Coverage Pointers - Volume XXV No. 21

Volume XXV, No. 21 (No. 668)
Friday, March 29, 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.


HF Coverage Pointers header


Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations. This week’s issue is attached.

Happy Easter to all who celebrate.



We start out with some tragic news, the loss of law partner and our friend, one of the sweetest (and smartest) of anyone I’ve ever known.

Diane Bosse, a wonderful lawyer, a superb and delightful friend, a supporter of the legal profession and of legal education with contributions unparallelled in the community of lawyers, a loving wife, died tragically in a car accident in Florida She had a perpetual smile, a self-deprecating sense of humor, and offered wisdom and insight that were unsurpassed.

Diane was an accomplished insurance coverage and appellate attorney and noted for her work not only on complex legal matters, but in education. She dedicated a substantial part of her life to bar and legal education, including 41 years of service to the New York Board of Law Examiners. Just last year, Diane received the American Bar Association's prestigious national Robert J. Kutak Award. The Kutak Award is presented annually to honor an individual who has made significant contributions to the collaboration of the legal academy, the bench, and the bar.

Diane was named one of the New York Law Journal’s inaugural Top Women in Law for 2016—one of only 30 women honored statewide. She was honored as Lawyer of the Year by the Bar Association of Erie County and received their Award of Merit, the Distinguished Alumnus Award for Public Service from the University at Buffalo Law Alumni Association, the Defense Trial Lawyer of the Year from the Defense Trial Lawyers of WNY, the New York State Bar Association Award for Excellence in Public Service, the Chair’s Award from the National Conference of Bar Examiners, and the Lamplighter Award from Eighth Judicial District Gender & Racial Fairness Committee.

Besides being our law partner, I was honored to call her my friend. Rest in peace, Diane.


New York Coverage Program, offered via Zoom
April 5th 1:00 EDT

[email protected] to register

We are just one week away from the April 5th New York Coverage Program, offered via Zoom.  Just a few seats left open so reach out if you wish to register. Some 900+ of your colleagues have done so.


Primer announcement


Heather Sanderson Honoured by being designated as KC:

Special kudos to our Canadian friend and columnist, Heather Sanderson, on her appointment as a KC (Kings Counsel), a tremendous honour, indeed.  The Order in Counsel 54/2024, March 27, 2024, reads:

The Lieutenant Governor in Council authorizes the issue of letters patent under the Great Seal of the Province for the appointment during pleasure of Heather A. Sanderson, named in the Appendix, as a provincial officer under the name of “His Majesty's Counsel, learned in the law, for the Province of Alberta”.

For those who may not be familiar with the title and honour, this from the website

The Minister of Justice will consider certain criteria when considering an application for King's Counsel (His Majesty's Counsel, learned in the law, for the Province of Alberta) and will award the appointments of King's Counsel to those lawyers who, in accordance with the King’s Counsel Act (Alberta), have been called to the bar for at least ten years, with a minimum of five years practicing in the province of Alberta, and have demonstrated the following attributes to the extent that they make the applicant a leader in the legal profession.

Competence, including:

  • sound intellectual ability with a thorough, comprehensive, and current knowledge of law and practice in the applicant's field
  • distinguished legal service with demanding and challenging legal work that contributes to the development of the law and practice
  • a recognized expertise in a particular area of law and practice (which may include the general practice of law)
  • an outstanding ability as a lawyer in the applicant's field, to a standard to be expected of King's Counsel

Also considered are contributions to the administration of justice, contributions to the community and contributions to the legal profession.


We don’t have the power to grant such designations, but in respect to her celebratory moment, we have excused her from offering her usual insight into Canadian coverage law this issue.


What’s in this issue?  Goodies galore.

There are several interesting decisions in this week’s issue, including three from the First Department.  The first decision holds that waiting 129 days to rescind a policy when you have the information earlier, is too long. That issue wasn’t even briefed in the appeal.

The second, involving the same insurer, discusses the eternal question, often debated by biblical scholars, and surely an essential part of the Talmud: “what does it mean to work on the ground floor?”. 

The third, from the same court that reduced former President Trump’s bond obligations, reduced, dramatically, the financial penalty imposed on policyholder for withholding 17 critical documents during discovery.

Greetings to those who have joined the CP family, as a result of the presentations at the PLRB Claims Conference in Boston.  A truly wonderful event, I enjoyed meeting several Coverage Pointers subscribers who stopped by to say hello. 

And who would have believed that someone would produce a ball point pen in my likeness?  Quite random.  My thanks to the Social Discovery Group, an exhibitor at the PLRB Expo, who offered to send me – gratis – a score of these pens.  There is an unfounded suggestion that I modeled for the website character, but that remains to be seen.

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Thank you to Haag Global and Congratulations on a Century of Service

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One of the nicest events I attended was the Haag Global celebration of its 100th anniversary.

Haag Global proudly celebrated 100 years of forensic innovation and commitment to excellence. Haag’s comprehensive services include forensic engineering, forensic meteorology, forensic architecture, construction consulting, fire origin and cause, forensic research and testing, education courses and training, and GIS, BIM, and 3D scanning technology solutions. Haag is a national authority by consulting on complex engineering and technical challenges following damage and failure. 

We wish them another century of success.

Also, a special thank you to my friends at MGC Law, for their kindness and invitation to a very nice receiption at the Bleacher Bar, in Boston’s Fenway Park.  It’s nice to have colleagues from national organizations throughout the country.


Do you 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.


Woodrow Wilson’s Will – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
29 Mar 1924

Value estate at $250,000; only debts are for funeral.


Washington, D.C., March 28.- The estate of Woodrow Wilson was valued at $250,000 in a petition for probate of his will, filed today by his widow, Mrs. Edith Bolling Wilson. 

The will was admitted to probate and the bond of Mrs. Wilson as executrix was fixed at $1,000. The estate is left largely to Mrs. Wilson with an annuity as long as she remains unmarried.

It was disclosed in the petition that the late President owned no real estate in the District of Columbia but was possessed of personal property consisting of cash in banks, bonds, securities and personal effects to the estimated value of $250,000.  

The only debts left by Mr. Wilson are those incident to his burial which will not exceed $2,000.


Peiper on Property (and Potpourri):

We start with a thank you to our friends at PLRB for putting together another superb conference last week in Boston.  The programming, networking, etc., are all top notch, and we’re grateful to have had an opportunity to participate.

Back at my desk, though, the insurance world never stops.  It rarely changes, too.  To that point, the Fourth Department issued a decision on March 15th which, again, upholds a denial of business interruption based upon a lack of physical injury. The Court of Appeals’ recent explanation that property damage requires a material alteration of the property is going to be a very useful tool for insurers moving forward.  The reality is, though, that the caselaw requiring actual property damage to trigger business interruption coverage is not new.  Indeed, on March 15, 2020, we were writing that business interruption claims, while going to be expansive, were destined to fail so long as Courts adhered to longstanding legal principles and precedent. They did, and resultingly they did. 

A final interesting case to note this week is from the Second Department which addresses bad faith discovery.  The decision granted a protective order exempting GEICO from responding to two specific document requests as overly broad and burdensome.  The Court doesn’t tell us what the demands were, but NYSCEF does.  The specific demands struck by the Appellate Division were:

(18)     Identify any and all BAD FAITH CLAIMS currently pending or resolved within the last 7 years in New York against GEICO or its affiliated entities, as well as the details and status of the claim and Court Caption and Index Number if suit was brought. [This demand does not anticipate bad faith letters or mere allegations during pending litigation – rather it focuses on bad faith claims that arose after a judgment was obtained or a verdict reached. See #7 above)] Objection: “Allegation of bad faith is not discoverable in an action such as this.”

(19)     Identify any and all BAD FAITH CLAIMS currently pending or resolved within the last 7 years in the United States against GEICO or its affiliated entities as well as the details and status of the claim and Court caption & index number if suit was brought. [Again, this demand does not anticipate bad faith letters or allegations – rather it focuses on bad faith claims that arose after a judgment was obtained or a verdict reached. See #7 above)]         

Thus, it appears that while you can ask for bad faith decisions from within the State, demanding a nationwide production is beyond the scope of permissible discovery.  Even in bad faith litigation. Store this case away for when you need it.

As a final point, like everyone else, we were amazed at the destruction in Baltimore’s Inner Harbor.  Amazement immediately turned to curiosity because the insurance issues will be grand.  Marine/Cargo claims, delay/demurrage claims, and the basic property claims are massive and complex. Will be one to watch for sure. 

Steven E. Peiper

[email protected]


Speeding through the Air from Buffalo to NYC – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
29 Mar 1924


            Mitchel Field, March 28. – Riding on a favorable wind, lieutenants M. L. Elliott and Homer B. Chandler made a record flight of 318 miles from Buffalo in two hours and 21 minutes today. The distance requires ten hours by train.

            Serious accident threatened the plane when a flock of 500 Canadian geese which they met near Binghamton suddenly broke from a V into a circular flying formation and compelled quick work by the aviators to avoid damaging the propeller by contact with the birds.

Editor’s note:  The flight is now an hour long, but the train ride remains at 10 hours.


Barnas on Bad Faith:

Hello again:

It is finally Opening Day, although we did get a sneak preview of baseball that counted with the Seoul Series between the Dodgers and Padres.  As Hall of Famer Rogers Hornsby once said: “People ask me what I do in winter when there's no baseball. I'll tell you what I do. I stare out the window and wait for spring.”  I am excited for the season ahead, although I unfortunately do not have that much hope for my Blue Jays this year.  We already have some key injuries to the pitching staff, and we did not make enough additions to our mediocre offense for me to feel strong about our lineup.  The good news is everyone is 0-0 (unless you’re the Dodgers and Padres) and hope springs eternal!

A rarity this week as I have two New York cases in my column.  In the first, the insurer’s motion to dismiss bad faith claims was denied.  The court refused to consider medical evidence about the underlying injuries as “documentary evidence” under CPLR 3211(a)(1).  In the second case, the court concluded there was an issue of fact on a GBL § 349 claim about consumer-oriented conduct.  However, the court dismissed plaintiffs’ claims for compensatory, consequential, and punitive damages pursuant to the statute.

Brian D. Barnas

[email protected]


Clearing Buffalo of Pests – 100 Years Ago:

Buffalo Courier
Buffalo, New York
29 Mar 1924

            The bill introduced by Senator Parton Swift to extend to Buffalo provisions in the penal code now applying only to New York City, would enable the authorities here to prosecute as “disorderly persons” such as pests as sidewalk mashers. The measure, just reported out by the Senate codes committee, ought to be passed. Buffalo’s street corners are badly in need of being cleared of these nuisances.


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

I’m not as young as I was last week. I was recently in California and came home on the red eye. After a nominal delay, we landed at JFK at 7 am, and I was all set to hit the ground running. That lasted until about lunch time. It took a good day plus to recover. It looks like the all-nighters, and nights spent sleeping in the office are now in my rearview mirror. On the flipside, I seem to have no trouble being in front of my computer by 6 am and sometimes even earlier. I don’t know when that happened—or why.

More importantly, we have some good coverage cases in this week’s edition dealing with some basic issues, such as standing and the record necessary to be successful on a motion for judgment on the pleadings. Also, you can find my guest D&O column in Kohane’s Coverage Corner.

Keep keeping safe.

Lee S. Siegel

[email protected]


Drug Abuse Was Around – 100 Years Ago:

The Buffalo Times
Buffalo, New York
29 Mar 1924

Gather in
Drug Store

Druggist Is Said to Have Purchased 7,000 Ounces of Paregoric Since Last May

            DENVER, March 29. Federal narcotic inspectors, led by H.B. Westover, chief of the Denver Bureau, launched an investigation, they said, to ascertain whether students of East High School were among the patrons of Harold C. Rust, proprietor of the Rust pharmacy, Nineteenth and California Streets, who is alleged to have purchased more than 7,000 ounces of Paregoric since last May.

     The investigation followed the arrest of Rust on a charge of violating the federal narcotic law. Paul Streen, proprietor of the First Aid Pharmacy, Nineteenth and Champa Streets, was also placed under arrest by Chief Westover and Inspector Frank H. Waite on the same charge.

       “We have nothing as yet to convince us that students at East High School may have been among the scored of patrons of Rust’s establishment who bought paregoric, but we have Rust’s word that students of the school were noonday lunch customers,” said Westover

Students Patronize Pharmacy

            “In view of the fact that Rust’s pharmacy is patronized largely by East High School students, we feel obligated to get to the bottom of this thing and find out exactly who were the persons who were buying so much paregoric.”


Kyle's Noteworthy No-Fault:

Dear Readers,

Exciting time of the year in sports, as March Madness enters the sweet sixteen and elite eight this weekend (bracket remains surprisingly intact thus far).  Hockey and basketball are in the final stretch of the regular season, and baseball season is right around the corner. Can’t get enough. Hope everyone has a great Easter!

In this week’s case, the insurer sought, pursuant to Insurance Law § 5106(c), a trial de novo of an award rendered in a no-fault automobile insurance arbitration proceeding brought against it by the defendant. The insurer contested the award of lost wages to the defendant, arguing the action was premature as there were outstanding verification requests made by the insurer including a NF-6 or Schedule C to his tax returns that were never submitted. The court sided with the insurer, granting its motion for summary judgment and dismissing the defendant’s claim for lost wages.

Until next time,

Kyle A. Ruffner

[email protected]


Imagining Cars Equipped with Radio Telephones by 1929 – 100 Years Ago:

The Buffalo News
Buffalo, New York
29 Mar 1924


            NEW YORK, March 29. – All automobiles, trains and other vehicles will be equipped with radio telephones within five years, is the prediction of Hiram P. Maxim, president of the American Radio Relay league, who has just returned from Europe.


Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers Subscribers:

Never thought I’d see the day that I would have a (very small) piece of the NCAA post-season college basketball broadcasting pie, but my work with Niagara University Women’s Basketball this season resulted in not one, but two opportunities to call WNIT games hosted in Western New York. After doing play-by-play for the University at Buffalo against Monmouth University, I headed to Lewiston to provide color commentary for Niagara University as it hosted Le Moyne College. Never forget that us attorneys know a thing or two about having court-side seats for the madness.

This edition, my column contains a Second Circuit Court of Appeals’ decision regarding a motion for a preliminary injunction to require an insurer to defend its insured prior to resolution of a declaratory judgment action. An interesting federal issue we do not see very often in our world, but here we are…

Until next time,

Ryan P. Maxwell

[email protected]


Who Doesn’t Like Science? – 100 Years Ago:

The Lake County Register
Libertyville, Illinois
29 Mar 1924


Science and Engineering May Aid in Many Processes

            Striking predictions of the development of the world’s natural resources through science and engineering were made in a speech Wednesday night before the joint convention at the Hotel Sherman, Chicago, of the Illinois Gas, Illinois State Electric and Illinois Electric Railway associations by Floyd W. Parsons, editor of the Gas Age Record.

            Some of his predictions were the probability of making milk from kerosene, the abolition of steam-driven power plants in favor of gas, the development of research in vacuum for the secrets of the sun’s catalytic action on growing plants, enabling man to solidify, ready for use the energy from the rays of the sun.

            “Over in Germany,” said Mr. Parsons, “a scientist has discovered a way to cure fatigue in an instant by introducing an antitoxin for poison in tired muscles.”

            Arts like refrigeration will be developed beyond recognition. It will be considered just as necessary to cool working places in Summer as to heat them in Winter.


Storm’s SIU:

Hi Team:

As you may recall, I had written an article, "Headed in the Wrong Direction" [click on the title to magically go to it] featured on the front page and published in the Second Quarter 2022 issue of New York Insurance Association’s quarterly magazine Your NY Connection

In the article, I discussed how the third-party liability standard for proving an insured’s lack of cooperation (the Thrasher Standard) does not apply when proving lack of cooperation in first-party property claims.  Although the insurer is said to have a “heavy burden” to establish non-cooperation in third-party claims, it has repeatedly been held that the burden of proof is far less stringent for property insurers.  New York courts and litigants have been increasingly misapplying the “Thrasher standard” to first-party property losses, gradually blurring the disparity between the two standards, resulting in a reduction of dispositive motions in favor of insurers.  

In the article, I provide practical advice in showing what the actual standard is for proving lack of cooperation in first-party property claims – lack of full compliance by the insured.

In this week’s case digests, I review a federal case from Pennsylvania, United States District Court, Middle District of Pennsylvania, which essentially comes to the same conclusion.  My summary of the case is:

Insureds’ Suit Alleging Breach of Contract on a First-Party Property Fire Claim Dismissed as Requests for Documents and Examinations Under Oath Were Outstanding When the Suit was Commenced and, Therefore, the Insureds Breached the Suit Condition (“No Action Can Be Brought…”).  The Standard for Breach of a Third-Party Liability Cooperation Condition Requiring a Showing of Substantial Prejudice Does Not Apply to a First-Party Property Claim.  Rather, the Policy Requires Full Compliance by the Insureds. 

I love this case!

Double prizes, as I also review a case on appraisal which holds:

Property Loss Not Subject to Appraisal When the Insurer Argues that the Damage to the Property was the Result of Age, Wear and Tear, Poor or Improper Maintenance, or Prior Efforts to Repair. 

Have a Happy Easter!  Enjoy your butter lamb!  Let baseball season begin…

Scott D. Storm

[email protected]


Civilization is Collapsing – 100 Years Ago:

The News and Observer
Raleigh, North Carolina
29 Mar 1924

Declares That Civilization
Is Now On Its Last Legs

            “I believe as verily as I stand among you that this Civilization is on its last legs,” declared Evangelist M. F. Ham at the wooden tabernacle last night.

            Last night the evangelist was more sweeping but less specific in his dire predictions than on Thursday night when he denounced as “boot-leggers” those who teach the theory of evolution and predicted the loss of their jobs. Last night’s predictions included the downfall of both major political parties in the United States disaster to “certain institutions” in North Carolina and misfortunes to individual sinners in Raleigh.


Fleming’s Finest:

Hi Coverage Pointers Subscribers:

Florals for Spring? Groundbreaking. Now that warmer weather has finally arrived, hope you have a happy and healthy Spring. 

In this week’s case from the Washington Supreme Court, the Court concluded that a resulting loss exception must have effect to preserve coverage for loss resulting from covered perils regardless of whether the peril is the natural consequence of an excluded peril.

See you in a fortnight,

Katherine A. Fleming

[email protected]


Girls on Ship in Trouble – 100 Years Ago:

The Buffalo News
Buffalo, New York
29 Mar 1924


Case Takes Different Turn, However, When It Comes Up in Court.

            The sight of two girls running about yesterday afternoon on the deck of the S.S. Herbert S. Black moored in the Goodyear slip for the winter, brought a telephone plea to the South Division Street station from a person unknown “to rescue two kidnaped girls.”

            Detective Eugene F. Downey and Patrolmen Carr, Lynch and Ryan raced out in an automobile. Once aboard the ship Downey found the girls screaming and climbing the rope ladders up into the rigging closely followed by two sailor lads. Downey’s authority on the high seas was questioned and he was threatened with a “keel-hauling,” but a pointed revolver quieted things.

            Today in City court the gallant rescue of the damsels began to resemble one of those of the famed knight, Don Quixote, when they admitted in City court that they had gone aboard the boat of their own accord the day before. The sailors fresh from Pennsylvania farms, were discharged and the girls were sent to the City hospital. They gave these names, Clifford Saxton, 24 years old; Millard Bell, 22 years old; Alice Whitcomb, 18 years old, and Anna Britt, 24 years old. The girls are waitresses in Dan’s Lunch, 54 South Division Street.


Gestwick’s Garden State Gazette:

Dear Readers:

Baseball season is upon us; let’s see what the Blue Jays can do. Indoor lacrosse season is starting to wrap up, with just a few regular season games left to go. The Bandits are hanging on by just a thread; a disappointing circumstance, considering they won the league championship just last season.

The case I have for you this week is about a jolly night turned sour. As the insured was preparing to deck the halls with boughs of holly, she discovered that her living room floor had sunk three inches. Does this constitute a “collapse,” as that term is defined in the additional coverages—collapse provision? Read on to find out.

Until next time,

Evan D. Gestwick

[email protected]


Daylight Savings Time Under Attack – 100 Years Ago:

The Buffalo News
Buffalo, New York
29 Mar 1924


Seven-Tenths of Population to Rise Hour Earlier – Ten Repeal Measure.

            ALBANY, March 29 – Thirty-six cities, with a total population of 7,133,449, or about seven-tenths of the state population will operate under daylight saving time this year, according to returns in the office of the State Conference of Mayors here.

            Thirty-five of the cities adopted the daylight-saving time ordinance in 1922 and have taken no action to repeal it. These cities are Albany, Amsterdam, Beacon, Buffalo, Cohoes, Fulton, Glen Cove, Glens Falls, Mechanicville, Middletown, Mount Vernon, New Rochelle, New York City, Newburgh, North Tonawanda, Oneida, Oswego, Port Jervis, Poughkeepsie, Rensselaer, Rome, Saratoga, Sherrill, Tonawanda, Troy, Utica, Watervliet, White Plains, and Yonkers.

            Schenectady adopted an ordinance effective only from year to year. The following cities adopted ordinances which have since been repealed: Auburn, Cortlandt, Geneva, Ithaca, Lockport, Niagara Falls, Ogdensburg, Plattsburgh, Syracuse, Watertown.

            All of these cities repealed in 1923 except Niagara Falls which repealed in 1924. The ordinances of the following cities were repealed in 1923 by referendum: Auburn, Middletown, Niagara Falls, Plattsburgh, Lockport.

            In 1923 an attempt to repeal the Niagara Falls ordinance was defeated. Another referendum in 1924 favored the repeal. In the remaining and following 14 cities daylight saving has never been in effect under the permissive law: Batavia, Binghamton, Canandaigua, Corning, Dunkirk. Elmire. Hornell, Jamestown, Long Beach, Norwich, Olean, Oneonta, Rochester, Salamanca.


O’Shea Rides the Circuits:

Hey Readers,

Last night the Ottawa Senators took home a big W against the vaunted, impregnable Buffalo Sabres. Admittedly, it has been a rough year, but at least the Sens still have a chance to finish above the Sabres in the standings.

This week I have a case from the Fifth Circuit that addresses a Pollution Exclusion in a commercial general liability policy. A previous Mississippi State Supreme Court decision found portions of a similar exclusion ambiguous, but the Circuit Court applying Mississippi law upheld the exclusions under the facts of the present case.

Ryan P. O’Shea

[email protected]


Who Can Argue?  Thrash Naughty Husbands – 100 Years Ago:

The Buffalo Enquirer
Buffalo, New York
29 Mar 1924

(By the United Press)

            Vienna, March 29. – Unfaithful husbands should be “thrashed” by their wives, a Viennese court has decided. Johann Playmaker, a dealer, demanded a divorce from his giant wife, Aloisia, on the grounds that she would habitually knock his teeth loose and open the windows for the neighbors to enjoy the episodes.

            Aloisia testified that Johann was a petticoat hunter and that she only punished him for infidelities.


Rob Reaches the Threshold: 

*In my best Jim Nantz voice*

“Hello Friends”

We are approaching a historic day in Western New York, as on April 8th we will be able to experience the total solar eclipse from an amazing perspective. However, as fate would have it, on April 8th I will not be in the area. Instead, I will be walking the hallowed grounds of Augusta National as Masters week kicks off – which is a different once-in-a-lifetime experience that I cannot wait for.

Apparently the First Department is the only division working hard to start 2024, because for this installment we examine yet another decision which highlights why fact-specific analysis is to be used when evaluating whether your case is ripe for successful summary judgment motion practice on the issue of serious injury under Insurance Law Section 5102(d).

I hope you all enjoy the read.

Robert J. Caggiano

[email protected]


Judge’s Compassion for the Homeless – 100 Years Ago:

The Buffalo News
Buffalo, New York
29 Mar 1924

Mother, Daddy Dead, Mary,
14 Years Old, Can’t Pay Rent

Judge, With Lump in Throat, Takes Up
Collection For Frail and Hungry Orphans.

NEW YORK, March 29. – “Call Mrs. Elizabeth Gerard,” directed Judge Genung when the Fourth District court opened.

A frail little girl of 14 made her way haltingly to the bar of justice, a baby boy clinging to her ragged skirts.

“Are you Mrs. Elizabeth Gerard?” asked his honor in astonishment. (The charge was non-payment of rent.)

“No, I’m Mary. Mother died three days ago, so I came instead,” whispered the emaciated little figure at the desk

          “And your father?”

   He had been dead for a “long time.” Moreover, there were three little brother and sisters and while they all had eaten recently. The rent was something quite beyond Mary’s comprehension.

Judge Genung appeared to have something in his eye and to have difficulty in swallowing.

       “Gentlemen,” he said, “I’d like to take up a collection.” The response was unanimous. A moment later a burly sergeant with tear dimmed eyes held out $48 to Mary. But she had fainted.


Goldberg’s Golden Nuggets:

Dear Readers,

After quite a hectic week, the weekend is here, along with Easter and the end of March. I look forward to April, which is known for being the month I was born in. April will end with Passover, and I do hope my two-year-old will appreciate the Rugrats’ rendition of the tale. In the meantime, the case I bring today is a good reminder of just when the diminution of resale value of a motor vehicle is a recoverable loss. Not all cars are collector cars until they are.

As always, be well and stay safe.

Joshua M. Goldberg

[email protected]


“Jail, Not Bail” – 100 Years Ago:

The Buffalo News
Buffalo, New York
29 Mar 1924


FRANKLIN, March 29. – “Why should I get bail? I am perfectly satisfied here.”

That was the answer today of John Noble, aged 74, of the Fifth ward, Oil City, arrested and placed in the county jail on a charge of desertion and non-support, preferred by his wife, Mrs. Gertrude Noble, who is 29 years old. Noble says that he has a cot, three square meals a day, and likes the camaraderie of the prisoners in the jail.

“This isn’t a hard life at all,” he said, addressing his attorney, and to Sheriff Voorhies he expressed the same view.


LaBarbera’s Lower Court Library:

Dear Readers:

In Buffalo, we are gearing up for an exciting day. On April 8, 2024, at 3:18 p.m. Buffalo will be straight in the path of a total solar eclipse. The electronic signs on the highway already bear warnings to plan travel appropriately. It is predicted people will flock to Western New York from across the nation to get a glimpse of the eclipse. If you are one of these people, I wish you the safest travels and the most magnificent views. 

This week, in a case from Monroe County, the Court granted a broker’s and insurer’s respective motions for summary judgment finding that both parties had fulfilled their obligations to the plaintiff and no special relationship existed which would impose a heighted duty on the insurance broker.  

Until next time…

Isabelle H. LaBarbera

[email protected]


Jurors Kneel in Prayer as they Acquit Grandad of Murdering Daughter – 100 Years Ago:


The Buffalo News
Buffalo, New York
29 Mar 1924

Jurors Kneel in Prayer, Take One Ballot, Which Results in Absolving of Father of Girl-Grandfather Religious Mania Victim.

Special to The Buffalo Evening News

   BRIDGETON, N.J., March 29. – Thompson Dickson was acquitted yesterday of the murder of his 15-year-old Daughter, Emma, whose body was found last September about two miles from their home in Bricks Boro. The Jurors knelt together in prayer as soon as they reached the jury room, then discussed the case briefly and took one ballot, which resulted in Dickson’s acquittal.

   The story of Dickson’s 82-year-old father, Uncle Ben Dickson, that he had seen his son standing above the body of the girl with a club in his hand, was discarded by the jurors as a result of medical testimony given yesterday that Uncle Ben was the victim of religious mania.

  Thompson Dickson raised both hands above his head, turned his face upward and cried “Thank God” in fervent tones when Hugh Sayres, foreman of the jury, reported that he had been found not guilty.

  Dickson remained in the county jail last night. He will be free to go where he chooses today but has not made his plans known beyond intimating that he would not return to the house in Bricks Boro, where he had been living alone with Uncle Ben.

  “I am greatly relieved,” he said, “although I expected all the time that I would not be convicted.”

   Uncle Ben was not in court yesterday. He is staying with a relative in Quinton, Ten miles from here.


North of the Border


Heather A. Sanderson
Sanderson Law, Calgary, Alberta

[email protected]


Too Late to Sue on Theft Policy – 100 Years Ago:

The Gazette
Montreal, Quebec, Canadá
29 Mar 1924

Claim for $5,000 Failed Because
Action was Taken Too Late

            Declaring that an action taken by S. Rosenstein against the Fidelity and Casualty Co., of New York, to recover $5,000 on a policy of insurance against theft, was outlawed at the time it was instituted, Mr. Justice Desaulniers yesterday dismissed Rosenstein’s claim, with costs against him.

            The policy of insurance in Rosenstein’s favor stated that all suits against the insurers should be taken within twelve months of the loss, and as this period had expired before the plaintiff took his action, his claim was completely prescribed, said Mr. Justice Desaulniers. For this reason, said the judge, there was no reason to decide the merits of the suit.

            Ruckenstein sued the defendant company to recover insurance under a policy issued on May 17, 1920. By this policy, the defendants agreed to insure against theft business premises occupied by the plaintiff and situated at 122 St. Lawrence Boulevard.

            On the night of May 14-15, thieves stole goods valued by Ruckenstein at $17,029.93 from the premises in question, resulting in the claim against the insurance company.

            When sued the defendant company pleaded that the plaintiff had failed to file a valid and legal proof of loss, and that he had not kept the terms of the policy which required that actions should be taken within a delay of twelve months from the time of the loss.

            The plaintiff claimed that the defendants were estopped from pleading prescription because they had violated the contract of insurance by setting up frivolous excuses for not accepting the proof of loss which was made.

            Mr. Justice Desaulniers upheld the claims of the defence, and dismissed the action, with costs.


Headlines from this week’s issue, attached:


Dan D. Kohane
[email protected]

  • First Department – Being Kind to President Trump, Continues Acts of Kindness and Compassion; Reduces Discovery Sanctions
  • Asserting a Claim for Rescission, 129 Days after Disclaimer is too Late.  A Classification Limitation that Limits Coverage to “All Exterior Work or Exterior Work Projects Above the Ground Floor” is Ambiguous and Claim Involving Interior Work Accident is Not Clearly Within Policy Limitation

  • Tough Day at the First Department for Mt. Hawley.  “Exterior Work Above Ground Level Exclusion” Does Not Apply to Worker Standing on Ladder on the Ground Floor

  • Policy Terms Dictate Priority of Coverage Unless the Policy Provisions Direct the Parties to the Trade Contract to Resolve Priority Issues.  That’s What Happened in this Case

  • Applying “but for” Test, Court Holds Prior Acts Exclusion Inapplicable


Steven E. Peiper

[email protected]

  • Another Case, Another COVID Biz Interruption Claim Dismissed


Brian D. Barnas

[email protected]

  • Plaintiff’s Claims for Bad Faith Refusal to Settle, Breach of the Implied Covenant of Good Faith and Fair Dealing, and Legal Malpractice Against Assigned Defense Counsel, All Survive Motions to Dismiss

  • General Business Law Section 349 Claim Survives Summary Judgment but Plaintiffs Not Entitled to Consequential or Punitive Damages under Statute


Lee S. Siegel

[email protected]

  • Motion for Judgment on the Pleadings Premature

  • Plaintiff Not a Third-Party Beneficiary to Policy, Suit Dismissed


Kyle A. Ruffner
[email protected]

  • Court Grants Insurer’s Motion for Summary Judgment Declaring Defendant Did Not Submit Requested Verification of its No-Fault Claim and Dismissing Defendant’s Claim for Lost Wages


Ryan P. Maxwell

[email protected]

  • Insured Unable to Obtain Federal Injunction Forcing D&O Insurer to Pick Up Defense Costs Following Exhaustion of Primary D&O Policy


Scott D. Storm

[email protected]

  • Insureds’ Suit Alleging Breach of Contract on a First-Party Property Fire Claim Dismissed as Requests for Documents and Examinations Under Oath Were Outstanding When the Suit was Commenced and, Therefore, the Insureds Breached the Suit Condition (“No Action Can Be Brought…”).  The Standard for Breach of a Third-Party Liability Cooperation Condition Requiring a Showing of Substantial Prejudice Does Not Apply to a First-Party Property Claim.  Rather, the Policy Requires Full Compliance by the Insureds

  • Property Loss Not Subject to Appraisal When the Insurer Argues that the Damage to the Property was the Result of Age, Wear and Tear, Poor or Improper Maintenance, or Prior Efforts to Repair


Katherine A. Fleming

[email protected]

  • Resulting Loss Exception Preserves Coverage For Resulting Loss from Covered Perils


Evan D. Gestwick

[email protected]

  • Court Holds no Collapse Coverage where Insured Failed to Prove Abrupt Falling Down or Caving in, Even where Engineer Opines Such Could Have Been the Case

Ryan P. O’Shea

[email protected]

  • Undefined “Irritant or Contaminant” in Pollution Exclusion can be Ambiguous Under the Right Circumstances, but Not Where Claim Involves Wastewater

Robert J. Caggiano

[email protected]

  • First Department Unanimously Affirmed, Without Costs, a Decision Granting Summary Judgment in Favor of Defendants Where Evidence Presented Sufficiently Showed that Plaintiff Did Not Suffer a Causally Related Serious Injury and Plaintiff Evidence Failed to Raise an Issue of Fact

Joshua M. Goldberg

[email protected]

  • Diminution in Market Value – 2014 GMAC Sierra 1500 Not Special


Isabelle H. LaBarbera

[email protected]

  • Court Dismisses Complaint Against Insurer and Broker Finding No Breach of Common-Law Duty and No Special Relationship


Heather A. Sanderson
Sanderson Law, Calgary, Alberta

[email protected]

  • Dispensation for her appointment as Kings Counsel in Alberta.


Again, Happy Easter.  We look forward to seeing many of you on April 5th.

By the way, Ryan Maxwell and I authored “Head Scratchers Rewarded with Curious Decisions” in the Q1 2024 edition of New York Insurance Association's magazine.

Each year, for over a decade, NYIA has asked Hurwitz Fine to provide a summary of court decisions impacting tort defendants and insurers that seem contrary to existing case law. This year, Kohane and Maxwell reviewed 432 judicial decisions in order to highlight the best of the worst.  Click on the graphic to read the article.


A cartoon of a person with a note




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

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

Goldberg’s Golden Nuggets

LaBarbera’s Lower Court Library

North of the Border


Dan D. Kohane
[email protected]


03/28/24       Riverside Cr. Site 5 Owner LLC v. Lexington Insurance Co.
First Department – Being Kind to President Trump, Continues Acts of Kindness and Compassion; Reduces Discovery Sanctions

You might have heard that the First Department, in an act of kindness and compassion (perhaps), reduced the bonding obligations imposed on former President Trump.  That same court was kind to policyholders who failed to turn over 17 significant communications during discovery and to comply with court-ordered disclosure.  The case involved a claim for coverage under an insurance policy for an alleged 235-day delay in completion of a construction project.

The lower court imposed a significant sanction for those failures, having the plaintiffs pay for all discovery cost including reasonable attorneys fees as well as the costs for future discovery.:

ORDERED that defendants’ motion for sanctions pursuant to CPLR 3126 is granted to the extent that plaintiffs shall pay defendants’ discovery costs, including reasonable attorneys’ fees, in their entirety, for all discovery conducted thus far in the litigation, as well as all future discovery; and the motion is otherwise denied without prejudice, and it

The First Department agreed that the plaintiffs ought to be sanctioned, but reduced the penalty, to the compensate the defendants for any additional costs incurred as a result of the failure to turn over the documents.:

Under the circumstances, the undisclosed communications were highly relevant to plaintiffs' alleged damages, and plaintiffs' failure to produce them was sufficient to support the award of sanctions (see D2D Holdings LLC, 222 AD3d at 430). However, we exercise our discretion and modify to the extent outlined herein in order to compensate the defendant for any additional discovery costs and legal fees incurred as a result of the failure to produce the 17 highly relevant and material documents previously withheld by the Riverside plaintiffs.


03/26/24       ZZZ Carpentry, Inc. v. Mt. Hawley Insurance Company
Appellate Division, First Department
Asserting a Claim for Rescission, 129 Days after Disclaimer is too Late.  A Classification Limitation that Limits Coverage to “All Exterior Work or Exterior Work Projects above the Ground Floor” is Ambiguous and Claim Involving Interior Work Accident is Not Clearly Within Policy Limitation

Mt. Hawley moved for summary judgment seeking rescission of the policy and the court below denied the motion and the First Department affirmed.

The court held that Mt. Hawley waived its right to rescind the policy after it unreasonably delayed asserting a claim for recission. It initially disclaimed coverage on June 28, 2016, and did not make its rescission counterclaim until November 4, 2016, which was 129 days later. In light of the waiver, the merits of the rescission argument need not be addressed.

Moreover, Mt. Hawley was not entitled to disclaim coverage based on the policy's classification limitation and designated ongoing operations exclusion. The Mt. Hawley policy classified ZZZ as a "General [C]ontractor — Interior," and the classification limitation limited coverage under the policy to ZZZ's "Operations as an Interior Renovations General Contractor hired by the Owner." The designated ongoing operations exclusion provided that "[t]his insurance does not apply to 'bodily injury' or 'property damage' arising out of the ongoing operations described in the [s]chedule of this endorsement, regardless of whether such operations are conducted by you or on your behalf or whether the operations are conducted for yourself or for others."

The endorsement's schedule stated, "[a]ll exterior work or exterior work projects above ground floor whether by you or by others."

Insurance policies are to be afforded their plain and ordinary meaning and interpreted in accordance with the reasonable expectations of the insured party. A coverage limitation or a coverage exclusion must be clear with no other reasonable interpretation.

The court held that in this case, there was another reasonable interpretation for the policy other than the one provided by Mt. Hawley. Mt. Hawley argues that the limitation and exclusion language in the policy should be interpreted to mean that there is no coverage under the policy if any exterior work is performed on the job.

However, another reasonable interpretation of the policy is that there would still be coverage for bodily injury arising out of interior work, but no coverage would be provided for bodily injury only arising out of exterior work. Since both interpretations are reasonable, coverage must be provided for interior work. As there is no dispute that the incident in this case arose out of interior work, Mt. Hawley is required to defend and indemnify ZZZ and Harris in the underlying action.

At a minimum, the above provisions are ambiguous, and the language must be construed in favor of the insured and against the drafter, Mt. Hawley, as Mt. Hawley "provides no extrinsic evidence that supports its interpretation".

Editor’s note:  Odd appeal, for sure.  ZZZ did not file a respondent’s brief.  The court’s finding that 129 days to rescind is too long, is troubling and a warning to insurers.  Four months.  Danger.  On that subject, below, ZZZ cited to only one case, and it was miscited:  Saitta v. NYCTA, 55 AD3d 422 finding four months unreasonable to disclaim not to rescind.


03/26/24       Wesco Insurance Company v. Mt. Hawley Insurance Company
Appellate Division, First Department
Tough Day at the First Department for Mt. Hawley.  “Exterior Work above Ground Level Exclusion” Does Not Apply to Worker Standing on Ladder on the Ground Floor

Supreme Court properly found that the provision in Mt. Hawley's insurance policy excluding from coverage "[e]xterior work above ground level" does not apply. The plaintiff in the underlying action alleges he was injured when he fell while standing on a ladder set up on the ground level outside the subject building.

As a matter of "common speech", "ground level" is reasonably interpreted to mean the first floor. Mt. Hawley has failed to satisfy its burden of establishing that "ground level" as used in the exclusion can only reasonably mean that the covered work must be performed on the ground itself.  Exclusions "are not to be extended by interpretation or implication, but are to be accorded a strict and narrow construction" (id.).

Editor’s Note: What has to be on the ground for someone to be working on the ground level?  Talk amongst yourself.  Step ladder, one step up?  Ten-foot ladder, up five feet?  Baker scaffold?


03/19/24       Hudson Excess Ins. Co. v. Certain Underwriters, et al
Appellate Division, First Department
Policy Terms Dictate Priority of Coverage Unless the Policy Provisions Direct the Parties to the Trade Contract to Resolve Priority Issues.  That’s What Happened in this Case

Although priority of coverage is controlled by the relevant policy terms, not by the terms of the underlying trade contract, a court may look to the terms of a trade subcontract to determine priority of coverage if the insurance policy itself expressly provides that the terms of the subcontract will determine whether the additional insured coverage afforded was primary or excess.

Here, the Excess Liability Primary and Non-Contributory Coverage endorsement of the Hudson policy, which concerns the insurance afforded by the Hudson policy for the benefit of an additional insured, provides that such insurance "shall be primary to, and on a non-contributory basis with, any other excess insurance available to such Additional Insured, provided that you are specifically required by a written contract to provide such insurance," and the endorsement specifically references the trade subcontract: "Coverage shall be limited to the extent required by the written contract."

The trade subcontract here provides that the insurance afforded to the additional insureds, "whether issued on a primary or umbrella/excess basis," "shall be primary to, and non-contributory with, any other insurance on which the Additional Insured is a named insured, whether such other insurance is primary, excess, self-insurance, or insurance on any other basis."

This broad language, to which the Hudson policy refers, renders the coverage provided by the Hudson policy to additional insureds primary and noncontributory of any excess insurance coverage, whether provided by the Lloyd's primary policy or a true excess policy. Even if the phrase "excess insurance," as opposed to "excess policy," is vague, the endorsement language should be construed against the drafter, Hudson, as Hudson provides "no extrinsic evidence that supports its interpretation".


03/19/24       Xerox Corp. v. Travelers Cas. & Sur. Co. of Am.
Appellate Division, First Department

Applying “but for” Test, Court Holds Prior Acts Exclusion Inapplicable

Reversing the trial court, the First Department held that Travelers owes Xerox coverage for the defense and settlement of several related lawsuits under its 2018-19 D&O tower but not under a run off tower. In both programs, Travelers was in an excess position, with follow form policies to the primary coverage. The programs contained contrapositive exclusions: the run off insurance precluded coverage for any claim arising from a Wrongful Act committed after January 1, 2017, and the 2018-19 program for acts committed prior to January 1, 2017.

Xerox entered into sales talks with Fujifilm in March 2017. It was sued by several of its largest shareholders, seeking to block the proposed sale. The suits alleged that Xerox breached its fiduciary duty in undervaluing the company, failing to follow an open bidding process, and keeping secret a 20-year-old joint venture with Fuji in which Xerox ceded valuable rights to Fuji.

The suits were specifically tendered to the 2018-19 program but not to the run off program. However, as the court noted, the suit notices contained a catch-all: "This matter is reported under any and all applicable policies whether or not cited." When Xerox settled the suits, the first and second layers of the 2018-19 program paid, however, Travelers resisted, claiming that the allegations that Xerox concealed its joint venture with Fuji was an allegation of Wrongful Acts committed prior to January 1, 2017, and, therefore, subject to the policy’s Prior Acts Exclusion. Travelers did not consider the potential for coverage under the run off policy.

Xerox sued Travelers for breach of contract. Xerox also alleged bad faith and negligent misrepresentation for the insurer’s delay in raising the prior acts exclusion until eight months post-settlement and going back on its “intimations” that it would rely in the primary carrier’s coverage analysis.

The appellate court found that Travelers owed coverage under the 2018-19 program but not under the run off program. “[T]he primary acts that gave rise to liability in this case are the negotiation and approval of the allegedly disadvantageous sale to Fuji beginning in early 2017, and the decision in 2017-2018 not to extend the period for board nominations. All of these acts occurred after January 1, 2017. Therefore, Travelers' run off policy under the first tower is not applicable to the loss.” For the same reason, the court held that coverage was owed under the 2018-19 program.

In evaluating the 2018-19 program’s Prior Acts Exclusion, the court applied a but-for test to the suit allegations. As the exclusion contained “arising out of” language, it was Travelers’ burden to establish that the shareholder suits would not have existed “but for” the pre-January 1, 2017, Wrongful Acts. According to the court, Travelers did not meet its obligation. “The acts giving rise to liability in the underlying cases consisted of the 2017-2018 negotiation and approval of an allegedly disadvantageous transaction with Fuji and Xerox's 2018 denial of a request for a waiver of a deadline for advance notice of director nominations. The complaints in the two Deason actions allege that Xerox's former CEO and certain directors breached fiduciary duties by agreeing to a rushed and unfavorable transaction in their own self-interest. These causes of action could be viable even if Xerox had not previously entered into the joint venture with Fuji.”

The appellate court agreed with the trial court that the settlements were not facially unreasonable and, therefore, raised a question of fact for a jury. A court is required to weigh several reasonableness factors, including the insured’s exposure, the cost of trial, and the amount of the settlement compared to similar cases. The court also upheld the denial of Travelers’ motion to dismiss the bad faith count, but reversed and dismissed the negligent misrepresentation claim finding that Xerox did not reasonably rely on the insurer’s statements.

[Ed. Note: This outcome comports with the basic goal of claims made insurance, in that the coverage was limited to a single policy period. While Travelers sought to deny coverage notwithstanding the insured’s continuum of end-to-end policies and Xerox sought to access both programs, the court appropriately looked to the “primary acts” in order to determine under which policy period coverage was triggered.]


Steven E. Peiper

[email protected]


03/15/24       Carrols Restaurant Group, Inc. v. Am. Guar. & Liab. Ins. Co.
Appellate Division, Fourth Department
Another Case, Another COVID Biz Interruption Claim Dismissed

Plaintiff operated a number of fast-food chains throughout New York State.  It was claimed, rightly, that the businesses were negatively impacted as a result of COVID-19 restrictions in the Spring of 2020.  American Guarantee denied the claim for business interruption losses and moved to dismiss the instant action.  The trial court granted the motion to dismiss, and on appeal the Appellate Division affirmed.

The Court referred to the Court of Appeals’ most recent decision finding that the possible existence of the COVID-19 virus did not constitute a material alteration of property, and thus the business interruption coverage form was not triggered. Further, plaintiff failed to establish that it was completely and persistently “dispossessed” of the property.  


Brian D. Barnas

[email protected]


03/20/24       Pergament v. GEICO
Appellate Division, Second Department
Plaintiff’s Claims for Bad Faith Refusal to Settle, Breach of the Implied Covenant of Good Faith and Fair Dealing, and Legal Malpractice Against Assigned Defense Counsel, All Survive Motions to Dismiss

Geico retained Picciano & Scahill, LLP and Gilbert Hardy (the law firm defendants) to represent Bryant in a personal injury action.  The plaintiff, the trustee of Bryant's bankruptcy estate, subsequently commenced this action against Geico and the law firm defendants.  As against Geico, the complaint alleged three causes of action: (1) bad faith refusal to settle the underlying personal injury action for the subject policy limit after a motion for summary judgment on the issue of liability was granted in favor of the underlying injured plaintiff, (2) breach of the covenant of good faith and fair dealing, and (3) punitive damages. As against the law firm defendants, the complaint alleged a cause of action for legal malpractice.  Defendants moved to dismiss.

The court declined to consider medical reports submitted by Geico as documentary evidence under CPLR 3211(a)(1), and Geico’s other evidentiary submissions were insufficient to utterly refute the plaintiff’s factual allegations in support of the bad faith claims. Second Department held that the Supreme Court properly determined that the plaintiff had causes of action against Geico alleging bad faith refusal to settle the underlying personal injury action for the subject policy limit and breach of the covenant of good faith and fair dealing.  The motion to dismiss those claims was denied.

Geico’s motion to dismiss the punitive damages cause of action was granted because there is no separate cause of action for punitive damages for pleading purposes.  However, the court concluded the complaint adequately alleged a demand for punitive damages.

The court also concluded that the complaint sufficiently stated a cause of action for legal malpractice against the law firm defendants when accepting all the facts alleged in the complaint as true and affording the plaintiff every inference on the motion to dismiss.


03/19/24       Hobish v. AXA Equitable life Insurance Company
Appellate Division, First Department
General Business Law Section 349 Claim Survives Summary Judgment, but Plaintiffs Not Entitled to Consequential or Punitive Damages under Statute

Plaintiffs commenced an action alleging breach of contract and violation of General Business Law § 349.  Plaintiffs argued that the term “a given class,” as used in the policy, was ambiguous.  The First Department concluded there were two reasonable interpretations of the term, but that the court was not required to resolve the ambiguity against the insurer, as the extrinsic evidence presented in the case was not conclusory.  The extrinsic evidence also did not only support one party’s proposed interpretation, such that the ambiguity could be resolved by the court as a matter of law.

The First Department affirmed denial of the insurer’s motion for summary judgment on the § 349 claim.  Even if the decedent did not read the policy herself, issues of fact existed as to whether there was consumer impact in this case.  However, the court dismissed plaintiffs’ claims for “restitutionary” damages and punitive damages pursuant to § 349(h).  The claim for “restitutionary” damages was too speculative to constitute actual damages under the statute.  In addition, the statute only provides for an award of actual damages of fifty dollars.  While a court may increase an award up to three times, up to one thousand dollars, these are the only “punitive damages” available.

The court also dismissed Plaintiffs’ claims for compensatory and consequential damages on the breach of contract action.  Plaintiffs’ sought approximately $1.5 million in damages which allegedly represented the value of the death benefit of the policy, offset by the surrender payment made to plaintiffs and any charges that would have been deducted during the decedent's life expectancy.  Assuming that defendant breached the policy by inequitably raising rates, defendant did not cancel it. Rather, the record establishes that Plaintiffs assessed the financial benefits of maintaining the policy with the higher rates, and then under protest chose to exercise the surrender provisions of the policy.  Having been surrendered, the policy was no longer in effect and plaintiffs were no longer entitled to the $2 million death benefit.


Lee S. Siegel

[email protected]


03/22/24       LM Ins. Corp. v. Hartford Ins. of the Midwest
United States District Court, District of Connecticut
Motion for Judgment on the Pleadings Premature

The court denied LM’s motion for judgment on the pleadings in a coverage dispute with Hartford over which carrier owed coverage for a workers compensation claim. LM provided coverage for Massachusetts claims, whereas Hartford covered Connecticut claims. LM argued that the claimant’s accident occurred in Massachusetts and, therefore, it did not owe coverage despite the claim being brought in Connecticut. Hartford asserted that the claimant alleged a repetitive trauma injury, and it was unclear which state’s law applied. The court found the motion premature as a more developed record was necessary to resolve the dispute. As the insured argued, and the court agreed, “there are issues of material fact as to the date and location of Thomas Soule's injury, which could alter the duties of both insurers.”


03/12/24       Levin v. Travelers Property Cas. Co.
Superior Court of Connecticut, Hartford
Plaintiff Not a Third-Party Beneficiary to Policy, Suit Dismissed

The plaintiff brought a breach of contract and class action complaint against Travelers, asserting that it systematically underpaid rental reimbursements. Levin’s Tesla was damaged by a negligent tow truck driver insured by Travelers. The insurer only offered her $25/day for rental car coverage, however, she claimed that it cost $300/day to rent a comparable vehicle. Levin was told by the adjuster and supervisor that Travelers’ company-wide policy was to only pay a maximum of $25/day, although she was later offered $150/day.

Travelers successfully moved to dismiss the complaint, as the court found that the plaintiff was not a third-party beneficiary to the tow truck driver’s policy and, therefore, she lacked standing to sue. Levin was not a party to the insurance contract and, since she had not obtained a judgment against the insured, she could not sustain her claim under Connecticut’s direct-action statute. The plaintiff countered that she was not suing to establish the insured’s liability but rather to enforce various statutory regulations regarding coverage. The court rejected this argument, finding that the minimum provisions regulations confirm that they do not establish direct obligations owed by insurers to third-party claimants. The court also rejected her CUTPA/CUIPA claims because the statutes “are aimed at the protection of insureds and do not impose on insurers direct obligations to third-party claimants.”


Kyle A. Ruffner

[email protected]


03/01/24       American Transit Insurance Company v. Lewis
Supreme Court, New York County
Court Grants Insurer’s Motion for Summary Judgment Declaring Defendant Did Not Submit Requested Verification of its No-Fault Claim and Dismissing Defendant’s Claim for Lost Wages

In this action the insurer sought, pursuant to Insurance Law § 5106(c), trial de novo of an award rendered in a no-fault automobile insurance arbitration proceeding brought against it by the defendant. The underlying arbitration arose from an auto accident where the defendant was a passenger in a taxi and sought lost wages from the insurer, for approximately a month after the accident. The insurer argued in the arbitration that it was not required to pay the lost wages because defendant had not established timely submission of his claim, defendant failed to provide requested verification of his lost wages, and the amount sought was in excess of the policy limits for lost wages. The arbitrator found in favor of the defendant for the full amount sought, which was confirmed by a master arbitrator, in part because the insurer failed to submit an affidavit by a person with knowledge sufficient to establish any of its defenses.

Following the award of a master arbitrator, where the award is $5,000 or more, either the insurer or the claimant "may institute a court action to adjudicate the dispute de novo" (Insurance Law § 5106[c]). The insurer argued this dispute was premature because its requested verification from the defendant remains outstanding, and the defendant argued he has responded to all requested and provided ample documentation.

An insurer is required to pay or deny claims for no-fault benefits within 30 days of receipt but may toll that time by seeking verification of the claim from the claimant. A claim does not need to be paid or denied until all demanded verification is provided. In this case, the defendant provided some documentation, including a W-2 and an NF-7 verification of self-employment income. However, the insurer requested additional verification such as the Schedule C to defendant’s taxes for any self-employment income or an NF-6 employer wage verification report. According to the insurer’s claims supervisor, the verification requests were timely sent, but they never received a completed NF-6 or Schedule C to his tax returns. The court determined the insurer satisfied its prima facie case that the action was premature by demonstrating (1) that the verification requests were timely mailed and (2) they did not receive the requested verification. In response, the defendant did not challenge the assertion that no Form NF-6 or Schedule C was sent to the plaintiff. Therefore, the court held the insurer was not obligated to pay the claim due to outstanding verification.

The defendant’s position was that the insurer had sufficient information to determine defendant’s entitlement to lost wages. However, the court held that the insurer is entitled to receive all items necessary to verify the claim from the party from whom information is requested, and the defendant could not support its position that its incomplete compliance with the verification requests was sufficient. Accordingly, it was ordered that the plaintiff insurer’s motion for summary judgment was granted and defendant’s claim for lost wages was dismissed.


Ryan P. Maxwell
[email protected]

03/18/24        Daileader v. Certain Underwriters at Lloyd’s
Second Circuit Court of Appeals
Insured Unable to Obtain Federal Injunction Forcing D&O Insurer to Pick Up Defense Costs Following Exhaustion of Primary D&O Policy

Timothy Daileader was the director manager of Oaktree, who wound up in legal troubles personally for allegedly breaching of his fiduciary duties. Certain Underwriters at Lloyds London Syndicate 1861, along with the others, provided Oaktree with follow-form excess directors and officers liability (“D&O”) insurance. Although Daileader was initially defended for his legal troubles by Landmark American Insurance Company under a primary D&O policy, Landmark’s $1,000,000 limit of liability was exhausted and Daileader found himself paying out of pocket for his defense moving forward. This out-of-pocket expense led Daileader to file this action seeking coverage from Lloyd’s for his defense, following its denial of coverage to Daileader. Daileader, in turn, sought a preliminary injunction to enforce Lloyd’s duty to defend. The district court denied Daileader’s motion and, agreeing with Lloyd’s, the Second Circuit affirmed as an appropriate use of discretion.

The Second Circuit noted that whether to issue an injunction is a matter of federal law, requiring that a party establish a likelihood of success on the merits, as well as a likelihood of irreparable harm, and that both the balance of equities tips in his favor and that an injunction is in the public interest. Here, Daileader was unable to surpass the first two elements.

For purposes of a breach of contract, disputes arise around maintenance of the “status quo.” That was the case here, since Daileader “argues that the [Lloyd’s] refusal to continue paying under its own policy upset the status quo of ongoing payments,” which ceased upon exhaustion of the primary policy, while Lloyd’s “contends that being compelled to pay Daileader’s defense costs would alter that status quo,” because it had denied coverage from the beginning, never incurring any defense costs whatsoever.

Here, the status quo favored Lloyds, since the “actual” status quo was one of non-payment and, accordingly, the relief sought was “mandatory” rather than “prohibitory,” requiring a more stringent standard for injunctive relief. Although Landmark had paid for Daileader’s defense, this did not bind the excess insurer, Lloyd’s, and Lloyd’s never agreed to provide such costs. “Injunctions to enforce such contested duties will very often involve ‘commanding some positive act’ and therefore will be mandatory, not prohibitory.” This was not a scenario where, for example, the insurer sought to void its policy, ab initio due to alleged fraud, which might disrupt the status quo—i.e. a contractual obligation—entirely.

Applying the more stringent standard, the Second Circuit found Daileader failed to establish either an irreparable harm or clear/substantial likelihood of success. The existence of a monetary award that provides adequate compensation establishes that Daileader’s injury is not “irreparable”. Although Daileader would like those funds now, it is “adequate” that he would be reimbursed his expenses were he successful in litigation against Lloyd’s.

As far as his likelihood of success is concerned, Daileader failed to establish that Lloyd’s was likely incorrect in its coverage position. The Second Circuit noted that Lloyd’s had better arguments relative to the potential application of its Bankruptcy/Insolvency Exclusion, in that it likely did apply to the adversary proceedings facing Daileader, and that the exclusion was likely not violative of the Bankruptcy Code. Although certainly Daileader may eventually be successful on the merits, a question left to the district court following further proceedings, he failed to establish a substantial likelihood of success on the merits at this juncture.

Accordingly, the Second Circuit found no error, much less an abuse of discretion by the district court in denying Daileader’s motion for a preliminary injunction.


Scott D. Storm

[email protected]


03/04/24       Mazer v. Frederick Mutual Ins. Co.  
United States District Court, M.D. Pennsylvania
Insureds Not Entitled to Coverage for Property Damage Claim Due to Outstanding Requests for Documents and Examinations Under Oath at Time of Suit Commencement on the Ground of Breach of Policy’s Suit Condition (“No Action Can Be Brought…”); Full Compliance, Rather than Substantial Compliance, Applies to First-Party Property Claim

On November 2, 2018, Plaintiffs' property was damaged by a fire. Plaintiffs submitted a claim under the Policy. The third-party adjustor retained by Defendant estimated actual cash values for the building, $334,795.07, and for the contents, $2,039.97. Defendant issued Plaintiffs checks for these amounts.

On behalf of Plaintiffs, however, C&Z Construction estimated that the replacement cost value for the property would be $686,373.56. Plaintiffs' adjuster, Jarrod Baker of United Adjusters of America, provided this estimate to Defendant on August 22, 2019, indicating that the Plaintiffs requested payment of the Policy limit. Robert Pelletier, then Defendant's Chief Claims Officer, responded that he would review the estimate, and in a follow-up letter the next month requested that Plaintiffs provide certain documentation relating to their claim. He also informed Plaintiffs of Defendant's position that, pursuant to the Policy, Plaintiffs could not claim replacement costs because (1) they had not yet repaired or replaced the property, and (2) they had not notified Defendant of their intent to claim replacement costs within 180 days of the loss.  Mr. Baker responded to Mr. Pelletier's letter the same day, expressing disagreement with Defendant's positions and indicating that Plaintiffs would be responding to Defendant's requests. In response, Defendant reiterated its position regarding replacement value costs and its request for documentation and noted the Policy's requirement that the insured "provide us with records and documents we request." As of the date of filing of their Complaint, Plaintiffs had not provided the requested documents or rebuilt the property.

On October 22, 2019, Plaintiffs brought this action claiming that Defendant breached its contract with them by refusing to provide full coverage for their losses and, in so denying them, acted in bad faith in violation of 42 Pa. Cons. Stat. §8371.

Defendant first asserts that Plaintiffs' action is barred by the Policy, which provides that:

No action can be brought against us unless there has been full compliance with all of the terms under Section I of this policy and the action is started within two years after the date of the loss.

Among the insured's "Duties after loss," set forth in "Section I — Conditions," are the requirements to "[p]rovide us with records and documents we request and permit us to make copies," and to "submit to examination under oath, while not in the presence of another ‘insured,' and sign the same."

By a September 24, 2019, letter to Mr. Baker, Mr. Pelletier requested that Plaintiffs provide the mortgagee's appraisal of the property at the time of purchase, invoices documenting improvements and repairs, the dates of C&Z Construction's visit, the property's agreement of sale and deed, the pre-closing home inspection, the municipal property assessment, and dates when Plaintiffs could be available for videotaped examinations under oath. Defendant contends that because Plaintiffs did not provide the requested documents or submit to an examination under oath, it is entitled to judgment as a matter of law pursuant to the Policy's "no action" provision.

Plaintiffs counter that the requested materials were not relevant to Defendant's coverage determination and that Defendant did not properly demand an examination under oath. Plaintiffs posit that "[i]n order to prevail on this argument, the Defendant must establish that any alleged failures to cooperate resulted in prejudice to the carrier and that any breach of duties by the Plaintiffs were material."

Plaintiffs' argument seems to suggest that the "no action" clause here should be treated like a cooperation clause in a liability policy. "Most insurance policies," including this one, "include what is commonly referred to as a ‘cooperation clause.'" Pennsylvania courts have understood such clauses as a condition to the insurer's liability but have required that an insured's breach result in "substantial prejudice" before the insurer's liability is discharged. 

The "no action" clause makes compliance a condition to the institution of an action, not to liability. It requires "full"—not reasonable—"compliance," and does not purport to require prejudice. Plaintiffs do not cite authority for the proposition that this type of "no action" clause is only effective upon a showing of reasonableness, prejudice or materiality. The court is not persuaded to impute such conditions on the "no action" clause here. The clause, and the duties alleged to have been violated here, are unambiguous. And there is no genuine dispute of material fact that Plaintiffs did not provide Defendant the records it requested or submit to an examination under oath.

Plaintiffs take issue with Defendant's requests in two other ways. First, they suggest that they were made "late," "long after the coverage decision was made." These requests, made only a month after Plaintiffs' request for replacement value, were thus not late relative to Plaintiff's claim for additional coverage. Second, Plaintiffs assert that Defendant did not "tender a compliant formal demand" for an examination under oath, positing that a demand "must expressly state the time and place for the examination and the person before whom it should take place." Defendant here requested that Plaintiffs supply "[d]ates that the Mazers can be made available for videotaped examinations under oath".  The court need not decide whether this request was sufficient, because Plaintiffs failed to comply with the Policy by not providing the documents requested by Defendant.

Because Plaintiffs have not fully complied with the terms of the Policy, the "no action" clause prohibits them from bringing an action for breach of contract. Defendant is, therefore, entitled to judgment as a matter of law on Plaintiffs' breach of contract claim.

The Court also dismissed the Plaintiffs’ bad faith claim saying they have not supported it with record evidence, and Defendant is, therefore, entitled to summary judgment on this claim.


02/28/24       Chapa Blue, Ltd. V. Mt. Hawley Ins. Co.
United States District Court, S.D. New York.
Property Loss Not Subject to Appraisal when the Insurer Argues that the Damage to the Property was the Result of Age, Wear and Tear, Poor or Improper Maintenance, or Prior Efforts to Repair

Plaintiff moves to compel an appraisal in this property insurance dispute, and "to abate judicial proceedings" pending the completion of the appraisal process. For the following reasons, the motion is denied.

Plaintiff filed this lawsuit alleging that as a result of hail/windstorm events, property that it owned sustained damage. Defendant denied coverage on the basis that the "damage to the property [was] due to wear and tear and interior water damage from rainwater that entered the building through wear and tear, improper installation, and lack of maintenance." Defendant reported that its investigator had determined that "the water damage to the property [was] due to preexisting openings in the roof and not related to wind or hail." 

After commencing suit, Plaintiff invoked the appraisal provision of the insurance policy and filed an "opposed motion to compel appraisal and to abate judicial proceedings" pending completion of the appraisal, on the basis of the appraisal provision in the insurance policy. The Court denies the motion.

Plaintiff's motion to compel an appraisal is predicated upon the appraisal clause of the insurance policy. The appraisal clause reads as follows:

If we and you disagree on the amount of loss, either may make written demand for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If they cannot agree on an umpire, either may request that selection be made by a judge of a federal court having jurisdiction. The appraisers will state separately the amount of loss, including an itemized determination of (1) the actual cash value for each damaged item included in the claim, and (2) the replacement costs value, if applicable under the policy, for each damaged item included in the claim. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding, and the decision must be itemized as specified in (1) and (2) above. Each party will:

a. Pay its chosen appraiser; and

b. Bear the other expenses of the appraisal and umpire equally.

If there is an appraisal, we will still retain our right to deny the claim.

Under no circumstances is appraisal allowed under this policy to determine causation or the existence or non-existence of coverage. Appraisal is also not allowed where coverage for the claimed loss has been denied in its entirety. You cannot invoke appraisal after suit has been filed.

Under the clear and unambiguous language of the appraisal provision, Plaintiff is not entitled to avail itself of the appraisal provisions of the policy where, as here, Defendant has denied coverage for the claimed loss in its entirety.  Moreover, the policy also is clear that Plaintiff cannot sue first and then ask for an appraisal later.

Such a reading of the appraisal provision is consistent with New York law, under which an "appraisal clause only applies to a case with a disagreement ‘as to the amount of loss or damage', and not where the insurer denies liability."  "The rationale underlying this rule is that disputes arising from questions of coverage or liability are purely legal issues, which should be left to the courts rather than an appraisal process, which ‘is limited to factual disputes over the amount of loss for which an insurer is liable.'" "Furthermore, under New York law, an insurer ‘contests liability and is not merely disagreeing as to the value of the loss,' when the insurer argues that the damage to insured property was ‘the result of age, wear and tear and/or poor or improper maintenance . . . [and/or] prior efforts to repair.'"  Here, Defendant denies coverage on the basis that the loss was as a result of wear and tear and poor and improper maintenance. For that additional reason, the dispute is not subject to appraisal.

Katherine A. Fleming

[email protected]


03/14/24       Gardens Condo. v. Farmers Ins. Exch.
Washington Supreme Court
Resulting Loss Exception Preserves Coverage for Resulting Loss from Covered Perils

Farmers insured the Gardens Condominium. The policy provided coverage for loss or damage caused by a covered cause of loss (any risk of direct physical loss), but it excluded losses caused by excluded events. Under the policy, damage is caused by an excluded event if the event directly or solely resulted in the loss or initiated a sequence of events that resulted in the damage. The exclusion for faulty workmanship contained a resulting loss exception that there would be coverage for resulting loss or damage caused by a covered peril. Gardens found damage in the condo building caused by faulty workmanship. Farmers denied the claim because it concluded that faulty workmanship caused the loss.

Gardens sued for a declaration that there was coverage for hidden water damage, arguing that because the policy ordinarily covered the damage at issue, the resulting loss exception to the faulty workmanship exclusion preserved coverage. Farmers argued that the resulting loss exception only applies if a covered event breaks the chain of causation between the excluded risk and subsequent losses or damage to other property. The trial court agreed with Farmers because the faulty workmanship initiated a sequence of events causing damage. The Court of Appeals reversed and remanded, reasoning that Farmers had agreed to pay for damage caused by a covered peril even when it resulted from faulty workmanship.

The Washington Supreme Court agreed with the appellate court. A resulting loss clause carves out an exception to the policy exclusion, and the Court noted that policy exceptions should not swallow the basic coverage provided by the policy. The Court disagreed with Farmer’s arguments because they would negate the effect of the resulting loss clause, and the Court refused to rewrite the policy language by adding requirements that the covered cause of loss be independent from the faulty workmanship or that it could not be a natural consequence of faulty workmanship. Instead, the Court held that the resulting loss exception to the faulty workmanship exclusion revived coverage even if the exclusions would otherwise deny it.


Evan D. Gestwick

[email protected]


03/18/24       Pezzano v. Liberty Mutual Mid-Atlantic Insurance Company
United States District Court, District of New Jersey
Court Holds no Collapse Coverage where Insured Failed to Prove Abrupt Falling Down or Caving in, Even where Engineer Opines Such Could Have Been the Case

The insured and her adult children were preparing to deck the halls of the insured premises just prior to Christmas. Things quickly became a bit less merry when the insured pulled the couch away from the living room wall, making room for the tree, only to discover a gap between the floor and the wall. Unbeknownst to the insured, the living room floor sunk three inches. Indeed, the insured and her two adult children each testified that they never felt a drop in the floor, or any shaking or movement of any kind.

The insured hired a forensic structural engineering service to determine the cause and appropriate remedy for this situation. The investigation determined that a wooden beam was cracked in the crawlspace. The engineer determined that the damage was caused by wood rot and termite damage, and that the beam deteriorated over a period of time. However, the engineer also opined that it was likely that the beam also experienced a sudden drop at some point, in addition to the gradual sinking that occurred over a period of time. The engineer’s report concluded that shoring of the beam was necessary, otherwise the house would be “at risk of collapse.” The engineer retained by Liberty Mutual, the insured’s homeowners carrier, generally agreed with these findings.

The Liberty Mutual policy contained an exclusion for loss involving collapse caused by mold, wet or dry rot, or insects. However, the policy also contained an endorsement providing that direct physical loss to covered property involving “collapse” of a building or any part of a building was covered in certain circumstances.

“Collapse” was defined by this endorsement to mean “an abrupt falling down or caving in of a building or any part of a building with the result that the building or part of the building cannot be occupied for its current intended purposes.” The endorsement also provided that a building that is in danger of falling down or caving in is not considered to be in a state of collapse. Moreover, the endorsement provided that a part of a building that is standing is not considered to be in a state of collapse, even if it has separated from another part of the building, or shows evidence of cracking, bulging, sagging, bending, leaning, settling, shrinkage, or expansion.

This endorsement provides coverage for loss caused by collapse caused by, among other things, decay, or damage from insects or vermin, that is hidden from view and unknown to an insured prior to the collapse.

The question before the Court was whether the insured was entitled to coverage under this collapse endorsement. The Court began its analysis by considering whether the property had suffered a “collapse,” as defined by the endorsement. In ruling that it had not, the Court reasoned that the insured did not establish an “abrupt falling down or caving in” of the living room floor. Indeed, the Court noted that neither the plaintiff, nor her two adult children who resided at the premises, had any knowledge as to when or how the floor dropped.

The existence of a “collapse” being the first dispositive point of inquiry under this traditional collapse endorsement, the Court concluded its analysis, since it was decided in the negative. The Court did not consider the policy’s exclusions for damage caused by wear and tear, deterioration, or vermin—although those exclusions likely would have been independently dispositive themselves.

Editor’s Note: Claims involving collapse are analyzed by first appreciating the general policy exclusion for collapse. From there, the attention goes to the “additional coverage—collapse” provision, if there is one. If so, the next question is whether a “collapse,” as defined by the additional coverage provision (or in this case, endorsement), applies. Importantly, the endorsement itself provides that the definition provided only applies with respect to the additional coverage provision—not necessarily to “collapse” as it is used in the exclusion. This Court’s analysis seems spot on, as it specifically notes on page 11 of the decision that the insured “fail[ed] to establish a ‘collapse’ for purposes of [the collapse coverage extension].” Had the insured established that this was a “collapse,” as used in the endorsement, the next question would have been whether the decay/vermin damage was truly “hidden from view.”


Ryan P. O’Shea

[email protected]


03/18/24       Gold Coast Commodities, Inc. v. Travelers Cas. & Sur. Co.
United States Court of Appeals, Fifth Circuit
Undefined “Irritant or Contaminant” in Pollution Exclusion can be Ambiguous Under the Right Circumstances, but Not where Claim Involves Wastewater

Gold Coast converts used cooking oil and vegetable by-products into animal feed ingredients. In June 2016, Gold Cost received a commercial general liability policy from Travelers. The policy renewed through June 2019. Gold Coast’s co-owners and principals, Thomas Douglas and Robert Douglas, were also insured under the policy. In July 2018, the City of Brandon filed a suit against Gold Coast, and its principals, alleging that the company dumped significant amounts of high-temperature, corrosive, low-pH wastewater into the City’s sewer system. The City sought damages from the negligence that resulted in the “discharge” or “release” of “pollutants.”

In June 2021, the City of Jackson filed a suit against Gold Coast, and its principals, alleging the company dumped “high temperature and corrosive” industrial waste into the City’s sewer system. Jackson also sought recovery for negligence resulting from the “discharge” or “release” of “pollutants”. In July 2018 and June 2021, Travelers denied coverage for the claims citing the “pollution exclusion”, which reads:

“[Travelers] will not be liable for Loss for any Claim based upon or arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of any Pollutant.”

The policy defined “pollutant” as “[A]ny solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.”

Travelers removed the actions to federal court and moved for summary judgment on the duty to defend and indemnify Gold Coast for the suits. The district court granted summary judgment on the pleadings. Gold Coast and its principals appealed.

The Fifth Circuit interpreted Mississippi contract law and affirmed the district court decision. The court noted that Mississippi law requires reading the policy as a whole and giving each provision of the policy meaning. It reasoned that the “pollution exclusion” unambiguously excluded coverage for the actions and noted that while the Mississippi Supreme Court had found a similar exclusion ambiguous, there were factual distinctions in the present matter.

The heavily referenced state court case, Omega Protein, Inc. v. Evanston Ins. Co., 336 So. 3d 128 (Miss. 2022), involved the explosion of a large metal tank that contained stickwater, which is composed of water, fish, oil, and fish solids. The explosion killed a contractor welding the tank. The gases of methanethiol, hydrogen sulfide, and methane emitted from the tank, as well. The insured argued those gases are naturally found in nature and were contained in the tank, not contacting, contaminating, or irritating anything. The Fifth Circuit noted that the Omega Protein court found “irritant or contaminant” was not defined in a similar exclusion, and created an ambiguity.

It nonetheless determined Omega Protein turned on a unique fact as to how a substance becomes an “irritant or contaminant.” It further explained the state court found that a substance can be an irritant or contaminant at its core or through contact. The first method is that no matter how the substance is contained, it either irritates or contaminates; and the second method is that substance becomes an irritant or contaminant through a process or change, such as crude oil. The Fifth Circuit further pointed out that Omega Protein’s claimant sought recovery for the explosion itself, not contact with the gases. The Omega Protein decision also found that the gases were not an irritant or contaminant while contained within the tank and only became so upon ignition, presumably through the welding. Thus, the Fifth Circuit found the facts of Omega Protein were unique and distinguishable.

The court then compared the respective complaints to the pollution exclusion’s language. In doing so, it found the deliberate discharge of toxic industrial water is the exact activity the exclusion was intended to apply to. It further found that there was not a reasonable interpretation that the wastewater was not an irritant or contaminant, much unlike the gases involved in Omega Protein.


Robert J. Caggiano

[email protected]


03/26/24       Perez-Torres v. Cocoa Point Car Service, et al 
Appellate Division, First Department
First Department Unanimously Affirmed, Without Costs, a Decision Granting Summary Judgment in Favor of Defendants where Evidence Presented Sufficiently Showed that Plaintiff Did Not Suffer a Causally Related Serious Injury and Plaintiff’s Evidence Failed to Create an Issue of Fact

Plaintiff appealed from an Order of Supreme Court, New York County, which granted Defendants’, City Bronx Leasing and Arelis Sanchez, motion for summary judgment dismissing the complaint on the ground that Plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). On review, the First Department unanimously affirmed 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 Plaintiff, Gerald Perez-Torres, was a passenger in a vehicle owned by Defendant, City Bronx Leasing, and operated by Defendant, Arelis Sanchez, which was impacted by a vehicle owned by Defendant, Cocoa Point Car Service, and operated by Defendant, Moustapha Diagne. As a result of the accident, Plaintiff alleged serious injuries to his left knee, which required surgery, and his cervical spine.

At the trial level before Supreme Court, New York County, Defendants, Sanchez and City Bronx Leasing, moved for summary judgment dismissing the complaint, arguing that Plaintiff had not proved he suffered serious injury pursuant to Insurance Law § 5102(d). The court agreed, and granted Defendants’ motion, prompting appeal by Plaintiff.

On review, the First Department confirmed the lower court’s finding that the moving Defendants met their initial burden on summary judgment. Specifically, Defendants submitted a report of an IME physician who had examined Plaintiff and opined that he had a normal orthopedic examination with no findings of limitations nor evidence of disability.

Notably, the First Department also found, contrary to arguments made by Plaintiff on appeal, that Defendants’ submission did not raise an issue of fact warranting denial of their motion. The moving Defendants submitted records from Plaintiff’s osteopath and orthopedic surgeon but did so to refute Plaintiff’s claim that his injuries were caused by the subject accident. Specifically, these records document a prior surgery Plaintiff had to his left knee before the subject accident, and also that his provider had found Plaintiff to have had full range of motion in his cervical spine and left knee six months after the subject accident. It was found that this evidence belied any claim by Plaintiff that his injuries were serious or caused by the accident.

Lastly, it was found that Plaintiff failed to raise an issue of fact in opposition. First, Plaintiff’s physicians failed to address his prior knee surgery during their causation opinions, nor explain why any limitation found was not related to that prior injury. Further, Plaintiff’s physicians who opined to range of motion deficits in more recent exams failed to reconcile such findings with normal examination from other providers which occurred six months after the subject accident. The First Department concluded that the physician’s opinion in range of motion limitations three years later, in light of the lack of findings or treatment within that initial six-month period following the accident, made any argument that claimed injury was causally related to the accident “speculative”.

Accordingly, the First Department unanimously affirmed the Supreme Court, New York County’s, Decision granting summary judgment in favor of the moving Defendants, dismissing the complaint against them, without costs. 


Joshua M. Goldberg

[email protected]


03/22/24       Freitas v Ahmed
Appellate Division of the Supreme Court, Fourth Department
Diminution in Market Value – 2014 GMAC Sierra 1500 Not Special

Plaintiff’s 2014 GMAC Sierra 1500 was damaged when it was rear ended by a vehicle owned and operated by the Defendant. Although Plaintiff was paid $8,437.03 from the Defendant’s insurance company to repair his vehicle, Plaintiff contends that he is further entitled to recover the diminution in value of his vehicle caused by the mere fact that the car had been in an accident. The Supreme Court granted Defendant’s motion for Summary Judgment and the Plaintiff appealed. In affirming the Supreme Court’s dismissal of the lawsuit, the Appellate Division relied upon its long-standing general rule that where repairs fully restored the vehicle to its pre-accident condition and the only basis for claiming a vehicle’s value was diminished only because the car had been in an accident, then the diminution in resale value is not to be taken into account when measuring damages.

In this case, the car was a 2014 GMAC Sierra 1500 pickup truck. Unlike the exception to the rule, where a car actually appreciates in value after purchase, the 2014 GMAC Sierra 1500 is, not surprisingly, not a vehicle that appreciates in value  - at least not yet. Perhaps in 40 years the 2014 GMAC Sierra 1500 will be as coveted as the 1967 Shelby Mustang GT350 is today, but that doesn’t do it for the plaintiff here.


Isabelle H. LaBarbera

[email protected]


03/15/24       Clark v. Preferred Mut. Ins. Co. 
New York State Supreme Court, County of Monroe
Court Dismisses Complaint Against Insurer and Broker Finding No Breach of Common-Law Duty and No Special Relationship

The plaintiff had renovated her home, increasing the square footage by roughly fifty percent. However, she failed to advise her insurance agent or broker about the addition. On January 28, 2021, the house was damaged by a fire. The claimed losses to plaintiff’s house and personal property were substantially larger than her insurance coverage limits, which did not incorporate the increased square footage of the house.

Following the loss, the plaintiff filed an action against her broker and insurer, alleging the broker negligently procured insufficient insurance coverage and the insurer should be held vicariously liable for the alleged negligence of the broker.

Both the broker and insurer moved for summary judgment. The broker and insurer supported their respective motions by arguing no compensation was received from the plaintiff above the premium payments, the plaintiff never made a specific request regarding raising her policy limit, and never disclosed that she had dramatically increased the home’s square footage through renovations.

The Court’s decision iterates the common-law duty placed on insurance brokers to obtain requested coverage for their clients within a reasonable time. However, under this obligation there is no continuing duty to advise, guide or direct a client to obtain additional coverage. A common-law breach requires an insured to establish a specific request was made to the broker, and the request was not provided for in the policy.

The Court points to further legal precedent highlighting that a heighted duty does not apply to insurance agents or brokers unless a special relationship exists. To establish the existence of a special relationship, it must be shown that (1) the agent receives compensation for consultation apart from payment of premiums; (2) an insured relied on the expertise of an agent in respect to a specific interaction regarding a question of coverage; or (3) there is a course of dealing, over an extended period of time, which would have put objectively reasonable insurance agents on notice that their advice was being sought and relied on. 

The plaintiff made a cross-motion for summary judgment, seeking an order that the broker was acting as an agent for the insurer. In addition, the plaintiff argued a heightened duty should be imposed on brokers to ensure inherited clients have sufficient coverage after purchasing a book of business from another agency. In support, plaintiff offered an expert affidavit of an individual with 34 years of experience in the insurance industry. The expert opined that when an insurance agency purchases a book of business from another agency, there is a duty to ensure that the purchasing agency is procuring proper coverage for inherited clients. However, the plaintiff did not cite any legal authority supporting these claims, and the expert provided no basis for his statements, either in the record or in industry standards. The Court found the expert opinion to be conclusory, speculative, and insufficient to create a triable issue of fact. 

Accordingly, the Court granted the broker and insurer’s respective motions for summary judgment and dismissed the complaint, finding that both defendants met their burden in establishing neither breached any common-law duty owed to plaintiff, and no special relationship existed to warrant imposition of a heightened duty.


Heather A. Sanderson
Sanderson Law
Calgary, Alberta

[email protected]

Editor’s Note:  As discussed in our cover note, Heather A. Sanderson was appointed as KC (Kings Counsel). Please see the cover note for a discussion of this superb achievement.  We have granted her dispensation for submitting an article this issue!.


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