Coverage Pointers - Volume XXV No. 11

Volume XXV, No. 11 (No. 658)
Friday, November 10, 2023
A Biweekly Electronic Newsletter

 

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

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

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

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

 

Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

Greetings from New York City, where I’m attending the Federation of Defense & Corporate Counsel’s Insurance Industry Institute.  I participated in a panel on the challenges on dealing with old and often forgotten insurance policies, a real problem for insurers and policyholders in Child Victims Act, asbestos, and other long-tail claims.  Tonight, we’ll be seeing the Book of Mormon, here on Broadway.

 

Hurwitz Fine is Pleased to be Among the Best

Best Lawyers^® has announced the release of the 2024 Best Law Firms^® rankings. Hurwitz Fine P.C. is proud to have Buffalo Metropolitan Tier One rankings in nine practice areas. Tier One practice areas include:

• Commercial Litigation
• Corporate Law
• Health Care Law
• Insurance Law
• Litigation – Insurance
• Mediation
• Personal Injury Litigation – Defendants
• Tax Law
• Trusts & Estates Law

Hurwitz Fine also received Tier Two honors in Elder Law, Litigation – Labor & Employment, Litigation – Municipal, Mergers & Acquisitions Law and Product Liability Litigation – Defendants. Tier Three honors include Employment Law – Management.  The 2024 rankings are based on Best Law Firms’ proven methodology that relies on qualitative and quantitative data on legal skillset, achievements and client successes collected through a submission process managed by Best Lawyers.

The 2024 rankings, which are distributed to more than 30,000 C-Suite and in-house counsel through our standalone publication, were evaluated from the largest participation pool to date, which incorporate more than 97,000 client submissions, more than 2.8 million Best Law Firms votes on ballots and more than 13.7 million evaluations of more than 23,000 firms. The rankings highlight a unique combination of high-quality law practices and the full breadth of legal expertise that has always been differentiated by the credibility and transparent rankings process developed by Best Lawyers.

The 2024 Best Law Firms rankings can be accessed at www.bestlawfirms.com.

 

Jody Briandi honored by the Amherst Chamber of Commerce as the “2023 Woman of Distinction”

Hurwitz Fine President/Managing Partner, Jody Briandi, was honored by the Amherst Chamber of Commerce as the “2023 Woman of Distinction” at their annual “The Event - Celebrating Business Excellence.” This award honors a female professional who has excelled in her field and continues to provide the Western New York region with leadership, professionalism, and community engagement.

 

Adams Shines!

Please join me in congratulating David Adams, Chair of Hurwitz Fine's Labor Law Team, who was just informed that he is this year's Western New York Defense Trial Lawyer Association Lawyer of the Year!!! Well deserved!

 

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.

 

Newsletters:      

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

• 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):

Lots of congratulations for lots of HF lawyers this week.  We give a particular shout out to our own David Adams for being recognized as the lawyer of the year for our local civil defense association.  David has been a tireless supporter of the group, frequently offering his time and expertise as a speaker at CLE events and just as often encouraging others to get involved.  Kudos to him for this well-deserved recognition.

On the property front, we take a moment to highlight the Second Department’s decision in the Multani case.  For over a decade, courts from around the State have recognized that coverage will be lost if the policy holder does not actually reside at the dwelling purportedly covered.  In Multani, the Appellate Division also notes that the dwelling, as constructed/configured, has to meet the definition of residence premises.  In that case, the dwelling was built to provide up to five different residences.  That was beyond the scope of the definition, and coverage was lost as a result. 

That’s it for this week. See you in two more.

 

Steve
Steven E. Peiper
[email protected]

 

German Money Approaches Worthlessness – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
10 Nov 1923

FREE

10,000
Genuine
GERMAN MARKS

 

With every fifteen cent cash purchase during November

R. J. Reidenberg Co.
309 W. Chippewa at Pearl.
Main, Cor. Chippewa—Rubins
Ellicott Square Court.
Chamber of Commerce
Lobby.

____________________

 

Quality-Service-Value

 

EDITOR’S NOTE:  In 1923, at the most fevered moment of the German hyperinflation, the exchange rate between the dollar and the Mark was one trillion Marks to one dollar, and a wheelbarrow full of money would not even buy a newspaper. Most Germans were taken by surprise by the financial tornado.

 

Wilewicz’ Wide-World of Coverage:    

Traversing the Via Appia. Check back next time for the latest.

Fino alla prossima volta,

 

Agnes
Agnes A. Wilewicz
[email protected]

 

Racism and Anti-Semitism – 100 Years Ago:

The Sacramento Bee
Sacramento, California
10 Nov 1923

 

KLAN LECTURER SAYS AMERICAN PRESS TOOL OF POPE

 

Classes Knights Of Columbus, Jews, Italians, Negroes And Bootleggers As One

 

          KLAMATH (Ore.), Nov. 10.—That news gather associations and newspapers in general are controlled by the Pope at Rose and Knights of Columbus, Jews, Italians, negroes, and bootleggers are as one was one declaration here last night by A. V. Allison, Ku Klux Klan lecturer, at a public meeting.

          The speaker became so warm from his heated denunciation that he shed his red robe of the cyclops.

          He denunciation of the press was followed by a plea for subscriptions to a Klan paper.

Labor Federation Scored.

          The American Federation of Labor, which, at the Portland convention went on record as opposed to the Klan, also is a tool of the pope, said Allison.

          Six Klansmen in full regalia accompanied Allison.  One acted a chairman, two were ushers and one of these was a subscription agent for the Klan paper.  Three sat before the platform and led the applause. 

 

Barnas on Bad Faith:

It has apparently been a busy two weeks in bad faith litigation, as I have two high court cases for your review this issue: one from Florida and one from Ohio.  The Florida case considers whether a SUM bad faith settlement was a collateral source and concluded it was not.  In Ohio, the court concluded that the choice of law analysis for tort claims applied to a bad faith claim.  Be sure also to take a look at Steve’s column for a Second Department case where the court dismissed a bad faith and General Business Law Section 349 claim.

 

Brian
Brian D. Barnas
[email protected]

 

Anti-Semitism – 100 Years Ago:

The La Crosse Tribune
La Crosse, Wisconsin
10 Nov 1923

 

YEMENITE JEWS COMPLAIN
BRIDES ARE KIDNAPPED

 

          JERUSALEM.—The plight of the Jews of the Yemen, in southwestern Arabia, is graphically described in appeals received by their kinsmen here, in which the former urge that greater facilities be given for the immigration into Palestine of Jews from Yemen to escape persecution at the hands of the natives.  Kidnapping of Jewish brides, torture of aged men and women, and the compulsory conversion of Jews to Mohammedanism are among the grievance enumerated in the communications from the Yemenite Jews. 

 

Lee’s Connecticut Chronicles:

Welcome back to me. It’s been a whirlwind these past few editions. As Dan revealed, I got married recently to the most wonderful woman in the world. Thank you to so many of you that passed along your well wishes and congratulations.  In between business trips, attending to our four college-aged kids, we went on a mini honeymoon, back to my alma mater, Indiana University, to watch Indiana take on my wife’s alma mater, Wisconsin, in a battle for the basement of the Big 10. It was a great weekend, the weather was phenomenal, as we continuously stripped off protective layers of clothing. And the game came down to the last play, with the hometown Hoosiers holding off the Badgers. A real honeymoon is set for early January, on a quiet beach in Mexico.

As for the Connecticut courts, well, it seems that they have been having a bit of a siesta as well, with slim pickings on the insurance law front. Today we report out on a bad faith trial victory for a carrier and a case that reminds us of the bases for vacating an arbitration.

Keep keeping safe.

 

Lee
Lee S. Siegel
[email protected]

 

The Quest for a Jewish Homeland – 100 Years Ago:

The Hutchinson News
Hutchinson, Kansas
10 Nov 1923

JEWISH HOMELAND IN PALESTINE, GOAL

Gentile Wife of Jewish Author
Laude the Plan for New Zion.

 

          New York, Nov. 10.—Mrs. Israel Zangwill, the Gentile wife of the famous Jewish author and leader, believes in her husband’s views regarding the establishment of the Jewish homeland in Palestine.  She arrived recently to join him during the remainder of his stay in the United States.

          She says:  “I am fully in sympathy with the program for the establishment of a Jewish homeland.  In fact, one of the first things which interested me in Mr. Zangwill twenty-five years ago was his keen interest in the Zionist movement.  If there really was a Jewish country I think it would be frightfully interesting to live there,” she said on arrival. 

          In reply to a question Mrs. Zangwill said she would be willing to live in Palestine.

          “I believe it would be a thrilling experiment,” she said, “If all the Jews were gathered in this one country.  When one considers how many distinguished Jews there are in the world, just imagine what astonishing results there might be in they were gathered in one country.”

 

Kyle's Noteworthy No-Fault:

Dear Readers,

Another disappointing loss for the Bills this week! Showed some signs of life against a strong Cincinnati team but, nevertheless, have been tough to watch lately - my fantasy team has followed suit and had similar success the last couple weeks.

In this week’s no-fault case, State Farm sought a declaration that it did not have an obligation to pay no-fault benefits in connection with a motor vehicle accident that involved its insured and a passenger. State Farm argued that it did not owe coverage because the insured and the claimant failed to attend EUOs, which the insurer requested due to the suspicious nature of the alleged hit and run and suspicions that the insurance application contained a material misrepresentation with regard to the insured’s address.

 

Kyle
Kyle A. Ruffner
[email protected]

 

Careerwomen – 100 Years Ago:

The Brooklyn Daily Eagle
Brooklyn, New York
10 Nov 1923

READS “HE AND SHE”

 

               The all-important question of whether a woman can pursue a career in spite of her husband, or conversely of whether she can retain her husband in spite of her career, was last night presented to an Institute audience at the Academy of Music in a reading by Maud Sheerer of Rachel Crothers’ “He and She.”  The lecture hall was filled. 

 

Ryan’s Federal Reporter:

See you in two weeks.

 

Ryan
Ryan P. Maxwell
[email protected]

 

Boys v. Girls – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
10 Nov 1923

BOYS BECOMING BETTER, GIRLS MUST WORSE

Cheap Literature and cabarets
Blamed for much waywardness.

 

          Chicago, Ill., Nov. 9 (A.P.).—America’s boys are becoming better all the time while the girls between the ages of twelve and twenty are becoming more wayward, according to Mrs. Mina C. Van Winkle, chief of the women’s division of the department of police of Washington, D. C., here to study police conditions.

          Gay cabaret life and cheap literature are making the majority of American girls unfit to become wives and mothers, Mrs. Van Winkle said.

          “Too many women want a career in business, away from home,” she asserted.  “The only career in every girl’s life should be the developing of a real home.”

          Most of the wayward girls turned over to policewomen come from the middle and rich groups of America, she explained, stating that poorer families think more of having a good home than dancing and drinking.         

 

Storm’s SIU:

Hi Team:

I’m out of town conducting examinations under oath.  More interesting cases in two weeks.

 

Scott
Scott D. Storm
[email protected]

 

Fire Insurance Ad – 100 Years Ago:

Worcester Democrat and the
Ledger-Enterprise
Pocomoke city, Maryland
10 Nov 1923

 

I Want You To Know

 

That our company issues the most liberal fire insurance policy in the country.  You are absolutely protected against loss from fire when you carry my policy.

“Don’t worry about the future”

Edgar Fontaine

 

216-218 Peninsula Building

Pocomoke City, Maryland.

 

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

Several of our firm’s attorneys recently attended the WNY Women’s Foundation’s Fall in Fashion event. The WNY Women’s Foundation creates opportunities for women to learn, earn, lead, and thrive. It was a lovely way to spend a day while supporting our local community.

This week’s case comes from the Supreme Court of Alabama. A vehicle was T-boned in an intersection when the oncoming car suddenly changed lanes while travelling at an unsafe speed. The driver and his wife sued their insurance company for uninsured-motorist benefits because the other vehicle’s driver was uninsured. The trial court denied the insurer’s motion for judgment as a matter of law and renewed motion regarding a charge on subsequent negligence and on a wantonness claim. The Alabama Supreme Court affirmed the judgment because the argument about the charge was not properly raised, and there was circumstantial evidence that supported the wantonness claim.

Catch you later,

 

Kate
Katherine A. Fleming
[email protected]

 

Fire Risks – 100 Years Ago:

The Marion Star
Marion, Ohio
10 Nov 1923

A NEW HAZARD

          An Ohio farmer whose barn was burned alleges a new fire hazard.  Shortly after an aeroplane circles over his barn the structure was discovered to be on fire, and it burned with an estimated loss of $10,000.  He believes it was ignited by a cigarette stud thrown from the aeroplane.  It is averred that other blazes less disastrous in that vicinity are chargeable to a like cause.

If aviators are addicted to smoking when on flights and carelessly fling overboard the butt ends of lighted cigars or cigarettes the result stated would be possible. It would constitute a hazard against which the owner of property could not of himself effectually guard. It would be a matter to be governed by law in which the aviator would be forbidden to smoke or at least would not be permitted to dump overboard anything which might start a blaze.

It may be contended that aviators are too busy to smoke while in flights. We do not know as to that, but we can see how in the future, if not now, the flight of an aeroplane over anything easily inflammable might become a hazard because of what might be thrown out.  Passengers on trains hurl lighted butts out of windows. It will not do to hope that, when folks became accustomed to air travel, they will abandon all the careless habits they manifest now.

 

Gestwick’s Greatest:

Dear Readers:

My heart (and my belly) are full, as I sit here in beautiful Punta Cana, Dominican Republic, to celebrate my mom’s wedding. It was, as you can imagine, a destination wedding, attended by all of her closest family and friends. I’m taking this edition off from Coverage Pointers to celebrate her, which means double cases for you, next edition. Stay tuned.

 

Evan
Evan D. Gestwick
[email protected]

 

The Key to Charm – 100 Years Ago:

Daily News
New York, New York
10 Nov 1923

 

The Key to the Charm

Men Cannot Resist

 

          The charm is the appeal of richly lustrous hair – and the key is the beauty-magic of a touch of henna in the shampoo.

          In Hennafoam there is a touch of henna treated scientifically to set every woman’s hair agleam with a witchery of lights.

          Whether you are blonde, brown-haired, or brunette, Hennafoam Shampoo will kindle in your hair a brilliant jewel-like sparkle.

          Begin using Hennafoam Shampoo and watch it work a spell no man’s glance can escape.

 

50^c a bottle at Drug Stores and Perfume Counters

Hennafoam Shampoo

“Makes the hair glisten”

 

On the Road with O’Shea:

Readers,

My less than one-year-old puppy, aptly named Reginald Howard White, is officially 140 lbs.; and dominating the BMI chart. A second dog was a bad decision.

On the hockey front, the Ottawa Sens had a rough few weeks of nothing but disappointment and bad decisions. A fellow unnamed columnist recently referred to the team as a poverty franchise. Yet, as I watch the Sens v. Leafs game,  I believe the team may be turning a corner.

Unfortunately, the courts have been quiet on the SUM front the past two weeks. Hopefully, there will be a few decisions to discuss in the next issue.

Until Next Time,

 

Ryan
Ryan P. O’Shea
[email protected]

 

Is Cursing OK? – 100 Years Ago:

Daily News
New York, New York
10 Nov 1923

 

CURSING ALL RIGHT IF CURSER EMPLOYS FOREIGN LANGUAGE

 

          Cursing in a foreign language will pass where English expletives will not, Magistrate Thomas Doyle in Far Rockway Police Court ruled yesterday.

          The case, which kept the courtroom in good humor for a quarter of an hour, was between Mrs. Josie Daquino, 179 Beach Eighty-first Street, and Mrs. Annie Cassecciu, of the same address.  Mrs. Daquino said Mrs. Cassecciu hurled epithets at her in Italian during a quarrel over a leaky barrel.

          Magistrate Doyle dismissed the case, saying that “curing in a foreign language in an American neighborhood did not constitute disorderly conduct.” 

 

Louttit’s Legislative and Regulatory Roundup:

Hello All,

I hope everyone is continuing to enjoy the fall. Today’s column discusses a bill signed into law taking effect in January of 2024 that would eliminate the need to have certain documents notarized in the form of an affidavit and instead affirm those documents. The previous CPLR requirement that certain documents be prepared in affidavit form and notarized had been unduly burdensome and not in alignment with federal practice and the practice utilized in 20 other states. We anticipate that this new law will ease litigation requirements concerning admissible evidence used in motion practice, which is substantially utilized in insurance coverage practice.

 

Rob
Robert P. Louttit
[email protected]

 

Huffing and Puffing and Blowing the House Down – 100 Years Ago:

The Brooklyn Daily Eagle
Brooklyn, New York
10 Nov 1923

 

Contractors Must Pay $2,200 For House That Fell Over

 

          Long Island City, L. I., Nov. 10—A jury in Part I of the Supreme Court, Queens, late yesterday afternoon brought in a verdict of $2,200 in favor of Edward and Anna Miller of 97 Sinclair Ave., Winfield, who had brought an action against the Estate of Carl Schroeder, a builder, and John H. Gerbe, a general contractor, because a house which they were building for the Millers toppled over on its side before i was completed.  The case went to the jury shortly before noon yesterday, and it was after 5 o’clock in the afternoon before the jury brought in a verdict.

          In October 1921, Gerbe contracted to excavate and build a foundation for $460, and Schroeder contracted to build the outside walls, roof, and partitions for $1,262.50.  Early in the morning of Dec. 19, 1921, when the work Schroeder was doing was not quite completed, the building toppled over on its side in the adjourning lot.

          Miller claimed that the toppling of the building was due to the poor material and workmanship put into their work by both Gerbe and Schroeder.  The builder and contractor claimed that the toppling of the building was due to elemental conditions, over which man has no control.  They claimed that during the night of Dec. 17 and the morning of Dec. 18 a severe storm raged; there were high winds and a beating rain, and these weather conditions were entirely responsible for the occurrence.

          The jury’s verdict fixed 60 percent as the amount of the $2,200 to be paid by Gerbe and 40 percent by the estate of Schroeder, who died in September 1922.

 

Rob Reaches the Threshold: 

Hello Readers,

As we approach the holiday season, the clocks fall back, and the temperatures drop here in Western New York. As a result, I’ve recently had to face a rather sad day – having to move the golf clubs from the car into the closet. Given that it’s pitch black when we now leave the office, I have said goodbye to the (often misguided) hope that I can sneak in some twilight holes after a day’s work. Time to look forward to simulator season!

For this issue, we again examine a decision out of the First Department, wherein the Court finds medical offered in opposition by a plaintiff contained sufficient detail to defeat summary judgment. This decision hopefully provides a nice refresher to all for what a medical provider should have in his/her report for successful motion practice.

I hope you all enjoy the read.

 

Rob
Robert J. Caggiano
[email protected]

 

Kill Your Spouse, Collect on Life Insurance – 100 Years Ago:

The Butte Miner
Butte, Montana
10 Nov 1923

 

Collects Insurance on  Life Murdered Husband

          PHILADELPHIA, Nov. 9. – Mrs. Catherine Rosier, with her brother-in-law, Arthur Rosier, today won a suit from two insurance companies of $35,568 on accident policies carried by her husband, Oscar Rosier, whom she shot and killed in his office here January 21, 1922.  She also shot and killed Rosier’s stenographer, Miss Geraldine Reckett, but was subsequently acquitted.

          Judge Thompson in the United States district court directed a verdict for the Rosiers on the ground that the insurance companies had failed to prove Rosier was committing a crime when he was discovered by his wife in the company of his stenographer and killed.

 

North of the Border:

You never know what’s around the corner. On Friday I stepped wrong, rolled my right ankle, fracturing it. I’m now in a boot, non-weight bearing. That shuttered travel to NYC for the FDCC I-3. I can’t navigate New York on crutches.  All indications are that in 6-8 weeks’ time, I’ll be back on my feet again.

My column this week deals with the appeal of a case interpreting a replacement cost endorsement as it applies to a home located in a flood plain. Is the cost of complying with mandated floodproofing in rebuilds within the coverage of a replacement cost endorsement? This is a timely decision given the multitude of properties that are impacted by flood and wildfire and are mandated by municipal by-laws to be built back better to withstand the next NatCat.

 

Heather
Heather A. Sanderson
Sanderson Law, Calgary, Alberta
[email protected]

 

Headlines from this week’s issue:

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

• What’s a “Story” in a “Three Story” Exclusion?

 

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]

• Multi-Family Configuration Was Beyond the One- or Two-Family Definition of “Residence Premises” and Coverage was Lost as a Result

• ALE and Certain Other Damages to Plaintiff’s Residence Excluded by Clear Terms and Conditions of Homeowner’s Policy

 

WILEWICZ’S WIDE WORLD of COVERAGE:
Agnes A. Wilewicz
[email protected]

• All roads lead to Roma

 

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

• A Settlement Payment by an Uninsured Motorist Insurer to Settle a First Party Bad Faith Claim is Not a Collateral Source

• Tort Choice of Law Analysis Applied to Bad Faith Claim

   

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]

• Carrier Loses on Coverage But Wins on Bad Faith

• Standard for Vacating Arbitration Award Reinforced

   

KYLE'S NOTEWORTHY NO-FAULT
Kyle A. Ruffner
[email protected]

• Court Grants Insurer’s Motion for Summary Judgment, Declaring State Farm had no Duty to Pay No-Fault Benefits Due to the Insured’s and the Claimant’s Failure to Attend Examination Under Oaths

 

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]

• See you in two weeks.

 

STORM’S SIU
Scott D. Storm
[email protected]

• Out of Town EUO’ing

 

FLEMING’S FINEST
Katherine A. Fleming
[email protected]

• Car T-Boned, Objection to Subsequent Negligence Charge Waived, and Sufficient Circumstantial Evidence Found for Wantonness

 

GESTWICK’S GREATEST
Evan D. Gestwick
[email protected]

• Celebrating my mom’s wedding abroad this week. See you in two!

 

ON the ROAD with O’SHEA
Ryan P. O’Shea
[email protected]

• The SUM front is quiet this week

 

LOUTTIT’S LEGISLATIVE and REGULATORY ROUNDUP
Robert P. Louttit
[email protected]

• The Use of Affirmations in Lieu of Affidavits

 

ROB REACHES the THRESHOLD
Robert J. Caggiano
[email protected]

• First Department Reverses Order which Granted Summary Judgment for Defendants Finding Plaintiff did not Sustain a Serious Injury Under any Asserted Category of § 5102(D) where Plaintiff’s Medical Evidence in Opposition Provided Numerous Details which was Sufficient to Raise a Triable Issue of Fact on the Issue 

 

NORTH of the BORDER
Heather A. Sanderson
Sanderson Law, Calgary, Alberta
[email protected]

• Replacement Costs Endorsements in Homeowners’ Policies are not Standalone Coverage and Must be Read Together any Applicable Exclusion and Endorsement; “Increased Costs” in a

 

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.

NEWSLETTER EDITOR
Dan D. Kohane
[email protected]

 

ASSOCIATE EDITOR
Agnes A. Wilewicz
[email protected]

 

COPY EDITOR
Evan D. Gestwick
[email protected]

 

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
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

Brian D. Barnas

Eric T. Boron

Robert P. Louttit

Ryan P. Maxwell

Joshua M. Goldberg

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

 

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

Michael F. Perley

Scott D. Storm

Brian D. Barnas

 

NO-FAULT/UM/SUM TEAM
Dan D. Kohane
[email protected]

Alice A. Trueman

Joshua M. Goldberg

 

APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]

 

Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri

Wilewicz’s Wide World of Coverage

Barnas on Bad Faith

Lee’s Connecticut Chronicles

Kyle’s Noteworthy No-Fault

Ryan’s Federal Reporter

Storm’s SIU

Fleming’s Finest

Gestwick’s Greatest

On the Road with O’Shea

Loutit’s Legislative and Regulatory Roundup

Rob Reaches the Threshold

North of the Border

 

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

 

10/31/23       Pinpoint Builders, Inc. v. Golden Insurance Company
Appellate Division, First Department
What’s a “Story” in a “Three Story” Exclusion?

Pinpoint contended that it is entitled to a defense and indemnification by Golden in connection with the underlying personal injury action as an additional insured under a policy issued by Golden to A1 Iron Works NY Corp, the underlying plaintiff's employer. The policy contained an "exclusion exterior operations" endorsement which stated in relevant part: "This insurance does not apply to 'Bodily Injury' or 'Property Damage' arising out of 'your work' on the exterior of any building which [at] its highest point is over three (3) stories in height." Pinpoint asserts that this exclusion does not apply because the building on which the underlying plaintiff was injured was less than three stories in height at the time of the accident.

Under a narrow reading of the policy the court found issues of fact with respect to its applicability. The exclusion does not quantify what is meant by "three stories in height." Thus, even if the exclusion is viewed from the time of the underlying incident, the record presents issues of fact as to whether the underlying plaintiff's work at the time of the incident was being done on a building that was considered more than three stories high at its highest point under the provisions of the applicable Building Cod).

However, we agree with Pinpoint that, in the event it is determined that the exclusion under the Golden policy does not apply, Pinpoint's coverage under the Golden policy is co-primary with its coverage under the policy issued by Mt. Hawley. Both policies contain "other insurance" provisions that purport to shift the coverage to excess coverage. Accordingly, the competing "other insurance" provisions cancel each other out and, should there be coverage under the Golden policy, Golden and Mt. Hawley will become co-insurers for Pinpoint as an additional insured.

Curious about the lower court’s finding on the number of stories, I checked the lower court decision:

Pinpoint counters that the Premises were only two stories in height at the time Martinez was injured. Furthermore, even when completed, the Premises would only consist of three stories and a bulkhead, which is to be disregarded when calculating a building's height pursuant to the New York City Building Code:

Rooftop structures including but not limited to roof tanks and their supports, ventilating, air conditioning, combined heat and power systems and similar building service equipment, bulkheads, penthouses, greenhouses, chimneys, and parapet walls 4 feet (1219 mm) or less in height shall not be included in the building height or considered an additional story unless the aggregate area of all such structures, exclusive of any solar thermal and solar electric (photovoltaic) collectors and/or panels and their supporting equipment, exceeds 33 1/3 percent of the area of the roof of the building upon which they are erected. Rooftop structures shall be constructed in accordance with Section 1509 (s 331/3 percent of the area of the roof of the building upon which they are erected. Rooftop structures shall be constructed in accordance with Section 1509

(New York City, N.Y., Code § 504.3)

In addition, Pinpoint submits a photograph, allegedly taken at or about the time of the incident, that shows that the Premises consist only of two stories  Martinez's testimony also raises triable issues because he initially testified that he was working on the third floor, but later clarified that he was including the basement when asked about the number of floors at the Premises.

On the subject of “other insurance”, the lower court found that one of the two policies recognized contribution from other carriers, while the other did not:

“The Golden Policy clearly distinguishable from the MH Policy because, unlike the MH policy, the Golden Policy does not provide for contribution. Thus, under well settled law, the Golden Policy is excess to the primary coverage provided by the MH Policy.

The Golden Policy unambiguously provides that: "This insurance is excess over other insurance, including any form of self-insurance, and shall not contribute with any other insurance, whether primary, excess, contingent or on any other basis. … When this insurance is excess, we will have no duty to defend the 'insured' against any 'suit' if any other insurer has a duty to defend. If no other insurer defends, we will undertake to do so, but we will be entitled to the 'insured's' rights against all those other insurers."

In contrast, the MH Policy provides that.

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

b. (1) This insurance is excess over: (a) Any of the other insurance, whether primary, excess, contingent or on any other basis: ...(b) Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured..

(c) This insurance is excess over any other insurance whether primary, excess, contingent or on any other basis that is available to you as an additional insured or contractual indemnitee under a policy issued to a subcontractor. You are required to give notice of claim to all "potential insurers" within 30 days of giving notice of claim to us... We will share the remaining loss, if any, with any other insurance that is not described in this Excess Insurance provision and was not bought specifically to apply in excess of the Limits of Insurance shown in the Declarations of this Coverage Part.

 

 

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]

 

11/08/23       Multani v. Castlepoint Ins. Co.
Appellate Division, Second Department
Multi-Family Configuration Was Beyond the One or Two Family Definition of “Residence Premises” and Coverage was Lost as a Result

Plaintiff sustained fire damage to the insured premises, and immediately filed a claim with Castlepoint.  The insurer, however, disclaimed coverage upon determining that the premises had been constructed to provide up to five separate individual residences.  At the time of the fire, there were three active residences at the location.  Castlepoint pointed to the fact that the insurance only extended to a one or two family dwelling, and here with the configuration being much larger the premises did not qualify as a residence premises and thus it outside the scope of coverage. 

In addition, plaintiff sought damages under General Business Law § 349.  That claim was dismissed for failure to allege how the conduct was consumer oriented.  The dispute here, whether the policy extended coverage to a five-family dwelling, did not have an “impact on consumers at large.”  Plaintiff’s attempt to argue that the consumer conduct related to administrative practices governing insurance applications was not germane to question of whether the reason for the denial (i.e., the residence premises question) impact consumers at large.

Finally, the claims of bad faith were also dismissed.  The claim here was nothing more than a private contractual dispute between the insured and her carrier.  Absent any indication of how/why this matter was actionable as an independent tort, the Court promptly dismissed the bad faith claims as being duplicative of the already pleaded claim for breach of contract. 

 

11/08/23       Gluck v. Mapfre Ins. Co. of New York
Appellate Division, Second Department
ALE and Certain Other Damages to Plaintiff’s Residence Excluded by Clear Terms and Conditions of Homeowner’s Policy

Plaintiff’s residence sustained damage when a condensation drainage pipe leaked and caused subsequent water damage.  The carrier accepted coverage for the loss, but later disclaimed additional loss which was claimed to tile flooring on a lower floor and additional living expenses.  On motion, Mapfre was adjudged to have met its burden on summary judgment, and the matter was accordingly dismissed.

Peiper Point – Limited facts in this one.  We presume that the carrier disputed that any damage to the tiles came from something other than resulting loss caused by the water leak.  Further, to trigger coverage for ALE one needs to demonstrate the living expenses were caused by the Covered Cause of Loss. If they ALE did relate back to the drainage pipe leak, coverage would not have triggered.      

 

WILEWICZ’S WIDE WORLD of COVERAGE
Agnes A. Wilewicz
[email protected]

All roads lead to Roma.

 

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

 

11/02/23       1555 Ellison v. WIlloughby
Supreme Court of Florida
A Settlement Payment by an Uninsured Motorist Insurer to Settle a First Party Bad Faith Claim is Not a Collateral Source

Randy Willoughby was badly injured in a car crash.  After the accident, he sued Alberta Ellison, bringing a vicarious liability claim based on Ellison's co-ownership of the other car in the crash.  Willoughby also sued his own uninsured motorist insurance carrier to recover policy benefits and for statutory bad faith damages. Willoughby and his insurer settled before trial for $4 million.

The subsequent trial against Ellison resulted in a $30 million jury verdict for Willoughby. Ellison then asked the trial court to set off the $4 million insurance settlement against the damages award, but the court denied the motion.  The Supreme Court of Florida considered the following certified question, which was slightly rephrased from the one originally certified:

Is a settlement payment made by an uninsured motorist insurer to settle a first-party bad faith claim a collateral source within the meaning of section 768.76(2)(a) 2.?

The Supreme Court of Florida answered no.  It agreed with the Second District that bad faith damages are not “benefits” for purposes of the collateral source definition in the statute.  First-party bad faith claims are a creature of statute, not of the underlying insurance contract between the parties. In particular, the damages recoverable in an uninsured motorist insurance bad faith claim are set out in section 627.727(10): “the total amount of the claimant's damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney's fees and costs, and any damages caused by a violation of a law of this state.”

Florida has characterized these statutory bad faith damages as “in substance, a penalty” because section 672.727(10) exposes insurers to liability for damages that they did not cause. The Supreme Court of Florida has said that statutory bad faith damages are “extracontractual.” It would not be reasonable to interpret the term “benefits” as encompassing a statutory penalty of this kind. Such a penalty does not fit within the ordinary meaning of the word “benefit.” Nor does the penalty square with the definitions of “benefit” found in insurance-focused dictionaries.

The court found Ellison's argument that the court should “apply a definition that accomplishes the purpose of the statute,” i.e., “to prevent windfalls to plaintiffs,” unpersuasive. Statutory purpose, if it is knowable and capable of being defined with sufficient specificity, can be an important ingredient in statutory interpretation. But the goal of giving effect to a law's purpose cannot justify a reading that stretches the language of a statute beyond its breaking point.
The court declined to consider whether a setoff under section 768.041(2) applied because that question was not preserved for appellate review.

 

11/01/23       Scott Fetzer Co. v. American Home Assurance Co.
Supreme Court of Ohio
Tort Choice of Law Analysis Applied to Bad Faith Claim

The case arose out of environmental cleanup and remediation at two sites in Michigan.  Fetzer sought insurance coverage from its insurers for environmental claims being asserted against it related to cleanup and remediation work.  Fetzer’s insurers denied coverage.

Fetzer commenced an action alleging breach of contract and bad faith.  The bad faith claims were bifurcated.  Discovery took place related to the bad faith claim and there were discovery disputes related to privilege issues.

The question was what law applied to the discovery disputes.  In Ohio, attorney-client privilege does not shield discovery documents revealing a defendant’s bad faith.  Michigan law does not recognize a cause of action for bad faith, and Indiana law does not allow discovery of materials covered by attorney-client privilege.

The court looked to the Restatement of the Law, Conflict of Laws to resolve the question.  The court held that the bad faith claim was a tort claim and thus the Restatement section regarding choice of law for tort issues governed.  Applying this section of the Restatement, the court concluded that Ohio law applied.

A two judge dissent would have held that the Restatement provision for choice of law for contract claims applied.  The dissent reasoned that a bad faith claim would not exist except for the contractual relationship between the insurer and the insurance company.  Thus, contract choice of law rule should apply.  The dissenting judges would have remanded for further proceedings on what law applied.

 

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]

 

10/13/23       Michael v. MAPFRE Ins.
Superior Court of the State of Connecticut, Hartford
Carrier Loses on Coverage But Wins on Bad Faith

Following a bench trial, the court held that MAPFRE owed its insured coverage for vandalism to an insured auto, but that it did not deny coverage in bad faith. Michael claimed that his car was vandalized, with a cracked windshield, scratches, and slashed tires among other damage. MAPFRE suspecting that the claim was false, investigated.

An SIU investigator interviewed the insured, residents in the insureds’ apartment complex, and local business owners. The investigator found that no other cars had been vandalized, which was suspicious. Although a mechanical inspection found that the car was in good working order, the report indicated that “most of the damages listed by the insured as vandalism were clearly the result of impacts and collision damage.” On these bases, MAPFRE denied the claim as both fraudulent and exaggerated.

The court found that the insured truthfully reported the vandalism, rather than inventing the vandalism in order to include the carrier to pay for prior unreported damage. Declaring the car, a total loss, the court awarded plaintiff $6,152. However, the court found that the investigation and denial were not done in bad faith and awarded no additional damages. “The defendant had a good faith basis for denying coverage,” the court wrote in recounting the carrier’s evidence in support of its denial.

 

10/04/23       Wedderburn v. Arbella Protection Ins. Co., Inc.
Superior Court of the State of Connecticut, Hartford
Standard for Vacating Arbitration Award Reinforced

The trial court refused to overturn a biding UIM arbitration award in favor of the carrier. The plaintiff argued that the arbitrator ignored and contravened controlling law. The court found that this is not a valid basis upon which to vacate an arbitration outcome. The court held that Connecticut law requires a showing that the arbitrator manifested a disregard of the law. “[T]he manifest disregard of the law ground for vacating an arbitration award is narrow and should be reserved for circumstances of an arbitrator's extraordinary lack of fidelity to established legal principles.” To meet this standard to vacate, a party must show that the arbitrator’s error was immediately obvious to an average qualified arbitrator, the arbitrator was aware of a governing principle but opted to ignore it, and the governing law ignored is well-defined, explicit, and clearly applicable.

The court held that just because the court may have reached a different conclusion or that the arbitrator was wrong is not a valid basis to vacate a binding arbitration award.

 

KYLE’S NOTEWORTHY NO-FAULT
Kyle A. Ruffner
[email protected]

 

10/16/23       State Farm Fire and Casualty Company v. Edmond Exilus
Supreme Court, New York County
Court Grants Insurer’s Motion for Summary Judgment, Declaring State Farm had no Duty to Pay No-Fault Benefits Due to the Insured’s and the Claimant’s Failure to Attend Examination Under Oaths

In this action, State Farm sought a declaration that it did not have an obligation to pay no-fault benefits in connection with a motor vehicle accident that involved its insured and his passenger. State Farm argued coverage was vitiated because a condition precedent to coverage under the policy was breached.

State Farm issued an automobile policy to the claimant, Edmond Exilus, which insured the vehicle involved in the subject accident. The policy covered any occupants of the insured vehicle for any medically necessary and causally related medical expenses arising out of the use or operation of the insured vehicle as a result of an accidental collision. On June 28, 2022, Exilus was operating the insured vehicle, which contained passenger Marie Metellus, when he was rear-ended. According to the police report, the other vehicle left the scene without exchanging information. State Farm received bills from One Touch Health Supply Inc. for services provided to Exilus and Metellus. Following receipt of the bills, State Farm scheduled Exilus and Metellus for Examinations Under Oath. Letters dated July 27, 2022, one addressed to counsel for Metellus, and one addressed to counsel for Exilus, were sent by State Farm to advise the complainants that they were required to submit to EUOs on August 11, 2022.

In support of its motion for summary judgment, State Farm submitted the affidavit of a claim specialist, Dominique Wafer, which was based on her knowledge of State Farm’s standard business practices acquired through her employment as well as documents in State Farm’s file. Wafer stated that all documents received by State Farm in regard to PIP benefits follow the same standard business practices, and these practices were in place and utilized when the documents relating to this matter were received and/or created. She also stated that EUOs were requested due to doubts as to whether the claimants were injured as they claimed. This was due to factors such as (1) no injuries or requests for medical attention were reported at the scene, (2) the accident involved a hit and run vehicle that was not identified, (3) the address on the insured’s policy was different that the address recorded for him on the police report and the accident occurred over 250 miles away from the policy address (4) there were doubts as to whether the insured resided at the address listed on the policy.

State Farm also submitted an affirmation of its attorney, based upon his knowledge of the law firm’s standard procedure in conducting EUOS. The attorney stated in his affirmation that EUOs for both Exilus and Metellus were scheduled by letters dated July 27, 2022, to be conducted on August 11, 2023, by virtual means. Both failed to attend these EUOs, which were then rescheduled for September 6, 2022. However, again, both Exilus and Metellus failed to attend their scheduled EUOs.

State Farm argued that the claimants' failure to appear for the EUOs is a breach of a condition precedent to coverage and therefore argued that the court should grant its summary judgment motion and declare that it had no duty to pay any of the no-fault benefits submitted by the answering defendants in connection with the alleged June 28, 2022 motor vehicle accident. In opposition to the motion, the answering defendants asserted that State Farm (1) failed to demonstrate that the claimants did not appear for their EUOs (2) there was a triable issue of fact regarding whether the EUOs were timely scheduled in accordance with 11 NYCRR § 65-3.5(b) and whether the claims were properly and timely denied pursuant to 11 NYCRR § 65-3.8; and (3) State Farm failed to provide affidavits from persons with personal knowledge of the facts and failed to provide a reasonable basis for requesting the EUOs of the claimants.

The court stated it is well established that failure to submit to an EUO violates a condition precedent to coverage, which vitiates an insurance policy. The court determined that, through the affidavit of State Farm’s claim representative and its attorney, State Farm has demonstrated that Exilus and Metellus failed to appear for their EUOs. Therefore, the burden shifts to the answering defendants to demonstrate that a triable issue of fact exists.

The court first considered the defendants argument that the EUOs were not timely and properly scheduled. Although an insurer must pay a claim or issue a denial within 30 days of receipt of proof of the claim, the timeliness of State Farm's denial of their claims was irrelevant since the violation of a condition precedent to coverage gives plaintiff the right to deny all claims retroactively to the date of the loss, regardless of whether the denials were timely issued. Further, 11 NYCRR § 65-3.5(b) states an EUO must be requested within fifteen days of receipt of the claim or verification form. An insurer need only demonstrate that it requested an EUO within 15 business days from receipt of a bill. The court held State Farm mailed notices to Exilus and Metellus to appear for EUOs on July 27, 2022, well within the 15-day time frame permitted by the regulation. The burden shifted to the defendants, and the court held they failed to show sufficient evidence the EUO requests were untimely.

Next, the answering defendants argued State Farm did not to submit sufficient affidavits from individuals with personal knowledge to establish its prima facie case and that that State Farm failed to submit an affidavit demonstrating that State Farm had a reasonable basis to demand EUOs. The court rejected these arguments, holding that a presumption of proper mailing was created as the claim representative stated based upon her personal knowledge State Farm's standard business practice concerning the receipt of no-fault claims, how claims are processed, and how notices are mailed. Further, Stated Farm submitted sufficient evidence that the claimants received the EUO notices and that neither claimant appeared for nor rescheduled their EUO. State Farm also demonstrated a reasonable basis for the EUOs, as the underlying facts raised a strong possibility that the collision did not occur as the claimants alleged.

Finally, the court rejected the argument that State Farm did not establish that the claimants failed to appear at their EUOs. The evidence presented by State Farm was sufficient to establish that the attempted EUOs took place as State Farm’s attorney represented, and also to establish that the EUO Zoom links were sent to the claimants.

Accordingly, the court held that State Farm established a prima facie case that a condition precedent to coverage was breached thereby relieving plaintiff of the duty to pay no-fault benefits in connection with the underlying accident. Therefore, the motion for summary judgment was granted in its entirety.

 

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]

See you in two weeks.

STORM’S SIU
Scott D. Storm
[email protected]

I’m out of town conducting examinations under oath.  More interesting cases in two weeks.

 

FLEMING’S FINEST
Katherine A. Fleming
[email protected]

10/20/23       State Farm Mut. Auto. Ins. Co. v. Wood
Supreme Court of Alabama
Car T-Boned, Objection to Subsequent Negligence Charge Waived, and Sufficient Circumstantial Evidence Found for Wantonness

While driving at an unsafe speed, Mark Stafford T-boned a vehicle driven by Brian Wood that was going through an intersection in Auburn. Wood and his wife sued Stafford, an uninsured motorist, alleging claims of negligence, wantonness, and loss of consortium. Witnesses testified that Stafford was speeding, weaving in and out of traffic, and almost collided with a motorcycle. When Stafford approached the intersection, he drove past a sign stating the right lane must turn right, and his view was obstructed by a hillcrest. When Wood arrived at the intersection, he stopped his vehicle at a stop sign and observed no oncoming vehicles in the flow-through lane or in the left-turn lane to his right. Although Wood never saw Stafford’s vehicle, he concluded it must have been in the mandatory right-turn lane on the opposite side of the intersection when Wood began to enter it.

Because Stafford was uninsured, the Woods also sued their automobile insurance company, State Farm, seeking uninsured-motorist benefits under their policy. The Woods unsuccessfully attempted to serve Stafford. Pursuant to Rule 4(f), Ala. R. Civ. P., the Woods sought to proceed to a final judgment against the other defendant, State Farm. The trial court held a jury trial, at which several witnesses testified. At the close of Woods’s evidence, State Farm moved for a judgment as a matter of law ("JML") on its contributory-negligence defense and on the Woods's wantonness claim, and the trial court denied that motion. State Farm renewed its motion for a JML at the close of all the evidence, and the trial court denied that motion as well. In relevant part, the trial court charged the jury on claims of negligence and wantonness, the affirmative defense of contributory negligence, and the doctrine of subsequent negligence. The jury returned a verdict in the Woods's favor, awarding them $700,000 in compensatory damages, and the trial court entered a judgment on that verdict. State Farm filed a post-judgment motion challenging the judgment on various grounds, including whether the wantonness claim should have gone to the jury. The post-judgment motion was denied by operation of law, and State Farm appealed.

State Farm argued that there was no evidence that Stafford knew Wood was in a dangerous position when driving through the intersection, and even if he had known, Stafford could not reasonably have avoided the accident. Thus, State Farm argued on appeal that the trial court erred by giving an instruction on subsequent negligence because there was insufficient evidence to support the charge. State Farm did not object before the jury returned to consider its verdict. Instead, at the charge conference, the parties only discussed the instruction, and State Farm argued that the debate amongst counsel constituted an objection. State Farm relied on the fact that Stafford didn’t testify, so there was no indication what he observed, saw, felt, heard, or thought immediately prior to or at the time of impact. However, the Alabama Supreme Court found that State Farm waived its objection to the charge by not timely raising the argument.

The Court did find that State Farm preserved its argument that there was insufficient evidence to support the Woods’s wantonness claim because it made a JML motion and renewed JML motion. There was no dispute that Stafford was speeding, but State Farm challenged whether there was evidence indicating that Stafford made an abrupt lane change from the mandatory right-turn lane to the flow-through lane. Since the Court did not have all of the evidence that the jury considered regarding a material issue before it though, the Court had to presume that there was evidence to support the trial court’s decision to deny the JML motion and to support the jury’s verdict, so it affirmed the judgment on the verdict. Further, State Farm did not seem to contest that a lane change while travelling at an unsafe speed would support a finding of wantonness, and the Court found that there was circumstantial evidence from which the jury could have concluded that Stafford suddenly moved from the mandatory right-turn lane to the flow-through lane shortly before the accident occurred. The Court also reasoned that ignoring traffic warning signs and the existence of a hillcrest obscuring a driver's view of an upcoming intersection would be additional factors that could combine with speed to elevate a driver's conduct from negligence to wantonness. Accordingly, the Court affirmed the judgment.

 

GESTWICK’S GREATEST
Evan D. Gestwick
[email protected]

Celebrating my mom’s wedding abroad this week. See you in two!

 

ON the ROAD with O’SHEA
Ryan P. O’Shea
[email protected]

The SUM front is quiet this week.

 

LOUTTIT’S LEGISLATIVE and REGULATORY ROUNDUP
Robert P. Louttit
[email protected]

 

10/25/23       The Use of Affirmations in Lieu of Affidavits

On October 25, 2023, New York’s Governor Hochul signed into law (S05162) which amends New York Civil Practice Law and Rule 2106 as follows:

Allows an affirmation by any person, wherever made, subscribed, and affirmed by that person to be true under the penalties of perjury, to be used in a civil action in New York in lieu of and with the same force and effect as an affidavit.

The above law, which is to take effect in January of 2024, expands the ability to submit an affirmation in lieu of an affidavit from certain health care practitioners to any person. In this regard, the requirement that litigants and other court participants notarize their documents is unduly burdensome, and federal law removed such requirements for federal courts decades ago. The law will align New York with the over 20 states that follow federal practice. The law will relieve unnecessary burdens on litigants, non-party witnesses, county clerks, and courts.

While not directly applicable to New York’s Insurance Law Statutes, the law will eliminate the current obligation of notarizing of certain documents. It will certainly assist in witness affirmations in support of motions or pleadings, which will obviate the need to have documents notarized.

 

ROB REACHES the THRESHOLD
Robert J. Caggiano
[email protected]

11/02/23       Hess v. Fabrizi, et al
Appellate Division, First Department
First Department Reverses Order which Granted Summary Judgment for Defendants Finding Plaintiff did not Sustain a Serious Injury Under any Asserted Category of § 5102(D) where Plaintiff’s Medical Evidence in Opposition Provided Numerous Details which was Sufficient to Raise a Triable Issue of Fact on the Issue 

Plaintiff, George Hess, appealed an Order from Supreme Court, New York County, which, in part, granted a motion for summary judgment in favor of Defendants, P.O. Thomas P. Fabrizi, the City of New York, and the New York City Police Department. Specifically, the Supreme Court granted these Defendants’ motion on the ground that Plaintiff did not sustain a serious injury within the meaning of New York Insurance Law § 5102(d). 

By way of background, this matter stems from a motor vehicle accident which occurred in September 2018, when Plaintiff Hess was a passenger in a taxi owned by Defendant, Chelsea Cab Corp., operated by Defendant, Huzaifa Akram, which was t-boned by an unmarked police vehicle operating without lights or sirens. As a result, Plaintiff alleged injuries to his brain, lumbar spine, left shoulder, and left knee.

Defendants moved for summary judgment, arguing that Plaintiff did not sustain any serious injury as alleged. As noted, the Supreme Court, New York County, granted this motion. However, upon review the First Department unanimously reversed the lower court, finding that the medical report and affirmation submitted in opposition was well-detailed, and provided numerous findings that sufficiently raised an issue of fact to defeat Defendant’s motion.

Specifically, Plaintiff submitted in opposition an affirmation and affirmed narrative report from a treating orthopedist. This orthopedist examined the Plaintiff and reviewed his medical records and contemporaneous diagnostic studies – which included MRIs which were taken six weeks to two months after the accident. During the physical exam of the Plaintiff, the orthopedist documented significant range of motion limitations in the allegedly injured body parts. The First Department found that the orthopedist sufficiently attributed these limitations to the traumatic process caused by the subject accident. Lastly, the First Department pointed out that, contrary to the motion court’s findings, the orthopedist did discuss plaintiff’s history of a prior work-related injury to his low back.

Based on the foregoing analysis of Plaintiff’s opposition, the First Department found that a triable issue existed regarding whether he suffered a serious injury under Insurance Law § 5102(d). The Order of Supreme Court, New York County, was unanimously reversed, on the law, without costs. 

 

NORTH of the BORDER
Heather A. Sanderson
Sanderson Law
Calgary, Alberta
[email protected]

 

11/03/23       Trillium Mutual Insurance Company v. Emond, 2023 ONCA 729
Ontario Court of Appeal
Replacement Costs Endorsements in Homeowners’ Policies are not Standalone Coverage and Must be Read Together any Applicable Exclusion and Endorsement; “Increased Costs” in a Building By-Law and Code Compliance Coverage Refers to the Cost of Complying with By-Laws or Ordinances Regulating the Rebuild that Came into Effect after the Original Building was Built

The Appeal of the decision that I reported on just over a year ago (XXIV, No. 9 (No. 630) Friday, October 14, 2022) was heard August 24, 2023 and reported on November 3, 2023.

This case involves a dispute between Trillium Mutual Insurance Company and Stephen and Claudette Emond regarding the coverage provided under a Homeowners Package Comprehensive Form Insurance Policy that insured the Emonds’ home. That home, located in the floodplain of the Ottawa River system, was severely damaged by the historic 2019 Ottawa River flood and deemed a total loss. (A flood of the same river system that occurred in 2017 was also considered ‘historic’.) Trillium acknowledged that the policy covered damage caused by flood.  The Emonds wished to replace the home. The parties disagreed on the costs of replacement.

The Policy included a Guaranteed Rebuilding Cost Coverage (GRC) endorsement, which provided coverage for the insured to replace the home with materials of similar quality using current building techniques. However, there was also an exclusion for increased costs of repair or replacement due to the operation of any law regulating the zoning, demolition, repair, or construction of buildings (the para. 8 Exclusion). However, there was a Building By-Law and Code Compliance Coverage (BBCC) endorsement that provided coverage for up to $10,000 for increased costs of demolition, construction, or repair to comply with any law regulating the zoning, demolition, repair, or construction.

It was estimated that to rebuild the Emonds’ home as it was and where it would be about $750,000. However, municipal ordinances enacted since the house was originally built mandated a flood proof foundation and other enhancements to deal with its location in a flood plain. With those enhancements, the rebuild would be just over $1 million.

The application judge interpreted the Policy to mean that the Emonds were entitled to recover 100% of the costs of rebuilding their home without any limitation of coverage resulting from the operation of any rule, regulation, by-law, or ordinance. On Appeal, Trillium argued that this interpretation would render the GRC a warranty for any and all rebuilding costs and would nullify the para. 8 Exclusion.

In reply before the Court of Appeal the Emonds contended that the GRC coverage guaranteed the full cost of rebuilding using current building techniques and that the para. 8 Exclusion only referred to statutes, not subordinate authorities such as by-laws or regulations. They also argued that the BBCC did not limit the coverage under the GRC.

The Court of Appeal held that “increased costs” as that term appeared in the paragraph 8 Exclusion and the BBCC means those increased costs related to replacing the dwelling “as it was”. Therefore, enhancements required by laws enacted after the building was constructed are “increased costs”.

The policy must be read as a whole – GRC is not a ‘stand-alone’ coverage. It is subject to the other policy provisions.  Read in this manner, the GRC provides the Emonds with enhanced coverage to rebuild their home where it was in the way it was, using materials of similar quality and current building techniques, (i) without deduction for depreciation and (ii) even if the cost of replacement exceeds the policy limit on the Declaration Page (i.e., inflation protection). The paragraph 8 Exclusion only applies to increased costs required by “any law” which included the by-laws and ordinances that mandated flood proofing. Against that exclusion the policy offers $10,000 of coverage for these otherwise excluded increased costs – the enhancements required by any law or ordinance, such as the requirements that the Emonds must now meet to rebuild in place.

In conclusion, the Court of Appeal held that the Emonds may recover the costs of rebuilding their home, without any deduction for depreciation, even if the amount exceeds the Policy limit. The home is to be built on the same location, with materials of similar quality using current building techniques, but without full coverage for “increased costs” to comply with any law regulating the construction or repair of the home. This excludes full coverage for the municipal bylaws and ordinances enacted after the original dwelling was built that would require fixing deficiencies or making enhancements to ‘flood-proof’ the home. The Emonds are entitled to $10,000 to cover these additional costs.

This decision is correct in law and fairly construes the policy wording. In doing so, the Court of Appeal is stating that it will take very clear wording for a standard homeowners’ policy to cover a ‘build back better’ initiative to protect Canadians from the natural catastrophes that have become far more frequent, impactful, and damaging due to the changing climate.  The difficulty of course is that homeowners who do not ‘build back better’ due to a lack of funds are harming their property value and risking the possibility that their property may not be insurable in the future due to a failure to deal with the obvious risks inherent with the location of the home.

 

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