Coverage Pointers - Volume XXV No. 12

Volume XXV, No. 12 (No. 659)
Friday, November 24, 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.


Hurwitz Fine's Coverage Pointers


Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

Durango Colorado Real Estate: Wishing You A Very Happy Thanksgiving

As we do each year when Coverage Pointers is scheduled for the Thanksgiving weekend, we’re sending out our issue a day (or two) earlier, so that you have the entire holiday weekend to catch up on coverage cases (and more importantly, so that our staff can spend time with their families, rather than writing case summaries).  Family first.

As this issue goes to press, we just learned of a vehicle explosion on the Peace Bridge, a Niagara Falls border crossing just 15 miles or so north of here.  Early reports are of a terror incident.  So terribly sad.  As of 3:00 PM Eastern, the two inside the vehicle were killed and one innocent person was injured, but not seriously.

We have thousands of Coverage Pointers subscribers, and we rarely hear from most of you (unless we run into you in the elevator, in court, at a conference, in a lawsuit, or otherwise). I want to thank the CP subscriber who called me last week, just to thank our staff for their dedication to purpose. We love producing this publication and our staff appreciates feedback from our readers. Sometimes, we receive a pushback from the lawyer who was on the losing side of an appeal on which we reported, explaining a nuance that was not in the reported decision. That’s fine, and we welcome comments and criticism and clarification. If we have reported on a decision and you find the summary does not comport with your understanding, or, if there is a “story behind the store,” feel free to update us or offer your own commentary.

We’ll publish your comments, if you want us to do that, or apologize if we misconstrued the reported decision.

At the end of this cover note, you will always find the headlines from the cases reported in CP.  The actual newsletter is attached.  If you want to miss the good stuff and go directly to headlines, click here.

Lots of traveling over the last couple of weeks, including a three-day trip to Greenville, SC with my law partner Lee Siegel, to mediate a bad faith case. Successfully settled, and a file closed and behind us.

Hurwitz Fine Ranked by Chambers USA in the Inaugural 2024 New York Regional Spotlight Guide

Hurwitz Fine P.C. is proud to announce that the firm has been ranked in the inaugural Chambers 2024 New York Regional Spotlight Guide for Dispute Resolution, which encompasses both litigation and insurance disputes.

According to Chambers, “Hurwitz Fine P.C. is noted for taking the lead on some of the more complex insurance disputes in the local market. Their caseload is complemented by additional strength in general commercial litigation.” In addition, Chambers notes, “the Buffalo-based firm handles an array of disputes. Working with local and regional business clients, the firm advises on sexual misconduct, toxic tort, securities, and labor & employment litigation. The group is active in the healthcare and construction industries.”

Hurwitz Fine is one of only four Buffalo law firms featured in the Spotlight, and one of only two featured for Dispute Resolution. The Spotlight rankings are awarded at firm-wide level, recognizing firms that are well-known for their expertise in certain selected practice areas.

This ranking recognizes firms that do “remarkable work which results in an impressive regional reputation” and offer a “credible alternative to Big Law.” Chambers' insight into the legal market has seen a trend of large companies seeking specialized support from smaller firms at a state or local level, who can respond more effectively and efficiently to in-house counsel needs. Chambers Regional Spotlight builds bridges between in-house counsel, who want more choice when purchasing legal services, and small to medium size firms.

A Chambers Spotlight ranking is achieved through an independent research process conducted by Chambers USA. The firms ranked in the USA Regional Spotlight Guide were selected based on in-depth market analysis, coupled with an assessment of their experience, expertise, and caliber of talent. Chambers’ conclusions were supported by comparative analysis drawing on their decades of knowledge of the U.S. legal market.

The Chambers Regional Spotlight highlights best small and medium-sized firms in specific regions. The 2024 New York Regional Spotlight highlights 105 law firms across six cities and eight distinct practice areas. Divided into 25 different ranking tables, these firms are well positioned to advise local, regional and national companies on a range of complex matters.


Want to Impress Your Clients? Close the File Quickly and Efficiently:

Closing a file quickly and efficiently is the hallmark of client service. For those who follow me on LinkedIn, skip this segment, because I posted this there,  For those that don’t, this discussion about file closing went viral, receiving thousands of impressions within the first 24 hours.  For lawyers and claims professional alike, feel free to repost this to your partners, associates, and panel firms, a repost from 2019 and it’s a good end-of-the-year message:

            Become a Rainmaker – CLOSE FILES

I have seen a number of plaintiffs’ lawyers posting messages here recently, chastising defense lawyers for doing their jobs and for “churning files.” Anyone who is successful in rainmaking knows that the last thing an insurer or corporate client wants is an open file if it can be closed quickly and efficiently.

Ask yourself this question, the next time you post one tenth of an hour to a file: “Did the work I just did, the phone call, the e-mail, etc., move this file closer to early resolution?” If the answer to the question is “no,” you have wasted your client’s money. One of my partners sent around this message to all of the litigation team, yesterday.

“Just had a lengthy conversation with an [XXX] adjuster. He indicated that they are under intense pressure to reduce litigation costs. They are looking for early and efficient resolutions to their claims, and want to avoid defense costs, IMEs, etc. where possible.”

Someone, in response, commented that the insurer “should never interfere with our ethical handling of the file and protection of our clients.” That wasn’t the point of the message, although it was always a good reminder. The plea from the insurer can be translated into this:

“Just had a lengthy conversation with [XXX] adjuster. He indicated that law firms that recognize that we are spending lots of unnecessary money on litigation expenses that often do nothing to aid in claim resolution and, as a result, seek to resolve claims quickly and efficiently will be rewarded for their understanding of our business goals with more work. Those that do not, are destined for the dust bin.”

My late senior partner and mentor, Shelly Hurwitz, used to say: “Close one file quickly and two will follow.” How right he was! We now pass that message down to young lawyers. Clients want files closed, efficiently, effectively, and as soon as possible. That does not mean you should be unethical. That does mean you should act outside your client’s best interests.

More than 95% of civil cases are settled, certainly the “smaller” cases resolve, almost without fail, before the jury renders a verdict. So do the larger ones. Look at mediation, some of it is court annexed and free or low cost. Some cost more but surely, the investment may well be worth the litigation costs saved in the future

So,if you can close the file this week rather than two years from now, you have truly protected your client and given him/her/it peace of mind (that lawsuit isn’t hanging over my head anymore) and the insurer that has asked you to represent that insured has saved thousands of dollars in defense fees and expenses and has cleared it reserved.

It’s truly a win-win situation.

Close the file. Be known as the lawyer who can close a file early and efficiently and you will become a file magnet.


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.



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):

This version of CP is coming to you from a random coach car on the Keystone Train from Manhattan to Harrisburg, PA. This is the second or third deadline that has been met speeding backward through the rolling hills of Lancaster County. CP knows no geographical limit. Only spotty Wi-Fi!

Before diving into another slice of pecan pie, we do have a good appraisal case to review. The insured/policyholder wanted appraisal; the carrier rejected. The policyholder wanted appraisal and petitioned the court to compel the process. The carrier fought it but complied with the trial court’s decision ordering it.

Upon completion of the appraisal, the carrier rejected the umpire’s award, and the policyholder, who wanted appraisal, petitioned the court to compel payment. When the umpire’s award was vacated, and sent back to appraisal, the policyholder decided she did not want appraisal anymore.

And, it turns out, that is her right. Where, as here, the appraisal process fails, through no fault of the policyholder, he or she can walk away. That’s what happened here, and the insured is free to proceed immediately with a breach of contract claim.

So, the takeaway is that appraisal can be very messy. So much for prompt resolution of valuation disputes.

That’s about it for this week.  Safe travels, and full stomachs to all this weekend. Given our recent dominance over Thanksgiving, the Bills have decided to let other, lesser, cities get involved this year. You are welcome.

Cheers. See you in two weeks.


Steven E. Peiper

[email protected]


The Beginning of the End for Germany – 100 Years Ago:

The Buffalo Commercial
Buffalo, New York

24 Nov 1923


            Stresemann has resigned and there is no longer a government in Berlin which represents the people. The Chancellor will continue in office for a time, it is said, as that will be necessary to prevent anarchy, but what successor will be able to carry on with any possible hope of success?

            No single body of socialists or all of the various elements of socialism combined will be strong enough to win the support of the Reichstag.  On the other hand, the nationalists are aggressive but not numerous. Neither the right nor the left can obtain parliamentary backing without which constitutional government is impossible, and the center has just fallen for lack of support.

Some sort of a coalition may emerge from this chaos, but how long it will hang together is a question. Certainly, it will be only a makeshift government.  Germany’s pr9oblems are too complex to be met by any single party or combination of parties now in existence. The probabilities are that a dictatorship will arise soon. What Germany needs is a Mussolini.

Editor’s Note: (from the History Channel website) – the Beer Hall Putsch:

From November 8 to November 9, 1923, Adolf Hitler (1889-1945) and his followers staged the Beer Hall Putsch in Munich, a failed takeover of the government in Bavaria, a state in southern Germany.

Since 1921, Hitler had led the Nazi Party, a fledgling political group that promoted German pride and anti-Semitism and was unhappy with the terms of the Treaty of Versailles, the peace settlement that ended World War I (1914-18) and required many concessions and reparations from Germany.

In the aftermath of the failed “putsch,” or coup d’état, Hitler was convicted of treason and sentenced to five years in prison. He spent less than a year behind bars, during which time he dictated Mein Kampf, his political autobiography. The putsch and Hitler’s subsequent trial turned him into a national figure. After prison, he worked to rebuild the Nazi Party and gain power via legal political methods.


Wilewicz’ Wide-World of Coverage:                                 

Dear Readers,

Happy Thanksgiving! As long-time readers know, this is not a holiday that we usually celebrate much in our family. Rather, the day after Thanksgiving starts official Christmas for us, so on turkey day we would usually spend watching the parade and the national dog show, while bringing up all of the decorations for the Christmas explosion. This year, however, we are going all-out. My brother agreed to present a traditional Texas Thanksgiving (whatever that means), and everyone is bringing homemade goodies with them. We’ll see how this goes!

Now, this week in the Wide World, we have something a little closer to home than usual. In a Fourth Department (NYS) case, we bring you a summary of Smith v. NGM Insurance. There, the Appellate Division determined that there was no SSL coverage for a spouse under a business auto policy, where the coverage was never actually paid for nor requested. It is particularly interesting since earlier this year the law of the land changed and made this specific type of coverage opt-out rather than opt-in. However, at the time of the issuance of this policy, it was still opt-in coverage, and the Court determined that this did not happen.

Check out the summary, with a link of the full decision, in the attached.

Until next time, happy holiday!


Agnes A. Wilewicz

[email protected]


Dancing? Bah, Humbug – 100 Years Ago:

The Buffalo Commercial
Buffalo, New York

24 Nov 1923


Kentucky’s Governor-elect Will Not Permit Dancing in Executive Mansion

            LOUISVILLE, Nov. 24. (A.P.)—William J. Fields, governor-elect of Kentucky, announced here yesterday he would not attend the inaugural ball scheduled to be held in his honor in the executive mansion at Frankfort on the night of Dec. 11.

            Mr. Fields declared that if such a ball was held it would not be in the governor’s mansion, nor would any dancing be permitted there while he was governor, as neither he nor Mrs. Fields approved of it.  The governor-elect, however, is said to have declared that he will do nothing to interfere with dancing outside his future home.

            In the meantime, a committee of Frankfort citizens are going ahead with plans to hold the ball.


Barnas on Bad Faith:

Hello again:

Happy Thanksgiving. The Bills have a rare Turkey Day off this year, so it will be a relaxing Thanksgiving of watching other teams play football in the Barnas household on Thursday. The Lions are a hot TV draw this year. The times really are changing.

On the change note, is it just me, or has “Black Friday” shopping gone even further off the rails this year? Back in the day, I used to look forward to looking through the ads in the paper on Thanksgiving and plotting out what stores I would wake up early to hit on Friday morning. Then, it got to the point where stores were open on Thanksgiving, and people had to interrupt time with their families to go to work or shop. Now, I am getting emails from all kinds of companies, weeks before, offering me early access to “Black Friday Sales.”  I think we need to come up with another name for this concept if “Black Friday” is going to span multiple weeks.

With that rant out of my system, I have a decision on a motion to dismiss a bad faith case from the United States District Court for the Eastern District of Kentucky in my column today. Should pair perfectly with your turkey and stuffing.

Enjoy the holiday.


Brian D. Barnas

[email protected]


The Ideal Man – 100 Years Ago:

The Buffalo Commercial
Buffalo, New York
24 Nov 2023

Minnesota Co-Eds Describe Ideal Mate

Place Wealth Secondary to Good Looks Moral Cleanliness and Chivalry.

            MINNEAPOLIS, Minn., Nov. 24. (A.P.) – Wealth, before such vital factors as good looks, a moral cleanliness and chivalry, is a secondar consideration in the selection of the ideal mate, in the estimation of forty university of Minnesota co-eds, in a questionnaire filled out by members of the sociology class.

            The ideal mate, according to an analysis of the questionnaire would be a man:

            Moderately good looking.

            Athletically inclined.

            Morally clean.

            Respectfully toward religion.


            Appreciative of the good and beautiful things in life.

            Will trained socially.

            Optimistic and good -natured.


            One co-ed insisted that her future husband “need not be good looking, but he must have red hair because all red-haired men are very ambitious.”


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

I see giant balloon animals floating over Manhattan, I hear the sounds of marching bands approaching, and awful lip-synching—that can mean only one thing, it’s Thanksgiving in New York! I’ve never been one for parades but growing up the Macy’s Thanksgiving Day Parade was a can’t miss event in my house (with the Tournament of Roses a close second). My mother just loved the Parade. From the first steps to the appearance of Santa Claus, the channel did not change. Personally, I’m still waiting for Hanukkah Harry to make an appearance, but I may be waiting a while longer for that. We never went to the Parade in person, my father hated the cold, and well, we couldn’t miss football. Maybe one day I’ll find a hotel room overlooking the Parade route and drag my parents up from Florida.

Hoping you all have a wonderful, happy, and healthy holiday full of juicy turkey, empty roads, and exciting football.

Keep keeping safe.


Lee S. Siegel

[email protected]


Unlucky 13 – 100 Years Ago:

Buffalo Courier
Buffalo, New York

24 Nov 1923



            Verona, Italy, Nov. 23. —Three persons were killed, three probably fatally injured and seven serious hurst today when a bus running between Verona and Santa Anna skidded and plunged down the mountain side.  The chauffeur was the only person in the car to escape injury.

            After the accident superstitious persons pointed to the fact that the bus was No. 13 and that it contained thirteen passengers.


Kyle's Noteworthy No-Fault:

Dear Readers,

I have just one No-Fault case for this week, involving a dispute over whether the action brought to recover no-fault benefits was time barred pursuant to the three-year statute of limitations found in CPLR 214(2), because the defendant was a self-insured entity.

I hope everyone has a great Thanksgiving weekend!

Until next time,


Kyle A. Ruffner

[email protected]


She Might Have Been Friendly, but Not Overfriendly – 100 Years Ago:

Daily News
New York, New York

24 Nov 1923



            After a jury had found his wife not guilty of a charge of overfriendliness with Harry K. Green, former State trooper, Roy H. Still, New York commercial artist was refused a divorce yesterday from Mrs. Rose E. Still of Crotonville, N. Y., in Supreme Court, White Plains. Justice Tompkins dismissed a counter claim for divorce by Mrs. Still, and reserved decision on a motion by Still’s attorney to set aside the verdict. Green was a witness at the trial of Walter S. Ward.


Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers!

Happy Thanksgiving! This year, the Maxwell’s have been battling a bout of COVID and will be celebrating amongst ourselves. Although not our normal Thanksgiving festivities, I intend to use this time to focus on what is most important. My wife and the boys. Okay, the dogs too.

This edition, I have summarized an interesting decision regarding erosion of limits relative to additional insureds under a burning limits policy. Do costs associated the named insured’s defense erode separate limits available for additional insureds? The answer may surprise you.

Until next time…


Ryan P. Maxwell

[email protected]


Get the Red Out – 100 Years Ago:

The Connecticut Labor News
New Haven, Connecticut

24 Nov 1923



            The expulsion of a communist from the convention of the A. F. of L. at Portland has offended the intelligentsia, sentimentalists, and other gushy folk.

These elements look upon the trade union movement as a sort of free grazing for every ism and wil-o’-the-wisp theory.

To them the trade union is merely a convenience. Its principal mission is to serve as a clearing house and meal ticket for everyone who bounces into town with a bundle of press notices from the last stop, the usual attack on the A. F. of L. and a "scientific and comprehensive program" for economic salvation.

And when the tale is unfolded to trade unionists they are supposed to gape in awe at the wondrous man.

The nerve of this element passeth understanding.

Take the case of the one expelled at Portland. He openly professed his faith in communism and his opposition to trade unionism.

It takes copper-lined nerve to publicly announce one's dislike of an institution and at the same time fight to maintain membership in that institution that it may be wrecked.

This is the policy of revolutionists arid their lilly-fingered, paper-doll lieutenants who howl when the unions take drastic action against the "bores."

Organized labor is calling a halt on having their unions made the roosting place for revolutionists, Wobblies, and other disguised detectives.

Revolutionists have no place in the trade unions. They have nothing in common with organized labor. …


Storm’s SIU:

Hi team:

Happy Thanksgiving! Sorry to be brief but business is booming.

Five cases this week:

  • “It is Generally Wise to be Forthcoming with Details Inquired into By Your Insurance Company While Investigating Your Insurance Claim, Especially When Those Details Go to the Heart of the Investigation.”

This is now my favorite court quote, and I can’t wait to use it in my next fraud related motion.

  • After a Settlement Dispute Over Underinsured Motorist Benefits and an Arbitration Award for the Maximum UIM Benefit Under the Policy, Insured’s Subsequent Claims for Common Law Bad Faith, Statutory Bad Faith Under 42 Pa. Stat. § 8371, and a Claim Under the Pennsylvania Unfair Trade Practices and Consumer Protection Law are Dismissed.

  • Motions In Limine in Strict Products Liability Action: Expert testimony of Long-Term, Low-Temperature Ignition of Wood Admissible; Multiple Experts Precluded from Offering Cumulative Testimony; and Evidence of Prior Incidents Precluded as Not Shown to Have Occurred Under Similar Circumstances.

  • Requirement of New York Insurance Law Section 5208 that Claimant Report Occurrence to Police Within Twenty-Four Hours to Prevent Fraud Was Not Frustrated When the Delay in Filing was a Mere Forty-Eight Hours and Surveillance Footage Showing the Alleged Accident was Provided.

  • Federal Complaint Dismissed for Lack of Subject Matter Jurisdiction as No Diversity of Citizenship Against Underwriters at Lloyd’s, London.

Gotta run and put up my Christmas decorations!

Talk to you soon,


Scott D. Storm

[email protected]


That’s Par for the Course – 100 Years Ago:

The Buffalo Enquirer
Buffalo, New York

24 Nov 1923




New York, Nov. 24. —When a man plays golf, he takes his own chances the supreme court said, dismissing the plea of John Harris, who sued for $15,000 when Henry Coe “beaned” him with a mashie pitch.


Fleming’s Finest:

Hi Coverage Pointers Subscribers:

Happy Thanksgiving! Safe travel to those hitting the roads (or skies).

This week’s “finest” case comes from the Hawaii Supreme Court. As we have often heard, there is a duty to defend where there is an allegation of coverage, and the duty to defend is broader than the duty to indemnify. Some jurisdictions allow insurers to recoup defense costs for defending claims that are ultimately not covered, but others do not. The Hawaii Supreme Court addressed whether insurers could recoup defense fees and costs for defending uncovered claims (assuming there is no reimbursement language in the contract) and held that there is no putative right to reimbursement for defense fees and costs in Hawaii because it clashes with the state’s stout duty to defend. The opinion is short and well-written, so I would recommend having a read.

Catch you later,


Katherine A. Fleming

[email protected]


A Husband with Lots of “Sole” – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York

24 Nov 1923


“Matrimonially Speaking” By MRS. HUGH McKAY

            My husband is a fanatic on the subject of his shoes.

            “Some men specialize in neckties, others in hats. Hugh’s weakness is for shoes—and he goes the limit.

            He has so many pairs that his closet looks like an army supply depot. It doesn’t seem possible that one man could wear all those shoes.

            And it isn’t only in the matter of variety that he’s particular, either.  Every last pair is polished up like a poor diamond in a jeweler’s window.

            Whenever he looks down at his shoes and can’t see whether his hair is properly brushed or not, he’s perfectly unhappy until he gets a boot black to remedy matters.

            And talk about treading on people’s toes! Once I made a misstep on one of his new pairs of shoes, and he didn’t speak to me for hours!

Copyright, 1923. By Public Leger Co.


Gestwick’s Greatest:


Happy Thanksgiving! Special congratulations to my mom and now stepdad, Andy, who were married in beautiful Punta Cana during the week of our last edition. Punta Cana was beautiful, weather mostly cooperative, and the food and drinks were to die for.

Since our kind Editor granted me a reprieve so I could properly celebrate the nuptials, and since the courts have been quiet the last two weeks, I am taking the liberty of extending back to the time period of our last edition to discuss the case I have for you, which is about a rescission based on a material misrepresentation as to the correct number of dwelling units in the insured premises. When the insured purchased the property, there were four units, plus a basement that consisted of a kitchenette and a bathroom. Only later did the insured convert the basement into two full units, making six in total. Finding that the defendant carrier had no right to rescind the policy on these facts, the Court reasoned that the carrier failed to show that it would not have issued the policy had it known of the six units, as it left much to be desired in terms of the required underwriting information a Court needs to uphold a rescission. I’ll discuss exactly what this entails, if you’d kindly read on.

The Bills are off this Thanksgiving holiday, which means I’ll still be watching football, though in normal clothes instead of my Bills attire. Nonetheless, Go Bills. More importantly, though, Happy Thanksgiving to you and yours.


Evan D. Gestwick

[email protected]


Never Ask a Question You Don’t Want Answered – 100 Years Ago:

The Buffalo News
Buffalo, New York

24 Nov 1923


Asks God to Pass on His Guilt; Drops Dead

            BREGENZ, Austria, Nov. 24. — “May Almighty God punish me with instant death if I am guilty,” was the final declaration of a man on trial here for the murder of his wife. Immediately after uttering these words, he swooned in the courtroom and died before doctors could come to his aid.

            His statement was made during a heated cross-examination under which the accused showed great excitement. Doctors certified that heart failure had caused his death.


On the Road with O’Shea:

Hey Readers,

It was a sweet Swedish excursion for the Sens this past week as it appears they are turning the tide on their season. They went 2 for 2 and finally have a winning record after protracted weeks of misery and poor showings. We’ll see if this holds up.

This week I have a liability case regarding a rear-end collision and the attempted invocation of the emergency doctrine.

For those travelling this weekend, stay safe and please make sure there are no rocks or pebbles under your floor mats.

Happy Thanksgiving.


Ryan P. O’Shea

[email protected]


KKK Win in Oklahoma– 100 Years Ago:

The Buffalo News
Buffalo, New York

24 Nov 1923




Senate Fails to Adopt Measure to Compel Publication of Membership Lists of Secret Order.

            OKLAHOMA CITY, OKLA., Nov. 24.—Ku Klux Klan supports emerged victorious in their first test of strength in the state senate when the upper house voted late yesterday to strike from the proposed anti-Klan measure under consideration a section which would have compelled secret organizations in Oklahoma to file their membership list for public inspection.

            Proponents of the section declared by its defeat the senate would fail to enact anti-Klan legislation with “teeth” in it, although they took some consolation in the passage of a provision requiring officers of secret organizations to register their names with county authorities.

            The action on the membership clauses came at the close of a day filled with dramatic debate in which members of both factions came out openly in support of their conviction’s precipitation verbal clashes unequalled in bitterness during the present extraordinary session.

Founded on Racial Hatred.

            Enemies of the Klan denounced the order as being founded upon racial hatred and religious intolerance and described it as a “revival of the organization of reconstruction days,” which was strongly condemned. Its friends defended it as a righteous organization upholding law and order in the midst of crime.


Louttit’s Legislative and Regulatory Roundup:

Hello All,

Happy Thanksgiving. Today’s column discusses a bill signed into law taking effect on October 25, 2023, that modernizes and updates New York State law with respect to the disposal and transfer of a motor vehicle which has sustained a total loss. We anticipate that this new law will expedite the payment of certain first party claims in New York.


Robert P. Louttit

[email protected]


Use the Rod, Lose the Child – 100 Years Ago:

Daily News
New York, New York

24 Nov 1923


            Resenting a spanking given by his mother, Bernard Lindstrom, fourteen, son of the Rev. Gustav Lindstrom, North Bergen, N. J., left home yesterday.


Rob Reaches the Threshold:

Hello Readers,

We get this issue of Coverage Pointers to you all right before everyone sits down for a wonderful Thanksgiving dinner. I hope you all have a blessed holiday, surrounded by family and friends. Also, if you’re like me, you’ll take part in the classic tradition of passing out in front of the TV after watching the Cowboys lose. Then on the weekend, my fiancé and I go get our Christmas tree! Happy Holidays all.

For this issue, we examine another decision out of the First Department, which reviews the discrepancies of medical submitted by a plaintiff in opposition to a summary judgment motion, as viewed against earlier medical from other treating providers. Funny enough, the Court had questions on why the opposition papers claimed a serious injury when there were medical reports months after the subject accident that said Plaintiff was healed.

I hope you all enjoy the read.

Robert J. Caggiano

[email protected]


The Beginning of the End for the German Government – 100 Years Ago:

Daily News
New York, New York

24 Nov 1923



French Chamber of Deputies Votes Confidence in Poincare


            Berlin, Nov. 23. —The German Government has fallen, Chancellor Stresemann’s Ministry has formally resigned after an overwhelming defeat in the Reichstag and Germany gain is grown into a state of political disorder, of which no one can foretell the outcome.

            By a vote of 230 to 155, the Reichstag refused to grant the Chancellor its support. Chancellor Stresemann and his Cabinet, therefore, formally presented their resignations to President Ebert, who accepted them.

            A country without a Government, Germany hears disquieting talk of a dictatorship, of a sudden move from any quarter that feels itself capable of jumping into the breach which Stresemann’s downfall has created.

Political Meetings Banned.

            Possibility of a dictatorship is discussed widely in Berlin.  In Reichstag circles there were rumors that a coup might be sprung overnight.

            Fears are heightened by the action of Gen. von Seeckt, recently appointed dictator by the Federal Government, in prohibiting meetings by the Communists, Socialist or Nationalist parties. Therese are the three parties that ousted Stresemann. It is hinted Von Seeckt may aspire to the post of dictator.


North of the Border:

I wish my American friends a very happy Thanksgiving - an opportunity to enjoy good food, friends, and family. It’s time to pause and reflect on the fact that we are boundlessly fortunate to have the luxury to enjoy this time together. These are precious days.

My column this week deals with an important issue in determining the trigger on pollution incident coverage.



Heather A. Sanderson

Sanderson Law, Calgary, Alberta
[email protected]


Headlines from this week’s issue:


Dan D. Kohane
[email protected]

  • Policies Mean What They Say. Policy that Added Subsidiaries and Joint Ventures of Insured Does Not Provide Coverage to a Company that is a Joint Venturer of a Subsidiary

  • Bond Requirements Require Strict Compliance to be Enforced


Steven E. Peiper

[email protected]

  • After Demanding Appraisal, and Having the Award Vacated Due to Umpire Error, Insured is Free to Withdraw from Future Proceedings

  • Another COVID case, another Disclaimer Affirmed


Agnes A. Wilewicz

[email protected]

  • No SSL Coverage for Spouse Under Business Auto Policy Where Coverage was Never Paid for and Insurer and Insurance Aggregator Received no Request for Coverage. Summary Judgment Denied for Broker Due to Question Whether Spouse was an Intended Third-Party Beneficiary


Brian D. Barnas

[email protected]

  • Bad Faith Claims Survived Motion to Dismiss


Lee S. Siegel

[email protected]

  • Contractual Indemnity Explained

  • No Coverage for Doctor Who Used His Own Sperm to Inseminate Patients


Kyle A. Ruffner
[email protected]

  • Court Holds That Claim to Recover No-Fault Benefits from a Self-Insured Entity is Subject to Three Year Limitations Period


Ryan P. Maxwell

[email protected]

  • Although Named Insured’s Defense Costs had not Yet Eroded Applicable Additional Insured Limit of Liability, it May


Scott D. Storm

[email protected]

  • “It is Generally Wise to be Forthcoming with Details Inquired into By Your Insurance Company While Investigating Your Insurance Claim, Especially When Those Details Go to the Heart of the Investigation.”

  • After a Settlement Dispute Over Underinsured Motorist Benefits and an Arbitration Award for the Maximum UIM Benefit Under the Policy, Insured’s Subsequent Claims for Common Law Bad Faith, Statutory Bad Faith Under 42 Pa. Stat. § 8371, and a Claim Under the Pennsylvania Unfair Trade Practices and Consumer Protection Law are Dismissed.

  • Motions In Limine in Strict Products Liability Action: Expert testimony of Long-Term, Low-Temperature Ignition of Wood Admissible; Multiple Experts Precluded from Offering Cumulative Testimony; and Evidence of Prior Incidents Precluded as Not Shown to Have Occurred Under Similar Circumstances.

  • Requirement of New York Insurance Law Section 5208 that Claimant Report Occurrence to Police Within Twenty-Four Hours to Prevent Fraud Was Not Frustrated When the Delay in Filing was a Mere Forty-Eight Hours and Surveillance Footage Showing the Alleged Accident was Provided.

  • Federal Complaint Dismissed for Lack of Subject Matter Jurisdiction as No Diversity of Citizenship Against Underwriters at Lloyd’s, London.


Katherine A. Fleming

[email protected]

  • In Hawaii, an Insurer May Not Seek Reimbursement from an Insured for Defending Claims When an Insurance Policy Contains No Express Provision for Reimbursement—a Reservation of Rights Letter Will Not Do


Evan D. Gestwick
[email protected]

  • No Rescission Available to Insurer Where Insurer Fails to Show that it Would not Have Issued the Policy had the Application Questions been Accurately Answered


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

[email protected]

  • Police Car is Not a Motor Vehicle for Purposes of SUM Coverage

  • Pebbles and Rocks Under a Floor Mat Not Enough of an Emergency to Avoid a Rear-End Collision


Robert P. Louttit

[email protected]

  • An Act to Amend the General Obligations Law and the State Technology Law, in Relation to Electronic Signatures and Salvage Title


Robert J. Caggiano

[email protected]

  • First Department Unanimously Affirms Order Which Granted Summary Judgment for Defendants Dismissing Plaintiff’s Claim Based on Inability to Meet the Serious Injury Threshold Where Plaintiff’s Medical Evidence in Opposition was Insufficient to Raise a Triable Issue of Fact


Heather A. Sanderson

Sanderson Law, Calgary, Alberta
[email protected]

  • A Condition Precedent to Coverage that a Pollution Event be “Detected by any Person” Within 720 Hours of its Commencement Begins when a Reasonable Person Ought to have known that a Release has 0ccurred.


Happiest and healthiest of Thanksgivings, from your friends at Hurwitz Fine.



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]

Evan D. Gestwick

[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

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


Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley

Scott D. Storm

Brian D. Barnas


Dan D. Kohane
[email protected]

Alice A. Trueman

Joshua M. Goldberg


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


Dan D. Kohane
[email protected]


11/16/23       Allied World Ins. Co. v. National Union Fire Ins. Co.
Appellate Division, First Department
Policies Mean What They Say.  Policy that Added Subsidiaries and Joint Ventures of Insured Does Not Provide Coverage to a Company that is a Joint Venturer of a Subsidiary

Sabra, a company that produces food products, is a joint venture between nonparties Frito-Lay, Inc., and Strauss Group, with each company owning 50% of Sabra. Frito-Lay is a wholly owned subsidiary of PepsiCo, Inc.

In November 2016, after discovery of listeria on its manufacturing equipment, Sabra issued a voluntary recall of certain products; it then submitted claims to its insurers, including plaintiff Allied World, the issuer of a $5 million policy in excess of a primary $5 million policy.

For the relevant coverage period, National Union had issued PepsiCo a contaminated products plus insurance policy, which provided in the declarations that PepsiCo was the "named insured" and provided in an endorsement that the named insured included "subsidiaries and joint ventures in which [PepsiCo] ha[d] a 50% or greater ownership." After exhausting its policy limits, Allied commenced this action, seeking a declaration that National Union's policy provides coverage for Sabra's losses associated with the recall.

Sabra is not covered under the National Union policy. Sabra is not a subsidiary of PepsiCo and is not a joint venture of PepsiCo. Rather, Sabra is a joint venture of Frito-Lay and Strauss, and Frito-Lay is a subsidiary of PepsiCo. It is not possible for Sabra to be a subsidiary of PepsiCo when Sabra is not even a subsidiary of Frito-Lay, which is PepsiCo's subsidiary.


11/14/23       Prismatic Development Corp. v. International Fidelity Ins. Co.
Appellate Division, First Department

Bond Requirements Require Strict Compliance to be Enforced

Prismatic sought to require defendant IFIC to defend and indemnify it against a suit brought by a subcontractor, EIC Associates, Inc., who alleges, in part, that another subcontractor, Nacirema, performed its work deficiently, causing EIC to incur substantial costs in performing its work out of sequence. IFIC submitted documentary evidence demonstrating that plaintiff did not comply with the conditions precedent contained in paragraph 3 of the AIA Document A312 performance bond issued by defendant, warranting dismissal.

In opposition, plaintiff argued that strict compliance was not required in the circumstances of this case, because Nacirema already had substantially completed its work and had been paid before EIC raised complaints about its work. However, the language of the bond unambiguously requires compliance with the conditions before IFIC's. The conditions precedent unambiguously applies to all of IFIC's obligations, including its obligation to defend and indemnify plaintiff, which is set forth in the subcontract that is incorporated by reference into the bond.

Editor’s Note – A rare bond case, but hey, it is insurance.


Steven E. Peiper

[email protected]


11/17/23       Stanz v. New York Central Mut. Ins. Co.
Appellate Division, Fourth Department

After Demanding Appraisal, and Having the Award Vacated Due to Umpire Error, Insured is Free to Withdraw from Future Proceedings

Plaintiffs sustained a fire loss at their premises insured by NYCM.  NYCM accepted coverage for the loss and set about adjusting the claim.  Eventually, an undisputed offer of $370,000 was presented to plaintiffs.  Plaintiffs rejected the offer, and, in turn, made a demand for appraisal under terms of the policy.

When NYCM rejected the demand for appraisal, plaintiffs commenced an action seeking to compel NYCM’s participation pursuant to the terms of the policy provision at issue.  Eventually, the trial court granted the petition seeking to compel appraisal.  After the parties selected their individual appraisers, the court was again engaged to select an umpire.

Upon receipt of the award, NYCM rejected it as improper and resultant from appraiser error.  Plaintiffs commenced another petition seeking to confirm the umpire’s rendered award. The trial court vacated the umpire’s award and directed the parties back to the same umpire for further proceedings.  At that point, Plaintiffs indicated they were withdrawing from the appraisal process.

On appeal, the Fourth Department agreed that where, as here, an appraisal award is vacated through no fault of the insured, he or she is free to walk away from further proceedings.  At this point, plaintiffs are free to simply file a breach of contract plenary action and seek damages from NYCM.    


11/16/23       Crescent Land Dev. Assoc LLC v. Illinois Union Ins. Co.
Appellate Division, First Department

Another COVID Case, Another Disclaimer Affirmed

Plaintiffs sought policy benefits under an alleged pollution condition coverage for losses sustained during the COVID 19 pandemic.  Illinois Union denied the claim on the basis that it was not a “pollution condition” as defined by the policy, nor did the claim qualify as an “indoor environmental condition.” 

On appeal, the First Department concluded that “pollution condition” did not encompass “viruses or virus material.”  Further, viruses appear to be closer aligned with the coverage for “indoor environmental conditions”, than “pollution condition.” 

With regard to the “indoor environmental condition,” the policy was modified by endorsement which removed viruses as a result of communicability through human-to-human contact or bodily fluids. Because COVID is/was transmitted by “respiratory droplets,” it was not included within the grant of coverage.


Agnes A. Wilewicz
[email protected]


11/17/23           Michelle Smith v. NGM Insurance Company, et al.
Appellate Division, Fourth Department
No SSL Coverage for Spouse Under Business Auto Policy Where Coverage was Never Paid for and Insurer and Insurance Aggregator Received no Request for Coverage. Summary Judgment Denied for Broker Due to Question Whether Spouse was an Intended Third-Party Beneficiary

Michelle Smith (Plaintiff) and her husband, nonparty Josh Smith (Smith), were involved in a single vehicle accident that occurred while Smith was driving, causing Plaintiff serious physical injuries. The vehicle was insured under a commercial auto policy issued to Smith by defendants NGM Insurance Company and The Main Street America Group (collectively, the MSA defendants). In anticipation of bidding on a painting contract, Smith contacted defendant Dave McMahon Insurance Agency, Inc. (DMIA) to obtain the required insurance. DMIA had an agreement with an insurance aggregator, defendant DeForest Group, Inc. (DeForest) and would forward applications for insurance to DeForest, who would then procure insurance proposals for DMIA’s customers.

Through DMIA and DeForest, Smith obtained several commercial insurance policies from the MSA defendants, including the subject commercial auto policy. Smith and Plaintiff believed that the policies contained provisions for supplemental spousal liability (SSL) coverage. After the MSA defendants denied coverage for Plaintiff, she sued, alleging that the insurance policies issued by the MSA defendants contained SSL coverage and that the MSA defendants breached the duty of good faith and fair dealing. Plaintiff alleged that DeForest and DMIA breached their contractual obligations to procure SSL coverage and were negligent in failing to procure SSL coverage. The defendants all filed motions for summary judgment, contending that they had no obligation to provide insurance benefits to Plaintiff, Plaintiff was not an intended third-party beneficiary of the policies, and Plaintiff lacked the requisite privity with them to maintain the action. The supreme court granted the motions for summary judgment. Plaintiff appealed.

On appeal, the Fourth Department agreed that DeForest and the MSA defendants had established that the policies did not contain any SSL provisions, no SSL premiums were paid, and they never received any request for such coverage. The Court concluded that DeForest and the MSA defendants established that Plaintiff was not an intended third-party beneficiary to the policies with the requisite privity to enforce the policies. However, the Court found that Plaintiff may have viable causes of action against DMIA as an intended third-party beneficiary if she can establish that a request for SSL coverage was properly made.

In opposition to DMIA’s motion for summary judgment, Plaintiff submitted deposition testimony from herself and Smith, contending that a DMIA employee told Smith about SSL coverage, Smith told the employee that he wanted to procure SSL coverage, the employee provided Smith with an SSL form for Plaintiff to sign, Plaintiff signed an SSL form, and Smith returned the signed SSL form to another former employee at DMIA. The conflict in the evidence submitted by DMIA and Plaintiff regarding whether Smith provided a written request for SSL coverage raised a question of credibility to be resolved at trial, so the Court modified the order by denying DMIA’s motion and reinstating the complaint against DMIA.


Brian D. Barnas

[email protected]


11/07/23       Brown v. Aimbridge Hosp.
United States District Court, Eastern District of Kentucky
Bad Faith Claim Survived Motion to Dismiss

Brown was injured at the Griffin Gate Marriot pool on September 3, 2022.  According to her complaint, Brown was walking back to her rented cabana from the restroom when she was approached by a Marriot-employed waitress.  To avoid crowding the walkway, Brown stepped aside to speak with the waitress.  When she began walking back to her cabana, she walked directly into an alleged defective metal twist key protruding from an umbrella stand.  The contact wounded her leg, and her injury required nineteen stitches.

The Hotel was insured by Starr and Gallagher Bassett was Starr’s third-party administrator.  Following the incident, Brown filed a claim with Gallagher Bassett.  Gallagher Bassett denied the claim and asserted that there was no liability due to the open and obvious nature of the umbrella stand.  Despite denying liability, Gallagher Bassett offered to pay up to $5,000 for medical expenses. On March 29, 2023, Brown demanded $100,000 from Gallagher Bassett.  The demand included photographs of the Marriott pool area, a photo of the umbrella stand, Brown's medical records and bills that totaled $2,901.80, and a photo of Brown's injury.  Starr/Gallagher Bassett responded acknowledging that they received the demand package and once again took the position that there was a clear lack of liability on behalf of Aimbridge.  The initial offer was reconveyed.

Brown initiated suit and brought numerous statutory and bad faith insurance claims against Starr and Gallagher Bassett.  The claims alleged that Gallagher and Starr refused to pay the claim without a reasonable investigation, they lacked a reasonable basis in law or fact for denying the claim and knew or acted with reckless disregard for whether such a basis existed, and they attempted to settle a claim for less than the amount which a reasonable person would have believed he was entitled to. Defendants filed a motion to dismiss, arguing that the facts pleaded do not state a cause of action under Kentucky law.

The court denied the motion.  Kentucky law requires evidence of outrageous conduct by the insurance company to support a bad faith claim.  The court concluded that Brown pleaded sufficient facts to make a plausible claim that Gallagher/Starr acted outrageously.  Brown pleaded that her injury resulted in nineteen stitches and permanent scarring.  The exhibits attached to the complaint further revealed that Gallagher/Starr's offered to pay up to $5,000 of Brown's medical expenses along with the $2,500 settlement offer.  Based on these facts, the court held it was at least plausible that the offer of $2,500 was grossly inadequate to compensate for Brown's injuries and Gallagher/Starr's conduct was outrageous.

The court also found that Brown pleaded the necessary three elements of bad faith under Kentucky law.  First, since Brown pleaded that the accident happened at the Hotel which was insured by Starr, it is plausible that Starr/Gallagher must pay the claim under the terms of the policy.  Second, it is plausible that there was not a reasonable basis in law or fact for denying the claim.  Gallagher/Starr stated that Brown's claim was denied because the umbrella stand was open and obvious and did not present an unreasonably dangerous condition.  The court found that at the early stage of the litigation it did not have enough facts to determine if that was a reasonable basis for denial or whether Gallagher/Starr knew that it was not a reasonable basis for denial.  Accordingly, the court allowed the bad faith claim to survive.


Lee S. Siegel

[email protected]


11/09/23       Brazao v. Pleasant Valley Apartments, LLC
United States District Court for the District of Connecticut
Contractual Indemnity Explained

While not an insurance case per se – surely there were insurance companies behind the motions – the court applied traditional insurance-based duty to defend concepts in extending a defense obligation to a general contractor. These are helpful to review.

Brazao was injured on a construction site when the railings on a second story platform collapsed.  The injured worker sued the project owner and general contractor for negligence. The defendants, in turn, commenced a third-party action against 84 Lumber, the railing subcontractor, seeking defense and indemnity. The plaintiff then amended the complaint to allege that 84 Lumber was also negligent.

Here, the facts are a bit unusual, however, they demonstrate the scope of the duty to defend. 84 Lumber subcontracted the railings to United Builders Solutions, Inc., which completed the railing installation in November 2019. On January 10, 2020, A.R. Building executed an “Inspection Sign Off,” indicating that the siding, decking, and railings were completed. Later, other contractors removed the railings of some of the balconies to use as loading platforms. According to one A.R. Building superintendent, these contractors were responsible for re-installing the railings after they finished loading their materials.

Brazao fell on January 16, 2020.

AR Building, the general contractor, tendered its defense to 84 Lumber, which resisted, claiming that it did not owe a defense or indemnity because the accident did not arise out of its installation of the railings. The general contractor moved for summary judgment.

The court first noted the language of the trade contract’s indemnity provision:

To the fullest extent permitted by law, Contractor hereby agrees to defend, save, indemnify and keep A.R. BUILDING COMPANY, INC. harmless against all demands, claims, causes of actions, damages, liabilities, penalties, and expenses (including fees and disbursements of counsel) arising out of or resulting from Contractor's performance of (and/or failure to perform) this Agreement…caused, in whole or in part, by any act or omission, or alleged act or omission, of Contractor, Contractor's subcontractors, its employees, or agents, whether or not caused in part by A.R. BUILDING COMPANY, INC.

A rider to the agreement, however, limited the scope of the indemnity obligation, eliminating the crucial “in whole or in part” language.

Any defense, indemnification, hold harmless, additional insured or similar obligation imposed on 84 [Lumber] under the Agreement shall be limited to any claims, demands, damages, defense expenses (including reasonable attorneys’ fees and litigations costs) or liabilities to the extent caused by 84 [Lumber's] negligence and joint negligence in or relating to the performance of its Work.

(Emphasis added.) The court, in footnote 2, attempts to harmonize the two provisions but, as you will see, ultimately treats them rather equally.

The court easily disposed of the indemnity motion, denying it. The court held that, “this evidence raises the reasonable inference that Brazao's fall did not arise out of or result from [the subcontractor’s] installation of the railing but rather from the negligence of one of the other contractors working at the site…. When viewing the evidence in favor of nonmovant 84 Lumber, as I must for the purposes of summary judgment, I find that a reasonable jury could decide this factual dispute in favor of 84 Lumber.”

The court then turned to the duty to defend. 84 Lumber argued that the standard concepts such as the duty to defend is broader than the duty to indemnify and related insurance coverage concepts, should not apply outside the insurance context. 84 Lumber relied on Medina v. CEO Services, LLC, where the court reasoned that “the risks assumed by an insurance company in issuing a liability policy to an insured are far different, and greater, than the risks assumed by a snow removal contractor that agrees to remove snow and ice from only certain portions of its customer's property.” 2022 WL 2063987, at *3 (Conn. Super. Ct. June 7, 2022). The Medina court noted that there was a genuine issue of material fact regarding liability, and as such, declined to award summary judgment on the issue of the duty to defend.

The court noted that despite this most recent ruling, many other trial courts in Connecticut have reached the opposite conclusion. While there is no Connecticut appellate authority, the court declined to make an Erie guess and instead held that based on the underlying plaintiff’s allegations, there is no disputing that the claim against the general contractor arises, at least in part, out of the installation of the railings.

In addition, the court, commenting on New York law, held that the contractual agreement to procure insurance coverage is equivalent to an agreement to defend. “This provision, too, conveys an intent that 84 Lumber would be responsible for ensuring that A.R. Building was protected from claims asserting bodily injury, including from the need to pay defense costs during the litigation of those claims. Indeed, even in New York, which generally does not treat the duty to defend outside the insurance context as being any broader than the duty to indemnify, courts regard provisions requiring the procurement of insurance coverage as tantamount to a promise to defend the promisee while claims are being litigated.”


11/08/23       Integris Ins. Co. v. Tohan
Superior Court of the State of Connecticut, Hartford
No Coverage for Doctor who Used His Own Sperm to Inseminate Patients

Integris brought this declaratory judgment against its medical liability insured, Dr. Tohan, claiming that it has no obligation to defend or indemnify him for underlying claims that he used his own sperm to impregnate two infertility patients without the patients’ consent. The underlying plaintiffs are the daughters of the patients, born in 1987 and 1990. They claim that Tohan is their biological father, and allege that he acted negligently, fraudulently, and in violation of CUTPA.

The claim was first made against Tohan during the 2005 policy period, which contained an October 1, 1984, retroactive date. Coverage had been continuous since 1986. The policy afforded coverage for damages because of a medical incident, defined as “any act or omission in the furnishing of professional services.” The policy included exclusions for damages arising out of sexual intimacy, sexual molestation, sexual harassment, sexual exploitation, sexual assault or sexual contact; willful, wanton, intentional, dishonest, fraudulent, criminal, illegal or malicious acts or omissions; and any obligation to pay punitive or exemplary damages. The carrier afforded a defense and commenced the coverage action asserting that the underlying claims are not a medical incident, are otherwise excluded, and that the claim was not timely reported.

Dr. Tohan first argued, in opposition to the carrier’s summary judgment motion, that the coverage is not capable of being adjudicated by the court on the unproven allegations of the complaint. Not a strong argument, although one I’ve heard raised by policy holder lawyers repeatedly. Still the court easily dismissed it.

The more involved issue for the court was whether using the doctor’s own sperm to inseminate his patients was an alleged medical incident. Ultimately, the court concluded that it was. “[I]n the present case, the insemination procedure could be found to be inextricably intertwined and inseparable from the alleged conduct that serves as a basis for the [underlying] action, which is that the defendant, as a reproductive endocrinologist, inseminated his patients with his own sperm without their consent.” The court held, therefore, that plaintiffs alleged injury arising from a medical incident because the treatment of their mothers was a professional service.

But no need to worry, as the court found that all the underlying causes of action fell equally within the intentional conduct and sexual misconduct exclusions. Integris argued that the doctor’s intent to cause harm should be inferred as a matter of law because his alleged conduct was so inherently harmful that the resulting damage is unarguably foreseeable. The insured argued that he was entitled to coverage because the underlying complaint alleged that he acted negligently, in addition to intentionally. The court wasn’t buying that.

The court, relying on Supreme Court precedent, held that just because a claim is alleged to be negligent the court is free to examine the alleged behavior without regard to legal conclusions. Further, where harmful intent may be inferred from inherently harmful conduct that a court may deem the resulting harm foreseeable. Well, that’s exactly what happened here, and the court held that all the damage alleged in the underlying action fell within the intentional conduct exclusion.

In dicta, the court also held that the sexual misconduct exclusion applied. Importantly, the court held that the exclusion is devoid of an intent element. See Merrimack Mutual Fire Ins. Co. v. Ramsey, 117 Conn. App. 769, 772-73, 982 A.2d 195 (affirming summary judgment in favor of plaintiff insurer and holding that injuries suffered in underlying action were excluded from coverage because relevant “exclusion expressly exempts coverage for bodily injury arising out of physical abuse. Nowhere does it provide that a consideration of the abuser's intent is required. In fact, the policy contains a separate exclusion that applies specifically to intentional acts.... When both exclusions are read together, it is clear that [the physical abuse] exclusion ... does not require a consideration of the insured's intent.” [Internal quotation marks omitted.]), cert. denied, 294 Conn. 920, 984 A.2d 67 (2009).

Here, the court held that the plaintiffs’ injuries arise out of excluded “sexual contact” because the injuries arose from “contact” with the insured’s sperm. “[T]he insertion of sperm other than the sperm consented to into a woman's cervix in order to impregnate that woman is aptly characterized as, at least, sexual contact.,” the court wrote.

[Ed Note: Given that the term “sexual contact” was undefined in an exclusion and, therefore, under the rules of construction must be narrowly construed, this aspect of the decision may not be affirmed on appeal. The exclusion speaks to sexual misconduct such as harassment, sexual exploitation, sexual assault, or sexual contact. Given the other conduct which gives “sexual contact” context, it is at least a reasonable interpretation that the exclusion only bars direct sexual conduct and not something as remote as what is alleged here. Nevertheless, an appellate court is unlikely to need to reach this exclusion to affirm.]


Kyle A. Ruffner
[email protected]


11/15/23       Lavern Pinder v. Sonnet Service Co., Inc.
Appellate Division, Second Department
Court Holds that Claim to Recover No-Fault Benefits from a Self-Insured Entity is Subject to Three Year Limitations Period

The plaintiff commenced this action to recover no-fault benefits for injuries she allegedly sustained while a passenger in a taxi that was involved in a motor vehicle accident. At the time of the accident, the defendant was the self-insured owner of the taxi.

It was undisputed that more than three years after the defendant made partial payment to the plaintiff of requested no-fault benefits, the plaintiff commenced this action to recover the unpaid balance. Therefore, the defendant moved for summary judgment dismissing the complaint, on the ground that the action was time-barred pursuant to the three-year statute of limitations found in CPLR 214(2). The plaintiff opposed the motion, contending that the action was governed by the six-year statute of limitations set forth in CPLR 213(2), and that the action was timely commenced. The Supreme Court granted the defendant’s motion and held that the action was timed barred pursuant to CPLR 214(2).

On appeal, the only issue considered by the court was which statute of limitation applied. The three-year statute of limitations under CPLR 214 (2) applies to actions to recover upon a liability created or imposed by statute. The defendant argued that this limitations period governed because defendant was a self-insured entity at the time of the subject accident and therefore had no contract for insurance with respect to that loss, as opposed to CPLR 213 (2), which establishes a six-year period of limitations for an action based upon a contractual obligation or liability. The defendant relied upon the authority of the Appellate Division, First Department, providing that a self-insured's "obligation to provide no-fault benefits arises out of the no-fault statute," and that "the three-year statute of limitations as set forth in CPLR 214 (2)" applies to disputes with respect to the payment of such benefits by a self-insured (M.N. Dental Diagnostics, P.C. v New York City Tr. Auth., 82 AD3d 409, 410 [1st Dept 2011]).

The court sided with the defendant, relying on the Court of Appeals holding in Contact Chiropractic, P.C. v. New York City Tr. Auth., 31 N.Y.3d 187 (2018). In that case, the court determined that the no-fault benefits in dispute were not provided by a contract with a private insurer and the defendant met its statutory obligation by self-insuring. “No-fault is a creature of statute (see Aetna Life & Cas. Co. v Nelson, 67 NY2d 169, 175 [1986] [‘the No-Fault Law does not codify common-law principles; it creates new and independent statutory rights and obligations in order to provide a more efficient means for adjusting financial responsibilities arising out of automobile accidents’]).” The Court of Appeals determined that the holding in Aetna Life & Cas. Co. was applicable, as "first-party benefits are a form of compensation unknown at common law, resting on predicates independent of the fault or negligence of the injured party" (id. at 175). In the absence of private law requiring defendant to pay first-party benefits, or in the absence of a contract for insurance, the only requirement that defendant provide such remuneration to the assignee as a result of the accident appears in relevant parts of the Vehicle and Traffic Law and the Insurance Law. Consequently, the source of the claim was wholly statutory, meaning that the three-year period of limitations in CPLR 214 (2) should control.

Therefore, contrary to the plaintiff's contentions, the court held that a claim to recover no-fault benefits from a self-insured entity such as the defendant is subject to the three-year limitations period set forth in CPLR 214(2). Accordingly, the action was time-barred.


Ryan P. Maxwell

[email protected]


11/13/23       Zurich Am. Ins. Co. v. XL Ins. Am.

Southern District of New York

Although Named Insured’s Defense Costs had not Yet Eroded Applicable Additional Insured Limit of Liability, it May

This declaratory action arose out of a personal injury lawsuit filed in New York’s Orange County Supreme Court. David Geoff Stewart (“Claimant”) alleged that he sustained injuries after a micropile struck him while he was employed by D.A. Collins Construction Company (“D.A. Collins”). D.A. Collins was under contract with the City of Port Jervis to operate as the general contractor for a construction project (“Project”), and in that capacity, entered into a subcontract agreement with Hayward Baker, Inc. (“HBI”) on September 17, 2018 (“HBI Subcontract Agreement”). Dkt. No. 85 ¶¶ 2-4; Dkt. No. 91 ¶¶ 2-4. The HBI Subcontract Agreement contained a provision entitled “Insurance Requirements,” which sets forth parameters for the insurance policy that HBI would be required to obtain in connection with the Project, including providing additional insured coverage to the City of Port Jervis, and HBI obtained that coverage from XL Insurance America.

Following prior litigation that resulted in a finding that XL had a duty to defend the City of Port Jervis on a primary, non-contributory basis, XL offered to defend D.A. Collins and Clough Harbor & Associates (“Clough Harbor”) as additional insureds, and to reimburse past defense costs, subject to a reservation of rights. Zurich accepted XL's offer to defend D.A. Collins and Clough Harbor and to reimburse their past defense costs and requested that XL identify the costs and expenses that have eroded the XL Primary Policy. XL’s calculation led to this action, in that its computation of the Remaining Limit presumed that its defense costs spent on HBI’s defense reduced the limit of the policy available to the additional insureds.

The S.D.N.Y. spent little time finding that “[c]osts incurred on behalf of HBI do not tally toward the $1,000,000 limit of liability applicable to the additional insureds under the XL Primary Policy,” because a few reasons.

First, “[b]oth the ‘Limits’ Clause and the ‘Most We Will Pay’ Clause limit the amount of insurance coverage to the lesser of the amount provided in the XL Primary Policy ($2,500,000) or the amount provided in the additional insured contract or agreement,” which the SDNY had previously determined.

Second, the court notes that “[t]he coverage caps that apply by way of the Limits Clause and the Most We Will Pay Clause apply only, by their own words, to additional insureds,” and HBI is instead a named insured. Thus, “[t]he additional insureds have a contractual right to up to $1,000,000 in coverage and will be able to enjoy that full amount of coverage unless and until any HBI defense costs exhaust not only the $1,500,000 but portions of the $1,000,000 in coverage at the bottom of the insurance stack.”

Third, “[t]he Separation of Insureds Clause does not, as XL argues, require that the XL Primary Policy be read such that defense costs incurred on behalf of HBI count toward the $1,000,000 limit of liability imposed on the additional insureds by the Limits Clause and the Most We Will Pay Clause.” This is because the inclusion “of the proviso that begins the Separation of Insureds Clause- ‘[e]xcept with respect to the Limits of Insurance’-is to ensure that the remainder of the clause does not create duplicative coverage limits that are separately available to each named insured.” It does not, however, mean that “defense costs incurred on behalf of HBI” somehow “count towards the distinct and additional coverage limit of $1,000,000 applied to the additional insureds by way of the Limits Clause and the Most We Will Pay Clause.” The SDNY instead found that “[t]he $1,000,000 limit imposed by the Limits Clause and the Most We Will Pay Clause acts as a maximum, but not a minimum, of coverage available to the additional insureds,” which would permit “the coverage available to the additional insureds [to] be eroded below $1,000,000” under circumstances not present here.

Ultimately, Zurich’s motion for partial summary judgment was granted in part and denied in part. Although “[d]efense costs incurred on behalf of HBI do not count towards the $1,000,000 limitation of liability applicable to the additional insureds under the XL Primary Policy” at this point in time, “Defense costs incurred on behalf of HBI may [potentially] erode the coverage available to the additional insureds if defense costs incurred on behalf of HBI exceed $1,500,000 before the $2,500,000 of coverage available under the XL Primary Policy is exhausted.”


Scott D. Storm

[email protected]


11/02/23  William Goldsmith v. Nationwide Ins. Co.
United States District Court, Middle District of Pennsylvania
“It is Generally Wise to be Forthcoming with Details Inquired into By Your Insurance Company While Investigating Your Insurance Claim, Especially When Those Details Go to the Heart of the Investigation”

My new favorite quote from a court.  I can’t wait to use it in my next fraud related motion.  And with that, the court dismissed the plaintiff’s bad faith claim.

[Abridged] Nationwide felt Plaintiff was not forthcoming with key details in its investigation into the alleged theft and arson of his car—such as when Goldsmith last saw the car or the fact that his daughter had been convicted of stealing his car before. Goldsmith says Nationwide denied his claim in bad faith. Nationwide now moves for summary judgment. A review of the record reveals Goldsmith has not come forward with sufficient evidence to show that Nationwide lacked a reasonable basis for denying his insurance claim, which is fatal to his bad faith claim.

A bad faith claim under 42 Pa.C.S. §8371 requires the plaintiff to show by clear and convincing evidence that the insurer (1) did not have a reasonable basis for denying benefits under the policy and (2) knew of or recklessly disregarded its lack of reasonable basis in denying the claim. The Third Circuit has described "the essence of a bad faith claim" as "the unreasonable and intentional (or reckless) denial of benefits." "Bad faith" in this context means:

any frivolous or unfounded refusal to pay proceeds of a policy; it is not necessary that such refusal be fraudulent. For purposes of an action against an insurer for failure to pay a claim, such conduct imports a dishonest purpose and means a breach of a known duty (i.e., good faith and fair dealing), through some motive of self-interest or ill will; mere negligence or bad judgment is not bad faith.

Mere negligence or bad judgment does not constitute bad faith; knowledge or reckless disregard of a lack of a basis for denial of coverage is necessary.  As such, an insurer may defeat a claim of bad faith by showing that it had a reasonable basis for its actions. 

The plaintiff's burden of proof in a bad faith insurance case is significant; it requires evidence "so clear, direct, weighty and convincing as to enable a clear conviction, without hesitation, about whether or not the defendants acted in bad faith."  

Here, a review of the undisputed material facts, of which there are many on this record, reveals Goldsmith cannot demonstrate bad faith on the part of Nationwide by sufficient evidence. Nationwide, as the moving party, has demonstrated it had a reasonable basis in denying Goldsmith's claim: namely, that he violated the policy's material misrepresentation provision when he provided inconsistent statements on the whereabouts of his truck prior to the theft and, more significantly, that he denied on multiple occasions that anyone had stolen his vehicle before, even though his daughter had been previously convicted of doing so in 2012.  "Pennsylvania courts have long ruled that a violation of the fraud and concealment provision of an insurance policy . . . serves as a complete bar to the insured's recovery under the policy."

The materiality of this information is plain, especially the information about Goldsmith's daughter's prior theft. "A misrepresentation is material if `a reasonable insurance company, in determining its course of action, would attach importance to the fact misrepresented.'" "A misrepresentation is also material if `[it] may be said to have been calculated either to discourage, mislead or deflect the company's investigation in any area that might seem to the company, at that time, a relevant or productive area to investigate.'"  Goldsmith's claim centered on the alleged theft and arson of his car. A reasonable insurer would want to know whether the insured had any idea who may have stolen the car. The fact that Goldsmith's daughter had done so in the past is clearly something a reasonable insurer would want to know. So, Goldsmith's original withholding and subsequent dual affirmations that no one had ever stolen his car in the past could reasonably be considered by an insurer to be a material misrepresentation.

In Rule 56 terms, then, the burden shifts to Goldsmith to show sufficient evidence to support a jury verdict in his favor. Goldsmith attempts to meet his burden by primarily arguing Nationwide conducted an incomplete investigation. Goldsmith avers Nationwide: (1) "is unable to provide any explanation or even any hint of any explanation for a motive on Goldsmith's part to either take part or participate in the theft and burning of his truck," (2) did not attempt to speak with the police or other relevant persons to "resolve any perceived inconsistencies" in Goldsmith's representations and (3) did not consider or investigate the fact that the truck's owner's manual allegedly provided an alternative method for making a key. These arguments fall well short of Goldsmith's burden of showing bad faith by clear and convincing evidence.

An insurer is not required to show that "the process used to reach its conclusion was flawless or that its investigatory methods eliminated possibilities at odds with its conclusion"; rather, an insurer need only show "it conducted a review or investigation sufficiently thorough to yield a reasonable foundation for its action."  Nationwide has done so here. Nationwide conducted a financial stress analysis, reviewed the police report, contacted the state police, inspected the vehicle, took several statements from Goldsmith, visited and photographed Goldsmith's property, tried to reach out to Goldsmith's daughter, and hired two experts. In addition, it was not unreasonable for Nationwide to rely on the reports of the two experts which provided that the only two keys in existence were the ones Goldsmith had, and that the vehicle was last operated by a properly cut and coded key. Notably, Goldsmith, whose burden it is to prove bad faith at trial, has not come forward with any counter expert to controvert Nationwide's experts.

Moreover, it is not Nationwide's burden to establish a specific motive on Goldsmith's part, or to pursue every conceivable investigatory angle. Instead, the record reveals Nationwide investigation was "sufficiently thorough to yield a reasonable foundation for its action."  And Goldsmith has not come forward with sufficient evidence to demonstrate Nationwide lacked a reasonable basis in denying his claim. Accordingly, the court will enter summary judgment in favor of Nationwide.

10/31/23       Lisa Carr v. Travelers Home and Marine Ins. Co.
United States District Court, Eastern District of Pennsylvania
After a Settlement Dispute Over Underinsured Motorist Benefits and an Arbitration Award for the Maximum UIM Benefit Under the Policy, Insured’s Subsequent Claims for Common Law Bad Faith, Statutory Bad Faith Under 42 Pa. Stat. § 8371, and a Claim Under the Pennsylvania Unfair Trade Practices and Consumer Protection Law are Dismissed

[Abridged] Presently before the Court is Defendant Travelers' Motion to Dismiss the Complaint. For the following reasons, the Motion is granted. This case involves a settlement dispute between Lisa Carr and her insurer, Travelers Home and Marine Insurance Company. After being injured in a car accident, Carr filed a claim with Travelers under her automobile insurance policy for underinsured motorist benefits. The parties engaged in an extensive back and forth over the course of more than two years in which Travelers ultimately made three settlement offers, each of which was rejected by Carr and her counsel. The parties' dispute was eventually submitted to arbitration, and Carr was awarded $100,000, the maximum UIM benefit under her policy.

 Carr filed a complaint in the Court of Common Pleas of Philadelphia County against Travelers, alleging common law bad faith, a statutory bad faith claim under 42 Pa. Stat. § 8371, and a claim under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Stat. § 201-1 et seq. Travelers removed the case to this Court and filed a motion to dismiss each claim. For the following reasons, each claim is dismissed. First, the common law bad faith claim is barred by res judicata. Second, the statutory bad faith claim does not raise a plausible claim for relief. Finally, the consumer protection law claim is not actionable based on the conduct alleged here.

In Count I, Carr alleges that Travelers violated its common law duty to act in good faith. To the extent that Carr alleges a tortious violation of this duty, she does not present an actionable cause of action. It is well-established that "Pennsylvania does not recognize a cause of action for breach of good faith and fair dealing sounding in tort." 

"Under Pennsylvania law, bad faith by an insurance company can give rise to two separate causes of action: a breach of contract action for violation of an insurance contract's implied duty of good faith, and a statutory action under the terms of Pennsylvania's bad faith statute, [Section 8371]."  "With respect to a breach of contract action, Pennsylvania courts have held that the common law duty of good faith and fair dealing is implied in every contract."  Consequently, "courts have consistently concluded that a plaintiff cannot bring a freestanding common law bad faith claim and a separate breach of contract claim, as the former is subsumed within the latter." 

To the extent that Carr suggests that her common law bad faith claim amounts to a breach of contract claim, that claim is barred under the principle of res judicata. Carr voluntarily submitted to arbitration to adjudicate what she was owed under the terms of her policy with Travelers. She had the opportunity to raise her common law bad faith claim there, as it was subsumed within her breach of contract claim and it only concerned alleged conduct that occurred before the arbitration proceeding. She cannot now bring that claim in a judicial adjudication. 

In Count II, Carr alleges that Travelers is also liable for its alleged bad faith under Section 8371, Pennsylvania's statutory bad faith cause of action. In order to show bad faith on the part of an insurer under that statute, and insured must demonstrate that (1) the insurer did not have a reasonable basis for denying benefits under the relevant policy, and (2) the insurer knew or recklessly disregarded its lack of a reasonable basis in denying the insured's claim.  In other words, bad faith on part of an insurer "is a frivolous or unfounded refusal to pay" a claim.  Bad faith can also be shown by lack of investigation into the facts of a claim or a failure to communicate with a claimant. 

While Carr's allegations lay out a possibility that Travelers behaved in a way that meets the standard of bad faith under Section 8371, they ultimately do not rise to the level that makes it plausible that Travelers did so.  Importantly, Carr's complaint contains a litany of the kind of conclusory allegations and threadbare recitals of a cause of action that are plainly insufficient to survive a motion to dismiss. 

Critically, Carr's factual allegations do not provide sufficient support to her claim of bad faith for this claim to survive a motion to dismiss. These allegations essentially amount to frustration that Travelers provided settlement offers that were lower than she desired, responded more slowly and less frequently than she would have liked, and relied on its own experts. However, Carr's allegations do not on their face paint a picture of Travelers knowingly or recklessly disregarding a lack of a reasonable basis for denying Carr's claim.

To the extent Carr alleges that Travelers engaged in bad faith by making unreasonably low settlement offers, she does not make a cognizable claim of bad faith. "`[B]ad faith is not present merely because an insurer makes a low but reasonable estimate of an insured's damages.'"  Nor does "the failure to immediately accede to a demand for the policy limit ... without more, amount to bad faith" under Section 8371.  Travelers' settlement offers of $5,000, $40,000, and $50,000, while all considerably lower than the ultimate award of $100,000, were not unreasonable in light of the fact that Traveler's increased its offer considerably from $5,000 to $40,000 (and eventually $50,000) after being given the chance to review new medical records sent by Soll. “A difference between the offer and the amount awarded is not, by itself, evidence of bad faith."

Nor does a long period of time between demand and settlement does not, on its own, necessarily constitute bad faith. Rather, courts have looked to the degree to which a defendant insurer knew that it had no basis to deny the claimant; if delay is attributable to the need to investigate further or even to simple negligence, no bad faith has occurred.

Finally, to the extent Carr argues that Travelers engaged in bad faith by placing more credence in its own experts compared to hers, that does not support a claim for bad faith under Section 8371. An insurer is under no obligation to accept the determinations of the insured's treating physicians at face value.  Travelers was well within its rights to rely on its own experts.

Ultimately, Carr has not provided sufficient factual support to make a plausible, non-speculative claim that Travelers knew or recklessly disregarded that it had no reasonable basis to deny Carr what she was seeking.

In Count III, Carr alleges that Travelers' conduct with regards to her UIM claim violated Pennsylvania's consumer protection statute, the UTPCPL. Travelers argues that the UTPCPL does not apply to this matter, as the "mere refusal to pay a claim, or failure to investigate or take other action, is nonfeasance and is, thus, not actionable" under this law.  As this Court held a few years ago,

The insurance bad faith statute applies to post-contract formation conduct. The UTPCPL, on the other hand, applies to conduct surrounding the insurer's pre-formation conduct. The UTPCPL applies to the sale of an insurance policy. It does not apply to the handling of insurance claims.... Rather, § 8371 provides the exclusive statutory remedy applicable to claims handling.

In any event, because Carr did not respond at all to Travelers' arguments with regard to Count III in its response, she has waived this claim. Consequently, Count III is dismissed with prejudice.

11/07/23       Country Mutual Ins. Co. v. Broan Nutone, LLC
United States District Court, Northern District of New York
Motions In Limine in Strict Products Liability Action: Expert Testimony of Long-Term, Low-Temperature Ignition of Wood Admissible; Multiple Experts Precluded from Offering Cumulative Testimony; and Evidence of Prior Incidents Precluded as Not Shown to Have Occurred Under Similar Circumstances

[Abridged] The parties have moved in limine to exclude certain evidence in advance of trial.  This action arises from a fire that occurred at an apartment building owned by Country Mutual's insured, Chason Management, LLC.  Plaintiff brought suit against Broan, arguing that the fire was caused by the malfunctioning of an exhaust fan manufactured by defendant. Plaintiff originally asserted claims against defendant for strict products liability, negligence, and breach of warranties. However, only plaintiff's strict products liability claim remains for trial.

A party may seek a ruling on the admissibility of certain anticipated evidence by filing a motion in limine to exclude anticipated prejudicial evidence before the evidence is actually offered.

Country Mutual's two motions in limine seek to exclude certain expert witness testimony and preclude cumulative expert witness testimony.  Broan's motion in limine seeks to preclude plaintiff from offering into evidence or referring to prior incidents involving exhaust fans.

The sole claim remaining for trial is strict products liability. "Under New York law, a manufacturer who places into the stream of commerce a defective product which causes injury may be held strictly liable."  There are three types of product defects recognized under New York law: (1) a manufacturing defect; (2) a design defect; and (3) a warning defect. 

In the present matter, Country Mutual asserts that the exhaust fan at issue in this case was: (1) defectively manufactured because its internal temperature control failed to activate and prevent an overheating incident that led to the fire; and (2) defectively designed because its internal temperature control was in a location that may not allow it to detect overheating events. 

To establish a strict products liability claim based on a manufacturing defect, a plaintiff "must prove: (1) a defect which existed at the time the product left the defendant's control, due to an error in the manufacturing process; (2) a causal connection between the defect and the injury; and (3) damages." 

To prevail on a strict products liability claim predicted on a design defect, a plaintiff "must show: (1) the product as designed posed a substantial likelihood of harm; (2) it was feasible to design the product in a safer manner; and (3) the defective design was a substantial factor in causing the plaintiff's injury." 

Country Mutual's first motion seeks to preclude Broan's experts, James Smolka and Dennis Scardino from providing certain testimony at trial.  Specifically, plaintiff takes issue with the experts' conclusion, outlined in their joint report, that the fire resulted from Long-Term, Low-Temperature Ignition of Wood.  The phenomenon of LTLTIW occurs when a heating source in close proximity to wood causes the wood to char, lowering the ignition temperature of the wood and resulting in self-ignition. Plaintiff asserts that the experts should be precluded from providing testimony related to LTLTIW because the phenomenon is "scientifically unproven, unpredictable, and untested," and "its application to the facts of this case is equally unreliable and questionable."

In opposition, Broan argues that LTLTIW is a well-documented scientific phenomenon that has been observed by fire investigators for decades. In fact, defendant maintains that Scardino "has personally observed LTLTIW on multiple occasions in his decades as a fire investigator."  Moreover, defendant asserts that Smolka and Scardino reliability applied LTLTIW to the relevant facts and concluded that the phenomenon caused the fire at issue in this case. 

The admissibility of expert testimony is governed by Federal Rule of Evidence 702.  Pursuant to Rule 702, an expert is permitted to testify so long as: "the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue," "the testimony is based on sufficient facts or data," "the testimony is the product of reliable principles and methods," and "the expert has reliably applied those principles and methods to the facts of the case."

"While the proponent of expert testimony has the burden of establishing by a preponderance of the evidence that the admissibility requirements of Rule 702 are satisfied, the district court is the ultimate `gatekeeper.'" "In this gatekeeping role, `the district court should consider the indicia of reliability identified in Rule 702.'" 

In Daubert v. Merrell Dow Pharmaceuticals, Inc., the Supreme Court set forth a list of factors, in addition to the criteria set forth in Rule 702, that bear on the determination of reliability. The factors outlined in Daubert include whether a theory or technique has been or can be tested, "whether the theory or technique has been subjected to peer review and publication," the technique's "known or potential rate of error" and "the existence and maintenance of standards controlling the technique's operation," and whether a particular technique or theory has gained general acceptance in the relevant scientific community.  Importantly, the factors outlined in Daubert do not constitute a "definitive checklist or test."  "Rather, the inquiry envisioned by Rule 702 is a flexible one, and the gatekeeping inquiry must be tied to the facts of a particular case." 

Notably, the Second Circuit has held that under Rule 702, there is a general presumption of admissibility of evidence.  "In other words, `the rejection of expert testimony is the exception rather than the rule.'" "Thus, `to the extent that a party questions the weight of the evidence upon which the other party's expert relied or the conclusions generated from the expert's assessment of that evidence, it may present those challenges through cross-examination of the expert.'" 

Measured against this standard, Smolka and Scardino's testimony related to LTLTIW shall not be precluded. A review of the joint report demonstrates that the experts' opinions are sufficiently reliable to pass muster under Rule 702 and Daubert. Accordingly, Country Mutual's first motion in limine shall be denied.

Country Mutual's second motion in limine seeks to preclude Smolka and Scardino from providing cumulative testimony.  In particular, plaintiff requests that if both experts are called to testify, "each expert's trial testimony should be limited to specific aspects of their joint report that do not overlap with the other expert's testimony."  In support of this request, plaintiff argues that allowing the experts to supply duplicative testimony would be prejudicial "insofar as it would risk wrongly conveying to a jury that more than one expert has reached their conclusions, affecting the weight possibility given to such testimony."  Plaintiff also asserts that allowing cumulative testimony "would waste the court's and jury's time." 

In response, Broan asserts that its expert disclosures identify the areas of expert testimony Smolka and Scardino are offering in this case. Defendant also maintains that during the deposition of the experts, Country Mutual "had the opportunity to, and in fact did, clarify which opinions from the joint report each expert would offer at trial."  In any event, defendant argues that the appropriate time to address cumulative testimony is at trial, not at the pretrial stage. 

Admissible expert testimony may still be excluded under Federal Rule of Evidence 403 if "its probative value is substantially outweighed by a danger of one or more of the following: unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence." Fed. R. Evid. 403. "The Rule 403 inquiry is particularly important in the context of expert testimony, `given the unique weight such evidence may have in a jury's deliberations.'"  In weighing the probative value of evidence against possible prejudice, district courts have broad discretion. 

Upon review, Smolka and Scardino are precluded from offering cumulative testimony at trial. As a result, the experts will be permitted to testify to the extent their testimony is not duplicative. Accordingly, plaintiff's second motion in limine shall be granted.

Broan's motion in limine requests an order prohibiting Country Mutual from offering into evidence or making any reference to other incidents involving exhaust fans.  Defendant's motion also seeks to preclude plaintiff from offering into evidence a report issued by the Consumer Product Safety Commission.  This report contains a review of incidents involving exhaust fans.  Defendant takes issue with the report because of its failure to identify the exhaust fans "by brand name or model."  According to defendant, the report's failure to include such information renders plaintiff unable to make the requisite showing of "substantial similarity" between the incidents mentioned in the report and the incident at issue in this case. 

In opposition, Country Mutual argues that the prior incidents it seeks to introduce are substantially similar to the incident at issue in this case. According to plaintiff, these prior incidents are substantially similar because each incident involved an exhaust fan with a thermal cutoff device, such as the exhaust fan at issue here.  Plaintiff asserts that it intends to refer to these prior incidents in order to demonstrate that thermal cutoff devices are dangerous and susceptible to failure. 

"Evidence of prior accidents may be admitted at trial only if the proponent establishes their relevance by showing that they occurred under the same or substantially similar circumstances as the accident at issue."  Whether a prior incident occurred under substantially similar conditions depends on the purpose for which the evidence is offered.  Of relevance here, "evidence offered for the purpose of showing the existence of a dangerous condition requires a high degree of similarity because it weighs directly on the ultimate issue to be decided by the jury." 

Applying these standards, Country Mutual has not demonstrated that the prior incidents it seeks to introduce are substantially similar to the incident at issue here. Namely, plaintiff has not shown that any of the prior incidents occurred under similar circumstances, i.e., involved the exhaust fan at issue in this case or one sufficiently similar. Consequently, plaintiff is precluded from offering into evidence or making any reference to prior incidents involving exhaust fans. Therefore, Broan's motion in limine shall be granted.

10/27/23       In Re. Matter of the Application of Charley Abreu v. MVAIC
New York State Supreme Court, New York County
Requirement of New York Insurance Law Section 5208 that Claimant Report Occurrence to Police Within Twenty-Four Hours to Prevent Fraud was not Frustrated when the Delay in Filing was a Mere Forty-Eight Hours and Surveillance Footage Showing the Alleged Accident was Provided.

[Abridged] Petitioner's Petition for an Order seeking permission to bring an action against Respondent pursuant to New York State Insurance Law Section 5218, is granted.

The action arises out of a motor vehicle accident that occurred on January 11, 2022. Petitioner was a pedestrian crossing the roadway in Bronx County, New York, when he was struck by a motor vehicle that subsequently fled the scene.

On January 18, 2022, a Notice of Intention to Make a Claim to MVAIC was filed on behalf of Petitioner, within ninety (90) days from the date of the Accident, along with an affidavit of Petitioner stating that neither Petitioner nor anyone residing in the same household as Petitioner owned a vehicle at the time of the Accident.

Petitioner filed the instant Petition on April 26, 2023, seeking permission to bring an action against Respondent pursuant to §5218 of the New York State Insurance Law. Pursuant to New York Insurance Law §5218 "any qualified person having a cause of action for death or personal injury arising out of the ownership, maintenance or use of a motor vehicle in this state, when the identity of the motor vehicle and of the operator and owner cannot be ascertained ... may, upon notice to the corporation, apply to a court for an order permitting an action therefor against the corporation in that court". New York Insurance Law §5218(b) further states that the court "may make an order permitting the action when after a hearing it is satisfied that ... the applicant has complied with the requirements of section five thousand two hundred eight of this article".

New York Insurance Law §5208(a)(2)(A) states, in relevant part, that the protection provided by the corporation shall be available to "any qualified person having a cause of action because of death or bodily injury, arising out of a motor vehicle accident occurring within this state and reported within twenty-four hours after the occurrence to a police, peace or judicial officer in the vicinity". New York Insurance Law §5208(a)(2)(B) further specifics that "the fact that the accident was not reported within twenty-four hours after the occurrence as required by subparagraph (A) hereof shall not prejudice the rights of the person if it is shown that it was not reasonably possible to make such a report or that it was made as soon as was reasonably possible".

Petitioner alleges that the Accident occurred on January 11, 2022. The MV-104 Report annexed to Petitioners papers is dated January 14, 2022, three days following the alleged incident. Petitioner's papers provide no explanation as to why Petitioner delayed in filing the report.  Even if Petitioner were to claim that he could not have reported the Accident within twenty-four hours or its occurrence, Petitioner further fails to establish that the incident was reported as soon as reasonably possible pursuant to §5208(a)(2)(B) of the New York Insurance Law. It has been held that when a party fails to report an accident within the twenty-four hour period specified in Insurance Law §5208(a)(2)(A) and fails to show that the report was made as soon as reasonably possible, that party has "failed to comply with a condition precedent to the right to apply for payment from MVAIC and the action must, therefore, be dismissed".

However, it is `well settled that the statutory purpose of the twenty-four hour filing period imposed by New York Insurance Law Section 5208 "is to enable MVAIC to investigate claims and prevent fraud". Annexed to Plaintiff's Petition is a copy of surveillance footage showing the accident.  As Plaintiffs minimal delay in filing his Report was a mere forty-eight hours, and Plaintiff has provided surveillance footage showing the alleged Accident, the Court finds that granting Plaintiff's Petition would not frustrate the statutory purpose of the twenty-four hour fling period imposed by Section 5208, namely, to enable Defendant to investigate Plaintiff's claims and prevent fraud. `therefore, in the interest of justice, Petitioner's Petition is granted.

10/29/23       Stanan, Inc. v. Mt. Hawley Ins. Co.
United States District Court, Southern District of New York
Federal Complaint Dismissed for Lack of Subject Matter Jurisdiction as no Diversity of Citizenship Against Underwriters at Lloyd’s, London.

[Abridged] Underwriters at Lloyd's, London has a "unique structure" that raises certain issues in assessing diversity jurisdiction. "As an unincorporated business organization, Lloyd's has the citizenship of each of its members."  Plaintiff therefore must plead every member's citizenship in order to establish diversity jurisdiction. 

Plaintiff identifies neither the citizenships of the individual investors nor...of the managing/lead underwriter for Lloyd's. Plaintiff asserts that Lloyds "is a foreign business corporation," but that is plainly false: Lloyds is an unincorporated organization.  Plaintiff also asserts, "on information and belief, that Underwriters at Lloyd's, London, its members, and syndicates are all foreign business entities registered in the United Kingdom, each with their principal places of business in London, U.K., which is a corporation registered and domiciled in the United Kingdom." This allegation fails. First, it is judicially noticeable public knowledge that many members, or "names," of Lloyd's are individuals, and therefore demonstrably not "foreign business entities."  Even a single syndicate may have hundreds of "names," whose identities are typically anonymous. But Plaintiff has brought suit not only against a specific syndicate, but against the entirety of Lloyd's, thus implicating thousands if not tens of thousands of "names" — each of whose citizenship must be completely diverse with that of Plaintiff. Plaintiff fails to allege the citizenship of all of those individuals and entities that are Lloyd's "names." It has thus failed to allege complete diversity. 

Plaintiff also contends that Defendant Lloyd's Syndicate 1458 has contractually submitted to the jurisdiction of this Court. But that is irrelevant. Parties may not waive or consent to subject matter jurisdiction, and this Court has an independent duty to ensure that it has subject matter jurisdiction of a case.  The Court concludes that Plaintiff has failed to adequately allege diversity of citizenship.

Katherine A. Fleming

[email protected]


11/14/23       St. Paul Fire & Marine Ins. Co. v. Bodell Constr. Co.
Supreme Court of Hawaii
In Hawaii, an Insurer May Not Seek Reimbursement from an Insured for Defending Claims when an Insurance Policy Contains no Express Provision for Reimbursement—a Reservation of Rights Letter will not Do

The Hawaii Supreme Court considered whether the state authorizes the equitable reimbursement of defense fees and costs incurred by an insurer in litigating on behalf of its insured. The Court held that in Hawaii, an insurer may not recover defense costs for defended claims unless the insurance policy contains an express reimbursement provision, and a reservation of rights letter will not do.

Some jurisdictions allow insurers to recoup defense costs for defending uncovered claims while others do not. The Court sided with policyholders, reasoning that insurers should not be able to recoup defense costs because the state’s stout duty to defend clashes with repayment. The three main arguments supporting the Courts decision were: The initial contract governs, reimbursement erodes the duty to defend, and the insured is not unjustly enriched by the assignment of defense counsel.

First, most insurance policies call for a defense but not reimbursement, and the terms of the parties’ agreement must govern. Further, reservation of rights letters retains defenses and exclusions under the policy, but they cannot unilaterally create new rights to repayment. A reservation of rights letters does not alter coverage or remake a contract, and the Court reasoned that it does not relieve the insurer of the costs incurred in defending where the insurer had a duty to provide that defense. The state’s law is pro-policyholder, so if an insurance policy does not have an express right to reimbursement, there is no reimbursement.

Second, the duty to defend is separate from the duty to indemnify, and an insurer must defend where there is a possibility of coverage--even if groundless, false, or fraudulent. The Court cautioned that recovery for defending uncovered claims would narrow the duty to defend, dilute the good faith duty to defend, and potentially bring on bad faith by allowing an insurer to only defend to the extent that they must ultimately indemnify. Insurers are skilled and well-positioned to evaluate whether they must defend, and bad faith or breach actions motivate them to honor contractual obligations. When insurers can recoup defense costs, insureds are only protected from repaying costs for claims eventually deemed covered.

Finally, insureds are not unjustly enriched because defense is part of the deal. Though the insurer owes a duty to defend it, it benefits by retaining the premium paid. In fact, the Court noted the enriched party might well be the insurer if the insured ended up with no greater benefit than if the insurer had refused to defend outright.

Based on the three major arguments, the Court decided that an insurer may not recover defense costs for defended claims unless the insurance policy contains an express reimbursement provision.

Evan D. Gestwick

[email protected]


10/30/23       Simms v. Liberty Ins. Corp.
New York State Supreme Court, County of Kings

No Rescission Available to Insurer Where Insurer Fails to Show that it Would not Have Issued the Policy had the Application Questions been Accurately Answered

Following a fire that occurred at the insured premises, Liberty’s insured made a claim under his homeowners policy. Liberty denied this claim on the bases that: (1) the premises did not meet the policy’s definition of “residence premises;” and (2) the policy was void ab initio on the ground that the insured misrepresented the number of dwelling units within the premises on his initial application for insurance. This declaratory judgment action followed.

During Liberty’s investigation of the claim, it was revealed that, at the time the insured applied for the homeowners policy with Liberty, it contained four residential dwelling units, plus a basement that consisted of a kitchenette and a bathroom. Only after the initial policy application did the insured add additional dwelling units in the basement of the building, causing the building to contain a total of six dwelling units at the time of the fire loss.

Upon conclusion of the investigation of the claim, Liberty denied coverage on the ground that, following the issuance of the policy, but before the loss occurred the insured added the two additional dwelling units in the basement of the property, effectively taking the insured premises outside of the policy’s definition of “residence premises.” The policy defined “residence premises” as (1) the one family dwelling; (2) the part of any other building where the insured resides, shown as the “residence premises” in the declarations; (3) a two-family dwelling where the insured resides in at least one of the units, shown as the “residence premises” in the declarations; or (4) for an additional premium, the three or four-family dwelling listed in the declarations. Since, at the time of the loss, the premises contained six residential dwellings, Liberty denied coverage on the ground that the premises did not qualify as the “residence premises” on the date of loss.

Liberty also rescinded the policy as void ab initio, on the ground that the insured indicated, on the policy application, that there were four dwelling units at the premises, but that there were instead six dwelling units.

In denying Liberty’s motion for summary judgment, which was based on these two grounds, the Court reasoned that Liberty did not show that it would not have issued the policy if it had known of the basement dwelling units. Specifically, Liberty did not provide a copy of the application for the policy, a copy of the underwriting inspection done prior to the issuance of the policy, or its underwriting guidelines.

In New York, it is well-established that, to uphold a rescission of a policy, the carrier must show: (1) that the insured made a misrepresentation on the application for insurance; and (2) that the representation was material. To satisfy the first prong, the carrier often has no choice but to produce to the court a copy of the insured’s application for insurance, together with a copy of its investigation report, to show the difference between what was reported, and what the actual facts were. If there is a difference here, the first prong is usually met. To satisfy the second prong, the carrier must show either that it would not have issued the policy at all, or that it would have charged a higher premium for the policy, had the facts been accurately disclosed. Often, carriers will produce a copy of their underwriting guidelines and/or manuals, which typically explain the difference between acceptable risks and unacceptable risks, as well as the bases for policy premiums (and, typically, higher premiums are charged for a higher number of residential units). However, here, Liberty produced none of that. Instead, all Liberty produced was the insured’s EUO transcript (discussing when exactly the premises went from having four units to having six units), and affidavits from two claims examiners who reiterated that the premises contained two dwelling units on the date of loss. 

The court denied Liberty’s motion to reargue its motion for summary judgment, on the ground that Liberty failed to establish its right to rescind the policy.

Editor’s Note: Concur in part, dissent (maybe) in part. I agree with the Court’s decision that Liberty, based on what it produced in connection with its motion, didn’t establish its right to rescind the policy. It should have produced the insured’s application along with the insured’s EUO transcript and investigatory reports (which it did produce), to show the misrepresentation. But it also should have produced a copy of its underwriting guidelines, which likely explain either that Liberty will not insure premises containing six dwelling units, or that it will charge a higher premium for six dwelling units than it would for four dwelling units (either way, that goes toward establishing the materiality aspect of the misrepresentation). But what about the “residence premises” issue? I don’t have a full copy of the Liberty policy, so I can’t tell you exactly what it says, but I do have the definition of “residence premises” as provided in the Liberty policy, as I’ve included above, and clearly, a six-dwelling premises does not qualify. This is an entirely different issue from the material misrepresentation/rescission. Assuming that premises that do not meet the definition of “residence premises” do not qualify for coverage under the terms of the Policy, Liberty still had a basis for disclaiming coverage; just not rescinding the policy (the difference being that Liberty still could’ve denied the claim, while leaving the policy in force). The court didn’t address this issue. It will be interesting to see whether Liberty appeals, at least on that issue.


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

[email protected]


11/22/23       New York Municipal Insurance Reciprocal v. Linares
Appellate Division, Second Department
Police Car is Not a Motor Vehicle for Purposes of SUM Coverage

In July 2016, Linares was a passenger in a vehicle driven by nonparty Ryan when another vehicle struck the vehicle being driven by Ryan. At the time of the accident, Ryan was Chief of Police for the Town of Plattekill and was driving an unmarked police vehicle that the Town provided him. Linares made a demand for supplementary uninsured/underinsured motorist (SUM) coverage from NYMIR, who issued a policy of insurance to the Town of Plattekill for the vehicle, and served a notice of intention to arbitrate.

NYMIR moved to permanently stay arbitration. Linares opposed the petition, arguing that, at the time of the accident, Ryan was using the vehicle in question for personal reasons and, thus, it was not a "police vehicle" as defined by the Vehicle and Traffic Law. By order dated July 1, 2021, the Supreme Court granted the petition, holding that the vehicle was a police vehicle and not a motor vehicle for purposes of the SUM endorsement of the policy. Linares appealed.

A police vehicle is not a 'motor vehicle' covered by a SUM endorsement under Insurance Law § 3420[f][2][A].  The vehicle in question, which was owned by the Town of Plattekill and operated by the Chief of Police for the Town of Plattekill at the time of the accident, was a police vehicle and not a motor vehicle for purposes of SUM coverage.  Accordingly, the court properly granted the petition to permanently stay arbitration.


11/15/23       Donnellan v LaMarche
New York Appellate Division, Second Department

Pebbles and Rocks Under a Floor Mat not Enough of an Emergency to Avoid a Rear-End Collision

In this bodily injury action, Donnellan sought to recover damages for injuries allegedly sustained in a motor vehicle accident on February 27, 2019, when a vehicle operated by LaMarche and leased to Quest Diagnostics (“Quest”) allegedly collided with Donnellan’s vehicle. Donnellan moved for summary judgment on liability, the trial court denied the motion. Donnellan then took the issue up to the Appellate Division.

The Second Department reversed the trial court’s decision. The court recited the well-known standard regarding rear-end collisions, that a vehicle approaching from the rear is required to maintain a reasonably safe distance and rate of speed under the prevailing conditions. Thus, a rear-end accident with a stopped or stopping vehicle establishes prima facie negligence and requires the operator to rebut the evidence with a non-negligent excuse for the collision.

The Appellate Division noted that the emergency doctrine applies when an operator is faced with a sudden and unexpected circumstance, which leaves little or no time for thought, deliberation or consideration, or causes the operator to be so disturbed so as to make a speedy decision without weighing alternative courses of conduct. But does not apply when the party invoking the doctrine created or contributed to the emergency.

On this backdrop, the court found Donnellan established a prima facie entitlement to summary judgment by demonstrating the collision occurred when Donnellan’s vehicle weas stopped and struck in the rear by LeMarche. The court rejected LeMarche’s emergency doctrine argument that he attempted to avoid the collision, but his foot slipped off the brake pedal due to the rocks and pebbles under the floor mat.


Robert P. Louttit

[email protected]


10/25/23       New York Senate Bill S3542A
An Act to Amend the General Obligations Law and the State Technology Law, in Relation to Electronic Signatures and Salvage Title

On October 25, 2023, New York’s Governor Hochul signed into law (S3542A) thereby amending general obligations law and the state technology law to allow the use of an electronic signature in connection with a power of attorney used specifically for salvage vehicle title transfer documents as follows:

Section 1:  amends section 5-1501-B of the general obligations law by adding a new subdivision 6 to allow the execution of a valid power of attorney for the purposes of transferring a salvage certificate of title and damage disclosure statement by electronic means.

Section 2:  amends subdivision 1 of section 307 of the state technology law to allow the electronic execution of a power of attorney specifically for the transfer of a salvage certificate of title and execution of an odometer and disclosure statement in a vehicle total loss or constructive loss.

The above law, which took effect immediately, modernizes and updates New York State law with respect to the disposal and transfer of a motor vehicle which has sustained a total loss. In situations where vehicles covered by insurance are damaged to the point of being declared a total loss and the customer and insurer agree on a settlement value for the damaged vehicle, and the insurer, pending receipt of title, delivers payment to the customer for the value of their vehicle, the prior statutory constraints under New York’s General Obligations law resulted in the receipt of their settlement payment in 9-11 days on average. Now, permission of the use of an electronic signature for a power of attorney and odometer damage and disclosure statement can reduce the time for a customer to receive payment, which in most cases is expected to be 1-2 days.

The above amended statutes now allow a valid agreement to get processed faster, allowing insurers to settle their claims in a more efficient cost-effective and expedited time frame.


Robert J. Caggiano
[email protected]


11/21/23       Hall v. Uber Technologies, Inc., et al 
New York Appellate Division, First Department
First Department Unanimously Affirms Order which Granted Summary Judgment for Defendants Dismissing Plaintiff’s Claim Based on Inability to Meet the Serious Injury Threshold Where Plaintiff’s Medical Evidence in Opposition was Insufficient to Raise a Triable Issue of Fact

Plaintiff Ashley Hall appealed an Order from Supreme Court, Bronx County, which granted a motion for summary judgment in favor of Defendants, Vanessa Rose Vargas and Raul Vargas. Specifically, the Supreme Court granted Defendants’ motion on the grounds that Plaintiff failed to raise a triable issue of fact whether she suffered 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 on March 3, 2019, when Plaintiff Ashley Hall was a passenger in an Uber, which was involved in an accident with a vehicle owned/operated by the Vargas Defendants.  As a result, Plaintiff alleged injuries to her shoulders, cervical and lumbar spine.

Defendants moved for summary judgment, arguing that Plaintiff did not sustain any serious injury as alleged. In support of this Motion, Defendants relied upon an expert report of an IME orthopedic surgeon, who found that plaintiff had normal range of motion, her injuries resolved, and there was no objective evidence of an orthopedic disability. Notably, Plaintiff’s own medical reports contemporaneous with the accident also show that she was discharged from care because her conditions were fully resolved.

In opposition to this evidence, Plaintiff failed to raise an issue of fact as to injury to any alleged body part. For her shoulders claim, she did not submit any admissible MRI reports to show objective evidence of an injury or any evidence of permanent/significant limitations of use.

For her alleged spinal injuries, Plaintiff submitted a report of a doctor who examined her by “video consultation”. However, this provider failed to explain how he determined plaintiff had limitations in her range of motion, or how his findings could be reconciled with medical reports from another treating provider that showed Plaintiff had full range of motion four months after the accident.

Based on the foregoing analysis of Plaintiff’s opposition, the First Department found that no triable issue existed regarding whether Plaintiff suffered a serious injury under Insurance Law § 5102(d). The Order of Supreme Court, Bronx County, was unanimously affirmed, on the law, without costs. 


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


11/08/23       Paramount Resources Ltd. v Chubb Ins. Co. of Canada
Alberta Court of Kings Bench
A Condition Precedent to Coverage that a Pollution Event be “Detected by any Person” Within 720 Hours of its Commencement Begins when a Reasonable Person Ought to have known that a Release has Occurred

There are only a few secret Zen places in the world. But then, everyone has their own version … for some it’s a beach; for some it’s a backyard garden, but if your Zen is a remarkable outdoor destination of mountains in every direction, intersected by fast clear creeks and rivers then you will find it in the Grande Cache area of Alberta.

Grande Cache (pronounced Grand Cash) is a hamlet about 435 kilometres (270 mi) west of Edmonton. Grande Cache overlooks the Smoky River, is at the northern edge of Alberta's Rockies, and serves as a gateway to the Willmore Wilderness Park. The fur trade brought French Canadians, British adventurers, and Europeans to the area in the late 1880’s.  Then coal was discovered and in the mid 20th Century coal gave way to oil and gas development. Today oil and gas development is at odds with the eco-tourism trade, though each has learned to live with each other.

About 80 km northeast of Grande Cache is the Resthaven gas processing facility. Since 2005, Paramount Resources Ltd. (a publicly traded oil and gas company headquartered in Calgary) and the ConocoPhilips partnership (headquartered in Houston, managed by a Canadian subsidiary) jointly owned and operated Resthaven. The facility consists of a gas processing plant and a 11 km buried pipeline that runs through remote, mountainous terrain.  The facility partially processes natural gas from the nearby gas field and turns it into low vapour condensate. Condensate is a clear liquid used to dilute raw Alberta oilsands crude to allow the crude to flow in a pipeline to market.  The Resthaven pipeline carries the condensate to sales tanks for sale on the oil and gas market.

Paramount delegated the day-to-day operation of the facility and pipeline to Conoco.

On April 21, 2016, the pipeline began to leak.

The volumes of condensate entering and exiting the Resthaven pipeline were metered by highly accurate meters which had been installed and became operational on the day before the pipeline began to leak. Conoco became aware of volume data anomalies showing significantly less condensate was exiting the pipeline than entering it.   However rather than shutting in the pipeline, Conoco waited until May 6-7, 2016, to pressure test the pipeline to see if it was leaking. The pipeline failed the test.  Despite the failure, Conoco continued to operate the pipeline believing that the newly installed monitoring equipment was the problem. On June 9, 2016, a Conoco employee found evidence of hydrocarbons on the surface near the pipeline run. Conoco finally shut-in the pipeline. But by then, an estimated 380,000 litres of condensate had entered the environment fouling a creek that was within five kilometres of a provincially designated grizzly bear management zone.  In the end about three square kilometres of land and water sheds were laid to waste and caused the deaths of unknown numbers of wildlife and birds.  This was one of the largest spills in Alberta’s history.

Conoco told Paramount about the leak on June 9, 2016. This was the first that Paramount had heard about the problem.

The Alberta Energy Operator ordered Conoco to clean up the spilled hydrocarbons.  The cost to remediate the environment was in the tens of millions of dollars.  Conoco called on Paramount under its agreement to pay ½ the cost of the clean-up expenses. Paramount refused.  After incurring the expense and mitigating the disaster that it created, Conoco commenced arbitration proceedings under the operating agreement to recover its claim against Paramount.  Paramount defended. As time passed, Paramount’s exposure to its alleged share of the clean-up costs, with interest and Conoco’s legal costs of the arbitration, exceeded C$30,000,000. A few months before the scheduled hearing date, Paramount and Conoco settled the claim for a lesser amount.  Paramount paid Conoco C$11 million.

Paramount had tendered notice of the arbitration proceedings to its primary and two layers of follow-form, excess pollution insurers, led by Chubb Canada as primary, Lloyd’s as first excess and Royal SunAlliance as second excess. Chubb refused to defend Paramount at the arbitration proceedings stating that the release was not “detected by any person” within 720 hours (30 days) of the commencement of the release. This detection was a condition precedent to coverage.

The claim primarily turns on the meaning of “detected by any person” in the primary policy.  Paramount argued that Conoco detected the release within 720 hours of the commencement of the release on April 21, 2016, therefore Paramount is entitled to coverage.  Chubb responded that the release was not detected until Conoco personnel observed the hydrocarbon contamination and subjectively concluded the pipeline was leaking on June 9, 2016. Chubb submitted that before that date, Conoco personnel were “blind” to the warning signs that the pipeline was leaking and therefore had not detected the release.

The definition of “pollution incident” in the Chubb policy in issue is commonly found in the oil and gas sector:

"Pollution Incident" means an unexpected and unintentional emission, discharge, release or escape of pollutants into or upon land, the atmosphere, or any watercourse or body of water, provided:

(1) that such emission, discharge, release or escape results in "environmental damage";

(2) that such emission, discharge, release or escape is detected by any person within 720 hours after commencement of such emission, discharge, release or escape;

(3) that the insured mails or delivers to us notice, in writing, or such emission, discharge, release or escape not later than 2160 hours following the discovery of such emission, discharge, release or escape as described in paragraph (2) above. However, if the insured is a non-operator, such notice must be delivered to us not later than 2160 hours following notification to the Insured by the operator of such emission, discharge, release, or escape; and

(4) that such emission, discharge, release, or escape does not occur in a quantity or with a quality that is routine or usual to the lnsured's operation.

The entirety of any such emission, discharge, release, or escape shall be deemed to be one "pollution incident".


Pollutants mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapour, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

Paramount agreed that the leak began April 9, 2016, and if so, the outside date to report as May 8, 2016. Paramount did not know about the leak until June 9, 2016, when it reported the situation to Chubb. Conoco did not subjectively believe that there was a leak until June 9. Until then they thought the newly installed meters were acting up.

In the face of Chubb’s steadfast denial of coverage, Paramount sued its insurers. The parties agreed to hold a summary trial to resolve the issue. Much of the trial was consumed with determining the meaning of “detected by any person”. Was it objective or subjective?  After much evidence, the Court concluded that:

The parties must have intended, from the objective perspective, that “detected” means knowledge by the person concerned of credible information that, in the mind of a person of ordinary prudence, would provide reasonable grounds to believe that an emission, discharge, release or escape of pollutants may have occurred or be occurring. Reasonable grounds to believe is not speculation nor is it as high as the balance of probabilities. In the case of a pipeline, it is information that would normally require the pipeline under industry practices or CSA Standard Z662 to be shut in pending resolution of the anomalous information.

The court held that Conoco’s gross negligence in the operation of the pipeline resulted in the failure to detect the leak within 720 hours of when it began.  However, after significant evidence and argument as to oil and gas operators practice, regulatory responsibilities, the law of agency, the Court concluded that Chubb did not demonstrate a persuasive reason or policy rationale to identify Paramount with Conoco’s actions in the day-to-day operation of the pipeline.

The Court also concluded that the pipeline operated under legal requirements and industry standards such that the operator must accept the implications of anomalies in the computational data unless and until it could clearly and readily explain that the data anomalies were attributable to some other circumstance.  It found that on this objective standard the 720-hour period began on April 30, 2016, when Conoco ought to have accepted the anomalies in the data as evidence of a leak.   With that, coverage was established.

The trial then turned to what damages Paramount was entitled to in view of the wrongful denial of coverage. The judgment contains a very useful review of what an insured must prove to establish its claim against its insurer. An insured in Paramount’s position must prove that in the face of the denial it acted reasonably to resolve the underlying dispute – the Court held that Paramount’s C$11 million settlement was reasonable.  Subject to the retentions, aggregate limits and pollution incident limits, Paramount was entitled to C$11 million from its insurers.

Despite the cleanup, a formerly pristine part of our world will never be what it once was.


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