Coverage Pointers - Volume XXIV, No. 14

Volume XXIV, No. 14 (No. 635)
Friday, December 23, 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:

Merry Christmas and Happy New Year from your friends at Hurwitz Fine

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Do you have a situation? We love situations.


Annual New York State Bad Faith Report:

Before we discuss the holidays, poetry, case law and related mischief, I have a tradition that I fortunately can continue again in this last issue of Coverage Pointers for the calendar year.

How many of you have heard lawyers threaten you or your client with a bad faith action? How many times?

This is New York.  We do have common-law bad faith, but we also have this very relevant statistic:

It has been 8962 days, that is, 24 years, 6 months, 13 days, since the last time any New York State appellate court upheld a finding of bad faith against a first- or third-party insurer in the Empire State.  The last case was Smith v. General Accident, decided on June 11, 1998.  If that doesn’t put you in the Christmas spirit, we can only offer you a poetic alternative,


Christmas Cheer:

And, making its seasonal reprise, is our 12-year-old Christmas offering, with thanks to my Christmas Elves for their contributions, years ago:

Christmas Coverage
A Policy for Saint Nicholas

Dan D. Kohane

With apologies to Clement Moore (or less)

Special Editorial Thanks to the Christmas Elves:  
Tim Sullivan, John Intondi, Mike Perley and Rich Traub


T‘was the night before Christmas, and all through the land.
Few coverage advisors were still in demand.
The policies still showed on both desk and on screen,
My eyes only open with thanks to caffeine.

Most company's adjusters had left for the day.
And most coverage lawyers had little to say.

It was surely the moment to turn out the light,
Shut down the computer, put work out of sight.

Then the phone started chirping, it startled my poise,
Not the typical ring-tone, but an odd sounding noise.

It jingled like sleigh bells, instead of a "ding,"
I knew I must answer, despite everything.

A Christmas Eve caller?  What could be the need?
But the sound of the music, would just not recede.

I was really not looking for Christmas Eve banter,
Imagine my shock when the caller was Santa!

"I need some advice, sir" said a somber Saint Nick,
"My Christmas Eve Policy is three inches thick."

I don't mean to bother, but I'm wrought with confusion
"I don't understand this new 'Gifting Exclusion.'"

"It carves out the nasties, the mean and the haughty,
It favors the good ones and leaves out the naughty, 

My coverage appears to have holes like Swiss Cheese,
I'm afraid if I'm sued, I will twist in the breeze."

"A products exclusion?

A chimney one too?  

Elf employment exception, I'm screwed through and through.

Just what is still covered? I sure am confounded,
With all of these issues, I'm fear that I'm grounded."

"With a sleigh full of sacks and reindeer at the ready,
I'm starting to feel just a tad too unsteady.

My belly has acid, my knees are a 'quiver
With millions and millions of toys to deliver."

"I want you to help me, I fear a disclaimer.
This policy's scary; I need you to tame her.

We must surely save Christmas, for good girls and boys. And Amazon won't refund "squat" on the toys.

The holiday challenged; I sure knew my mission
We needed to craft a new ISO edition.

Santa needed an ally, a comrade, a fighter,
On the opposite side was a Grinch Underwriter.

I am sure you'd imagine how hard it would be
To secure for Saint Nick a late-night policy.

Without coverage gaps, so that Santa could fly,
To save Christmas Day, we were destined to try.

The person in charge of the coverage for Nick,
Had left the shop early, was feeling quite sick.

Perhaps it was sadness, or guilt or just gumption,
He thought he'd killed Christmas, a well-placed assumption.

In order to soften his hardening heart,

We had to play coy, we had to be smart,

We needed to dazzle that Grinch with our guile,

To show him the risk was sure worth his while.

Worse yet, betwixt and between stood a broker,
A bloodsucker culled from the mind of Bram Stoker.

Through him we must go, around or about,
He'd bring pressure to bear, he's really got clout.

"It's Santa," we'd say, "who'd sue him for cash?" 
"Another broker can get us a better deal in a flash. We'll go to the market if a deal can't be made;"
The Grinch saw his bonus beginning to fade.                  

From the cream of the crop, a new team we'd assemble,

To get Santa protection, to weaken his tremble.

We'd send out the e-mail, we'd tweet, and we'd twitter.

 We needed to find the best of the litter.

The other apt choice, as the time slipped on by,
Was to use those fine people, to make him comply.

By plane and by car, by boat and by train.
We beckoned this family to join in refrain.

And gather they did, first a few then a score,
Lawyers and brokers, claims folks and more.
Much more than a choir, it was surely a throng, Together they gave voice to a beautiful song.

And they reached that man's spirit, his heart and his soul, And in no time at all, they'd accomplished their goal. "Give me my pen", the Grinch yelled to his clerk.
I knew then and there that our ploy it had worked.

"Exclusions begone!  Limitations not there!
We'll provide him his coverage, no need to beware."

And so, it was written, and Santa could jet,
And Christmas was saved, the best Yuletide yet.

On cold winter night, when you're hearing his jingle,
When the children are sleeping and in comes Kris Kringle, Remember that coverage protected his flight………….
Happy Christmas to all, and to all a good night.


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, unless the Governor and the Legislature are at an impasse.

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

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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.


CUNY Coverage Case:

On Thursday, there was, what we consider, a peculiar coverage decision out of the First Department, which we keep in our back pocket if we need it.  Worth reading from my column,


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 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.


A Look Back at CP’s 2022 Activity:

We love producing this newsletter for our thousands of subscribers.  It is the product of the dedication of our column editors and our support staff, Donna Boice and Cassidy Guzman, and the produced for the benefit of our diverse audience.  To publish this newsletter, we read and digest every New York and Connecticut appellate decision, opinions from the high courts and federal circuits throughout the country, and, with the help of Heather Sanderson, the courts in Canada as well.  We try to digest and foresee trends and advise you, in advance, of what we see developing in the field.

We so appreciate your feedback, when we receive it, knowing that our publication has a positive impact for your company or in your practice.

In the last issue of each calendar year, we pause to look back on the previous 12 months’ activities.  We were pleased to provide over 400 reviews and commentaries this year, and again, we want to thank our HF CP team for all they do for you.

This year’s gold star goes to Dan Kohane, whose articles on all thing’s insurance coverage were the most frequent offerings for the 2022 calendar year.  Thanks to Evan Gestwick for his help with the “count”:


Kohane                                       Kohane’s Coverage Corner                                          78

Storm                                           Storm’s SIU                                                                     66

Peiper                                          Peiper on Property (and Potpourri)                         39

Siegel                                          Lee’s Connecticut Chronicles                                     36

Dischley                                     Dishing Out Serious Injury Threshold                    32

Sanderson                                North of the Border                                                        29

Barnas                                        Barnas on Bad Faith                                                     27

Fleming                                      Fleming’ Finest                                                              22

Wilewicz                                    Wilewicz’s Wide World of Coverage                           20

Rauh                                            Rauh’s Ramblings                                                         13

Ruffner                                        Kyle’s Construction Column                                      12

Mark                                             Off the Mark                                                                     9

Englert                                        CJ on CVA and USDC (NY)                                           8

Gestwick                                   Gestwick’s Greatest                                                         5

Bucci                                           Bucci on B                                                                          5

Heintzman                                Heintzman’s Hideout                                                      4

Perley                                          Liening Tower of Perley                                                1

Total                                                                                                                                     422




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:

Happy Holidays and Merry Christmas.

We meet our deadline this week with the shores of Lake Erie still looking quite placid.  By the time this missive reaches your screen, however, we trust it will look quite different.  We hope our friends to the west have come through without too much damage.

Wind claims, doubtless, will be the word of the day come Monday.   

We close 2022 with an interesting discovery decision for your review.  A tip of the cap to the First Department for a thoughtful, and consistent, application of the material prepared in anticipation of litigation doctrine.  We have been seeing with increased frequency an attempt to access the claims file a carrier maintains while providing a defense to its insured.  The justification in these requests is that decisions of a carrier made up to the decision to pay or deny a claim are discoverable, and, as such, with litigation ongoing there has been no final decision.

The position advanced, however, misunderstands the precedent in this area.

When a claim is accepted for coverage, everything undertaken by the insurer is done with an eye on lessoning its insured’s exposure. Put another way, every bit of investigation done by an insurer building a defense for its insured is performed with an eye toward litigation.  As such, that file (including statements, examinations, etc.) are all categorically exempt from discovery.

On the other hand, where the insurer is investigating coverage, it is performing tasks that are consistent with the ordinary claims process.  As a carrier does not (or at least should not) investigate coverage with thoughts of litigation preparation, the theory is the material prepared in anticipation doctrine will not apply.

The bottom line is that insurance discovery is not “one size fits all.”  Careful thought must be given to what is requested, and whether there is a valid basis for objection.  That is exactly what was done in the case we review this week, and the result was a fair, reliable and consistent decision from the Appellate Division.

That’s all for now. Stay safe all, and best wishes on peaceful and successful new year.

Steven E. Peiper

[email protected]


Substantial Settlements – 100 Years Ago:

The Buffalo Enquirer
Buffalo, New York

23 Dec 1922


Big Verdicts Upheld
By Appellate

According to word received today by Attorney Hamilton Ward, the appellate division of the supreme court at Rochester yesterday unanimously affirmed verdicts of $44,280.79 and $16,079.59 against General Electric company, returned in Niagara County courts in favor of Melissa Doel, as administrator of the estate of Samuel Doel, and Frank B. Shamrock, as administrator of the estate of Edward Shamrock. Doel and Shamrock met their death in an explosion while installing machinery at a switching tower maintained by Tonawanda Power company.


Wilewicz’ Wide-World of Coverage:

Dear Readers,

Happy Holidays!! As cliché as it sounds, this really is the best time of the year. Granted, it sounds like this year we may be snowed/iced in and travel may be incumbered just a bit. However, this shouldn’t put a damper on the merriment, cheer, and general sparklines of the season. Indeed, I think the fact that a good swath of the country will certainly have a White Christmas is a nice present and silver lining.

Now, further down below you will find a new column – On the Road with O’Shea. Ryan has finally found his footing and picked a CP beat to cover himself. He will be writing about auto liability coverage going forward. Check him out.

This week in the Wide World of Coverage, the Second Circuit brings us a quick primer on the duty to defend. In Great American v. AIG, the Court discusses a number of adages and mantras that should by now be ingrained in your hearts: the duty to defend is exceedingly broad; there is a duty to defend where there is a reasonable possibility of coverage; and finally, if any claims against the insured arguably arise from covered events, the insurer has the duty to defend the entire suit/action. As always, the carrier can only get out of the duty to defend where it can be concluded, as a matter of law, that there is no possible legal or factual basis on which they might be ultimately held obligated to indemnify, under any provision of the policy.

With that, dear readers, Happy New Year!

Until next year,

Agnes A. Wilewicz

[email protected]


Santa’s NOT Coming To Town – 100 Years Ago:

The Buffalo Commercial
Buffalo, New York

23 Dec 1922


Russia Puts Ban On Santa Claus

MOSCOW, Dec. 23. (A. P.)—Santa Claus is finding Christmas little to his liking in the principal cities and towns of Soviet Russia this year; in fact, to the young communist he will be “persona non grata.”

Members of that organization, contending that Christmas and St. Nicholas both are worn out myths, have announced that the celebration of the Russian Christmas beginning January eighth will be marked by a series of elaborate carnivals in which Santa Claus will be assigned no part. They have further decided that the singing of Christmas carols shall be dispensed with and that the figure of an angel may be not displayed on a Christmas tree appearing in public.

Instead, the celebration plans call for torchlight precession, masked balls, dinner parties and gay theater performances day and night, together with various other forms of amusement designed to suppress and offset any religious ceremonies. The young communists contend that Christmas legends have fooled children and their elders long enough and that everyone should know better.


Barnas on Bad Faith:

Hello again:

One of the common refrains you will hear someone from Buffalo make in response to a comment about the cold and snowy weather is “at least we don’t get hurricanes.”  Apparently, this weekend we are going to be receiving the winter equivalent of a hurricane, which I have heard referred to as a “bomb cyclone.”  So much for that line.  I am not sure what methods Santa has to deliver presents during a bomb cyclone, but I hope that everyone stays warm and safe during the expected storm.

I have a bad faith case from the Supreme Court of Kentucky in my column this week.  The court found that the trial court improperly denied Cincinnati’s motion for a directed verdict dismissing a bad faith claim.  Plaintiff had not provided evidence from which a reasonable juror could conclude Cincinnati lacked a reasonable basis for its denial of coverage and that Cincinnati knew there was no reasonable basis for denying the claim or acted with reckless disregard for whether such a basis existed.  This was a close call, as three judges on the seven-judge panel would have allowed the bad faith cause of action to go to the jury.

Enjoy the holidays.

Brian D. Barnas

[email protected]


Gifts Galore – 100 Years Ago:

The Buffalo Courier
Buffalo, New York

23 Dec 1922



CHICAGO, Dec. 22.—Superior Court Judge Hurley today proffered his aid to Santa Claus, announcing that he would free a dozen members sentenced by him to the “alimony club” at the county jail. “They may spend Christmas with their families,” he said, “and perhaps with another chance they will do the right thing.”

The judge arranged a Christmas tree in the court of domestic relations, and credits Yuletide atmosphere with patching up thirty broken homes in the past week.


Kyle's Construction Column:

Dear Readers:

I hope everyone has a Merry Christmas and a Happy New Year! Go Bills!

In this week’s case, a homeowners association sought declaratory judgment against two insurers to collect damages arising out of a construction defect lawsuit. The Court held that the reservation of rights letters of the insurers were insufficient as they failed to inform the insured that the insurers intended to litigate coverage issues.

Kyle A. Ruffner

[email protected]


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

New York Herald
New York, New York

23 Dec 1922


Motor Driver Who Killed Boy While
Speeding Gets Two to Five Years

That the courts intend to enforce strictly the law against reckless driving was emphasized yesterday when jail terms were meted out to three chauffeurs after their conviction on charges of automobile accidents. The most severe punishment was imposed in General Sessions by Judge Nott, who sentenced John Badalati, aged 25, of 345 East 121st street, to from two to five years in State prison. He was convicted of manslaughter in the second degree.

John E. McDonald, Assistant District Attorney, said this was the third conviction in automobile killing cases within a month and that Badalati’s sentence was the longest imposed in many years in such cases. He was driving an automobile on Third avenue at 118th street when he knocked down and ran over Edward Reiss, 12, of 2933 Third avenue. The boy died. Witnesses said the car was going thirty-five miles an hour, Judge Nott said:

“If ever a law needed enforcement this law does. The fact that the accident occurred at a crosswalk clearly shows the criminal carelessness of the driver.”

William Crockett of 145 West Forty-eighth street, was sent to the workhouse for sixty days by Justices Hermann, McInerney and Edwards in Special Sessions. He was operating a truck at Park avenue and 118th street on May 22 when it ran wild and hit Samuel Stiglitz, 50, of 1475 Washington avenue. Stiglitz, a cripple on crutches, after months in a hospital, appeared last week and asked that the complaint be withdrawn, as he did not want to see anyone sent to jail.

Anastocios Tarzakos, 33, a furrier of 331 Fifth street, was sentenced to twenty days in the workhouse after pleading guilty of assault and not reporting an accident. An automobile that he was driving on Third avenue and Fifty-first street on October 14 struck and injured Stephen Callahan, 49, a porter of 209 East Fifty-First Street.


Fleming’s Finest:

Hi Coverage Pointers Subscribers:

Happy Holidays! Hopefully the winter storm sweeping across the country will not dampen the festivities (for those who celebrate). Stay safe if travelling.

Tale as old as time. Song as old as rhyme. Covid and the courts. This week’s case from the Ohio Supreme Court found that coverage for “direct loss” to property does not include being unable to use business offices due to covid. The case follows the clear trend across the country that the presence of covid in the community, on surfaces, or in infected persons does not constitute direct loss or damage to property.

See you next year,

Katherine A. Fleming

[email protected]


Compensation – 100 Years Ago:

The Buffalo News
Buffalo, New York
23 Dec 1922

Settle Death Claim.

PENN YAN, Dec. 23.—A representative of the New York Central Railroad company, was in Penn Yan today and settled the claim of the family of William Thompson of the town of Torrey. Thompson was killed on November 11 by the explosion of a locomotive near Moreland. The company allowed nearly $7,000. Thompson was 27 years of age and leaves a wife and 10-months’-old child.


Ryan’s Capital Roundup:

Hello Loyal Coverage Pointers Subscribers:

Happy Holidays from the Maxwells to you and yours. It is truly the most wonderful time of the year, if we discount the last minute Christmas Shopping and what is being reported as the storm of the century sweeping the Northeastern United States. Buffalo has a blizzard warning in effect for Friday, if you haven’t heard. Stay safe out there.

New Years is upon us, which is a time of reflection, rejuvenation, and renewal. I have started my reflection early and am coining 2023 as my year of renewal. A fresh start for me should go a long way and I, for one, am excited for where my latest journey will take me. These solid bones, rejuvenated for the year ahead. Onward.

Until Next Time,

Ryan P. Maxwell

[email protected]


Bear-y Big Feast– 100 Years Ago:

The Buffalo Times
Buffalo, New York
23 Dec 1922



OLEAN, Dec. 23.—Three hundred and fifty pound bear , shot in Kinzua, Pa., was brought here yesterday. It will be cut up and sold for Christmas dinners by a local meat market. The big, black animal was killed by a Kinzua hunter. After the meat has been sold, the fur will be disposed of. It is the biggest bear brought to this city in a long time, and the carcass attracted considerable attention.


Dishing Out Serious Injury Threshold:

Dear Readers,

Well, the end of the year is here, and it feels like the year just flew by. I hope everyone has a happy and healthy holiday season filled with lots of family and friends and a Happy New Year. Cheers to 2023!!

I have a classic case from the First Department to discuss which discusses the proof necessary to raise a question of fact. Particularly with regard to plaintiff’s submission of unsworn and unaffirmed medical reports and MRI reports.

Additionally, there was a recent conviction of various doctors and attorneys in the Greater NYC area who were involved in a fraud scheme that recruited plaintiffs to stage accidents and undergo medically unnecessary procedures. I included a summary of the scheme and a link to the press release regarding the conviction below.


Michael J. Dischley
[email protected]  


Holiday Festivities – 100 Years Ago:

Coventry Standard
Coventry, West Midlands, England

23 Dec 1922



Jews all over the world are celebrating the Feast of Chanukah, and on Sunday afternoon a special service was held at the Coventry Synagogue in Barras Lane. At the present time the local Synagogue is without a resident Rabbi, and the service was conducted by Rabbi Dainow (Birmingham).

The celebration of the Chanukah Feast, which covers a period of eight days, is in commemoration of the victory of the Maccabees over Antiochus, the King of Syria, who threatened the religious freedom of the Jews.

The first act of the Maccabees after their victory was to re-dedicate the Temple and re-light the Perpetual Lamp. This particular act is now commemorated by the lighting of candles in synagogues and homes of the Jews.

After the service at the Coventry Synagogue the children of the religious classes were entertained to tea and a lantern lecture in the schoolroom, the arrangements being carried out by the committee of the Coventry Literary and Zionist Society.


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

Wishing everyone a very Happy Hanukkah! As Jews across the world rejoice, we are thankful for reaching this occasion, the many wonderous joys of life, and the opportunity to kindle the Hanukkah lights.

VIBE INK Happy Hanukkah Blue & White Yard Sign (Menorah, Dreidel, Star of David) 24x18, Double-Sided, Large, Corrugated Plastic, Waterproof, Metal Stand Included - Made in The USA!

Happy Holidays and a Healthy New Year to all! 

Lee S. Siegel

[email protected]


Naughty or Nice? – 100 Years Ago:

The Brooklyn Citizen
Brooklyn, New York

23 Dec 1922



BOWLING GREEN, Ky., Dec. 23. The Juvenile Court today released Sammy Jennings, 6 years old, when he returned 74 cents and confessed he had stolen it from the first grade collection box.

The pupils in Sammy’s class had put their pennies in a box to be given to the Red Cross to buy Christmas presents for the poor.

“I wanted to buy a present for teacher,” Sammy told the court.


Rauh’s Ramblings:

Hello all!

Christmas is right around the corner and as usual, I have waited until the very last minute to finish my shopping, wrapping, and baking.  I have no idea why I continuously put myself into this stressful situation year after year, but at least I’m consistent!  It looks like it will definitely be a white Christmas in Buffalo this year as another storm is on the horizon – hopefully it won’t be quite as bad as predicted.

I found an interesting case from the Eleventh Circuit in which the Court analyzed an exclusion in a life insurance policy for suicide.  In this particular case, the insured under the policy was shot and killed by police in a “suicide by cop” scenario.  There was a dispute between the parties as to whether this qualifies as “suicide” since the insured did not die by his own hand.  As the Eleventh Circuit acknowledges in its opinion, this is a question that has never been addressed by any Court in the U.S., so read my summary to find out how the Court ruled!

I hope everyone has a wonderful holiday and a safe and healthy New Year.  See you in 2023!

Patricia A. Rauh

[email protected]


Pain and Gain – 100 Years Ago:

The Standard Union
Brooklyn, New York
23 Dec 1922



A suit for damages brought by Mrs. Mary Nott, 20 years old, of 663 Humboldt Street, against the L. A. Thompson Scenic Railway Company at Coney Island, has been settled with the consent of Supreme Court Justice Callaghan for $1,500.

Mrs. Nott and her husband, William, went to Coney Island on Sunday, June 19, 1921, and became passengers on the scenic railway operated by the defendant company at Surf Avenue near West Eighth street known as the “Big Dipper.”

The train became stalled and according to Mrs. Nott was struck by another from behind. She was struck over the left eye with a brake handle at the back of her seat and was thrown from her seat. She hurt her right knee, back and head and was confined to her bed for six weeks.

A claim made by her husband for loss of her services as well as injuries sustained by him at the same time was settled by the payment of an additional $400.


Storm’s SIU:

Hi Friends:

Merry Christmas, Happy Holidays and Happy New year!

No interesting decisions reported this time, so I shared a case our firm won for a client, confirming that it is an insured’s duty to prove an alleged loss occurred within the policy period and it is not enough to do so by supposition or conjecture but requires actual proof.

I will leave you with “Christmas Bells” by Henry Wadsworth Longfellow as a little inspiration as we head into the New Year!

I heard the bells on Christmas Day
Their old, familiar carols play,
    And wild and sweet
    The words repeat
Of peace on earth, good-will to men!

And thought how, as the day had come,
The belfries of all Christendom
    Had rolled along
    The unbroken song
Of peace on earth, good-will to men!

Till ringing, singing on its way,
The world revolved from night to day,
    A voice, a chime,
    A chant sublime
Of peace on earth, good-will to men!

Then from each black, accursed mouth
The cannon thundered in the South,
    And with the sound
    The carols drowned
Of peace on earth, good-will to men!

It was as if an earthquake rent
The hearth-stones of a continent,
    And made forlorn
    The households born
Of peace on earth, good-will to men!

And in despair I bowed my head;
"There is no peace on earth," I said;
    "For hate is strong,
    And mocks the song
Of peace on earth, good-will to men!"

Then pealed the bells more loud and deep:
"God is not dead, nor doth He sleep;
    The Wrong shall fail,
    The Right prevail,
With peace on earth, good-will to men."

I am thankful for you!

Scott D. Storm

[email protected]


Interrogation – 100 Years Ago:

Buffalo Truth
Buffalo, New York

23 Dec 1922


“I suppose,” said the cross-examining lawyer, in his snappiest manner. “that you remember the date of your birth?”

“Certainly,” said the witness with a bored air. “Every man remembers his birthday.”

“A newly born infant has no memory. Now, sir, how do you know that it wasn’t a day sooner or a day later, or a week, or a month, or a year than the date you have in mind?”

“Why-er-ahem—I’ve been told—”

“Exactly. You’ve been told, but you don’t know. Step down. Gentlemen of the jury, this is the kind of witness who has testified against the unimpeachable character of my client.”— Birmingham Age-Herald.


Gestwick’s Greatest:

Hello Readers!

While the Bills continue to win, none of their wins seem particularly impressive. But, a win is a win, I suppose. Alas, my position remains that the only thing standing between the Bills and the Lombardi Trophy are those pesky Kansas City Chiefs—if we make it past them, we can beat anybody.

This week, I bring to you two decisions that discuss New York’s no-fault statute, and what an insurer needs to prove should it decide to disclaim such benefits. The operative rule is this: an insurer may assert a lack of coverage defense based on a founded belief that a claimant’s alleged injury did not arise out of a covered accident. Notably, this rule applies not only to no-fault benefits, but across the board.

In Hereford Ins. Co. v. Advanced Ortho & Joint Preserve, P.C. et al., the claimant alleged that he was hit by the door of a livery vehicle that was left open, following a verbal exchange with the livery driver. The livery driver, on the other hand, gave a written statement that he was dropping off a passenger when the claimant reversed and hit his front bumper, and that the livery driver never hit the claimant. The Kings County Supreme Court held that Hereford demonstrated facts constituting its founded belief that the claimant’s injuries did not arise out of a covered incident by offering this written statement as evidence, as well as the fact that the claimant was unable to recall details about his supposed medical treatment during his EUO. Tangentially, the Court noted that the claimant also failed to comply with the policy’s conditions, a condition precedent to coverage, by failing to submit to an IME or return a signed copy of his EUO transcript.

Another Hereford case that was decided within the last two weeks bears striking similarity to that above. In Hereford Ins. Co. v. PDA NY Chiropractic P.C., the claimant’s EUO testimony was that she was taken from the scene of the accident by ambulance and went directly to the hospital; however, the claims professional assigned to the case submitted an affidavit stating that the claimant first went to the police station to report the incident, then went to the hospital. This inconsistency was enough for the Kings County Supreme Court to hold that Hereford met its burden in showing that its belief that the claimant’s injuries did not arise out of a covered incident was founded on the evidence. 

That’s all for this week, see ya next year!

Evan D. Gestwick – Admission Pending
[email protected]


Christmas Cheer – 100 Years Ago:

The Buffalo Enquirer
Buffalo, New York

23 Dec 1922





Marching four abreast and singing “Oh, Come, All Ye Faithful,” more than 1,000 men and women stopped at Shelton square at 12:30 o’clock today to join with the Park band and the Community chorus to sing Christmas carols.

Bankers, with their gold for the children at home, poor man with the soil of ditch digging on their clothing, women in furs and women with shawls over their heads stood side by side to sing the old familiar tunes: “It Came Upon a Midnight Clear,” “Silent Night, Holy Night,” and all those we heard when we stood at our mother’s knee.

Heartily they sang, and when Harry Barnhart, leader, said, “Let’s sing ‘Oh Come, All Ye Faithful’ and lets march four abreast while we sing,” the big crowd fell into step and marched back and forth in front of St. Paul’s cathedral.

Many a telephone girl used up all of her lunch time singing and several men in shabby clothing, but with the market baskets on their arms to carry home the turkey—or possibly only beef stew if the bankroll would not warranty sixty cents a pound for bird, postponed the marketing to sing.

It showed the true Christmas spirit exists in every breast, no matter whether furs or rags constitute the outer clothing.


On the Road with O’Shea:

Hello Readers,

This week is the debut of my new column On the Road with O’Shea. In this column, I will review and write about auto cases including SUM, No-Fault, and general coverage issues involved in auto cases.

For the debut of the column, I have two decisions from the Second Department. Both involving arbitration awards of No-Fault benefits. The court got both decisions right and overturned the awards, one for default and the other based on the mandatory personal injury protection required by 11 NYCRR 65.

Happy Holidays to everyone and stay safe if travelling! 

Ryan P. O’Shea

[email protected]


Amber Alert – 100 Years Ago:

The Wichita Eagle
Wichita, Kansas

23 Dec 1922


But Baby’s Cries in Mail
Sack Lead to Discovery

of Its Whereabouts

CLEVELAND, OHIO, Dec. 22.—Amid the hustle and bustle of a large crowd of Christmas shoppers in the main post office today came the cries of a mother for her lost infant.

Christmas packages at a table in the lobby she placed the child in a market basket, which she placed under the table. Her packages ready to be mailed, she looked for the baby. It disappeared.

The basket, with its contents, had been picked up by a post office employee and thrown into a mail sack. Cries from the child as the sack was about to be placed on a truck led to its discovery. The woman refused to divulge her identity.


North of the Border:

It has been outrageously cold since Monday – the windchill this morning was -45C which is -49F.  It is supposed to moderate on Saturday, December 24. Most are working from home today as we get ready to celebrate over the next few days.

I co-wrote the article below in 2017 with my friend and fellow FDCC member, David Mackenzie who is a partner at Blaney McMurtry in Toronto. Enjoy.

"...Better Watch Out, Better not Cry, Santa Claus may be delivering a coverage dispute to an insurer near you..."

A white Christmas is in the forecast for most Canadian cities this season and many of our offices are closed this week. It is a time to slow down and reflect – or catch up!

Experience shows that the holiday season may turn out to be a gift that keeps on giving as it may generate coverage disputes in the New Year. Not to put a damper on the season's festivities but:

  1. Just because Mom invites you over for the Christmas turkey and stuffing doesn't mean you are member of her household (and therefore an unnamed insured under her homeowners' policy): Sequeira v. Sequeira, 1995 CanLII 1222 (BC SC)

  2. In fact, even the decision of your 20-something to come home from school for the Christmas holidays can give rise to a coverage dispute: Personal Insurance Company v. Allstate Insurance Company, 2009 CanLII 64827 (ON SC), as to whether the student who was attending school on a scholarship was a dependent of his parents and therefore entitled to accident benefits under their auto policy. 

  3. Care must be taken, even while Christmas shopping, as just going to the Mall can generate a coverage dispute: Jakubik v. Liberty Mutual Insurance Company, 2001 ABAB 836 (A claim for a stolen, purse, Christmas gifts and the van that housed the purse and gifts was allowed as the insurer was unable to prove firstly that the insured never actually paid for the van from its former owner and secondly that the insured was party to a plan to strip and damage the van, to ensure recovery of the full value for the van via the insurance proceeds.)

  4. If you do suffer loss or injury over the Christmas break, give notice without delay, because the festive holidays won't excuse a failure to give timely notice under a claims made policy: Stuart v. Hutchins et al.; American Home Assurance Company et al., third parties, 1998 CanLII 7163 (ON CA)

  5. Even while drinking your eggnog, it is always key to keep priorities in mind. Who will have the duty to defend when the company Christmas Party held at the boss' home gets out of hand? The homeowner's insurer of the residence where it happened or the GL insurer of the business who paid for the party? In keeping with the belief that it is better to give than to receive, the answer is probably both! Doucet v State Farm Fire and Casualty Company, 2017 ONSC 1222 (CanLII)

  6. When is a Christmas tree not a Christmas tree? When it is a riser, splitting the flow of propane from a propane tank farm to outbuildings and living quarters at a work camp: Slocan Forest Products Ltd. v. Trapper Enterprises Ltd. and Daryl H. Zimmerman, 2011 BCCA 351; when it is an assembly of valves, spools, pressure gauges and chokes fitted to the wellhead of a completed well to control production: Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co., 1969 CanLII 716 (AB CA)

  7. Even when the holiday passes, the danger of a Christmas coverage dispute is not over. Did the kids receive a snowmobile under the tree (or, at least in the driveway)? No, while Mom and Dad had bought it at Christmas for the kids to use, they retained ownership, compelling their insurer to defend and indemnify against its negligent use and operation by their children: Cleworth v. Zackariuk, 1987 CanLII 2686 (BC CA)

Best Wishes and Happy Holidays to all from the Great, mostly White North!

Heather A. Sanderson
[email protected]


Trouble In Paradise – 100 Years Ago:

Buffalo Morning Express
Buffalo, New York

23 Dec 1922


Sixteen-year-old Margaret Crage charged with perjury at license bureau


Second marriage can be annulled if society decides that is best course.

Margaret Crage, sixteen years old, a pretty ward of the Children’s Aid society, was secretly married without the permission of her legal guardians on December 13th. Yesterday she was arraigned in a city court on a perjury charge brought by Miss Pauline M. Aldrich of the Children’s Aid society. Miss Aldrich alleges that the girl, in obtaining a marriage license, swore that her name was Martha Lunge, twenty years old, of East Aurora. The hearing was adjourned for a week at the request of her attorney, John L. George.

This is the girl’s second marriage venture. She was wed in 1920 to Aaron Walpert of Ellicott Street, but the marriage was soon annulled and since then she has been under the care of the Children’s Aid society. Her father married a second time and has been living at No. 319 Moselle Street, but he is said to have taken little to no interest in the child’s welfare. When she lived at the association’s home on Delaware avenue, Leonard Crage, 23 years old, assistant head waiter at the Ritz café on Washington street, frequently called on her. Employment was obtained for her in a private family. On December 13th she gave up her position and was married. With her husband she began her second honeymoon in a kitchenette apartment at No. 228 Carolina Street, where she was arrested yesterday noon by Detective Alfred Gardner.

Just what action the association as her guardians will take in the girl’s future life has not been decided, but it is understood that the marriage can be annulled because the license was obtained upon false representation.

The little girl told the court that she did not know her correct age. She knew she was more than sixteen, she said, and was supposed she was twenty.

Attorney George assured the court that the girl’s husband came from a respected Italian family.

Judge Woltz allowed the girl to go on her own recognizance and she left the courtroom with her husband.


Headlines from this week’s issue:

Dan D. Kohane

[email protected]

  • Despite Allegations of Employment in Tender Letter, Failure to Promptly Disclaim on Employment Exclusion.Thousands Scratch their Head in Amazement

  • Legal Malpractice Claim Stands Against Law Firm but Fraud Claims Dismissed because of Disclosure of Conflicts.

  • Multiple Outbreaks of COVID-19 in Multiple Locations Owned by a Single Insured is Not a Single Event Under Self-Insured Retention Policy.


Steven E. Peiper

[email protected]

  • Claim File Maintained Insurer as Part of Ongoing Defense of Its Insured is Privileged and Otherwise Exempt as Material Prepared in Anticipation of Litigation


    Michael J. Dischley

    [email protected]

  • Plaintiff Failed to Provide Sworn Copies of Medical Records and MRI Reports Thereby Precluding Motion for Summary Judgment
  • New York Attorney and Doctor Convicted of Defrauding New York City-Area Businesses and Their Insurance Companies of More Than $31 Million Through Massive Trip-And-Fall Fraud Scheme


Agnes A. Wilewicz

[email protected]

  • Second Circuit Holds Carrier has Duty to Defend, Where There is a Reasonable Possibility of Coverage Under its Policy


Brian D. Barnas
[email protected]

  • Court Should Have Granted Directed Verdict Dismissing Bad Faith Failure to Settle Claim


Lee S. Siegel

[email protected]


  • Extrinsic Evidence Does Not Have to Be Credible to Trigger Duty to Defend
  • “Actual Impairment” Includes the Forced Diversion of Resources From Ordinary Operations


Kyle A. Ruffner
[email protected]

  • Court Grants Insured’s Motion for Summary Judgment due to Insurer’s Failure to Reserve its Rights to Litigate Coverage Issues Regarding Underlying Construction Defect Lawsuit


    Ryan P. Maxwell

    [email protected]

  • Package Of Workers’ Compensation Bills Delivered to the Governor for Consideration


Patricia A. Rauh

[email protected]

  • Life Insurance Policy Exclusion for ‘Suicide’ Shall be Broadly Construed to Include ‘Suicide by Cop’



Scott D. Storm

[email protected]

  • It is the Insured's Burden to Prove an Alleged Theft Occurred within the Policy Period.


Katherine A. Fleming

[email protected]

  • Direct Physical Loss or Damage to Property Does Not Arise from (1) The General Presence of Covid in the Community, (2) The Presence of Covid on Surfaces at a Premises, or (3) The Presence on a Premises of a Person.


Evan D. Gestwick (Admission Pending)

[email protected]

  • Inconsistent Statements Among Parties May Serve As The Foundation For Insurer’s Belief That Claimant’s Injuries Did Not Arise From Covered Accident
  • Affidavit From Claims Professional May Also Serve As The Foundation For Insurer’s Belief That Claimant’s Injuries Did Not Arise From Covered Accident


ON the ROAD with O’SHEA
Ryan P. O’Shea

[email protected]

  • There Must Be Some Opposition To Establish A Reasonable Excuse To Prevent A Default Judgment
  • Insurer Cannot Escape Payment Of No-Fault Benefits Where Rental Agreement Attempted To Relieve Insured Of Providing Mandatory Personal Injury Protection


Heather A. Sanderson

[email protected]

  • Unless There is a Choice of Law Clause Specifying a Jurisdiction Other than Ontario, the Ontario Courts have Jurisdiction to Hear Coverage Disputes under Policies that were Brokered and Issued to Insureds at an Address Outside of Ontario, Where the Issuing Insurers are Registered and Licensed to Transact Business in Ontario; the Insured Does Business in Ontario; and, the Policies Relate Largely, but not Exclusively to the Insured’s Operations in Ontario.



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

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

Dan D. Kohane

[email protected]


Agnes A. Wilewicz
[email protected]


Patricia A. Rauh

[email protected]


Dan D. Kohane, Chair
[email protected]

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

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Thomas Casella

Brian D. Barnas

Eric T. Boron

Robert P. Louttit

Ryan P. Maxwell

Patricia A. Rauh

Diane F. Bosse

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick – Admission Pending

Ryan P. O’Shea – Admission Pending


Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley

Scott D. Storm

Brian D. Barnas


Dan D. Kohane
[email protected]

Alice A. Trueman


Jody E. Briandi, Team Leader
[email protected]

Diane F. Bosse

Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri

Dishing Out Serious Injury Threshold

Wilewicz’s Wide World of Coverage

Barnas on Bad Faith

Lee’s Connecticut Chronicles

Kyle’s Construction Column

Ryan’s Capital Roundup

Rauh’s Ramblings

Storm’s SIU

Fleming’s Finest

Gestwick’s Greatest

On the Road with O’Shea

North of the Border


Dan D. Kohane

12/22/22       City University of New York v. Utica First Ins. Co.
Appellate Division, First Department

Despite Allegations of Employment in Tender Letter, Failure to Promptly Disclaim on Employment Exclusion.  Thousands Scratch Their Head in Amazement

The City University of New York (“CUNY”) sough a declaration that Utica First (“Utica”), which had issued an insurance policy to nonparty AIM Builders Corp., was required to defend and indemnify them as additional insureds on AIM's policy on a primary and noncontributory basis, in an action against them commenced by an employee of AIM. Plaintiff Stalco Construction Inc.'s primary insurer has assumed plaintiffs' defense in the underlying action. Stalco's insurer, Travelers Indemnity Company, originally tendered coverage to Utica in December 2015, but Utica denied coverage in March 2016 citing, among other things, an employee exclusion contained in AIM's policy. Plaintiffs contend that Utica's denial of coverage based on its employee exclusion was untimely, and that Utica is therefore estopped from denying coverage pursuant to Insurance Law § 3420(d)(2).

Utica's contention that Travelers is the only real party in interest in this action is unavailing. The court finds that plaintiffs have standing to pursue their claims, as there has been no settlement of the underlying action paid by Travelers within its policy. However, the court denied the motion for summary judgment, finding a question of fact as to whether the disclaimer was late.

Utica contended that it was not readily apparent when it was first placed on notice that the employee exclusion applied, even though, in its original tender letter, Travelers alleged employment. The court found that since no complaint had been filed and provided to Utica for its review, and no other evidence was submitted to Utica substantiating that he was an employee injured during his employment, the application of Utica's employee exclusion was not readily apparent.

The court considered plaintiffs' remaining arguments, including their argument that Utica never denied coverage as to City University of New York, and found them unavailing.


12/15/22       Federal Insurance Company v. Lester Schwab Katz & Dwyer
Appellate Division, First Department
Legal Malpractice Claim Stands Against Law Firm but Fraud Claims Dismissed because of Disclosure of Conflicts

The law firm, LSKD, moved to dismiss a malpractice action brought by the insurer. The verified complaint sufficiently alleges specific facts from which, if true, a factfinder could reasonably infer that, but for LSKD's alleged negligence in conducting the insureds' defense in the underlying action, plaintiff insurer would have achieved a better result in that litigation than the $4 million settlement to which it ultimately agreed.

However, the causes of action for fraud and negligent misrepresentation, however, should have been dismissed pursuant.  Both claims are based on the contention that LSKD obtained its assignment to defend the insureds in the underlying action by misrepresenting or omitting to disclose the fact that it had a conflict of interest as to the City of New York, a codefendant in the underlying action. This conflict prevented LSKD from pursuing a cross claim against the city, to the detriment of the insureds and their insurers. The theory that LKSD misrepresented or failed to disclose the existence of the conflict is conclusively refuted by documentary evidence, plainly revealing the conflict and the inability to sue the City because of other matters where the firm represented the City.


11/16/22       Nat’l Fire and Marine Ins. Co. v. Genesis Healthcare, Inc.
United States District Court, Eastern District of Pennsylvania
Multiple Outbreaks of COVID-19 in Multiple Locations Owned by a Single Insured is Not a Single Event Under Self-Insured Retention Policy.

Defendant Genesis owns hundreds of companies that individually own and manage nursing homes and healthcare facilities. Throughout the COVID-19 pandemic, many of these nursing homes’ residents contracted the virus. Genesis claimed to have adopted certain protocols to stop the spread, however, the nursing home residents still contracted the virus. Genesis owned companies, and Genesis itself to a smaller extent, faced 23 lawsuits and 20 pre-suit notices from residents that contracted COVID-19. Each claim varied.

Genesis purchased insurance coverage for the 2020 year to pay for its losses above a $3 million self-insured retention (SIR), which Genesis incurred in defending and satisfying a claim arising from a single health care event. Plaintiff National Fire issued the policy. Genesis sought coverage in December 2021 for losses above the $ 3 million SIR by characterizing each of the lawsuits as a single health care event per the terms of the policy.

National Fire brought a declaratory judgment action in the Eastern District of Pennsylvania to declare thar its coverage obligation begins after Genesis incurs more than $ 3 million on each of the separate suits. At this point Genesis incurred approximately $1.3 million at the close of discovery with an expected additional $300,00 to be spent in the next five months. The crux of the decision focuses on whether the 43 lawsuits bought by residents of the various healthcare facilities is considered a single healthcare risk due to the COVID 19 pandemic or whether each claim is considered a single healthcare itself, thus, requiring a single claim to trigger the SIR.

The district court found for National Fire and determined each of the 43 claims constituted a single health care under the 2020 policy and did not aggregate into a single event. In reaching its decision the court looked to the definition of “health care event,” which the policy defined as “any event in the rendering of, or failure to render, professional services that results in injury, [a]ll injuries arising out of, or in connection with, the same or related acts or omissions in furnishing professional services shall be considered one health care event.” The policy defined an “event” as an “accident,” which is “[a]ll injuries arising out of, or in connection with: (1) the same or related acts or omissions; or (2) the continuous or repeated exposure to substantially the same harmful conditions; will be considered one event.” The policy defines “professional services” as “treatment[s]” such as medical, surgical, dental, mental health, and nursing services.”

The court’s analysis of the underlying actions and claims against Genesis found each claim against Genesis and its subsidiaries were not identical. Notably, the court identified that the claims involved 32 different locations in 13 different states. It also determined the claimants allege significantly different injuries in different geographic regions at different times from different sources. The court further addressed the claims by finding 12 of the suits contain allegations unrelated to COVID-19; and that of the 31 COVID -19 related suits, 11 sue individual operating companies, 9 sue both Genesis and its operating companies, and 3 sue Genesis only. The district court held that while Genesis seemingly created unified polices, the claimants were almost always suing the operating company’s actions that led to the resident to contract the virus.

Against this backdrop, the court provided its analysis of its determinations using the “cause” test. The “cause” test looks at the cause(s) of the injury to determine the number of occurrences and consider whether a single cause or multiple causes led to the loss sustained. Accordingly, if the court could identify a common source of the injuries, then the cause would be considered a single occurrence. In approaching this test, the court analogized food poisoning in that the claims do not arise from a single incident related to the same meal in the same form at the same location. It also looked to previous cases for guidance, and distinguished Donegal Mut. Ins. Co. v. Baumhammers by finding those defendants could point to a single negligent act that resulted injuries in several injuries at several locations. However, the court found the present facts did not present a similar knowledge base

The court next looked to toxic tort cases and found repeated exposure to dangerous chemicals constituted a single occurrence because all the injuries arose from a common source. The court also compared sexual discrimination claims raised against a company based on its employment policy and an action based on a plane crash, all of which were found to be a single occurrence based on a single cause. However, the district court found the facts to be more in line with opinions finding multiple occurrences. Namely, American Home Assurance Co. v. Superior Well Services, Inc. where the Pennsylvania Supreme Court found multiple occurrences because the damage sustained occurred at separate distinct locations. It also looked to Busby v. Steadfast Insurance Co., where multiple occurrences were found where a driver rear ended one car and a third party rear-ended the driver because each accident involved independent actors.

The district court found that much like Superior Well Services, Inc., the Genesis claimants’ injuries occurred at different facilities throughout different states. It was also persuaded by Busby by finding that the while Genesis promulgated unified policies, Genesis did not actually operate or have control over the individual facilities, and therefore, the operating company facilities acted independently when they engaged in professional services. As such, the district court held the underlying action and claims were the result of separate and unrelated acts or omissions made by the 32 operating companies and their employees.

The district court also rejected Genesis’s argument based on National Fire’s alleged change during performance when addressing the multiple claims as a potential single event prior to issuing its reservation or rights. The court held that because the course of performance cannot be used to contradict the express terms of the unambiguous language, the express terms of the policy controlled. It also rejected Genesis’s argument that the underwriting materials that identified that the 2020 policy could cover multiple locations would alter its analysis because the materials do not reference COVID-19, but generally states the $3 million SIR applies to one event even if multiple locations are involved. Accordingly, the court granted summary judgment in favor of National Fire.

-Editor’s Note:

We would like to extend a great thanks to Olga Kats-Chalfant for submitting the case for our review. If you come across decisions and opinions that you feel should be included in Coverage Pointers, please feel free to submit them.


Steven E. Peiper

[email protected]

12/20/22       Springer v. Tishman Speyer Properties, L.P.
Appellate Division, First Department
Claim File Maintained Insurer as Part of Ongoing Defense of Its Insured is Privileged and Otherwise Exempt as Material Prepared in Anticipation of Litigation

Defendant Schindler sought additional discovery from co-defendant Christie’s as part of what appears to be a bodily injury lawsuit seeking recovery for personal injuries.  Among the information sought was the deposition of Christie’s risk manager, and discovery of statements Christie’s employees allegedly provided to its insurance company as part of the claims investigation.

In rejecting the demands, the First Department noted that a liability insurer’s file is conditionally privileged as material prepared in anticipation of litigation.  Moreover, communications between Tishman and Christie’s and/or their respective insurers were also confidential and thus protected from disclosure.


Michael J. Dischley
[email protected]

12/20/22       Thomas Cinelli v. Greyhound Lines, Inc. et al.
Appellate Division, First Department
Plaintiff Failed to Provide Sworn Copies of Medical Records and MRI Reports Thereby Precluding Motion for Summary Judgment

Order, Supreme Court, New York County (Shlomo S. Hagler, J.), entered June 22, 2021, which, inter alia, granted defendants' motion for summary judgment dismissing the complaint on the threshold issue of serious injury within the meaning of Insurance Law § 5102(d), unanimously affirmed, without costs.

Plaintiff alleges that he sustained injuries to his lumbar spine and left hip, including an impaction fracture, because of an incident that occurred in June 2016 when he was a passenger on defendant Greyhound's bus, and an unsecured handicapped accessible seat slid back and struck his knees.

The Appellate Court found that defendants demonstrated prima facie that plaintiff's claimed lumbar spine injuries were preexisting through submission of a 2012 MRI report showing that plaintiff had the same claimed disc herniations and bulges four years before the accident. As for the claimed left hip injury, defendants' orthopedic expert personally reviewed plaintiff's MRI films, as well as his medical records showing a prior hip replacement surgery and pain and limitations in use predating the incident, and opined that plaintiff did not sustain any fracture, tear or other injury as a result of the June 2016 incident and that there was no objective evidence of any other injury causally related to that incident.

In opposition, the Appellate Court found that plaintiff failed to rebut defendants' prima facie showing that his lumbar spine and left hip injuries were preexisting. He submitted unsworn and unaffirmed medical records and MRI reports, which were not relied upon by defendant's expert who reviewed the MRI films independently, and therefore were inadmissible. The affirmation of plaintiff's physician which "recite[d] the findings in the unaffirmed reports," could not be used to "bootstrap" the unaffirmed MRI reports into evidence. The report of plaintiff's physician, who first examined him nearly four years after the incident, was insufficient to raise an issue of fact as to causation. In particular, the physician failed to specifically address and explain why plaintiff's limitations were not related to his left hip replacement surgery, as opposed to the subject incident. Nor did he provide any basis for finding an aggravation of those preexisting left hip conditions. Plaintiff's physician also failed to acknowledge that an MRI of the lumbar spine taken four years before the incident, showed a preexisting condition, or to provide any basis for his opinion that the incident had caused plaintiff's lumbar spine injury

New York Attorney and Doctor Convicted of Defrauding New York City-Area Businesses and Their Insurance Companies of More Than $31 Million Through Massive Trip-And-Fall Fraud Scheme

On December 16, 2022, a New York Lawyer and New York Orthopedic Surgeon, were convicted in a massive trip-and-fall fraud scheme spanning from 2013 to 2018.  The jury convicted both the lawyer and doctor following a three-week trial before U.S. District Judge Sidney H. Stein.  There were several co-conspirators, including various lawyers and medical providers, that previously pled guilty or were convicted before Judge Stein for their involvement in the same trip-and-fall fraud scheme.  Sentencing is scheduled for March 21, 2023.

U.S. Attorney Damian Williams said: “Today’s unanimous jury verdict holds [the participants] accountable for their participation in a widespread fraud scheme that preyed upon poor, vulnerable, and at-times homeless individuals.  These individuals were recruited to stage trip-and-fall accidents and undergo medically unnecessary surgeries performed … were designed to increase the value of fraudulent personal injury lawsuits filed ….  [The participants] abused their professional licenses, degrees, and titles to line their own pockets with millions of dollars, and they now face the prospect of lengthy prison sentences for their crimes.”

According to the allegations contained in the Superseding Indictment and the evidence presented in Court during the trial:

Between 2013 and 2018, [the participants],  among others, engaged in an extensive fraud scheme, in which individuals (the “Patients”) were recruited to stage trip-and-fall accidents and then undergo medically unnecessary surgeries in order to increase the value of the fraudulent personal injury lawsuits that were filed on their behalf against the owners of the accident sites and/or insurance companies of the owners of the accident sites (the “Victims”).  During the fraud scheme, [the participants] attempted to defraud the Victims of more than $31 million.

[The participants] relied upon a team of “runners” who were paid cash kickbacks to recruit the Patients to stage or falsely claim to have suffered trip-and-fall accidents at particular locations throughout the New York City area.  Common accident sites used during the fraud scheme included cellar doors, cracks in concrete sidewalks, and purported “potholes” in front of commercial establishments, such as gas stations, diners, and other businesses. 

After their staged accidents, the Patients were directed to go to the hospital to obtain discharge papers and then were brought to [The Lawyers] office, by the carloads, where they met with [The Lawyer] briefly, after which [The Lawyer] would uniformly accept their case.  [The Lawyer] failed to ask even the most basic questions during the intake process, including the locations of the purported accidents, and yet, would file fraudulent lawsuits, under penalty of perjury, on behalf of the Patients against the Victims.  During the scheme, [The Lawyer] filed nearly 200 fraudulent lawsuits and earned more than $5 million dollars in settlement fees from these fraudulent cases.

Following the Patients’ meeting with [The Lawyer], the Patients were driven to various medical appointments, including visits with chiropractors, physical therapists, and to obtain MRIs, all of which was designed to justify the surgical procedures on their knees, shoulders, and backs that Patients were required to have as part of the scheme.

The Patients were then driven to meet with [The Doctor], an orthopedic surgeon, who would perform arthroscopic knee and shoulder surgeries on Patients within one to two weeks of first meeting the Patients.  [The Doctor] paid hundreds of thousands of dollars in kickbacks for these Patient referrals.  [The Doctor] performed no physical exams on the Patients and fabricated his medical reports to make it seem like the Patients were injured, when in reality they were not.  To incentivize the Patients to get surgery, the Patients were paid approximately $1,000 after each surgery.  During the course of the scheme, [The Doctor] performed nearly 300 medically unnecessary surgeries and earned more than $3.2 million dollars.  [The Doctor] received approximately $10,000 per surgery.

The surgeries, as well as the other medical procedures, were funded by litigation funding companies, including a funding company owned by co-conspirator Adrian Alexander, even when the Patient maintained medical coverage through an insurance company or a government-subsidized program.  The funding companies also paid the fraud scheme organizers and participants referral fees, typically $1,000 to $2,500, for each Patient who signed a funding agreement.  In exchange for funding Patients’ medical and legal costs, the funding companies charged the Patients high interest rates.  The interest rates were so high that oftentimes the majority of the proceeds that were awarded in the fraudulent lawsuits were paid to the Funding Companies, [The Lawyer], and other scheme participants, with the Patients receiving a much smaller percentage of the remaining recovery.

The Patients were overwhelmingly poor – individuals desperate enough to submit to surgeries in exchange for the small payments they would receive after surgery.  It was common for the Patients to ask for food or money when they would appear for their intake meetings with [The Lawyer].  Patients were recruited from homeless shelters and often suffered from drug and alcohol addiction as well.”

[The participants] were found guilty of counts of conspiracy to commit mail and wire fraud, mail fraud, and wire fraud. The maximum potential sentences in this case are prescribed by Congress and any sentencings of the defendants will be determined by the judge.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas Folly, Danielle Kudla, Alexandra Rothman, and Nicholas Chiuchiolo are in charge of the prosecution.


Agnes A. Wilewicz

[email protected]

12/13/22       Great American Insurance Company v. AIG Specialty Ins. Co.
United States Court of Appeals, Second Circuit
Second Circuit Holds Carrier has Duty to Defend, Where There is a Reasonable Possibility of Coverage Under its Policy

Houlihan/Lawrence, a subsidiary of HomeServices America, was a mutual insured of both Great American and AIG. When Houlihan was sued in a class action suit in New York, they sought defense and indemnification from their carriers. In turn, Great American filed a declaratory judgment complaint against AIG, seeking a declaration that AIG had to contribute to the defense of Houlihan in the underlying suit.

In the DJ, AIG argued that it had no duty to defend under New York law because the alleged wrongful acts against Houlihan were not covered by AIG’s policy, as they occurred either (1) before Houlihan became an insured “Subsidiary” of HomeServices, or (2) after they became a subsidiary but were “Related Acts” that should have occurred before Houlihan became an insured “Subsidiary”.

Ultimately, on appeal, the issue was whether AIG had a duty to defend in the first instance. The Second Circuit found that it did. Citing seminal New York law, the Court noted that in New York an insurer’s duty to defend is “exceedingly broad” and that “an insurer will be called upon to provide a defense whenever the allegations of the complaint suggest a reasonable possibility of coverage”.

The Court went on to write: “Thus, an insurer may be required to defend under the contract even though it may not be required to pay once the litigation has run its course. A defendant has no obligation to defend only if it can be concluded as a matter of law that there is no possible factual or legal basis on which [the] defendant might eventually be held to be obligated to indemnify plaintiff under any provision of the insurance policies. If the allegations of the complaint are even potentially within the language of the insurance policy, there is a duty to defend.”

In this matter, since there was a reasonable possibility of coverage, the duty to defend was triggered. There was no way around that. Moreover, it was a highly factual analysis to determine the potential applicability of exclusions and definitions that AIG cited from its policy. Rather, AIG would have had to have shown that there was “no possible factual or legal basis” for the allegations to trigger coverage, which they could not do. Here, given disparate facts, and potential varying interpretations of the provisions and their applicability to the facts, that reasonable possibility of coverage was apparent. AIG’s arguments regarding other facts or public policy grounds were unavailing.

Finally, the Court wrote, “Under New York law, if any of the claims against the insured arguably arise from covered events, the insurer is required to defend the entire action. A defendant has no obligation to defend only if it can be concluded as a matter of law that there is no possible factual or legal basis on which the defendant might eventually be held to be obligated to indemnify the plaintiff under any provision of the insurance policies. If the allegations of the complaint are even potentially within the language of the insurance policy, there is a duty to defend.”


Brian D. Barnas

[email protected]

12/21/22       Belt v. Cincinnati Insurance Company
Supreme Court of Kentucky
Court Should Have Granted Directed Verdict Dismissing Bad Faith Failure to Settle Claim

The Kersnicks were the member-managers of K2 Catering, LLC.  They hosted an event at their home on August 6, 2011, during which they allowed their son Zachary to give rides to guests on a UTV they had purchased the day before.  Zachary crashed the UTV while giving a ride to Haley Belt and several other individuals.  Belt sustained permanent and disfiguring injuries.

The Kersnicks filed claims their CGL insurer CIC and their homeowners insurer EMC.  CIC investigated and sent a reservation of rights letter on October 12, 2011.  CIC filed a declaratory judgment action on December 1, 2011.  EMC asserted claims in that lawsuit that the accident was not covered under the homeowners policy.  Belt filed a lawsuit for her personal injuries in July 2012.  CIC sent a supplemental reservation of rights letter and provided a defense to the Kersnicks.  The two lawsuits were consolidated, and Belt filed an amended complaint alleging common law and statutory bad faith against CIC and EMC.  However, the coverage and bad faith claims were eventually bifurcated.

A bench trial was held in the coverage action.  The court found coverage under both the CIC and EMC policies.  Both insurers paid policy limits to Belt following the trial court’s ruling.  Belt then settled with K-2 and the Kersnicks, who assigned their bad faith claims to Belt.

The bad faith claims were tried before a jury.  CIC moved for a directed verdict on the grounds that Belt had failed to prove evidence from which a reasonable jury could conclude CIC acted in bad faith.  The trial court denied the motion.  The jury returned a verdict in Belt’s favor awarding over $4.5 million in total damages.  The Court of Appeals reversed, holding the trial court erred as a matter of law by failing to grant CIC a directed verdict.

The Supreme Court of Kentucky agreed with the Court of Appeals.  In Kentucky, an insured must prove three elements in order to prevail against an insurance company for alleged refusal in bad faith to pay the insured's claim: (1) the insurer must be obligated to pay the claim under the terms of the policy; (2) the insurer must lack a reasonable basis in law or fact for denying the claim; and (3) it must be shown that the insurer either knew there was no reasonable basis for denying the claim or acted with reckless disregard for whether such a basis existed.

The first element was satisfied in this case.  The trial court found that the accident was covered.  The Supreme Court of Kentucky concluded that the second and third elements were not met.  There was a dispute about whether the use of the UTV was related to K2’s business or whether it was personal use by the Kersnicks and their son individually.  CIC had obtained a coverage opinion and commenced a declaratory judgment based on factual issues in the case and an unsettled legal question about the use of potential  business property (the UTV) for a non-business purpose (rides at a birthday party).  Thus, the court concluded a reasonable juror could not conclude CIC lacked a reasonable basis for disputing coverage.

Belt also failed to provide evidence CIC acted with reckless disregard for whether a reasonable basis existed for denial of the claim. Kentucky courts have found intentional misconduct or reckless disregard in cases in where affirmative evidence showed that an insurer blatantly misrepresented policy provisions to the insured, used the claimant's financial struggles to leverage its bargaining position,  focused its investigation on evading paying the claim, or refused to settle a claim until the claimant released the insurer from liability arising from its misconduct.

Here there was no evidence of intentional misconduct.  The court rejected Belt’s argument that a mere delay in settlement constituted bad faith conduct.  Belt provided no evidence of improper motive in CIC's delay in payment of settlement.  CIC was also within its rights in filing a declaratory judgment action to determine whether there was coverage.  In Kentucky, seeking a declaratory judgment action does not preclude a bad faith claim, but when it is coupled with genuine questions of law and fact that make coverage fairly debatable, the delay in settlement caused by a DJ action does not expose the insurer to liability for bad faith.

Three justices dissented.  The dissenters would have held that Belt put forth evidence sufficient to prove that CIC possessed all the information necessary to make a coverage determination in the first two months of having the claim file, that CIC failed to reasonably investigate the claim, that CIC had no justification for its one settlement offer amount, that CIC filed a declaratory judgment action to force a lower settlement, and that CIC repeatedly misrepresented material information to the claimants


Lee S. Siegel

[email protected]

12/15/22       B&W Paving & Landscape v. Employers Mutual Casualty Co.
United States District Court, District of Connecticut
Extrinsic Evidence Does Not Have to Be Credible to Trigger Duty to Defend

United Illuminating, an energy company located in the greater New Haven community, hired Whiting Turner Construction as its general contractor for its new central facility. WT subcontracted with Cherry Hill Construction for site work underneath the parking lot and driveways, including installing base and subbase materials. B&W was subcontracted by WT to provide asphalt paving. UI sued WT for defective work and WT, in turn, sued its subcontractors including B&W. In the third-party complaint, WT alleged that B&W installed an insufficient quantity of asphalt and incompletely installed asphalt for the parking lots and driveways.

B&W tendered its defense to Employers, which denied coverage. Following an expert report opining that B&W’s defective asphalt allowed water intrusion damaging the substrate levels of the project, B&W asked Employers to reconsider, but it again denied coverage. This suit followed.

As a starting point, both sides agreed that defective construction work by the insured is only covered if it is alleged that it caused damage to other, non-defective property; there is no coverage for repairing or replacing the insured's defective work under a standard CGL policy. B&W asserted that the expert report opining that its work damaged other property was sufficient to trigger a duty to defend. Employers disputed the quality of the report and pointed to other reports from other experts finding that Cherry Hill’s negligence was the cause of the damage.

The court found Employer’s effort at line drawing between objective extrinsic facts and disputed evidence to be contrary to established duty to defend guideposts. There is no basis, in determining a duty to defend, to test the validity or credibility of the extrinsic evidence. “Here the relevant fact is not the truth of GZA's conclusion that defects in B&W's work caused damage to Cherry Hill's work but the fact that an expert was able to reach such a conclusion, thereby creating the possibility of coverage.” It is the possibility of coverage that triggers an insurer’s duty to defend.

The court went further, finding that the allegations in the third-party complaint also raised the possibility of coverage. The court found that Employer’s arguments missed the mark in understanding its defense obligations. “The fact that the underlying complaint does not specifically identify damage to Cherry Hill's non-defective work does not mean that such damage falls outside the scope of the complaint. Defendant's argument that for the duty to defend to be triggered, WT must have specifically named covered forms of damage in the underlying complaint misapprehends the basis for determining (sic) the duty to defend.”


12/12/22       New England Systems, Inc. v. Citizens Ins. Co. of Am.
United States District Court, District of Connecticut
“Actual Impairment” Includes the Forced Diversion of Resources From Ordinary Operations

New England Systems suffered a data breach and sought business interruption benefits from its insurer. Citizens denied the claim, asserting that the insured suffered no loss. NES sued for breach of contract and bad faith.

The Citizens policy included a Date Breach Coverage Form, with an aggregate sublimit of $250,000. The form included Cyber BI and EE. “[Defendant] will pay actual loss of “business income” and additional “extra expense” incurred by [Plaintiff] during the “period of restoration” directly resulting from a “data breach” which is first discovered during the “policy period” and which results in an actual impairment or denial of service of “business operations” during the “policy period”.” (Emphasis added.)

NES provides its clients with outsourced information technology support, strategy and consulting, and cybersecurity services. NES fixes printers, changes passwords, restores backups, fixes servers, performs virus scans, installs software patches, and assists with email, malware, and recoveries from ransomware attacks and viruses. NES suffered a data breach in June 2019, which it claims disrupted its operations resulting in indemnifiable business loss. Multiple clients contacted NES after noticing encrypted items on their servers. “The bad actor or actors were able to access some of Plaintiff's clients’ systems and send a virus and malware that encrypted the clients’ data.” The breach also encrypted NES’ own data on its Microsoft Dynamics accounting server. NES remediated the issues caused by the breach for itself and its clients on its own. NES asserts that it lost business income because it was unable to perform work for six of its clients following the data breach and lost service subscriptions.

Citizens moved for summary judgment, arguing that there was no evidence of “actual impairment”, pointing to increased net revenues in or about the time of the breach. The court rejected the motion, finding that a reasonable jury could find that NES suffered an actual impairment of its operations as a result of the breach. “To begin, the Court cannot conclude, as a matter of law, that Plaintiff did not suffer business interruption losses under the Form.” The court was required to construe the undefined term “actual impairment” and it could not conclude that, as a matter of law, it did not embrace NES’ alleged loss. It held that taking time away from revenue-generating operations to remedy it’s the impact of the breach on its clients presents an actual impairment.

The court, however, sided with the carrier and struck the bad faith cause of action. “None of the evidence Plaintiff references indicates that Defendant acted with a dishonest purpose. Applying Connecticut law, the Second Circuit has stated that “[a]llegations of a mere coverage dispute or negligence by an insurer in conducting an investigation will not state a claim for bad faith against an insurer.” Mazzarella v. Amica Mut. Ins. Co., 774 F. App'x 14, 17 (2d Cir. 2019). Moreover, a plaintiff “cannot recover for bad faith if the insurer denies a claim that is ‘fairly debatable,’ i.e., if the insurer had some arguably justifiable reason for refusing to pay or terminating the claim.” McCulloch v. Hartford Life & Acc. Ins. Co., 363 F. Supp. 2d 169, 177 (D. Conn. 2005), adhered to on reconsideration No. 3:01-CV-1115 (AHN), 2005 WL 8165602 (D. Conn. Sept. 29, 2005).”


Kyle A. Ruffner
[email protected]

12/13/22       Stoneledge at Lake Keowee Owners’ Ass’n v. Cin. Ins. Co.
United States Court of Appeals for the Fourth Circuit
Court Grants Insured’s Motion for Summary Judgment due to Insurer’s Failure to Reserve its Rights to Litigate Coverage Issues Regarding Underlying Construction Defect Lawsuit

Stoneledge, a homeowner’s association, managed a community of 80 townhomes. Phase I consisted of the first 37 units and Phase II consisted of the remaining units, built by Marick Homes and Rick Thoennes. Stoneledge sued Marick and Thoennes, among other defendants, alleging construction defects in the townhomes that resulted in water intrusion and other physical damage.

Marick and Thoennes had commercial general liability policies through Builders Mutual from 2004-2007 and Cincinnati from 2008-2012. After Marick notified the insurers of the underlying action, Builders Mutual and Cincinnati sent Marick reservation of rights letters. The underlying construction defect action proceeded in two phases with two separate trials. The court issued judgments in the first trial against both Marick and Thoennes for breach of warranty, breach of fiduciary duty, and negligence. After the Phase I trial, Stoneledge brought a declaratory judgment action against Cincinnati seeking coverage for the judgment. Stoneledge later amended its complaint adding Builders Mutual as a defendant and seeking coverage for damages for the settlement agreement in the Phase II action. The insurer appealed after the District court granted Stoneledge’s motion for summary judgment on the ground that the insurers failed to reserve the right to contest coverage.

On appeal, the court explained that the Supreme Court of South Carolina’s decision in Harleysville Group Insurance v. Heritage Communities, 420 S.C. 321 (S.C. 2017) controlled. In that case, the court held that an insured must be provided sufficient information to understand the reasons the insurer believes the policy does not provide coverage, and that generic denials of coverage are not sufficient. Further, the Harleysville court found the reservation of rights letters at issue insufficient because the insurer merely identified the policy numbers and policy periods for policies that potentially provided coverage and failed to set forth its coverage defenses. At the very least, the Harleysville court held the insurer must discuss its position and explain its reasons for potentially denying coverage.

The court agreed with the District Court that if the reservation of rights letters were deficient as to Phase I, they were also deficient as to Phase II. The insurers received notice of the underlying action in 2009 and of the amended complaint in 2012. This provided them with ample opportunity to set forth an adequate reservation of rights that would apply to both Phase’s damages. The letters in this case, as in Harleysville, failed to inform the insureds that the insures intended to litigate coverage issues and did not apprise the insureds of potential conflicts of interest. Builders Mutual’s letters merely referred the insured to certain policy exclusions and summarized the general nature of those exclusions. Cincinnati’s letter listed certain policy exclusions and noted that coverage may be limited by several other exclusions and endorsements. The letter continued that it is doubtful that the claim alleged an occurrence or that the claim alleges property damage within the policy definition. However, the letter was devoid of any explanation of why Cincinnati found it doubtful that these was an occurrence of property damage under the policy. Therefore, the court held that both letters failed to meet the Harleysville standard for a sufficient reservation of rights.

Therefore, the court found no reversible error in the District Court’s application of Harleysville to the reservation of rights letters in this case and affirmed the lower court ruling granting Stoneledge’s motion for summary judgment


Ryan P. Maxwell
[email protected]

12/19/22      Legislative List      
Workers’ Compensation Bills Delivered to Governor
New York State Executive

Package Of Workers’ Compensation Bills Delivered to the Governor for Consideration

On Monday, the New York State Legislature delivered several bills to the Governor for consideration that would amend the workers’ compensation scheme in New York in various ways. Each of the four bills are linked below, with discussions of their potential impact. Spoiler alert—some are more impactful than others.

  • S9149 – Justice for Injured Workers Act

    The most impactful of all four bills delivered is the Justice for Injured Workers Act, which provides that determinations by the workers' compensation board shall not be given collateral estoppel effect in any other action or proceeding arising out of the same occurrence, other than the determination of the existence of an employer employee relationship. According to the Sponsor Memorandum, this bill purports to “correct recent court decisions that granted preclusive effect to decisions of the Workers' Compensation Board (WCB), barring injured workers from seeking justice through the courts because of an administrative decision of the WCB.”

    Specifically, the Sponsor Memorandum notes that

    “In 2013, the New York Court of Appeals held that the collateral estoppel doctrine was being used to deny an injured worker his right to a fair trial. This ruling, in Auqui v Seven Thirty One Ltd.  Partnership, 22 NY3d 246, 255-57 (2013), reinforced the concept that the party responsible for causing an injured worker's injuries remains obligated to pay for lost wages and medical expenses.

    Unfortunately, Auqui left open the possibility that courts could apply the collateral estoppel doctrine to a prior Worker's Compensation decision and deny injured workers the right to have a jury rule on their claims.”

Maxwell’s Minute: This amendment has potentially far-reaching implications regarding the purpose of the workers’ compensation system generally, that go well beyond the holding in Auqui. Specifically, although workers’ compensation is supposed to be faultless, it requires, at minimum, an administrative finding that there was (1) an employment relationship between the claimant and the employer and (2) that the employee was injured because of a work-related incident, in order to trigger benefits. The WCB is charged with making factual determinations on these issues and to the extent the WCB finds that an injury did not occur because of a work-related incident, the claimant should be bound by that determination. There is no logical reason to exclude one factual finding from collateral estoppel effect (employment relationship), but not the other (work related accident). That is exactly what this bill does.

The Court of Appeals in Auqui was concerned merely with the WCB’s limited scope inquiry into available benefits versus the broad swath of damages available to a negligence plaintiff. The Court of Appeals in Auqui noted that “this holding should not be read to impair the general rule that the determinations of administrative agencies are entitled to collateral estoppel effect (citations omitted). That rule is well-settled and should continue to be applied where, unlike here, there is identity of issue between the prior administrative proceeding and the subsequent litigation.” Where the Court of Appeals in Auqui found that the WCB did not have identity of issue, since the jury in a negligence case “is charged with determining the broader question of plaintiff's total loss, as opposed to the Workers' Compensation Board's narrower focus on the employee's ability to work.” The Court of Appeals carefully distinguished between the WCB’s award of benefits to  “substitute for an injured employee's wages” due to an “[in]ability to perform work,” and a negligence lawsuit which seeks “to make an injured party whole for the enduring consequences of his or her injury—including, as relevant here, lost income and future medical expenses.” In other words, the WCB does not determine “necessarily” “the larger question of the impact of the injury over the course of plaintiff's lifetime,” which is served in a negligence lawsuit.

Certainly, the WCB’s power as an administrative agency should be limited to those matters that it necessarily decides under New York’s Workers’ Compensation framework. This amendment goes well beyond that, rendering the WCB’s necessary factual determinations aside from an employment relationship toothless.

This bill would amend the Workers' Compensation Law to provide that benefits for permanent or temporary partial disability, or permanent or temporary total disability, shall not be less than one-fifth of the statewide average weekly wage (SAWW). If the injured worker receives a wage that is equal to or less than one-fifth of the SAWW, then their benefit would be their actual earnings.

Currently, the Workers' Compensation Law provides a minimum weekly benefit of $150. For 2021, the New York State Department of Labor's Research and Statistics Division computed the New York State Average Weekly Wage (NYSAWW) to be $1,688.19. Accordingly, this proposed amendment would increase the minimum weekly benefit from $150 to $337.64.

Maxwell’s Minute: The feasibility of this increase requires the involvement of those less mathematically and economically challenged than I. But increasing this minimum weekly benefit by more than double would appear to have potentially large-scale implications on the costs associated with providing workers with such benefits. In particular, I’m looking directly at you, state government and local municipalities (*eyes emoji*). Again, I have not reviewed the numbers myself, but feel that it would be best for the Governor to take a good hard look at the budgetary implications of this increase, in light of recent vetoes issued solely on the grounds of budgetary implications in a post-pandemic era. The coffers appear tight at the moment.

  • S6373B – Mental Injury From Extraordinary Work-Related Stress

    This bill Expands to all workers the ability to receive PTSD coverage under NYS Workers' Compensation Coverage identified work-related stress.

    Currently, Workers’ Compensation law §10(3)(b) provides:

    (b) Where a police officer or firefighter subject to section thirty of this article, or emergency medical technician, paramedic, or other person certified to provide medical care in emergencies, or emergency dispatcher files a claim for mental injury premised upon extraordinary work-related stress incurred in a work-related emergency, the board may not disallow the claim, upon a factual finding that the stress was not greater than that which usually occurs in the normal work environment.

This bill would remove any reference to first responders and emergency medical personnel, replacing them with “worker,” and remove “work-related emergency” from the equation in favor of “at work”. Specifically, the new provision would be amended to read as follows:

(b) Where a worker files a claim for mental injury premised upon extraordinary work-related stress incurred at work, the board may not disallow the claim, upon a factual finding that the stress was not greater than that which usually occurs in the normal work environment.

Maxwell’s Minute: As a society, we certainly have come to acknowledge the existence of mental and emotional injuries. Work is stressful at times and if the Legislature wishes to expand the scope of those workers that can potentially obtain benefits for extraordinary work-related stress, that’s its prerogative, like Bobby Brown used to say in his prime. What is unclear to me, however, is how removing “work-related emergency” makes sense under the circumstances. Under this amended provision, the WCB would be required to determine that mental injury is “premised upon extraordinary work-related stress incurred at work” but may not disallow a claim by finding “that the stress was not greater than that which usually occurs in the normal work environment.” It would appear to me that, by removing “work-related emergency,” certain occupations automatically lend themselves to claims of “mental injury premised upon extraordinary work-related stress incurred” merely “at work”.

Again, this likely increases the pool of claims and benefits sought, which will increase the costs associated with coverage for both private and public sector employers. The Governor must understand the stress public employees face and the increased costs associated with procuring coverage for even the threat of those claims.

  • S768 – Defining Temporary Total Disability

    This bill would add a definition of temporary total disability within Section 15 of the Workers’ Compensation Law as “the injured employee's inability to perform his or her pre-injury employment duties or any modified employment offered by the employer that is consistent with the employee's disability.”

    Maxwell’s Minute: I like defined terms. However, it would have made some logical sense to include certain qualifying words like “temporarily,” “complete,” and/or “total” or some synonym thereof in the definition of a term like “temporary total disability”. Now, I would assume that the term speaks for itself on these issues, in a way, but you know what they say about assuming things.


Patricia A. Rauh

[email protected]

12/14/22       North American Co. for Life and Health Ins. v. Caldwell, et al.
United States Court of Appeals, Eleventh Circuit

Life Insurance Policy Exclusion for ‘Suicide’ Shall be Broadly Construed to Include ‘Suicide by Cop’

North American Company for Life and Health Insurance (“North American”) issued two life insurance policies to Justin Caldwell (“Caldwell”) – the first policy was issued November 9, 2018, and named an irrevocable trust managed by trustee Michael Harner (“Harner”) as the beneficiary.  The second policy was issued on July 9, 2020, and named Caldwell’s wife, Michelle, as the beneficiary. Each policy provided a $1 million death benefit.  Both policies contained an essentially identical clause that excluded suicide from coverage under the policy.  The clause stated:

“SUICIDE – If the Insured commits suicide, while sane or insane, within two years from the Policy Date, Our liability is limited to an amount equal to the total premiums paid.”

In October 2020, Caldwell began showing signs of suicidal tendencies after learning his wife wanted a divorce.  On October 8, 2020, Michelle Caldwell called 911 to report that Caldwell was suicidal and that he was in possession of a rifle, a shotgun, and another firearm that he was in the process of loading.  Police officers attempted to de-escalate the situation but were forced to fire non-lethal rubber bullets to deter Caldwell.  However, Caldwell proceeded to reach into his truck, grab a rifle, and point it at the officers, at which point the police shot and killed him.

Following Caldwell’s death, a claim was made for the life insurance proceeds from both policies that had been issued to him.  In response, North American filed a declaratory judgment action against the beneficiaries claiming that the “$2 million cumulative death benefits under the Policies are not payable because [Caldwell] committed suicide.”  The beneficiaries argued that the term “suicide” in the policies would not include “suicide by cop”, which is a term that refers to a justifiable homicide.  The district court agreed that the plain meaning of the term “suicide” only encompasses the act of killing oneself – not the killing of a person by another.  North American appealed the district court’s ruling.

The Eleventh Circuit acknowledged that no other American court had ever decided this particular question in the past.  The beneficiaries of the insurance policies argue that the term “suicide” is only when a person dies by his own hand, whereas North American favored a broader interpretation that would include a person’s act when he intends to die and achieves that end.

Ultimately, the Eleventh Circuit agreed with North American.  They ruled that a death is a suicide when a person intentionally causes his own death.  The requirements for a suicide are: (1) a person’s intent to die; (2) his voluntary act on that intent; and (3) his resultant death.  The specific method of achieving that result is irrelevant. Additionally, the broader definition of suicide is the most consistent with the intent of the parties to the life insurance policies.  Therefore, the question in determining whether Caldwell committed suicide as understood by the parties when they contracted for life insurance is whether he planned to end his own life when he provoked the police to kill him.  Based on the facts of the case, the Court must assume that he did.  Accordingly, the Eleventh Circuit vacated the judgment against North American and remanded the case for further proceedings.


Scott D. Storm
[email protected]


12/15/22       Tarver v. Amica Mutual Ins. Co.
New York Supreme Court, Erie County
It is the Insured's Burden to Prove the Alleged Theft Occurred within the Policy Period.

I had the privilege of winning a case for a client in which the claim had been denied, among other grounds, based upon fraud. The plaintiff claimed that she last saw her car at 11:00 p.m. and discovered it missing the next morning at 4:00 a.m. Unfortunately for her, the policy had expired at 12:01 a.m. The Court dismissed the action as the plaintiff's assertion that the car allegedly could have been stolen between 11:00 p.m. and 12:01 a.m. was based on supposition and insufficient to overcome the insurer's motion for summary judgment. It is the insured's burden to prove the loss occurred during the policy period.

In addition, the Court also ruled:

  • Insurance Law Sec. 3420(d)(2) requiring insurers to issue coverage denials within a reasonable amount of time does not apply to 1st-party property claims (only 3rd-party liability claims involving death or bodily injury). Nevertheless, the insurer's 4-month investigation was prompt and not unreasonable.

  • Plaintiff failed to demonstrate how additional discovery might reveal material facts within the insurer's exclusive knowledge.

  • The insurer issued a reservation of rights and, therefore, no waiver or estoppel may be inferred.

  • Plaintiff's claim for attorneys' fees was dismissed as not recoverable in N.Y. as a matter of law.


Katherine A. Fleming
[email protected]

12/12/22       Neuro-Communication Servs., Inc. v. Cincinnati Ins. Co.
Supreme Court of Ohio
Direct Physical Loss or Damage to Property Does Not Arise from (1) The General Presence of Covid in the Community, (2) The Presence of Covid on Surfaces at a Premises, or (3) The Presence on a Premises of a Person

On March 9, 2020, the governor of Ohio declared a state of emergency due to the COVID-19 pandemic and ordered business shutdowns. Neuro-Communication Services, Inc. (“Neuro”) owns and operates an audiology practice in northeast Ohio under the name Hearing Innovations. Neuro provides hearing and balance services to its patients, many of whom are elderly. Neuro holds an “all-risk” commercial-property insurance policy issued by Cincinnati Insurance Company, Cincinnati Casualty Company, and Cincinnati Indemnity Company (collectively, “Cincinnati”). Neuro submitted a claim for lost revenue due to the governor’s shutdown orders, but Cincinnati denied Neuro’s claim because the claim did not involve direct physical loss to property caused by a covered cause of loss.

Neuro then filed suit in the United States District Court for the Northern District of Ohio. Neuro argued in the underlying litigation that its commercial insurance policy entitles it to recover income it lost after it was forced to cease almost all operations for the first several weeks of the COVID-19 pandemic. Overall, the complaint alleged that the governor’s Shutdown Orders caused Neuro to suffer a direct physical loss to its property by requiring it to temporarily suspend most of its operations and lose access to its property for business purposes.

The Northern District of Ohio certified the following question to the Ohio Supreme Court:

Does the general presence in the community, or on surfaces at a premises, of the novel coronavirus known as SARS-CoV-2, constitute direct physical loss or damage to property; or does the presence on a premises of a person infected with COVID-19 constitute direct physical loss or damage to property at that premises?

Cincinnati argued that the policy’s definition of the term “loss” as “accidental physical loss or accidental physical damage” necessarily requires that there be some physical damage to Neuro’s property to trigger coverage. Neuro disagreed and argued that the term “loss” includes a loss of use. The Supreme Court agreed with Cincinnati that there must be loss or damage to Covered Property that is physical in nature for coverage to be provided. Such loss or damage does not include a loss of the ability to use Covered Property for business purposes. Further, Neuro’s premises were not wholly uninhabitable. Instead, they were unsafe only to the extent that they served as an indoor space in which people could gather and Covid could be transmitted. Therefore, Neuro’s loss of the use of its premises for business purposes during the shutdown was not akin to a total loss of access, so any potential exception to the rule that direct loss requires some physical loss or damage to covered property did not apply.

The court noted that its conclusion was consistent with the clear trend in other jurisdictions. Many other state and federal courts considering insurance claims for business losses due to Covid and related shutdown orders have concluded that the mere loss of use of a premises does not constitute a direct physical loss.


Evan D. Gestwick – Admission Pending
[email protected]

12/15/2022   Hereford Ins. Co. v. Advanced Ortho & Joint Preserve, P.C.
Inconsistent Statements Among Parties May Serve As The Foundation For Insurer’s Belief That Claimant’s Injuries Did Not Arise From Covered Accident

The claimant and the driver of a livery vehicle got into a heated exchange, the reasons for which are still up for debate. According to the claimant, the livery driver fled the scene following the altercation, forgetting to close his passenger side door, which struck the claimant in the leg and caused injuries. The claimant alleged that he received medical treatment from various providers as a result of this supposed incident, who then submitted their expenses to Hereford, the insurer of the livery vehicle, for payment.

Hereford then contacted the driver of the livery vehicle to ascertain his version of the events. According to the driver, the claimant had first reversed into his front bumper, which started the verbal altercation. However, the driver claims that he never struck the claimant with any part of his car.

Justifiably uncertain as to the true version of events, Hereford asked the claimant to submit to an IME and an EUO. During the EUO, the claimant was unable to recall details about the purported medical treatment he incurred because of the alleged accident. The claimant also never furnished a signed copy of his EUO transcript and failed to submit to his IME, in violation of the policy.

The New York State Supreme Court, County of Kings, cited the general rule when deciding whether to grant judgment in favor of Hereford: an insurer may assert a lack of coverage defense where it has a founded belief that the claimant’s alleged injuries did not arise from any covered accident. In applying this rule to the present case, the Court held that Hereford had met its burden. Specifically, the Court held the fact that the claimant and the livery driver each provided different accounts of the accident, and that the claimant was unable to recall simple details from the medical treatment he allegedly received, as dispositive. Additionally, the Court noted that the claimant’s failure to submit to his IME and failure to furnish a signed copy of his EUO transcript were breaches of policy conditions which are treated as an independent bar to coverage.


12/15/2022   Hereford Ins. Co. v. PDA NY Chiropractic P.C.
Affidavit From Claims Professional May Also Serve As The Foundation For Insurer’s Belief That Claimant’s Injuries Did Not Arise From Covered Accident

No verbal altercation this time. Instead, the claimant was a pedestrian when she was hit by a vehicle that reversed into her, causing her to injure her arm and her hip. The insured vehicle allegedly fled the scene.

During her EUO, the claimant states that she was taken from the scene by ambulance to the hospital. However, the claims professional submitted an affidavit, based on personal knowledge, that the claimant first went to the police station to report the incident, and then went to the hospital from there. The driver of the vehicle that fled the scene also submitted an affidavit stating that he was not even in the location at the time, nor did he hit anyone on the day in question. The New York State Supreme Court, County of Kings, held that this affidavit was enough for Hereford to meet its burden in proving that its belief that the claimant’s injuries did not arise from any covered injuries was founded.

The two above cases illustrate the multitude of ways in which an insurer may prove the foundation of its belief that the claimant’s claims do not arise from a covered incident: in the first case, we saw that a showing of inconsistencies in the insured’s EUO testimony and/or a written statement that contradicts the claimant’s narrative are each sufficient to make this showing. In this case, we see that an affidavit from the claims professional assigned to handle the matter will also suffice.


ON the ROAD with O’SHEA
Ryan P. O’Shea (Admission Pending)
[email protected]

12/07/22       Lancer Insurance Co. v. Zair Fishkin, etc.
Appellate Division, Second Department
There Must Be Some Opposition to Establish a Reasonable Excuse To Prevent A Default Judgment

Plaintiff Lancer is the no-fault carrier for defendant Fishkin. After an auto accident, Lancer denied Fishkin’s claims for medical reimbursement for medical treatment. Fishkin then pursued arbitration and was awarded $10,029.73. Lancer sought review of the award, but the award was confirmed by a master arbitrator. Lancer then brought an action pursuant to New York Insurance Law § 5106(c) for a de novo determination of Fishkin’s claim for no-fault benefits. The basis of Lancer’s argument was that the medical services were not necessary and were not related to the auto accident.

Fishkin never responded to the Complaint. Lancer then moved for leave to enter a default judgment. Fishkin failed to respond to the motion, however, he moved for change of venue two months later based on the convenience of material witnesses. Lancer opposed the motion, arguing Fishkin’s motion was untimely and unsupported on the merits. The Nassau County Supreme Court denied both motions. Lancer and Fishkin filed cross-appeals.

The Second Department found for Lancer. On appeal Lancer presented the evidence of proof of service, an attorney affirmation attesting to Fishkin’s failure to answer or appear, a copy of the verified complaint, its expert’s affirmed peer review, and the master arbitrator’s award affirming the original $10,029.73 awarded to Fishkin. Unsurprisingly, the Second Department found Fishkin’s failure to respond or appear meant he failed to meet his burden of establishing a reasonable excuse. Appropriately, the court found Lancer’s motion for leave to enter a default judgment should have been granted.


12/07/22       In the Matter of GEICO Gen. Ins. Co., etc. v. Wesco Ins. Co.
Insurer Cannot Escape Payment of No-Fault Benefits Where Rental Agreement Attempted to Relieve Insured of Providing Mandatory Personal Injury Protection Appellate Division, Second Department

Plaintiff GEICO provided no-fault benefits to its insured Biru Saha. Defendant Wesco insured New Car, a motor vehicle rental company. Mr. Saha entered into a rental agreement with New Car to provide a loaner. Unfortunately, Mr. Saha was injured in an accident while operating the New Car loaner. GEICO provided Mr. Saha with no-fault benefits. GEICO then appropriately sought recovery of the benefits from Wesco in a compulsory arbitration proceeding. However, the arbitrator determined GEICO was liable for the paid benefits.

Subsequently, GEICO filed an action to vacate the arbitration award. The Supreme Court denied the petition and dismissed the claim. Thereafter, GEICO filed this appeal with the Second Department.

The court found the arbitrator’s determination was arbitrary and capricious. The reasoning of the court looked to 11 NYCRR 65’s mandatory obligation of auto insurers to provide personal injury protection (“PIP”) coverage. It found that the rental agreement between Mr. Saha and New Car seeking to relieve Wesco of providing the PIP coverage was contrary to the statute, which expressly prohibits any release, express or implied, from mandatory or optional PIP benefits. For these reasons, the Second Department held the Supreme Court should have vacated the arbitration award.


Heather A. Sanderson
[email protected]

12/09/22       Vale Canada Limited v. Royal & Sun Alliance Ins. Co. of CA
2022 ONCA 862, Ontario Court of Appeal
Unless There is a Choice of Law Clause Specifying a Jurisdiction Other than Ontario, the Ontario Courts have Jurisdiction to Hear Coverage Disputes under Policies that were Brokered and Issued to Insureds at an Address Outside of Ontario, Where the Issuing Insurers are Registered and Licensed to Transact Business in Ontario; the Insured Does Business in Ontario; and, the Policies Relate Largely, but not Exclusively to the Insured’s Operations in Ontario.

For the last 80 years, International Nickel Company of Canada Limited, later re-named Inco Limited, was the world’s leading producer of nickel. Throughout its existence, Inco has been headquartered in Toronto, Ontario with satellite offices throughout the world.  In a deal that took place in 2007, Inco was purchased by the Brazilian company, Vale S.A. resulting in a change of name to Vale Canada Limited.  In May 2022 Vale S.A. signed an agreement with Tesla to supply Tesla with Canadian nickel for EV battery production.

Over the past 20-30 years, Inco/Vale Canada incurred environmental remediation costs for damage caused by its operations in relation at 26 sites around the world. Of those sites, 22 are in Canada with 19 being in Ontario. It also incurred remediation costs at sites operated through subsidiaries in Japan, Indonesia, New Jersey, and Wales.

Over several decades, 24 separate primary and excess insurers issued a total of 92 policies to Inco/Vale to cover the worldwide environmental liabilities in issue. Inco/Vale initiated claims for coverage under all 92 policies for the remediation costs incurred at its worldwide sites.

The claims advanced by Inco/Vale and its subsidiaries under the insurance policies relate predominantly, but not exclusively, to environmental expenditures incurred in Ontario that were generated by its Ontario operations. All of Vale Canada’s information and documents about all the insurance claims for environmental expenditures is in Ontario. Witnesses about the expenditure claims are in Ontario (except for four people in Manitoba and one person in New Jersey).

Vale sought to negotiate its claim for insurance coverage. The negotiations broke down, and Travelers Casualty & Surety Company brought an action in the Supreme Court, New York County, New York against Vale, and the many insurers with respect to whether it was obligated to indemnify Vale.

Vale has an office in New York. One or more policies were brokered and underwritten in New York and issued to Vale Canada at its New York address. Notice of claims on those policies was to be given in New York.[1]

Soon after, Inco/Vale and Royal & Sun Alliance Insurance Company of Canada (RSA), one of Inco/Vale’s primary insurers, issued an identical action in Ontario. Vale and RSA took the position that the action they commenced should continue in Ontario. Travelers and several other insurers took the position that the Ontario action either cannot, or should not, proceed.  Each side accused the other of gamesmanship and forum shopping.

Inco/Vale and RSA brought an application within the Ontario action to have Ontario declared the appropriate forum to hear the coverage action. The motions court agreed with Inco/Vale and RSA that Ontario was the appropriate forum. In a decision released December 9, 2022, the Ontario Court of Appeal affirmed the decision of the Motions Court.  The Court of Appeal stated:

A comprehensive general liability insurer, underwriting primary or excess insurance coverage for Ontario risks, connects itself to Ontario for jurisdictional purposes and thus commits itself to defending, in Ontario, claims arising out of those risks. No other outcome is commercially reasonable in the operation of the international insurance market and consistent with the principles of comity. There is no place that enjoys universal jurisdiction.

The common law principles of comity underpin the doctrines of jurisdiction simpliciter and forum non conveniens and stand against forum shopping and the notion that the race should go to the swiftest, for good reason, as we will explain. These principles ensure that Vale, an Ontario-based international miner, can sue its primary, comprehensive general liability insurer RSA, an Ontario-based insurer, in respect of environmental liabilities largely incurred by Vale for polluting Ontario properties, in Ontario’s Superior Court of Justice. These principles also entail the conclusion that Vale and RSA can sue the insurers who provided additional or excess insurance, largely follow-form, for the same type of risks, significantly but not exclusively tied to Ontario, in the same court.

The interesting finding in this case is that Ontario is the appropriate jurisdiction for the coverage disputes implicating the follow form excess insurers. The follow-form policies did not contain a choice of law / jurisdiction clause meaning that the common law determines the issue of what is the appropriate jurisdiction to hear coverage disputes.  The motion court and the Court of Appeal pointed out that the insurers were licensed and registered to undertake insurance in Ontario; the policies were issued to an insured doing business in Ontario and that was sufficient connection to Ontario for the Ontario courts to assume jurisdiction.   One of the insurers argued that it was not licensed to undertake insurance in Ontario.

 The Court held that the record before it did not contain that evidence but that even if it did, that insurer would have had a reasonable expectation at the time the policy was issued that it would be acted upon in Ontario and therefore it was subject to the jurisdiction of the Ontario courts.

In the meantime, Vale and RSA applied in the New York Courts to have the New York action commenced by Travelers dismissed on the basis that the Ontario courts have the jurisdiction to hear the coverage disputes. On May 10, 2022, their application was denied, and the New York action was allowed to continue. That ruling is under appeal and will be heard shortly.

[1]             This information is mentioned in the Ontario proceedings and specifically referred to in Travelers Cas. & Sur. Co. v. Vale Can. Ltd., unpublished opinion, Borrok, J., May 10, 2022

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