Coverage Pointers - Volume XXIV, No. 12

Volume XXIV, No. 12 (No. 633)
Friday, November 25, 2022
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.

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Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.  Call, my friends, we mean what we say.  We love situations. Our goal is to EMPOWER you, so that your claims staff can feel comfortable in confronting “situations”. As is our tradition when Coverage Pointers is published during Thanksgiving week, we publish a day early so you can spend half-time during the Bills game on Thanksgiving Day reading your favorite newsletter.  It’s attached to this cover letter.  There are some fun cases in there.

We scored a couple of wins in the Fourth Department since the last issue, both reported in my column.  Kudos to Brian Barnas on sustained attorney client privilege in a discovery matter.  The Kohane-Maxwell team literally nailed one involving pedicures and professional services.  Our opponents cited to a 15-year-old issue of Coverage Pointers, where we reported on a Texas decision, in oral argument.  Glad they are reading. Nice to be considered authoritative.  Ha.

We Thank Our Peers:

Best Lawyers® and U.S. News & World Report have announced the release of the 2023 U.S. News – Best Lawyers® "Best Law Firms" rankings. Hurwitz Fine P.C. is proud to have Buffalo Metropolitan Tier One rankings in eight practice areas. Tier One practice areas include:

Hurwitz Fine also received Tier Two honors in Commercial Litigation, Elder Law, Litigation - Labor & Employment, Litigation - Municipal, and Product Liability Litigation - Defendants.  Tier Three honors include Employment Law - Management and Mergers & Acquisitions Law. 

The 2023 edition of U.S. News – Best Lawyers® “Best Law Firms” recognizes the most elite firms across the nation, identified for their professional excellence with consistently positive feedback from clients and peers. To become eligible for a “Best Law Firms” ranking, at least one lawyer at the firm must be recognized in the latest edition of The Best Lawyers in America®, an exclusive award presented to only the top 5% of lawyers in the United States.

Buffalo Flurries:

Thank you to the many CP subscribers who took the time to write to us about the snow in Buffalo.  In the city, where I live and where are office is located, we had a mere 18 inches.  Our friends in the South towns, had upwards of five, six feet.  But we’re a tough lot and we’re fully operational.


Let us know if we can assist in providing coverage advice or in the defense of the accused …

On May 24, 2022, Governor Kathy Hochul signed into law the Adult Survivors Act, which renews access to judicial relief for adult survivors of sexual assault.  In the State of New York, the current statute of limitations for filing a civil suit for rape is 20 years, while some forms of forcible sexual contact have only a five-year statute of limitations.  The new law implements a one-year lookback window for individuals who were sexually assaulted as adults to file claims against their abusers, even if the statute of limitations has already expired. 

Governor Hochul’s official statement regarding the Adult Survivors Act may be accessed here.

The new law is patterned after the Child Victims Act, which, by the end of the lookback window in August 2021, resulted in nearly 11,000 civil actions being filed.  As with the Child Victims Act, the Adult Survivors Act provides survivors six months to determine if litigation is the right choice for them, investigate their claims, and consult with counsel prior to the commencement of the one-year lookback window. 

The lookback window allows these same individuals to sue the entity where the assault occurred, such as workplaces, schools or religious institutions.  Given the age of the claimants at the time of the alleged abuse, the universe of potential institutional defendants, as well as avenues for insurance coverage, may be quite different than the claims made under the CVA entities who suspect that they may become defendants would be well served to consider their document retention policies and how best to position themselves for litigation during this six-month period. 

Hurwitz Fine represents local, national and international organizations—and individuals—in the defense of Child Victims Act cases and anticipates that there will be a number of Adult Survivors Act cases brought in the near future.  Our insurance coverage team also helps guide insurers and institutional clients, alike, through the complex array of issues involving insurance coverage for abuse cases, including issues concerning lost or historical policies, late notice, policy towers, and other related coverage matters.

Insurance 101 – A Coverage Primer

Third Day Added


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In 2021, during the heart of the pandemic, my good friend, John Trimble, from Lewis Wagner, Indianapolis, and I, scheduled a Zoom continuing education program which we entitled, Insurance 101 – a Coverage Primer for Claims Professionals and Attorneys.  We have been asked to reprise that presentation, so we scheduled a date in January 2023, which was announced in the most recent issue of Coverage Pointers.  That program audience was filled in 72 hours and then added a second date in February, which is now fully subscribed.


So, we’ve added a third day, March 2, 2023, at 1:30 PM Eastern Time, 12:30 PM Central.

Since it is the last scheduled class, we expanded the room to 100.  As of today, we are 98% subscribed for our final day of programming.  If there are institutional clients that are interested in a presentation (insurers, bar groups, etc.), we are surely willing to discuss a private program.  We have several scheduled already.

This is a great opportunity for newer claims professionals, especially those who may be joining your coverage teams, to get a crash course in liability insurance coverage.  The presenters are two old, and seasoned, codgers who actually love this stuff. 

Simply contact John Trimble or me and we’ll either put you on a wait list or discuss a special program, if there are enough folks interested.

Insurance Coverage Basics for Mediation:

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Recently, Tyler Gerking, partner in the firm of Farella Braun + Martel, and I had the pleasure of presenting on the importance of understanding the role of insurance coverage in mediating cases, as part of the Will Work For Food program. We invite you to listen to the program and make a donation to your local food bank.  Simply click on the graphic above or here.

Need a mediator?

Coverage mediation is a thing!  Subject matter expertise may be useful.

Hey coverage lawyers.  Hey claims professionals. Have you and a friend, adversary, or lawyer for whom who have respect reached a stalemate on a coverage dispute?  Look, we know each other.  We know that.  We don’t want to litigate every coverage disagreement.  Why?   Because the position we oppose today may be the one we advocate tomorrow.  Face it.  We all understand that.

Let me help mediate your disagreement to see if there is some mutual agreement we can reach that will not box us into a corner. Reach out to me.  I will be pleased to mediate your dispute.

My partners, Mike Perley and Ann Evanko, are also available to help resolve other challenges.

You don’t want adverse precedent that will bite you next time you might have a slightly different view on coverage issues. You don’t want to spend tens of thousands of dollars to litigate a coverage issue before a motion judge or appellate justice that know as much about insurance coverage as you do about nuclear physics.  For those in the Western District of New York, I am certified by the Court and on the WDNY Mediation Panel as are Mike and Ann.

Try mediation.

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And if that’s not enough, don’t forget the PLRB Claim Conference and Expo in Orlando where I will be speaking on Risk Transfer, this time with John Hanlon, Director, Complex Claims and Litigation at Kemper.


Training and More Training:
Schedule your in-house training for 2023.  Need a topic?  Here are 160 or so coverage topics from which to choose.



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:

  • 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.


Peiper on Property and Potpourri:

Greetings and Happy Thanksgiving: 

It has been a remarkably hectic couple of weeks, and with the Holiday Season approaching (if not here already) life is not about to slow down anytime soon.  Recognizing that we all need a break, we’ll keep our note short this week. 

Before you sneak off for an early slice of Pecan Pie, though, we’d encourage you to take a look at the Merchants Mutual case reviewed in Dan’s column this week.  Handled by our own Brian Barnas, the Fourth Department interjected some much-needed reason into the ongoing skirmishes between policyholder and insurer over claims file discovery.  Here, the Court (rightly we might add) rejected the injured party’s demand for the underlying claims file on the basis of material prepared in anticipation of litigation.  We take issue with how the Court go there, but their holding (if not their analysis) was at least correct.  Simply, the claims materials created and maintained with respect to the defense of the insured in the underlying tort action should be, and must be, protected from discovery. 

Great job, Brian.

Happy Thanksgiving. Stay healthy and safe. 

Steven E. Peiper

[email protected]


Insult to Injury – 100 Years Ago:

The Buffalo News
Buffalo, New York
25 Nov 1922


John Miller, 24 years old, who occupies the lower apartment at 187 Krettner Street, was today fined $5 by City Judge Hager for assaulting Mrs. Teresa Fassel, occupying the upper apartment.

On November 12, Mrs. Fassel is said to have taken exception to the continuous playing of Miller’s graphophone and began stamping on the floor to the time of the music, but with such violence that it broke Miller’s gas mantels.

Enraged, Miller is alleged to have run to the attic where he stamped on that floor, breaking Mrs. Fassel’s mantels. On his way down, Mrs. Fassel claims Miller struck her with a stick, but Miller denied, asserting that it was Mrs. Fassel who attacked him. They were warned by the court that they must both have consideration for each other so long as they dwell in a flat.

Editor’s note – I wondered about the property but the building no longer exists.  Ahh well.


Wilewicz’ Wide-World of Coverage (featuring Ryan O’Shea):         

Dear Readers,

Happy Thanksgiving to all! So, in our house, we don’t actually celebrate Thanksgiving, as we just never did when I was a kid. I never really had a point of reference. There is no such holiday in Poland and, up until I joined HF, I always worked in the office on the Friday that followed. During high school and college I did attend the feast at friends’ homes, which was always lovely, but as an adult I have just taken the day off to watch the parade and dog show. This year, we will be doing that, plus a couple of college campus tours (and I did buy a little turkey for the road).

This week’s case comes from the Seventh Circuit and concerns “aggregate provisions” found within the definition section of a policy. Essentially, the court found the aggregate provisions extended from the original complaint to the new allegations asserted against the insureds in an amended complaint. This interpretation caused the insureds’ notice to Hanover to be untimely and preclude coverage. Have a Happy Thanksgiving and enjoy the long weekend! ~ Ryan


Agnes A. Wilewicz

[email protected]


Do the Crime, Do the Time – 100 Years Ago:

Buffalo Courier
Buffalo, New York
25 Nov 1922


Eight women were sentenced by Judge Maul in city court yesterday. Seven were arrested in the tenderloin district by Lieut. Roche and his squad early Sunday morning, November 12. They were charged either with loitering or residing in disorderly houses.

Rose Kelly, No. 99 Elm Street, the other, was charged with public intoxication. She drew the heaviest sentence, six months in the penitentiary.

Three were sentenced to thirty days in the same workhouse. They were: Peggy Levere and Rose White, both arrested at No. 157 East Eagle Street, and Helen Smith, No. 105 East Eagle street.

Josephine Lang and Hazel Hymer, both arrested at No. 157 Oak Street, were fined $50 and placed on probation for 100 days.

Marjorie Miller and Bessie Peltier, N. 157 Oak Street, were placed on probation for 100 days.

Grace Barry, charged with being proprietress of a disorderly house at No. 185 East Eagle Street, will be tried later. She conducts a cigar store at the same address.


Barnas on Bad Faith:

Hello again:

Happy Thanksgiving.  It is setting up to be an incredible sports weekend.  The Bills are playing on Thanksgiving for the third time in four years.  Hopefully we can complete the Thanksgiving time slot sweep.  It is also rivalry week in college football.  I looked to see how much tickets would be for OSU-Michigan in what basically is a playoff play-in game.  It appears you can get in the building for about $500.  Guess I will be watching on tv.  The World Cup has also started, which is strange for this time of year, but I have been enjoying following the games so far.  England-USA Friday should be good.  Add that to a regular weekend of NBA, NHL, and college basketball action, and the sports calendar is fuller than I will be after Thanksgiving dinner.

In addition to the sports, be sure to enjoy the food and time with family and friends. I know I will.

Brian D. Barnas

[email protected]


Improved Insurance  – 100 Years Ago:

New-York Tribune
New York, New York
25 Nov 1922

Would Alter Insurance Laws

Ten insurance men were named as a committee yesterday to draft suitable changes in insurance laws in order to permit fire, marine and casualty companies to write other kinds of policies than the class their charters specifically call for. Francis R. Stoddard jr., State Superintendent of Insurance, who appointed the committee as the result of a conference with officials of leading companies, said that he did not believe the time was ripe yet for altering the law so that companies can handle all kinds of insurance.

It is the object of the State Insurance Department to make it possible for companies to furnish coverage required by present business development without breaking down entirely the barriers which separate the different classes of companies.


Kyle's Construction Column:

Dear readers,

I hope everyone has a great Thanksgiving! Go Bills!

This week’s case involves a coverage dispute regarding whether the insurer had a duty to indemnify defendants in the underlying action for allegedly defective work and the subsequent repair of the allegedly defective work.

Until next time,

Kyle A. Ruffner

[email protected]


Eliminating Dummy Corporations – 100 Years Ago:

The Buffalo Times
Buffalo, New York
25 Nov 1922


Buffalo druggists have formed an incorporated association which will co-operate with the State Pharmaceutical Association to put out of business ostensible drug stores which are really not pharmacies but saloons under a thin disguise.

The purpose of such establishments is to sell bootleggers’ whiskey, and it is notorious that there are many of these concerns in full blast.

The taint which legitimate druggists are organizing to keep clear of was foreseen from the start by everybody who looked at Volsteadism with a view of its inevitable consequences.

With the public debarred from beer and light wines, bootlegging sprang into existence. One of its results is using a nominal drug trade as a mask for the sale of bad whiskey.

Liberalize the Volstead Act by allowing the people beer and light wines and the saloon drug store would disappear as quickly as it came. The pharmaceutical associations have to take action as they find it. Their efforts will doubtless have some effect in making a widespread evil less easy to put across than it has been. But the source of the trouble lies deeper than that.

An honorable and indispensable profession is being destroyed by the association of it with bootlegging ad the cause of bootlegging is Volsteadism.

The honest druggists have railed for the salvation of their business and the protection of the public. But the business will continue to suffer from an undeserved stigma and public demoralization will continue so long as prohibition is permitted to throw out of joint all the normalities of daily life and occupational activity.


Fleming’s Finest:

Dear Coverage Pointers Subscribers:

As I write this, I am staring at mountains of snow outside. The snowblower broke, and the plow couldn’t get down the street for days due to a car that got stuck during the recent storm. However, seeing the dog’s sheer joy while playing in the snow made being stuck at home pretty fun.

For this week’s case…

Country roads

Take me home

To the place I belong

West Virginia.

In this week’s case, the West Virginia Supreme Court found that there was a question of material fact whether the insured’s answer to a thirty-day-occupancy question on its insurance application was both false and material to the insurer’s decision to issue the policy. The insured was flipping the house and keeping personal property there, and the insurer did not demonstrate that the occupancy question was material.

Happy Thanksgiving,

Katherine A. Fleming

[email protected]


Payday – 100 Years Ago:

The Buffalo News
Buffalo, New York
25 Nov 1922


MAYVILLE, Nov. 25.—The Cherry Creek National bank won its lawsuit against the Fidelity and Casualty company of New York late Friday afternoon after a trial lasting all the week. The verdict was $8,485.65. The jury was out about four hours. The question involved was whether the safe in the bank had been properly locked the night before the $70,000 burglary in October last year. The defendant will appeal.


Ryan’s Capital Roundup:

Hello Loyal Coverage Pointers Subscribers:

Snowstorms in WNY hit hard, with schools, offices, and roads throughout the region closed. But don’t cancel those plans just yet. Amidst historic snowfall, my son shared a few laughs with his schoolmates at a birthday party on Saturday. Sure, we got quite a bit of snow in the suburbs north of Buffalo (the “Northtowns” for those in the know). But our neighbors to the south (you guessed it, the Southtowns) get hit much harder on a regular basis. The stories you have heard about neighbors digging out Buffalo Bills players are tales of standard Southtowns’ struggles, and those struggles are real. But don’t even get me started on the City of Buffalo itself, many residents of which have not yet seen a snowplow.

The winter is always a nice reminder that the City of Good Neighbors is a fitting moniker for Buffalo, with its responses to snowstorms a prime example. No snowblower halts at the property line; your neighbors are out of gas, old in age, or outright asleep. They’ll get you the next time around. Snowplow just buried your car? You can bet on three complete strangers appearing to shovel you out and push you on your way. It’s times like these that the community comes together and comes alive.

Honestly, for the amount of national media we get during a snowstorm, there are worse weather events to live through. Still, this is the second time in eight years we’ve had to move a Bills home game to the friendly confines of Ford Field in Detroit. The silver lining? We won and will play again in Detroit on Thanksgiving Day. Happy Thanksgiving and Go Bills!

Until next time,

Ryan P. Maxwell

[email protected]


Settlement – 100 Years Ago:            

The Buffalo News
Buffalo, New York
25 Nov 1922

Woman Gets $1000 Award.

LOCKPORT, Nov. 25.—A verdict of $1000 was yesterday reported by a Supreme Court jury in favor of Ella A. Kell of Martinsville and against James M. Sheehan of North Tonawanda. The former was injured on December 14, 1920, when she was hit by an auto driven by Sheehan. The accident occurred in North Tonawanda when the woman carried an umbrella and stepped in front of the auto.


Dishing Out Serious Injury Threshold:

Dear Readers,

Happy Thanksgiving!! We’re enjoying the Fall weather downstate but our colleagues up in Buffalo had a severe snowstorm. I hope everyone is okay and was able to dig themselves out to enjoy Thanksgiving and give thanks with friends and family.

I have two cases for this issue. One is from the Fourth Department pertaining to defendants’ IME doctor failing to opine as to preexisting degenerative disease, thereby precluding success of defendants’ motion for summary judgment. The second is from the Second Department where defendants’ IME doctor failed to adequately explain his belief that plaintiff’s limitations were self-imposed, thereby precluding summary judgment.


Michael J. Dischley

[email protected]


Insurance to Indictment – 100 Years Ago:

The Buffalo Enquirer
Buffalo, New York
25 Nov 1922


(Special Telegram to The Enquirer)

Lockport, Nov. 25.—Judge Hickey in county court yesterday imposed sentences on three prisoners, who were among four indicted for the alleged burning of an automobile on Lewiston hill December 19, 1921, to collect the insurance. Those arraigned were Pasquale Gerbase, twenty-one, of La Salle; John Abate and Charles Cannello, each twenty years old, of Niagara Falls, all of whom were first sentenced to Elmira reformatory until discharged by law, which was later suspended and fines imposed and were then released on probation for three years each. Gerbase was fined $50, Abate $75 and Cannello $200.


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

We have 20 people coming for dinner, we are in the process of moving, and we both have business travel coming up (me to Buffalo, her to South Beach—I got the wrong end of that deal). So, while a bit crazed and stressed, we wish you all a very happy Thanksgiving.

Enjoy and keep keeping safe.

Lee S. Siegel

[email protected]


Darn Yankees – 100 Years Ago:

The New York Times
New York, New York
25 Nov 1922


Hirsch, Put Out of Polo Grounds
in 1920, Gets Verdict Against
the Yankees.

Louis E. Hirsch, music composer, won a verdict of $750 yesterday in Justice Isidor Wasservogel’s part of the Supreme Court for his ejectment from the Polo Grounds on May 20, 1920, during a baseball game between the Yankees and Detroit. The defendant in the suit was the American League Baseball Club of New York (The Yankees).

On hearing the verdict Mr. Hirsch said: “I am glad I have been vindicated. I shall contribute the money to various charities–the Actors’ Fund, the Jewish Relief Drive, the Red Cross, the Salvation Army and others.”

The baseball club’s representatives said Mr. Hirsch had changed his seat several times in violation of rules which were made to prevent gamblers from operating. Mr. Hirsch said he had changed his seat twice, once when smoke from the pipe of a “fan” sitting next to him annoyed him and once when one of the special policemen stood in front of him just as “Babe” Ruth came to bat.

Victor Herbert testified as a character witness for Mr. Hirsch.


Rauh’s Ramblings:

Hello all!

I can’t believe Thanksgiving is already upon us! There is so much to be thankful for this year and I am looking forward to spending the holiday with my family.  Although we were originally planning to travel to Connecticut to celebrate, we decided to stay in Buffalo as we are all recovering from the flu.  It will be nice to be able to relax at home and not worry about traveling.  I have been tasked with cooking the stuffing this year, so hopefully it turns out just as good as my mom’s!

This week, I found a case from the Ninth Circuit which involves a denial of long-term disability benefits.  The defendant, Lincoln Life Assurance Co. raised new rationales for its denial of benefits during litigation that were not raised during the internal administrative review process.  The Ninth Circuit held that Lincoln could not do that and goes into an interesting analysis of ERISA and the specificity to which denial letters need to be crafted.  Read on for more information!

Wishing you all a happy, fun, and relaxing Thanksgiving!

Until next time,     

Patricia A. Rauh

[email protected]


Illicit Gains – 100 Years Ago:

Star Tribune
Minneapolis, Minnesota
25 Nov 1922

Poison Plot Is Suspected in
Death of Minnesota Woman

Body Is Exhumed at Ceylon
—Husband Has Collected
Insurance, Departed.


Ceylon, Minn., Nov. 24.—After the body of Mrs. C. O. Hamblen had been exhumed, a coroner’s jury this afternoon found the woman had “come to her death through neglect, foul play or poisoning.”

County Attorney Paul C. Cooper and Coroner H. C. Jones arrived this afternoon and had the body exhumed. The contents of the stomach were sent to the University of Minnesota for examination to determine whether there were traces of poison.

The husband of the woman is about 30 years of age. He is a World war veteran and left Ceylon two weeks after his wife died on October 13, last. A month before the death of Hamblen, he had taken out life insurance for himself and $1,000 for his wife.

Insurance Collected

Hamblen collected the insurance money on account of his wife’s death and left for the West. He is supposed to be in Yuma, Ariz., en route for California.

At the coroner’s inquest held today, C. E. Champine, an insurance man of this place, testified that Hamblen and his wife were insured about a month prior to the woman’s death and that Hamblen left here October 29.

Dr. H. B. Bailey testified that he was called to the Hamblen home to attend Mrs. Hamblen on October 9. He said the woman was about 30 years old. He found her lying on the floor, complaining of a stiffness in the limbs, neck and jaw.


Storm’s SIU:

Hi Everyone:

Two interesting cases this week:

  • Breach of the 2-Year Suit Limitation Condition and Dismissal of Claim for “Bad Faith” Punitive Damages.

  • Subpoena to No-Fault Collection Law Firm Representing Medical Providers, Seeking Documents Relating to the Submission to Plaintiff of Allegedly Fraudulent Bills by Medical Providers Held to be Sufficiently Relevant to be Discoverable.


I hope you have a wonderful Thanksgiving!  “I awoke this morning with devout thanksgiving for my friends, the old and new.” ~  Ralph Waldo Emerson.

Go Bills!

See you in two weeks,

Scott D. Storm

[email protected]


Market Updates – 100 Years Ago:

The Oregon Daily Journal
Portland, Oregon
25 Nov 1922


By Hyman H. Cohen

Turkeys are quoted at 40c a pound for dressed stock on the public market, which is practically the wholesale price at the moment. Whether this price to consumers will remain during the Thanksgiving trade depends upon the whim of the marketmaster.

Private stores which have rent and other high expenses are forced to charge at least 45c & 50c for turkeys in order to make any sort of profit.

Walnuts are being offered on the public market at 35c a pound, which is as high, if not higher, than private stores are asking for similar offerings.

Cauliflower of quality is very scarce. Ordinary heads selling at 20c & 25c each.

Small supplies of Concord grapes are still being offered on the market.

A small shipment of alligator pears was offered by one of the big retail shops during the day.


Gestwick’s Greatest:

Hello Readers!

In case you hadn’t heard, it’s been a snowy week here in Buffalo! I recently moved from the suburbs to just north of Downtown Buffalo, and for the first time in my life, am forced to park on the street. The thing is, I moved there over the summer, and didn’t have the foresight to know that, when the street is plowed, there would be an absolute mountain of residual snow surrounding my car. One hour and a sore back later, I am officially dug out!

The New York State Supreme Courts have once again been very quiet this time around in terms of insurance coverage cases. However, I was able to dig up an interesting case concerning the Child Victims Act. As you may already know, this Act revived legal claims for sexual abuse that would otherwise be time-barred by the applicable statute of limitations. Since this Act was enacted in early 2019, we have seen many sexual abuse lawsuits that concern actions from several decades ago. A common problem with these cases is the availability of evidence—documents, witnesses, and even the abuser. Memories fade, people pass away, and documents get lost or destroyed. Concomitantly, however, the New York CPLR provides for a motion to dismiss based on documentary evidence, meaning that, if a moving party can show sufficient evidence that utterly refutes the plaintiff’s allegations and establishes a defense as a matter of law, they may be entitled to dismissal. In ARK683 Doe v. Archdiocese of N.Y., we see exactly how this heavy burden can be met in the interesting context of a CVA case.


Evan D. Gestwick – Admission Pending

[email protected]


Gobble Gobble – 100 Years Ago:

The Gridley Herald
Gridley, California
25 Nov 1922


From the most reliable information obtainable it is safe to assume that there is a slight decrease in the production of turkeys in most sections of the state, over the last year. Although some growers are of the opinion that there is little or no increase in their immediate localities, many report an increased production ranging from 5 per cent to 10 per cent over last year.

As an offset to this probable increase many turkey producers state that only a small per cent of their turkeys will be in marketable condition for the Thanksgiving and Christmas trade.

Information as to prices being offered by wholesalers is very meager, according to Fred N. Bigelow, chief of the division of markets. From some sections comes the report that buyers are offering 38c per pound, on fat, live turkeys and a delivered price of 45c on well-conditioned dressed turkeys. It seems reasonable to believe that prices on both live and dressed turkeys will not vary greatly from prices paid last year during the holiday season.

If early receipts prove light, prices may soar above 45c on dressed turkeys, while heavy shipments may act to the advantage of the buyer and consumer and bring lower prices. In most sections feed appears to be plentiful, while in a few localities growers plan to market their turkeys early because of a scarcity of feed. It is considered a very poor policy to ship turkeys, not well conditioned, and farmers might advantageously hold back their shipments where feed is plentiful.


North of the Border:

The November 10-11, 2022, FDCC I-3 in New York was stellar. Amazing speakers with fascinating topics coupled with engaging attendees and plenty of opportunity to network.  My husband and I took the three days following the conference to enjoy New York. Wonderful time.

Since we returned home our two grandsons (both brothers under 3) have been stricken with RSV and have been hospitalized – one after the other. The youngest remains in hospital. A roller coaster of emotions. The wave of RSV that is cascading across North America has besieged pediatric hospitals and stretched personnel to their limits. There is no sign of it ending anytime soon. We are grateful that our hospital staff do what they do.

Heather A. Sanderson

[email protected]


Headlines from this week’s issue, attached:

Dan D. Kohane

[email protected]

  • Complaint Adequately States Claim for Policy Reformation Based on Mutual Mistake as to Who was Intended to be Insured and Potential Claim for Consequential Damages
  • Tripping Over Hose, Connected to Parked Truck, is Not an Accident Arising Out of Use and Operation of Motor Vehicle, So No Need to Establish a “Serious Injury”
  • Lack of an Arbitration Transcript Does Not Mean Reversal of an SUM Arbitrator’s Decision
  • In Declaratory Judgment Action, Underlying Plaintiff’s Demand for Portions of Claims File is Denied.  In the Absence of Undue Hardship, Material Prepared for Litigation is Not Discoverable
  • Professional Liability Exclusion for Cosmetic Coverage Nailed in Pedicure Case. Failure to Sanitize Equipment Used in the Pedicure Leading to MRSA, is “Due To” a Professional Service


Steven E. Peiper

[email protected]

  • A Release is a Release is a Release


Michael J. Dischley

[email protected]

  • Defendant Expert Failed to Opine as to if Plaintiff’s Injuries Were the Result of Preexisting Degenerative Disease Thereby Precluding Summary Judgment
  • Defendant Expert Failed to Adequately Explain, with Competent Medical Evidence, his Belief that Plaintiff’s Limitations were Self-Imposed Thereby Precluding Summary Judgment


WILEWICZ’S WIDE WORLD of COVERAGE (featuring Ryan O’Shea):
Agnes A. Wilewicz

[email protected]

  • Insureds Failed to Give Timely Notice Because of Aggregate Provisions Located in Policy’s Definitions


Brian D. Barnas
[email protected]

  • Estate had Bad Faith Claim to Assign


Lee S. Siegel

[email protected]

  • New Money Means, Well What We Think It Means


Kyle A. Ruffner
[email protected]

  • No Coverage Available Under Liability Policy for Allegedly Defective Work Performed on an Apartment Complex or the Repair of Such Work


Ryan P. Maxwell

[email protected]

  • New York’s High Court Grants Leave to Appeal Dismissal of COVID-19 Business Interruption Lawsuit
  • Guidance Reminds Insurers of Prohibition on Underwriting Inquiries or Adverse Action Based Upon Expunged Cannabis-Related Convictions


Patricia A. Rauh

[email protected]

  • Lincoln Could Not Raise New Reasons for Denying Plaintiff’s Claim for Long Term Disability Benefits During Litigation that were not Raised During the Administrative Process


Scott D. Storm

[email protected]

  • Breach of the 2-Year Suit Limitation Condition and Dismissal of Claim for “Bad Faith” Punitive Damages.
  • Subpoena to No-Fault Collection Law Firm Representing Medical Providers, Seeking Documents Relating to the Submission to Plaintiff of Allegedly Fraudulent Bills by Medical Providers Held to be Sufficiently Relevant to be Discoverable.


Katherine A. Fleming

[email protected]

  • Insurer Did Not Show Response To Occupancy Question Was False Or Material For Insured Flipping House.


Evan D. Gestwick – Admission Pending

[email protected]

  • The Archdiocese May Be Dismissed from a CVA Case Where it Can Show Evidence Sufficient to Refute the Plaintiff’s Allegations and/or Establish a Defense as a Matter of Law


Heather A. Sanderson

[email protected]

  • Who wins when a self-represented, determined, senior citizen, angry at mistakes made in the adjustment of a property claim takes on the largest insurance company in Canada and receives a $1200 judgment after almost 10 years of litigation? No one.


Happy Thanksgiving.  There are many reasons to be thankful.  Included in my list is having all of you as loyal subscribers.


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
Scott D. Storm
Thomas Casella
Brian D. Barnas
Eric T. Boron
Robert P. Louttit
Ryan P. Maxwell
Patricia A. Rauh
Diane F. Bosse
Kyle A. Ruffner
Katherine A. Fleming
Evan D. Gestwick – Admission Pending
Ryan P. O’Shea – Admission Pending

Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley
Scott D. Storm
Brian D. Barnas

Dan D. Kohane
[email protected]

Alice A. Trueman

Jody E. Briandi, Team Leader
[email protected]

Diane F. Bosse

Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri

Dishing Out Serious Injury Threshold

Wilewicz’s Wide World of Coverage

Barnas on Bad Faith

Lee’s Connecticut Chronicles

Kyle’s Construction Column

Ryan’s Capital Roundup

Rauh’s Ramblings

Storm’s SIU

Fleming’s Finest

Gestwick’s Greatest

North of the Border


Dan D. Kohane
[email protected]

11/23/22       Hilgreen v. Pollard Excavating, Inc.,
Appellate Division, Third Department
Complaint Adequately States Claim for Policy Reformation Based on Mutual Mistake as to Who was Intended to be Insured and Potential Claim for Consequential Damages

Hilgreen was injury in 2016, when he fell on a staircase outside of his apartment in Altamont, New York. In 2018, he sued the Pollards, the property owners and Pollard Excavating, Inc. and Pollard Disposal Service, Inc.

The Pollards unsuccessfully sought a defense and indemnification under multiple insurance policies, including, as is relevant here, one issued to Pollard Excavating that provided premises liability coverage for the subject property and that had been issued by Central Mutual Insurance Company (“Central”). The Pollards thereafter brought a declaratory judgment action against Central seeking coverage under the policy or reformation of the policy due to mutual mistake or reformation because of unilateral mistake coupled with fraud, and declaratory relief. The third amended third-party complaint also asserted claims alleging that Central Mutual should be estopped from denying the Pollards indemnification and a defense, as well as that the Pollards were entitled to damages for Central Mutual's breach of the covenant of good faith and fair dealing. Supreme Court then issued an order that, as is relevant here, denied Central Mutual's motion to dismiss that pleading. Central Mutual appeals.

On the reformation claims the Pollards had consistently maintained that the Central Mutual policy was intended to provide liability coverage for the subject property and that they had asked Central Mutual's agents to obtain that coverage for them as the owners of the subject property, as well as that both they and Central Mutual mistakenly believed that the Central Mutual policy provided that coverage. The third amended third-party complaint included additional factual allegations to illustrate how Central Mutual either shared the Pollards' misunderstanding as to who was covered by the policy or fraudulently misrepresented the true state of affairs while knowing that they were not entitled to coverage. In particular, the Pollards alleged that the Central Mutual policy first took effect on December 31, 2013, and that, by May 15, 2014,

Central Mutual knew or should have known that the written policy inaccurately identified the named insureds because its agent conducted a risk assessment of the subject property and notified it that the Pollards owned the subject property. The Pollards further detailed how Central Mutual subsequently behaved in a manner that reflected either a mutual misunderstanding as to who was covered by the policy or Central Mutual's knowing misrepresentation that the policy covered the Pollards when it did not. In particular, the Pollards alleged that Central Mutual failed to comply with its internal policy of notifying them of the error in the named insureds and correcting the mistake, then repeatedly accepted the Pollards' premium payments and renewed the policy despite the fact that the policy as written did not cover the actual owners of the subject property.

The Third Department held that the foregoing sufficiently detailed the Pollards' allegations of an agreement coupled with a mistake as to who was covered by the written Central Mutual policy. The allegations regarding Central Mutual's conduct after being advised that the Pollards were the owners of the subject property — including that Central Mutual failed to correct the written policy for reasons that are unclear and accepted the Pollards' premium payments and renewed it — could support a finding of mutual mistake or "permit a 'reasonable inference' of the alleged [fraudulent] misconduct" by Central Mutual

Accepting the allegations in the third amended third-party complaint as true, the Pollards sufficiently articulated how Central Mutual had agreed to provide them with coverage, accepted premiums for a policy that purportedly did so, and then acted in a manner that "destroy[ed] or injur[ed] the right of [the Pollards] to receive the fruits of the contract" The Pollards therefore stated a claim for consequential damages arising out of a breach of the implied covenant of good faith and fair dealing

11/16/22       Skefalidis v. China Pagoda NY, Inc.
Appellate Division, Second Department
Tripping Over Hose, Connected to Parked Truck, is Not an Accident Arising Out of Use and Operation of Motor Vehicle, So No Need to Establish a “Serious Injury”

I like this one.

On September 28, 2017, the plaintiff tripped and fell over a hose on the sidewalk. The hose was attached to a parked truck owned by the defendant Bio Energy and extended across the sidewalk to a restaurant at the premises operated by the defendant China Pagoda. Thereafter, the plaintiff commenced this action to recover damages for personal injuries.

Bio Energy moved to dismiss the complaint asserting that the accident arose from a motor vehicle accident and therefore the plaintiff needed to prove a “serious injury” under the No Fault statute.

Accepting the facts as alleged in the amended complaint as true, and giving the plaintiff the benefit of every possible favorable inference, the pleading sufficiently alleged a negligence cause of action against Bio Energy.

The plaintiff was not required to allege that she sustained a serious injury within the meaning of Insurance Law § 5102(d) to recover damages for personal injuries against Bio Energy. The amended complaint sufficiently alleged that the No-Fault Insurance Law was inapplicable on the theory that the "use or operation" of Bio Energy's truck was not a proximate cause of the plaintiff's injuries.

In support of its finding, the court relied upon the Cividanes case which held that a plaintiff, who stepped off a bus, into a hole, was not injured through the use and operation of a motor vehicle. The use or operation of the vehicle must be the proximate cause of the accident.

11/15/22       Jackson v Main Street American Group
Appellate Division, First Department
Lack of an Arbitration Transcript Does Not Mean Reversal of an SUM Arbitrator’s Decision

Contrary to respondent's contention, the lack of a transcript from the arbitration hearing does not, by itself, preclude judicial review of the arbitration award.  In any event, the motion to vacate the arbitration award should have been denied. Review of an arbitration award pursuant to CPLR 7511(b) is limited, and an award will be upheld when the arbitrator "'offer[s] even a barely colorable justification for the outcome reached.  906 [2021]). Here, the arbitrator set forth a plausible basis for the award, including for the amount of damages for past and future pain and suffering.

11/10/22       Merchants Preferred Insurance Company v. Campbell
Appellate Division, Fourth Department
In Declaratory Judgment Action, Underlying Plaintiff’s Demand for Portions of Claims File is Denied.  In the Absence of Undue Hardship, Material Prepared for Litigation is Not Discoverable

Charleus was injured in an automobile accident when her vehicle collided with a vehicle that was covered by a policy of insurance issued by Merchants. After Charleus commenced a personal injury action arising from that collision, Merchants commenced the instant action seeking to disclaim coverage due to the non-cooperation of its insured. In response to Charleus's first notice for discovery and production of documents in this action, Merchants disclosed certain materials but withheld portions of its insurance claim file relating to the personal injury action on the ground that the documents were material prepared in anticipation of litigation, were protected by attorney client privilege, and were otherwise not relevant to the action to disclaim coverage.

Charleus moved to compel production of the withheld documents, and plaintiff cross-moved for a protective order. After reviewing the withheld materials in camera, the motion judge granted the motion in part by ordering Merchants to disclose certain withheld portions of its claim file and, in effect, denied the cross motion.

An insurance company's claim file is conditionally exempt from disclosure as material prepared in anticipation of litigation unless material prepared in anticipation of litigation "a party demonstrates that he or she is in substantial need of the material and is unable to obtain the substantial equivalent of the material by other means without undue hardship

The materials sought by Charleus and ordered by the court to be disclosed following its in camera review constitute material prepared in anticipation of litigation and were prepared at a time after plaintiff had already determined to reject and defend against the claim made by Charleus. Because the materials sought by Charleus and ordered to be disclosed by the court's order were prepared in anticipation of litigation and because Charleus has not made a showing justifying disclosure it is exempt from discovery.

Editor’s Note: Kudos to Brian Barnas on this win.

11/10/22       Walker v. Erie Insurance Company
Appellate Division, Fourth Department
Professional Liability Exclusion for Cosmetic Coverage Nailed in Pedicure Case. Failure to Sanitize Equipment Used in the Pedicure Leading to MRSA, is “Due To” a Professional Service

HF corned the 11/10 Fourth Department insurance cases.  This was mine with Ryan Maxwell on the brief.

Walker contracted the bacterial infection MRSA during a pedicure performed at a nail salon that was insured under a CGL policy issued by Erie Insurance.  Walker sued the salon (insured) and Erie denied coverage and did not defend. The denial was based on an endorsement consisting of a professional liability exclusion that precluded coverage for the cosmetic services. A judgment was ultimately entered against the insured in the underlying action and plaintiff then commenced a direct action against Erie to recover the damages under the judgment pursuant to the terms of the policy.

Erie argued that the professional liability exclusion is unambiguous as the exclusion precludes coverage for plaintiff's injuries inasmuch as the evidence establishes that plaintiff contracted MRSA due to the rendering of a cosmetic service or treatment, namely, the professional pedicure performed by the insured. The underlying plaintiff argued that subject exclusion is inapplicable given that she was injured due to preparatory acts taken by the insured prior to and unconnected with any specific cosmetic treatment (failure to property sterilize equipment) and any ambiguity must be construed in favor of coverage.

A secondary argument was that Erie did not establish that the insured had notice of the exclusion.

The court held that the exclusion was unambiguous.

In determining a dispute over insurance coverage, courts first look to the language of the policy.  Unambiguous provisions of an insurance contract must be given their plain and ordinary meaning, and the interpretation of such provisions is a question of law for the court. Insurance contracts must be interpreted according to common speech and consistent with the reasonable expectations of the average insured. When an insurer wishes to exclude certain coverage from its policy obligations, it must do so 'in clear and unmistakable' language" To the extent that there is any ambiguity in an exclusionary clause, [courts] construe the provision in favor of the insured.

The insurer has the 'heavy burden' of establishing that the exclusion is expressed in clear and unmistakable language, is subject to no other reasonable interpretation, and is applicable to the facts.

Here, the professional liability exclusion states—in clear and unmistakable language—that the insured's policy "does not apply to 'bodily injury' . . . due to . … [t]he rendering of or failure to render cosmetic . . . services or treatments." Contrary to plaintiff's contention, there is no ambiguity in the wording of the exclusion inasmuch as it is susceptible of only one reasonable interpretation: there is no coverage for bodily injury due to (i.e., "caused by") the rendering (i.e., the performance) of a cosmetic service or treatment (e.g., a pedicure).

Plaintiff insisted on a different reading, i.e., that the policy excludes only "injuries due to the manner in which the cosmetic service is performed" such that "the manner in which the pedicure was performed must be the cause of the injury," which would not include preparatory tasks undertaken before a customer arrives for cosmetic treatment. The court rejected that argument:

We rejected that argument:

"Courts may not, through their interpretation of a contract, add or excise terms or distort the meaning of any particular words or phrases, thereby creating a new contract under the guise of interpreting the parties' own agreement.

Nowhere does the exclusion limit its reach to "the manner" of performance, which, under plaintiff's view, means only those precise physical acts undertaken contemporaneous with the cosmetic service upon the customer's person, but does not include any tasks taken in preparation for the service. Rather, the court’s analysis of the exclusion language makes clear, the policy excludes coverage for injuries caused by the performance of acts that constitute part of the pedicure service.

Ultimately, the court agreed with Eri that plaintiff's assertion that the "due to" causal trigger in the exclusion may be reasonably interpreted to draw a distinction between acts that occur during the cosmetic service and those that occur in preparation thereof constitutes an impermissible attempt to manufacture an ambiguity. Parties cannot create ambiguity from whole cloth where none exists, because provisions are not ambiguous merely because the parties interpret them differently.

Defendant is also required to establish that the exclusion is applicable to the facts. Here, Erie submitted in support of its cross motion the verified complaint in plaintiff's underlying personal injury action in which plaintiff alleged that she received a pedicure by a nail technician employed by the insured and, as a result of the insured's negligence, contracted MRSA. More particularly, plaintiff alleged that the insured was negligent in "fail[ing] to properly clean, disinfect and sanitize the pedicure equipment and materials used for . . . [p]laintiff's pedicure, including but not limited to the foot bath, to ensure the safety and health of . . . customers including . . . [p]laintiff."

Plaintiff further alleged that her infection was "caused by the actions, equipment and/or materials that were exclusively in the [insured's] control." Defendant also submitted the verified complaint in the present action in which plaintiff represented that, pursuant to the underlying judgment, the insured was found liable for the conduct alleged in the underlying verified complaint and set forth in a confession of judgment. Pursuant to the confession of judgment as quoted by plaintiff, the court found that the insured was negligent in failing to properly clean, disinfect, and sanitize the premises to ensure the safety and health of the customers and, consequently, the premises and the equipment and materials used for plaintiff's pedicure, including the foot bath and tools, became contaminated. Plaintiff contracted MRSA directly as a result of the insured's negligent acts and omissions.

We conclude that defendant's submissions established that the exclusion applies to the facts here because the bodily injury (MRSA infection) was due to (caused by) the rendering (the performance) of a cosmetic service and treatment (the professional pedicure) with the unsanitary pedicure equipment and materials. As is clear from the allegations of negligence for which the insured was found liable, plaintiff's injury was not caused by the insured's mere failure to sanitize the pedicure equipment—i.e., plaintiff was not infected simply by her presence among unsanitary instruments at the nail salon—but rather was caused by the insured's use of that contaminated equipment while performing the professional pedicure on plaintiff's feet and toenails.

Plaintiff's further contention that the exclusion does not apply to the insured's liability for her negligent training and supervision claims is also without merit. Each of plaintiff's negligence theories, including negligent supervision and training, is dependent on the injury sustained as a result of the insured's failure to use sanitized equipment during the professional pedicure service, and therefore those theories "are solely and entirely within the exclusionary provisions of the [professional liability] exclusion."

The court remanded the matter back to the trial court for a hearing to establish whether the exclusionary endorsement was sent to the insured.


Steven E. Peiper

[email protected]

11/18/22       Putnam v. Kibler
Appellate Division, Fourth Department
A Release is a Release is a Release

Plaintiff sustained injury while riding as a passenger on a snowmobile operated by Kibler.  As the Kibler snowmobile crested a hill, it was struck by a snowmobile, coming in the opposite direction, operated by Gniazdowski. Kibler stated he was not going fast and was as far over on the right had side of the trail as possible.  The other driver could not recall his speed or location and was ticketed. Kibler was not. 

Kibler and Plaintiff both retained the same lawyer who negotiated a settlement with Gniazdowski’s insurance carrier.  With regard to plaintiff, her claim was resolved for $25,000.  The carrier issued a Release to plaintiff’s counsel, and plaintiff executed the same in counsel’s presence.  As a result, the insurer issued a $25,000 settlement check to plaintiff’s counsel. 

Thereafter, plaintiff retained different counsel who commenced the instant proceeding.  Gniazdowski appeared by way of an Answer, and immediately moved to dismiss on the basis of the previously executed Release and payment.  Even though defendant produced an undisputed copy of the Release as part of his moving papers, the trial court denied the motion without explanation.  On appeal, the Fourth Department reversed. 

In so holding, the Appellate Division rejected plaintiff’s claim that Gniazdowski waived his right to rely upon the Release as a defense because it was not raised in his Answer.  The Court explained that the Answer specifically identified several Affirmative Defenses including one which read “plaintiff has provided a signed release to this answering defendant, such that this action is barred by release.”

The Court further ruled that a general release is governed by contract law principles, and it should be enforced as “unambiguous if the language it uses has a ‘definite and precise meaning’…”   Plaintiff argued that the term “bodily injury damages” as employed in the general release was ambiguous.  This argument, too, was rejected by noting that bodily injury is understood to mean personal injury damages which include medical expenses, pain and suffering, and wage loss.

In addition, plaintiff argued that the general release should be set aside because she did not realize that she was giving up the right to sue in exchange for $25,000.  The Court noted that plaintiff was 19 years old at the time of the settlement, and bare allegations of not understanding the impact of her decision did not sufficiently support of a claim of lack of capacity.  In any event, a “mere unilateral mistake” was not an “adequate basis for invalidating a clear, unambiguous and validly executed release.”

The Court also rejected plaintiff’s argument that the release should be invalidated because her initial counsel was conflicted due to his dual representation of Kibler and plaintiff.  Plaintiff’s claim was, again, a bare legal conclusion without any real support.  The Appellate Division also noted that at the time of the settlement there was no indication that Kibler was negligent, and specifically referenced the fact that Gniazdowski was ticketed for negligent operation and Kibler was not. 

Finally, plaintiff argued that Gnizadowski’s motion should have been denied because he did not prove that she received consideration (namely, her portion of the $25,000 settlement).  The Court noted that plaintiff’s position was again unsupported, and, in fact, flatly contradicted by the documentary evidence produced by Gniazdowski’s motion papers (including an affidavit evidencing payment of the check to plaintiff’s lawyer).  Further, even if compensation was not provided, it is not a question of consideration, but rather a breach of contract.  In effect, the deal had been struck between plaintiff and Gniazdowski, and she could not reopen that claim.  If she had not been paid, her remedy was to sue Gniazdowski and/or the insurance carrier for breach of contract in defaulting on their obligations under the Release.


Michael J. Dischley
[email protected]

11/10/22       Suman Toor v. Samuel Lotemple and Retrotech, Inc.
Appellate Division, Fourth Department
Defendant Expert Failed to Opine as to if Plaintiff’s Injuries Were the Result of Preexisting Degenerative Disease Thereby Precluding Summary Judgment

Appeal from an order of the Supreme Court, Monroe County (Debra A. Martin, A.J.), entered September 20, 2021. The order, insofar as appealed from, denied in part the motion of defendants for summary judgment.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by granting that part of the motion with respect to the 90/180-day category of serious injury within the meaning of Insurance Law § 5102 (d) and dismissing the complaint, as amplified by the bill of particulars, to that extent and as modified the order is affirmed without costs.

Plaintiff commenced this action seeking damages for injuries she allegedly sustained when the vehicle she was driving was struck by a vehicle driven by defendant Samuel LoTemple and owned by defendant Retrotech, Inc. In her complaint, as amplified by the bill of particulars, plaintiff alleged that she sustained a serious injury within the meaning of Insurance Law § 5102 (d) under, inter alia, the significant limitation of use and 90/180-day categories. Defendants moved for summary judgment dismissing the complaint, and they now appeal from an order that, among other things, denied their motion with respect to the significant limitation of use and 90/180-day categories of serious injury.

The Appellate Court found that, contrary to defendants' contention, they failed to meet their initial burden with respect to the significant limitation of use category of serious injury. The reports of defendants' medical experts did not establish that plaintiff's injuries are the result of preexisting degenerative disease inasmuch as they " 'fail[ed] to account for evidence that plaintiff had no complaints of pain [in the allegedly affected areas] prior to the accident' ". Further, although defendants contend that plaintiff's injuries are not "significant" as that term is used in Insurance Law § 5102 (d), their own submissions in support of their motion raised triable issues of fact with respect to whether plaintiff's injuries are significant. In light of defendants' failure to meet their initial burden with respect to that category of serious injury, there is no need to consider the sufficiency of plaintiff's opposition thereto.

However, the Appellate Court agreed with defendants, however, that Supreme Court erred in denying their motion with respect to the 90/180-day category of serious injury, and we therefore modify the order accordingly. " 'To qualify as a serious injury under the 90/180[-day] category, there must be objective evidence of a medically determined impairment or impairment of a non-permanent nature . . . as well as evidence that plaintiff's activities were curtailed to a great extent' ". An injured plaintiff must be prevented " 'from performing substantially all of the material acts which constituted his [or her] usual daily activities' for at least 90 out of 180 days following the accident". Here, defendants met their initial burden by submitting plaintiff's deposition testimony, which established that although plaintiff was limited in certain daily activities, she was able to perform others. In response, plaintiff did not raise an issue of fact.

11/09/22       Justin M. Augustus v. Michelle D. Negron
Appellate Division, Second Department
Defendant Expert Failed to Adequately Explain, with Competent Medical Evidence, his Belief that Plaintiff’s Limitations were Self-Imposed Thereby Precluding Summary Judgment

In an action, inter alia, to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Johnny Lee Baynes, J.), dated March 12, 2020. The order granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident.

The Appellate Court ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is denied.

The plaintiff commenced this action, inter alia, to recover damages for personal injuries that he allegedly sustained in a motor vehicle accident on February 21, 2016. The defendants moved for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident. In an order dated March 12, 2020, the Supreme Court granted the defendants' motion. The plaintiff appeals.

The Appellate Court found that defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the accident. The defendants failed to submit competent medical evidence establishing, prima facie, that the plaintiff did not sustain a serious injury to the lumbar region of his spine under either the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d). Specifically, the Appellate Court found that the defendants' expert found significant limitations in the range of motion of the lumbar region of the plaintiff's spine and the expert failed to adequately explain and substantiate, with competent medical evidence, his belief that the limitations were self-imposed. Further, the Appellate Court found that defendants failed to establish, prima facie, that the alleged injury to the lumbar region of the plaintiff's spine was not caused by the accident. Since the defendants failed to meet their prima facie burden, it is unnecessary to determine whether the opposing papers were sufficient to raise a triable issue of fact.


Agnes A. Wilewicz

[email protected]

10/24/22       The Hanover Ins. Co. v. R.W. Dunteman Company
United States Court of Appeals, Seventh Circuit
Insureds Failed to Give Timely Notice Because of Aggregate Provisions Located in Policy’s Definitions

Ms. Jane Dunteman owned a minority stake in an asphalt company and a concrete company, which were also owned and operated with her husband and other family members. The couple divorced in 2009, and Ms. Dunteman passed away in 2017, along with her ex-husband who passed sixth months later. Ms. Dunteman’s death caused state court litigation over the size of her interests in the family businesses; and her Estate sued her four sons for dilution of ownership interest after the 2009 divorce. The sons acted as directors, officers, and shareholders of the company following the divorce.

Hanover provided “claims made” liability insurance in 2018 and 2017, with the policies extending coverage for coverage for directors, officers, and entities. The policies placed a timely notice condition on coverage. The insureds were required to report a claim “as soon as practicable” after becoming aware of the claim or the latest within 90 days of the policy’s expiration date. The Estate filed a declaratory judgment action in 2017 naming the asphalt company only. However, the Estate filed an amended complaint in 2018 naming the sons and the concrete as co-defendants, while also adding allegations of oppressive behavior. The sons notified Hanover and sought coverage under the 2018 policy. Hanover disclaimed for late notice under the 2017 policy and filed its own declaratory judgment action. The district court entered judgment in favor of Hanover and found the 2017 policy’s “aggregate provisions” treated the new allegations as a single claim. The Seventh Circuit affirmed the judgment.

As a matter of course, the Court examined the relevant policy language. The policy defined “claim” as a civil proceeding commenced by the service of a complaint against an insured for a “wrongful act.” It also defined a “wrongful act” is defined as any alleged act, error, omission, misstatement, misleading statement, neglect, [or] breach of duty by an insured. Through these definitions the Court determined the original complaint in 2017 triggered the insureds’ duty to notice Hanover of the claim.

As for the new allegations of oppressive behavior against the added insureds, the policy’s broad definition of “related wrongful acts” precluded the new allegations from being considered new claims under the policy. The policy defined “related wrongful acts” as acts that are logically or causally connected by reason of any common fact, circumstance, situation, transaction, casualty, event, result, injury or decision. Due to this exceedingly broad definition, the Court found the allegations in the original and amended complaints were logically connected because each concerns the same share dilution of Ms. Dunteman’s stake in the family’s businesses. It further reasoned, a “claim” commenced by the service of a complaint spans the entire action, not just the legal theories and allegations that commence the action. Therefore, the aggregate provision found within the “related wrongful acts” definition includes not only the original allegations, but also those in the amended complaint.

The Seventh Circuit also rejected the insureds’ argument that the claim did not commence until 2018 because neither the sons nor the concrete company were named in the original complaint. While somewhat persuasive, the Court denied this theory because the asphalt company is affiliated with the other insureds, and the original complaint raised related “wrongful acts.” The Court also found an aggregate provision within the policy’s definition of “related claims.” The policy defined “related claims” as all claims based upon, arising from or in any way related to the same set of facts, circumstances, situations . . .” The policy also treated “related claims” as a single claim made in the policy period. Thus, the plain meaning of the policy is that any claim related to the dispute of Ms. Dunteman’s share is considered first made in 2017 and is subject to that policy’s reporting period. In sum, “aggregate provisions” can be found within a policy’s definitions and can be used to prompt an insured’s action or disclaim coverage upon their inaction.


Brian D. Barnas

[email protected]

11/14/22       Petersen v. Allstate Mutual Insurance Company
United States District Court, District of Minnesota
Estate had Bad Faith Claim to Assign

Petersen was injured in an auto accident with Allstate’s insured Munion in August 2016.  Munion died less than a year after the accident.  In December 2017, nine months after Munion’s death, Petersen demanded the policy limits of $100,000 to settle his personal injury claim, claiming he already had $30,000 in medical bills.  Allstate rejected the demand and counter-offered $5,000.

Petersen brough suit against Munion’s estate in 2019.  Petersen made an offer of judgment in the amount of $20,000.  Allstate rejected it and countered with an offer of $18,000, which Petersen rejected  The case proceeded to trial, and the jury returned a verdict of almost $600,000.  Allstate paid the limits of $100,000 plus costs and interest of over $50,000. 

The Munion estate assigned any claims against Allstate to Petersen.  Petersen then brough suit against Allstate alleging bad faith failure to settle.  Allstate made an early motion for summary judgment, arguing that the estate never had authority under Minnesota law to assert a bad faith claim.  It argued that Munion died by the time Allstate allegedly breached its failure to settle.  Therefore, the decedent had no claim against Allstate prior to death and the estate should have no claim.

The court rejected this argument.  It found that Allstate owed an obligation of good faith to the estate after the death of Munion, Allstate continued to defend the estate and controlled settlement negotiations on its behalf, which is what triggers the duty of settlement.  The court noted there were not many cases on the subject, but that some out of state authority supported the rule that an estate can become the insured and is owed the same duty of good faith.

Allstate also argued that a bad faith claim by the estate would be barred by the applicable limitations period.  In Minnesota, all claims against a decedent’s estate that arose before death must be brought within one year.  However, there is an exception for any proceeding to establish liability of the decedent for which there is protection by liability insurance.  The exception applies to proceedings to recoup liability insurance to the limits only.  Allstate argued this limited any claim to the policy limits, which it had already paid.  The court disagreed, noting that the underlying lawsuit was not filed within one year of Munion’s death, and Allstate did not raise the limitations period there.  As such, the court found Allstate had forfeited that argument.

However, the court left the door open for later summary judgment motions on a more fully developed record.


Lee S. Siegel

[email protected]

11/17/22       Tenney v. State Farm Auto. Ins. Co.
Superior Court of Connecticut, Danbury
New Money Means, Well What We Think It Means

Clarity in settlement terms is important. Just ask the State Farm adjuster who tried to clarify the terms of a settlement after they were already agreed to. Tenney brought an underinsured motorist action against the State Farm, following the tortfeasor paying the limits of his auto policy. The lawyers negotiated a settlement, but State Farm reneged and Tenney moved to enforce the settlement. Following an evidentiary hearing, the court sided with Tenney, ordering State Farm to pay up.

Initially, Tenney demanded $70,000. State Farm rejected the demand but paid $9,150 which it described as an “impasse payment.” At each step during the negotiations the plaintiff's counsel acknowledged and accounted for the prior payment and characterized each new demand as being “new money.” With each new offer provided by defense counsel, the plaintiff's counsel made clear that the demands and offers being discussed were to be considered as “new money.” Finally, the parties agreed to a $30,000 settlement. The credible testimony according to the court was that “defense counsel left a phone message for plaintiff's counsel asking if the plaintiff would accept an offer of $30,000. Plaintiff's counsel then returned the call the next day and told defense counsel that the $30,000 in “new money” was agreeable to his client.”

State Farm refused to pay, saying that the offer included the impasse payment. The court disagreed. “The terms and intent of the agreement were clear and unambiguous at the time of the acceptance of the defendant's offer and were accepted prior to any attempt by the defendant to alter the terms of the agreement. Accordingly, the parties are bound by the agreement that has been negotiated.” As a result, the court enforced the settlement of $30,000 “new money.”


Kyle A. Ruffner

[email protected]

11/10/22       St. Paul Fire & Marine Ins. CO. v. Bodell Constr. Co.
United States District Court for the District of Hawaii   
No Coverage Available Under Liability Policy for Allegedly Defective Work Performed on an Apartment Complex or the Repair of Such Work

St. Paul Fire and Marine Insurance Company, The Phoenix Insurance Company, The Travelers Indemnity Company, and Travelers Property Casualty Company filed this action against Defendants Bodell Construction, Sunstone Realty, and Steadfast Insurance Company. The Plaintiffs moved for summary judgment seeking a ruling that they had no duty to indemnify the Defendants, Bodell Construction Company and Sunstone Realty Partners for allegedly defective work and the subsequent repair of such work.

In the underlying action, the Association of Apartment Owners of Ali’i Cove (AOAO) filed an action for alleged construction defects against Sunstone, AOAO’s developer. Sunstone filed a Third-Party Complaint against Bodell, alleging that Bodell, the general contractor for Ali’I Cove, had a duty to indemnify and reimburse Sunstone. During the underlying litigation, Sunstone retained Porter Construction to conduct a cost report of AOAO’s claims. The expert issued a Subrogation Response outlining the subrogation of claims to Bodell and its subcontractors. During an arbitration between Bodell and Sunstone, the arbitrator used the Subrogation Response as a framework to review the claimed deficiencies. The arbitrator ultimately issued a Decision and Award which awarded over 8 million dollars to Sunstone and listed numerous defects for which Bodell was partly or fully responsible. The award did not include damages for the costs of repairs or removal of units affected by the defects and did not discuss each individual defect or specify the amount of damage attributable to each defect.

The issues raised in this motion included (1) whether the defects caused physical injury or damage to the property; (2) whether so-called “rip and tear” damages constitute physical damage to the property for purposes of coverage; (3) whether the Arbitrator awarded damages for loss of use of the property: and (4) if the defects are not covered by the policies, whether it is possible to determine the dollar amount of such work.

The Plaintiffs asserted that for damages to be covered under the policies, the damages must constitute “property damage” caused by an “occurrence,” defined by the Policies to require physical injury to tangible property. With the exception of the “rip and tear” damages, the court held that neither Bodell nor Sunstone disagreed with the Plaintiffs that the defects did not involve any such physical injury. In addition, there was no other evidence that indicated the defects included property damage under the Policies. In contrast, Sunstone and Bodell did contend that the removal of non-defective work to repair the defects constituted “property damage.” However, the court held that courts have not interpreted “physical injury to tangible property” to include the cost to repair a defective product or structure. The court explained that this is because insurance policies are not designed to provide contractors and developers with coverage against claims that their work is inferior or defective. Therefore, granted summary judgment to the Plaintiffs on both of these issues.

Further, the parties dispute whether the Arbitrator awarded loss of use damages, such as expenses to temporarily move out of units defectively constructed. The court agreed with the Plaintiffs that the Award did not include, expressly or otherwise, damages for loss of use damages. The court explained that the award was clear as to what was and was not factored into the evaluation and calculations. While the award contained a long list of construction defects and certain testimony heard during the arbitration, not one of the listed construction defects, nor any of the referenced testimony, concerned loss of use damage, such as move-out expenses. Further, the court held that the evidence submitted by the Plaintiff was insufficient to establish, as a matter of law, the amount of damages awarded for the defects by the arbitrator. While the Plaintiffs set forth estimated calculations based on the Award, the court held it was not their role to decide who has produced the most reasonable guess for the damages assigned to the defects.

Therefore, Plaintiffs’ motion for summary judgment was granted as to the first three issues but denied as to the fourth issue because a genuine dispute existed as to the amount of damages.


Ryan P. Maxwell
[email protected]

COVID-19 Business Interruption

11/17/22       Consolidated Restaurant Operations, Inc. v. Westport Ins. Corp.
New York Court of Appeals
New York’s High Court Grants Leave To Appeal Dismissal of COVID-19 Business Interruption Lawsuit

Last week, New York’s Court of Appeals, the state’s highest court, agreed to resolve an issue of statewide importance that has been front and center since the COVID-19 pandemic began. The issue? Whether the presence of Coronavirus within an insured premises can constitute “direct physical loss of or damage to property,” which is necessary to trigger business interruption coverage. The Court of Appeals decision granting leave is slim on the details. However, our very own Steve Peiper previously wrote about the First Department’s affirmance of the dismissal in April, which is excerpted below for your convenience:

Beginning in early February into March 2020, plaintiff, the owner and operator of numerous restaurants both in the United States and abroad, took initial steps to protect its customers by implementing enhanced cleaning procedures, and by installing hand sanitizer stations and physical partitions. By mid-March, however, plaintiff was forced to suspend its indoor dining operations as a result of various executive closure orders in New York and elsewhere. In some states plaintiff was allowed to continue providing its customers with takeout, drive through and/or delivery services. It is unrefuted that plaintiff suffered tens of millions of dollars in revenue loss because of sharply curtailed operations.

Plaintiff had purchased commercial all risk property insurance from Westport with business interruption coverage.  The policy had a $50 million per occurrence limit, and it insured all risks of direct physical loss or damage to insured property while on insured location(s).

Plaintiff filed a claim in April 2020, claiming that it had suffered direct physical loss or damage to its property because the actual or threatened presence of the virus in and on its property eliminated the functionality of the restaurants.  Westport denied coverage in July 2020, stating that there was no physical loss or damage to the property.  Westport also denied coverage based on a contaminant exclusion that contained the term virus.  Plaintiff filed a lawsuit against Westport, and Westport moved to dismiss.

Initially, Plaintiff argued that the term “physical loss or damage to property” was ambiguous because the word physical was undefined.  The court rejected this argument.  The First Department had previously held that a claim for loss of use was not covered under a policy providing coverage for direct physical loss or damage to property.  The term requires a physical change or damage to the property in some tangible way.  The Plaintiff’s complaint only made conclusory assertions that its property was altered by the coronavirus.  This was insufficient to survive dismissal.

The court relied on a series of federal court decisions applying New York law, as well as other federal court decisions around the country, holding that conclusory assertions that COVID-19 caused physical damage to property fail to state a basis for coverage.  The court also cited New York trial level court decision finding that the meaning of “physical” requires some tangible alteration to the property.

Plaintiff failed to identify any physical change, transformation, or difference in its property.  The pleading did not identify a single item Plaintiff had to replace, change, or that was damaged.  In fact, Plaintiff was able to provide takeout and drive through services, which indicated the property was still useable and operable.  Plaintiff was also denied leave to amend.

Finally, Plaintiff argued that there was coverage for a virus-related claim because the policy did not contain a specific virus exclusion.  The court rejected this argument, as exclusions subtract coverage rather than grant it.  Having concluded that there was no coverage in the first instance, the court did not address the applicability of any exclusions.

Maxwell’s Minute: Notably, the First Department found Consolidated Restaurant’s allegations of the presence of the virus and its impact to covered property both vague and conclusory, such that they were not afforded a presumption of truth on a threshold motion to dismiss.

Carriers hope for an affirmance. Assuming that occurs, will the Court of Appeals do so by merely deeming these conclusory allegations insufficient under New York’s pleading standard? Or will the Court of Appeals find that the presence of Coronavirus cannot cause direct physical loss of or damage to property as a matter of law? These are two very different conclusions.

Alternatively, Policyholders obviously hope for a reversal. This position is largely based upon the breadth of New York’s pleading standard, and hinges upon whether Consolidated Restaurant has asserted non-conclusory allegations to be afforded a presumption of truth on a motion to dismiss. Surpassing the threshold pleading standard is one thing. Establishing that Coronavirus causes “direct physical loss of or damage to property” when put to your proof is a whole different story.

Time will tell. Well, that and the Court of Appeals, of course.

Regulatory Wrap Up

11/21/22       Cannabis-Related Criminal Convictions and Insurance Underwriting
Department of Financial Services
Guidance Reminds Insurers of Prohibition on Underwriting Inquiries or Adverse Action Based Upon Expunged Cannabis-Related Convictions

On Monday, the New York State Department of Financial Services (“DFS”) issued Insurance Circular Letter No. 13 (2022) regarding changes in the New York Criminal Procedure Law (“CPL”) that have resulted in the expungement of certain cannabis-related convictions. The Circular Letter reminds insurers “that they must implement and maintain procedures and controls to ensure that they neither inquire about nor take adverse action based upon any arrest or conviction specified in Executive Law § 296(16), including expunged cannabis-related convictions.”

Circular Letter No. 13 notes that Executive Law § 296(16) provides, in no uncertain terms, that:

[i]t shall be an unlawful discriminatory practice, unless specifically required or permitted by statute, for any person, agency, bureau, corporation or association, including the state and any political subdivision thereof, to make any inquiry about, whether in any form of application or otherwise, or to act upon adversely to the individual involved, any arrest or criminal accusation of such individual not then pending against that individual which was followed by a termination of that criminal action or proceeding in favor of such individual as defined in subdivision two of section 160.50 of the criminal procedure law, or by an order adjourning the criminal action in contemplation of dismissal, pursuant to section 170.55, 170.56, 210.46, 210.47, or 215.10 of the criminal procedure law, or by a youthful offender adjudication, as defined in subdivision one of section 720.35 of the criminal procedure law, or by a conviction for a violation sealed pursuant to section 160.55 of the criminal procedure law or by a conviction which is sealed pursuant to section 160.59 or 160.58 of the criminal procedure law, in connection with the…providing of…insurance to such individual….

In 2021, the Marihuana Regulation & Taxation Act (“MRTA”) was signed into law. CPL § 160.50(3)(k) was amended by MRTA to terminate certain cannabis-related convictions.  CPL § 160.50(5)(a) expunges certain marihuana-related records. Accordingly, DFS concludes that insurers inquiring about or acting adversely based upon a New York cannabis-related expunged conviction would violate Executive Law § 296(16). 

Continuing, DFS notes that since an expungement restores the accused to their pre-arrest status, insurer inquiry into or adverse action based upon the expunged conviction results in unfair discrimination in violation of Insurance Law § 2303 or 4224.

Accordingly, DFS advises that insurers “must review their procedures and controls and update them, as needed, to ensure that they address recently expunged cannabis-related convictions, as well as other arrests or convictions specified in Executive Law § 296(16). This includes, but is not limited to, procedures for “denying applications, making a distinction in premiums or rates, or making a distinction in the terms and conditions of insurance.” For insurers that “include a general question about past criminal convictions on applications for insurance,” DFS recommends “instructing applicants at the time of application that an applicant may respond to questions about convictions specified in Executive Law § 296(16) as if the convictions did not occur,” but at the very least “not inquiring about or acting adversely based upon any convictions specified in Executive Law § 296(16) during the underwriting process.”


Patricia A. Rauh

[email protected]

11/21/22       Collier v. Lincoln Life Assur. Co.
U.S. Court of Appeals, Ninth Circuit
Lincoln Could Not Raise New Reasons for Denying Plaintiff’s Claim for Long Term Disability Benefits During Litigation that were not Raised During the Administrative Process

From 2013 to 2018, Plaintiff, Vicki Collier (“Collier”) worked at the Automobile Club of Southern California (“AAA”) as an insurance sales agent.  During that time, Collier experienced ongoing pain in her neck, shoulders, upper extremities, and lower back, which limited her ability to type and sit for long periods of time.  She was eventually diagnosed with multiple physical impairments that restricted mobility in her back, shoulders, elbows, and wrists.  Collier ended up having surgery on her right shoulder and was able to return to work, but her pain continued.  In addition to the surgery, Collier also received cortisone shots, an epidural, Botox injections, oral pain medication, acupuncture, and physical therapy.

In April 2018, Collier applied for worker’s compensation.  A worker’s compensation representative recommended that AAA provide certain accommodations for Collier to allow her to work with less pain.  Despite these accommodations, however, Collier reported that her pain persisted.  In May 2018, she stopped working at AAA because of her pain.

While employed at AAA, Collier purchased long-term disability (“LTD”) insurance through her employer (the “Plan”), which was sponsored by defendant, Lincoln Life Assurance Company of Boston (“Lincoln”).  Collier was entitled to LTD benefits if she could show that she was disabled under the terms of the Plan.  The Plan provided that Collier would be considered “disabled” if:

during  the  [26  week]  Elimination  Period  and  the  next  12  months  of  Disability [Collier], as a result of Injury or Sickness, [was] unable to perform with reasonable continuity the Substantial and Material Acts necessary to pursue [her] Own Occupation in the usual and customary way; and thereafter, [Collier was] unable to perform, with reasonable continuity,  the  Substantial  and  Material  Acts  of  any  occupation,  meaning that as a result of sickness or injury [Collier was]  not able to engage  with  reasonable  continuity  in  any  occupation  in  which  [she]  could reasonably be expected to perform satisfactorily in light of [her] age,  education,  training,  experience,  station  in  life,  and  physical  and  mental capacity.

In February 2019, Collier filed a claim for LTD benefits with Lincoln.  Lincoln sent Collier’s medical records to outside doctor, Dr. Chhatre, who reviewed the medical records, but did not actually examine Collier.  He reported that Collier could work full-time without restrictions.  In addition, a vocational analyst retained by Lincoln reviewed Collier’s claim and determined that Collier’s occupation as an insurance sales agent could be performed at either sedentary or light work levels.

In May 2019, Lincoln denied Collier’s claim for LTD benefits.  Lincoln concluded that based on Collier’s medical records, she did not meet the definition of “disabled” under the Plan.  In its denial letter, Lincoln principally relied on Dr. Chhatre’s report and said nothing about Collier’s credibility or the lack of objective medical evidence as a basis for the denial.

Collier timely appealed the denial and submitted additional medical records, a functional capacity evaluation (“FCE”) and affidavits from her family and a close friend.  Lincoln scheduled Collier for an independent medical examination (“IME”) with Dr. Vlachos.  Dr. Vlachos reviewed Collier’s medical records and examined her in-person.  Dr. Vlachos observed that Collier had numerous areas of tenderness, but noted that her symptoms appeared to be out of proportion to what would be expected based on her MRI findings.  Dr. Vlachos concluded that Collier could continue to work fulltime with restrictions, but that she could only perform tasks like typing on an occasional basis.

In April 2020, Lincoln denied Collier’s appeal and continued to assert that Collier had not provided sufficient proof of her disability.  As to accommodations, Lincoln stated that “ergonomic equipment is readily available” without specifying what equipment was available or how it would be implemented to accommodate Collier’s restrictions.

Following Lincoln’s denial of her appeal, Collier filed suit under ERISA § 502(a)(1)(B).  The district court ordered a bench trial and in its trial briefs, Lincoln argued for the first time that Collier was not credible and that because her doctors largely relied on her subjective reports of pain, the conclusions were not supported and thus did not constitute objective evidence of her disability.  Further, Lincoln argued that even if Collier were disabled under the Plan’s terms, her typing restriction could be accommodated with ergonomic equipment, such as voice-activated software.

The district court affirmed Lincoln’s denial of LTD benefits.  The district court concluded that Collier had failed to demonstrate that she was disabled under the Plan.  Collier appealed this decision to the Ninth Circuit. 

Pursuant to ERISA, every employee benefit plan shall “provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth specific reasons for such denial…” 29 U.S.C. §1133(1).  The notice of claim denial must contain: (1) the specific reason(s) for the denial; (2) reference to the specific plan provision on which the determination is based; (3) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (4) a description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA.  Upon denial of a claim for benefits, the claimant must be provided an opportunity for a “full and fair review” of the denial.  If a plan administrator relies on a new or additional rationale during the review process, the administrator must provide the rationale to the claimant and give her a reasonable opportunity to respond.

The Court noted that it has held numerous times that a plan administrator undermines ERISA and its implementing regulations when it presents a new rationale to the district court that was not presented to the claimant as a specific reason for denying benefits during the administrative process.  In other words, a plan administrator may not fail to give a reason for the benefits denial during the administrative process and then raise that reason for the first time during a judicial proceeding.

Here, Lincoln did not cite Collier’s lack of credibility or the lack of objective evidence when it denied her claim initially and on review.  In its initial denial letter, Lincoln informed Collier that she did not “meet the definition of disability” under the Plan and that her claim for benefits was therefore being denied.  Lincoln reiterated this reasoning in its denial letter of Collier’s internal appeal.  Lincoln never stated that it found Collier to not be credible or that she failed to present objective medical evidence, or that such evidence was required under the Plan.  It was not until Collier initiated litigation that Lincoln argued for the first time that she was nor credible and that she failed to present objective medical evidence in support of her claim.

The Ninth Circuit held that the district court erred in adopting Lincoln’s new rationales to uphold the denial of Collier’s LTD benefits.  The Court reversed the district court’s ruling and remanded the case back to the district court with directions to reconsider the administrative record to determine whether Lincoln correctly denied Collier’s claim for LTD benefits.  In conducting this re-review, the court may not rely on rationales that Lincoln did not raise in the administrative process.


Scott D. Storm

[email protected]

11/8/22         Romain v. State Farm Fire & Casualty Co.
United States District Court, E.D. New York.
Breach of the 2-Year Suit Limitation Condition and Dismissal of Claim for “Bad Faith” Punitive Damages.

Plaintiffs allege claims for breach of contract related to insurance claims they submitted for damages to their dwelling and personal property. Defendants filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), on the grounds that Plaintiffs' claims are time-barred. The Court granted the motion in part and denied in part.

Plaintiffs' homeowner's policy stipulates that "[n]o action shall be brought unless there has been compliance with the policy provisions and the action is started within two years after the occurrence causing loss or damage."

On May 6, 2018 Plaintiffs' clothes dryer caught on fire due to a clogged dryer vent. Plaintiffs allege that smoke from the fire spread outside through open windows and damaged the surrounding trees. Plaintiffs' detached garage was located under three of the damaged trees. "Leaves and dead branches from the trees destroyed the detached garage." Following the Town of North Hempstead's inspection of the premise, Plaintiffs were instructed to demolish the detached garage. Plaintiffs claim that Defendant declined to reimburse Plaintiffs as required by the Policy.

Additionally, Plaintiffs allege that they "called and on September 28, 2021, wrote a letter to State Farm to request inspection concerning damage that occurred because of a broken pipe leaking water in the laundry room from September 11, 2021, through September 20, 2021." Plaintiffs claim that part of the basement ceiling in the laundry room had collapsed as a result of the broken pipe and the basement inundated with water. As a result, Plaintiffs allege damages.

Plaintiffs claim that on November 15, 2021, they attempted to repair the damage themselves with the assistance of two hired helpers and spent $62,424.55 in repairs for which State Farm should have reimbursed them in accordance with the Policy. They allege that State Farm breached the insurance contract.

Plaintiffs' September 28, 2021, letter to State Farm, indicates that the funds State Farm paid to Plaintiffs were insufficient to cover the estimated cost to repair the damage to their home and their personal property caused by the May 6, 2018 fire. The letter does not mention the broken pipe in Plaintiffs' basement or any loss occurring in September 2021. It also does not reference the damaged trees or the detached garage.  Plaintiffs filed their initial Complaint on November 30, 2021.

The Court finds: (1) Plaintiffs' breach of contract claim with respect to damages caused by the May 6, 2018 fire is time-barred; but (2) Plaintiffs' breach of contract claim with respect to damages caused by the September 2021 broken pipe is not time-barred.

New York law generally affords parties to a contract six years to file suit for an alleged breach of contract, accruing from the date of the breach. N.Y. C.P.L.R. § 213(2). However, parties to a contract may agree to shorter limitations periods, which are normally enforceable when they are reasonable and in writing. N.Y.C.P.L.R. § 201. This rule applies to insurance policies. Generally, two-year limitations periods in insurance policies are regularly upheld and enforced by courts applying New York law.

Here, by the terms of Plaintiffs' Policy, Plaintiffs were required to commence this action within two years of the occurrence causing loss or damage, i.e.[,] the date of the catastrophe insured against." Given the applicable two-year limitations period in Plaintiffs' Policy, their breach of contract claim against State Farm for damages caused by the May 6, 2018 fire had to have been brought no later than May 6, 2020. However, Plaintiffs did not commence the instant action until November 30, 2021 — more than one year after the limitations period expired and more than three years after the fire damage occurred. Therefore, Plaintiffs' claim regarding damages to their detached garage caused by trees which had been damaged by smoke from the May 6, 2018, fire is time-barred.

However, in their Opposition, Plaintiffs contend that their breach of contract claim with regard to the loss allegedly caused by the September 2021 broken pipe falls within the two-year limitations period. Plaintiffs assert that on October 8 and 14, 2021, they contacted State Farm by phone, requesting an appointment for inspection of the broken pipe, but, despite their repeated efforts, were unable to get an appointment scheduled. Plaintiffs contend that State Farm "ignored the inspection request in their letter September 28, 2021;" yet, Plaintiffs acknowledge that the September 28 letter, which discusses the damages caused by the May 6, 2018 fire, fails to mention the alleged broken pipe. Ultimately, Defendant concedes that in the event Plaintiffs' "new loss with new damages occurred in September 2021" and is "entirely unrelated to their fire loss and resulting damages," Plaintiffs' suit appears to be timely. The Court agrees. Therefore, to the extent that Plaintiffs' breach of contract claim is based upon Defendant's denial or failure to respond to a claim for damages caused by the September 2021 broken pipe, which is wholly unrelated to the May 6, 2018 fire, that portion of their action is not time-barred by the two-year limitations period.

Defendant contends that Plaintiffs' demand for punitive damages based on an alleged breach of contract also fails as a matter of law. The Court agrees.

Under New York law, "[p]unitive damages are not recoverable for an ordinary breach of contract as their purpose is not to remedy a private wrong but to vindicate public rights."  To state a claim for punitive damages, a plaintiff must plead: (i) the defendant's conduct is actionable as an independent tort; (ii) the alleged tortious conduct is of an egregious nature; (iii) the egregious conduct is directed at the plaintiff; and (iv) the egregious conduct is part of a pattern directed at the public generally. Further, in order to recover punitive damages against an insurance carrier, a plaintiff must demonstrate that the carrier, in its dealings with the general public, engaged in a fraudulent scheme which demonstrates such a "high degree of moral turpitude" and "such wanton dishonesty as to imply a criminal indifference to civil obligations." Thus, punitive damages are not available for a mere breach of an insurance contract "even if committed willfully and without justification." 

Here, the Plaintiffs have failed to allege an independent tort separate and apart from the alleged breach of the Policy or that State Farm's alleged conduct was of an egregious nature. Essentially, this case involves "a ‘private' contract dispute over policy coverage and the processing of a claim which is unique to these parties, not conduct which affects the consuming public at large." Hence, Plaintiffs' demand for punitive damages must be dismissed with prejudice.

11/8/22 Government Employees Insurance Company v. Kalitenko
United States District Court, E.D. New York.
Subpoena to No-Fault Collection Law Firm Representing Medical Providers, Seeking Documents Relating to the Submission to Plaintiff of Allegedly Fraudulent Bills by Medical Providers Held to be Sufficiently Relevant to be Discoverable.

Motion filed by GEICO to compel non-party Kopelevich & Feldsherova, P.C. ("K&F") to comply with a subpoena duces tecum seeking information relating to the submission to plaintiffs of allegedly fraudulent bills by defendants Sergey A. Kalitenko Physician, P.C. and Sergey Kalitenko, MD ("defendants"). Plaintiffs contend that the subject subpoena seeks documents regarding K&F's financial involvement with defendants' submission of fraudulent billing. K&F opposes the motion, arguing that service of the subpoena was ineffective and that the information is neither relevant nor proportional to the needs of the case. Plaintiffs' motion is denied without prejudice.

Service of a subpoena is governed by Rule 45 of the Federal Rules of Civil Procedure, "requires delivering a copy to the named person[.]" Fed. R. Civ. P. 45(b)(1). "[T]o satisfy Rule 45's mandate of ‘delivering a copy to the named person' when the ‘person' is a corporation, there must be delivery to an appropriate agent, as identified by Rule 4(h) [of the FRCP]."  According to Rule 4(h), the subpoena must be delivered to "an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process." Fed. R. Civ. P. 4(h)(1)(B).

Here, it is undisputed that plaintiffs served the subject subpoena on a calendar clerk/paralegal at K&F, who is not an officer, director, managing or general agent of K&F. Accordingly, service of the subpoena was ineffective.

Nevertheless, under the circumstances, and in order to avoid further delay, this Court authorizes alternate service by email and permits plaintiffs to serve K&F by sending the subpoena via email to its managing agent.  Although some courts have required service under Rule 45 by personal delivery, courts in the Second Circuit have, increasingly, authorized alternative service, as long as service is calculated to provide timely actual notice.

Here, Mr. Kopelevich, the managing agent of the law firm K&F, acknowledged by email to plaintiffs' counsel on October 24, 2022, that K&F had received a copy of the subpoena but would not respond because the subpoena was "improper."  Under the circumstances, permitting service by email to Mr. Kopelevich at the email address he has used to communicate with plaintiffs' counsel is consistent with the principle embodied in Rule 1 of the FRCP that the Rules should be interpreted "to secure the just, speedy, and inexpensive determination of every action and proceeding."

In addition to the ineffectiveness of service, K&F argues that plaintiff's subpoena constitutes "an invasive fishing expedition." Specifically, K&F contends that the discovery sought would not yield relevant evidence because K&F's sole involvement in defendants' billing to insurance carriers is the use by defendants of K&F's business address as the address to which the insurance companies are asked to respond to defendants' bills.

On a motion to enforce or quash a subpoena, the issuing party "bears the initial burden of demonstrating that the information sought is relevant and material to the allegations and claims at issue in the proceedings." "Once relevance is established, the party seeking to quash a subpoena bears the burden of demonstrating that the subpoena is over-broad, duplicative, or unduly burdensome." Here, plaintiffs have sustained their initial burden of demonstrating the relevance of the subpoenaed materials. In their reply, plaintiffs demonstrate that they have in their possession checks that they sent to defendants in connection with the allegedly fraudulent billing that "were cashed and deposited into [K&F's] attorney-IOLA accounts[.]"  In addition, plaintiffs submit copies of wire transfers sent from K&F to an entity that defendants use to obtain certain funding, which is collateralized against the receivables owed to defendants by insurance companies. Based on this record, which appears to belie K&F's representation that it merely provides a mailing address for insurance payments to be sent, plaintiffs have demonstrated that the nonprivileged documents sought are sufficiently relevant to be discoverable.

As to K&F's arguments regarding the scope of the subpoena, the parties are directed to promptly meet and confer in good faith after the subpoena has been served in accordance with this opinion.


Katherine A. Fleming

[email protected]

11/17/22       McDowell v. Allstate Vehicle and Prop. Ins. Co.
Supreme Court of Appeals of West Virginia
Insurer Did Not Show Response To Occupancy Question Was False Or Material For Insured Flipping House

Damon McDowell (“McDowell”) and Deeanna Lawson (“Lawson”) purchased an insurance policy from Allstate Vehicle and Property Insurance Company (“Allstate”) for a derelict house McDowell intended to remodel. Defendant Patrick O. Hambrick, Jr., is an insurance agent who sold policies for defendant Allstate. McDowell stated that he had known agent Hambrick for several decades prior to 2019, and agent Hambrick knew McDowell was “fixing up houses.” In mid-May, McDowell said he had a discussion in a grocery store with agent Hambrick, and they talked about McDowell’s purchase of and intent to remodel a house. Agent Hambrick said he was selling homeowner’s insurance, and he gave McDowell a business card and said he would like to earn McDowell’s business. It is not clear how an Allstate policy was obtained for the premises.

After a fire was intentionally set at the premises, Allstate sought to rescind the policy, claiming that McDowell digitally signed an application and falsely answered a question regarding whether he would occupy the house within thirty days. McDowell contended that he never saw the application; never signed it; and that his answer was not false because he entered the property within thirty days to store personal property and begin renovations. Allstate and McDowell proffered two different versions of the application for insurance and two different versions of the circumstances surrounding the completion of the application. McDowell provided some information for the application, and other information was filled in by Allstate. In his deposition, McDowell argued that he would never have signed the version of the application proffered by Allstate, if he had seen it, because it contained errors. McDowell also argued that Allstate never demonstrated that the thirty-day-occupancy question on the application was material to its decision to issue the policy, in part because the question conflicts with the terms of the policy.

The Circuit Court of Fayette County granted Allstate’s motion for summary judgment, and McDowell appealed. On appeal, the Supreme Court of Appeals found that there was evidence McDowell was visiting the house and conducting repairs and renovations to ready the house for habitation. Further, nothing in the Allstate policy prohibited repairs and renovations to a property. Since McDowell was entering the property to renovate it, the question regarding occupancy was ambiguous, and the language of the policy provided that a dwelling under construction was not vacant or unoccupied. Under the circumstances, the court found that there was a question whether McDowell had made a false representation.

Regarding the materiality of the application question, Allstate submitted the affidavit of a “product and risk management litigation consultant” who opined that Allstate would not have issued the policy if McDowell had disclosed that the property as an investment or flip property, but the court found that Allstate had not demonstrated that the thirty-day occupancy question was material to Allstate. Beyond the opinion affidavit of its employee, Allstate offered no written underwriting policies, manuals, guidelines, or other writings pertaining to the company’s use of the thirty-day-occupancy question in assessing whether to issue a policy. Accordingly, the court found that the lower court had improperly granted summary judgment because there was a question of fact whether there was a false representation and whether it was material.


Evan D. Gestwick – Admission Pending

[email protected]

11/15/22       ARK683 Doe v. Archdiocese of N.Y.
Supreme Court of the State of New York, New York County
The Archdiocese May Be Dismissed from a CVA Case Where it Can Show Evidence Sufficient to Refute the Plaintiff’s Allegations and/or Establish a Defense as a Matter of Law

In early 2019, the State of New York first enacted a statute known as the “Child Victims Act,” or “CVA.” Under this Act, the statute of limitations for claims of child sexual abuse was re-opened to survivors of sexual abuse that occurred decades ago. Given the nature of the CVA, evidence is often difficult, if not impossible, to come by, provided that memories of key witnesses, including the abused, may have faded, other key witnesses and/or the abuser may have deceased, and records may be lost or destroyed.

ARK683 Doe v. Archdiocese of N.Y., however, presents an interesting spin on this problem. There, the plaintiff utilized the CVA to bring their otherwise-time-barred claim for sexual abuse against the Archdiocese of New York. The plaintiff asserted three causes of action against the Archdiocese: negligence, negligent training and supervision of employees, and negligent retention of employees.

The Archdiocese moved to dismiss the complaint on the ground that a defense was founded upon documentary evidence. Pursuant to New York’s Civil Practice Law and Rules (for our non-New York subscribers, that is the collection of New York’s rules of civil procedure), on a motion to dismiss based on documentary evidence, the moving party is required to present evidence that “utterly refutes” the plaintiff’s allegations and establishes a defense as a matter of law. This is not an easy burden to meet.

To meet its burden, the Archdiocese offered evidence that it did not have ownership or control of the persons alleged to have abused the plaintiff. The Archdiocese put on its proof by submitting a property deed, which showed that they did not own the property where the relevant school was located at the time at which the abuse was alleged to have occurred. It also offered an affidavit of its own General Counsel, which testified that the Archdiocese did not create, oversee, supervise, manage, control, direct, or operate the school at which it was alleged the plaintiff suffered the abuse. This affidavit also stated that the faculty/staff/other employees at such school were not employed, supervised, trained, or retained by the Archdiocese during the relevant time period, nor did it supervise or control the students there.

Although the plaintiff did submit their own affidavits, they were largely based in Canon Law, that is, the Catholic Church’s internal norms and regulations. In ruling that the plaintiff had failed to rebut the Archdiocese’s showing of documentary evidence that establishes its defense, the Court reasoned that Canon Law has no bearing on this action. Instead, the Court held that the Archdiocese had met its burden in putting forth sufficient evidence to “utterly refute” the plaintiff’s allegations and establish its defense as a matter of law, and granted the Archdiocese’s motion accordingly.

This case is extraordinary in that it serves as an example of an instance in which sufficient evidence was able to be gathered, even decades after the fact, relating to the CVA claim. We will certainly be on the lookout for more cases like this one.


Heather A. Sanderson

[email protected]

11/17/22       David Walter Eaglestone et al v. Intact Insurance, 2022 BCSC 2007
British Columbia Supreme Court (trial level)
Who Wins When a Self-Represented, Determined, Senior Citizen, Angry at Mistakes Made in the Adjustment of a Property Claim Takes on the Largest Insurance Company in Canada and Receives a $1200 Judgment After Almost 10 Years of Litigation? No One.

Seldom does anyone really win when a case takes more than a few years to resolve. The time and expense is seldom recovered. This recently released, 184 paragraph, November 17, 2022, judgment illustrates that statement in spades. Speaking for the British Columbia Supreme Court, Mr. Justice Nigel Kent begins:

[1]        This “David vs Goliath” case pits a self-represented but very determined, some might even say stubborn, senior citizen against one of this country’s financial and insurance behemoths.

[2]         The triggering event was a November 29th, 2013 accidental fire on Mr. Eaglestone’s property near Smithers, BC. It originated in a small shed sheltering a pressure tank that was part of the water distribution system for a nearby mobile home on the land. In addition to destroying the shed and its contents, the fire also scorched the siding of the mobile home, whose tenants fortunately emerged unscathed.

[3]         The shed and mobile home were insured under separate policies issued by Intact Insurance Company (“Intact”), who over the next few months paid out some $22,000 for necessary replacement or repairs. In doing so, Intact may have made some relatively minor errors in adjusting the loss which ordinarily might not have been worth disputing but which, following further problems with the shed repairs in October 2016, have since been meticulously dissected by Mr. Eaglestone in painstaking detail.

[4]         Perhaps because of his background auditing forestry contracts and regulatory compliance, Mr. Eaglestone has formed rather rigid views on strict performance of contractual obligations. He is by nature also something of a stickler for detail. For sure, in the course of this trial, he displayed an impressive knowledge of some of the more arcane aspects of insurance law, one that few self-represented litigants, or indeed anyone other than industry professionals, possess.

[5]         Still, perspective matters. The filing fees and other disbursements incurred in this case will have alone exceeded the unpaid bills or recoverable loss forming the basis of this claim. I recognise that for Mr. Eaglestone, this dispute involves important points of principle but one can only hope that the modest award which follows does not have pyrrhic consequences.

Those prosaic introductory words predict the conclusion.

Justice Kent’s judgment, written for the self-represented insured’s benefit, painstakingly reviews the contentious facts, and delves into the two contentious legal issues (who between the insurer and the insured retained the contractor that repaired the insured shed – a question of fact resolved against the insured and whether Intact committed bad faith in the adjustment of the claim).

Intact’s adjustment of the claim was not stellar. Intact failed to use a written authorization to clarify that the insured retained the contractor; failed to explain the implications of an actual cash value settlement; did not advise the insured that an appraisal process existed; failed to bring the statutory two-year limitation period to the insured’s attention (but the insured was aware it in any event).

However, Justice Kent found that the errors were not motivated by any intention to take advantage of the insured and present an unreasonable position. He also pointed out that Intact could have applied two deductibles on the facts but elected not to.    No bad faith was found and the claims for aggravated and punitive damages, as well as damages for mental distress, were dismissed.

With minor adjustments to the amounts that Intact paid and what was found to be owing, the insured was awarded $1200. As for costs, the Justice Kent urged restraint:

[180]   In this case Intact has asked the Court to defer any ruling on costs until after delivery of the judgment on the merits so that it might make submissions on the matter.

[181]   I infer from Intact’s request that it has made a formal settlement offer to Mr. Eaglestone and Majestic, an offer which will almost certainly have exceeded the amounts recovered and which therefore will trigger cost consequences pursuant to Supreme Court Civil Rule 9-1. And in any event, Supreme Court Civil Rule 14–1(10) would limit the plaintiffs’ cost recovery to disbursements only, unless the Court finds that they had “sufficient reason” for bringing the proceeding in the Supreme Court as opposed to the Provincial Court under the Small Claims Act, R.S.B.C. 1996, c. 430.

[182]   The parties are therefore granted leave to schedule another appearance before me to address the matter of costs. Before doing so, however, the following non-binding observations may be of assistance.

[183]   There is no doubt Mr. Eaglestone was ill-advised in stubbornly advancing this litigation to the extent that he has. While he very clearly believed that he has been wronged by his insurance company, it turns out that his claims are essentially without any legal merit. He has spent many thousands of dollars on filing fees and other disbursements in this case, amounts that he may well not recover should the question of costs be further litigated and any countervailing “set offs” in Intact’s favour have been applied.

[184]   For its part, Intact admits that its handling of the plaintiffs’ claims was not perfect and that some mistakes were made, including breaches of the Insurance Act. It is a substantial corporation whose in-house counsel defended this litigation. It can well afford to forgive a senior citizen insured who was a somewhat misguided and ultimately unsuccessful self represented litigant. Some might think the undesirable “optics” of pursuing costs should be avoided in favour of a settlement bringing the litigation to an end, perhaps without payments by either side.

We do not know what steps Intact took to settle this case and the company is no doubt annoyed that it spent almost 10 years litigating a dispute over, what was eventually proven to be essentially, nothing. However, in the end, Justice Kent’s advice should be headed.

Finally, all of us who write legal articles and texts wonder when our words will be quoted to us in argument ….

Prior to his appointment to the Court, Justice Nigel Kent was a partner at the Vancouver law firm of Clark Wilson where he practiced insurance defense and coverage for many years. I had the pleasure of both litigating with and against him.  We also appeared as co-panelists at CLE events. The judgment records …..

During final argument in this case, and with an amused grin, Mr. Eaglestone actually handed up an article I wrote years ago on the subject: “The Role of an Insurance Adjuster in Property Insurance Claims”. I repeat part of that article here (with some modification to account for legislative updates), not as any particular legal authority, but because the analysis still applies today …

I expect that Justice Kent was relieved that his words written years ago did, in fact, still apply.


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