Coverage Pointers - Volume XXV No. 19

Volume XXV, No. 19 (No. 666)
Friday, March 1, 2024
A Biweekly Electronic Newsletter


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

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

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

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


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Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.  Our goal is that you don’t have any that you cannot handle!  So, we provide training for your professional staff.


HF Coverage Presentation


Over 650 registered for NY Liability Coverage Training via Zoom, Friday, April 5, 2024, at 1:00 PM Eastern Time (75 minutes):

When we announced this program two weeks ago, we had limited attendance to 75.  Due to an overwhelming response, we secured a 500 participant Zoom Room and then had to expand to 1,000.  We have 650 registered so far.

If you handle New York coverage work, either as a claim professional or as a lawyer, this training is for you. New York coverage protocols differ significantly from those in other states, primarily because of the statutory requirements set forth in Insurance Law §3420(d).  When must a coverage letter be sent?  Who is required to receive a copy?  What happens if you don’t follow the rules?

If you are preparing to write, for example, a reservation of rights letter on a New York loss, like the ones that you write in other jurisdictions – STOP.  You may be shooting yourself in the foot, or heart, or wallet. There may be – and often are – dangerous consequences if one fails to send out a timely, properly copied, coverage letter or if it does not contain a high degree of specificity.

If there is a New York accident and an out-of-state policy and you’re feeling comfortable ignoring New York rules – STOP, read and appreciate what our great state may do to you if you fail to follow our rules.

The Zoom presentation will take place at 1:00 PM Eastern Time on Friday, April 5, and should last about 75 minutes.  There will be time for Q&A.  For claims supervisors reading this message, this is the perfect opportunity for a “lunch and learn”.

Contact me by email to register:  [email protected]


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Pardon the shortened message today – I am in Las Vegas for daughter’s wedding.  I am sure you will give me slack on  that!

Kudos to Heather Sanderson

Congratulations to Heather Sanderson, our Canadian editor, whose scholarship is heavily quoted in a what is likely to be s seminal Court of Appeal decision on the duty to defend and, in particular, the duty to defend long term injury and property damage cases. An article that she wrote in 2017 was relied upon to decide that consistent with several Canadian decisions on point, defence costs are to be allocated on a pro rata time on risk basis rather than on an all-sums approach.


Boston Training Videos - Boston Video Production for Business - Rewatchable, Inc.



For the past few years, in partnership with my colleague, John Trimble from Lewis & Wagner in Indianapolis, we have offered on-line Zoom training programs providing a Primer for CGL coverage, Risk Transfer, Choice of Law and other topics. We have had thousands of participants in these programs and the feedback has been fantastic.

We’re now planning our 2024 training schedule.  Are there topics for which your staff could use interactive Zoom training?  Are you interested in the programs we’ve shared in the past because of new hires?  Let us know.

Just respond here and let me know: [email protected]

Need a mediator for an insurance dispute? 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 V. Christopher Potenza 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 Elizabeth Midgley at [email protected] to subscribe.


      Censored Outfits – 100 Years Ago:

      Buffalo Courier Express
      Buffalo, NY
      1 Mar 1924


Chicago, Ill., Feb 29. More clothing for some of the girls in George White’s Scandals production was ordered today by Chief of Police Collins as a result of the first report of Mayor Dever’s advisory committee appointed recently at the instigation of a church federation committee.

         The committee reported today that a doll chorus required more clothing from the waistline up; that certain living statues should change their postures; that the sapphire girl should wear more sapphires; recommended the elimination of a part of a looking glass scene and decreed at least tights for certain living models.


Peiper on Property (and Potpourri):

A tip of the cap to Phil who warned us earlier this month that an early Spring was forthcoming.  It was warmer in Buffalo yesterday than it was in Florida last week where I was attending the IADC mid-year meeting.  We opened the window last night for the first time in months and enjoyed a nice breeze through the house.  Pay no attention to the fact that temps will drop by 40+ degrees over the next two days.  Warmer weather has arrived in the Northeast, and golf days will be upon us soon enough.

A quick note, too, if I may, on my conference experiences.  I attended a really provocative discussion on attorney wellness/mindfulness.  It is an important issue to me, and to us in the firm.  Understanding the stresses and constraints of this profession, and its impact on our own health and well-being is crucial to maintaining healthy and successful careers.  I’d encourage all of you to be open to a more centered life if you can find it (and it’s not easy to do).  It’ll be to your great benefit, and the evidence shows pretty overwhelmingly you’ll be a better lawyer too. 

There are scores of resources on the web.  Just ask ChatGPT and you’ll have more than enough reading to get you started. 

That’s it for this week.  We’ll be joining you next time on the eve of the PLRB’s annual meeting in Boston.  If you haven’t yet signed up and are anywhere near Boston or can get there relatively easily, please give it some thought. It is one of the very best insurance conferences of the year. I’m delighted to be back as a faculty presenter again this year. 

Steven E. Peiper

[email protected]


Hudson Tunnel Needs $$ – 100 Years Ago:

Buffalo Courier Express
Buffalo, NY
1 Mar 1924


Newark, N.J., Feb. 29. – To complete the Hudson river vehicular tunnel on schedule the necessary additional funds must be forthcoming immediately, declared Theodore Boettger, chairman of the New Jersey interstate bridge and tunnel commission, in a statement today. The additional funds are essential for the letting of contracts for work which must be finished at the same time that the tunnel bores are ready, he declared.


Barnas on Bad Faith:

Hello again:

In today’s column, we are revisiting a decision that was covered in this space back in our September 29, 2023, edition.  Back in September, the District Court of Appeal of Florida, Second Division, held that an insurer had no duty to enter into a consent judgment agreement exceeding the policy limits.  A motion for a rehearing was filed and granted, and the court issued a new opinion, which ultimately reached the same conclusion.  The court revised the decision to address arguments made by the plaintiffs based on two Florida Supreme Court decisions and to revise language to reflect that an insurer does not ordinarily have a duty to pay a claim in excess of a policy’s limit.  Ultimately, the court again held that the insurer had no duty to enter into a consent judgment in excess of the policy limits, but it remanded the case to the court below for consideration of other theories of bad faith.

Brian D. Barnas

[email protected]


No Kissing! – 100 Years Ago:

Daily News
New York, New York
1 Mar 1924


          Kanas City, Kan., Feb. 29. – A mob of 150 students today attacked Clarence T. Rice, principal of the Kansas City High School, and showered him with eggs, vegetables and other such ammunition, The professor sought shelter in a drug store and escaped. The riot resulted from a kissing episode which recently upset the school. E. E. Damien, instructor, resigned after he had kissed Margaret Pratt, senior, on a dare. Rice opposed Damien’s reinstatement.


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

I think it’s officially unofficially the end of the beginning of the New Year, as we now move into March. Today we got a little glimpse of spring here on the Connecticut shoreline, as temperatures were in the mid-50s complete with spring showers. At least all the snow is finally gone.

I had the opportunity to lend my expert opinion to Business Insurance about the potential implications of a pending Ninth Circuit case involving whether an omission—the failure to answer an application question—can be a misrepresentation. We’ll all have to watch how that one plays out.

Here in Connecticut, the courts are finally putting out some usable cases to talk about. This edition we highlight the dangers of issuing a policy applied for by one entity to a different entity, and the old standard of what constitutes residency under a homeowners policy. 

Keep keeping safe,

Lee S. Siegel

[email protected]


First Woman Taxi Driver Fined – 100 Years Ago:


Daily News
New York, New York
1 Mar 1924



        Esther Ohlson, twenty-five, the first woman taxi chauffeur to appear in Manhattan Traffic court this year, faced Magistrate Norman J. Marsh yesterday on a charge of failing to stop on a signal, brought by Patrolman John Geideman. She pleaded guilty in a loud firm voice without betraying the slightest sign of nervousness, although this was her first court experience.

Miss Ohlson who lives at 275 East 244th street, listened attentively while Geideman detailed the complaint. She made no plea in her own defense and joked with the clerk while paying a $5 fine.

Fifty-nine of the 185 defendants convicted were taxi drivers, and the day’s fines totaled $779. Thirty-seven defendants, thirteen of them taxi chauffeurs, were fined for failing to stop on signals.


Kyle's Noteworthy No-Fault:

Dear Readers,

In this week’s No-Fault case, the insurer brought a summary judgment motion arguing it did not have an obligation to pay the No-Fault benefits of multiple claimants because, among other things, multiple claimants failed to attend their examination under oath. The insurer had requested EUOs and undertook an investigation of the claims due to the suspicion that the alleged accident was intentional or staged.

Kyle A. Ruffner

[email protected]


Immigration Problems– 100 Years Ago:

Albany Daily Democrat
Albany, Oregon
1 Mar 1924


 “Immigrant tide” is an appropriate figure of speech. A tide ebbs as well as flows.

Immigration to this country is now arousing comment because it is at the full flood. The receding aliens attract little attention, but they must be reckoned with to get an accurate size-up of the situation. It is the “mean tide” or average that fixes the line of sea level. In the case of immigration, it is the net gain that counts.

          That is far less than most Americans suppose. In the last 12 months there were about 310,000 immigrants admitted, and about 199,000 departed, leaving a net gain of only 111,000.

          If all the newcomers had stayed, it would have meant only one-half or one-third as many recruits as the country used to gain in a year. As matters stand, it was far less. The gain was only about one immigrant to every 1000 people already here. And the proportion is not likely to grow larger under the present law, or any law that supersedes it.

          There is very little danger in that, to American institutions, especially if the immigrants are scattered as they should be. Any city of 100,000 people ought to be able to easily to assimilate 100 aliens a year.


Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers:

Big broadcasting weekend for this guy as I’ll have the ESPN+ call for Niagara University’s WBB MAAC games against Rider and Iona on Thursday and Saturday, with a Daemen University MVB match on Friday against Harvard. Niagara is jockeying for tournament seeding as we head into March Madness, while Daemen has broken the AVCA’s top-20 list for the first time in program history—as a NCAA Division II program, I might add. Great things in WNY sports this weekend.

This week, my Federal Reporter column outlines a recent United States Supreme Court decision concerning the enforceability of choice-of-law provisions in marine insurance policies (or other maritime contracts, for that matter).

Until next time,

Ryan P. Maxwell

[email protected]


Wrongful Death Verdict – 100 Years Ago:

The Cincinnati Enquirer
Cincinnati, Ohio
1 Mar 1924

Awarded $10,000 For Wife’s Death

          A verdict for $10,000 was returned by Judge Edward T. Dixon’s Common Pleas Jury yesterday in favor of Robert Kyde, 45 West Court Street, as administrator of the estate of his wife, Aurelia Kyde, against Mrs. Rosella Davidson, 1640 Cooper Street.

          Kyde sued for $12,500 damages, alleging that Mrs. Davidson performed an operation upon his wife, July 28, 1922, which caused her death at St. Mary’s Hospital August 2, 1922. Kyde was left with four small children, which he had to place in an orphanage after his wife’s death.

          Attorneys D. T. Hackett and Samuel Rotter represented Kyde, and Attorney Nicholas Klein appeared for the defense. Twelve men were on the jury and voted unanimously for the verdict.


Storm’s SIU:

Hi Team:

Sorry to be brief, but I just got back to town from conducting an EUO in Albany. 

Two interesting Pennsylvania cases for you this week:

  • Plaintiff's Son Did Not Materially Breach the Policy in Failing to Submit to an Examination Under Oath as the Policy Condition Required “You” (Defined as the Named insured and Resident Spouse) to Comply with the Condition but Not an “Insured Person”. 

  • Demand for UM/UIM Benefits Denied Based Upon the Household Vehicle Exclusion Which Serves as an Unambiguous Preclusion of All UM/UIM Coverage (Even Unstacked Coverage) for Damages Sustained While Operating an Unlisted Household Vehicle.

Happy to be watching baseball on TV again.  A hopeful sign of a glorious spring to come. 

We will talk again in two weeks,

Scott D. Storm

[email protected]


A Scotch Verdict? – 100 Years Ago:

San Francisco Bulletin
San Francisco, California
1 Mar 1924

How It Started
A “Scotch Verdict”

          The term “Scotch verdict” is used nothing. It is frequently employed in popular speech with reference to private decisions, but it was with reference to a court verdict that it had its origin.

          In this country a man on trial must be adjudged guilty or not guilty, and once found not guilty he cannot again be brought to trial for the same offense. In Scotland, however, there was long the notorious custom when a jury disagreed as to the guilt or innocence of a man on trial to bring in a verdict of “not proven.”

          Consequently, the accused was then free for the time being, but not free of the stigma of the charge made against him. It was from the unsatisfactory nature of such a verdict that the term “Scotch Verdict” came into common parlance in the sense in which it is popularly used today.


Fleming’s Finest:

Hi Coverage Pointers Subscribers:

Since it has been unseasonably warm, the dog was able to have a proper golf outing for the first time this year. Nothing makes him happier than sprinting after golf balls, but his ball retrieval technique could use a little work.

This week, we are mixing it up and looking at an opinion from the First Circuit on Massachusetts law. The case is interesting because the SJC has not yet addressed whether an insurer may seek reimbursement for defense costs pursuant to a unilateral reservation of rights. The First Circuit considered whether a liability insurer who has chosen to defend its insureds may seek reimbursement for settlement payments and defense costs from its insureds.

Until next time,

Katherine A. Fleming

[email protected]


Too Dead to Appear in Court? – 100 Years Ago:

St. Louis Post-Dispatch
St. Louis, Missouri
1 Mar 1924


Man Claiming to Be the Once Declared Legally Dead
by a Jury Fails to Appear in Court


Judge Rules He Has No Power to Bring Him In,
but it Must Be Proved He Is Alive

          John P. Adams, former bookkeeper at Century Boat Club, who was declared dead by a jury in a suit by his former wife, Mrs. Cora M. Preiss, 2624 Rutger street, to recover on his policy in the Mutual Life Insurance Co. of New York, although the company claims he is alive, did not appear yesterday in Circuit Judge Killoren’s court at a hearing on a motion for a new trial.

          Several witnesses, however, testified they saw the real Adams in the flesh last Sunday in a law firm’s office in the First National Bank Building, East St. Louis. They talked with him and could not be mistaken in their identification, they said. He asserted in their presence that he was Adams.

Want Adams in Court

          Former circuit Judge Vital W.  Garesche and Ernest A. green, attorneys for Mrs. Preiss, insisted the hearing be postponed until the company produced Adams in court. “Our Client is honest and does not want a cent of insurance money if she is not entitled to it,” declared Garesche. “But we have a right to see this man and ascertain for ourselves who he is. Ther have been many cases of mistaken identity.”


Gestwick’s Garden State Gazette:

Dear Readers:

I have returned from a chilly Florida trip with my girlfriend and her family. We visited EPCOT and saw the Daytona 500. Pretty cool stuff.

This week, I have another COVID-19 business interruption case. Consistent with those that came before it, the gravamen of the court’s holding was that the insureds were not entitled to coverage because the premises sustained no damage caused by any direct physical loss.

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

Evan D. Gestwick

[email protected]


Follow up on Death Case – 100 Years Ago:


St. Louis Post-Dispatch
St. Louis, Missouri
25 Mar 1924


Judge Killoren Convinced Man Once
Declared to Be Legally Dead Is Alive.

          Motion for a new trial in the suit of Mrs. Cora M. Preiss against the Mutual Life Insurance Co. of New York was granted yesterday by Circuit Judge Killoren, on the contention of the insurance company that John P. Adams, former husband of Mrs. Preiss, is not dead, as she maintained when a jury recently gave her a verdict of $2629.15 on insurance carried by Adams.

          The company, as it is known, a short time ago produced affidavits from a man claiming to be Adams and also introduced testimony of acquaintances that they had seen Adams recently in East St. Louis. Adams disappeared in 1915 saying his body would be found in the Meramec River. There were reports of shortages in his books at a local rowing club, and when in East St. Louis recently, the man said to be Adams did not cross the river.

          Judge Killoren, in sustaining the company’s motion, said he was convinced Adams was alive and that justice demanded a new trial.

Editor’s Note:  I think he was, in fact, alive …


O’Shea Rides the Circuits:

Hey Readers,

Spring is almost here, but it feels like Spring has been here almost all Winter. Nonetheless, this is the year I finally invest in actual golf irons. My present irons are a set of Lee Trevino Faultless from 1970. Unlike the irons’ name, my golf game is nothing but faulty. Practice, rather than new irons, is probably the cure.

This week I have a case from the Seventh Circuit involving a first party property claim for the repair of a smelting furnace. The court discussed causation and the burden needed to establish the cause of a loss. The court noted the insured never submitted an expert report in the action. Based on the two preceding sentences, I think you can infer how the court ruled in this case.

See you in two weeks.

Ryan P. O’Shea

[email protected]


How Large a Percentage of New Yorkers Were Immoral? – 100 Years Ago:


The Buffalo Enquirer
Buffalo, New York
1 Mar 1924


          New York, New York, March 1 – Public dance halls in New York are 20 per cent immoral, according to an official report of investigators who have completed a four months’ survey.

          “Closed halls,” where men are forbidden to bring partners and girls from the streets and from public high schools mingle as hired “instructresses” at the beck and call of yellow men, were described as the worst in the report.

          The girls in these places are forced to dance seventy times a week to eke out a living wage of $20 a week. They were paid four cents a dance.

          Twenty-one such places were listed on the east side. Most of the men who patronize the places are described by the committee of investigation, which included prominent club women, as “socially undesirable Oriental.” The halls are declared to be a product of the Barberry coast of San Francisco.

          “Appalling conditions of immorality” are declared to exist in Greenwich Village, where complaint is made against both sanitary and moral codes.

          Mrs. Henry Moskowitz, chairman of the Commercial Recreation committees of the New York City recreation committee and the Women’s City Club, who presented the report, declared that in two of the big dance palaces on Broadway, men were being openly solicited and liquor sold.


Louttit’s Legislative and Regulatory Roundup:


Robert P. Louttit

[email protected]


Dance Bands Preceded by Dance Bans – 100 Years Ago:

The Brooklyn Daily Eagle
Brooklyn, New York
1 Mar 1924

Dr. Dane Defied in Dance Ban
After Clash with Trustee

          The affairs of St. Mark’s congregational church, Decatur St., and Ralph Ave., are in an upset state today as a result of a clash last night between the pastor, the Rev. Dr. Charles W. Dane and members of the board of trustees over the subject of dancing.

          At the conclusion of a minstrel show at the church last night, when dancing was scheduled, Dr. Dane stepped to the middle of the platform and announced there was to be no dancing. There was a buzz of comment and Frederic Hommel, vice president of the board of trustees, objected on the ground that dancing had been advertised.

          “There will be no dancing here while I am pastor of the church,” the clergyman declared, when he said this James Reed, the pianist, refused to supply the music. However, Evelyn Devore volunteered to take his place.

          The music started and the couples stepped out in a foxtrot. The clergyman protested vigorously, and the dancing stopped abruptly. The guests went home.

          When asked about the incident today Dr. Dane said: “It is absolutely untrue that it was advertised in any way that dancing would take place here last night. There is a small minority in this church who would dance in God’s house.

          “At the end of a three-hour program some began to move chairs away and make the floor ready for dancing. I stepped forward and announced that there would be no dancing in God’s house. Mr. Hommel, who has no authority, got up and sad, ‘There will be dancing.’

          “I can assure you,” he said, “that there was no dancing in St. Mark’s last night and there will not be while I am pastor here. This whole matter will come up before the church boards and congregation soon. I am confident that my stand will be vindicated by them.”


Rob Reaches the Threshold: 

Hello Readers,

Spring has (maybe) sprung in Western New York. With record highs, golf courses opening in February and March (!!), and no snow on the ground – it’s  been a nice month in the Buffalo area. And down south, Juan Soto laces up for the Yankees in spring training. Let’s carry these good vibes into March.  

After a few decisions to start the year from the First Department, we switch up for this installment, with a nice decision from the Second Department which highlights the importance of strong expert reports on all issues involving both serious injury and causation.

I hope you all enjoy the read.

Robert J. Caggiano

[email protected]


Stamp Act – 100 Years Ago:


The Standard Union
Brooklyn, New York
1 Mar 1923


          Berryville, Va., March 1.- Armed residents of this village fought two battles with robbers, who dynamited the post office safe early today and escaped with a quantity of stamps. Scores of shots were exchanged between villagers, awakened by the explosion, and the robbers who made their escape in a touring car. It is believed one of the robbers was wounded.


Goldberg’s Golden Nuggets:

Happy leap day readers. For those who have birthdays today, happy birthday. I heard Facebook previously did not allow you to celebrate your leap year birthday – which apparently has now changed. Congratulations.

Anyway, I bring you two cases – a serious injury determination and a violation of the Public Health Law resulting in a valid denial of benefits.

Enoy the beginning of March.

Joshua M. Goldberg

[email protected]


Lose a Leg?  $8,500 – 100 Years Ago:

The Buffalo Enquirer
Buffalo, New York
1 Mar 1924


          A verdict of $8,500 was reported this morning to justice Dudley in supreme court when a jury returned a sealed verdict in favor of the plaintiff in the action of George Ryan, No. 658 Clinton street, against the New York Central Railroad company.

          Attorney Dana L. Spring explained to the jury during trial that Ryan, a brakeman for the Pennsylvania Railway company, last October 22, lost his left leg when a freight car was backed on him in the Alabama street yards of the New York Central which are adjacent to the Pennsylvania tracks.


LaBarbera’s Lower Court Library:

Dear Readers:

One extra day this year, hopefully everyone used it to do something fun. Although I am looking forward to March, my indoor soccer league is moving outside within the next two weeks. I’m sure you can guess whether or not I am excited to be running around in freezing weather for a few months while we wait for temperatures to rise…

This week, I address a case where the sole question before the court was whether the delay in providing timely notice resulted in prejudice to the insurer. Here, since the delay in notice was over two years after the policy so required, under New York Insurance Law, the burden shifted to the insured to establish that the insurer had not been prejudiced.

That’s all for now.

Isabelle H. LaBarbera

[email protected]


Divorce Denied – Then What Happens? – 100 Years Ago:

The Buffalo Enquirer
Buffalo, New York
1 Mar 1924

No Cause Verdict
in Divorce Case
in Mayville Court

(Special Telegram to The Enquirer.)

          Mayville, March 1 – When the February term of the Supreme Court has adjourned without date, the last case tried was a divorce action brought by Samuel D. Lyon, of Westfield, against Elizabeth Lyon, now of Cleveland. The trial lasted several days and was one of the most snappy trials ever held in the new court room. Arthur Lofgren, of Jamestown, one of the co-respondents named, and his wife, told of watching the Lyon home, then in Jamestown, one night, and seeing a man go in who later came out, and as he left kissed the defendant. They followed the mab to the home of H. Warren Stumpf, Jamestown postal clerk, who was also named as a co-respondent. Lofgren told of love affairs between himself and Mrs. Lyon but declined to answer the crucial question claiming his privilege as it might incriminate him.

Mrs. John T.  Kerrin, wife of a former rector of a Jamestown church, who resided in the same house as the Lyons, told of seeing men come to the house at night while Mr. Lyon was away at his work as a salesman. Mr. Stumpf and Mrs. Lyon denied all the charged, and Stumpf said he only knew Mrs. Lyon as a neighbor to say “How do you do” as he met her on the street. In summing up the case Attorney Michael D. Lombardo, counsel with Judge Allen E. Bargar for the defendant, scored Lofgren in no uncertain terms. Henry C Williamson was Lyon’s attorney. The jury was out but a short time and gave a verdict in favor of the defendant, for no cause of action.


North of the Border:

In the last 10 days I have crisscrossed Canada and the United States.

On February 21, I flew to St. John’s, Newfoundland, where, in my capacity as President of Canadian Defence Lawyers, I presented CDL’s highest award to Stephen May of the Cox & Palmer law firm in St. John’s. I then battled weather delays and cancellations to fly back to Calgary (via Toronto) to catch a flight on February 24 to Tampa, Florida (via Denver) to attend the 2024 FDCC Winter Meeting in St. Petersburg, Florida, where, in addition to partaking in the fellowship of the members, I presented as part of a panel on ESG issues impacting D&O cover. On February 28, I returned to Calgary (via Chicago).

I’ll stay put until March 1 when I go to Edmonton for an overnight (but does staying in one’s home province count)?

In the last 10 days I have had the pleasure and privilege of interacting with some of the finest defence and coverage lawyers in the United States and Canada. It is inspirational and uplifting to be counted in their midst.

On February 27, the Ontario Court of Appeal released a seminal decision dealing with select duty to defend issues arising from the defence of opioid class actions. My piece scratches the surface of what that Court had to say. Subject to appeal, that decision will be cited in the months and years to come as one of the seminal Canadian insurance cases. Have a read. Until next time.


Heather A. Sanderson
Sanderson Law, Calgary, Alberta

[email protected]


Headlines from this week’s issue, attached:

Dan D. Kohane
[email protected]

  • Policy Applications Misrepresentations Justify Rescission
  • If Insurance Agent was Specifically Required to Secure Coverage Required in Trade Contract, and Insurer Denies Coverage Based on Exclusion, Summary Judgment Not Granted to Agent.  Whether Insured Read the Policy Goes to Insured’s Culpable Conduct


Steven E. Peiper

[email protected]

  • Grace Period Required Receipt of Premium Funds Prior to Date Certain

  • Questions of Fact on the Status of Independent Contractor vs. Employee Analysis


Brian D. Barnas

[email protected]

  • On Rehearing Insurer Still Had No Duty to Enter into Consent Judgment Agreement Exceeding the Policy


Lee S. Siegel

[email protected]

  • Following Trial, Court Finds Loss Location Was Not a Residence Premises

  • Carrier Denied Premium Audit Where It Wrote Coverage to Non-Applicant


Kyle A. Ruffner
[email protected]

  • Court Grants State Farm’s Motion for Summary Judgment, Declaring the Insurer Did Not Have an Obligation to Pay No-Fault Benefits


Ryan P. Maxwell

Choice-of-law Provision in Maritime Insurance Policy is Presumptively Enforceable, Despite Alleged State Public Policy Implications


Scott D. Storm

[email protected]

  • Plaintiff's Son Did Not Materially Breach the Policy in Failing to Submit to an Examination Under Oath as the Policy Condition Required “You” (Defined as the Named insured and Resident Spouse) to Comply with the Condition but Not an “Insured Person”

  • Demand for UM/UIM Benefits Denied Based Upon the Household Vehicle Exclusion Which Serves as an Unambiguous Preclusion of All UM/UIM Coverage (Even Unstacked Coverage) for Damages Sustained While Operating an Unlisted Household Vehicle


Katherine A. Fleming

[email protected]

  • Insurer’s Recoupment of Defense and Settlement Costs at Odds with Massachusetts Law


Evan D. Gestwick

[email protected]

  • Still No Recovery for Business Interruption Caused by COVID-19 Unless there is a Direct Physical Loss


Ryan P. O’Shea

[email protected]

  • Legalese Does Not Make Up for Lack of Expert Evidence


Robert P. Louttit

[email protected]

  • Nothing to Report


Robert J. Caggiano

[email protected]

  • First Department Unanimously Affirmed, Without Costs, a Decision Granting Summary Judgment in Favor of Defendant Where Plaintiff’s Evidence Failed to Raise an Issue of Fact on Whether He Suffered Serious Injury Within the Meaning of Insurance Law § 5102(d)


Joshua M. Goldberg

[email protected]

  • Electronic Prescription Required for No-Fault Benefits

  • Significant Injury Need Not Be Permanent


Isabelle H. LaBarbera

[email protected]

  • Insurer Failed to Establish Prejudice and was Required to Defend Additional Insured


Heather A. Sanderson
Sanderson Law, Calgary, Alberta

[email protected]

  • Select Issues Arising Out of the Defence of Canadian Class Actions to Recover Damages and Expense as a Result of the Opioid Crisis is Assessed by the Ontario Court of Appeal


Wish my daughter and her soon-to-be-husband good luck and good fortune!

And remember, every day is a gift to be enjoyed and treasured.



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

Robert P. Louttit

Ryan P. Maxwell

Joshua M. Goldberg

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera


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
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 Garden State Gazette

O’Shea Rides the Circuits

Louttit’s Legislative and Regulatory Roundup

Rob Reaches the Threshold

Goldberg’s Golden Nuggets

LaBarbera’s Lower Court Library

North of the Border


Dan D. Kohane
[email protected]


02/29/24       Barese v. Erie and Niagara Insurance Association
Appellate Division, Third Department
Policy Applications Misrepresentations Justify Rescission

In 2002, plaintiff loaned funds to his employee and her husband (“mortgagors”) to purchase a residence and the loan was secured by a mortgage on the property. Naccarato Insurance assisted the mortgagors with obtaining a homeowners' insurance policy with Adirondack Insurance Exchange.

Around May 2013, the mortgagors stopped making mortgage payments to plaintiff, and, in August 2013, plaintiff learned that they had also stopped paying their insurance premiums with Adirondack and that the policy would be cancelled effective September 2013. Plaintiff contacted Naccarato to insure the property, and Naccarato secured insurance for plaintiff through Security Mutual Insurance Company. Plaintiff commenced foreclosure proceedings against the mortgagors in October 2013. During that time, the plaintiff learned that Security Mutual would be cancelling the policy effective November 30, 2013, citing an inspection that revealed a dog on the property and asbestos siding on the dwelling.

Assisted by Naccarato, plaintiff applied for a landlord package policy from defendant Erie and Niagara Insurance Association (“ENIA”) on December 3, 2013. Erie & Niagara issued plaintiff an insurance policy pursuant to that application.

Thereafter, the foreclosure action concluded, and plaintiff obtained the deed to the property in July 2014; the mortgagors vacated the property around that time. The property remained vacant and, around September 2014, a fire erupted, causing property damage. Plaintiff filed a claim with Erie & Niagara for such damage but, following a lengthy investigation, Erie & Niagara sent plaintiff a notice disclaiming coverage.

In 2016, plaintiff commenced the instant action, alleging that ENIA breached the insurance contract by denying coverage and that Naccarato had been negligent in filling out the insurance application, causing ENIA to deny coverage.

While materiality of a misrepresentation is generally a question of fact, an insurer may establish materiality as a matter of law by "present[ing] documentation concerning its underwriting practices, such as underwriting manuals, bulletins or rules pertaining to similar risks, to establish that it would not have issued the same policy if the correct information had been disclosed in the application".

ENIA submitted the affidavit of its claim manager, who explained that plaintiff's landlord package policy contained a provision that rendered coverage void if plaintiff engaged in misrepresentations about any material fact concerning the policy or his interest therein; the policy was attached to the claim manager's affidavit. Among other things, the claim manager explained, plaintiff had misrepresented that he was the owner of the property and denied the existence of a mortgage on the property. An underwriting manager with Erie & Niagara explained, through a separate affidavit, that the landlord package policy was only available to owners of rental property, not mortgagees, and she supported that assertion with Erie & Niagara's manual for the landlord package policy program. According to the underwriting manager, but for plaintiff's misrepresentations that he owned the property and that tenants resided therein, Erie & Niagara would not have issued plaintiff the landlord package policy.

Here, the evidence proffered by Erie & Niagara was sufficient to meet its burden on a motion for summary judgment. The documentary evidence and plaintiff's admissions show that the insurance application included various misrepresentations, and the affidavit of the underwriting manager and the landlord package policy program manual establish materiality.


02/20/24       Crosby v. AJA Turnpike Properties
Appellate Division, First Department
If Insurance Agent was Specifically Required to Secure Coverage Required in Trade Contract, and Insurer Denies Coverage Based on Exclusion, Summary Judgment Not Granted to Agent.  Whether Insured Read the Policy Goes to Insured’s Culpable Conduct

JMJ entered into a subcontract with Cinos and Conboy to perform work on the construction of a fast-food restaurant. The subcontract required JMJ to obtain insurance to defend and indemnify Cinos and Conboy against any claims arising from JMJ's performance of its duties under the subcontract.

Based on the subcontract's coverage requirements, JMJ contacted DiMonda, an insurance agency, to secure appropriate coverage, giving a copy of the subcontract directly to DiMonda and its agents. DiMonda then obtained a commercial general liability (CGL) policy for JMJ from Colony Insurance Company. Plaintiff in the underlying action was later injured at the job site and commenced an action against Cinos and Conboy, who in turn brought a third-party action seeking indemnification from JMJ.

Citing employee liability-based exclusions in the CGL policy, Colony denied coverage to JMJ for plaintiff's claim. JMJ sued the agent DiMonda, asserting causes of action for failure to obtain the proper insurance coverage, negligence, breach of the duty of care, and breach of fiduciary duty.

DiMonda failed to establish entitlement to summary judgment dismissing the action against them, as the record presents conflicting testimony from the parties as to their expectations with respect to obtaining the appropriate insurance coverage.

DiMonda's contentions that JMJ failed to timely read and understand the policy go to comparative negligence, but do not bar the action altogether.


Steven E. Peiper

[email protected]


First Party

02/21/24       Feldman v. Nassau Life Ins. Co.
Appellate Division, Second Department
Grace Period Required Receipt of Premium Funds Prior to Date Certain

Plaintiff maintained a $3,000,000 life insurance policy with Nassau.  That policy, however, contained a provision that terminated all coverage should premium payments become overdue, and upon notice be more than 61 days late.  The 61-day rule was driven by the receipt of the funds by Nassau. 

Here, plaintiff failed to make premium payments and was notified of his deficiency in July of 2019.  In the notice advising of the past due premiums, Nassau noted that all premiums needed to be received before September 30, 2019.  When payment was not timely received, Nassau canceled the policy and this action ensued. 

In opposition to Nassau’s position, plaintiff produced proof that he mailed something (allegedly a check) to Nassau on September 15, 2019.  As such, plaintiff reasoned that he had substantially complied with the policy’s requirements.    In affirming the trial court, the Appellate Division noted that the alleged mailing date was irrelevant. The policy plainly required receipt of the funds on or before September 30, 2019, and Nassau had met its burden of demonstrating no payment was received by that date. 



02/20/24       Brown v. Window King, LLC
Appellate Division, First Department
Questions of Fact on the Status of Independent Contractor vs. Employee Analysis

This matter arises from an incident involving the installation of windows on property managed by Stillman.  Stillman moved for summary judgment dismissing Brown’s action on the basis that as the property manager it did not maintain exclusive control over the facility, and, as such, was not responsible for the claimed injuries. 

At the same time, Window King also moved for summary judgment arguing that parties Herrera and Rivera were not employees but rather were independent contractors.  Evidence demonstrated that Rivera was employed by Herrera, who, in turn, was retained via a written contract with Window King.  Thus, because Rivera’s negligence was two steps removed from Window King its motion for summary judgment was granted. 

Stillman’s motion, on the other hand, was denied on a question of fact.  On appeal filed by Stillman, the Appellate Division ruled that evidence suggested that Stillman retained control over common areas.  As such, a question existed as to whether Stillman displaced the owner’s duty to safely maintain the premises. 

The Appellate Division did, however, throw a proverbial bone to Stillman. The Court noted that the Record also demonstrated that Rivera and Herrera both wore Window King shirts at the time of the incident, and that prior to the incident Rivera had worked, exclusively, on installations of windows sold by Window King.  Further, Window King even paid Rivera’s salary on the occasions when Herrera was unable to do so.  As a result, even though Window King demonstrated it did not supervise, direct, control, nor employ Rivera in the traditional sense, a question of fact existed as to its potential liability for Rivera’s negligence.    


Brian D. Barnas

[email protected]


02/28/24       Markuson v. State Farm Mutual Automobile Insurance Co.
District Court of Appeal of Florida, Second District
On Rehearing Insurer Still Had No Duty to Enter into Consent Judgment Agreement Exceeding the Policy

The District Court of Appeal of Florida decided a motion for rehearing on a prior opinion it issued on September 15, 2023.  The court granted the rehearing and reached the same conclusion on rehearing, holding that the trial court directly determined that State Farm had no duty to enter into a consent judgment in excess of the limits of its policy. 

The underlying case arose out of a 2006 automobile accident involving Erik Saterbo and Mr. Markuson. At the time of the accident, Erik was operating a vehicle owned by his father, Stephen. Due to his injuries, Mr. Markuson sued the Saterbos on September 10, 2008. The Saterbos had an insurance policy with State Farm which provided policy limits of $300,000.00. On January 15, 2009, State Farm authorized the Crawford Law Group, P.A.—the firm retained by State Farm to defend the Saterbos—to make a settlement offer to Mr. Markuson to resolve his case for the policy limits. The offer was not accepted.

Instead, in 2011 and 2012, Mr. Markuson issued two settlement offers to State Farm's insureds that would have required State Farm to (1) tender the $300,000.00 policy limits to Mr. Markuson; (2) authorize State Farm's insureds to enter into a consent judgment in the amount of $1.9 million that would not be recorded or enforced against the Saterbos; and (3) authorize the Saterbos to assign their rights in any claims against their insurance agent. In return, Mr. Markuson would execute a release of all his claims against the Saterbos and a satisfaction of the aforementioned consent judgment. The proposal made no indication that State Farm would be released from any bad faith liability. State Farm declined to accept these proposals, and the case continued to trial. Following a jury trial, Mr. Markuson recovered a total of $3,084,074.00.

The settlement offers by Mr. Markuson formed the basis of a bad faith complaint against State Farm. The alleged bad faith occurred when State Farm failed to settle the personal injury action by declining three of Mr. Markuson's proposals for settlement. State Farm moved for partial summary judgment, asserting that it did not act in bad faith because the proposals for settlement included consent judgments above the policy limits and pursuant to Kropilak, it owed no duty to its insured to enter into a consent judgment in excess of the limits of its policy. To the extent the bad faith claims rested on other basis, it did not seek summary judgment.

The trial court granted partial summary judgment for State Farm, finding that pursuant to Kropilak, State Farm had no duty to enter into a consent judgment that was in excess of the policy limits as a matter of law. The trial court found that each of the three proposals exposed State Farm to extracontractual claims for payment and that nothing suggested State Farm would be released by entering into the proposed consent judgments. It further found that State Farm never withdrew its offer of the policy limits. Thus, the trial court determined that "State Farm did not act in bad faith when it did not agree to or negotiate with respect to any of the three proposals."

The appellate court discussed the Eleventh Circuit's decision in Kropilak, which was the basis of the trial court’s holding. In Kropilak, Eleventh Circuit held that "an insurer owes no duty under Florida law to enter into a so-called Cunningham agreement and likewise owes no duty to its insured to enter into a consent judgment in excess of the limits of its policy. In Cunningham, the parties entered into an agreement to try the bad-faith action before trying the underlying negligence claim. The parties further stipulated that if no bad faith was found, the Cunninghams' claims would be settled for the policy limits, and the insured would not be exposed to an excess judgment. Ordinarily, to commence a bad faith action against a liability insurer, a party must first obtain a judgment against the insured in excess of the policy limits. However, the parties' stipulation voluntarily eliminated this procedural prerequisite. Thus, the stipulation was the functional equivalent of an excess judgment.

Here, the thrust of the bad faith case turned on State Farm's refusal to enter into the proposals for settlement.  In the plaintiffs' view, had a duty to authorize its insureds to consent to a judgment more than five times the amount of the policy limit (thereby expediting the availability of a bad faith claim) and to do so without releasing State Farm from liability. But an insurer does not ordinarily have an obligation to pay a claim in excess of the policy.

In the new opinion, the court considered Plaintiffs’ argument that two Florida Supreme Court cases, Cope and Toomey, were controlling case law.  The court rejected this contention.  In a new section of the decision, the court “emphasize[d] that the ultimate question in a bad faith cause of action is whether the insurer breached the duty owed to the insured to make decisions in good faith with proper care and concern given to the interests of the insured.”  In the court’s view, neither Toomey nor Cope comment on an insured’s duty to accept a settlement proposal, and neither case addresses a scenario where the assignee could hold onto the assignment of rights for a period of time before releasing the assignor.  However, the court explicitly stated that the holding of Kropilak was not so expansive as to eliminate other theories of bad faith.

Thus, the court concluded as a matter of law that the trial court correctly determined that State Farm had no duty to enter into a consent judgment in excess of the limits of its policy. Thus, where there was no duty to accept the proposals, declining the proposals could not serve as the basis of the bad faith claim.  However, the court noted that the trial court erred by entering a final judgment in favor of State Farm where the plaintiffs raised other bad faith theories.


Lee S. Siegel

[email protected]


02/22/24       Krusiewicz v. Kemper Independence Ins. Co.
Superior Court of Connecticut, New Britain District
Following Trial, Court Finds Loss Location Was Not a Residence Premises

Mary Krusiewicz was a long-time owner and resident of a house in West Hartford. In 2013 or 2104, she bought a house in Berlin and made that her primary residency. Her nephew lived in the West Hartford house until August 2020. Mary intended to renovate West Hartford and sell it, undertaking some work. In February 2021, frozen pipes burst causing calamitous damage to the premises. Kemper denied coverage, arguing that the West Hartford property was not the insured’s residence premises and that she failed to take steps to maintain the heat or drain the systems of water.

The typical Connecticut Special HO3 form requires that the loss location be a residence premises. The policy, as the court noted, provides coverage for the residence premises which is defined as the one-family dwelling where you reside. The term “reside” is not defined but, in Connecticut, is governed by a number of factors. In addition, the policy excludes coverage for damage caused by frozen pipes, unless the insured used reasonable care to maintain the heat, shut off the water, or drain the water system.

At trial, Mary testified that she slept exclusively in Berlin (there was no bed in West Hartford), took all her meals in Berlin, garaged her car in Berlin, and the majority of her belongings were in Berlin. The court, who was the trier of fact, noted that Mary was still registered to vote in West Hartford, received mail there, and kept some toiletries, clothes, and furniture in West Hartford. Kemper presented evidence, through water and natural gas bills, that there was minimal to no water or gas use in the two months prior to the loss (despite average temperatures being below freezing). “Occupants of homes use water in their daily activities. Given the average freezing temperatures, consumption of natural gas would be expected,” wrote the court.

“The evidence that there was negligible consumption of water or natural gas at the West Hartford property for two months prior to the loss substantiates the defendant's contention that the plaintiff did not reside there,” the court concluded. Further, “the pipes froze because the plaintiff failed to maintain heat and failed to drain water from the system. Failure to do either of these things triggers an exclusion from coverage of the loss.”

The court entered judgment for Kemper.


02/14/24       Associate Employers Ins. Co. v. Morain
Superior Court of Connecticut, Waterbury District
Carrier Denied Premium Audit Where It Wrote Coverage to Non-Applicant

This is not our usual bailiwick, but there’s slim pickings in the Connecticut coverage corral lately. Here, the insured’s workers compensation carrier conducted a post-policy period audit, finding that the insured owed an additional $30,000 in premium for undisclosed employees. The only problem the carrier had was that it issued the policy to Mr. Morain who had applied for the coverage in the name of his (admittedly) defunct company, Morain Carpentry, LLC.

In a case presided over by Judge Trial Referee Pellegrino, the court was clearly perturbed by the carrier’s conduct. The court could not understand how the carrier, receiving an application for coverage in the name of an LLC could then issue the policy in the name of an individual who had not asked for the coverage. The Judge was left with many unanswered questions.

The plaintiff has provided the court with no evidence as to why it issued a policy dated January 11, 2019, in the defendant's personal name, in spite of the fact that the application for insurance was made in December of 2019 [sic] in the name of a[n] LLC…. The plaintiff offered no evidence that it knew that the LLC was not in existence on January 11, 2020, the date the policy was written in the defendant's individual name. There was no evidence submitted by the plaintiff as to why the plaintiff was asked to insure the individual as opposed to the LLC. There was no evidence presented as to whether the plaintiff informed the defendant that it wrote the policy in the individual's name as opposed to the corporation's name as requested. There was no evidence presented as to why the plaintiff did not refuse to insure the corporation if, in fact, they knew on January 11, 2020, that the LLC applicant was not in existence.

Ultimately, in entering judgment for the defendant, the court commented that the insurer “had no authorization or right to insure the defendant without his permission or authorization nor to seek premium payments on a policy it had no authority to write.”

Individuals and their LLCs are not interchangeable. This was a costly lesson for the carrier.


Kyle A. Ruffner

[email protected]


02/16/24       State Farm Mutual Automobile Ins. Co. v. Nasia Gaspard, et al
Supreme Court, New York County
Court Grants State Farm’s Motion for Summary Judgment, Declaring the Insurer Did Not Have an Obligation to Pay No-Fault Benefits

State Farm issued a policy to Lemaitre Videau and Nasia Gaspard for the insured vehicle.  On March 16, 2022, an individual who was allegedly "falsely and fraudulently impersonating Miguel Philippi” was driving the insured vehicle and defendant claimants Patrick Joseph, Vena Videau, Joseph Pierre and Shawn Williams were passengers. The insureds were not in the vehicle. It is alleged that the insured vehicle was involved in an accident with a BMW reportedly owned by Odaya Simpson and being operated by Gail Wheatle. There was no police report, so the allegations concerning the accident arose from a motorist accident report filed by the individual claimants. State Farm has received multiple bills for treatments allegedly provided to the three claimants due to injuries suffered from the accident.

In support of its motion for summary judgment, the insurer submitted an affidavit of its Claim Specialist who asserted that, after investigation, State Farm questioned the legitimacy of the claim because there was no police report, both the alleged drivers of the vehicles denied being in any kind of motor vehicle accident, and the insurance policy was obtained less than two months prior to the alleged loss. Therefore, State Farm requested EUOs of all parties allegedly involved in the accident, but only the alleged driver of the insured vehicle, Phillipe, and one of the claimants, Joseph, showed for their EUO. Pursuant to its investigation, State Farm determined that the alleged accident was staged or intentionally caused for, among other things, the following reasons: the reported drivers of the vehicle denied involvement, inconsistencies in the testimony of Phillipe and Joseph, changes to the claimants testimony with regard to the facts of the loss, evidence that the damage was not caused by contact with another vehicle, and Phillipi denied knowing either Gaspard or Lemaitre. Further, State Farm submitted the affirmation of its attorney, supporting State Farm’s efforts to schedule the EUOs of the rest of the involved parties, who failed to attend their EUOs on two occasions.

Therefore, State Farm argued that it was entitled to summary judgment and a declaration that it has no duty to pay any no-fault benefits for claims submitted by the defendants because of the failure of the parties to attend their EUOs on multiple occasions, breaching a condition precedent to coverage and because the loss in question was not a covered event because it was staged an/or intentional. In opposition, the defendants argued State Farm failed to establish the accident was intentional, failed to show it properly mailed EUO notices or prove the merits of its no-show defense, and that there had not been time for discovery. Therefore, they argued State Farm failed to show it had no duty to pay no-fault benefits.

With regard to the failure to attend EUOs, the court explained it is well established that failure to submit to an EUO and subscribe to the same violates a condition precedent to coverage, which vitiates an insurance policy. Accordingly, through the affidavits and affirmations submitted by State Farm, it demonstrated that Vena, Pierre and Williams failed to appear for their EUOs, and the burden shifted to the defendants to demonstrate a triable issue of fact.

The court then considered the argument of the defendants that State Farm did not demonstrate proper service of EUO notices and did not comply with New York State No-Fault timeliness requirements in denying the claims. However, the court explained that the timeliness of State Farm's denial of their claims is irrelevant since the violation of a condition precedent to coverage gives plaintiff the right "to deny all claims retroactively to the date of the loss, regardless of whether the denials were timely issued". Further, with respect to the argument that the EUOs were not timely requested, the court determined that State Farm met its burden of demonstrating that its requests for EUOs were served within 15 days of receipt of bills that served as the bases for those requests and that the notices were properly mailed. In opposition, the opposing defendants did not submit any evidence to contradict State Farm’s claims concerning the timeliness and proper ailing of its notices.

Next, the opposing defendants argued State Farm failed to demonstrate justification to request the EUOs of the claimants. However, the claims representative demonstrated facts that raised a strong possibility that the collision did not occur as the claimants alleged, which provided a reasonable basis to request an EUO. Therefore, the court held that State Farm has demonstrated an objective justification for its EUO requests. Lastly, the court rejected the defendants’ argument that the summary judgment motion was premature because there was not adequate time for discovery, because the court did not belief any further discovery would help the defendants defat State Farm’s condition precedent to coverage defense for the failures to appear for EUOs.

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


Ryan P. Maxwell
[email protected]


02/28/24       Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC
United States Supreme Court
Choice-of-law Provision in Maritime Insurance Policy is Presumptively Enforceable, Despite Alleged State Public Policy Implications

In this matter, Great Lakes Insurance SE, the marine insurer for Raiders Retreat Realty Co., LLC, a Pennsylvania-based boat owner, sought a declaratory judgment confirming that Raiders had breached its contract, permitting Great Lakes to deny coverage for a claim after the boat ran aground. Before the United States Supreme Court was the Third Circuit’s vacatur of the Eastern District of Pennsylvania’s prior determination that Raiders’ counterclaims based upon Pennsylvania-law were unavailable, as New York law applied pursuant to choice-of-law provision in parties' insurance contract.

Under Article III, Section 2, Clause 1 of the United States Constitution, federal courts were granted jurisdiction over maritime cases in order to set a uniform system of maritime law, nationwide. Federal courts follow prior rules set by federal courts, in addition to setting new rules for previously undetermined issues.

Relative to choice-of-law issues, federal maritime rules have long dictated that forum-selection clauses in maritime contracts are presumptively enforceable, absent unreasonableness. And here, the SCOTUS found no reason that same standard should not extend to choice-of-law provisions. Despite the traditional state regulation of insurance following passage of the McCarron-Ferguson Act, such considerations do not speak to the concern addressed by a choice-of-law provision—namely, which state’s laws should apply to a given case.

No recognized exception was advocated for by Raiders. And although Raiders argued for the creation of an exception to presumptive enforceability in situations where the chosen state’s law would violate the public policy of the state with the greatest interest in the dispute, this proposed exception not only lacked precedential support, but also contravened the fundamental purpose of choice-of-law provisions, generally. Raiders proposal would merely substitute one state’s caselaw for another, which does not support federal maritime interests in developing uniformity of maritime law.

Finally, the SCOTUS rejected advocation for adoption of the choice-of-law approach set forth in §187(2)(b) of the Second Restatement of Conflict of Laws, since that provision arose from interstate cases, rather than federal-state conflicts—and maritime conflicts at that.


Scott D. Storm

[email protected]


02/16/24         Adekola v. Allstate
United States District Court, E.D. Pennsylvania
Plaintiff's Son Did Not Materially Breach the Policy in Failing to Submit to an Examination Under Oath as the Policy Condition Required “You” (Defined as the Named insured and Resident Spouse) to Comply with the Condition but Not an “Insured Person”

[Abridged] Adekola alleges that Defendant wrongfully denied her coverage for losses arising from a fire at her property. Plaintiff's Amended Complaint raises two claims against Defendant: Count I — breach of contract and Count II — trespass pursuant to 42 Pa. C.S.A. § 8371 ("Bad Faith").

In response to Plaintiff's Amended Complaint, Defendant moved for Judgment on the Pleadings on the grounds that Defendant was not obligated to cover the losses because Plaintiff's son materially breached the policy when he failed to submit to an examination under oath. The Court denied Defendant's Motion for Judgment on the Pleadings on February 13, 2024.  Before the Court is Defendant's Motion for Reconsideration of the Court's Order of February 13, 2024, which is denied.

Plaintiff resided in the household with her two sons, Nico Bradshaw and Lemmeco Bradshaw. At the time of the fire, Plaintiff had a "House & Home" insurance policy with Defendant. Plaintiff — Michelle Adekola — was the person listed as the "Named Insured" on the policy. 

Defendant also requested examinations under oath of Plaintiff and her son, Nico. On May 16, 2023, counsel for Defendant examined Plaintiff and Nico via Zoom.  Defendant then sought to examine Plaintiff's other son, Lemmeco, an adult. Plaintiff tried to produce Lemmeco for an examination, but these efforts were not successful. 

Thereafter, in August 2023, Defendant ceased paying for Plaintiff's temporary housing.  A month later, on September 18, 2023, Defendant notified Plaintiff that Lemmeco's failure to participate in an examination under oath "constituted a material breach of the duties under the Policy" and that this breach was prejudicial to Defendant.  The letter stated that, under the policy, Lemmeco had a duty to submit to an examination under oath.  Defendant stated that it had no obligation under this policy so long as the breach continued, which would "obviously include any additional living Expense, dwelling/structure, and personal property benefits." 

Plaintiff's counsel responded by letter on October 13, 2023, stating that Plaintiff complied with her obligations under the policy, namely submitting to an examination under oath and producing members of her household, to the extent it was within her power to do so.  Further, Plaintiff's counsel explained that Plaintiff did not have the power to force Lemmeco to participate in an examination.  The letter also noted that Lemmeco experienced a health issue in August 2023.  The letter concluded that because Plaintiff did "all that she is reasonably required to do under the Policy, there is no breach by Plaintiff." 

In its Motion for Reconsideration, Defendant continues to rely on its errant premise that Plaintiff's son, Lemmeco Bradshaw, had a duty under Plaintiff's policy to submit to an examination under oath. The Court reviewed the policy's relevant language and did not discern such a duty.  As discussed in the Court's February 13, 2024, Order, the policy distinguishes between "You" and "insured persons" in assigning obligations.  "You" is defined as the named insured on the policy and that person's resident spouse. "Insured persons" is defined as "you"; any relative residing in the household; and any person under the age or 21 residing in the household and in the named insured's care. Here, Plaintiff Michelle Adekola is the person named on the policy; she is both "you" and an insured person. Her sons, Nico Bradshaw and Lemmeco Bradshaw, are "insured persons" because they were relatives residing in the household at the time of the loss.

"Section I Conditions" of the policy outlines what "You" — the named insured — must do following a loss covered by the policy. Subsection 3(f)(2) states that "you must, as often as we reasonably require, at our request, submit to examinations under oath, separately and apart from any other person defined as you or insured person. This plain language requires "You" to submit to an examination under oath. The language is silent as to what, if anything, an "insured person," as distinct from "you," must do with respect to examinations under oath.

While Defendant counters that "there is no difference in or delineation of the duties of you and an insured person for items a) through g) which include the duty to submit to an examination", the Court finds no basis for this conclusion. The policy does in fact define "you" and "insured persons" as different entities; "you" is both the named insured and an insured person, but an insured person is not a "you." Interchanging "you" and insured person with respect to obligations in the event of loss is an interpretative liberty that the Court will not take.

The Court finds the policy language with respect to obligations in the event of loss clear. Defendant has not provided any new analysis or evidence as to why the Court's interpretation of the policy's language is an error of fact or law. Accordingly, the Court's interpretation of the language remains unchanged.

Defendant then points to the language in Section I Conditions, Subsection 3, which states that "We have no duty to provide coverage under this section if you, an insured person, or a representative of either fail to comply with items a) through g) above, and this failure to comply is prejudicial to us."  Defendant asserts that under this provision, Lemmeco's failure to submit to an examination [item 3(f)] means that Defendant has no duty to provide coverage. 

Defendant believes that reconsideration of the Court's order denying Defendant's Motion for Judgment of the Pleadings is warranted because the Court "inadvertently overlooked this very specific language in the Policy dealing with an insured person."  This is not the case. As discussed, the Court did not find that Section 3(f) obligated Lemmeco to submit to an examination. Thus, if there is no failure to comply with items a) through g), then the provision precluding Defendant from providing coverage is not triggered, and further analysis of this provision is neither warranted nor relevant.

Defendant also asserts that the insurance policy imposes joint obligations on persons defined as insured persons.  According to Defendant, "[t]his means that the responsibilities, acts, and failures to act of a person defined as an insured person will be binding upon another person defined as an insured person."  Defendant contends that "Lemmeco Bradshaw had his own duty to submit to an Examination Under Oath." Defendant asserts that Lemmeco's failure to submit to an examination is binding upon Plaintiff. Yet, again, as discussed, the Court does not find that the policy expressly required an insured person, as distinct from "you," the named insured, to submit to an examination. Therefore, because Lemmeco did not breach a duty under the policy, there is no such breach to impute to Plaintiff.


02/15/24       Hafer v. Allstate
United States District Court, M.D. Pennsylvania
Demand for UM/UIM Benefits Denied Based Upon the Household Vehicle Exclusion Which Serves as an Unambiguous Preclusion of All UM/UIM Coverage (Even Unstacked Coverage) for Damages Sustained While Operating an Unlisted Household Vehicle

[Abridged] Hafers filed a one-count complaint against Defendant on behalf of themselves and the estate of their son, Richard Hafer seeking a declaration stating that Allstate has a duty to provide them underinsured motorist benefits under their insurance policy. Defendant filed a motion to dismiss pursuant for failure to state a claim, which is granted.

After Richard Hafer's unfortunate death following an automobile accident with Arielle Williams, his parents, Todd and Kathryn Hafer, received $15,000 from Williams' insurance policy. They have also asserted "a claim for underinsured motorist benefits against" Allstate.

There are two relevant insurance policies: Richard Hafer's motorcycle policy with Progressive Insurance and Todd and Kathryn Hafer's Allstate automobile policy.  Richard Hafer insured his motorcycle with Progressive Insurance but declined underinsured motorist coverage ("UM/UIM coverage").  Kathryn and Todd Hafer insured six vehicles through an Allstate automobile policy. Richard Hafer "was a ‘listed driver' on" this policy and lived with his parents at the time of the accident. In this automobile policy, Allstate included the following provision concerning the priority of different policies offering UM/UIM coverage:

If There is Other Insurance

When the limits of two or more insured autos may not be stacked:

If the insured person was in, on, getting into or out of a vehicle you do not own which is insured for this coverage under another policy, this coverage will be excess. This means that when the insured person is legally entitled to recover damages in excess of the other policy limit, we will pay up to your policy limit, but only after all other collectible insurance has been exhausted.

If more than one policy applies to the accident on a primary basis, the total benefits payable to any one person will not exceed the maximum benefits payable by the policy with the highest limit for underinsured motorists benefits. We will bear our proportionate share, as it applies to the total limits available, up to the full limits of liability for this coverage under this policy. This applies no matter how many autos or auto policies may be involved whether written by Allstate or not.

The Hafers' policy also contained several exclusions to their UM/UIM coverage. The household vehicle exclusion states:

Allstate will not pay any damages an insured person is legally entitled to recover because of:

... bodily injury to anyone while in, on, getting into or out of or when struck by a motor vehicle owned or leased by you or a resident relative which is not insured for Underinsured Motorists Coverage under this policy.

Allstate has twice rejected the Hafers' request for UM/UIM benefits based on its analysis of Pennsylvania law and the household vehicle exclusion. The Plaintiffs contend that Allstate "has ignored the specific language in its own policy by wrongfully and willfully refusing to pay underinsured motorist benefits."

Allstate relies heavily on Erie Insurance Exchange v. Mione to argue that dismissal is appropriate. In Mione, the plaintiff sought to receive UM/UIM benefits through two Erie Insurance policies held by members of his household because he lacked UM/UIM coverage under his own, separate insurance policy. Both Erie Insurance policies had household vehicle exclusions.

After deciding that its prior decisions did not per se invalidate household vehicle exclusions, the Pennsylvania Supreme Court emphasized that "the Miones were not attempting to stack anything at all." Instead, they wanted Erie Insurance to provide UM/UIM benefits "in the first instance." "The problem with that argument was that the Erie Insurance policies explicitly excluded UM/UIM coverage for damages sustained while operating an unlisted household vehicle." The Pennsylvania Supreme Court concluded that under these "circumstances, the household vehicle exclusion serves as an unambiguous preclusion of all UM/UIM coverage (even unstacked coverage) for damages sustained while operating an unlisted household vehicle."

Plaintiffs' sole argument asserts that an "UM/UIM case is a contractual claim" and the "Plaintiff policy holders are entitled to what was contracted for and paid for." According to the Hafers, the "proper focus of the Court's analysis is the Allstate policy of automobile insurance, not the motorcycle policy." But this very argument was rejected in Mione; "it is only for the limited purpose" of determining "whether the insured is actually attempting to stack coverage at all" that the Decedent's motorcycle policy enters the analysis. Otherwise, the Court has exclusively focused on the terms of the Allstate automobile policy. Further, the relevance of the subsection cited by the Plaintiffs is questionable given that it concerns the priority of policies and fails to undermine the household vehicle exclusion.  Consequently, the automobile policy's household vehicle exclusion bars the Plaintiffs' recovery of UM/UIM benefits from Allstate. 


Katherine A. Fleming

[email protected]


02/22/24       Berkley Nat’l Ins. Co. v. Atlantic-Newport Realty LLC
U.S. Court of Appeals for the First Circuit
Insurer’s Recoupment of Defense and Settlement Costs at Odds with Massachusetts Law

Mr. Papsis (“Papsis”) sued Atlantic-Newport Realty LLC ("Atlantic") and Granite Telecommunications, LLC ("Granite") for a foot injury in Massachusetts state court. Berkley National Insurance Company ("Berkley") insured Granite, and the policy named Atlantic as an additional insured. Granite and Atlantic sought defense and indemnification from Berkley under the liability policy in connection with Papsis’s claims against them. Berkley responded that it had no duty to indemnify the insureds based on policy exclusions. Berkley ultimately agreed to defend Atlantic and Granite while expressly reserving its right to disclaim coverage and to commence a declaratory judgment action to be relieved of its continuing duty to defend. Berkley agreed to provide a full defense in the meantime and to pay all reasonable costs and fees associated with the defense. Berkley commenced the declaratory judgment action in the District of Massachusetts, and Berkley sought restitution based on the amount that Berkley had paid to defend the insureds against Papsis’s suit. Papsis then settled his suit against Granite and Atlantic, so Berkley amended its complaint to include a request for restitution for the settlement payment it had made to Papsis. After discovery, the District Court granted Berkley’s motion for summary judgment concerning the policy exclusions, declared Berkley had no obligation to defend or indemnify, and declared that the insureds had to reimburse Berkeley for the sums it paid to defend and settle Papsis’s suit.  Atlantic and Granite appealed.

The First Circuit agreed with the insureds that the district court’s rulings were at odds with Massachusetts law governing when an insurer who has chosen to defend may seek reimbursement from its insureds. For the settlement payment, the First Circuit noted that the case was not distinguishable from precedent setting forth the only circumstances in which a liability insurer defending under a reservation of rights may later seek reimbursement for a settlement payment in the underlying action: (1) the insured had agreed that the insurer could commit the insured’s own funds to a reasonable settlement with the right later to seek reimbursement; (2) the insurer had specific authority to reach a particular settlement which the insured had agreed to pay; or (3) the insurer had notified the insured of a reasonable settlement offer and given the insured an opportunity to accept the offer or assume its own defense. Since this case did fall within any of those circumstances, the First Circuit agreed that Berkley could not seek reimbursement of the settlement payment. As for the defense costs, the SJC has not yet addressed whether an insurer may seek reimbursement for defense costs pursuant to a unilateral reservation of rights. The court noted that other jurisdictions are split as to whether an insurer may recover such defense costs, but since Berkley did not reserve the right to recover defense costs, there was no basis for its argument for reimbursement. 


Evan D. Gestwick

[email protected]


02/21/24       Westfield Area YMCA et al. v. The North River et al.
Superior Court of New Jersey, Appellate Division
Still No Recovery for Business Interruption Caused by COVID-19 Unless there is a Direct Physical Loss

The old tale continues to ring true: Want coverage for business interruption? The reason better not be because your business was shut down due to COVID-19 restrictions. That is, unless your property suffered a direct physical loss.

This appeal arises from the dismissal of several lawsuits brought by five YMCAs against their respective property insurance carriers. After being forced to close their doors as a result of the COVID-19 shutdowns, the YMCAs sought business interruption coverage under their insurance policies. These claims were summarily denied by the respective carriers due to the lack of direct physical damage to property. The lower court agreed.

The insuring agreements in each of the relevant policies were substantially the same, each providing that the carrier would pay for direct physical loss of or damage to covered property resulting from any covered cause of loss. Each policy also contained a business income and extra expense coverage form, which provided that the carriers would pay for the actual loss of business income sustained by the insured due to the necessary suspension of the insured’s operations during any period of restoration. The business income coverage forms each specified that the suspension of operations must be caused by direct physical loss.

The Appellate Division affirmed the lower court’s holding, that no coverage was available under any of the policies, under either the property coverage form or the business income coverage form, given that the insureds did not show that their buildings sustained any direct physical loss. That is old news.

However, each policy also contained an “Exclusion of Loss due to Virus or Bacteria” exclusion, barring coverage for damage caused by any virus, bacterium, or other micro-organism that induces physical distress, illness, or disease. In an attempt to avoid this exclusion, the insureds argued that the proximate cause of the loss was the governmental shutdown, not the pandemic. In response, the Appellate Division noted that, in determining whether a loss is “caused by” an excluded risk versus a covered peril, New Jersey courts employ the “efficient proximate cause test,” which provides that where a peril specifically insured against sets other causes in motion which, in an unbroken sequence and connection between the act and final loss, produces the result for which recovery is sought, the insured peril is regarded as the proximate cause of the entire loss. Under this test, the Court reasoned, the virus caused the shutdowns, not vice versa. Since no covered peril set the shutdown in motion, the exclusion applies.

The policies also contained an “ordinance or law” exclusion, which bars coverage for damage caused by the enforcement or compliance with any ordinance or law regulating the use of any property. This, the court held, served as an additional basis by which to deny coverage.

Editor’s Note: This was an appeal from a motion for summary judgment, made after conducting discovery. You may remember my case from a few editions ago, in which I discussed a case named AC Ocean Walk, LLC v. Am. Guar. & Liab. Co. In AC Ocean Walk, the Court was able to grant the motion to dismiss before any discovery was taken. Given the nature of this topic, it’s like that these cases can be short-circuited.


Ryan P. O’Shea

[email protected]


02/24/24       Aluminum Recovery Tech., Inc. v ACE Am. Ins. Co.
United States Court of Appeals, Seventh Circuit
Legalese Does Not Make Up for Lack of Expert Evidence

Aluminum Recovery Technologies (“ART”) operates a smelter and recovers aluminum from scrap metal. ART renovated and enlarged Furnace #4, which failed the day it was put back into operation. Aluminum escaped the furnace and damaged both the plant and the furnace itself. ACE paid for some of ART’s losses, but not the cost of replacing the furnace’s refractory. The entirety of the refractory was removed and replaced, which cost approximately $400,000. ACE retained an expert as to why Furnace #4 failed, ART agreed to the inspection. This expert removed and inspected portions of the refractory. Eventually, ART removed and replaced all of the refractory to put the furnace back into operation. ACE disclaimed coverage for the furnace based upon an exclusion that reads:

“This Policy does not cover: ... Any refractory lining or catalyst, except for damage or destruction directly resulting from the perils of fire, lightning, windstorm, hail, explosion ....”

ACE’s expert concluded that faulty welding led Furnace #4’s frame to fail, which allowed the aluminum to escape. ART contended that an explosion in the furnace caused the failure. The district court ruled in favor of ACE. ART appealed.

The Seventh Circuit noted that an ART employee claimed to have heard a noise, which he believed was an explosion that occurred at the time of the leak. ACE’s position was that the sound was the molten aluminum landing on the plant’s floor. The court reasoned it need not determine the exact series of events, because even if there were some sort of an explosion, the exclusion applied unless that explosion caused the damage to the refractory.

The court looked to the evidence supporting causation. It found the ACE’s expert determined faulty welding was the cause. In addition, ART’s refractory contractor agreed with the expert’s assessment. Meanwhile, ART proffered no expert evidence, only arguments presented that the court aptly named “lawyer talk.” It further noted that ART never presented any expert evidence as to whether the explosion actually caused the damage. Due to the need for expert witnesses to assist in the cause of loss, the court rejected ART’s res ipsa loquitur argument.

The court also rejected ART’s post hoc ergo propter hoc (“after and necessarily because of”), which essentially is that explosion occurred prior to the leak and therefore caused it. The court noted this argument held no water where ART simply provided no evidence aside from legal concepts as to what caused the furnace’s failure. The court further shut the door on ART’s argument that ACE’s expert took too much refractory for testing, which could have limited the loss to $10,000 and thus, ACE owed the excess expense. The Seventh Circuit identified that ART agreed to ACE’s plan of investigation, including the expert’s removal of the refractory.


Robert P. Louttit

[email protected]


Nothing to report this week.


Robert J. Caggiano

[email protected]


02/01/24       Cardwood v. R&F Limousine Inc.
Appellate Division, First Department
First Department Unanimously Affirmed, Without Costs, a Decision Granting Summary Judgment in Favor of Defendant Where Plaintiff’s Evidence Failed to Raise an Issue of Fact on Whether He Suffered Serious Injury Within the Meaning of Insurance Law § 5102(d)

Plaintiff appealed from an Order of Supreme Court, Bronx County, which granted Defendant’s motion for summary judgment dismissing the complaint on the ground that Plaintiff did not meet the serious injury threshold of Insurance Law § 5102(d). On review, the First Department unanimously affirmed the granting of the motion, finding the evidence presented in opposition failed to raise an issue of fact.

By way of background, this matter stems from a motor vehicle accident, where a vehicle owned and operated by Defendant R&F Limousine, Inc., struck the vehicle owned and operated by Plaintiff Brandon Cardwood. As a result of the collision, Plaintiff asserted significant and permanent injuries to his left knee, lumbar spine, and left wrist. Notably, the left knee injury involved surgical intervention allegedly related to the subject loss.

On review, the First Department started its analysis by confirming the lower court’s finding that the Defendant met its initial burden for summary judgment dismissing the complaint. Specifically, Defendant presented a sworn report of a radiologist who reviewed plaintiff’s left knee MRI taken shortly after the accident, which showed only degenerative conditions. Further, Defendant submitted an affirmed expert report showing plaintiff had normal range of motion and objective testing on independent exam – and the expert opined plaintiff’s injuries had resolved. Notably, that same independent expert report contained findings that Plaintiff’s range of motion in the left knee was the same as compared to the uninjured right knee.

In opposition, the First Department also confirmed the lower court’s finding that Plaintiff failed to raise a triable issue of fact. Plaintiff’s evidence consisted of an unaffirmed operative report for the left knee from his orthopedic surgeon – which was deemed inadmissible since Defendant’s expert did not rely upon it. However, even if admissible, Plaintiff’s surgeon did not provide an opinion on causation, nor opine to how the observed degenerative conditions seen on imaging were ruled out as a cause of the treatment needed and injury claimed. Another expert report produced, from plaintiff’s orthopedist, was also deemed incompetent to create an issue of fact as it was based on the unsworn reports and unproduced records of another physician.

Accordingly, the First Department unanimously affirmed the Supreme Court, Bronx County’s, Decision granting summary judgment in favor of the Defendant dismissing the complaint against it, without costs. 


Joshua M. Goldberg

[email protected]


02/29/24       Matter of Floral Park Drugs, Inc. v Nationwide Gen. Ins. Co.
Appellate Division of the Supreme Court, First Department
Electronic Prescription Required for No-Fault Benefits

Petitioner, a medical provider seeking benefits assigned to it by its assignor, sought to vacate awards of an arbitrator and a master arbitrator. The lower arbitrator denied Petitioner’s claim for benefits on the basis that the prescriptions it honored were not electronically submitted. The First Department affirmed the lower court’s decision to deny the petition. Public Health Law §281 requires that all prescriptions be submitted electronically. The Court rejected Petitioner’s argument that it was entitled to rely on the Education Law, however, Public Health Law §281 expressly provided that compliance was required not withstanding any other law to the contrary.


02/23/24       Strong v Sigman
Appellate Division of the Supreme Court, Second Department
Significant Injury Need Not Be Permanent

Plaintiff appeals form an order granting the defendant summary judgment dismissing the complaint on the basis that plaintiff did not sustain serious personal injury within the meaning of Insurance Law §5102(d). On appeal, the Appellate Division reversed the order of the trial court. Defendant’s had argued that the injuries to the cervical and lumbar regions of the spine were not permanent and therefore did not fall within the meaning of a serious injury. In reversing, the Court emphasized that there is no temporal requirement for the significant limitation of use category in order to constitute serious injury.


Isabelle H. LaBarbera

[email protected]


02/16/24       Hartford Fire Ins. Co. v. Hudson Excess Ins. Co.  
New York State Supreme Court, New York County
Insurer Failed to Establish Prejudice and was Required to Defend Additional Insured

This declaratory judgment action arose after a dispute regarding who was obligated to provide a defense to a property owner in relation to an underlying personal injury action. In the underlying action, it was alleged a subcontractor’s employee was injured after falling off a ladder during the course of his employment.

By way of background, Mayer Balbin Realty I, LLC (“Mayer”) had contracted with Dumani Construction Inc (“Dumani”) to renovate the Mayer property. Dumani subcontracted with 177 TS Group, Inc (“177 TS”) to perform a certain portion of the renovation work. Following an alleged incident at the renovation site, the injured employee brought the underlying personal injury action.

Hartford Fire Insurance Company (“Hartford”) had issued a policy to Mayer. Hudson Excess Insurance Company (“Hudson”) had issued a policy to 177 TS. Hartford provided a defense to Mayer but tendered the matter to Hudson on March 23, 2020, seeking defense and indemnification for Mayer in relation to the underlying action. On June 11, 2020, Hudson disclaimed coverage stating that Mayer was not an additional insured, and in any event, there would be no coverage for the claim because Hudson suffered material prejudice due to the late notice. As a result, Hartford and Mayer commenced the current declaratory judgment action.

Hartford and Mayer moved for partial summary judgment as to Hudson’s duty to defend only, seeking a declaration that Hudson is obligated to defend Mayer. Hudson moved for summary judgment, seeking a dismissal of the complaint and all crossclaims, only on the grounds that notice had been untimely. Since Hudson did not move on grounds asserting that Mayer is not an additional insured, the court found that Hudson had effectively conceded that had notice timely been received, Hudson would have provided coverage to Mayer. Accordingly, the sole question before the court here was whether the late notice had prejudiced Hudson.

Under New York Insurance Law § 3420(c)(2)(A), the burden of proof to establish prejudice is on the insurer if notice is provided within two years of the time required under the policy, but the burden shifts to the insured, injured party, or claimant if the notice was provided more than two years after the time required in the policy. Under the same statute, prejudice is shown when the failure to timely provide notice materially impairs the ability of the insurer to investigate or defend a claim. Ins. Law § 3420(c)(2)(C).

Here, Hartford had conceded that the tender was more than two years late, therefore, the court found the burden is on Hartford and Mayer to show that Hudson had not been prejudiced by the late notice. The court opined that Plaintiffs had shown there was no prejudice suffered as a result of the late notice. The court pointed to the fact that Hartford has been vigorously representing Mayer’s interest in the underlying action.

The court opined that Hudson was unable to raise a meaningful challenge as to how their ability to defend had been prejudiced in respect to the defense of Mayer. Instead, Hudson argued that their defense of 177 TS had been impaired, because 177 TS never appeared in the underlying action or the declaratory judgment action. Hudson alleged that the failure of the named insured to ever provide notice would be a bar to coverage. However, the court found that this argument is unavailing because Hudson cited no authority that confirms alleged prejudice suffered as to the defense of an insured who is not seeking coverage, should allow an insurer to bar coverage to an insured whose defense has not been prejudiced.

As a result, the court held that Hudson was obligated to provide a defense to Mayer in the underlying action. Hartford sought reimbursement for past defense costs incurred from the date of their tender to Hudson. However, the court found that Hudson was only obligated to provide defense costs from the date of the disclaimer, until the date Hudson assumes the defense.

As to the remainder of Hudson’s motion for summary judgment, the court granted dismissal of the crossclaims asserted by the injured party and contractor. The contractor did not oppose the motion or produce any evidence that it notified Hudson of the underlying action. The court indicated that notice from another party does not vitiate another’s obligation to provide notice.  The injured party alleged that the disclaimer was improper because Hudson failed to send the claimant a copy of its disclaimer. However, in ordering that the crossclaim was dismissed, the court found that when an additional insured provides notice to an insurer, rather than the injured claimant, the insurer is not obligated to send the disclaimer to the injured claimant.


Heather A. Sanderson
Sanderson Law
Calgary, Alberta

[email protected]


02/27/24       Loblaw Companies Limited v. Royal Sun Alliance Insurance Company of Canada, 2024 ONCA 145
Select Issues Arising out of the Defence of Canadian Class Actions to Recover Damages and Expense as a Result of the Opioid Crisis is Assessed by the Ontario Court of Appeal

Insurers who issued consecutive liability policies to a common insured and who owe a duty to defend will pay defence costs on a pro rata, time on risk basis. If a time limited share is subject to an SIR, then that SIR must exhaust before the insurer has an obligation to pay defence costs. The primary layer of that share must exhaust before the excess layer of that share is engaged. The insurer of that excess layer has no duty to defend until the primary exhausts. Nonetheless, that excess insurer may associate in the defence. If it does, and if it has issued a reservation of rights that is conduct based going to a liability issue in the underlying action, then the associating excess insurer is entitled to privileged information on a case by case basis but only if there is sufficient ethical screens in place to ensure that information is being used to assess the insured’s liability in the underlying action.


On February 27, 2024, The Ontario Court of Appeal released its decision on the Loblaw appeal. Unless an application for leave to appeal to the Supreme Court of Canada is filed and that Court agrees to hear an appeal, this decision will take its place in the library of seminal Canadian insurance coverage decisions.

This appeal involved the allocation of defence costs amongst the consecutive insurers of a drug manufacturer (Sanis Health), a pharmacy (Shoppers Drug Mart) and their parent company, a grocery store chain, Loblaw who were three of forty-one named defendants in five opioid class actions.

The underlying class actions consisted of:

  • A governmental class actions filed by the Government of British Columbia as the representative plaintiff on behalf of all Canadian federal, provincial, and territorial governments that paid healthcare, pharmaceutical, and treatment costs related to opioids;
  • The City of Grande Prairie, Alberta as the representative plaintiff on behalf of all Canadian municipalities and seeks recovery of increased costs incurred by municipalities as a result of the opioid crisis, including, among other things, increased EMS, policing, and mitigation costs; and
  • Three user actions (actions filed by an anonymous British Columbia opioid user on behalf of all opioid users in British Columbia; and two other similar user actions filed by Ontario and Quebec users).

All five actions alleged negligent research, development, manufacturing, testing, regulatory licensing, distribution, sale, marketing, and after-market surveillance of opioids.

All five actions covered a 20–23-year time span from 1996 (when Purdue Pharma began the sale of oxycontin) up to the date that each of the actions were filed, which varied between 2016 and 2019.

Billions of dollars are at stake.

The allegations in these five actions triggered consecutive, mostly standard, commercial and comprehensive general liability policies issued by multiple insurers, each of which contained a defence agreement that applied to covered bodily injury that occurred during the policy period. Sanis, Shoppers Drug Mart and Loblaw were able to provide proof of continuous, successive insurance that covered the entire time frame described in the five class actions.

The coverage for each period differed. There were excess policies applicable to some of the policy periods. Some policy periods were subject to deductibles. Other policy periods were subject to self-insured retentions (SIRs).

The main issues on appeal pertained to the allocation of defence costs; the treatment of SIRs and deductibles; relief from forfeiture of coverage for pre-tender defence costs; and the implementation of a defence reporting agreement.

Allocation of Defence Costs

The application judge at first instance applied an ‘all-sums’ approach to the allocation of defence costs. The Ontario Court of Appeal firmly rejected that approach stating that it is contrary to several Canadian cases and the conclusions of at least three authors, including myself. At para. 114 that Court provided:

It makes no sense for an insurer with minimal exposure to be tasked with controlling the defence and the defence costs. The participation of all insurers at an early stage is conducive to the conduct of the best defence possible and also serves to promote settlement.

Defence costs are to be allocated on a pro rata time on risk basis.

Treatment of SIRS and Deductibles

The Court of Appeal then moved on to consider the impact of self-insured retentions (SIRs) and deductibles on the duty to defend. That Court noted that deductibles usually only apply to the obligation to indemnify and leave the defence obligation untouched: The insurer’s obligation to pay defence costs begins at dollar one.

An SIR represents the degree of risk that an insured bears before the policy in issue applies. They usually afford the insured a degree of control over claims investigation, handling, and defence. This acceptance of risk carries a related reduction in premium payment. The most significant characteristic of an SIR is that the insured must satisfy its SIR obligation before the insurer has any obligation to respond. Courts often analogize SIRs to primary insurance in discussing the insured’s own obligation to defend claims until the SIR amount is satisfied. That Court stated at para. 138:

Unquestionably an SIR must be paid before an insurer has an obligation to defend. (sic)

Consequently, the defence costs are partitioned into pro rata shares premised upon time on risk. The implicated insurer will pay its allocated share once the SIR for that particular share has been exhausted by the payment of defence costs by the insured.

The Implications of the Insureds’ Defence Reporting Agreement (DRA)

The insureds (Sinus, Shoppers Drug Mart, and Loblaws) drafted a defence reporting agreement and only those insurers who agreed to its terms would be apple to associate in the defence of the class action and receive defence counsel reports. Those reports would include privileged information (either solicitor work product or litigation work product as between the insureds and defence counsel).

The insureds insisted upon on agreement to the terms of the DRA as the insurers required to defend did not insure each of the insureds during the entire class period and therefore there would be conflicts amongst the insureds; several insurers had issued reservations of rights letters reserving their right to deny the obligation to indemnify on the basis of the intentional act exclusion.

Three excess insurers refused to sign the DRA. The insisted that their policies extended to them an unfettered right to associate in the defence. For example, one of the excess insurers, Markel stated that it was entitled to full unfettered access to all of the records §received by its insureds), regardless of whether the documents were declared to be privileged and producible the underlying litigation. The application judge rejected that claim. Each of these excess insurers, Markel, Chubb, and QBE appealed.

Markel’s policy, containing $100 million of coverage spanned four years of the class action period. It did not contain a defence agreement and the underlying primary layer has not been exhausted. It was agreed that Markel had no obligation to defend but, nonetheless, Markel wished to associate in the defence. Markel also stated that it would use the information obtained through its association in the defence to inform its coverage position.

Chubb had issued a full reservation of rights and, as of the date of the appeal had not opted to associate in the defence.

QBE did not elect (in other words, disclaimed) its right to associate in the defence. However, it issued a reservation of rights premised upon intentional conduct.

Like Markel, both Chubb and QBE insisted that they were entitled to both the privileged and non-privileged documents that were relevant and material to the underlying class actions. Together, Chubb and QBE had about $860 million of coverage.

Therefore, even though each of the three excess insurers had reserved on a conduct issue (intentional act) that is material to the insureds’ liability in the underlying class actions, they collectively argued that the DRA violated their fundamental rights as excess insurers to receive all of the insureds’ relevant information in keeping with the insureds’ obligation to cooperate with its excess insurers.

The backdrop to this argument is that even though the Ontario Court of Appeal has held in the Brockton decision that the right of an insurer to control the defence is not absolute; that control may have to be surrendered in certain situations of conflict; there is authority from the Supreme Court of Canada (Trial Lawyers) that says that an insured must share all information in its possession that might void coverage.

It is fairly evident that the Ontario Court of Appeal was seriously tested by this portion of the appeal which goes to the fundamentals of the tri-partite relationship between defence counsel, the insured, and the insurer – with the added complication that ‘the insurer’ is multi-layered.

The Court of Appeal began its analysis by discussing the nature of the right of an excess of insurer to associate in the defence of an insured. After citing the various policy provisions conferring that contractual right the Court accepted the guidance of § 23 of the American Restatement of the Law of Liability Insurance (2019) as to what the right entails. That right devolves to a right to be heard rather than to direct the defence. Disclosure rights include the right to receive the information to allow the insurer to be reasonably informed of the insured’s liability position.

In this case, the Court of Appeal held (at para. 259) that without an effective ethical screen which silos the information that the excess insurers receive as they exercise their right of association, the excess insurers’ input, and advice to defence counsel, and the insureds could be tailored to avoid coverage.

That Court also held that the excess policies in issue do not mandate a blanket disclosure of all relevant and material information in the insureds’ power and possession (both privileged and producible) that could pertain to an assessment of its liability in the underlying actions. The Trial Lawyers decision held that the insured has a duty to disclose to its insurer the facts material to the claim including information and facts that voided coverage but not all privileged information. At. para. 275: “…privileged information that relating to coverage issues which arise in the course of a solicitor-client relationship between defence counsel and the insured cannot be shared with the insurer.”

Therefore, the insurers entitlement to information that pertains to coverage is limited and needs to be assessed in a case-by-case basis. The Court of Appeal refused to rule on that entitlement at this stage – it must be determined on a situational basis. Further each of the excess insurers must institute a robust split-file /ethical screen to prevent the information disclosed falling into the hands of the decision maker within the excess insurer that decides the obligation to indemnify.

Pre-Tender Defence Costs/Relief from Forfeiture of Insurance Coverage

Finally, Loblaws incurred defence expense before discovering two of the primary policies. Those insurers took the position that those expenses were pre-tender defence costs, and those costs would be allowed to erode any applicable SIRs, but they were not otherwise covered defence expense. Relief from forfeiture is not available as no coverage has been forfeited: the insurers involved have agreed to defend, subject to a determination of the scope of that defence.


Pending further appeal to the Supreme Court of Canada, I conclude by stating that there are many nuggets in the 121 pages of this judgment which Canadian coverage counsel will be digesting in the months and perhaps years to come. Hopefully, this piece provides the reader with a taste of what this judgment offers.

A full copy of this decision is available upon request.

© Hurwitz Fine P.C. 2024
All rights reserved

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