Coverage Pointers - Volume XXIII, No. 7

Volume XXIII, No. 7 (No. 599)
Friday, September 17, 2021
A Biweekly Electronic Newsletter

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

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

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

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


Dear Coverage Pointers Subscribers:

Do you have a situation?  We love situations.  Greetings from the bonnie, bonnie banks of Lake Erie. A special greeting to our several new subscribers.

Hey,  make sure you read Lee Siegel’s Yom Kippur reflections on the Child Victims Act, below.

And a special thanks to our staff support, Donna Boice, Jessica Oates, Carolyn Batt and Andy Renner, who contribute so much to this publication.

I was proud to be part of the Federation of Defense & Corporate Counsel’s FDCC Boot Camp with wonderful lawyers from across the fruited plain.  We had about 100 students over two afternoons. I know that some of our students came from our readership here and we hope you found it rewarding.  Watch for other great programs.  Congrats to our own Nick Heintzman and Patty Rauh to matriculated through that program.

This should be about the end of the summer drought of appellate decisions.  With the appellate courts back up and running, we can expect decisions to begin dribbling out of the courts over the next few weeks until we’re back at full tilt.

Growing by Leaps and Bounds:  Hurwitz & Fine has welcomed five associates, pending admission, to the firm’s Insurance Coverage and General Litigation teams.

Aarti Chandan

Aarti received her J.D. from the University at Buffalo School of Law and a Bachelor of Arts in Political Science from the University of Pittsburgh. While at the University at Buffalo, she had a particular focus on Finance & Law, participating in their New York City finance law developmental program.

Prior to joining Hurwitz & Fine, she was a Summer Associate at Neighborhood Legal Services in Buffalo, where she gained experience drafting CLE training materials, researching housing law matters, and acted as a first contact for potential clients. Before this, she held the position of Legal Extern at a New York City law firm, Law Clerk at the United State Attorney’s Office for the Western District of New York, and Congressional Intern for a New York congressional representative.

Hannah Cominsky

Hannah completed her J.D. at the University at Buffalo School of Law, where she was active as the Executive Publications Editor for the Buffalo Law Review, a teaching assistant, a student representative for Kaplan Bar Review, and a member of the Women’s Bar Association of Western New York. She received her Bachelor of Arts from the University at Buffalo as well, dual majoring in International Trade and Geography.

Hannah has previously been employed at a large Buffalo law firm as Head Law Clerk, where she conducted legal research, organized, and allocated assignments to law clerks, and worked as the sole librarian in placing orders, organizing inventory, and distributing publications. Prior to this position, she worked as a Student Attorney at the Health Justice Law & Policy Clinic in Buffalo, a Fellow at the Veterans Legal Assistance Practicum, and as a legal intern at another Buffalo law firm.

Franco Mirolo

Franco comes to Hurwitz & Fine from the University at Buffalo School of Law, where he received his J.D. While attending, he was an Associate at the Buffalo Law Review and a semifinalist in the 2021 Legal Innovation Tournament hosted by the New York State Bar Association and Hofstra University. He was also the recipient of the 2020 Martin A. Feinrider Scholarship, a teaching assistant, and a member of the Intellectual Property Law Society. He received a Master of Intellectual Property Law at the Universitat De Barcelona OBS Business School and his Bachelor of Law at the Universidad Nacional De Cordoba.

Franco has a mixture of U.S. and foreign legal experience. In Argentina, he worked for several law firms as both a Law Clerk and an Associate, conducting client interviews, analyzing claims, negotiating settlements, and representing clients. In the U.S., Franco worked as a Research Assistant at the University at Buffalo School of Law and an Intellectual Property Contracts Intern at the Office of Technology Transfer.

Mark Nesbitt

Mark received his J.D. from the Albany Law School of Union University, where he was an octofinalist of the Dominick L. Gabrielli Appellate Advocacy Competition. He participated in the Donna Jo Morse Client Counseling Competition, was a member of the New York State Bar Association, a member of the Italian American Law Student Association, and was employed as a teaching assistant. He received his Bachelor of Arts in Political Science from the State University of New York at Buffalo.

Mark has worked for several different law offices in Albany as a law clerk and extern, as well as for multiple United States District Judges. While at these offices, he regularly conducted research, drafted memoranda of law, attended proceedings, and prepared draft decisions and orders.

Kyle Ruffner

Kyle completed his J.D. at the University at Buffalo School of Law, where he worked as a Note and Comment Editor for the Buffalo Law Review. He received his Bachelor of Science in biomedical engineering at the University of Rochester.

While at the University at Buffalo School of Law, Kyle worked in their Civil Rights and Transparency Clinic, facilitating interviews, conducting legal research, and working on cases involving fair housing law violations. Additionally, he worked as a Summer Associate at a local Buffalo law firm, where he drafted motions and prepared memos of law in such areas of medical malpractice and products liability

Welcome all.


Risk Transfer

I am troubled by the growing number of cases, two reported in this issue in my column, where courts are looking to self-serving allegations in third-party pleadings to determine whether other insurance coverage triggers a defense obligation.  In two decisions, one out of the Southern District and one out of the Eastern District, the courts found, basically, that a contractor can plead itself into additional insured coverage by claiming that a subcontractor was responsible for an accident.

Isn’t that an easy thing for a contractor to do?  Want to escape defense obligations?  Plead that someone else cause the plaintiff’s injury you’re in like flint.


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.  Happy to provide training.


New York Coverage Protocol Training:

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

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

  2. Do you know the “30-day” rule?

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

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

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

If the answer to question “1” was “yes” or the answer to any of the remaining questions were “no”, let’s schedule NY Coverage Training.



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

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

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

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

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

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



    Happy National Hispanic Heritage Month! 

    September 15th through October 15th is National Hispanic Heritage Month. During this time, we recognize and celebrate the contributions Americans tracing their roots to Spain, Mexico, Central America, South America, and the Spanish-speaking nations of the Caribbean have made to American society and culture. This month corresponds with Mexican Independence Day, which is celebrated on September 16, and recognizes the revolution in 1810 that ended Spanish dictatorship. It also recognizes the Independence Day celebrations of the countries that make up the “five republics” of Central America (Honduras, Guatemala, Nicaragua, Belize, and Costa Rica). 

    I’m a little under the weather, so I will catch you on the next CP, where I will be talking about mental health and what firms and organizations can do to support their employees during these trying times. 

    Mirna M. Santiago

    [email protected]


    Burglary Insurance – 100 Years Ago:

New York Herald
New York, New York
17 Sep 1921


Burglary Insurance Man Denies Prevalence
of Fake Robberies by Owners.

          David Hirshfield, Commissioner of Accounts, resumed yesterday Mayor Hylan’s investigation into the business methods of burglary insurance companies, but terminated the sessions with great suddenness when he discovered that inadvertently he had called the wrong witness.

          Mayor Hylan’s orders to Commissioner Hirshfield made it clear that the purpose of the investigation was to show that the burglary insurance companies pursue such law methods that much of the property insured, such as automobiles, does not exist; that, therefore, the Police Department hardly can be blamed for failing to recover property that doesn’t exist when somebody collects the insurance on it upon the representation that it was stolen, and that, in addition, the Police Department is efficient.


Peiper on Property and Potpourri:

We start by saying thanks to everyone who attended PLRB’s Regional Conference in Columbus last week.  It was good to be back in front of a group, and good to share and learn with some of the best claims minds in the business. 

For those of you who missed it due to travel restrictions or the pesky hurricane season, I presented on navigating your way through the work product exclusions in a CGL policy.  We started with the misconception that all of them mean basically the same thing, and then deconstructed that notion by showing that each exclusion on the property side of a CGL policy has a specific meaning. That specific meaning means that each exclusion has a specific application to specific circumstances. 

It was a fun discussion, and hopefully left folks with a better understanding of how to interpret the CGL in the context of a large-scale property claim.  If you handle property, particularly construction defect, it is a very helpful discussion--- if I do so say so myself.  If you have any interest in the topic, please drop me a line.  I’m only a video conference away.

I’m also looking forward to being back in Columbus for DRI’s next coverage program – the Complex Coverage Forum (November 11th).  It is a top-notch panel of presenters, and I am grateful to be a part of it.  On that show, I’ll be back on the first party side of things looking at complex business interruption and extra-expense claims.  This is an ever increasingly timely topic with COVID delays further, both real and imagined, serving havoc throughout the claims process.

On the home front, we were delighted to welcome three new attorneys to our coverage team this past Monday.  Hannah Cominsky, Kyle Ruffner and Franco Mirolo all join us as recent grads from the UB Law School.  Although they await admission to the bar, they’ve all hit the ground running and we are delighted to have their relatively open schedules! Please welcome them when you have an opportunity to meet them.

Hannah, Kyle, and Franco were also joined on their first days by Mark Nesbitt and Aarti Chandan who also joined our litigation team. This is an unprecedented infusion of energy and talent to the firm, and we’re excited about the possibilities to come.  

That’s it for now.  See you in two weeks.

Steven E. Peiper

[email protected]


Losing the Spirit(s):

Dunkirk Evening Observer
Dunkirk, New York
17 Sep 1921


Night Watchmen of Building In Which Liquor Was Stored Were Overpowered.

          New York, Sept 17.— (United Press.)—Fifteen armed bandits early today raided a paper factory in Brooklyn and escaped with 48 barrels of whiskey, valued at $15,000.

          Two watchmen were seized and overpowered by the raiders. One of them was later arrested by police on suspicion of having connived with the bandits.

          What the 48 barrels of liquor were doing in the factory has not yet been explained. The raiders are believed to be members of a gang engaged in the bootleg war which has been in progress here for more than a week.

          When police arrived, they found marks of ropes on the wrists of Phillip Pelegrino, one of the watchmen, who said armed men grabbed and bound him and carried him into the building.

          The other watchman, Thomas de-Santis, was arrested after he had been questioned.


Wilewicz’ Wide-World of Coverage:

Dear Readers,

Taking a brief break from the golf course this week, as the rains have made our local public course a little too soggy. Nevertheless, you can find us invariably at the range, rain, or shine! It really has become quite an obsession in our household, but I’m not complaining. There are worse things to be obsessed with out there.

Now, this time around in the Wide World of Coverage, we have a case out of our own Second Circuit finally. In Day Kimball v. Allied World, at issue was whether an excess policy issued to a hospital provided coverage for an underlying medical malpractice claim. In analyzing the insuring agreement, the court found that it did not. Rather, it unambiguously provided excess coverage only for claims related to the hospital’s employee benefits program. Words matter! Here, those words could not be stretched to provide coverage for something that was not intended. The full write up and a link to the original decision on the Court’s site is attached in this week’s edition.

Until next time!

Agnes A. Wilewicz

[email protected]


No Thanks – I Don’t Want Him:

The Buffalo Times
Buffalo, New York
17 Sep 1921

Wife Refuses to Compete in Bidding for Spouse

Special to the Buffalo TIMES

          SAN FRANCISCO, Sept. 17.—When her husband began writing letters asking her to bid for him, with a $50,000 widow bidding against her, Mrs. Lillian Maginnis, No. 1338 Webster Street, refused to risk even a dollar.

          Instead, she asked for an annulment and got it.

          Cheater J. Maginnis took Lillian as his wife December 2, 1919, and on December 15th, the same year, while his wife was suffering from influenza in a local hospital, he left for Los Angeles. She has never seen him since.

          Yesterday Mrs. Maginnis told Judge Graham that at the time her husband left he took with him $100 that she claimed was hers. A few months later she heard from Maginnis. He was still in the South and penned this:

          Here is what I want thoroughly understood before I return to you. You must place $500 (that is not much) in my name in bank. I will account and consult you before one dollar is removed. You understand, dear, that this is merely to remove this timid feeling from me when I go to make a deal of some sort, so I feel that I can act without someone’s advice. I will ask you about it, of course, though if I think your ruling is poor, I’ll act anyway. This will merely get me out of that down and out feeling which holds me down so now.

          The next time her wrote he started his letter in this fashion:

          For sale—one perfectly good man goes to the highest budder Gee, that’s a funny way for a fellow to feel, ain’t it? But now, really, dear, don’t you honestly think I’m worth more that I ask you to put aside so I could get a start?

          Really, dear, I believe there are girls down here who would pay more than that for me, and if I was really going to sell myself, I’d sure set a larger price on my head that you could pay. I met a perfectly good little widow down here last week who has $50,000 worth of orange groves right here and no more children than you, and she said she’d take me and make a man out of me. I told her she’d have some job.


Barnas on Bad Faith:

Hello again:

The Bills season started with a dud, but luckily the Blue Jays’ recent run of play has given me something to be excited about in the world of sports.  After a loss on August 27th, the Blue Jays were 9.5 games behind the Yankees for the first wild card spot and 6.5 behind Boston for the second wild card.  Since then, the Jays have gone 15-3 and sit tied with both New York and Boston for the wild card.  I would not describe myself as the most optimistic sports fan in history, so I definitely did not see this coming.  The Blue Jays have only been legitimately good a couple times in my adult life, and the Fall feels totally different when they are.  Hopefully they keep it up.  It would be great to cap off a year where they spent significant time in Buffalo with a playoff bid.

My column features the Hallaren case from Colorado this week.  The insured tried to argue that Geico’s internal claim evaluation constituted evidence of an undisputed claim amount that should have been paid.  The court rejected this argument, holding that a claim evaluation is not admissible evidence of an undisputed amount that must be pad under an insurance policy.

That’s all for now.  Enjoy the weekend.

Brian D. Barnas

[email protected]


Necessary Investments:  a Century Ago:

The Buffalo Times
Buffalo, New York
17 Sep 1921

You Should Have $250

Washington, D.C., Sept. 17, --Every man woman and child in the country is supposed to have $250 saved up, according to figures issued by the treasury, which put the total population at $108,000,000. The savings of small investors throughout the country, it was said, total approximately $27,000,000,000, of which $21,000,000,000 is invested in Government securities and $6,000,000,000 is represented by deposits in savings banks.


Off the Mark:

Dear Readers,

The family vacation in Ocean City, Maryland, went well.  The kids spent every day at the hotel pool while dad hit the beach alone.  At least I had my boogie board and some decent waves.  My wife didn’t mind sitting at the pool as she brought a few good books to read, and the hotel staff kept her drinks topped off.  School is back in session, and we are settling into our routine. 

It seems the courts were also on vacation as there were no interesting construction defect cases to discuss.

Stay safe and check back in two weeks.

Brian F. Mark

[email protected]


Mother, Defined:

The Watchman and Southron
Sumter, South Carolina
17 Sep 1921

The Mother of Twenty-Two

Nebraska Woman is Leader in
Anti-Race Suicide Derby

          Omaha, Sept. 14. —Mrs. Earl M. Rowray, aged forty-one, gave birth to her twenty-second child yesterday. She became a bride at 14 and a mother at seventeen. She has been married twice. Two children have been born since her second marriage.


Boron’s Benchmarks:

Very busy this week, but I will see you in two weeks.

Eric T. Boron

[email protected]


The First of Four Articles About a Church-Banned Wedding (Hilarious, that this required FOUR different stories in papers around the country):

The Buffalo Enquirer
Buffalo, New York
Sep 1, 1921

Ban Wedding of Mrs. Lydig and Dr. Grant

Bishop Manning Forbids Ceremony on Canon Which Makes it Impossible to Remarry Divorced Persons

(By the International News Service)

New York, Sept. 17. —The marriage of the Rev. Dr. Percy Stickney Grant, rector of the Protestant Episcopal Church of the Ascension, to Mrs. Rita de Acosta Lydig, former wife of Maj. Philip M. Lydig, by a Protestant Episcopal clergyman has been forbidden by Bishop William T. Manning, it became known today. Bishop Manning’s ruling was based on the canon which forbids the re-marriage of divorced persons.

Dr. Grant refused to make any comment when the matter was called to his attention but intimated, he might have something to say later.

Before Dr. Grant’s engagement to Mrs. Lydig was announced the clergyman, it is understood, informed Bishop Manning of his purpose.


Ryan’s Capital Roundup:

Hello Loyal Coverage Pointers Subscribers:

Rough loss for the Bills this past weekend. Not the way Western New York drew up Week 1, this year. But the early loss—against a top defense—should leave this team, in the ever-inspirational words of Head Coach Sean McDermott, “humble and hungry”. Humbling. But hungry (for Dolphin week). #SquishTheFish

Although the weekend did not finish as I would have hoped, it began with a bang. For years, I have served as the play-by-play voice for NCAA Div. II Men’s and Women’s Volleyball at Daemen College, streaming on the ECC Network. However, this past Friday, September 10, I was asked by NCAA Div. I Canisius College to provide play-by-play on ESPN+ for matches against Duquesne and WVU. Quite a ride from watching ESPN’s SportsCenter before catching the school bus at the corner every morning, to broadcasting matches (plural) at the Koessler Athletic Center with the ESPN watermark in the corner of the screen. If you have ESPN+, be sure to pull up the matches on demand and tell me what you think. And don’t miss the next matches available through ESPN3 on September 18 and 19 at noon, where I will be on the call for Canisius’ matches against Siena and Marist.

In this edition of Ryan’s Capital Roundup, we outline new guidance for carriers handling claims following Tropical Depression Ida. Carriers are reminded to do your part and know your “obligations.”

Until next time,

Ryan P. Maxwell

[email protected]


The Second Article – Resisting the Church:

Richmond, Indiana
Aug 11, 1921


Mrs. Philip Lydig

Announcement of the engagement of Mrs. Philip Lydig, twice divorced, and Rev. Dr. Percy S. Grant, Episcopal minister of New York city, has set church circles agog. Episcopal canon law forbids the marriage of persons who have obtained divorces. Mrs. Lydig, nee Rita de Acosta, was married at the age of sixteen to W.E.D. Stokes. She divorced him and later married Major Philip Lydig, from whom she obtained a divorce, on grounds of incompatibility, in France in 1918.


CJ on CVA and USDC(NY):

Hello all,

Football is back! I will save you all from my Buffalo Bills wrap up, as there really is not much to say about the team’s performance this past Sunday. I will, however, mention that I currently lead the Firm’s fantasy football league, a first for “Englert’s Errors.” If this keeps up, I may need to think of a new team name next year! I wish anyone who has a fantasy team good luck, and I apologize to those that avoid it, as I am sure you are sick of hearing about your friends’ and coworkers’ teams.

It appears that the District Courts in New York are back up to full steam. This issue I have an interesting additional insured case for your enjoyment. Dealing with questions of whether or not an insurer must defend an additional insured, the court allowed allegations in a third-party complaint that the named insured’s negligence may have caused the triggering injury to trigger an insurer’s duty to defend an additional insured.

See you in two weeks,

Charles J. Englert, III

[email protected]      


The Third Article – Victory to the Church:

The Daily Times
Salisbury, Maryland
May 26, 1924

Prefers Ministry To Married Life

Engagement Of Modernist And Prominent
Society Leader By Bishop Manning

          New York, May 26. —The engagement of Mrs. Rita de Acosta Lydig and the Rev. Dr. Percy Stickney Grant, Rector of the Church of the Ascension, has been terminated because of the refusal of Bishop William L. Manning to give his consent to the marriage in the Protestant Episcopal Church. An announcement to this effect was given last night to the press by Mrs. Lydig. The engagement was formally announced in August 1921 and attracted wide attention because of Mrs. Lydig’s social prominence and Dr. Grant’s activity as a modernist leader in the Episcopal Church.

          The withholding of consent to the marriage is in accordance with a person except under specific conditions. Mrs. Lydig’s divorce from Philip M. Lydig was obtained in Paris in 1919 on ground that did not meet the requirements of the Protestant Episcopal Church.

          Mrs. Lydig’s first husband was W.E.D. Stokes, wealthy, hotel man, whom she married in 1895 and divorced a few years later. She was married to Mr. Lydig in 1902.


Dishing Out Serious Injury Threshold:

Dear Readers,

We are now thoroughly in September; the days are getting shorter and the nights cooler. While I love this time of year, it’s a little early to be seeing the Thanksgiving displays start to show up in stores.

In the Serious Injury Threshold world, Carter v. Patterson provides that Defendant expert findings that plaintiff had a pre-existing degenerative condition was not sufficient as Defendant expert did not account for plaintiff not having any complaints prior to the subject accident.

Be well,

Michael J. Dischley

[email protected]  


The Selma Times-Journal
Selma, Alabama
Oct 20, 1929

Mrs. Lydig Dies At Hotel In New York

          NEW YORK, Oct. 19—(AP)—Mrs. Rita de Acosta Lydig, former society leader prominent in the news a few years ago, died today at the Hotel Gotham of anemia.

          In 1895, she was married to W.E.D. Stokes. Five years later they were divorced. Her second marriage to Major Philip M. Lydig, also ended in divorce.

          Her engagement to the late Rev. Dr. Percy Sticknet Grant, former director of the Episcopal Church of the Ascension, was announced in 1921, but the marriage never took place because Bishop Manning objected to the ceremony taking place in the Protestant Episcopal Church.

          Six years later, Mrs. Lydig filed petition in bankruptcy, listing liabilities of $94,000. In 1913, she had sold her art collection for $262,555.

Editor’s note:  The marriage never took place and both Rita and Dr. Grant died without every marrying anyone.


Bucci on “B”:

Hello friends,

There was not much in the way of Coverage B issues in the courts the last couple of weeks.  I don’t have much to say today, either, which is rare indeed.  I think I’ll go with it and see what it’s like to be quiet. 

Diane L. Bucci

[email protected]


A Big Question a Century Ago:  Should Married Women Work?

The Sacramento Bee
Sacramento, California
17 Sep 1921

“Should Married Women Work” Is Revived.
Labor Commissioner Helpless

The whole question of “Should Married Women Work,” which was the subject of an extended symposium in the columns of The Bee a few months back, threatens to be resurrected in Sacramento, in view of the unemployment situation.

A woman writing to John S. Blair, Deputy State Labor Commissioner, says she thoroughly agrees with the sentiments expressed recently by Mrs. Samuel Gompers, wife of the President of the American Federation of Labor, that married women should work only in cases of economic necessity.

“But the local woman goes considerably further by expressing the belief that married women workers right here in Sacramento, due to their holding positions in homes, stores, and factories, are taking bread and butter out of the mouths of capable, needy and deserving sisters.

“This is one of those subjects concerning which there is much diverse opinion,” said Blair, “but if married women are able to hold positions and want to work, I don’t know what I can do about it.”


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

This is the period of the Jewish calendar for reflection. As we approach Yom Kippur, Jews across the world will reflect on the year past, seeking forgiveness from those they have wronged and perhaps even look inward seeking to forgive themselves, because we are often our own harshest critics.

This opportunity for reflection also coincides with the recent closing, in New York, of the window for bringing claims under the Child Victims Act. New York, like so many other states, passed a statute reviving the time in which to file suits arising from acts of child molestation where the statute of limitations had long since closed. It’s been reported that, over the two-year revival period, nearly 11,000 CVA lawsuits were filed in New York. By comparison, California and Delaware had the largest number of lawsuits in states that suspended the statutes of limitations in child sex abuse cases, with about 1,100 in each state, according to a national child protection organization. The scope of the claims, the reach into so many organizations of all ilk’s, speaks to not a singular siloed problem but a broader societal one.

CVA cases have a long way to go, as they wind themselves through a pandemic-clogged judicial system. It is too early to tell whether these victims will obtain justice, however one opts to define that term in this context. Will the victims obtain psychological relief, closure so to speak; will the goals of the CVA’s sponsors be met? There are many questions yet to be answered. Of course, the light shown on these horrific acts and our collective societal responsibility is a positive. We can and must do better.

Yet, the unintended negative consequences from the CVA are also now coming to the forefront. As we said, a court system nearly paralyzed by a once-in-a-century pandemic, now has 11,000 new tort suits to resolve. Those 11,000 suits have led to hundreds and perhaps ultimately thousands of corresponding insurance coverage actions. And then there are the bankruptcies. The public ones are well known—the Boy Scouts of America, the dozens of Roman Catholic Dioceses. But there are hundreds of others that will never make the newspapers—the psychological and medical practices that unwittingly employed a child abuser, tutoring and test preparation services, human services organizations, and charities, and perhaps we will even see school districts seek bankruptcy protection as they face the overwhelming costs for defense and settlements and judgments brought on by acts of long since retired administrations. And, of course, there is the impact on our insurance carrier clients. Premiums received 20, 30, and even 40 years ago are not nearly enough to cover the costs of defense and settlement of present-day actions. Carriers long ago took down statutory required reserves on the expectation that, for example, a school district, municipal, or church-issued policy written in 1985 could have no further claims. These monies will have to come from somewhere and, as we know, they will be passed on to the broader economic community in higher premiums and the increased cost of goods and services.

The cost, expense, and lost business opportunity as a result of these litigations, in New York alone, are likely to be measured in the hundreds of millions of dollars. The impact on human services organizations, charities, school districts, and religious institutions and the good works they do will be untold.

The history of the CVA is still being written. What will it be?

Lee S. Siegel

[email protected]


Nice Idea. Never Happened:

The Buffalo Enquirer
Buffalo, New York
17 Sep 1921


          IN BASEBALL, the wining team is the one that scores the greater number of runs. It often happens that the team with the greater number of base hits and fewer errors finishes with a minority of runs. Good luck in bunching hits or ill luck with untimely errors negatives general superiority of play.

          If that is injustice to be corrected or if baseball needs something to vary the monotony of the majority of treaders of the home plate taking the game, how would it do to adopt a new system of scoring? Why not add up the runs, the base hits, the sacrifice hits, the flies to the outfield and flies and rollers to the infield, outfield flies to count twice as much as infield strokes, the stolen bases, the missed strikes—deduct the errors and bases on balls—and strike an average for each team covering all the plays and misplays, the team with the higher average to be the winner?

          Baseball may not need this, but it would introduce something new. Perhaps it should be explained the idea of this suggestion is less to start something than to kill space on a dull day.


Rauh’s Ramblings:

Hello all,

It was a very disappointing start to the Bills’ season, but I am not going to dwell on it.  I have faith that we will redeem ourselves on Sunday against the Dolphins, and having faith is what being a Bills fan is all about!

This week, I discuss a case from the U.S. District Court for the District of New Jersey where a physician obtained power of attorney over his patient in order to commence a lawsuit on her behalf.  The lawsuit alleges wrongful denial of health insurance benefits under an ERISA-sponsored health insurance plan.  Read on for more!

Until Next Time,

Patricia A. Rauh

[email protected]


The Standard Union
Brooklyn, New York
Sep 17, 1921


          Babe Ruth has 13 more games in which to make four more home runs to reach the goal of 60 for this season. New York fans are willing to bet most anything that he will do it.

          The bambino will face the St. Louis Club at the Polo Grounds again to-day. He got his 56th off day sailing the bobbin over the rightfield stands.

          Interest in whether Ruth will make 60 home runs this season is so keen it almost rivals that in the pennant race itself. Ruth, himself, isn’t making any predictions now that he has shattered his own home-run record of 54 made last year.

Editor’s Note: the Babe hit 59 in 1921 and did not hit 60 in a season until 1927.


Storm’s SIU Examen:

Hi Everyone:

I had a blast Monday presenting at the International Association of Special Investigation Units (IASIU) conference in Orlando on: “The Opioid Epidemic’s Addiction to Insurance Claims: Identifying Drug Inspired Property/Casualty Claims and Analyzing the Coverage Issues Involved (i.e., ‘Drug Rentals’).” Thank you IASIU for the opportunity!  If this sounds like a presentation you would be interested in for your organization or company, please let us know.

Only one case for you this week -- in a federal declaratory judgment action commenced by insurers for rescission due to material misrepresentations in the underwriting process, a motion by the injured third-party to intervene and to be joined as a necessary party is denied. 

This week’s encouraging word: “Every day is another chance to get stronger, to eat better, to live healthier and to be the best version of you!”  I’ll start tomorrow, right after my second bowl of Lucky Charms.  

Talk to you soon,

Scott D. Storm

[email protected]


All for Two Bits:

The Brooklyn Daily Eagle
Brooklyn, New York
Sep 17, 1921


Prisoners Had Beaten Citizen and Robbed Him of 25 Cents


          Francis Maher of 315 Jay St., Joseph Kirby of 74 Clermont Ave. and John Cuskey of 68 Johnson St. were each held in default of $5,000 bail by Magistrate Dale, sitting in the Adams St. court this morning, for a hearing on Tuesday, on a charge of assault and robbery.

          Thomas Wagner of 262 Front St. was walking along Gold, near Johnson St., at 3 o’clock this morning when he was attacked, he says, by the three men, who knocked him down, kicked him and beat him and robbed him of 25 cents, all the money he had in his pocket. He says that the two others held him while Cuskey went through his pockets. He was making an outcry for help when they ran away.

          Patrolman Howard J. Smith of the Adams St. station saw them running and gave chase. He caught Cuskey, after firing four shots at him, on Myrtle ave. about four blocks from the scene of occurrence. The other two were arrested by other policemen.


Heintzman’s Hideout:

Dear Readers,

After a few months of difficulty sleeping, I’ve been enjoying a very disciplined sleep schedule. I put all electronics down at 11:00 pm each night, read for exactly 30 minutes, and fall asleep by about 11:40. Then I wake up at exactly 6:45 am. Given that my apartment is a two-minute walk from our Buffalo office, I’m usually in my office working by 7:45 each morning. I’ve found that a very regimented sleep schedule has cured my sleep difficulties, as my body now knows exactly when it should fall asleep and wakeup. This week, the Civil Court of the City of New York dismissed, on res judicata grounds, a plaintiff’s claim seeking assignment of no-fault benefits from an insurer.


Nicholas J. Heintzman

[email protected]


Oh My. A President who Played Golf 100 Years Ago:

Lawrence Daily Journal-World
Lawrence, Kansas
17 Sep 1921

The President Plays Golf


          Norfolk.  Sept. 17—President Harding and members of his vacation party who arrived in Hampton Roads on the Mayflower during the night, came ashore here today, the President going to the Norfolk country club for a round of golf. 


North of the Border: 

My Dear CP:

Back in Calgary to opinions, mediations, meetings for professional organizations … our week on the Canadian West Coast seems like a distant memory. However, I am definitely more energized and enthusiastic to be here. Looks like we vacationed in a window of opportunity that is closing. The folly of our provincial government in removing the COVID restrictions on July 1 has come home to roost. The virus has taken hold and is threatening our health care system with the ICUs at capacity. We are living the consequences of releasing the dragon. Our schools filled with unvaccinated kids are in session and in that vein, it is appropriate to discuss a coverage case as to whether a modified, yellow school bus is “an automobile” under a standard auto policy. See my column for more detail.

Heather Sanderson

[email protected]


Headlines from this week’s issue, attached:

Dan D. Kohane
[email protected]

  • A Good Read – Additional Insured Coverage Which Purports to be Excess, Ends Up Being Co-Primary, after SIR is Paid.  Court Looks to Complaint and Third-Party Complaint to Trigger AI Coverage

  • Another District Court Looks to Self-Serving, Third-Party Pleadings to Determine Duty to Defend an Additional Insured.  Excess Other Insurance Clause Does Not Apply Where Another Carrier Insured Different Risks


Steven E. Peiper

[email protected]

  • WCB Decision on the Existence of an Accident, Collateral Estopped Bodily Injury Litigation


Michael J. Dischley
[email protected]

  • Defendant Expert Findings that Plaintiff Had Pre-Existing Degenerative Condition Failed as Plaintiff did Not Have Any Complaints Prior to the Subject Accident


Agnes A. Wilewicz

[email protected]

  • Second Circuit Upholds Dismissal of Declaratory Judgment Action Related to Medical Malpractice Case, Where Policy at Issue Unambiguously Provided Excess Coverage Only for Claims Related to Employee Benefit Programs


Brian D. Barnas

[email protected]

  • Insurer’s Claim Evaluation is not Admissible Evidence of an Undisputed Amount that Must be Paid under an Insurance Policy


Lee S. Siegel

[email protected]

  • No HO Coverage for Cybersex Crimes


Diane L. Bucci

[email protected]

  • False Imprisonment by Proxy

  • Violation of Right of Privacy is a Covered Offense, but Coverage is Excluded


Brian F. Mark
[email protected]

  • No interesting construction defect cases to discuss this edition.  Check back in two weeks.


Eric T. Boron

[email protected]

  • Simply no time to submit this week.


Ryan P. Maxwell

[email protected]

  • New Insurance Circular “Reminds” Carriers Covering Homes Or Businesses Affected By Flooding of Their “Obligations”


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

[email protected]

  • When There Is Any Possibility That a Named Insured May Be At All Liable For A Triggering Injury, A Defense Is Owed To An Additional Insured


Patricia A. Rauh

[email protected]

  • Physician Obtains Power of Attorney Over Patient to Bring Suit on Her Behalf; Case Dismissed for Failure to State a Claim as Physician Plaintiff Did Not Sufficiently Plead that Defendant Improperly Denied Benefits Under ERISA Plan


Mirna. M. Santiago

[email protected]

  • Under the weather – catch you on the next CP.


Scott D. Storm

[email protected]

  • In a Federal Declaratory Judgment Action Commenced by Insurers for Rescission Due to Material Misrepresentations in the Underwriting Process, a Motion by the Injured Third-Party to Intervene and to be Joined as a Necessary Party is Denied


Nicholas J. Heintzman

[email protected]

  • Civil Court of the City of New York Dismisses Plaintiff’s Claim Seeking Assignment of No-Fault Benefits from Insurer on Res Judicata Grounds


Heather Sanderson

[email protected]

  • Is a Modified Yellow School Bus an “Automobile”?



We love hearing from you.  Write often.




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

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

Dan D. Kohane

[email protected]

Agnes A. Wilewicz

[email protected]

Patricia A. Rauh

[email protected]

Dan D. Kohane, Chair
[email protected]

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

Michael F. Perley
Agnieszka A. Wilewicz
Lee S. Siegel
Brian F. Mark
Diane L. Bucci
Mirna Martinez Santiago
Scott D. Storm
Thomas Casella
Brian D. Barnas
Eric T. Boron
Ryan P. Maxwell
Charles J. Englert
Patricia A. Rauh
Nicholas J. Heintzman
Diane F. Bosse
Joel R. Appelbaum

Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley
Scott D. Storm
Eric T. Boron
Brian D. Barnas

Dan D. Kohane
[email protected]

Jody E. Briandi, Team Leader
[email protected]

Mirna Martinez Santiago
Diane F. Bosse


Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri
Dishing out Serious Injury Threshold

Wilewicz’s Wide World of Coverage

Barnas on Bad Faith

Lee’s Connecticut Chronicles

Off the Mark

Boron’s Benchmarks

Bucci on “B”

Ryan’s Capital Roundup

CJ on CVA and USDC(NY)

Rauh’s Ramblings


Storm’s SIU Examen

Heintzman’s Hideout

North of the Border


Dan D. Kohane
[email protected]

09/03/21       U.S. Specialty Ins. Co. v. Harleysville Worcester Ins. Co.
United States District Court, Southern District of New York
A Good Read – Additional Insured Coverage Which Purports to be Excess, Ends Up Being Co-Primary, after SIR is Paid.  Court Looks to Complaint and Third-Party Complaint to Trigger AI Coverage

Editor’s Early Note:  I see that CJ covered this case in his column (an appropriate place to report it) but so did I – so you can get two different reviews.  Since I was reporting on the Eastern District case which follows, I wanted to report on this one as well). No extra charge.

370 Seventh Avenue Associates, LLC (“Owner”) and Aggressive Heating, Inc. (“Contractor”) entered in a contract to perform an oil-to-gas conversion project.  Contractor promised owner trade contract indemnity and it was required to provide Owner with additional insured coverage under a liability policy for claims cause “in whole or in part by the acts or omissions” of the contractor.  Contractor entered into a subcontract with E.N. Chimney (“subcontractor”) to do the work that Contractor had agreed to do.

Contractor secured a policy with Harleysville which contained a blanket additional insured endorsement adding as an additional insured those entities with whom it agreed in writing in a contract or agreement to insured, but only for acts or omissions caused in whole or in part by its acts or omissions (CG 20 33).

The Harleysville policy provided, however, that any coverage provided by its CG 20 33 would be excess over any other coverage, primary or excess, provided to the additional insured.

The US Specialty (“USSIC”) policy had limits of $1,000,000 each occurrence subject to a $100,000 self-insured retention, with the $1,000,000 in excess of the SIR and the SIR burned by defense costs and expenses.  Otherwise, its policy was excess over any policy where the owner was added as an additional insured.

USSIC argues that Harleysville policy obligated it to defend the Owner, its additional insured.  Harleysville argued that the complaint did not suggest its named insured, Aggressive, the Contractor, cause the accident and in any event, its policy was excess over the Owner’s policy, by its terms.

The District Court found that there was a reasonable possibility of coverage, based on the allegations in the underlying third-party complaint, where the Owner claimed that the Contractor’s negligence caused the accident combined with the allegations in the underlying plaintiff’s complaint, that he was working for the subcontractor.  Accordingly, Harleysville’s policy is triggered, at least for defense.

As to defense allocation, the court found that the amendment to Harleysville’s policy, placing it in excess over the additional insured’s policy was practically identical to USSIC’s other insurance clause, which held that it was excess over additional insured coverage provided by another carrier so both carriers had to share in the defense of Owner.  However, because of the SIR, which is not insurance, USSIC does not have to share in the defense of the Owner until the $100,000 SIR is exhausted by Owner’s payments (or by payments of $100,000 by Harleysville).


09/01/21       AXIS Construction Corp. v. Travelers Indemnity Company
United States District Court, Eastern District of New York
Another District Court Looks to Self-Serving, Third-Party Pleadings to Determine Duty to Defend an Additional Insured.  Excess Other Insurance Clause Does Not Apply Where Another Carrier Insured Different Risks

Axis (“Contractor”) was working on a construction project in Islandia, New York.  It engaged two subcontractors, “AWI” for millwork and “ABC” for flooring.  Each required that the Contractor be an additional insured on a primary and non-contributory basis for claims caused “in whole or in part” by the acts or omissions of the subcontractor. AWI was insured with Travelers, but specially excluded the Contractor’s acts or omissions. ABC was insured with SNIC but the SNIC coverage issues were not before the court.

Filippone, an AWI employee, was hurt during the project when he fell. Travelers refused to defend Owner claiming its insured did not cause the accident.

The motions concerned Travelers's duty to defend Axis in two respects: (I) whether the allegations in the Filippone Action give rise to a reasonable possibility of coverage under Travelers's policy, or whether Travelers has knowledge of facts which potentially bring the Filippone Action within its policy coverage, and, if so, (II) whether Travelers is nevertheless relieved of its duty to defend Axis because such coverage would be excess.

Again, the court considered the third party pleadings in determining Travelers duty. Travelers argued that the third-party complaint was self-serving (it was).  The court cited seven cases, including Indian Harbor v. Almar Tower, LLC, 165 AD3d 549 (1st Dept. 2018) that allowed the court to examine the third-party complaint to ascertain obligations of the third-party defendant’s carrier to defend the third-party plaintiff.

Travelers argued that its policy was excess to the ABC-secured SNIC policy because its language provided that the Travelers policy was excess over any other insurer’s that had an obligation to defend the Owner.  The court rejected that argument because the risk insured by Travelers was different that the risk insured by SNIC.


Steven E. Peiper
[email protected]

09/15/21       Lennon v. 56th Park(NY) Owner, LLC
Appellate Division, Second Department
WCB Decision on the Existence of an Accident, Collateral Estopped Bodily Injury Litigation

Plaintiff allegedly sustained injury to his knee when a hoist elevator made several sudden rises and drops.  Within weeks, plaintiff filed a workers’ compensation claim which ultimately resulted in a hearing with an Administrative Law Judge.  Plaintiff testified on his own behalf at the hearing, and plaintiff’s counsel had occasion to cross examine witnesses from his employer who testified that the incident could not have happened in the manner claimed by plaintiff.  In short, the employer argued that the mechanical safety features of the hoist elevator would have prevented the rise/fall action described by plaintiff, and even if it had happened the entire system would have had to have been reset.  There was no record of a malfunction that day, and no record of the elevator being reset. 

At the conclusion of the hearing, the ALJ rendered an opinion that denied plaintiff’s workers’ compensation claim.  In his concluding remarks, the ALJ noted that he “did not believe that the hoist elevator malfunctioned in any way, much less in the drastic and dramatic way described by [the plaintiff].”

Nevertheless, while the workers’ compensation claim remained pending plaintiff also commenced a personal injury action against, among others, 56th and Park.  Plaintiff’s claims were premised upon alleged violations of Labor Law §§ 200, 240(1) and 241(6).  Defendants all appeared by way of Answer, but no one asserted collateral estoppel as an affirmative defense therein. 

Approximately five months after the Note of Issue was filed, defendants moved for leave to amend their Answers to assert a collateral estoppel defense.  They also moved, concurrent therewith, for summary judgment.  The trial court granted the motion to amend and granted defendants’ motion for summary judgment.

On appeal, the Court first addressed the question of whether defendants’ motion to amend should have been granted.  The Court noted that leave to amend shall be freely granted unless the proposed amendment is baseless, prejudicial to the opposition party, or there was inordinate delay in seeking the relief.  

Here, the Court found that the proposed affirmative defense was potentially meritorious and there was no surprise or prejudice to plaintiff.  Indeed, plaintiff was aware that the ALJ had previously dismissed the workers’ compensation claim on the basis that plaintiff’s story was not credible.  While the Court cautioned that the motion to amend could have been made approximately 18 months earlier, the fact that plaintiff was aware of the defense during that same time mitigated any potential prejudice to which he may have been subjected.

Having affirmed the motion to amend, the Appellate Division next tackled the question of whether the hearing decision resulted in collateral estoppel.  The Court reviewed several cases that have previously grappled with this issue and appeared to endorse the rule that collateral estoppel principles apply only when the central issue decided in the workers’ compensation hearing is squarely identical to the issue in the companion bodily injury case.  If there are even the slightest differences in theories of recovery or damages claimed, a collateral estoppel defense will be lost. 

Here, the issue decided in the workers’ compensation process was the factual issue of whether the incident occurred in the first place.  The ALJ held that the incident did not happen, and his finding was affirmed on appeal to the full Workers’ Compensation Board.  That same issue (ie., whether a tortious event occurred) is central to the theory of plaintiff’s bodily injury case.  Because plaintiff had a full and fair opportunity to litigate that issue (albeit in a quasi-judicial setting), and because the factual issues were identical, the collateral estoppel defense applied. 


Michael J. Dischley
[email protected]

08/26/21       Louis S. Carter v. Jermaine Patterson
Appellate Division, Fourth Department
Defendant Expert Findings that Plaintiff Had Pre-Existing Degenerative Condition Failed as Plaintiff did Not Have Any Complaints Prior to the Subject Accident

Appeal and cross appeal from an amended order of the Supreme Court, Erie County (Frank A. Sedita, III, J.), entered January 24, 2020. The amended order, among other things, denied the motion of defendant Jermaine Patterson for summary judgment dismissing the complaint against him, denied in part plaintiff's motion for partial summary judgment on the issue of negligence, and granted in part the cross motion of plaintiff for partial summary judgment on the issue of serious injury.

Plaintiff commenced this action to recover damages for injuries he allegedly sustained when his vehicle was struck by a vehicle driven by Jermaine Patterson (defendant). Plaintiff asserted that, as a result of the accident, he suffered 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 contends on his appeal that the court erred in denying his motion for summary judgment because he met his initial burden of establishing that "plaintiff did not suffer a serious injury causally related to the accident" and plaintiff failed to raise a triable issue of fact in opposition. However, the Appellate Court found that, contrary to defendant's contention, his own submissions in support of his motion raise triable issues of fact with respect to whether the motor vehicle accident caused plaintiff's alleged injuries. Defendant submitted the report of his expert physician, who concluded that plaintiff's lumbar strain or sprain was not significant and that plaintiff's disc injuries were degenerative in nature and not caused by trauma from the accident. The report of defendant's expert, however, "does not establish that plaintiff's condition is the result of a preexisting degenerative [condition] inasmuch as it 'fails to account for evidence that plaintiff had no complaints of pain prior to the accident'”.

The Appellate Court also rejected defendant's contention that he established his entitlement to judgment as a matter of law with respect to the 90/180-day category of serious injury. Defendant's own submissions in support of his motion included plaintiff's deposition testimony that he was not able to perform his normal or customary activities during the first four or five months after the accident. Thus, the Appellate Court found that defendant failed to establish that plaintiff was not limited or impaired in carrying out substantially all of his customary daily activities during 90 of the first 180 days following the accident.

Contrary to defendant's further contention, the Appellate Court found that the Court also properly denied those parts of his motion with respect to the significant limitation of use and permanent consequential limitation of use categories of serious injury. Even assuming, arguendo, that defendant made a "prima facie showing that plaintiff's alleged injuries did not satisfy [the] serious injury threshold" with respect to those categories the Appellate Court concluded that plaintiff raised an issue of fact sufficient to defeat defendant's motion by presenting objective proof that he sustained two herniated discs, together with the qualitative and quantitative assessments of his treating orthopedist and chiropractor, who both concluded that plaintiff's injuries were significant, permanent, and causally related to the accident.

As such, the Appellate Court Ordered that the amended order so appealed from is unanimously modified on the law by denying those parts of plaintiff's cross motion for partial summary judgment with respect to the significant limitation of use and 90/180-day categories of serious injury within the meaning of Insurance Law § 5102 (d) and granting those parts of plaintiff's motion for partial summary judgment seeking a determination that defendant Jermaine Patterson was negligent and that his negligence was a proximate cause of the accident, and as modified the amended order is affirmed without costs.


Agnes A. Wilewicz

[email protected]


08/27/21       Day Kimball Healthcare v. Allied World Surplus Lines Ins. Co.
United States Court of Appeals, Second Circuit
Second Circuit Upholds Dismissal of Declaratory Judgment Action Related to Medical Malpractice Case, Where Policy at Issue Unambiguously Provided Excess Coverage Only for Claims Related to Employee Benefit Programs

Day Kimball Healthcare, Inc. and Erica J. Kesselman appealed from an order that dismissed their complaint that sought a declaratory judgment directing Allied World Surplus Lines Insurance Company and Steadfast Insurance Company to indemnify plaintiffs pursuant to their respective insurance policies in connection with an underlying medical malpractice lawsuit.

Day Kimball was the hospital where Kesselman practiced obstetrics. Day Kimball had a primary insurance policy through Lexington Insurance Company that covered a variety of liabilities, including professional liability coverage for medical malpractice claims and employee benefit claims (the “Lexington Policy”). Plaintiffs also contracted for excess coverage from both Allied World and Steadfast. Both plaintiffs were sued in Connecticut state court for medical malpractice, and Lexington is providing a defense in that action.

The Allied World policy was made up of three insurance agreements (“Insuring Agreements”): A, B, and C. As relevant here, Insuring Agreement A provided excess coverage to the Lexington Policy for professional liability claims. It was a “claims-made and reported policy,” and the parties agreed that plaintiffs failed to provide Allied World with timely notice of the Corona claims. Allied World refused to provide excess coverage on the ground that the claim was untimely, and Steadfast, which follows form with the Allied World policy, denied coverage on the same basis. Because they were not able to access coverage through Insuring Agreement A, plaintiffs sought coverage under Insuring Agreement C, which provided excess coverage for claims related to employee benefit programs.

Under Connecticut law, which applied here, “[a]n insurance policy is to be interpreted by the same general rules that govern the construction of any written contract and enforced in accordance with the real intent of the parties as expressed in the language employed in the policy [and] [t]he policy words must be accorded their natural and ordinary meaning[.]” A court “must look at the contract as a whole, consider all relevant portions together and, if possible, give operative effect to every provision in order to reach a reasonable overall result[.]”

Here, the Second Circuit held that the underlying district court correctly dismissed the complaint. Insuring Agreement C unambiguously provided excess coverage to the Lexington Policy only for claims related to employee benefit programs. The Schedule of Underlying Insurance set out in the relevant agreement detailed the five different types of insurance coverage issued to the insured, and for each category identifies the underlying insurers, policy number, policy period and liability limit. Insuring Agreement C stated plainly that it is “in excess of the Applicable Underlying Limit for the insurance identified in Items 3 and 4,” and that the “terms and conditions of such Scheduled Underlying Insurance are, with respect to this Insuring Agreement C., made a part of this Policy.”

The underlying policy’s employee benefits coverage provided coverage for alleged wrongful acts committed “while acting solely within the administration of your employee benefit programs.” Such programs included “[g]roup life insurance, group accident or health insurance, profit sharing plans, pension plans, employee stock subscription plans, workers compensation, unemployment insurance, social security benefits, disability benefits . . . .”

The underlying litigation was a medical malpractice action that clearly implicated only the professional liability coverage. The court was thus unpersuaded by plaintiffs’ argument that Insuring Agreement C's use of the word “insurance” instead of “coverage” translated into Insuring Agreement C providing excess coverage for all claims covered by the underlying Lexington policy, rather than just claims arising out of employee benefit matters. The Second Circuit went on to state that the district court correctly rejected this argument, aptly noting that: “The use of two largely interchangeable words does not create ambiguity nor upend the clear structure set-up by the relationship between the Schedule of Underlying Insurance and the individual Insuring Agreements. The Insuring Agreements specifically identified the item or items within the Schedule of Underlying Insurance to which they provide excess coverage. The Schedule of Underlying Insurance then specifically and unambiguously identified, among other attributes, the type of coverage and the underlying policy to which each item refers.”

Plaintiffs also sought coverage under the Steadfast policy, which was excess to both the Lexington and Allied World policies, and followed form with those policies. Plaintiffs argued that because they were entitled to coverage under the Allied World policy pursuant to Insuring Agreement C, they were thus entitled to coverage under the Steadfast Policy. As explained above, plaintiffs were wrong about their right to coverage under Insuring Agreement C, however, and thus are also incorrect about their entitlement to coverage under the Steadfast policy.

Finally, on appeal plaintiffs argued that Steadfast’s maintenance provision preserved coverage under Allied World’s Insuring Agreement A. At oral argument before the district court, however, plaintiffs asserted that the maintenance provision left Steadfast liable under Insuring Agreement C, not Insuring Agreement A, affirmatively agreeing that Insuring Agreement A was 4 “no longer in play.” The Second Circuit therefore concluded that the plaintiffs’ argument relating to the maintenance provision and Insuring Agreement A was forfeited.


Brian D. Barnas
[email protected]


09/10/21       Hallaren v. Geico Casualty Company
United States District Court, District of Colorado
Insurer’s Claim Evaluation is not Admissible Evidence of an Undisputed Amount that Must be Paid under an Insurance Policy

On April 26, 2019, Mr. Hallaren was injured in a motorcycle crash.  He received $75,000 combined from the tortfeasor and other policies not at issue in this case.  Mr. Hallaren was also insured through Geico Casualty (the “Insurer”) with a liability limit of $100,00 in UIM benefits.  Mr. Hallaren filed suit on November 2, 2020, by which time he had undergone two surgeries related to the accident.  As of that date, the Insurer had not paid any UIM benefits to Mr. Hallaren.

Importantly, prior to receiving all of Mr. Hallaren's medical records, the Insurer had evaluated Mr. Hallaren's medical bills as $70,573.57.  The evaluation also estimated that Mr. Hallaren had suffered $20,000 in “Other Specials” and $40,000 for various categories of “Generals,” which included estimates for pain and suffering.  Based on these numbers, the Insurer evaluated the low end of the “full value” of Mr. Hallaren's claim as $93,154.61.  As previously noted, Mr. Hallaren had already received $75,000.  When that amount is deducted from $93,154.61, the remainder is $18,154.61—which is the amount the Insurer in its own evaluation identified as the start of its negotiation range.  Notably, because Mr. Hallaren's medicals were only $70,573.57 and he had already been paid more than this from his other polices and the tortfeasor, none of the other amounts listed in the Insurer's claim evaluation were for undisputed medical bills—the $18,154.61 is comprised exclusively of estimated unliquidated future economic damages, such as future medical bills.

The Insurer made several settlement offers: $18,154.61 on April 30, 2020, $62,573.57 on September 18, 2020, and $65,000 on October 1, 2020.  On October 22, 2020, Mr. Hallaren’s attorney wrote to the Insurer that its offers meant that his claim was worth at least $62,573.57 and requested payment be tendered in that amount.  The Insurer responded by emphasizing that the offers were simply offers to compromise and settle a disputed claim, not an admission of liability or the worth of the claim.

Mr. Hallaren brought a bad faith claim against the Insurer based on its settlement offers and evaluation of the claim.  At the time of the decision, the Insurer had paid the full policy limits, thus eliminating the breach of contract claim.  The court first held that Mr. Hallaren could not rely on the settlement offers to prove the existence of an undisputed amount.  However, Mr. Hallaren also argued that the Insurer’s evaluation of the claim constituted evidence that the claim was undisputed and should have been paid.

The court found that a claim evaluation is not admissible evidence of an undisputed amount that must be pad under an insurance policy.  The claim evaluation informed the settlement range for Mr. Hallaren's noneconomic and future, undetermined medical damages, and included a variety of other factors that are, by their very nature, subjective.  The settlement offers and the underlying evaluation were prepared simply to aid in reaching a compromise and are not binding on the Insurer.  Since Mr. Hallaren’s bad faith claims were premised solely on the claim evaluation, the court granted summary judgment in favor of the Insurer.


Lee S. Siegel
[email protected]

09/10/21       Liberty Ins. Corp. v. Lamb et al
United States District Court, District of Connecticut
No HO Coverage for Cybersex Crimes

Liberty won judgment on the pleadings, as the court found it had no duty to defend or indemnify its insureds for allegations of computer hacking and related activities.

Lamb was arrested and pled guilty to dozens of counts of various cybersex crimes against minors, including voyeurism, computer crimes, and unlawful dissemination of an intimate image. The three “Doe” defendants sued Lamb and two other parties in Connecticut Superior Court, alleging that Lamb used computers provided by the Lohbuschs (presumably his parents) to hack into their cloud-based personal and social media accounts, gaining access to, among other things, nude photographs. Lamb posted the nude photographs together with disparaging comments about the Does on social media sites and/or forwarded that material via electronic means to, inter alia, their contacts, parents and workplaces. The Does’ causes of action against Lamb, a minor, sound in intentional infliction of emotional distress, negligent infliction of emotional distress, libel, invasion of privacy by false light, and invasion of privacy by intrusion upon seclusion. The claims against Lohbusch include negligence, negligent entrustment, and negligent supervision of Lamb during the period when he was a minor. The state court action also accuses Lohbusch of fraudulently transferring property. The Does assert that they have suffered severe anxiety, shame, embarrassment, loss of sleep, weight loss, hair loss, nausea, shaking tremors, heart racing, nightmares, thoughts of suicide, self-harm, high blood pressure, panic attacks, self-medication, loss of community, depression, post-traumatic stress disorder, obsessive-compulsive disorder, taunting, bullying, and harassment.

Liberty provided homeowners insurance to Lohbusch from 2016 through 2018; however, the complaint asserted that Lamb’s conduct began in 2012 and 2013, against the respective Does. Liberty argued that it had no duty to defend or indemnify the insureds because the allegations, as alleged, do not claim bodily injury because of an occurrence. Further, even if coverage was triggered, the policies explicitly exclude coverage for bodily injury and property damage “arising out of sexual molestation, corporal punishment or physical or mental abuse,” and also exclude coverage for bodily injury and property damage “that was expected or intended by the insured.”

The Does claimed that the policies’ definition of “bodily injury” should include emotional distress, relying on the definition’s inclusion of “bodily sickness” and “bodily injury.” Our well-versed New York readers will recognize that this argument persuaded the Court of Appeals; however, it did not carry the day in Connecticut. The federal court held that dictionary definitions do not trump clear Connecticut precedent that “emotional distress, by itself, is not a bodily injury” and the physical symptoms that result from emotional distress “still do not count as bodily injury” (citations omitted). Moreover, the court found that the allegations did not assert bodily injury caused by an occurrence during the policy period and that allegations of self-harm are not a bodily injury caused by an occurrence but rather are a consequence of the emotional injury and abuse.

In addition, the court held that the abuse exclusion precludes coverage in any event. The policies unambiguously exclude coverage for bodily injury arising out of mental abuse or that was expected or intended by the insured, the court wrote. The exclusion for physical or mental abuse contains no implicit intentionality requirement and the term “abuse” is unambiguous. The court, therefore, concluded that all of the Does’ underlying allegations arose out of claimed mental abuse, which is precluded from coverage.

Finally, the court also held that the Does’ complaint asserted injury that was expected or intended by the insured. The allegations in the Underlying Action, the court wrote, show that Lamb acted intentionally. The conduct occurred over several years, Lamb used more than one computer to hack into the cloud-based accounts, Lamb posted nude photographs online, in addition to posting disparaging comments about his victims, and he shared the material with people who knew the victims. “These allegations are plainly inconsistent with a negligence claim and plainly describe intentional conduct. That is why Lamb was charged with criminal offenses and pled guilty to these crimes. Thus, Lamb's conduct alleged in the Underlying Action was so inherently harmful that the resulting emotional harm suffered by the Doe Defendants was unarguably foreseeable, and under the circumstances here was, as a matter of law, expected and intended.”


BUCCI on “B”
Diane L. Bucci

[email protected]

09/03/21       Main St. Am. Assurance Co. v. Marble Sols., LLC
W.D. Tenn.  
False Imprisonment by Proxy

Marble Solutions was hired by the Holiday Inn Express to renovate the hotel. Marble Solutions employed one Waller, who allegedly raped a minor in the hotel.  The plaintiffs sought to recover from Marble Solutions based on various theories including the failure to properly vet the employee, who had an extensive history of criminal acts against minors.  

In the declaratory judgment action that followed, the insurer agreed that the claim involved bodily injury in the coverage territory.  It argued however, such claims did not involve an occurrence. 

As it pertained to Coverage B, the rape involved false imprisonment because the victim was restrained through violence, threats, and the like.   However, argued the insurer, the offense had to arise out of the insured’s business; mere false imprisonment outside of business activities did not trigger coverage.  Marble Solutions did not restrain the victim, nor was it its business to do so.   Nevertheless, the plaintiff  argued that Marble Solutions was liable for the damages resulting from the false imprisonment based on various theories of negligence, gross negligence and respondeat superior.

The court held that the insurer’s interpretation of arising out of the insured’s business was too narrow, and it was possible that the attack “arose out of,” the business, broadly construed. Consequently, the court held that the suit alleged personal and advertising injury.  It held that while the claims against Waller would not be covered, the individual claims against Marble Solutions might.  Presumably because Marble Solutions did not knowingly falsely imprison anyone, the knowing and intentional exclusions were not addressed. 


09/07/21       Allstate Insurance Co. v. Brittany Russell & Lee Mccasland d/b/a Lee Mccasland Agency
N.D. Tex.
Violation of Right of Privacy is a Covered Offense but Coverage is Excluded

In the underlying lawsuit, Russell sought damages against insured McCasland for the improper disclosure, publication, and distribution of nude photographs after she resigned her post.   McCasland found the photographs, presumably in course of examining her computer, and then allegedly showed them to her former co-workers and business associates.  It was alleged that McCasland’s actions were malicious and intended to harm her image and reputation. 

Russell brought claims against McCasland for (1) disclosing intimate visual material under Tex. Civ. Prac. & Rem. Code Section 98B.001; (2) invasion of privacy; (3) intentional infliction of emotional distress; (4) defamation; and (5) negligence.

The Coverage B offense addressed by the court is the, “[o]ral or written publication, in any manner, of material that violates a person's right of privacy.” Allstate argued that the facts were specifically excluded from the scope of coverage by one of the following exclusions: 

a.       Knowing Violation of the Rights of Another

"Personal and advertising injury" caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict “personal and advertising injury".

b.       Material Published With Knowledge Of Falsity

"Personal and advertising injury" arising out of oral or written publication, in any manner, of material, if done by or at the direction of the insured with knowledge of its falsity.

The insured argued that there was coverage based on the claims made against him, including negligence in the use of the computer.  “Negligence” is not a trigger of coverage.  To the contrary, the court found that the focus of a duty to defend inquiry is the “origin of damages” not the “legal theories advanced” by a plaintiff. Id. (citing VRV Development L.P. v. Mid-Continent Cas. Co., 630 F.3d 451, 456 (5th Cir. 2011)). 

According to the court, the origin of damages was the disclosure of photographs to others as opposed to the storing of computer activities or the failure to warn her of the computer policy.  If there was no disclosure, there would be no harm.  Id. relying on Burlington Ins. Co. v. Mexican American Unity Council, Inc., 905 S.W.2d 359, 363 (Tex.App.—San Antonio 5 1995, no writ) (holding that under the “concurrent causation” doctrine, there is no duty to defend when covered and excluded events combine to cause damages.)

The insured attempted to argue that he did not intend to harm Russell.  He alleged he showed the photographs to three female employees solely to determine why they were on the computer and  instructed them not to disclose the fact of them.  The court held that why the photographs were disclosed was irrelevant.  It was the act of showing them that was the origin of the damages.  Consequently, coverage was excluded by the  Knowing Violation of the Rights of Another exclusion. 


Brian F. Mark
[email protected]

No interesting construction defect cases to discuss this edition.  Check back in two weeks.


Eric T. Boron
[email protected]

Simply no time to submit this week.


Ryan P. Maxwell
[email protected]

Regulatory Wrap-Up

09/02/21       DFS Guidance For Handline Tropical Depression Ida Claims
Department of Financial Services
New Insurance Circular “Reminds” Carriers Covering Homes Or Businesses Affected By Flooding of Their “Obligations”

On September 2, 2021, DFS issued Insurance Circular Letter No. 8 (2021), in response to major flooding following Tropical Depression Ida. Therein, DFS advises that during this emergency “the Department expects all insurers to do their part.” Not only are insurers expected to “work towards [] fair and speedy resolution of claims,” but “also fulfill their obligations as good corporate citizens in this state by assisting policyholders with helpful information regarding emergency aid, tips for damage prevention, and resources for remediating damage.”

In accordance with the above, DFS “reminds all carriers covering homes or businesses in the areas affected by the flooding of their obligations,” providing a list of these “obligations”. DFS lists the following “obligations”:

  • Carriers are required to increase their resources to ensure proper treatment of their policyholders during this State of Emergency;
  • Carriers must allow claimants to make immediate repairs to damaged property if necessary to protect health or safety;
  • Carriers must allow claimants to provide as reasonable proof items such as photographs or video recordings (without the need for a physical inspection), material samples (if applicable), inventories, and receipts for any repairs to or replacement of property;
  • Carriers and their third-party adjusters must promptly assess claims;
  • Carriers must provide affected policyholders with fair and equitable claim settlement treatment under the New York Insurance Law and Regulations;
  • Carriers must not deny claims caused by multiple perils when not all perils are covered under the applicable policy; and
  • Carriers should make timely payments of claims that arise out of covered perils.

DFS urges carriers to maintain adequate numbers of independent adjusters, and/or augment existing staff by sponsoring individuals not licensed in New York, but otherwise qualified to adjust claims.

Maxwell’s Minute: Respectfully, the underlined “obligation” above appears misleading. In a recent email exchange between a few colleagues, it was noted that after a flood, a water backup is typically not covered (absent a special endorsement) because:

  • The “Water” exclusion typically excludes flood, as well as water that backs up through sewers or drains.Both are often generally excluded.

  • The “Water” endorsement is usually preceded by anti-concurrent causation language (“We do not insure for loss caused directly or indirectly by any of the following.Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.These exclusions apply whether or not the loss event results in widespread damage or effects a substantial area”).

  • Under N.Y. decisional law, in the absence of anti-concurrent causation language, when there are multiple causes combining to result in the damage, the analysis must consider the proximate, efficient, dominant cause, which arguably is the flood.

Not only do New York courts require considerations of proximate, efficient, and dominant cause of the damage, absent anti-concurrent causation language, but the particular terms of each individual policy must be considered (including anti-concurrent causation language), which lends me to conclude that each and every carrier is not “obligated” to “not deny claims caused by multiple perils when not all perils are covered under the applicable policy.”


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

09/03/21       U.S. Specialty Insurance Company v. Harleysville Worcester Insurance Company
United States District Court, Southern District of New York
When There Is Any Possibility That a Named Insured May Be At All Liable For A Triggering Injury, A Defense Is Owed To An Additional Insured

Plaintiff U.S. Specialty Insurance Company (“USSIC”) brought this declaratory judgment action against defendant Harleysville Worcester Insurance Company (“Harleysville”), seeking inter alia, a declaration that Harleysville has a duty to defend and indemnify in connection with a state-court personal injury action.  Non-parties 370 Seventh Avenue Associates, LLC (the “Owner”)1 and Aggressive Heating, Inc. (“Aggressive”) entered into a contract pursuant to which Aggressive was to perform an oil-to-gas boiler conversion project (the “Project”) for the Owner (the “Contract”). The contract, defining Aggressive as the “Contractor” provided:

§ 3.3.1 The Contractor shall supervise and direct the Work, using the Contractor’s best skill and attention. The Contractor shall be solely responsible for, and have control over, construction means, methods, techniques, sequences and procedures and for coordinating all portions of the Work under the Contract, unless the Contract Documents give other specific instructions concerning these matters. If the Contract Documents give specific instructions concerning construction means, methods, techniques, sequences or procedures, the Contractor shall evaluate the jobsite safety thereof and, except as stated below, shall be fully and solely responsible for the jobsite safety of such means, methods, techniques, sequences or procedures. If the Contractor determines that such means, methods, techniques, sequences or procedures may not be safe, the Contractor shall give timely written notice to the Owner and [the] Architect and shall not proceed with that portion of the Work without further written instructions from the Architect. If the Contractor is then instructed to proceed with the required means, methods, techniques, sequences or procedures without acceptance of changes proposed by the Contractor, the Owner shall be solely responsible for any loss or damage arising solely from those Owner-required means, methods, techniques, sequences or procedures.

§ 3.3.2 The Contractor shall be responsible to the Owner for acts and omissions of the Contractor’s employees, Subcontractors and their agents and employees, and other persons or entities performing portions of the Work for, or on behalf of, the Contractor or any of its Subcontractors.

§ 3.3.3 The Contractor shall be responsible for inspection of portions of Work already performed to determine that such portions are in proper condition to receive subsequent Work.

Aggressive was also required to purchase insurance naming the Owner as an additional insured for claims caused in whole or in part by the Contractor’s (Aggressive) negligent acts or omissions during Aggressive’ s operations.

The underlying state-court action alleged that Craig Garcia was injured on May 20, 2014, while working on a construction project at the Owner’s premises, and asserted claims for negligence and under the New York Labor Law against the Owner and The Feil Organization, Inc. (“Feil”). the Owner filed in the Underlying Action a third-party complaint asserting against Aggressive claims for breach of contract, contractual indemnification, common law indemnification, and contribution (the “Third Party Complaint”). In the Third Party Complaint, the Owner alleged that, if Garcia sustained any damages, “then such damages were caused solely by reason of the primary, active and affirmative negligence, recklessness and/or breach of contract of Aggressive . . . .” The Owner then tendered to Aggressive its defense in the state-court action. Harleysville responded to the Owner with a reservation of rights, and later agreed to defend Aggressive in the state-court action under a reservation of rights. The Owner re-tendered its defense to Harleysville, in response to which Harleysville asserted that “it has no duty to defend” the Owner. USSIC is currently defending the Owner in the Underlying Action.

Aggressive obtained a commercial general liability (“CGL”) insurance policy from Harleysville for the period July 1, 2013, to July 1, 2014 (the “Harleysville Policy”), with limits of $1 million per occurrence and $2 million in the aggregate. The Harleysville Policy contains an endorsement entitled “Additional Insured — Owners, Lessees or Contractor — Automatic Status When Required in Construction Agreement With You” (the “Additional Insured Endorsement”), which provides:

A. Section II – Who Is An Insured is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy. Such person or organization is an additional insured only with respect to liability for “bodily injury”, “property damage” or “personal and advertising injury” caused, in whole or in part, by:

1. Your acts or omissions; or

2. The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured.

The Harleysville Policy also contains an “Other Insurance” provision which provides:

If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as


a. Primary Insurance

This insurance is primary except when Paragraph b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in Paragraph c. below.

b. Excess Insurance

(1) This insurance is excess over:

(a) Any of the other insurance, whether primary, excess, contingent or on any other basis:

(i) That is Fire, Extended Coverage, Builder’s Risk, Installation Risk or similar coverage for “your work”;

. . .

(b) Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured by attachment of endorsement.

(2) When this insurance is excess, we will have no duty under Coverages A or B to defend the insured against any “suit” if any other insurer has a duty to defend the insured against that “suit”. If no other insurer defends, we will undertake to do so, but we will be entitled to the insured’s rights against all those other insurers.

(3) When this insurance is excess over other insurance, we will pay only our share of the amount of the loss, if any, that exceeds the sum of:

(a) The total amount that all such other insurance would pay for the loss in the absence of this insurance; and

(b) The total of all deductible and self-insured amounts under all that other insurance.

(4) We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part.

c. Method Of Sharing

If all of the other insurance permits contribution by equal shares, we will follow this method also. Under this approach each insurer contributes equal amounts until it has paid its applicable limit of insurance or none of the loss remains, whichever comes first.

If any of the other insurance does not permit contribution by equal

shares, we will contribute by limits. Under this method, each insurer’s share is based on the ratio of its applicable limit of insurance to the total applicable limits of insurance of all insurers.

The Harleysville Policy also has an “Other Insurance Amendment”, which states:

Any coverage provided by . . . CG 20 33 Additional Insured — Owners, Lessees or Contractors — Automatic Status When Required in Construction Agreement with You . . . to an additional insured shall be excess over any other valid and collectible insurance available to the additional insured whether primary, excess, contingent, or on any other basis unless a written contract specifically requires that this insurance be primary and that the additional insured’s primary coverage be noncontributory.

Even if the requirements of the above paragraph are met, this coverage shall share with other insurance available to the additional insured which is conferred onto said person or organization by a separate additional insured endorsement. This cost sharing shall be pursuant to Section IV, paragraph 4.c., Method of Sharing . . .

The Owner is the named insured under a CGL insurance policy that USSIC issued for the period June 17, 2013, to June 17, 2014 (the “USSIC Policy”), with limits of $1 million per occurrence and $2 million in the aggregate, and applies in excess of a self-insured retention of $100,000 each occurrence (the “SIR”). The SIR is defined as “the amount of dollars including ‘loss adjustment expense’ for which the Named Insured is responsible for each ‘occurrence’ or offense. This amount is charged to the ‘stop loss aggregate’.” The USSIC Policy contains the same “Other Insurance” provision as the Harleysville Policy and contains an SIR Endorsement which provides:

The Insurance provided by this policy is subject to the following additional provisions:

1. The Limits of Insurance shown in the Declarations will apply in excess of the “self-insured retention” designated in the Schedule above. You agree not to reinsure the retained limit without our knowledge and written permission. Our obligation under the policy applies only to the amount excess of the “selfinsured retention”. This policy will not drop down to assume or satisfy your obligation under the “self-insured retention”.

The “self-insured retention” limit shown in the Schedule will be reduced by any “loss adjustment expense” you incur.

You have the obligation to provide proper defense and investigation of any claim. We have the right, but no obligation, in all cases, at our own expense to assume charge of the defense and/or settlement of any claim, and, upon our written request, you must tender such portion of the “self-insured retention” as we may deem necessary to complete in the settlement of such claim. Once the “self-insured retention” limit shown in the Schedule above has been properly exhausted, we will have the right and duty to defend you against any claim or suit. You will accept any offer of settlement within the “self-insured retention” and deemed reasonable by us. We will not pay any loss, cost or expense above what we would have paid had the loss been settled for any reasonable offer within the “self-insured retention.”

Addressing the question of, must Harleysville defend the Owner in the state-court action, USSIC argues that the allegations of the Underlying Action clearly trigger Harleysville’s duty to defend its additional insured, the Owner, and pointed out that Aggressive agreed to, and did, include the Owner as an additional insured “for claims caused in whole or in part by Aggressive’s negligent acts or omissions during Aggressive’s operations.” USSIC further argues that Aggressive agreed to “supervise and direct the Work,” which Garcia’s employer, agreed to perform pursuant to the Subcontract and that because Garca was injured while working on the Project and the Third Party Complaint alleges that those injuries “were caused solely by reason of the primary, active and affirmative negligence, recklessness and/or breach of contract of Aggressive,” USSIC contends that there is “a reasonable possibility that Aggressive proximately caused injury triggers Harleysville’s duty to defend the Owner.” Harleysville, however, argued that in neither the Underlying Action nor the third-party Complaint is it alleged that “the work of Aggressive” caused Garcia’s injury, ad further argues that the USSIC Policy is primary and has the “sole and primary obligation” to defend the Owner in the Underlying Action.

The Court found that Harleysville has a duty to defend the Owner, as an additional insured, in the Underlying Action because there is a “reasonable possibility” that coverage of the Owner, under the Harleysville Policy, is implicated by the third-party complaint. The court began by asserting the well-recognized premises that an insurer’s duty to defend far exceeds its duty to indemnify, and then asked if Harleysville, in response to USSIC’s motion, established as a matter of law that there is no possible factual or legal basis on which it might eventually be obligated to indemnify the Owner under the Harleysville Policy. The court then looked at both the state-court complaint and the Third-Party Complaint to determine whether or not the allegations fell within the ambit of coverage under the Harleysville Policy. The court then found that Garcia’s allegations combined with those in the third-party complaint, when liberally construed, fall within coverage of the Harleysville Policy. Garcia alleged that he was injured while working the Project as an employee of E.M., which, pursuant to the Subcontract, was acting on Aggressive’ s behalf while Aggressive was performing operations for the Owner, which Aggressive had agreed in the Contract be added as an additional insured on the Harleysville Policy. In addition, as the Owner asserts in the third-party Complaint, Aggressive’s negligence or recklessness may have been the cause of Garcia’s injuries. The court analyzed the stat-court complaint and third-party complaint in coming to its determination that Aggressive’s acts or omissions may have been a proximate cause, which is all that is necessary to trigger the duty to defend. The court distinguished the facts of this matter from the holdings in the well-known New York case Burlington Ins. Co v. NYC Tr. Auth., by reminding us that in Burlington the additional insured


Patricia A. Rauh

[email protected]

09/13/21       Emami v. Community Insurance Co.
U.S. District Court, District of New Jersey
Physician Obtains Power of Attorney Over Patient to Bring Suit on Her Behalf; Case Dismissed for Failure to State a Claim as Physician Plaintiff Did Not Sufficiently Plead that Defendant Improperly Denied Benefits Under ERISA Plan

Plaintiff, Dr. Arash Emami (“Plaintiff”) brought suit against Community Insurance Company (“Defendant”) claiming that they improperly denied his patient, Amy M. (“Amy”) benefits under the terms of her health insurance plan (the “Plan”), which is governed under the Employee Retirement Income Security Act (“ERISA”).  Defendant moved to dismiss the claim for lack of standing, as time-barred, for failure to exhaust administrative remedies, and for failure to state a claim.  The Court granted the motion without prejudice for failure to state a claim.

Plaintiff is a medical provider affiliated with the University Spine Center, but not an in-network provider for Amy’s ERISA plan.  On August 18, 2015, the Plaintiff performed emergency spinal surgery on Amy and the medical bills were in excess of $300,000, which were submitted to Defendant by way of health insurance claim forms.  The Defendant denied reimbursement on November 11, 2015, claiming that “requested information was not received, or received incomplete.”  The University Spine Center appealed that determination, but was unsuccessful.  On November 16, 2017, University Spine Center brought suit to recover Amy’s unpaid benefits claiming they had standing to sue because it “obtained an assignment of benefits” from Amy, even though the ERISA Plan contained an anti-assignment clause.  After the complaint was filed, the Third Circuit decided American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield, 890 F.3d 445 (3d Cir. 2018), holding that anti-assignment clauses in ERISA-governed health insurance plans are enforceable under ERISA.  The judge held that University Spine Center lacked standing to sue due to the Plan’s anti-assignment clause.

Plaintiff, Dr. Emami, obtained power of attorney over Amy, and then brought the present action claiming that he had standing to sue because he is Amy’s attorney-in-fact.  Plaintiff alleged one count – “Recovery of Benefits under 29 U.S.C. § 1132(a)(1)(B)” – and claims that Defendant improperly denied benefits to Amy.

On the issue of standing, the Court stated that under ERISA, a “participant or beneficiary” may bring a civil action to recover benefits, but healthcare providers that are neither participants nor beneficiaries may obtain derivative standing by assignment from a plan participant or beneficiary, so long as there is not a valid anti-assignment clause that covers the lawsuit in the ERISA plan.  On the issue of whether a medical provider can obtain power of attorney over his or her patient as a way to get around an anti-assignment clause, the Court found that neither party offered persuasive arguments supporting their position.  The Court decided not to rule on the validity of the power of attorney and instead dismissed the complaint on other grounds, as detailed below.

In regard to the statute of limitations, Defendant argued that the claim was time-barred because it was filed after the expiration of the statute of limitations for commencing a lawsuit under Amy’s Plan.  The parties do not dispute that Amy’s Plan contained a three-year statute of limitations.  However, the Plaintiff argued that the six-year statute of limitations for breach of contract actions should apply here because Defendant did not notify Amy of the shortened time limit as required under the Department of Labor’s regulations.  The Defendant argued that the regulation only requires such denial letters to include time limits with respect to internal administrative review procedures and limitations, and not limitations periods on commencement of court litigation.  However, the Court disagreed with Defendant’s interpretation of the regulation and found that Defendant had not clearly established that the three-year statute of limitations applied.

In regard to Plaintiff’s alleged failure to exhaust all administrative remedies before suing, the Court held that Plaintiff did exhaust all administrative remedies.  The denial of benefits was appealed within the 180-day period required by the Plan.

Finally, in regard to failure to state a claim, the Court agreed with Defendant and dismissed the case for this reason.  The Court held that Plaintiff failed to state a claim under ERISA because he did not sufficiently tie his claims to a provision in Amy’s Plan.  The complaint did not point to any specific provision within the Plan.  Rather, Plaintiff vaguely plead that Defendant improperly denied benefits due to Amy and such allegation is not sufficient.


Mirna M. Santiago
[email protected]

Under the weather – catch you on the next CP.


Scott D. Storm
[email protected]

08/26/21       Crum & Forster Indemnity Co. and U.S. Fire Ins. Co. v. Sidelines Tree Service, LLC, and Huntington Ins., Inc.  
United States District Court, W.D. Pennsylvania
In a Federal Declaratory Judgment Action Commenced by Insurers for Rescission Due to Material Misrepresentations in the Underwriting Process, a Motion by the Injured Third-Party to Intervene and to be  Joined as a  Necessary Party is Denied

Provins, administratrix of the Estate of the deceased third-party, unsuccessfully moved to intervene in this action pursuant to Fed. R. Civ. P. 24 and to be joined as a necessary party under Fed. R. Civ. P. 19.    

Plaintiffs' commenced this action for declaratory judgment pursuant to Fed. R. Civ. P. 57 and 28 U.S.C. § 2201 seeking damages against Huntington, the insurance broker, as well as a declaration that the policies are void ab initio from 5/22/20 through the expiration of the policy periods due to the named insured’s (Sidelines') and Huntington's material misrepresentations in connection with the reinstatement of the policies. 

CFIC issued commercial automobile and CGL policies to Sidelines and U.S. Fire issued an umbrella policy, all through Sidelines’ insurance broker, Huntington. Sidelines also entered into a Commercial Premium Finance Agreement with First Insuring Funding pursuant to which FIF was granted power of attorney to cancel the policies.  FIF sent a "Notice of Intent to Cancel Insurance Coverage" to Sidelines on 3/5/20 due to Sidelines' failure to make timely installment payments. Sidelines then brought its account current but again became delinquent through 5/22/20, at which time FIF forwarded a Notice of Cancellation of the policies, which was processed on 6/3/20.  On 6/3/20 an employee of Sidelines was driving an insured vehicle when he was in a serious automobile accident involving a vehicle driven by the deceased. 

On 6/3/20 after the accident Sidelines paid all outstanding balances with respect to the policies.  On 6/8/20 Huntington contacted Plaintiffs to request reinstatement of the policies.  Plaintiffs agreed to reinstate the policies with an effective date of 5/22/20.  Plaintiffs had a Producer Agreement in effect with Huntington pursuant to which Huntington was to notify Plaintiffs of claims, suits, or losses under Plaintiffs' policies and cooperate fully in Plaintiffs' investigation, adjustment, settlement, and payment of claims.  Plaintiffs averred that Huntington was aware of the accident when it communicated with Plaintiffs on 6/8/20 to request reinstatement of the policies but did not advise Plaintiffs of the accident. Plaintiffs first received notice of the accident on 6/9/20. 

The CFIC Auto policy also contained a "Pennsylvania Changes — Cancellation and Nonrenewal Endorsement," which provides: "[t]his policy may also be cancelled from inception upon discovery that the policy was obtained through fraudulent statements, omissions or concealment of facts material to the acceptance of the risk or to the hazard assumed by us". Plaintiffs assert that the policies at issue are void due to misrepresentations made by the insured and/or the broker and should thus be rescinded.

The Court said that where a litigant seeks intervention as of right under Rule 24(a)(2), the Third Circuit has held that the litigant must establish:  1) a timely application for leave to intervene; 2) a sufficient interest in the underlying litigation; 3) a threat that the interest will be impaired or affected by the disposition of the underlying action; and 4) that the existing parties to the action do not adequately represent the prospective intervenor's interests.

Federal Rule of Civil Procedure 19(a)(1)(B)(i) provides with respect to required joinder of parties that "[a] person who is subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction must be joined as a party" if that individual "claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may…as a practical matter impair or impede the person's ability to protect the interest."

Provins asserts that because Plaintiffs are seeking to void and/or rescind the insurance policies that provide coverage related to the underlying accident, disposition of this declaratory judgment action will entirely dictate Provins' ability to recover for the untimely death suffered by the decedent.  Provins also argues that she is a necessary party and that she should be joined pursuant to Fed. R. Civ. P. 19(a)(1)(B)(i) because a declaration regarding the application of the policies will prejudice Provins with respect to her tort claims against Sidelines.

Plaintiffs argue that the Motion to Intervene should be denied because Provins does not have a sufficient interest in this litigation that will be impaired or affected by the disposition of this declaratory judgment action.  Plaintiffs' claims against Sidelines and Huntington in this matter are only "related" to the deceased’s accident in that Sidelines and Huntington actively hid the fact of the accident from Plaintiffs while they sought to have insurance policies that had been properly cancelled by Plaintiffs reinstated. Provins' interest in this matter remains simply a contingent economic interest, the same as any injured party, and is insufficient to support Provins' intervention as of right.  Plaintiffs further assert that the existing parties to the action adequately represent such interests.  Plaintiffs argue that the possible unavailability of insurance coverage to respond to Provins' claims is a legally insufficient interest to be joined as a necessary party to this action. 

Citing case law, the Court held that to justify intervention as of right the applicant must have an interest relating to the property or transaction which is the subject of the action that is significantly protectable. The applicant must demonstrate that there is a tangible threat to a legally cognizable interest to have the right to intervene.  In general, a mere economic interest in the outcome of litigation is insufficient to support a motion to intervene. Thus, the mere fact that a lawsuit may impede a third party's ability to recover in a separate suit ordinarily does not give the third party a right to intervene. 

Provins cited no controlling authority to support the argument that plaintiffs who have asserted tort claims against the insured can intervene as of right in an insurance coverage declaratory judgment action between the insured and its insurer.  The Third Circuit has explained that an assertion that a declaratory judgment action could impact the potential intervenors' ability to collect a judgment in the potential intervenor's tort action does not set forth a sufficient interest in the declaratory judgment action such that intervention is warranted. 

Further, the Third Circuit has rejected the potential intervenors' argument that they should be permitted to intervene as of right because the defendant was insolvent and lacked sufficient funds to either satisfy judgments or to adequately defend their interests.  Plaintiffs dispute whether Sidelines is insolvent and the only indication of Sidelines' potential insolvency are speculative statements.

In regard to joinder, the potential intervenors did not constitute necessary parties under Rule 19 because their interest did not relate to the subject of the action.  A party is only “necessary” if it has a legally protected interest and not merely a financial interest in the action.  The Court said it has already determined that Provins failed to set forth a legally protectable interest in the policies and thus rejected the assertion that she is necessary party to this action under Rule 19(a)(1)(B)(i).


Nicholas J. Heintzman

[email protected]

09/08/21       Columbus Imaging Ctr. v Country Wide Ins. Co.
Civil Court of the City of New York, Queens County
Civil Court of the City of New York Dismisses Plaintiff’s Claim Seeking Assignment of No-Fault Benefits from Insurer on Res Judicata Grounds

In August 2018, Plaintiff, a medical service provider, sued Defendant insurance company in Civil Court of the City of New York (“the present action”) to recover unpaid first party no-fault benefits for assignor Javier, who was injured in an automobile accident. Meanwhile, in November 2018, Defendant commenced an action in Supreme Court, New York County against Javier and Plaintiff (“the Supreme Court action”), seeking a judgment declaring that Defendant owed no duty to pay no-fault benefits because Javier failed to appear for his scheduled examination under oath (“EUO”). Defendant took a default judgment in the Supreme Court action, and the Supreme Court held that Defendant was “not required to provide, pay or honor any current or future claims for no-fault benefits.”

In the present action, Defendant moved for summary judgment, arguing that Plaintiff’s complaint is barred by res judicata, a legal doctrine which bars a party from litigating a claim where a final judgment on the merits exists from a previous action between the same parties involving the same subject matter. The Court held that the parties and subject matter in the instant matter and the Supreme Court action are identical since both actions involve the same question of whether Defendant was required to pay no‑fault benefits. Although default judgment was entered in the Supreme Court action, the judgment constituted a conclusive final judgment since it was not vacated. Thus, the Court granted summary judgment for Defendant in the present action.


Heather Sanderson

[email protected]

09/09/21       Aviva Insurance v. PK Construction Ltd., 2021 NSCA 66
Nova Scotia
Is a Modified Yellow School Bus an “Automobile”?

On September 9, 2021, the Nova Scotia Court of Appeal released its decision in Aviva Insurance v. PK Construction Ltd. which addressed the meaning of the “newly acquired automobile” language that is found is most Canadian standard form auto policies. 

Peter Kalkman owns PK Construction Ltd. The company carries on business in construction, excavation, property maintenance and septic tank installation. It has several vehicles, all of which are insured with Aviva Canada under a commercial fleet policy. One of those vehicles was a 1994 Ford E350 Van which was used to transport employees to job sites; once there, provide a place for the employees to dry their clothes and equipment and act as a place to eat lunch.

On a Saturday night in 2016, Kalkman bought a 1997 Bluebird School Bus. (In other words, a traditional yellow school bus that my kids called a cheese wagon.) The bus had been modified to open at the rear to accommodate a vehicle. Bench seating and a kitchen table had been installed. Kalkman intended to use the bus in a similar fashion as the Ford E350 and for personal use to transport a race car. Kalkman believed that he had 14 days to add the bus to his commercial policy.

A PK Construction employee used the bus on Sunday, the day after Kalkman bought it; that employee had friends with him; he had an accident; injury claims from the passengers ensued.

On Monday, the first business day following acquisition, Kalkman notified his broker of the acquisition of the bus on Saturday and the accident on Sunday. Aviva took the position that the bus was not a vehicle that would have covered as it was materially different from the other vehicles that they covered under the fleet policy; that it is not a “newly acquired vehicle” under the policy wording and therefore there was no obligation to defend the passenger claims.

The policy language in issue read:

a “newly acquired automobile” which is an automobile, ownership of which is acquired by the insured and, within fourteen days following the date of its delivery to him, notified to the insurer in respect of which the insured has no other valid insurance, if either it replaces an automobile described in the application or the Insurer insures (in respect of the section or subsection of the Insuring Agreements under which claim is made) all automobiles owned by the insured at such delivery date and in respect of which the insured pays any additional premium required; provide however, that insurance hereunder shall not apply if the insured is engaged in the business of selling automobiles;

The issue of whether there was a change material to the risk vitiating coverage was dismissed by the Court of Appeal on the basis that the addition of the vehicle was notified the first business day after acquisition.

As the insured did notify within 14 days; Aviva did insure all other vehicles owned by PK Construction; PK Construction does not sell vehicles; the sole remaining question was whether the modified school bus was “an automobile”. Aviva argued that this wording was founded on an expectation that vehicles that are fundamentally different from those covered under the fleet policy would not qualify for this coverage.

After considering the reasonable expectations principles; principles of policy interpretation; Aviva’s argument was dismissed. The self-propelled, yellow, modified, school bus qualifies as “an automobile” within the definition found in the Nova Scotia Insurance Act:

“automobile” includes a trolley bus and a self-propelled vehicle, and the trailers, accessories, and equipment of any of them but does not include railway rolling stock that runs on rails, or watercraft, or aircraft of any kind;

Accordingly, the Court held:

As for the appellant’s concern about risk, when an additional vehicle is acquired, there will usually be additional risk for the insurer because of the potential for it to be on the road at the same time as the other vehicles.  Yet the standard form insurance policy clearly contemplates an insured’s ability to acquire an additional automobile, and for at least 14 days, enjoy insurance coverage, provided the insured is not in the business of selling automobiles and all of the insured’s vehicles are already insured with the same provider … Once notified, the insurer has an opportunity to assess the additional risk, if any, and charge additional premiums in order to maintain the insured’s coverage. 

On that basis, Aviva was compelled to accept coverage and defend the injury claims.

In reaching this conclusion, the Nova Scotia Court of Appeal declined to interpret the policy according to Aviva’s expectations. The wording was clear and unambiguous and therefore there was no need to look to the reasonable expectations of the parties.

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