmed that the policy specifically provided coverage for losses occasioned from a windstorm.  The Court also noted that plaintiff presented proof that the incident involved the application of the force of wind.  The Court went on to rule that the term “windstorm” was ambiguous, and that a gust of wind could have been sufficient to have triggered the disputed coverage.  On this basis, Midrox’s motion for summary judgment was denied and the matter remanded to the trial court for further proceedings.

In addition, the Court ruled that because there was a dispute as to the cause of the loss, a question of fact existed on Midrox’s attempt to invoke the wear and tear exclusion. 

 

DISHING OUT SERIOUS INJURY THRESHOLD
Michael J. Dischley
[email protected]

08/19/20       Fraleigh v. Casson
Appellate Division, Second Department

Plaintiff’s Unaffirmed Expert Reports Were Not in Admissible Form and, Thus, Insufficient to Raise a Triable Issue of Fact

The plaintiff commenced this action to recover damages for personal injuries he allegedly sustained in a motor vehicle accident. The defendant moved for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. The Supreme Court granted the defendant's motion, and the plaintiff appeals.

On appeal, the plaintiff does not raise any arguments relating to the Supreme Court's determination that the defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident.

In opposition, the plaintiff submitted unaffirmed reports of the plaintiff's treating physicians. The Appellate Court held that these unaffirmed reports of the plaintiff's treating physicians were not in admissible form and, thus, they were insufficient to raise a triable issue of fact.

Accordingly, the Appellate Court agreed with the Supreme Court's determination to grant the defendant's motion for summary judgment dismissing the complaint.


08/19/20       Virk v. Gutt
Appellate Division, Fourth Department
Defendant’s Expert Physician Did Not Review Plaintiff’s Imaging Studies, and Therefore, Speculated as to No Change in Plaintiff’s Spine Pre- and Post-Accident

Plaintiff was injured in a motor vehicle accident when his vehicle collided with a vehicle driven by defendant. Plaintiff and his wife commenced this action alleging, inter alia, that plaintiff sustained a serious injury within the meaning of Insurance Law § 5102 (d) under the significant limitation of use, permanent consequential limitation of use, and 90/180-day categories. Defendant appeals from an order that, insofar as appealed from, denied her motion for summary judgment dismissing the complaint.

In support of her motion, defendant submitted the affirmed report of an expert physician who examined plaintiff on defendant's behalf. The expert physician averred that he reviewed plaintiff's medical records and imaging studies from before and after the subject accident and concluded that there was no objective evidence demonstrating that plaintiff, who had suffered two prior injuries to his neck and back, sustained a new cervical or lumbar disc herniation, or permanent injury to his nervous system or spine as a result of the accident. The expert physician, however, failed to perform a comparison of plaintiff's pre- and post-accident imaging studies and, therefore, was unable to aver, without engaging in speculation, that he observed no relevant change or difference in plaintiff's spine caused by the accident. Further, although defendant's expert physician opined that plaintiff had suffered no new injuries, there were observable changes between plaintiff's pre- and post-accident MRI scans, and defendant's expert physician noted that plaintiff had a decreased range of motion and increased pain after the accident. Despite those changes, defendant's expert physician concluded that plaintiff's spinal condition was purely degenerative in nature, and yet failed to explain the basis for that conclusion.

However, the Appellate Court also found that the lower court erred in denying the motion with respect to the 90/180-day category. The Appellate Court found that defendant met her initial burden with respect to that category by submitting plaintiff's deposition testimony, wherein he testified that, one week after the subject accident, he resumed working 60 to 70 hours per week as an anesthesiologist. He also testified that, one week after the accident, he was able to dress, bathe, and groom himself without assistance, and that in the first three months after the accident, he was able to perform numerous household chores. Plaintiffs failed to raise an issue of fact in opposition. They failed to demonstrate that plaintiff's physician placed plaintiff on formal work restrictions, notwithstanding that his physician advised him not to lift heavy items, and plaintiffs' assertions that plaintiff could not play golf or garden during the relevant time period after the accident are similarly unavailing.

Based on the foregoing, the Appellate Division modified the order in granting the motion in part and dismissing the complaint with respect to the 90/180-day category of serious injury within the meaning of Insurance Law § 5102 (d).

 

WILEWICZ’S WIDE WORLD OF COVERAGE
Agnes A. Wilewicz

[email protected]

Circuit Courts not covering coverage in the last throes of summer.

 

JEN’S GEMS
Jennifer A. Ehman

[email protected]


08/20/20       American Empire Surplus Lines Ins. Co. v. Federal Ins. Co.
Supreme Court, New York County
Court Finds Question of Fact on Obligation of Insurer to Afford Indemnity to an Alleged Additional Insured

On September 4, 2013, Luis Fierro was working in the course of his employment for Sky VL on a construction project when he fell through the base of a fire escape as he was working on the building’s façade.  Fierro then brought a Labor Law case against numerous defendants including the property owner, its agent and Skyline Restoration Inc. (the general contractor).  It is our understanding that Skyline subcontracted the façade work to Pofi Construction Corp. who then sub-subcontracted it to Fierro’s employer.

Plaintiff issued a general liability policy to Skyline which was in effect on the date of the accident.  Plaintiff agreed to provide a defense to the property owner and its agent but reserved on indemnity.  It then brought this declaratory judgment action asking the court that it be permitted to withdraw the defense, that the owner’s own insurer should step in, and that it is entitled to reimbursement.

Plaintiff argued that, based upon the Burlington decision, the facts in the underlying action established that Skyline was not a proximate cause of the accident and the injuries had nothing to do with its work.  Plaintiff insisted that the landing of the fire escape collapsed because of long-term corrosion and rust build up.

In opposition, defendants submitted that the contract between the owner and Skyline required that the later take all reasonable steps to ensure safe working conditions including conditions for workers of any subcontractors such as Fierro’s employer.  The contract also required that Skyline provide general liability coverage naming the owner and its agent as additional insureds.  Defendants submitted that a trier of fact could find that Skyline’s subcontractors were a proximate cause of Fierro’s injuries.  They noted that Pofi had agreed to take reasonable safety precautions.

After considering the arguments, the judge denied Plaintiff’s motion finding an issue of fact with respect to whether Skyline was a proximate cause of Fierro’s injury.  It reasoned:

Skyline was the general contractor at the worksite where Fierro was injured.  There is no question that Skyline had a duty to ensure a reasonably safe worksite.  While plaintiff argued that it had no control over the fire escape, that does not compel the Court to grant the motion.  Fierro was working on the façade; therefore, a jury could find that Skyline had a duty to make sure the places upon which subcontractors were working were safe and not susceptible to collapse.  A jury might find that Skyline had constructive notice and should have conducted some investigation into the fire escape while the façade work was performed.  That inspection may have revealed rust or some suspicion that the fire escape was not same.

The court acknowledged the possibility that the owner and agent might share some of the responsibility, but noted that this did not entitle Plaintiff to summary judgment since there can be more than one proximate cause of an accident.

Lastly, the court noted that a Labor Law § 200 claim, which is a codification of common law negligence, had been asserted against Skyline and commented that it had not yet been determined that Skyline was not negligent.

 

BARNAS ON BAD FAITH
Brian D. Barnas
[email protected]

08/25/20       Berg v. Nationwide Mutual Ins. Co.
Supreme Court of Pennsylvania
Divided Supreme Court in Pennsylvania Dismissed Appeal of Superior Court Decision Vacating Trial Court Finding of Bad Faith

Sharon Berg was involved in a car accident on September 4, 1996 while driving a Jeep Grand Cherokee.  The Jeep was leased, and it was insured by Nationwide.  The damaged vehicle was taken to Lindgren, which was an established participant in Nationwide’s direct repair program.

Initially, the appraiser assigned to assess the Jeep declared it a total loss due to a twisted frame.  However, a Nationwide claim examiner reviewed the assessment and Nationwide made the determination to repair rather than replace the Jeep.  After four months of repairs, the vehicle was returned to the Bergs, but issues persisted, which prompted the Bergs to return to Lindgren several times.  Subsequent inspections concluded that the Jeep was unsafe to drive due to inadequate structural repairs.  The Bergs eventually filed a lawsuit against Nationwide alleging, among other things, breach of contract, bad faith, and violation of the Unfair Trade Practices and Consumer Protection Law.

Post-litigation inspections confirmed that the Jeep had not been repaired adequately.  Counsel for Nationwide and the Bergs discussed what to do with the Jeep once their lease was up in December 1998.  Nationwide purchased the Jeep, and eventually declared it a total loss.

In 2004 the case proceeded to bifurcated trial.  The jury found that Nationwide and Lindgren violated the Unfair Trade Practices and Consumer Protection Law and awarded damages of $1,925 against Lindgren and $295 against Nationwide.  The case then proceeded to a bench trial on bad faith in 2007.  The trial court granted a directed verdict in favor of Nationwide, but this was vacated and remanded by the Superior Court on appeal.  The case was remanded for a new trial on the bad faith claim.

The new trial was assigned to Judge Sprecher.  The parties agreed that the testimony from the prior trials would be read rather than recalling the witnesses.  Additional exhibits and witness testimony were heard in the new trial.  On June 21, 2014, Judge Sprecher entered judgment in favor of the Bergs and awarded $18 million in punitive damages and $3 million in attorney’s fees.  Nationwide filed a motion for judgment in its favor notwithstanding the verdict or a new trial.  The trial court denied the motion.

Superior Court reversed on appeal and granted Nationwide’s motion.  The court found Nationwide did not act in bad faith under the policy.  In particular, it concluded that Nationwide’s duty was limited to paying for repairs, Nationwide had no duty to inspect repairs for quality, and there was insufficient evidence to support a finding that Nationwide vetoed the initial total loss finding to save money.  The Superior Court also found that Nationwide did not force Lindgren to repair the Jeep knowing that it could not be restored and that it did not knowingly allow Lindgren to return the Jeep to the Bergs knowing it was unsafe.  Finally, the appellate court did not find that Nationwide’s conduct during the litigation further evidenced its bad faith.

On appeal, the Supreme Court panel was divided in a fashion that prevented it from reaching a majority disposition.  As such, the appeal of the Superior Court’s decision was dismissed.

The opinion in support of reversal would have given greater deference to the findings of the trial court than the Superior Court did.  In particular, the judges in favor of reversal would have credited four key factual conclusions of Judge Sprecher: (1) Nationwide overrode Lindgren's initial total loss appraisal in order to save money; (2) Nationwide forced Lindgren to repair the Jeep knowing that the Jeep could not be restored to its pre-accident condition; (3) Nationwide knowingly allowed Lindgren to return the unsafe and uncrashworthy Jeep to the Bergs; and (4) Nationwide's conduct during the course of litigation was further evidence of Nationwide's bad faith.  Based on these findings, they would have concluded that Nationwide was motived by its own financial concerns at the expense of the safety of the insured, and that Nationwide had no reasonable basis for returning the Jeep to the Bergs.

In contrast, the opinion in support of affirmance would not have given great deference to the findings of the trial court.  The opinion notes that there was an unresolved claim of judicial bias on the part of the trial judge, which the opinion found to be colorable.  The judges who favored affirmance also concluded that the trial court’s finding that the Jeep was not repairable was wholly unsustainable.  Rather, they concluded that the repair efforts were utterly substandard.  The court also noted that the Bergs were kept apprised of the majority of the repair efforts, and that Mr. Berg made the decision to proceed with repairs.  In addition, the opinion in affirmance did not consider Nationwide’s post-litigation conduct in its bad faith analysis.  The opinion would have implemented the majority approach that evidence of post-litigation conduct is generally inadmissible in insurance bad faith litigation.

 

BUCCI ON “B”
Diane L. Bucci

[email protected]

Come back next time for more on Coverage B.

 

JOHN’S JERSEY JOURNAL
John R. Ewell
[email protected]

 

08/25/20       Pickett v. Moore’s Lounge et al.
New Jersey Superior Court, Appellate Division

New Jersey Appellate Court Confirms Broadly Written Assault & Battery Exclusion applies to “Bar” Negligent Hiring and Training Claims against Bar

Early on New Year's Day, Pickett and Corley got into an argument in Moore's Lounge in Jersey City. As Pickett turned to walk away, Corley shot him three times, killing him. Corley was convicted of aggravated manslaughter and is incarcerated.

The estate sued the tavern owner, EMRO, Inc., for damages alleging EMRO negligently permitted the shooter to enter the tavern armed, remain there, and then intentionally shoot Pickett. Pickett's estate alleged the tavern's staff subjected Pickett and other customers to a weapons search before they entered, but Corley, a retired police officer and a regular customer, was allowed to enter with a concealed weapon. The estate also alleged that the staff continued to serve Corley after he had already consumed excessive amounts of alcohol and displayed signs of intoxication.

EMRO settled with the estate. EMRO sought indemnification from its insurer, Northfield Insurance Co., for its settlement share and defense costs. In denying coverage, Northfield invoked the following assault-or-battery exclusion:

Assault Or Battery

"Bodily injury" or "property damage" arising out of any act of "assault" or "battery" committed by any person, including any act or omission in connection with the prevention or suppression of such "assault" or "battery".

. . . .

3. The following is added to the DEFINITIONS Section:

"Assault" means any attempt or threat to inflict injury to another, including any conduct that would reasonably place another in apprehension of such injury.

"Battery" means any intentional, reckless or offensive physical contact with, or any use of force against, a person without his or her consent that inflicts some injury, regardless of whether the resulting injury inflicted is intended or expected.

EMRO sued Northfield for coverage. Northfield moved for summary judgment on the assault-or-battery exclusion. The trial court held that the assault-or-battery exclusion barred EMRO's claim, because the estate sought damages for bodily injury arising out of Corley's assault or battery of Pickett, and the estate's negligence-based claims referred to, as the policy stated, "any act or omission in connection with the prevention or suppression of such 'assault' or 'battery.'" EMRO appealed.

The Appellate Division began its analysis by reviewing the exclusion. The assault-or-battery exclusion bars claims against the insured for bodily injury that arise out of an assault or battery. The estate alleged that Corley intentionally shot Pickett. The estate thereby alleged a "battery," because the policy defines "battery" as an "intentional, reckless or offensive . . . use of force against, a person without his . . . consent that inflicts some injury." Although Corley was convicted of recklessly causing Pickett's death, the Court found that his recklessness also satisfies the policy's "battery" definition.

The Court noted that it did not need to decide whether excluding bodily injury claims "arising out of any act of 'assault' or 'battery'" would alone suffice to bar EMRO's claim for a defense and indemnification of the estate's negligence-based claims. That is because the exclusion of claims arising out of an assault or battery expressly "includ[es] any act or omission in connection with the prevention or suppression of such 'assault' or 'battery.'" Thus, the Court determined the exclusion encompasses negligent acts or omissions that fail to prevent or suppress the assault or battery. That embraces the estate's general allegation that EMRO negligently failed to exercise reasonable care to assure the tavern was a safe place. The exclusion also embraces the estate's allegation that, as a result of EMRO's negligent personnel management (i.e. hiring, training and retention), EMRO's staff did not prevent Corley from shooting Pickett. Specifically, staff allowed Corley to enter with a gun, allowed him to retain the gun throughout the evening as he became more intoxicated, and did not intervene when he began arguing with Pickett.

Since the bar's alleged negligence was connected only with an assault or battery, the Northfield policy's exclusion encompasses the estate's claim against the bar. Accordingly, the Appellate Division affirmed that the assault-or-battery exclusion precluded the bar’s claim for indemnification of its defense costs and settlement paid to the estate.

 

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel

[email protected]

07/27/20       Bass v. Federal Ins. Co.
Superior Court of Connecticut, Stamford

Court Pierces the Pleading Veil, Orders Plaintiff to Amend Complaint

You’ve heard, of course, of a spite fence. Well, this case involves a bit of a spite drainage system and Federal Insurance is caught in the mud.

Pamela Bass and the Bakers are neighbors, but apparently not the kind that would ever think to borrow a cup of sugar from each other (does anyone ever do that in real life anyway?). Bass sued the Bakers over a failed drainage system that she claims is damaging her property. But that’s not this lawsuit, at least not directly. While Bass is quite angry with the Bakers, she’s even angrier with their insurance company, which happens to be her insurance company, Federal.

Bass sued Federal for breach of contract and bad faith, in connection with Federal affording a defense to the Bakers. Bass claims that the defense tactics in the underlying suit, paid for and approved by Federal, is wronging her with respect to her own insurance coverage. As the court painfully pointed out, “It must be emphasized that the plaintiff maintains that she is not claiming tortious conduct but rather breach of contractually-based obligations derived from her own insurance contract—breach of contract, breach of the duty of good faith and fair dealing, and breach of fiduciary duty.”

Federal’s failures include not promoting a resolution of the underlying action “which would have benefited both the plaintiff and defendants in the underlying action”; failing to protect the plaintiff's property from a casualty loss as required by the policy; failing to advise the Bakers that their policy requires them to cooperate with Federal; and failing to repair the drainage system. In short, Bass claims that Federal favored the interests of the Bakers.

The court eloquently framed the dispute:

The issue before the court is … whether [Federal], in providing a contractually required defense and financial protection (indemnification) to its insureds under the Bakers' policy, simultaneously owes a linked duty to a separate—and here, adverse—insured under a different policy (the plaintiff's) to protect and advance her interests, even if the simultaneous and intrinsically-conflicting duties may limit or impair the Bakers' defense and impede their ability to protect their own interests. Instead of attempting to compartmentalize and isolate the interests of distinct insureds, the plaintiff is claiming that an insurer must consider the interests of other insureds under their policies, to the extent that the insurer may control settlement of claims against an insured by an insured.

But, as the court noted, Bass’ complaint is “noticeably silent” as to the provisions in her policy with Federal that form the basis for her breach of contract claims or any occurrence which would trigger a duty owed by Federal to her.

However, the court refused to let the apparent pleading deficiency end its analysis. Applying a little-known rule, referred to as piercing the pleading veil, the court dug deeper. Although a court must take the plaintiff's allegations at face value, that rule is not absolute, and the court is able to look beyond the specific language of a pleading to discern its real underlying basis.

Applying the rule and based on a court’s inherent power to supervise the pleadings, the court ordered Bass to amend her complaint. In so doing, she is required to specify whether Federal’s alleged duties are first-party, third-party, or both, or other provisions of her policy; identify the applicable policy language creating the duties that are owed to her by Federal; and identify what triggers coverage owed to her. Identifying the contract provisions that form the basis of the breach of contract claim and which provide the springboard for the bad faith claims will, the court opined, permit it to properly judge the legal sufficiency of the dispute.

Personally, I’d like to see the Bakers counterclaim against Bass, triggering Federal’s duty to defend both sides of the case. That would really make things interesting.

Note: Please email me if you would like a copy of the decision.

 

OFF THE MARK
Brian F. Mark
[email protected]

No interesting decisions this edition.

 

BORON’S BENCHMARKS
Eric T. Boron
[email protected]

08/28/20       Progressive Northern Ins. Co. v. Muller
Vermont Supreme Court

Underinsured Motorist Coverage – Vermont Supreme Court Affirms Combined Single Limit of UM/UIM Policy is Maximum Insurer Required to Pay Regardless of Number of Claims

Last Friday, the Supreme Court of Vermont affirmed the Order of the Superior Court granting Progressive Northern Insurance Company summary judgment in a declaratory action instituted by the insurer to clarify its obligations and payment limits under Underinsured Motorist Liability coverage.

In June 2017, Todd and Melissa Muller, while riding together on a motorcycle, were seriously injured in a collision with a car insured by GEICO. Because the other driver was at fault, the Mullers each received $100,000.00 payments from GEICO. The Mullers then sought underinsured motorist coverage from Progressive, as the named insureds under two Progressive insurance policies:  a primary motorcycle insurance policy and an excess automobile policy.  Each Progressive policy has a combined single limit for “Uninsured/Underinsured Motorist Bodily Injury”.  Notably, the combined single limit of the motorcycle policy is, according to Supreme Court’s reading of the primary policy, the most Progressive will pay regardless of the number of: claims made; covered motorcycles; insured persons; lawsuits brought; vehicles involved in the accident; or premiums paid.  The primary motorcycle policy combined single limit is $300,000.00.  The excess policy has a combined single limit of $500,000.00.

Progressive determined that under the primary policy, the Mullers were entitled to $100,000 of underinsured motorist coverage for bodily injury.  Progressive reasoned that the setoff provision in the primary policy allowed it to reduce its underinsured motorist liability “by all sums ... paid because of bodily injury by or on behalf of any persons or organizations that may be legally responsible.”  Pursuant to this setoff provision, Progressive determined it could aggregate the $100,000 payments each of the Mullers received from GEICO and reduce its underinsured-motorist liability on the primary policy by $200,000, leaving $100,000 of primary coverage. (Progressive paid out the full $500,000 of coverage under the excess policy.)

Before the trial court, the Mullers argued that the setoff provision of the primary is ambiguous because it does not expressly outline how the setoff applies when there are multiple claimants under the policy. They argued that the setoff provision could be reasonably interpreted to apply either separately against each claimant—leaving $200,000 of coverage—or, as Progressive argued, cumulatively against the total amount paid by the tortfeasor's GEICO insurance, leaving $100,000 of coverage. Arguing that because any ambiguity is construed against the insurer, the Mullers ought to be entitled to separate setoffs.

The trial court disagreed, concluding the setoff provision clearly provided for aggregate setoffs, allowing Progressive to reduce its underinsured-motorist liability by “all sums ... paid because of bodily injury” and “nothing else in the policy renders the phrase ‘all sums’ confusing or ambiguous.” The phrase all sums, in this case, included both of the respective $100,000 payments from GEICO, resulting in a total setoff of $200,000 leaving only a $100,000 payment obligation from the primary insurance policy. On this analysis the trial court accordingly granted summary judgment to Progressive, and the Mullers appealed.

Per Supreme Court’s Opinion, the only issue before Supreme Court on appeal is whether the setoff provision is ambiguous with regard to how setoffs should be applied when there are multiple claimants.  The setoff provision at issue states:

The limits of liability for bodily injury under this Part III will be reduced by all sums:

1. paid because of bodily injury by or on behalf of any persons or organizations that may be legally responsible. ...

Supreme Court determined, in a de novo review, and “construing the insurance policy as a whole”, that the setoff provision at issue was not ambiguous.   Supreme Court’s opinion cited that “several” other state courts have similarly concluded that almost identical setoff provisions were unambiguous in the context of multiple claimants seeking underinsured motorist coverage under the same policy, specifically citing decisions rendered under the laws of the states of Indiana and Oregon, respectively.  The Supreme Court of Vermont rejected the Mullers’ contention that Ohio case law should be followed, because the Ohio case law, applying separate and successive setoffs, was decided taking into account public policy considerations and Ohio statutory law issues not pertinent to Vermont.  

In sum, Supreme Court affirmed the Superior Court ruling, taking into account the various provisions of the Mullers’ UM/UIM policy, thereby confirming that there is no ambiguity in the setoff provision at issue and the combined single limit amount of the Mullers’ UM/UIM policy is the maximum Progressive Northern is required to pay, regardless of the number of claims.

 

BARCI’S BASICS (ON NO FAULT)
Marina A. Barci
[email protected]

08/21/20       American Tr. Ins. Co. v. Wildex; American Tr. Ins. Co. v. Martinez
New York County Supreme Court
Default Judgment Has No Effect on Provider’s Right to Claim No-Fault Benefits if Assigned Those Benefits Before the Default Happens

In case one, Mr. Wildex was in a vehicle that was involved in a collision, and the vehicle was covered by a no-fault policy issued by American Transit. Wildex treated with various medical providers, who he assigned the right to collect no-fault benefits under the policy to. City-Wide Health Facility was one of the providers Mr. Wildex treated with, and when they made a claim for no-fault benefits, American Transit denied.

American Transit brought a declaratory judgement action that it is not required to pay no-fault benefits to Wildex or any of his assignees. City Wide was the only defendant who appeared in the action, so American Transit moved for default against Wildex and the other non-appearing providers. The Court granted the default without opposition and issued a declaration that Wildex and the non-appearing providers “are not entitled to no-fault benefits as a result of the motor vehicle accident…due to Wildex’s failure to appear for duly scheduled independent medical examinations.”

The Court also severed and continued the action against City Wide and American Transit moved for summary judgment against them. American Transit argued that because City Wide was an assignee of Wildex, their claim for benefits is derivative of Wildex’s rights under the no-fault policy, and thus the default judgment against Wildex ousted City Wide’s right to claim benefits. However, it was long ago established that when an assignment of no-fault benefits is made prior to the institution of legal action, a decision on default against the assignor does not bar the assignee from asserting a claim to no-fault benefits. Thus, American Transit is not entitled to summary judgment against City Wide based solely on the Court’s prior default judgment against Wildex.

Alternatively, American Transit argued that Wildex’s failure to appear for scheduled IME’s defeats coverage under the no-fault policy and therefore also bars City Wide’s claim to benefits. Failure to appear for an IME is a violation of the policy terms and will prevent coverage, however, before the insurer can seek a declaration for this violation it must demonstrate that it complied with all procedural and timeliness requirements of 11 NYCRR § 65-3.5, which governs the handling of no-fault claims. One such requirement is that if the insurer requests additional verification in the form of an IME, the IME must be scheduled to occur within 30 days from the date of receipt of the prescribed verification forms. The Court found that American Transit did not show it satisfied this 30-calendar-day timeframe because the documents submitted by American Transit indicated that the first IME was scheduled to be held 43 days after the date of the scheduling notice itself. So, given this failure of proof, American Transit failed to satisfy its initial prima facie burden at summary judgment. Thus, City Wide’s claim for no-fault benefits against American Transit may proceed.

An identical situation occurred in case two. Mr. Martinez was involved in a motor vehicle accident and assigned his no-fault benefits to the medical providers he treated with, including Wellmart RX. American Transit brought a declaratory judgment action against Martinez and his assigned providers; Wellmart was the only one who answered. The Court granted default judgments against Martinez and the other providers and severed and continued the action with Wellmart. With the exact same analysis as it did in the Wildex case, the Court found that the default judgment had no effect on Wellmart’s right to claim benefits and that American Transit was not entitled to summary judgment against Wellmart.

 

RYAN’S CAPITAL ROUNDUP
Ryan P. Maxwell
[email protected]

Legislative List

09/02/20       CA Business Interruption Bill Shall Not Pass
California State Legislature

Special Guest Columnist Andrew Downs, Bullivant Houser Bailey PC

Bill to Create Statutory Presumption of Direct Physical Loss for COVID-19 Business Income Claims Dies in California Legislature

Unedited from the Bullivant Houser website:

Earlier this year, we reported on an effort in the California legislature to create a statutory presumption that there was direct physical damage to insured property for any COVID-19 Business Income claim, thus reversing burdens of proof for Business Income claims.

We are pleased to report that bill, AB 1552, died when the California legislature's session ended August 31st, without its passage.

Governor Newsom has until September 30 to sign bills that did pass both houses of the legislature. We'll report in a few weeks on the net effect of this year's legislative activity.

Maxwell’s Minute: Keep your eyes peeled for more on this bill and all things West-Coast law from our good friend, Andrew Downs and his team at Bullivant Houser. We thank them for allowing us to share this important update on this legislation.

 

Regulatory Wrap-Up

08/19/20       In the Matter of The Signal Agency, LP, An Assurant Company
Department of Financial Services
Assurant Subsidiary Pays $2.8M Settlement After Failing to Comply with New York Insurance Laws and DFS Circular Letter Advising of Duties

The Department of Financial Services (“DFS”) fined The Signal, LP, an Assurant Company, (“Assurant”) $2.8 million for providing inadequate consumer disclosures for insurance offerings regarding mobile phones, tablets, and other wireless communication equipment. Moreover, Assurant also improperly bundled wireless insurance with service contracts and other non-insurance benefits. Furthermore, Assurant offered identity theft insurance underwritten by an unauthorized insurer.

In 2018, DFS issued Insurance Circular Letter No. 1 which identified six improper practices for that industry, generally, including failures to provide required notices and disclosures, as well as bundling insurance offerings with non-insurance. At that time, DFS advised all companies selling this type of insurance that they must disclose to consumers information including matters of producer compensation, premium credits availability for holders of third-party service contracts, and fees imposed for failure to return a device after replacement.

Assurant, a New York-licensed insurance producer that packages insurance programs, designing brochures and other materials for wireless communications equipment vendors. As a licensee, Assurant was required to make proper disclosures to assist New York consumers in effectively assessing these offerings. However, by failing to provide the required disclosures of offerings—which did, in fact, include unauthorized insurance—Assurant was potentially causing serious harm to consumers and thus, found to be in violation of Insurance Law §§ 2117, 2131, 2324 and Regulation 194.

 

08/17/20       In the Matter of Teva Pharmaceutical Industries, LTD. et al.
Department of Financial Services
DFS Files Administrative Charges Against Teva and Allergan in Connection with the Opioid Crisis Alleging Fraudulent Marketing and Promotional Campaigns Misrepresenting the Safety and Efficacy of Opioid Drugs

The Department of Financial Services has initiated administrative proceedings against Teva Pharmaceutical Industries, and various subsidiaries (“Teva”), and against Allergan PLC and its subsidiary Allergan Finance LLC (“Allergan”).

According to an announcement made by Governor Cuomo regarding the matter, Teva manufactures approximately 20% of the opioid products that flooded New York from 2006 to 2014. Teva manufactured both its own branded opioids as well as generic opioids through its Actavis subsidiaries. Allergan also manufactured opioid products from 2006 to 2014.

The DFS Statement of Charges alleges that Teva and Allergan knowingly furthered false narratives regarding the appropriate use of powerful opioid products on a broad pain spectrum. Teva and Allergan are alleged to have greatly downplayed the well-known, addictive nature and risks. Its alleged that this effort caused increased acceptance of opioids as legitimate, necessary, and appropriate painkillers by patients and medical professionals alike. As a result, demand industrywide soared to unprecedented levels along with an epidemic of addiction and abuse resulting from overprescribing.

Teva is alleged to have intentionally and successfully marketed its fentanyl drugs—100 times more potent than morphine—for off-label use, misrepresenting their risks while doing so. In furtherance of this strategy, Teva is also alleged to have crafted template "letters of medical necessity" for professionals to supply to insurers, justifying off-label use and get the prescriptions reimbursed. Providing an example of this successful campaign, Teva’s drug, Actiq, was approved by the FDA for treatment of cancer pain, but Actiq sales skyrocketed from $16 million in 2000 to an excess of $590 million by 2006, at which time only 8% of patients were taking the drug for cancer pain.

Allergan is alleged to have misrepresented its drugs in marketing materials. In fact, the FDA warned Allergan as early as 2010 that brochures the company had released for its drug Kadian impermissibly omitted and minimized risk information, while also failing to state the drug's full indication and including unsubstantiated claims of efficacy and superiority over other opioid drugs.

Additionally, both Teva and Allergan are alleged to have used various third parties, including industry groups and medical professionals, to disseminate misleading information regarding the safety and efficacy of opioids in general. This included both educational offerings and written materials targeting patients and prescribers. These materials are alleged to have misrepresented the addictive nature of opioids, labelling concerns overblown as "opiophobia," and actual addiction in patients as "pseudoaddiction."

DFS charged Teva and Allergan with the violation of Ins. Law § 403, which prohibits fraudulent insurance acts and provides a statutory penalty for each violation of up to $5,000 in addition to amount of the fraudulent. DFS alleges that each fraudulent prescription constitutes a separate violation.

Additionally, DFS charged Teva and Allergan with violations of New York’s Financial Services Law § 408, which prohibits intentional fraud or intentional misrepresentation of a material fact regarding, inter alia, health insurance , which prohibits fraudulent insurance acts and provides a statutory penalty for each violation of up to $5,000. Again, DFS alleges that each fraudulent prescription constitutes a separate violation.

A hearing will be held by DFS on October 26, 2020.

 

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

 

08/27/20       MTA, et al. v. James River Ins. Co.
United States District Court, Southern District of New York

A Court May Cite an Exclusionary Provision of a Policy When That Provision is Used in Concert with Contract Language. Failing to Provide Sufficient Evidence a Party Will Defeat a Motion to Dismiss Will Halt an Effort to Amend One’s Complaint

Plaintiffs initiated an action in state court for claims of breach of contract and declaratory judgment after defendant denied plaintiff’s tender for insurance coverage related to on-the-job injuries sustained by an employee of Nuco Painting Corporation (“Nuco”) in May of 2017. Nuco had obtained a policy of liability insurance through defendant effective April 14, 2017 to April 14, 2018 (the “Policy”). The Policy provided that defendant would defend and indemnify Nuco for injuries to Nuco’s employees, which the employees suffered during the course of their employment. The Policy also contained language stating that “[t]his insurance does not apply to any liability arising out of…operations…where a Consolidated Insurance Program (CIP) in which [the insured] participate[s], commonly referred to as an Owner Controlled Insurance Program (OCIP),…has been provided by the contractor, project manager or owner of the construction program in which [the insure is] involved.” Nuco was hired as a subcontractor on a construction project owned by the Metropolitan Transit Authority (“MTA”). The Subcontract between the MTA and Nuco required that Nuco add the MTA and all other plaintiffs as additional insureds on the Policy. However, the Subcontract also provided that the project was covered by owner provided insurance under the MTA’s OCIP.

In October 2019, defendant moved to dismiss the action. The court concluded that, while plaintiffs did qualify as additional insureds under the Policy, the Policy did not provide coverage for on-site injuries. Plaintiffs then moved for reconsideration of that decision. Plaintiffs argued that the court improperly used an exclusionary provision in coming to their decision on the motion to dismiss. However, the court held that it did not use an exclusionary provision in the Policy, instead it relied on the language in the Subcontract, which stated that the MTA’s OCIP would provide coverage for all on-site injuries, and the court simply cited the exclusionary provision for further support of its decision.

Plaintiff also brought a motion to amend the complaint, seeking to add allegations purportedly demonstrating that Nuco was an excluded contractor, and therefore not covered under the OCIP policy. While plaintiff’s amended allegations purportedly would allow them to introduce portions of the OCIP manual, which deal with excluded contactors, into evidence, plaintiffs did not explain which portions of the OCIP manual would alter the terms of the Subcontract. Furthermore, the portions of the OCIP manual that were submitted stated that when the OCIP manual and Subcontract are inconsistent with each other, the language of the Subcontract prevails. Accordingly, the court denied plaintiffs’ request to amend the complaint as they provided insufficient proof that the complaint would survive a Rule 12(b)(6) motion to dismiss.

 

CARA’S CANADIAN AND CROSS-BORDER CONNECTIONS (WITH HEATHER SANDERSON)
Cara A. Cox
[email protected]

Heather Sanderson
Sanderson Law (Alberta, Canada)
[email protected]

Cara’s Cross Border Connection
Assault and Battery Claims During Protests/Counter-Protests

Across the U.S., there are protestors and counter-protestors. When these groups clash, it’s usually in a public area such the streets or in a park. However, what happens if tensions rise and an incident occurs on a commercial property? Locally, an incident took place at a bar when protestors and counter-protestors met. Although the bar was shut down due to social distancing violations, there have been allegations from both sides as to possible assault and battery claims.

If a commercial general liability policy includes an assault and battery exclusion endorsement, then a “bar fight” would likely not be covered. For example, an assault and battery exclusion endorsement may provide the following:

It is agreed that no coverage shall apply under this policy for any claim, demand or suit based on Assault and Battery, and Assault and Battery shall not be deemed an accident, whether or not committed by or at the direction of the insured.

Accordingly, if tensions rose to the point that a “fight” broke out between individuals or groups of people, there would likely be no coverage, even if the individual alleges to have acted in self-defense because “[u]nder New York law a civil battery is defined as ‘the intentional physical contact with another person without that person’s consent.’”[1] Therefore, even if a claimant alleges they “hit back” in self-defense, the claimant’s response would still have been intentional. A New York court will likely hold that not only does the exclusion unambiguously extend to intentional and negligent acts but also to “so-called unintentional assaults and/or batteries.”[2] This is because in New York, like many other jurisdictions, follow the notion that “the intent which is an essential element of the action for battery is the intent to make contact, not do injury.”[3]

However, business owners with an assault and battery exclusion endorsement should also be aware that a failure to prevent an assault or battery may also be excluded. A bar or restaurant’s employee’s failure to prevent an assault and/or battery would also likely not be covered where the endorsement reads as followed:

Claims arising out of an assault and/or battery, whether caused by or at the instigation of, or at the direction of, or omission by, the Insured, and/or his employees.

Under such an exclusion, an allegation of negligent hiring for failure to prevent an assault and/or battery by failure to act would also be excluded from coverage because the exclusion “expressly excludes claims for assault and battery caused by the ‘omission by, the Insured, and/or his employees.’”[4]

 

Does the Duty to Defend under a CGL Policy That is Part of a Commercial Package Policy Extend to Other Forms in That Policy?

Is the duty to defend under a CGL that is issued as part of a package commercial policy limited to the CGL coverages?  There ought to be a clear answer to that:  “Of course!” However, according to the April 28, 2020 decision of the Alberta Court of Appeal in Intact Insurance Company v. Clauson Cold & Cooler Ltd., 2020 ABCA 161, the answer depends upon the wording of the defence agreement in the CGL.

If the defence agreement stipulates that the obligation upon the insurer is to defend the claims that fall within the coverage of “the policy”; and, the main commercial policy declarations define “the policy” to be the compilation of the various forms included in the commercial package, then the duty to defend extends to all third party coverages in the entire package. Intact v. Clauson is under appeal to the Supreme Court of Canada. Pending the resolution of that appeal, will this decision force a change in how commercial package policies are issued in Canada, or is this result unique to the Intact policy forms?

Background

For more than 50 years, Clauson Cold & Cooler Ltd. has operated a cold warehouse storage business in Calgary, Alberta, offering cold storage, as well freezers for their customers’ goods. One such customer was BHJ Canada Meat Products Ltd. which sources meat and fish products for the animal and petfood industries. Another of Clauson’s customers was Bonduelle Canada Inc. Part of the Bonduelle Group, this company sells and exports vegetables that are preserved naturally.

Both BHJ and Bonduelle had warehouse contracts with Clauson. In an action against Clauson filed in 2016, BHJ alleged that in September of 2015, some of its warehoused goods thawed while in Clauson’s custody and were spoiled. Bonduelle alleged in an action filed against Clauson in 2017 that they experienced the same problem on several occasions in 2015 and 2016. BHJ’s action alleged that Clauson breached its duty of care to inspect and maintain its refrigeration equipment and its warehouse. The Bouduelle action was similar in that it alleged that Clauson failed to store the goods at the appropriate temperature; failed to inspect their facilities; and, failed to keep those facilities in working condition.

Clauson held a “Commercial Edge Express Plus Policy” issued by Intact Insurance Company. Clauson tendered both actions to Intact for a defence. Initially, Intact assumed the defence of the BHJ action but, subsequently, withdrew. Intact refused to defend the Bonduelle claim.

The Insurer’s Denial

The commercial package policy that Clauson held contained two liability coverages: A CGL that excluded property damaged when it is in the care, custody and control of Clauson (excluding both the BHP and Bonduelle claims) and warehouse legal liability coverage.  The warehouse form excluded liability assumed by Clauson for mechanical or electrical breakdown, or loss or damage due to extreme changes in temperature. Both the BHJ and Bonduelle claims allege just that. As the claims were squarely within the exclusions, Intact said that it was within its rights to deny any obligation to defend.

The Insured’s Position

Clauson pointed to another coverage on the package policy, entitled “Equipment Breakdown Consequential Form” (EBCF) that provides coverage for lack of refrigeration:

To pay the amount of loss on "Specified Property" of others which the Insured shall become obligated to pay by reason of the liability of the Insured for such loss. . . provided such loss is due to spoilage from lack of ... refrigeration, resulting solely from an "Accident".

Clauson argued that this was a “hybrid” property/liability form; that the CGL defence agreement extended to it:  The EBCF form was party of “the Policy” and the CGL contains a covenant to defend claims covered by “the Policy”. The defence agreement in the CGL read:

DEFENCE, SETTLEMENT AND SUPPLEMENTARY PAYMENTS — COVERAGES A, B and D … “ with respect to the insurance afforded by the other terms of this Policy, the Insurer agrees … to defend in the name and on behalf of the insured, claims, suits …..instituted against the Insured for any accident or “occurrence” covered by this Policy” (the emphasis was that of the Court);

Intact took the position that the EBCF was a first party property form that did not contain an obligation to defend. The obligation to defend under the CGL was confined to the CGL coverages A, B and D.

Trial Judgment

Clauson launched an action in the Alberta Court of Queen’s Bench for a declaration that Intact was obliged to defend both of these actions. Clauson’s declaratory action was initially heard by Master Farrington, who concluded in an unreported, oral decision issued June 18, 2018, that the losses claimed in the pleadings by both BHJ and Bonduelle could be insured losses under the Policy and therefore the duty to defend arose.

Intact appealed to a Judge in Chambers at the Court of Queen’s Bench. Madam Justice Dilts determined in a judgment released on December 7, 2018 (2018 ABQB 997) that Master Farrington was correct. Justice Dilts held that Intact had issued a complex policy of some 150 pages to Clauson to cover the property owned by Clauson, as well as the liability risks of running its business. Further she found that “the Policy” (as those words are used in the CGL defence agreement and the commercial package policy declarations) is the collection of all of the components which includes the EBCF form; that the EBCF is not limited to first party claims; that form extends coverage for Clauson's liability to third parties for loss of products under refrigeration due to spoilage when the loss arises solely from an accident.

On that basis, Justice Dilts accepted Clauson’s argument and ordered that Intact’s obligation to defend in the CGL extends to the coverage offered under the EBCF. Therefore, Intact was ordered to defend both the BHP and Bonduelle actions.

As for court costs, Clauson argued that its legal bill to argue the appeal from Master Farrington was just over $56,000; Intact had wrongfully denied its obligation under the policy which means that Clauson was entitled to full indemnity costs. Nonetheless, Clauson stated that it would accept approximately half of its actual legal fees, namely $30,000.  The parties were unable to resolve the issue of court costs and the matter was referred to Justice Dilts for resolution. At the time costs were being considered, Intact had appealed the Court’s judgment to the Alberta Court of Appeal and asked that costs be deferred pending the appeal. In a judgment released April 2, 2019, (2019 ABQB 225) Justice Dilts noted that the Court has the discretion to award costs despite the existence of an appeal and, as she found that a delay in the award of costs would disadvantage Clauson, costs would be awarded (and are payable) despite the existence of the appeal. As to the amount, citing several factors, Clauson was awarded 40% of its actual legal bill, about $22,500.

The Appeal Judgment

On April 28, 2020, the Alberta Court of Appeal agreed with the Judge in Chambers that the EBCF is not limited to Clauson’s own losses; that it is not solely a first party property coverage. The form covers third party liability. Further, the Court of Appeal rejected Intact’s argument that the duty to defend under the CGL was limited by its heading to the CGL coverages. The word “policy” in the obligation to defend was defined by the policy declarations which included the EBCF. The duty to defend Clauson against that liability is found in the CGL. Finally, in upholding the decision of the Courts below, the Court of Appeal held that Intact’s position does not comport with commercial reality:  “being in the business of a cold storage warehouse … [Clauson] … would have expected its insurer to provide coverage, somewhere in the volume of forms, for the most basic aspect of its business — the safe warehousing of customers' frozen products.”

This statement - that the policy interpretation must reflect the commercial reality of the insured - has resonated in Alberta. On May 20, 2020, less than a month after the release of this appeal judgment, the Alberta Court of Queen’s Bench determined in Bowness Real Estate Corp v AXA Pacific Insurance Company 2020 ABQB 327, (a judgment that is worthy of another article in this newsletter), that commercial reality dictated that there was coverage for a specific piece of equipment in a production line under an Equipment Breakdown form.

On July 10, 2020, Intact appealed this decision to the Supreme Court of Canada.  Time will tell whether the Supreme Court will grant leave to hear this appeal.

In the meantime, property and casualty underwriters should take a careful look at how “the policy” is defined in their package commercial policies that contain CGL forms. Is this result solely due to the unique structure of the Intact policy which apparently contained one set of policy declarations rather than separate sets of property and liability declarations? Is it due to the words “with respect to the insurance afforded by the other terms of this Policy” that were present in the Intact defence agreement? If the word “coverage” was substituted for “Policy” would the result have been the same? One would think not. Nonetheless, Intact v. Clauson may force insurers to define the word “policy” in CGL forms.

 

[1] Mount Vernon Fire Ins. Co. v. 25th Hour S & K Associates, 1993 WL 464725 (S.D.N.Y. 1993).

[2] United Nat. Ins. Co. Tunnel, Inc. 988 F.2d 351, fn 1, (2d Cir. 1993)

[3] Id. 988 F.2d at 355.

[4] Id. at 354.

 

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