Coverage Pointers - Volume XXIV, No. 13

Volume XXIV, No. 13 (No. 634)
Friday, December 9, 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.


Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

Greetings from New York City where I’m attending the DRI Insurance Coverage and Practice Symposium.  Always trying to stay on the cutting edge.  Attached is the December 9 edition of Coverage Pointers.  One more issue before year’s end, just before Christmas.  To those who celebrate Chanukah, the first night is December 19th, before our next issue, so we wish you the best for the holidays.  All our children and grandchildren will be with us to celebrate the holidays and we are blessed.

Legislative Update – the amendments proposed to New York State’s wrongful death statute, the so-called “Grieving Family’s Act”, passed by the Legislature a couple of months back, has still not reached the Governor’s desk. It will have to reach that desk by December 31, so we are watching carefully.

We hope you are remaining healthy, as we are concerned about the rise of virus-associated diseases and conditions.

Registration is around the corner for 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.


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 knows 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.



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 from New York City where I, too, am enjoying a return to the traditional DRI Insurance Coverage and Practice Symposium.  This is always an excellent conference and presents a great opportunity to connect with friends from around the country in the glow of the Rockefeller Christmas Tree.

We review an interesting decision this week out of the Appellate Division, Third Department.  As many of you already know, the typical homeowner’s policy does not extend dwelling coverage for properties that are not a “residence premises” i.e., a place where you reside.  Now, for certain, one can have two residences, and, thus, it is possible that coverage for dwellings can be extended to two different locations under a policy. 

Here, however, there is no argument that the plaintiff did not live at the premises and had not for years.  What prevails in Finch is the latest of a series of decisions of the past five to seven years which have been consistently chipping away at the policy requirement.  The Court focused on indicia of residence (i.e., presence of personal items at the location, the fact that plaintiff visited the location with some frequency) as evidence that a question of fact may exist.  The decision, however, appears to miss the forest by examining the individual trees.  Regardless of indicia, the insured admitted he did not live there.  That, respectfully, should have been the end of the analysis.  

Since the Court of Appeals’ decision in Dean nearly a decade ago, courts have been outwardly skeptical of the “residence premises” defense.  The Finch decision is yet another strike to the defense.  Be forewarned. 

Steven E. Peiper

[email protected]


Sticky Fingers – 100 Years Ago:

The Buffalo Times
Buffalo, New York
09 Dec 1922


Has Had Adventurous Career and Is Charged with Swindling
and Duping Wealthy People—Country Girl Lured to the Bright Lights of Gay Resorts.

Special to the Buffalo TIMES.

          BOSTON, Mass.—One more chapter is being written in the checkered history of Mrs. Ruth Ruickholdt, 38, comely wife of a wealthy New Haven physician who prefers the ways of crime to respectability.

          The one-time pseudo-Boston heiress and philanthropist is in jail in Hartford, Conn., charged with fleecing a wealthy resident of some hundreds of dollars through blackmail.

          It is said that since her arrest, the police have received many similar complaints and that a sweeping probe will be conducted to find out just how many people have been victimized and to what extent.

          Her present difficulty is likely to result in her being returned to Auburn, N.Y., prison to serve the balance of an unexpired term for the attempted larceny of diamonds from Tiffany’s.

Once a Candy Girl.

          The history of Mrs. Ruickholdt is amazing. She came from the town of Waterford, Conn., an innocent girl of considerable beauty, to New London, Conn., and there obtained a position as clerk in a candy shop.

          In a short time, she had all the gay youths of the city trailing her, and Ruth, the country girl, became the talk of the town. It was then that she won a newspaper contest as the most popular girl in town, and she went to Washington D. C.

          It was there that she met with a dashing navy officer and a romance began that ended more or less disastrously for the girl. Her downfall started then.


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

Dear Readers,

It’s usually a frenetic time of year, and this year in particular has been no different. Between year-end closings, motions deadlines to meet, holiday parties, and Christmas shopping/planning, calendars are filling up fast and the days seem to be flying by. Hopefully, everyone can catch a breather in the mix and take a moment to slow down and enjoy this magical time of year.

This week in the Wide World of Coverage, once more we have guest author, Ryan O’Shea, discussing the very latest in interesting Federal Circuit Court decisions from around the country.

This issue’s case is an unpublished decision from the Fourth Circuit. I already hear the boos, the contempt for the unpublished decision is palpable. However, it is interesting as it deals with a shareholder derivative and what triggers an Employment Related Practices claim. Enjoy your holidays!

Until next time – Happy Holidays!

Agnes A. Wilewicz

[email protected]


Top Dollar Payouts – 100 Years Ago:

Montpelier Evening Argus
Montpelier, Vermont
09 Dec 1922


  Boston, Dec. 9. —Vermont leads the union with a verdict of $465,000 in a “love suit” for the loss of a husband’s affections, and the damage is assessed against the parents of the aforesaid husband. Green Mountain farmers have set up a record mark for “love juries” to shoot at. All previous verdicts pale into insignificance besides the finding in the million-dollar alienation suit of Mrs. Dorrit S. Woodhouse against Mr. and Mrs. Lorenzo E. Woodhouse of New York and Burlington, which was decided Thursday.

          There have been many famous verdicts where love was concerned, but the big ones have heretofore concerned a breach of promise; where the man failed to keep his promise to marry the woman and she sought balm for the broken heart and years of devotion.

          When a jury in New York gave Honora May O’Brien $225,000, because John B. Manning, her 85-year-old admirer, failed to marry her, the Empire State sat up and took notice. Incidentally, the verdict attracted attention throughout the country. The New York jury thought it was doing things up brown and leaned back with a satisfied air. The award did look big.

          But it remained for a Chittenden County, Vt., jury to make all juries look like “piker,” and where New York rested on a quarter of a million, the Vermonters stopped just short of half a million dollars. In fact, the Chittenden County jury put New England on the big money map, for prior to the Woodhouse case the biggest verdict in a “love” case in New England was rendered in Maine; $116,000 in the breach of promise action brought by Elizabeth L. Garmong against John B. Henderson of Washington and Bar Harbor. The verdict was later set aside.


Barnas on Bad Faith:

Just a brief note from me from New York City where it was a balmy 57 degrees yesterday on the opening day of the DRI Insurance Coverage and Practice Symposium.  We had an excellent afternoon and evening of programming and networking, and I am looking forward to another full day today.  We also had the Insurance Law Committee business meeting yesterday afternoon, and the ILC has many exciting things coming in 2023 as well.  If you are interested in joining the ILC or DRI, or you are already a member and are looking for ways to get even more involved, do not hesitate to reach out.

Go Bills.

Brian D. Barnas

[email protected]


Iceless Baby – 100 Years Ago:

The Times
Shreveport, Louisiana
09 Dec 1922

Ice All Around But No Ice In Water In Maine

          Augusta, Me., Dec. 8. —Ice, ice, everywhere in Maine, but not an iced drink in sight. Maine beat all other states in passing prohibition laws and now comes a new one which indicates that Maine intends to set the pace and attempt to regulate all matters pertaining to any kind of drinks.

          A new law prohibits ice to be served in or for any drinks in hotels or public eating places. Hotel guests and restaurant patrons cannot be served ice legally, even in drinking water. In the new law ice cannot come in contact with any fluid to be drunk.

          It is pointed out by officials that there is danger of the existence of harmful bacteria in ice. While some of it is said to be good, a great portion of the state’s ice supply comes from rivers and streams that are said to be subject to pollution.


Kyle's Construction Column:

Dear Readers,

I hope everyone had a nice Thanksgiving! I enjoyed the time visiting with family and quickly transitioned into Christmas mode the next day . . . getting lots of shopping done and even putting up our new tree! Glad the Bills are continuing to roll, hopefully we can keep it up with a couple big wins against divisional opponents coming up.

The week’s case involves a coverage dispute between an insurer and an insured regarding whether the policy exclusions for negligent work and wear and tear precluded coverage for water damage to the plaintiff’s church after a storm.

Until next time,

Kyle A. Ruffner

[email protected]


Death Sentence – 100 Years Ago:

The Miami News
Miami, Florida
09 Dec 1922


Mob Took Charles Wright Away From Sheriff—Another Negro Was Exonerated by Doomed Man

(By Associated Press)

          PERRY, Dec. 9. —Peace prevailed here early today with county and state authorities reporting no racial outbreaks during the night following the burning at the take of Charlie Wright, negro, by a mob estimated a several thousand men early last night after he is said to have confessed to having slain Miss Ruby Hendry, a schoolteacher, here last Saturday.

          The police say that the mob, which gathered from the northern section of the state, quietly dispersed after Wright’s body had been burned to a crisp a short distance from here, and by midnight the streets had been cleared.

          Officials and an undertaker went to the scene of the lynching early today and prepared the body for burial.

          The authorities are still holding in custody Albert Young, negro, who was captured in a Georgia town early yesterday after he had been trailed for six days. Wright, however, it is said, in his confession, exonerated Young. Wright implicated another negro whose name he did not give as having robbed Miss Hendry after he (Wright) had cut her throat.

          It was the intention of the mob to lynch both of the negroes, but following the alleged confession by Wright, the second negro was turned over to the authorities, who put him in jail for further investigation.


Fleming’s Finest:

Hi Coverage Pointers Subscribers:

And just like that, the holiday season is upon us. We recently gathered for the HF holiday party, and it was lovely to get together as a firm to celebrate.

As I was writing up this week’s case, I could not help but wonder: what nuggets of wisdom would Rose Nylund from Golden Girls have? Yes, this week’s case from the Minnesota Supreme Court considered whether there was coverage for preexisting damage to masonry where storm damage to the drywall could not be replaced without also repairing the preexisting damage. Since the cracks in the masonry violated the city of St. Paul’s building code, the city would not allow a church to replace the drywall without also repairing the masonry.

Catch you later,

Katherine A. Fleming

[email protected]


Landslide – 100 Years Ago:

The Labor World
Duluth, Minnesota
09 Dec 1922


          One of the sensations of the elections in the southwest was the success of George W. P. Hunt, who was elected governor of Arizona by the largest vote ever given a candidate for that office in this state. The new governor held that office several years ago and earned the enmity of the copper barons because he refused to admit strikebreakers and gun men into this state during the Metcalf copper strike.

          Since then, Governor Hunt has battled to save the direct primary. He entered the present contest for governor with nothing but the plain people behind him. He had no newspaper and no party organization.


Ryan’s Capital Roundup:

Hello Loyal Coverage Pointers Subscribers:

Our Christmas tree is officially in the house and decorated, since ‘tis the season. Although with young children, families are never quite done with decorating a tree, which has undergone near constant redecorating in the days that have followed. The votes are in its our best tree yet! Until next year, that is…

Nothing to report this issue, unfortunately.

Until next time…

Ryan P. Maxwell

[email protected]


Diversity in Legislature – 100 Years Ago:

The Buffalo Times
Buffalo, New York
09 Dec 1922


Nearly All Trades and Professions Represented in New Legislature.

          NEW YORK, Dec. 8.—Lawyers and farmers will predominate in the next Legislature, numbering 106 of the 201 members, the manual now being prepared by the clerks of the Senate and Assembly shows. In the Senate there will be twenty-six lawyers, two farmers, and one “agriculturist.” The new assembly will have fifty-three lawyers, twenty-two farmers, one fruit grower and one retired farmer.

          Nearly every other line of work and profession is represented among the other ninety-four lawmakers. J. Griswold Webb, one of the millionaire members of the Legislature, is down as a farmer, while Senator Theodore Douglas Robinson of Herkimer County, nephew of former President Roosevelt, gives his calling as an “agriculturist.” Assemblyman F. Trubee Davison of Nassau County, son of the late Henry P. Davison, reported himself as a law clerk. Senator Nathan Straus, Jr., gave his occupation as a newspaperman.


Dishing Out Serious Injury Threshold:

Dear Readers,

Hope everyone had a Happy Thanksgiving. Somehow, we are at the end of the year. I honestly do not know where the year went but hopefully everyone is ready for the end-of-year festivities and can find some more time to enjoy in the coming year.

I have one case for this issue that pertains to a plaintiff failing to adequately explain their gap in treatment as well as failing to refute defendant’s expert who found a lack of a causal relationship between the subject accident and the injuries alleged.


Michael J. Dischley

[email protected]  


Gifts for Gentlemen – 100 Years Ago:

The Buffalo News
Buffalo, New York
09 Dec 1922

At Woman’s Window

Presents for Men.

          A little while ago I suggested to my readers that men dislike unexpected presents and that a little management must be used to cause them to appreciate gifts. But man, being a conventional animal, faithfully expects presents at Christmas or the New Year. I suppose that already millions of women are searching their brains for inspiration. They need it, since husband or lover expects woman to enter exactly into his feelings, and to give him the ideal thing. He also reserves the right to sneer at a woman’s judgment, and to censure her choice, privately when he is engaged, and audibly some years after the wedding.

          The first thing that occurs to women is to buy a man tobacco or nicotine accessories. Here danger lurks; if you buy tobacco, be sure that it is the one he smokes; take one of his old tins with you, so that there may not be the slightest risk. Cigars always left alone; not only will the store trade on your womanhood, but the cigars your husband smokes may be the best he can afford and not those which please him. Do not give him a cigarette case or a matchbox if he already has six. On the other hand, you are safe, if commonplace, when buying something made of leather: pocketbook, diary, notecase, all this is safe providing you buy neither too big nor too small. Also within the field of safety are tennis racquets (if you note their weight), but golf clubs avoid since players are fanciful. Golf balls and tennis balls are excellent. Ties are safe only if you take him round first. The same applies to socks. Machines are splendid: scales, portable typewriters, fountain pens, cigar-cutters. On the whole, for a man buy as for a boy. He is a boy.


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

I am writing to you live from the Big Apple, where I am attending DRI’s annual insurance conference. As someone who has not spent a lot of time on the rubber chicken circuit since COVID, it’s both great and a bit overwhelming to reconnect with so many colleagues from around the country. I’m definitely going to have to get out more!

This week, we report on a couple of auto cases, one for property damage and the other for UIM. Both cases teach us the same lesson—it’s important to pay attention to the details. The wrong serial number and a missing dec sheet were, respectively, the source of failure in each case.

Keep keeping safe,

Lee S. Siegel

[email protected]


Insurance Incline – 100 Years Ago:

The Western Daily Press
Bristol, Avon, England
09 Dec 1922


          By invitation of the president and members of the Birmingham Chamber of Commerce, Mr. A. H. Riseley gave an address to the Chamber at their palatial building in New Street, yesterday, the subject being “Commercial Insurance.”

          The President (W. Hickingbottom) occupied the chair, and in introducing the lecturer commended his address to the careful consideration of the large gathering of merchants and manufacturers present.

          Mr. Riseley said the first thing that impressed him on starting to write some notes on the subject of commercial insurance was the remarkable contrast between the commencement of insurance in the early part of the 17th century, and the condition of affairs as they stood today. From the days of 300 years ago, when merchants shared one another’s risks, and did this by signing at the end of the policy (hence the term “underwriting”) we find today a highly efficient organization equipped to transact insurance against almost every contingency that the mind of a man could imagine, with one proviso prominently in the foreground—that it must be a genuine contingency, and not a condition which could be deliberately brought about or avoided by the will of the individual. For instance, one could not ensure the prosperity of one’s business or profession for the reason chiefly that it would be possible for the assured to put his hands in his pockets and do no more work, or he might turn a hobby into an occupation and devote his time to golf instead of commerce. Given, however, an unknown factor one could generally get an insurance such as a rise or fall of the income-tax imposition or removal or alleviation of a duty—the success or failure of a “Pussyfoot” campaign (he said this in all seriousness, as inquiries were already being made for rates to insure veto being accepted in Scotland), the risk of fine weather for a fete, outdoor entertainment, or one’s summer holiday. These were some of the less known forms of insurance.


Rauh’s Ramblings:

Hello Readers!

I hope everyone is having a good week.  Between working and getting ready for Christmas, this is always a very hectic time of year for me, as I’m sure many of you can relate.  Despite the craziness though, I absolutely love the holiday season!

This week, I have a case from the First Circuit that involves competing claims over the rightful beneficiary of a life insurance policy – the ex-wife claimed that she is entitled to the proceeds pursuant to the divorce decree and the widow claims that the estate is entitled to the proceeds.  Read my summary to find out how the court ruled!

Until next time,

Patricia A. Rauh

[email protected]


Antiheroes – 100 Years Ago:

The Salt Lake Tribune
Salt Lake City, Utah
09 Dec 1922

Delinquent in Alimony Payments Sent to Jail

          The arrest of Wallace O. Nyberg for failure to pay alimony to his divorced wife, Emma T. Nyberg, was ordered by Judge L. M. Ritchie of the Third District court yesterday, after Nyberg had been cited into court for not keeping up payments.

          In committing the defendant, Judge Ritchie reminded him that he had been brought into court several times for failing to comply with court orders for payment of alimony. Nyberg must remain in jail until he has paid his wife $40 support money, the court ordered.

          Alfie Oswald, who charged that her husband, Andrew Oswald, struck her, was given a divorce because of cruelty.

          On the ground of failure to provide, Judge Ritchie granted a decree to Myrtle Houtz in her action against Daniel Houtz, and to Perka K. Lero in her suit against John T. Lero.

          Virginia Murphy filed suit for divorce against John S. Murphy yesterday, alleging that he beat her with his fists.


Storm’s SIU:

Hi everyone:

Three interesting cases this week:

1.  Summary Judgment in Favor of Insurer in Declaratory Judgment Action and on Statutory Insurance Fraud Claim When Insured Submitted Doctored Invoices During the Adjustment of its Insurance Claim.

2.  No Collapse Coverage When a Neighboring Building Collapsed. 

3.  Uh Oh, They’re Trying to Back Out…Do We Have a Binding Settlement

I will leave you with some words of Henry Wadsworth Longfellow: “The heights by great people reached and kept were not attained by sudden flight, but they, while their companions slept, were toiling upward in the night.”

Go Bills!

See you in two weeks,

Scott D. Storm

[email protected]


The Buffalo Hero – 100 Years Ago:


The Buffalo News
Buffalo, New York
09 Dec 1922


John Winter Only Buffalonian to Aid in Booth’s Capture.

          John Walter, 80 years old, 225 Saranac Avenue, who with nine soldier companions and two Pinkerton detectives traced John Wilkes Booth, President Lincoln’s assassin, to the deserted barn where he was shot, died yesterday. Mr. Winter was the only Buffalonian among the 12 men who ran Booth to the end of his trail.

          Mr. Winter enlisted in Company I, 16th New York Volunteer cavalry, August 11, 1863. He was then 23 years old. He enlisted in Buffalo and saw action in several skirmishes. He was in Washington wearing the chevrons of a sergeant when word that Lincoln had been shot while in his box at Ford’s theater.

          Winter joined one of the many search parties organized to find the assassin. Booth was tracked to a deserted barn in the south. He refused to come out. The place was set on fire. The actor still remained within. Later he was shot by one of the soldiers. For his part in the apprehension of Booth, Winter shared the price set on the assassin’s head. He received $1,600.

          Mr. Winter was born in Alsace Lorraine in 1843. He came to America with his parents when he was two years old. At one time he owned a tug and a fleet of barges on the lake front. Up to the time of his death he was a familiar figure on the waterfront. He belonged to Chapin post 2, G. A. R. He will be buried Tuesday morning at Saint Margaret’s church at Hertel and Saranac avenues.


Gestwick’s Greatest:

Hello, Readers!

I hope everyone had a great Thanksgiving. I was fortunate enough to spend some quality time with my aging grandparents and other relatives from out of town. Funny story to share: my grandmother hates cats. Hates them. Even her Facebook biography (yes, she’s 88 years old and on Facebook, go her!) reads “I HATE CATS!!!” Just like that. Nobody really knows why. But my mom recently acquired a cat, and my grandmother doesn’t know, nor does she need to know (she doesn’t read Coverage Pointers). She was over at my mom’s house for Thanksgiving, so we locked the cat in the basement. We let him out the moment my grandparents left. As we were all on the floor apologizing profusely to the cat for locking him in the basement, the front door opens—it's my grandmother. Forgot her gin. I have never moved so fast in my life, and luckily, all tragedy was averted.

This week, I have a case about risk transfer. No insurance companies were named in the action, but it is still a valuable lesson in the world of insurance litigation. In Merrick v. Macerich Co. et al., the owner and property manager of a mall contracted with ThyssenKrupp to provide escalator and elevator maintenance and repair service. Part of this contract required ThyssenKrupp to indemnify, defend, and hold harmless the owner and property manager against claims, causes of action, and other liabilities arising out of breach of the agreement, including claims for bodily injury. An employee of a non-party was injured when he was hit in the head by the elevator door while working on the premises. The employee sued the owner, property manager, and ThyssenKrupp for his injuries. This lawsuit triggered the owner and property manager to assert a cross claim against ThyssenKrupp for contractual indemnification. In granting summary judgment in favor of the owner and property manager, the New York State Supreme Court, New York County, reasoned that the agreement required ThyssenKrupp to indemnify the owner and property manager against any claim, demand, or cause of action arising out of either a breach of the agreement, or arising out of the alleged negligent performance thereof. Since the plaintiff alleged that his injuries were caused by ThyssenKrupp’s negligent performance of its contractual obligations, ThyssenKrupp’s indemnification obligation was triggered.

That’s all for this week, see you in two weeks!

Evan D. Gestwick – Admission Pending

[email protected]


Objection! – 100 Years Ago:


Elmira, New York
09 Dec 1922


          Albany, Dec. 9. —A marriage ceremony performed by radio is illegal, according to a construction today placed upon the domestic relations law by Attorney Charles D. Newton. The words “in the presence,” as contained in the law, means an actual and not constructive presence, the attorney general held.

          “It is essential that the witnesses and persons officiating should be immediately at hand, as it is that the contracting parties to the marriage should be in view of each other.” Mr. Newton said in his opinion.

          Question as to the legality of a radio ceremony was brought up by the proposal to have a San Francisco clergyman broadcast the ritual to contracting parties in the Grand Central Palace in New York City. The bride and groom were to broadcast their responses in return.

          “The importance and sanctity of marriage relation.” Mr. Newton said, “requires a strict rather than a liberal interpretation of the safeguards which the Legislature has set up in the statute. I am of the opinion that any attempt by a clergyman or magistrate to perform a marriage ceremony without being actually present with the contracting parties, witnesses, or witnesses, would not comply with the mandates of this state.”


North of the Border:

I’m happy to report that both of our grandsons have recovered from their consecutive bouts of RSV and their parents are on the mend from the physical and mental exhaustion of it all. Over this past weekend, our 2.5-year-old proudly showed me the stuffed moose dressed in a paramedic uniform that the EMS crew gave him on his ambulance ride to the hospital. My daughter-in-law would rather not look at it.

In the meantime, we have settled into winter with windchills at times of about -30C and, by Buffalo standards, paltry snow falls of a few centimetres every other day. It’s beginning to look a lot like Christmas …

My column this week has a moral:  Holding back information does not support trust in relationships and can void insurance claims.  Enjoy.

Heather A. Sanderson

[email protected]


Headlines from this week’s issue:

Dan D. Kohane

[email protected]

  • Another Assault Case under a Homeowners Policy.  Here, there was a Possibility that the Injuries were Unexpected so at Least a Duty to Defend
  • Assault and Battery Sublimit Applies Where Hotel’s Guest was Stabbed to Death
  • If You Want to Discontinue a Claim, Say So
  • I’m Exhausted, Through No Fault of My Own
  • Excess Policy is Only Excess Over Underlying Policy in Effect During Same Policy Year


Steven E. Peiper
[email protected]

  • Question of Fact on Residence Premises, Even the Insured Admittedly Didn’t Live There -- Thousands Flee


Michael J. Dischley
[email protected]

  • Plaintiff’s Failure to Explain Gap in Treatment or Causal Relation Arguments by Defendants were Fatal to Case


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

[email protected]

  • Shareholder’s Derivative Action Does Not Trigger an Employment Practices Claim Where Plaintiff Does Not Allege Wrongful Termination

Brian D. Barnas

[email protected]

  • Summary Judgment Denied on Claims that Insurer did not Promptly Investigate and Pay Claim and Compelled Insured to Commence Litigation

Lee S. Siegel

[email protected]

  • No Coverage for Damage to Replacement Vehicle Before Listed on Policy
  • No Dec Sheet, No Summary Judgment


Kyle A. Ruffner
[email protected]

  • Court Holds that Negligent Work and Wear and Tear Exclusions Precluded Coverage for Water Damage that Resulted from Long-Term Roof Leaks Caused by Defective Construction and Faulty Maintenance


Ryan P. Maxwell
[email protected]

  • Nothing to report this issue. Until next time.


Patricia A. Rauh

[email protected]

  • Court Finds that Ex-Wife Gave Plausible Interpretation of Divorce Agreement to Claim that She is Entitled to Life Insurance Proceeds of Ex-Husband; Case Remanded to District Court for Further Proceedings


Scott D. Storm

[email protected]

  • Summary Judgment in Favor of Insurer in Declaratory Judgment Action and on Statutory Insurance Fraud Claim When Insured Submitted Doctored Invoices During the Adjustment of its Insurance Claim
  • No Collapse Coverage When a Neighboring Building Collapsed
  • Uh Oh, They’re Trying to Back Out…Do We Have a Binding Settlement?


Katherine A. Fleming

[email protected]

  • No Coverage For Unrelated Preexisting Damage Even Though No Storm-Related Repairs Could Be Completed Without Repairing The Preexisting Damage


Evan D. Gestwick – Admission Pending

[email protected]

  • Indemnification Provision Triggered by Allegations that the Agreement Was Negligently Performed


Heather A. Sanderson

[email protected]

  • A Policy Condition or Exclusion in a Claims-Made Professional Liability Policy that Requires Reasonable Foresight on the Part of a Risk Manager or General Counsel that a Claim Would Result from a Wrongful Act, Voids Claims Where One of Those Officers had Information that a Claim Could or Might Result from the Wrongful Act.


All the best to you and your family in this holiday season.

- Dan

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

North of the Border

Dan D. Kohane
[email protected]

12/08/22         Vermont Mutual Insurance Group v. LePore
Appellate Division, Third Department
Another Assault Case under a Homeowners Policy.  Here, there was a Possibility that the Injuries were Unexpected so at Least a Duty to Defend

Jodi Cole, and her spouse, commenced an action against defendant LePore, for alleged personal injuries sustained. The alleged injuries stemmed from an incident where school staff, including Cole, broke up a fight between LePore and another student. After LePore and the student were separated, the student said something to LePore and, in response, LePore tried to hit her.

Cole had her back to LePore at this time and then "felt somebody come up and over [her]." According to a witness, LePore "took a swing and inadvertently hit [Cole]" with her forearm.

Vermont issued a homeowner to LePore. The policy defined an "[o]ccurence" as "an accident . . . which results, during the policy period, in [b]odily injury." The policy further stated that coverage was excluded for "bodily injury . . . [w]hich is expected or intended" by an insured. As relevant here, plaintiff disclaimed coverage on the grounds that LePore's act in hitting Cole was not an "occurrence" within the meaning of the policy and that the policy's intentional act exclusion applied.

The complaint in Cole's personal injury action alleged that LePore was involved in a physical altercation with another student and that Cole was injured as she attempted to break up this altercation. The bill of particulars alleged that LePore "negligently and carelessly struck [Cole] in the back causing [Cole] to fall into a cement wall" while Cole] was trying to stop an altercation involving LePore. It also alleged that LePore did not intend to injure Cole but accidently struck Cole while trying to hit the other student and that LePore "committed culpable conduct when she chose to ignore a command by [Cole] . . . to stop her involvement in an altercation." These allegations give rise to the possibility that Cole's injuries could have resulted from unintentional conduct by LePore.

Although the record contains evidence suggesting that the incident at issue was an intentional tort, "the pleadings can be read as alleging that [Cole's] injuries were negligently inflicted by LePore.

Vermont contends that no coverage exists under the insurance policy because LePore intended to cause physical harm to another person. The record contains evidence that Cole was inadvertently hit. In view of this, a sufficient basis exists to conclude that Cole's injuries were not expected or intended within the embrace of the policy. To that end, LePore can be indemnified under the policy, not because she acted negligently, but because her intentional act caused unintended harm.


12/07/22         Great American E & S Insurance Co. v. Commack Hotel, LLC
Appellate Division, Second Department
Assault and Battery Sublimit Applies Where Hotel’s Guest was Stabbed to Death

Stanley Davis's son (hereinafter the decedent) was stabbed to death by the defendant Rodriguez during a party in a room at a hotel owned by the Commack Hotel, LLC, doing business as Howard Johnson. In an underlying action entitled Davis v Commack Hotel, LLC, the defendant Stanley Davis, as administrator of the decedent's estate, was awarded summary judgment on the issue of liability against, among others, Howard Johnson.

Great American brought a declaratory judgment action asserting that it owes no obligation to indemnify Howard Johnson in excess of $25,000 under the assault and battery limits of liability endorsement of its insurance policy,

"An exclusion for assault and/or battery applies if no cause of action would exist 'but for' the assault and/or battery. Negligence claims arising from an assault and battery also fall under assault and battery endorsements that limit coverage for damages (see American Safety Indem. Co. v Loganzo, 107 AD3d 835, 836).

The sublimit was therefore applicable and enforceable.


12/06/22         The Burlington Ins. Co. v. Kookmin Best Insurance Co., Ltd.
Appellate Division, First Department
If You Want to Discontinue a Claim, Say So

In this declaratory judgment coverage action, which arises from a 2010 accident in which an NYSEB employee was injured at a supermarket operated by NYSEB, NYSEB failed to establish its entitlement to dismissal of the claims for contractual indemnity and contribution. The stipulation discontinuing the underlying personal injury action — under which Burlington and AGLIC, Winking Group LLC's subrogee insurers, together paid the injured plaintiff a portion of the settlement in the amount of $1.1 million — did not include in its caption the third-party action for indemnification filed by Winking against NYSEB, and thus did not serve to discontinue the claims asserted in that third-party action.

As a result, the stipulation provides no basis for barring litigation of the related indemnification and contribution claims filed in this separate action by Burlington and AGLIC. In any event, because the insurers' subrogation rights attached upon their payments of the settlement amounts on behalf of Winking, Winking could not, without their express consent, extinguish those rights based on the stipulation of discontinuance that occurred after the settlement and settlement payments were made.


12/01/22         Country-Wide Insurance Company v. Metro-Pain Specialists
Appellate Division, First Department
I’m Exhausted, Through No Fault of My Own

Country-Wide satisfied its prima facie burden of showing that it exhausted the policy by submitting the policy declaration page, an affidavit by its no-fault claim supervisor responsible for Aguilar's claim, and the payment ledger showing that it had paid out $50,000 to Elmhurst Hospital Center by May 21, 2018. Country-Wide was under no further obligation to pay defendants once the policy limits were exhausted (see Countrywide Ins. Co. v Sawh, 272 AD2d 245, 245 [1st Dept 2000]). Contrary to defendants' contention, the affidavit by the no-fault claim supervisor, who had personal knowledge of the claim file and the procedures for processing no-fault claims, was sufficient to lay a foundation for admission of the documents as business records.


11/29/22         The Burlington Insurance Co. v. New York Const. & Renov.
Appellate Division, First Department
Excess Policy is Only Excess Over Underlying Policy in Effect During Same Policy Year

Burlington Insurance Company commenced this declaratory judgment action to determine insurance coverage available in two underlying actions involving damage sustained by property owned by DAJ Realty, LLC as a result of construction work performed by defendant New York Construction & Renovation Inc. (NYC&R) during an unspecified period. Burlington provided primary coverage to NYC&R for the periods February 2013 to 2014 and February 2014 to 2015; Century provided an excess policy that was to be triggered by exhaustion of "controlling underlying insurance," defined in the Century policy as the 2013-2014 Burlington policy.

Insofar as relevant to this appeal, Burlington seeks a declaration that it has no duty to defend or indemnify NYC&R under its two policies because the Century policy will be triggered before one or more of the Burlington Policies are triggered. For its part, Century argues that its policy is triggered only after all other insurance is exhausted, including both Burlington policies. Century also contends that coverage will be allocated on a pro rata basis among available policies, resulting in all primary policies being exhausted before Century's policy is reached.

Burlington's allegation in the complaint that the Century Policy will be triggered before one or more of the Burlington Policies are triggered is incorrect, as the Century policy is an excess policy. However, Century's contention in support of its motion that the Century policy is excess to both Burlington policies is also incorrect. The insuring agreement of the Century policy states that Century "will pay on behalf of the insured the 'ultimate net loss' in excess of the retained limit,'" which in turn is defined as "the available limits of 'controlling underlying insurance' applicable to the claim" — that is, the 2013-2014 Burlington policy. In light of the language in Century's excess policy "tying [its] attachment only to [a] specific underlying [policy] in effect during the same policy period as the applicable excess policy, and the absence of any policy language suggesting a contrary intent," the Century policy is triggered by exhaustion of the underlying available coverage within the same policy period — namely, the 2013-2014 Burlington policy.

To the extent Century relies on the "other insurance" clause in its policy, that clause applies when "other valid insurance, whether collectible or not, is available to the insured for a loss we cover," and Century's policy covers property damage "during the policy period." "Other insurance" clauses generally "apply when two or more policies provide coverage during the same period" and "have nothing to do with whether any coverage potentially exists at all among certain high-level policies that were in force during successive years").


Steven E. Peiper
[email protected]

12/01/22         Finch v. Erie Ins. Co.
Appellate Division, Third Department
Question of Fact on Residence Premises, Even the Insured Admittedly Didn’t Live There -- Thousands Flee

Plaintiff owned two parcels of land in Broome County; one at Kennedy Road and one at Bishop Road.  The Kennedy Road premises sustained significant damage after a fire occurred on November 22, 2016.  The cause of the fire appears to have been hot ashes that were removed from a pellet stove on the premises.  During its investigation, Erie learned that Mr. Finch did not reside at the Kennedy Road premises, and in fact had not lived at that location for years. 

It was further developed that Mr. Finch purchased the premises from his parents while he still resided therein in approximately 2001.  Since 2001 the premises had been occupied, initially by him, but more recently by family members. Plaintiff’s sister resided at the premises at the time of the fire. In addition, Erie learned that Mr. Finch’s sister was paying the mortgage for the property and that he planned to transfer ownership to her at some point in the future.  

On this factual record, Erie disclaimed coverage on the basis that while the property was insured under the Erie policy it was not a “residence premises” and, as such, not covered for damages to the dwelling.  Erie also disclaimed on the basis that the installation of the pellet stove at the Kennedy Road premises materially increased the risk that was initially underwritten.  The trial court denied Erie’s motion for summary judgment, and, also, denied plaintiff’s cross-motion. 

On appeal, the Appellate Division affirmed the denial of Erie’s motion.  While the Court recognized that the proof demonstrated that Mr. Finch, decidedly, did not live at the premises, a question of fact still prevailed.  The Court noted the fact that plaintiff testified he visited the premises every day, still received mail at the premises, and had some level of personal property stored there.  He also testified that he used the premises for personal and recreational purposes, and that he performed all maintenance and upkeep at the location.  Finally, plaintiff indicated, seemingly in conflict with his intent to transfer ownership, that he intended to return to Kennedy Road after he updated the residence on Bishop Road for his sister. 

The Court found that Erie, as the movant and denying party, had the burden of demonstrating that the incident was not a residence premises, and on this Record, there was too much evidence adduced by Mr. Finch to grant summary judgment. 

With regard to plaintiff’s appellate arguments, the Court rejected an attempt to revisit the denial of plaintiff’s motion dismissing Erie’s defense based upon the pellet stove.  Simply, the Court noted that plaintiff failed to take an appeal of that decision and it declined to search the Record to grant relief not previously requested.


Michael J. Dischley
[email protected]

11/29/22        Brandyann Ziehl v. Chao Rui Zhu, et al
Appellate Division, First Department
Plaintiff’s Failure to Explain Gap in Treatment or Causal Relation Arguments by Defendants were Fatal to Case

Order, Supreme Court, Bronx County (Veronica G. Hummel, J.), entered on or about March 24, 2022, which granted defendants' motion for summary judgment dismissing the complaint based on plaintiff's inability to demonstrate that she sustained a serious injury within the meaning of Insurance Law § 5102(d), unanimously affirmed, without costs.

The Appellate Court found that defendants made a prima facie showing that plaintiff did not sustain a serious injury to her cervical spine, lumbar spine, or other claimed injured parts of her body by submitting the reports of an orthopedic surgeon and a neurologist finding normal ranges of motion, negative clinical test results, absence of any neurological disability, and resolved strains and sprains. Defendants also made a prima facie showing that the injuries were not causally related to the accident by submitting the report of a radiologist, who, upon a review of the MRIs of plaintiff's cervical and lumbar spine, observed only disc desiccation and minimal disc bulging, and concluded that those conditions were degenerative in nature. Defendants further demonstrated prima facie absence of causation through plaintiff's testimony that she ceased treatment for her injuries five months after the accident.

In opposition, the appellate Court found that plaintiff failed to raise a triable issue of fact. The only evidence plaintiff submitted was the report of a chiropractor who examined her once shortly after the accident and again seven years later. Plaintiff's failure to provide an adequate explanation for this seven-year gap in treatment rendered speculative the chiropractor's opinion with respect to severity, permanency, and causation. The absence of a reasonable explanation for what was in fact a cessation of treatment also severed the causal link between the accident and the claimed persisting injuries. Rather, the Appellate Court opined that the evidence showing that plaintiff returned to work, days after the accident and ceased treatment within five months demonstrated that she sustained only minor injuries, and not a "significant" or "permanent consequential" limitation of use of her spine, as a result of the accident.

The Appellate Court found that because plaintiff submitted no medical evidence to support her claims of injury in her left hand, shoulder, leg, and hip, those claims were properly dismissed.


Agnes A. Wilewicz

[email protected]

11/29/22         Madison Mechanical, Inc., et al v. Twin City Fire Ins. Co.
United States Court of Appeals, Fourth Circuit
Shareholder’s Derivative Action Does Not Trigger an Employment Practices Claim Where Plaintiff Does Not Allege Wrongful Termination

This appeal arose from a declaratory judgment action that involved Plaintiffs alleged wrongful termination of an employee. In 2015, Twin City a commercial general liability policy to Madison Mechanical OS Corp.,(“Holding Company”) and Madison Mechanical, Inc. (“Operating Company”). In that time the shareholders of the Holding Company sought to squeeze out a fellow shareholder, the CFO of the Operating Company. The shareholders sought to do so by forming a new LLC with a fifth investor. Getting wind of the plan, the CFO sent a November 2015 Letter to the shareholders and investor that the new LLC sought to divert business and issued a cease and desist demand. Shockingly, the CFO was thereafter terminated ‘for cause.’

The CFO’s termination required him to sell back his shares. The method required by the shareholder agreement required him to take the lesser value. Another shocker is that the shareholder elected lower value estimated the worth of each share at $0. The CFO disagreed and sent a May 2016 Demand Letter to the Holding Company requesting an inspection of the books. The Holding Company ignored the letter and a derivative action followed. The parties would settle the underlying action for $725,000. Of course, the Plaintiffs couldn’t foot the bill so, they brought an action against Twin City alleging breach of contract.

Twin City previously disclaimed coverage based on lack of coverage for Employment Practices Wrongful Act, The Policy defined Employment Practices Wrongful Acts to include "wrongful dismissal, discharge, or termination of employment . . . or wrongful deprivation of career opportunity. An Employment Practices Claim includes any “written demand for monetary damages or other civil relief commenced by the receipt of the demand; or through a civil proceeding commenced by service of a complaint.

In affirming the district court’s decision in favor of Twin City, the Fourth Circuit determined the November 2015 Letter did not mention employment, termination, or employment related relief. Rather the letter asserted classic shareholder-based claims. Plaintiffs attempted to argue the November 2015 Letter need not mention “employment” because it was part of his ownership interest. The Court reasoned that while Maryland allows the use of extrinsic evidence to establish coverage, it must relate in some manner to the cause of action actually alleged. The Court found Plaintiffs attempted to assert a new claim, not found in the letter.

It also took a break to recognize that Maryland finds the independent tort of “wrongful termination” where an employee’s ‘for cause’ termination violates some clear mandate of public policy. Examining the May 2016 Demand Letter, despite finding Plaintiffs waived the argument, the Court concluded the letter constituted a typical shareholder demand letter. Although the letter referenced termination, it did not allege the termination was unlawful nor sought employment related relief.

Next the Court examined the CFO’s underlying complaint to find the Maryland tort. The Fourth Circuit again found the CFO did not allege any wrongful termination nor sought employment related relief. Although requested relief included the CFO maintain his employment and ownership interest, the Court again determined this relief was sought to alleviate the corporate ownership related counts. It reasoned the relief was related to his position as a stockholder, not an employee. As for the repeated allegations that the CFO’s termination was not for cause. The Court reasoned the allegations asserted. Rather it asserted the ‘for cause’ was to force the transfer of the CFO’s stock. Accordingly, no allegations in the complaint alleged the Maryland tort of wrongful termination.


Brian D. Barnas

[email protected]

11/28/22         Corrales Ventures, LLC v. Union Insurance Company
United States District Court, District of New Mexico
Summary Judgment Denied on Claims that Insurer did not Promptly Investigate and Pay Claim and Compelled Insured to Commence Litigation

Plaintiff owns a strip shopping center in Albuquerque, New Mexico.  The property was insured by an insurance policy issued by Union.  On July 31, 2018, the property was damaged by a storm.  In May 2019, following roofing work in response to tenant complaints, Plaintiff made a claim for hail damage to the property.  Union hired an independent adjuster and two engineers to inspect the claim. 

The inspection by the independent adjuster was performed ten days after Union was notified of the claim.  The IA observed damage to the roof as well as damage to HVAC units.  Plaintiff had previously had an HVAC inspection performed and indicated it would forward the report.  After receiving the report, Union retained two engineers to investigate the scope of damage to the roof and HVAC.

On September 19, 2019, Union issued payment for damages to the HVAC system.  The roofing engineer determined that the roof could be repaired by recoating the granules, and had the IA prepare an estimate to do so, which came to $100,297.45 with $43,513.91 in depreciation.  Union issued another payment on December 12, 2019, for $56,783.54 and informed Plaintiff that $70,573.09 of recoverable depreciation was now available.

Union heard nothing after issuing the December 2019 payment until March 6, 2019, when it was advised that Plaintiff had obtained a public adjuster.  A reinspection of the roof was performed, and Union had a roofer present for the reinspection.  The roofer agreed with the method of repair, but he suggested an additional adhesive be applied.  Based on this reinspection, Union issued an additional payment on August 12, 2020, of $73,943.30.  Union again informed Plaintiff of its duty and obligations related to the recoverable depreciation.

Plaintiff disagreed with Union’s findings regarding the repair method, scope, and costs related to the roof and HVAC units.  Plaintiff’s expert opined that the entire roof must be replaced.  The costs to replace the roof were estimated between $1.2 and $1.35 million.  Plaintiff commenced a lawsuit against Union for breach of contract, bad faith, and unfair claims settlement practices under the New Mexico Unfair Insurance Practices Act.

The court denied Union’s motion for summary judgment on the breach of contract claim.  The court concluded that there were factual issues in dispute between the experts about the cause of loss and extent of the damage that could not be resolved on summary judgment.  The applicability of the exclusions relied upon by Union turned upon resolution of the factual disputes.

The court partially denied and partially granted Union’s motion for summary judgment on the extra-contractual causes of action.  Plaintiff alleged Union had acted in bad faith and violated the New Mexico Unfair Insurance Practices Act by misrepresenting facts and policy provisions; failing to act reasonable and conduct a prompt, fair, or equitable investigation; having an unfounded valuation of the claim; and that Union’s actions compelled Plaintiff to institute litigation. 

Summary judgment was granted on the claims that Union had misrepresented facts or policy provisions, that its valuation was unfounded, and that it failed to adopt and implement reasonable standards.  However, the court denied the summary judgment motion on the claims that Union failed to act reasonable under the circumstances to promptly and fairly investigate the claim and the claim that Union acted in a manner that compelled Plaintiff to institute litigation. 

On the delay claim, the parties disagreed as to whose conduct caused the delay in resolving the claim.  The court concluded that this was an issue for the jury to determine whether Union had acted reasonably under the circumstances.  On the claim that Union’s actions compelled Plaintiff to institute litigation, the court noted that Plaintiff had to file the lawsuit under the policy’s suit limitation clause before the supplemental report and revised estimate were received.  The final payment was not issued until after the lawsuit was filed.  Thus, the court found that a reasonable jury could conclude Union compelled Plaintiff to institute litigation by offering less than what Plaintiff may recover in a breach of contract claim.


Lee S. Siegel

[email protected]

12/02/22        Eric's Landscaping & Tree Service, LLC v. Great American Ins. Co.
Superior Court of Connecticut, Tolland
No Coverage for Damage to Replacement Vehicle Before Listed on Policy

Eric’s Landscaping had a run of bad luck with its truck-mounted hydraulic cranes, but its inattention to detail left it without coverage.

Eric’s crane was damaged and declared a total loss by Great American. Eric’s rented a crane, paid for by Great American, until it took delivery of a new, replacement crane. All three cranes were identical models. Eric’s renewed coverage with Great American before it received the new crane. When the policy renewed, the serial number of the rental crane was listed on the policy’s equipment schedule.

Somehow, unexplained by the decision, Eric’s new crane was also damaged, in early October 2019. Days later, Great American received a request from the plaintiff's insurance agent to amend what was described as a “typo” in the serial number of the crane listed on the policy's schedule of covered items. Great American removed the serial number of the rental crane and inserted the serial number of the replacement crane. This change became effective on October 16, 2019. That same day, Eric’s provided notice of the damage to the replacement crane that occurred the week prior.

Great American wasn’t happy and denied coverage for the damaged replacement crane. The denial letter stated that “the crane was not scheduled on [the] policy at the time of the loss, nor did the crane meet the policy's definition of Additionally Acquired Property.” The Great American policy required that “You must report these items to us within 30 days of the date when you first take physical possession of them or have them delivered to a specified location, whichever is earlier.... If you fail to report newly acquired items within the 30 day period, coverage does not and will not apply to such unreported items.”

Eric’s sued for breach of contract and unjust enrichment, arguing that Great American took its premiums but afforded no coverage for the replacement crane. The plaintiff responded to the policy defense by stating that Great American should be equitably estopped from asserting its special defenses because Great American continued to accept the plaintiff's insurance premiums even after it learned that the plaintiff had returned the rental crane. The plaintiff contended that extending coverage to the replacement crane did not increase the insurance risk for Great American because the replacement crane was virtually identical to the original crane.

The court held that Great American did not breach the insurance contract. “Because it is uncontested that the replacement crane was not included in the policy's declarations schedule when the replacement crane was damaged on October 9, 2019, there is no genuine issue of material fact that the replacement crane was not “Covered Property.””

Additionally, the court held that the crane did not satisfy the newly acquired property provision. “Because it is uncontested that: 1) the plaintiff took possession of the replacement crane on September 9, 2019; 2) the replacement crane was damaged sometime between October 9 and October 11, 2019; 3) the replacement crane was not listed as covered property under the policy at the time of the loss; and 4) the plaintiff waited more than thirty days after acquiring the replacement crane to notify Great American that it had acquired the replacement crane, there is no genuine issue of material fact that the replacement crane is not covered under the additional equipment provision of the policy.”

The court easily swept away the plaintiff’s equitable claims, finding that there was no misrepresentation or detrimental reliance by the plaintiff. Further, under Connecticut precedent, there can be no unjust enrichment in the payment of insurance premiums where the insured received the benefit of potential coverage.


11/16/22        Russo v. Essentia Ins. Co.
Superior Court of Connecticut, New Haven
No Dec Sheet, No Summary Judgment

Russo was driving an unscheduled vehicle on his classic car policy when he was hit by an underinsured driver—or that’s at least what Essentia argued. However, the court found that Essentia’s failure to attach the policy’s declaration page to its summary judgment motion was fatal. “The defendant's “Exhibit B,” which the defendant's counsel avers “is a true and accurate copy of Plaintiff's Essentia Classic Auto Policy, with a policy number 7P90128,” does not include the “Declarations” specific to the plaintiff's policy. That is, the policy offered by the defendant in support of its motion provides no information as to the insured's “Name and Address,” “Auto and Vehicle,” “Policy Period,” or “Coverages and Amounts of Insurance.””

No word, so far, if Essentia refiled with the dec sheet as an exhibit.


Kyle A. Ruffner

[email protected]

11/30/22         Abundant Faith Cathedral v. State Auto Prop. & Cas. Ins. Co.
United States District Court for the Eastern District of Michigan, Southern Division
Court Holds that Negligent Work and Wear and Tear Exclusions Precluded Coverage for Water Damage that Resulted from Long-Term Roof Leaks Caused by Defective Construction and Faulty Maintenance

Abundant Faith Cathedral (AFC) commenced this suit against State Auto Property and Casualty Insurance Company, alleging that State Auto breached its insurance contract by failing to cover repairs to AFC’s church. AFC had work completed on its roof in 2018 by Five Star Commercial Roofing in order to seal the roof, which suffered from a water leak in the office bathroom and within the sanctuary. Five Star performed work on the front and back portions of the roof in October 2017 and completed additional roof work in May 2018. No other roofing companies worked on the church roof after Five Star.

In December 2019, two storms caused damage to the church, as church members observed the ceiling and windows, and the walls were wet with water running down the walls onto the floor. AFC filed a proof of loss claim with its insurer, State Auto, which retained experts to assess the damage to the property. One of the insurer’s experts concluded that construction defects and poor roof maintenance caused the water leaks. The insurer’s other expert made similar findings, and explicitly stated that Five Star’s roofing installation violated building codes and contributed to the loss. Based on the expert reports, State Auto issued a Coverage Determination, which denied coverage based on exclusionary provisions in AFC’s policy for (1) Negligent Work, on Five Star’s behalf, and (2) wear and tear. In Response, AFC filed this action alleging breach of contract against State Auto. State Auto removed the action to the District Court and filed a motion for summary judgment.

AFC did not dispute that negligent workmanship and wear and tear caused leaks in the roof. However, AFC argues that exceptions to those exclusions apply because although the roof has construction defects and wear and tear, the water damages were concurrently caused by the windstorm and windstorms are a covered resulting loss in the policy. Although Michigan’s default anti-concurrent causation rule does not provide coverage where a loss was concurrently caused by a combination of a covered loss and an excluded loss, this rule only applies where the plain language of the policy does not include a resulting loss clause. However, the policy exclusions in AFC’s policy include resulting loss clauses. The issue was whether AFC presented evidence of concurrent causation.

Although AFC did not dispute that negligent work caused the leak, it alleged the water damage to the interior of the building resulted from wind driven rain, a covered cause of loss. Based on the policy language, the court determined the policy contained an exception to the negligent work exclusion where negligence and wind driven rain both result in water damage inside a building, but only when the rain does not contribute to the damage with an event that is excluded. The court held that State Auto did not intend to exclude loss resulting from both an excluded cause and a covered cause. Therefore, the court rejected AFC’s contention that to be a resulting loss a peril had to be the product of a new, independent cause. Further, the court held the exception that the exclusion in this case did not require the covered cause of loss to occur before the excluded cause of loss.

However, although wind driven rain may be a covered cause of loss that could defeat the application of the negligent work exclusion, the court held that AFC produced no evidence showing that wind driven rain caused water damage to the interior of the building. Based on State Auto’s expert opinions, the water damage resulted from the long-term roof leaks caused by defective construction and faulty maintenance. Due to the negligent work, water infiltrated the roof for a considerable amount of time, months or years. The court found that none of AFC’s witnesses could establish that the water damage did not occur until after the storms. As a result, there was no evidence to refute the expert opinions that the excluded causes of loss were the but for cause of the water damage inside the building and that water had been leaking for months or years before the inspection. Since the negligent work exclusion applied, the court held there was no coverage for the water damage, regardless of whether the wear and tear exclusion applied. Therefore, State Auto’s Motion for Summary Judgment was granted.


Ryan P. Maxwell
[email protected]

Nothing to report this issue. Until next time.

Patricia A. Rauh

[email protected]

12/07/22         Sevelitte v. Guardian Life Insurance Co. of America
U.S. Court of Appeals, First Circuit
Court Finds that Ex-Wife Gave Plausible Interpretation of Divorce Agreement to Claim that She is Entitled to Life Insurance Proceeds of Ex-Husband; Case Remanded to District Court for Further Proceedings

This is an interpleader action wherein Renee Sevelitte (“Renee”), the ex-wife of decedent, Joseph Sevelitte (“Joseph”), and Robyn A, Caplis-Sevelitte (“Robyn”), Joseph’s widow, assert competing claims to the death benefit of a life insurance policy owned by Joseph and administered by defendant, Guardian Life Insurance Company of America (“Guardian”).  Guardian acknowledged liability but was unable to determine who the proper beneficiary was.  The uncertainty stemmed from whether a Massachusetts statute revoked Renee’s beneficiary status upon divorce, or whether Renee’s and Joseph’s divorce agreement preserved the beneficiary designation.

The district court discharged Guardian from the action and awarded the death benefit to Robyn.  The First Circuit affirmed the discharge of Guardian but vacated and remanded the case for further proceedings to determine who is entitled to the death benefit.

As background, Joseph and Renee got married in 1986.  In 1996, Joseph purchased a whole life insurance policy (the “Policy”) with a death benefit of $75,000, naming Renee as the beneficiary.  No contingent beneficiary(ies) was named.  In 2013, Renee and Joseph divorced and executed a divorce agreement, which required, in part, that the parties acquire or maintain various insurance policies.  The divorce agreement further stated that the Policy at issue here remained in full effect and ownership of the Policy stayed with Joseph.  If Joseph cashed in the Policy, Renee would be entitled to one-half the value received at the time it is cashed in.

Joseph later married Robyn and he subsequently passed away in 2020 due to COVID-19 complications.  Robyn was appointed personal representative of Joseph’s estate (the “Estate”).  Renee submitted a claim to Guardian for the Policy proceeds, along with a copy of the divorce agreement stating that the divorce agreement stated that Robyn would remain the primary beneficiary of the Policy.  On February 24, 2021, Guardian responded that according to their reading of the divorce agreement, it does not state that Renee would remain the beneficiary under the Policy.  The Guardian also cited the Massachusetts Uniform Probate Code Section 2-804(b), which states the following:

Except as provided by the express terms of a governing instrument, a court order, or a contract relating to  the  division  of  the marital  estate  made  between  the  divorced individuals  before  or  after  the  marriage, divorce,   or   annulment,   the   divorce   or annulment of a marriage:

(1) revokes any revocable (i) disposition or appointment of property made by a divorced individual to the individual's former spouse in a governing instrument . . ..

Because Guardian deemed it possible that Renee’s beneficiary status had been revoked, and because no contingent beneficiaries were named in the Policy, Guardian informed Robyn that the Estate had a competing claim to the proceeds from the Policy, so Robyn filed a competing claim on behalf of the Estate on June 16, 2021.  Before Robyn submitted her claim, Renee initiated a suit against Guardian.  Renee alleged the following causes of action: (1) breach of contract; (2) fraudulent misrepresentation of contract; (3) Guardian’s acknowledgement of Renee as owner of the Policy; and (4) violation of Massachusetts General Laws Chapter 93A.

Guardian asserted a counterclaim for interpleader against Renee, Robyn, and the Estate and noted that it was indifferent as to who is entitled to the Policy proceeds.  Guardian then deposited the proceeds from the Policy into the court register, sought judgment on the pleadings, and asked to be discharged.  Robyn also moved for judgment on the pleadings and asserted various crossclaims against Renee, alleging that Renee was “raiding the Estate assets.”  In response, Renee brought various crossclaims against Robyn for her handling of the Estate.

The district court granted Guardian’s motion for judgment on the pleadings, based on its reading of Section 2-804(b).  The court held that there can be no breach of contract against Guardian because Renee was not entitled to the proceeds of the Policy, which also means Guardian did not commit a 93A violation, as alleged by Renee.  The district court discharged Guardian from the action and ruled that the Estate was entitled to the Policy proceeds.

Renee appealed the case to the First Circuit.  In regard to the lower court’s entry of judgment on the pleadings in favor of Guardian and Robyn with respect to the death benefit from the Policy, the Court affirmed as to Guardian, but vacated and remanded as to Robyn.

According to the First Circuit, the district court erroneously concluded that the divorce agreement was a “governing instrument” under Section 2-804(b), but the Circuit Court found the divorce agreement insufficient to counteract Section 2-804(b).  Under the statute, a “governing instrument” is the document that creates the “disposition or appointment of [the] property” arguably being revoked by divorce.”  This can be an insurance policy or annuity, for example.  In this case – it is the Policy – not the divorce agreement – that is the governing instrument.

There are three discrete exceptions to Section 2-804(b): (1) the “express terms” exception; (2) the court order exception; and (3) the “contract exception.”  Analyzing the divorce agreement under the “contract exception” (since the divorce agreement is a contract), the Court must ask whether the divorce agreement saves Renee’s beneficiary status from revocation.  Under ordinary contract law principles, the Court found that the applicable provision of the divorce agreement was at least ambiguous, and that Renee’s interpretation was plausible.  As to the issue of who was entitled to the Policy’s proceeds, the case was remanded back to district court for further proceedings.


Scott D. Storm
[email protected]

11/18/22        State Auto Property and Casualty Insurance Company v. Sigismondi Foreign Car Specialists, Inc.
United States Court of Appeals, Third Circuit
Summary Judgment in Favor of Insurer in Declaratory Judgment Action and on Statutory Insurance Fraud Claim When Insured Submitted Doctored Invoices During the Adjustment of its Insurance Claim

Sigismondi Foreign Car Specialists, Inc. appeals the District Court's summary judgment in favor of State Auto Property and Casualty Insurance Company on State Auto's declaratory judgment action and statutory insurance fraud claim. Sigismondi also appeals the Court's order dismissing its counterclaim. Sigismondi disputes whether it knowingly made material misrepresentations when it submitted doctored invoices during the adjustment of its insurance claim. The Court rejected Sigismondi's arguments.

This appeal concerns a commercial insurance policy issued by State Auto that provided coverage for Sigismondi's car repair shop. Sigismondi requested an insurance payment for water damage, but State Auto denied the claim, citing fraud.

The misrepresentations at issue occurred during the claims-adjustment process. Sigismondi and State Auto retained adjusters to value the damaged inventory. The adjusters first created a joint inventory—a list of all the damaged items for which Sigismondi sought insurance proceeds. State Auto's adjuster, Chad Foster, then researched prices of the same or similar products to determine either a "replacement value" (if Sigismondi replaced the item) or an "actual cash value" (if not). Sigismondi's adjusters, or Sigismondi itself, likewise valued the items.

Sigismondi valued certain items higher than Foster estimated or could verify. For these, Foster requested that Sigismondi's adjusters obtain "invoice support" from Sigismondi. Sigismondi responded with what appeared to be original invoices from various vendors. In truth, a Sigismondi employee had scanned at least some of the invoices into the computer and then used editing software to change the items and prices listed by the vendors. After Foster alerted State Auto to this issue, State Auto sent Sigismondi a reservation of rights letter, requesting further documentation and highlighting a policy provision stating the policy would be void if any insureds "intentionally conceal or misrepresent a material fact concerning . . . [a] claim under this policy."

State Auto filed suit after further investigation confirmed the alterations. It sought a declaratory judgment that the policy was void. It also requested damages for statutory insurance fraud, 18 Pa. Cons. Stat. § 4117; common law fraud; and reverse bad faith. Sigismondi counterclaimed for statutory bad faith. At the summary judgment stage, Sigismondi initially claimed its misrepresentations were not material. It later obtained leave to address a recent decision in Commonwealth v. Risoldi, 238 A.3d 434 (Pa. Super. Ct. 2020). Sigismondi then offered new arguments: that the altered invoices were not knowingly made to contain false or misleading information and that they were not, in fact, misleading. The District Court determined these new arguments were forfeited and the misrepresentations were material, so it granted summary judgment to State Auto on its declaratory judgment action and statutory insurance fraud claim.  The Court also declined to vacate its prior order dismissing Sigismondi's counterclaim. 

Sigismondi's appeal of the summary judgment for State Auto is based on its argument that there are genuine disputes of material fact as to whether the edited invoices were knowingly made to be false or misleading, whether they were misleading at all, and whether they were material—necessary elements of both the declaratory judgment and statutory fraud causes of action. See 18 Pa. Cons. Stat. § 4117(a)(2).

Sigismondi has forfeited these arguments. In its initial summary judgment briefing, Sigismondi framed its argument entirely in terms of materiality. It was not until Sigismondi was given leave to address Risoldi that it shifted focus to the other elements of the cause of action. That was too late. The District Court granted leave to address Risoldi's impact on the materiality question before the Court; it was not an invitation to raise new arguments that could have been raised sooner. The District Court thus correctly concluded that Sigismondi forfeited these arguments.  Regardless, it's hard to imagine how the invoices—which were doctored to include prices that did not come from the vendor—were anything but knowingly made to include false or misleading information. "A fabricated receipt created by a consumer and presented as an official document from a retailer, without the retailer's knowledge, constitutes false or misleading information....".

Sigismondi also argues that any misrepresentations were not material because the invoices would not be the final word on value—Foster would conduct his own inquiry into prices based on the items and vendors. See 18 Pa. Cons. Stat. § 4117(a)(2). We disagree.

Sigismondi provided the altered invoices in response to a request for "invoice support" or other "documentation for the value claimed."  Its argument that the invoices, to which it added prices, were relevant only for information about items and vendors is thus contradicted by undisputed evidence. And because this exchange of information was part of an effort to determine the value of the insured items, the falsified invoices that indicated prices charged by vendors were undoubtedly material.  

Reviewing the record in the light most favorable to Sigismondi, the altered invoices were material. So, the District Court properly granted State Auto summary judgment on its declaratory judgment and statutory insurance fraud claims.

As Sigismondi recognizes, our affirmance of declaratory relief in favor of State Auto dooms Sigismondi's counterclaim for statutory bad faith. Because the policy was void, it did not cover Sigismondi's damaged inventory. It follows that State Auto cannot be liable for bad faith denial of the claim. 


11/29/22        NG Investments, LLC v. Atain Specialty Ins. Co.
United States Court of Appeals, Third Circuit
No Collapse Coverage for Damages When a Neighboring Building Collapsed

NG Investments and Front St Investments bought a policy for 2204 Ridge Avenue from Atain Specialty Insurance. The insureds filed a claim for damage sustained when the adjacent building at the abutting building at 2206 Ridge Avenue collapsed. Atain denied the claim. The District Court granted summary judgment for Atain because "the Policy nowhere provides coverage for damage caused by the collapse of an uninsured structure." Affirmed.

The policy provides that Atain "will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss." "Covered Causes of Loss means Risks of Direct Physical Loss unless the loss is" excluded or limited.  The applicable exclusion states that Atain "will not pay for loss or damage caused by or resulting from . . . Collapse, except as provided . . . in the Additional Coverage for Collapse."  The policy further limits the exclusion: "But if collapse results in a Covered Cause of Loss at the described premises, we will pay for the loss or damage caused by that Covered Cause of Loss."

The insureds filed a claim for damage that 2204 sustained. The insureds argue that 2204 sustained damage from 2206 when "flying debris from that building struck the exterior of Plaintiffs' buildings."  Atain denied coverage. It informed the insureds that damage from a collapse is a Covered Cause of Loss only when the collapsed building is also insured under the policy. Because the policy did not cover 2206, Atain determined it was not obligated to pay for damage caused by 2206's collapse.

The District Court correctly decided that there was no coverage because the undisputed facts show that the damage was caused by collapse, an excluded cause, and not a Covered Cause of Loss.

The insureds contend that flying debris is a Covered Cause of Loss. Under the policy, "if collapse results in a Covered Cause of Loss at the described premises, [Atain] will pay for the loss or damage." The insureds conclude that their all-risk policy covered the damage and that the collapse exclusion does not apply.

The problem for the insureds is that Atain provided evidence that 2206's collapse, and not flying debris, caused the damage. The insureds speculated about other causes but provided no evidence. Their response does not cite evidence supporting their flying-debris theory of causation. So, the District Court correctly found no genuine dispute that 2206's collapse caused 2204's damage.

2206's collapse is not a Covered Cause of Loss.  In this policy, "Covered Causes of Loss means Risks of Direct Physical Loss unless the loss is: Excluded . . . or Limited."  The policy unambiguously excludes collapse as a Covered Cause of Loss when it says, "We will not pay for loss or damage caused by . . . Collapse, except as provided below in Additional Coverage for Collapse."  The additional coverage applies only if the collapse is of an insured building, which is not the case here.  As a result, 2206's collapse is an excluded cause not saved by the additional coverage provision.


11/24/22        Travco Ins. Co. v. Gree U.S.A., Inc. et al
United States District Court, W.D. New York
Uh Oh, They’re Trying to Back Out…Do We Have a Binding Settlement?

Pedersen, M.J. Defendants sent the Court an Emergency Motion to Enforce Settlement. Defendant's filing took place minutes before the Court's deadline to either settle the case, or have Plaintiff withdraw its motion, which were the conditions on which the Court would have abstained from filing a Decision and Order regarding Plaintiff's motion to compel and for sanctions. By their emergency motion, Defendants seek to enforce a settlement agreement Defendants' claim Plaintiff entered into via email. The Court denies Defendant's emergency motion.  No settlement exists.  

On November 9, 2022, Plaintiff's counsel made a demand for settlement to Defendants via email communication. The correspondence is key to the issue at hand and as such is reproduced below. On November 9, 2022, at 11:36 AM, Plaintiff's counsel sent defense counsel the following:


If you want to contact the Court, feel free. My response will be robust. Your threats are not well received.

My client rejected your offer, as you know. You haven't made any new offers. The release language you requested is unacceptable. I am trying to find time to edit that document, but as you know am out of the office this week speaking at and attending a conference that I also brought my family to in order to try to spend time with them. At the same time, we want the Court's order, it is only you who is worried about that order. Stated plainly, you being afraid of an order that was of your clients' making is not a top priority for me. I want the order, I recject[sic] your cliens' [sic] and firm's improper practice of delaying, breaking rules, and disrespecting the system and then expecting to whine and cut a deal and demand the adverse respond at a moment's notice when you finally face the consequences of your actions. Where was this urgency a year ago? 6 months ago?

Late yesterday I got approval to make a demand of [$] but to be clear we are not settling anything unless the settlement language is abundantly clear my client is not accepting ANY risk related to other exposure your clients have. We will NOT agree to any further Court delay, period. And since we will not have the money under any circumstances by Friday we will want the order regardless, it is not something you can work around. Your clients made the mess, accept the consequences.

We also must have 60 day payment, you haven't indicated agreement on that front.


Defense counsel responded the same day at 6:05 PM stating:


We have an agreement at [$]. I have attached a settlement agreement to be signed by your client. As you requested, there is no language as to indemnity, and payment is to be due within 60 days of the executed settlement agreement being returned to us.



Defendants allege that these two emails constitute a settlement agreement.

In his responding declaration, opposing counsel states:

At the November 14th, 2022, the conference, both the Court and I made clear to Mr. Sears that if his clients agreed to the settlement agreement Plaintiff had provided on 11/10/22, then there would be a settlement. The Court even reiterated the point, asking me to confirm it was true, and then make sure that Mr. Sears understood. At the Court conference the Court again indicated it would delay entry of an order on pending motions until only noon the following day.

The Court "has the power to enforce summarily on motion, a settlement agreement reached in a case." Where the parties have reached a "preliminary agreement" to all the terms that were negotiated, even if the negotiations were oral or written in an email, the settlement is enforceable. This is true even where the parties intend to memorialize the agreement in a written document. 

When determining whether a contract exists, it is the objective intent of the parties that control it, and the secret or subjective intent of the parties is irrelevant. When deciding on this issue, there are four factors:

(1) whether there has been an express reservation of the right not to be bound in the absence of a writing;

(2) whether there has been partial performance of the contract;

(3) whether all of the terms of the alleged contract have been agreed upon; and

(4) whether the agreement at issue is the type of contract that is usually committed to writing.

No single factor is, on its own, decisive, "but each provides significant guidance."  Courts in New York, both federal and state, have held that email exchanges constitute binding writings in the context of settlement negotiations. 

Plaintiff's email communication indicated there would be no settlement agreement unless language included as part of their demand was in the settlement release. Defendants provided Plaintiff's counsel with a settlement release which Defendant proports included all of their terms. The Court disagrees with Defendants' assessment. As detailed above, Plaintiff's email states: "Late yesterday I got approval to make a demand of $[] but to be clear we are not settling anything unless the settlement language is abundantly clear my client is not accepting ANY risk related to other exposure your clients have."

Defendants argue that by providing Plaintiff with a settlement agreement they have partially performed on the contract because Plaintiff's demand made by email communication was accepted, thus creating a contract, and Defense counsel performed by providing Plaintiff's counsel with the settlement release which included the language that was demanded. This analysis is undermined by Plaintiff's response. In that response Plaintiff altered the terms of the agreement, directly mirroring Plaintiff's email correspondence. Plaintiffs added to Premise D, and paragraphs 7 and 13.

Defendants' version of Premise D states:

D. Nothing in this agreement is intended to or shall limit the rights or claims that Joseph and Lynn Eckl has against the Released Parties hereto.

Plaintiff added the following proposed language to Premise D:

The Released Parties specifically warrant and promise they will make no arguments in any action brought by Joseph or Lynn Eckl, that this agreement in any way minimizes or extinguishes any right the Eckls have to pursue claims or damages against the Released Parties.

Defendants' proposed settlement agreement at paragraph 7 states:

7. The Parties to this Agreement agree and understand that they shall bear their own costs, expenses and attorney's fees incurred in connection with the Incident.

Plaintiff added the following language to the proposed agreement:

However, the Released Parties specifically agree they shall pay any amount in sanctions ordered by the Court pursuant to any pending motions.

Defendants' paragraph 13 of the proposed settlement agreement states the following:

13. The Parties understand and agree that the failure of Defendants to make timely payment would constitute a breach of contract, the harm of which is difficult to estimate. As such, the Parties desire to provide a vehicle for enforcement of this agreement and to detail the nature of certain harms that will occur if timely payment is not received. The Parties agree that if payment is not timely made by the Defendants to this Agreement that the Plaintiffs shall be entitled to file a motion to enforce this Agreement in the Eckl Action, which shall not be dismissed until payment is received in full. The Parties agree that Plaintiff shall be entitled to all other damages and rights and remedies Plaintiff has under the law and in equity for a failure of the Defendants to timely make payment under this Agreement, which may include costs and reasonable attorneys' fees, at the discretion and judgment of the United States District Court, Western District of New York.

Plaintiff's response added this language to the end of that paragraph:

The Released Parties agree and warrant that in the event they do not timely make payment and a motion to enforce is brought they shall not make any argument to the Court that any such motion is improper or that the Plaintiff is limited to filing a breach of contract action, but that the presiding Court may adjudicate that issue in full and may, in its discretion, award sanctions up to and including default judgment against all Defendants to the Eckl Action. The Released Parties further understand that if payment is not timely received, Plaintiff may immediately rescind this Settlement Agreement in full by simply sending an email advising of such rescission to Mr. Minkin. In that event, the Released Parties understand and agreement the Plaintiff may file a motion for sanctions with the Court to recover all costs and fees incurred by the Released Parties' failure to timely pay.

These additions mirror Plaintiff's email directly. Plaintiff stated in his email correspondence that "to be clear we are not settling anything unless the settlement language is abundantly clear my client is not accepting ANY risk related to other exposure your clients have."

Plaintiff's counsel has repeatedly expressed concern that Defendants have not proceeded in good faith, and with that in mind, expressed the need to have an absolutely clear understanding if there were to be any settlement between Plaintiff and Defendants. Plaintiff is also in a fiduciary role with respect to its beneficiaries and is endeavoring to protect their interests as well. As the correspondence between counsel and the edits to Defendants' proposed settlement agreement make clear, there was no meeting of the minds between the parties. Because of the distrust, the insistence on terms in the agreement that were not included in Defendants' draft, and the need for a writing to memorialize the agreement, the email correspondence does not constitute a settlement.


Katherine A. Fleming

[email protected]

11/28/22         St. Matthews Church of God and Christ v. State Farm Fire and Cas. Co.
Supreme Court of Minnesota
No Coverage for Unrelated Preexisting Damage Even Though No Storm-Related Repairs Could be Completed Without Repairing the Preexisting Damage

St. Matthews Church of God and Christ (St. Matthews) is located in St. Paul. State Farm Fire and Casualty Company (State Farm) insured St. Matthews. The policy provided replacement cost coverage for damage to St. Matthews’s buildings. In June 2017, a storm damaged the property of St. Matthews, including the building’s drywall. Approximately 1 year later, St. Matthews reported the loss to State Farm. State Farm worked with St. Matthews to process the claim and agreed to cover the storm-related damage to its buildings, including the drywall. St. Matthews was required to obtain a building permit from the City to make the necessary repairs, including replacing the drywall. During the process of obtaining the permit and removing the drywall, cracks in the masonry behind the damaged drywall were discovered. The cracks in the masonry created a hazardous condition, and consequently, the City required St. Matthews to bring the masonry into accordance with the City’s building code requirements. There is no dispute that the cracks in the masonry preexisted the storm. However, because the cracks in the masonry violated the city’s building code, the City of St. Paul (City) would not allow St. Matthews to replace the drywall without also repairing the masonry. St. Matthews requested that State Farm reimburse it for the cost of repairing the masonry. State Farm hired a consultant to evaluate the damaged masonry and determine the cause of damage and subsequently denied coverage.

St. Matthews and State Farm disagreed about whether State Farm had to cover the cost of repairing the masonry merely because the City of St. Paul would not allow St. Matthews to replace the drywall without also repairing the masonry. The district court granted State Farm’s motion for summary judgment because the storm did not damage the masonry, which led to the code upgrade requirements, so no coverage existed. The court of appeals agreed. St. Matthews appealed.

The question for the Supreme Court was whether State Farm was required to cover the repairs to the masonry under either Minnesota law (Minn. Stat. § 65A.10, subd. 1) or State Farm’s policy. Under the statute, an insurer must cover the cost of bringing “any loss or damaged property” up to minimum code, and by providing different rules for a “partial loss” and a total loss, the statute makes it clear that if only part of the property was damaged by an insured event, then the insurer’s coverage responsibility would not extend to the entire property. In the event of a partial loss, an insurer’s obligation is limited to bringing up to code that “portion of the property” that was damaged. Nothing in the language of the statute suggests that it expands the scope of insurance to cover losses or damage to property that is not expressly covered by the policy.

St. Matthews suffered a partial loss, so State Farm’s obligation to bring the damaged portion of the property up to minimum code was limited to repairs necessary to bring up to code that part of the property that was damaged in the insured event. Here, it was undisputed that only the drywall was damaged in the storm. It was also undisputed that the masonry was damaged earlier as a result of a different, unknown cause. As a result, State Farm was not required to pay for repairs to bring the masonry up to code under the statute.

Moreover, the policy language did not require State Farm to pay for any repairs needed to bring the masonry up to code. The policy language closely mirrored Minn. Stat. § 65A.10, subd. 1 and provided the same minimum coverage as required under the statute. Since State Farm did not offer, and St. Matthews did not pay for more extensive coverage, State Farm was not required to pay for the repairs to the masonry based on the policy language either.


Evan D. Gestwick – Admission Pending
[email protected]

11/30/22         Merrick v. Macerich Co. et al
New York State Supreme Court, County of New York
Indemnification Provision Triggered by Allegations that the Agreement Was Negligently Performed

Following a lawsuit initiated by an employee of a non-party for injuries he sustained in the course of a project performed at a mall, the owner and property manager of said mall made a cross claim against a contractor it hired for the maintenance and repair of the mall elevators.

Here, the plaintiff, an employee of a non-party, was hit in the head by an elevator door while transporting materials to use in the installation of the floor of the mall from the basement to the main floor. The plaintiff brought suit against the Queens Center Mall (“Queens Center”), the property owner, Macerich Property Management Company (“MPM”), the property manager, and ThyssenKrupp Elevator Corporation (“TEC”), alleging that negligence on the part of each of them caused his injuries. Importantly, the plaintiff alleged that TEC was negligent in its maintenance of the elevator sensor and gate—duties with which it was tasked under the trade contract it entered into with an affiliate of MPM.

Indeed, under that trade contract, TEC agreed to indemnify, defend, and hold harmless, in relevant part, MPM, its affiliates, and any owner of the mall, against any claim, demand, or cause of action arising out of the breach of said trade contract or the actual or alleged negligent performance by TEC. The language of this provision of the trade contract expressly provided for indemnification from claims of bodily injury. The trade contract also included a provision that required TEC to procure a commercial general liability policy providing coverage for such bodily injury as to all of the aforementioned parties.

Defendants Queens Center and MPM moved for summary judgment on their cross claims against TEC on the ground that TEC was required to indemnify each of them as against the plaintiff’s claims asserted against them on the basis of the trade contract. In granting this motion, the Court reasoned that, since the trade contract requires TEC to provide such indemnification even if it is only alleged that TEC negligently performed its duties under the trade contract, and here, the plaintiff alleged exactly that, the indemnification provision was triggered.

In its opposition to the motion for summary judgment, TEC argued that New York’s General Obligations Law 5-321.1 forbade Queens Center and MPM from contracting away their potential liability in connection with bodily injury arising out of their negligence in their lease of the real property. Indeed, this provision makes void against public policy any agreement regarding any lease of real property that purports to exempt the lessor from liability for damages for injuries cause by their negligence, or by the negligence of those working on their behalf. However, in accordance with well-established New York case law, the Court held that since the trade contract included a “savings clause,” the indemnification provision was enforceable, and was not void against public policy. Essentially, a “savings clause” is one that limits the application of the company that it keeps to the “fullest extent permitted by law.” See, e.g., Alarcon v. UCAN White Plains Housing Dev. Fund Corp., 100 A.D.3d 431 (1st Dept 2012).

All told, this case does a fantastic job of illustrating the inner workings of a risk transfer scenario. Indeed, it presents two key takeaways: (1) where an indemnification provision provides that it applies “to the extent arising out of or derived from the breach of [the] [a]greement or the actual and/or alleged negligent performance," either of those situations triggers the provision; and (2) indemnification provisions are not violative of New York’s General Obligations Law Section 5-321 so long as they provide that they old apply to the fullest extent permitted by law.


Heather A. Sanderson
[email protected]

11/01/22         Colliers International Group Inc. v Liberty Mutual Insurance Company, 2022 ONSC 6184
Ontario Superior Court of Justice (trial level)
A Policy Condition or Exclusion in a Claims-Made Professional Liability Policy that Requires Reasonable Foresight on the Part of a Risk Manager or General Counsel that a Claim Would Result from a Wrongful Act, Voids Claims Where One of Those Officers had Information that a Claim Could or Might Result from the Wrongful Act

All claims-made professional liability policies contain a common condition or, in some cases, an exclusion, which requires disclosure of all known potential claims at the inception of the policy period. Those conditions and exclusions deliver that message using language that varies from policy to policy, but the message is the same. The insured must disclose, failing which, coverage for the undisclosed claim, when it is made and reported, may be denied.

Some general counsel or risk managers apparently believe that it benefits the company to hold back information on potential claims when a professional liability policy is renewed, apparently subscribing to the opening lines of Brett Young’s “In Case You Didn’t Know”:

I can’t count the time times
I almost said what’s on my mind
But I didn’t.

Just the other day I wrote down all the things I’d say
But I couldn’t I just couldn’t.

Holding back information does not support trust in relationships. What applies to your partners in life applies to the insured / insurer relationship.  Non-disclosure is not a good idea. Ever. Colliers International Group Inc. recently learned that lesson.

Colliers International Group Inc. is a Canadian based professional services company whose clientele consists of commercial real estate owners and users - primarily serving the hotel, industrial, mixed-use, office, retail and residential property sectors. Colliers provides consulting services, real estate investment services, landlord and tenant representation, project management, urban planning, property, and asset management through its 400 offices in 68 countries and through its 15,000 employees. One of those employees was Alexander Deitch who was with Colliers’ Atlanta office.

Mattress Firm, Inc., (MFI) based in Houston, Texas, was one of Deitch’s clients.  MFI is an American company that operates retail stores that sell mattresses and other bedding products. Typically, MFI does not own the real property on which its retail stores are located. Instead, independent real estate developers own the real property and lease it back to MFI.  From roughly 2009 to the end of March of 2016, MFI was engaged in an aggressive expansion campaign to expand its retail presence across the United States. Deitch was the master real estate broker for MFI reporting to two MFI executives, Levy and Vinson.

According to what is reported in Mattress Firm, Inc. v. Deitch, 612 S.W. 3d 467, in 2017, MFI sued numerous defendants, including Deitch and Colliers Atlanta—as well as Levy, Vinson, and multiple real estate development companies and their principals—alleging that since 2009 the defendants had engaged in a multi-year fraudulent scheme that involved the payment of bribes and kickbacks in an effort to induce MFI to enter into dozens of lease agreements with unfavorable conditions, such as above-market rental rates and long lease terms. With respect to Deitch and Colliers specifically, MFI alleged that Deitch paid bribes and kickbacks to Levy and Vinson in exchange for being retained as a Master Broker; that Deitch charged fraudulent "development fees" and "brokerage fees" to development companies that were payable to him, or entities controlled by him, and that he received bribes and kickbacks directly from development companies.

MFI also alleged in the 2017 lawsuit that Deitch created at least two entities that he used to purchase properties. He then, allegedly, signed leases with MFI, without informing MFI of his ownership interest in these entities. MFI alleged that, because of this purportedly fraudulent scheme, MFI paid "significantly above market rents" and "agree[d] to other unfavorable lease terms" for hundreds of leases and that the scheme caused MFI "to misallocate resources by opening unnecessary stores, thereby harming the sales of existing stores nearby."

But all good lawsuits – including the juicy ones – have their start and this one started on March 1, 2016, when MFI fired Deitch.

Then, on March 30, 2016, MFI sent Colliers Atlanta a litigation hold letter. According to the Ontario Superior Court … stay tuned for explanation as to how the Ontario courts got involved … that letter did not contain any allegations – no facts – no details. It simply said that MFI is investigating circumstances “…that may lead to Colliers being involved in litigation.”

After the litigation hold letter was issued, MFI asked (demanded?) that Deitch submit to questioning as part of that investigation. Deitch agreed. The topic was ostensibly about the actions of Levy and Vinson who MFI had recently fired. Deitch was asked to hand over his cell phone for a forensic investigation. He refused. Deitch reported to Collier’s Chief Legal Counsel who then prepared a report.  That report detailed Deitch’s version of the financial business dealings between Deitch and Levy.

About a month later, Deitch’s personal counsel proposed a joint defence agreement and asked Colliers to cooperate with Deitch on document management, “in order to combat claims being made by MFI”. Apparently, the Chief Legal Officer agreed. Further, in the summer, Colliers’ Chief Legal Officer hired an independent lawyer to review Deitch’s emails.

Shortly thereafter, Colliers’ a claims-made and reported professional liability policy that was issued by Liberty Mutual renewed. The date of the renewal is not stated in the Ontario judgment. Colliers did not disclose the MFI matter prior to renewal.

After the policy was renewed, MFI filed its action against Deitch and Colliers in the state courts of Texas. Colliers tendered the MFI action to Liberty Mutual for a defence.  At some point, Liberty Mutual denied coverage for the MFI claim, relying upon the following failure to disclose exclusion:

We shall not cover claims: [ ... ]

…  arising out of or resulting, directly or indirectly, from any wrongful act committed prior to the first inception date if, as of the first inception date, your Global Claims & Insurance Department or Chief Legal Counsel knew or could have reasonably foreseen that such wrongful act did or would result in a claim against you …

Colliers argued that prior to the inception date of the policy, neither the Global Claims & Insurance Department nor the Chief Legal Counsel knew with sufficient certainty that MFI was going to sue Colliers. The operative words of the exclusion are “would result in a claim against you”. “Would” does not mean “might”.

Liberty Mutual argued that “would result” cannot be taken out of context. The exclusion applies if the Global Claims & Insurance Department or the Chief Legal Officer knew or could have reasonably foreseen that a wrongful act would result in a claim. The issue is not whether the insured knew with certainty that a claim would be brought. The issue was whether it was reasonably foreseeable that one would be brought.

Colliers sued Liberty Mutual in the Ontario courts requesting a declaration that Liberty Mutual was obligated to defend Colliers against the lawsuit filed in Texas. I am assuming that the coverage action was brought in Ontario because either the policy was issued in Ontario, or because the policy contained an exclusive jurisdiction clause in favour of the Ontario Courts.

The Ontario Superior Court judge heard the matter and agreed with Liberty Mutual.  The Court stated:

 “…The words “could have reasonably foreseen that such wrongful act…would result in a claim” do not carry the imperative meaning that the Chief Legal Counsel knew facts from which a claim would certainly result … The Chief Legal Counsel had more than ample knowledge of alleged wrongful acts that he could have reasonably foreseen that the wrongful acts would result in a claim during the policy period … This is not a case where all that was known was that someone sent a litigation hold letter…[Collier]… had the facts from their own employee against whom allegations of complicity in wrongdoing by …[MFI’s] …senior officers had been raised in an interrogation. No reasonable lawyer, especially one skilled and experienced in commercial real estate trading, could miss the import of the facts reported by Mr. Deitch. And the applicants’ Senior Legal Counsel did not miss the import. He acted on it… the claim made by …[MFI]… during the policy term is a claim arising out of wrongful acts committed prior to the policy commencement date. Based on the foregoing, I find that at the policy commencement date the applicants’ Chief Legal Counsel could have reasonably foreseen that such wrongful acts would result in a claim against the applicants during the policy term. … it is possible that the Chief Legal Counsel could have reasonably foreseen that no claim would be brought during the policy term. But he could also have reasonably foreseen that a claim would be brought and that is precisely what triggered the exclusion clause.”

The moral of the story:  Holding back information does not support trust in relationships and can void insurance claims. 


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