Coverage Pointers - Volume XXV No. 3

Volume XXV, No. 3 (No. 650)
Friday, July 21, 2023
A Biweekly Electronic Newsletter


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

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

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

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

Coverage Pointers Header


Dear Coverage Pointers Subscribers:

Do you have a situation? We love situations.

I celebrated an anniversary on July 14.  After my 1L year, I started as a 24-year old law clerk at a 45-day old, four-lawyer law firm on July 14, 1977. Forty-six years later, I'm still there and while I don't plan on being here another 46, Hurwitz Fine is still home.

Nice to see StevieB: October 2010

Welcome to our 650th issue of one of your favorite insurance coverage newsletters.  For our new subscribers, and we have a dozen or so newbies since our last issue, Coverage Pointers, the newsletter itself, is attached.  This is our cover note, where our dozen plus editors (and bless our editors for their continual efforts) add some personal and professional commentary, and where I (try to) to entertain you with highlights and newspaper stories from 100 years ago today.  We get to see how the world hasn’t changed as much as we think it has.

I am on my way to the FDCC Annual Meeting at the Broadmoor in Colorado Springs.  While I hate to travel in the summer – and leave the beach – I always enjoy the time with my colleagues and friends at the Federation and the professional development that takes place throughout the week.

The summertime is a quiet time for the appellate courts in New York.  It is rare to see more than a handful of judicial opinions coming out of those courts, so this issue doesn’t offer our usual robust array of summaries.  For our new subscribers, welcome, and don’t take this issue as reflective of what we have seen between the end of September and the end of June.  We do have some interesting cases to review, from New York, other states and from our friends up north (thanks, Heather Sanderson).

CGL Primer

Through the Federation of Defense & Corporate Counsel, the FDCC, my colleague in Indianapolis, Lewis & Wagner partner, John Trimble, and I are running a CGL Primer presentation in mid-August.  By the time you receive this note, the August date is likely to be fully subscribed with 100 offices throughout the country doing a “Lunch and Learn”. We’re considering a second session, if there is sufficient interest.  Let me know and I’ll start to keep a list.  Here was the announcement:

Insurance Coverage 101: A CGL Primer
Live Zoom Webinar – Lunch & Learn
August 16, 2023: 1:30PM - 2:45PM ET
Speakers:  Dan Kohane John Trimble

Does your firm or company have attorneys, summer associates, or claims professionals that are just learning or need a refresher on how to approach insurance coverage questions and prepare coverage opinions? The FDCC Insurance Coverage Section is pleased to present a Zoom primer on Commercial General Liability coverage with a focus on a practical approach to liability coverage analysis, including a repeatable process to consider the policy grant, exclusions, and policy conditions. This 75-minute interactive presentation also discusses how to craft disclaimers and reservation of rights letters. Presented by the FDCC's two seasoned coverage attorneys, Dan Kohane, from the New York firm of Hurwitz Fine P.C., and John Trimble, from the Indiana firm of Lewis Wagner, LLP, the Insurance Coverage Section is offering this as the first in a series of programs meant to assist law firms and insurers alike, in handling insurance issues.

The presentation will be via Zoom from 1:30 p.m. to 2:45 p.m. Eastern Time on Wednesday, August 16, 2023. Written materials will be circulated electronically. We encourage firms with multiple registrants to view the broadcast in a conference room. To preregister, contact either Dan at [email protected] or John at [email protected]. You will then receive a link for the presentation. Please register today as seating

is limited!

It is anticipated that this lecture will yield one hour of CLE skills credit in New York and will be appropriate for both newly admitted (admitted two years or less) and experienced attorneys. You may wish to check with your own state to see whether those CLE credits will be recognized in your state.


Training and More Training:
Schedule your in-house training for 2023.  Need a topic?  Here are 160 or so coverage topics from which to choose.


Need a mediator?

Coverage mediation is a thing!  Subject matter expertise may be useful.

Hey coverage lawyers.  Hey professionals. Have you and a friend, adversary, or lawyer for whom who have respect reached a stalemate on a coverage dispute?  Look, we know each other.  We know that.  We don’t want to litigate every coverage disagreement.  Why?   Because the position we oppose today may be the one we advocate tomorrow.  Face it.  We all understand that.

Let me help mediate your disagreement to see if there is some mutual agreement, we can reach that will not box us into a corner. Reach out to me.  I will be pleased to mediate your dispute.

My partners, Mike Perley and Ann Evanko, are also available to help resolve other challenges.

You don’t want adverse precedent that will bite you next time you might have a slightly different view on coverage issues. You don’t want to spend tens of thousands of dollars to litigate a coverage issue before a motion judge or appellate justice that knows as much about insurance coverage as you do about nuclear physics.  For those in the Western District of New York, I am certified by the Court and on the WDNY Mediation Panel as are Mike and Ann.

Try mediation.



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

  • Premises Pointers:  This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant, and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!).  Please drop a note to Jody Briandi at [email protected] to be added to the mailing list.

  • Labor Law Pointers:  Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at [email protected] to subscribe.

  • Products Liability Pointers:  Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving.  Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies.  This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework, and governmental agencies.  Contact Brian F. Mark at [email protected] to subscribe.

  • Medical & Nursing Home Liability Pointers.  Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Chris Potenza at [email protected] to subscribe.

And now a word from our editors:

Peiper on Property (and Potpourri):

Back from a great week of connecting with colleagues at IADC’s annual meeting.  An important focus of that meeting, and the undersigned, is on the increasing sophistication of Artificial Intelligence and how that technology can be harnessed for increased efficiency and productivity.  It will be an interesting decade to come, as the current technology has the possibility of being far more transformative than the internet and email were a generation ago. 

As for the column this week, take a moment to review the Yan decision.  The Appellate Division stops a creative defense counsel from getting an authorization to speak to plaintiff’s treating physician’s assistant where the information sought was not related to treatment but rather the plaintiff’s description of the accident.  A thought-provoking read if nothing else.


Steven E. Peiper

[email protected]


Half-Blind Justice – 100 Years Ago:

Press and Sun-Bulletin

Binghamton, New York

21 JUL 1923

Large Compensation

Given for Loss of Eye

Granville Beers Awarded Amount Estimated at between.

$1,000 and $2,000 at Hearing by Referee Richards Here

Among the 98 cases on the calendar of the compensation hearing held yesterday afternoon at the courthouse by Referee W. C. Richards of the State Industrial Commission was the application for compensation filed by Granville Beers, 2 Arthur Street, who received an award for the loss of an eye. It is estimated that he will receive from $1,000 to $2,000 compensation for his injuries, which were sustained while at work for the Endicott Johnson Corporation in the factories at Johnson City.


Wilewicz’ Wide-World of Coverage:    

Dear Readers,

This week once more finds us traversing the Great State of New York, as appearances and oral arguments are increasingly (finally) in person more often than not. It’s really a far better experience to physically appear before a Court rather than talking at a screen. It’s why a lot of us went to law school in the first place. So, it’s been nice to get back out there and see the world.

Now, this time in the Wide World of Coverage, we bring you a few far-flung decisions of interest. In the annexed edition of CP, we have one from the Fifth Circuit (Louisiana law), Third Circuit (Pennsylvania), and Eleventh Circuit (Florida). Check them out, along with all our other columnists.

Until next time,


Agnes A. Wilewicz

[email protected]


75 Years of Seneca Falls – 100 Years Ago:

Democrat and Chronicle

Rochester, New York

21 JUL 1923



Amendment to Federal Constitution

Will Be Urged at Seneca Falls Meeting.

Seneca Falls, July 20.—The seventy-fifth anniversary celebration and conference of the National Women’s Party opened here today with over 300 delegates present representing every state in the Union. All Seneca Falls turned out to welcome the officers and founders of the party at their three-day anniversary here. Many of the leading citizens of this village are the grandsons and granddaughters of the little group of pioneers, who held the first convention here in1848. The greeting given the party was enthusiastic. The principal streets of the village have been decorated with purple, white, and gold, emblematic of the party and the banks of Van Clief Lake prepared in holiday fashion of the official reception.

The first meetings of the day were held this morning. The National Council meeting at the home of Mrs. Mary Hoskins in Cayuga street and the National Industrial Council of the party meeting at Hotel Gould.


Barnas on Bad Faith:

Hello again:

I am back from a fun golf weekend at Peek’n Peak.  Luckily, the nice weekend with friends more than made up for the poor performance on the golf course.  I have really been struggling with my game trying to implement a new swing change lately.  However, the overhauling of my long game does not excuse the constant shortcomings with my short game.  If you have any good tips for chip and pitch shots around the greens, please send them.

I have an interesting bad faith case from the Eleventh Circuit in my column this week that was on a petition for rehearing.  Southern Owners asked for a rehearing considering the Supreme Court’s recent decision in Dupree v. Younger, 143 S. Ct. 1382 (2023), which concerned whether arguments denied at summary judgment are appealable after a trial on the merits if they raise purely legal issues.  Unfortunately for Southern Owners, while the court granted the rehearing, it concluded that the argument raised about the applicability of a policy exclusion to the facts of an underlying loss was not a pure legal issue.  The court otherwise upheld its finding that Southern Owners had acted in bad faith.


Brian D. Barnas

[email protected]


Medium Commits Large Crime – 100 Years Ago:

The Buffalo Times

Buffalo, New York

21 JUL 1923

Kidnaping Charge

Against Mrs. Myers

Mrs. Jean Myers, who came here two weeks ago from Jamestown and took rooms at No. 64 Irving Place, was arrested last night and taken back to that city where she faces a charge of kidnaping.

The prisoner, who is the mother of four children, all less than 10 years old, is alleged to have kidnaped Chester Smith, an 11-year-old boy, on June 28th. She is said to have told police when arrested that she had no intention of stealing the boy, but that she took him for a short while because her own children became so attached to him when they went to school together in Jamestown. She also stated that she wired Mrs. Smith, the boy's mother, asking if she could take the boy with her. Receiving no reply, she says she thought everything was all right.

The woman claims to be a spiritualist and to have the ability to give readings.

Editor’s Note – Seems oxymoronic to me, that a medium would commit a large crime.


Lee’s Connecticut Chronicles:

Dear Nutmeg Newsies:

This may not be news where you are but take it from me—it’s hot. Everywhere is hot. I’ve been on the road seemingly non-stop, and it’s been hot. London-hot. Milan-hot. Venice, hot. Miami, Buffalo, Atlanta-hot, hot, and somehow hotter. There’s been no relief from the heat, and seemingly no escaping the poor air quality brought on by the Canadian wildfires. Heat waves are raging across the country and across the globe. I read an article which asked, ‘Is this the coolest summer of the rest of your life?’

Let’s hope not. Save the planet and keep keeping safe.


Lee S. Siegel

[email protected]


Doomed To Repeat – 100 Years Ago:

The Buffalo News

Buffalo, New York

21 JUL 1923




WASHINGTON, July 21. —Highly significant admissions fell yesterday from the lips of George H. Moses of New Hampshire, old guard member and chairman of the Republican senatorial committee just returned from a trip through five western states Including Minnesota.

Briefly he said: 1.—There will be a third-party presidential nominee in 1924 and the Republicans at the next election can “handily lose control of the senate.

2.—Radicalism in the middle west is so infectious it can’t be checked but, there is little danger of it in the east.

3.—There is much support for Henry Ford to head a third party and if the Independents will nominate him early enough the Democrats will "break their necks" trying to find excuses to endorse him.

4.—The Republican party only ones refused a president renomination and then the new man was defeated from which the moral is to be drawn that if anybody considers the G.O.P. will be weak with Harding at the head of the ticket it will be weaker if someone else is placed there.

Senator Moses said if the Republican nominating convention were held tomorrow President Harding would be renominated without opposition. The same will be true next year, he predicted, adding that “we have a president on the record of whose administration we must go to the country."

Editor’s Note:  Moses was mostly right.  In the 1924 presidential election, Calvin Coolidge was the successful Republican candidate, John Davis was the Democratic candidate and Robert La Follette was the Progressive nominee, winning 13 electoral votes from his home state of Wisconsin.  The GOP picked up three seats in the Senate, extending their hold. Henry Ford put his campaign in reverse and did not run.


Kyle's Noteworthy No-Fault:

Dear Readers,

Hope everyone is enjoying the warm weather lately! This week’s case involves a motion for summary judgment on the grounds that plaintiff-assignor failed to appear for four duly and timely scheduled examinations under oath. In response, the plaintiff argued that the defendant failed to establish timely denial, in that the insurer’s denial exceeded the thirty-day time period from the second EUO no show of the plaintiff.

Until next time,


Kyle A. Ruffner
[email protected]


Sentencing to be Whipped Up – 100 Years Ago:

The Buffalo News

Buffalo, New York

21 JUL 1923



LUMRERTON, N.C., July 21.—This case in which three men are standing trial here on charges growing out of the flogging of two white women near Proctorville last April by robed and hooded band of 18 men will go to the jury today at the conclusion of arguments by opposing counsel.

Presentation of evidence was concluded yesterday after Mrs. Mary Watson, one of the women who were whipped, had testified that her husband, Samuel Watson, a Proctorville policeman, who is not under indictment “and his Klan were responsible."  Mrs. Watson testified that B. M. Lawson, Fairmont chief of police, one of the defendants, swung the strap across the backs of herself and Mrs. Hattie Purvis.


Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers’ Subscribers!

Shout out to my wife, Lorraine, who stepped up to the plate in a big way this past weekend and helped a community leader, a single mother, and dog, knocking it out of the park. Lorraine volunteers at the City of Buffalo Animal Shelter (who can say no?), helping dogs in need and making every effort to get them adopted. The seed for this endeavor was planted long ago, after navigating the twists and turns of dog adoption ourselves in 2014 and caring for our beloved Colby for eight long years, before he left us last summer. Although her goal was to become a dog walker, it does not take a rocket scientist to know that we quickly grow connected to our furry friends. We were foster parents for Buffalo’s Christmas storm this past year, and foster fails the following week, adopting our Maggie-Moo. She has contemplated the next foster ever since, since fostering is not only about caring for a fur-baby for a short time, but obtaining an in-depth understanding of who the dog is. Our house poses unique challenges for dogs, and it goes a long way towards adoption knowing that a foster dog was great with an existing dog or your kids.

Fast forward to this weekend, and another volunteer—who has his hands in all things that this community needs—needed our help. Due to an allergy, he was unable to keep his most recent foster, a six-month-old puppy who my wife recalled spent his days at the shelter cowered in a corner. He couldn’t go back, and that is where she stepped in and stepped up. Although our time with Marley was short lived, she now has a forever home with a wonderful family and, from what I hear, they rescued each other when it matters most.

This edition, I cover a recent business interruption decision involving extra expense coverage associated with the loss of data used for financial auditing purposes. Riveting stuff and the more you know…

Until next time,


Ryan P. Maxwell

[email protected]


Veiled Justice – 100 Years Ago:


Elmira, New York

21 JUL 1923

We Women

“Defendant Dismissed!”

By Betty Brainerd


A very unusual verdict was rendered recently in a Brooklyn court.  A young man looking at a movie flirted with a young woman sitting next to him and was arrested. In court the magistrate said the young woman was as much at fault as the young man.

Addressing the young woman, he said: "You are very beautiful. It is the nature of young men to be attracted to beautiful girls. Since this is so I cannot blame the defendant.  He isn't at fault. At the same time, you are not to be held responsible. The responsibility is Nature's. Young man, stop flirting. I forgive you this time.  Don't let it happen again.  Young woman you should wear a veil. You are very pretty. This young man disturbed the peace, and you caused him to. Case dismissed."


Rauh’s Ramblings:

On parental leave.


Patricia A. Rauh


Smiting or Coincidence? – 100 Years Ago:


The Tablet

Brooklyn, New York

21 JUL 1923



Faced by a charge of having murdered his wife to obtain the insurance a man shouted, “May God strike me dead if I am guilty.” He immediately fell dead in the witness box. People will now judge that he was guilty and that he was punished for a false oath.  It does not follow that God struck the man down for a lie. It does not even follow that the man lied. Coincidences equally strange have happened before. We have no right to judge the man’s guilt on that incident alone, as strong as the evidence may seem. And if we are not entitled to adjudge the man a murderer in circumstances which seem to point the finger of guilt at him so infinitely still less, are we entitled to judge one another by the petty things which some Christians do judge one another. Think it over.


Storm’s SIU:

Hi Everyone:

Two interesting cases for you this edition:

  • First-Party Property Action Based Upon Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing are Subject to a Two-Year Limitations Period.  Insured’s Equitable Estoppel Argument Fails.

  • Court Denies Defendants’ Motions to Dismiss Indictments Under Federal Criminal Fraud Statutes Against Medical Providers for Conspiring to Commit Healthcare Fraud by Materially Misrepresenting to No-Fault Insurers That They are Owned and Controlled by a Physician, Thereby Wrongfully Obtaining Payment for Medical Services.

I hope you’re having an awesome summer.  It’s flying by.  Talk to you again in two weeks.


Scott D. Storm

[email protected]


Get Insured, Businessmen Are – 100 Years Ago:


Dunkirk Evening Observer

Dunkirk, New York

21 JUL 1923


Businessmen Know

That it would be dangerous to attempt a manufacturing project without the guarantee of insurance. Factories would be idle if investors were asked to purchase the stocks and bonds of concerns that took chances with disaster. Is your property protected? The service that you will receive from this agency plus a policy are certain guarantees of protection.

KAISER & STARR     425 Central Ave., Phone 3457 Dunkirk, N. Y.


Fleming’s Finest:

Hi Coverage Pointers’ Subscribers:

Does the subjective intent of a person committing an assault or battery matter for an exclusion for bodily injury arising from assault or battery? This week’s case from the Ohio Supreme Court considers whether a provision in a commercial general liability insurance policy excluding coverage for bodily injury arising from assault or battery can be nullified based on the mental state of the person who committed the assault or battery. Before you answer that the assault or battery must be expected or intended from the standpoint of the insured, make sure you read the policy language!

Stay cool,


Katherine A. Fleming

[email protected]


Narrow Minded Thinking Harms Dixieland – 100 Years Ago:


Elmira, New York

21 JUL 1923

A White Majority

South Carolina’s whites are in the majority this year for the first time in more than a century. The negro exodus to the industrial centers of the North, stimulated by business prosperity and the demand for unskilled labor, has swung the balance and the state again takes rank among those where white citizens of native American stock are predominant numerically as in business and politics.

Since the days of reconstruction, the whites of South Carolina, embittered by their political and economic woes in that period, have felt constrained to greater efforts to maintain their supremacy than helping to develop the latent possibilities of the blacks who dwelt among them.  Now, with a clear majority of their own stock among the voters, they have the opportunity to undertake the work too long left undone and to attempt it in a new spirit.

In Northern centers of population, Americanization work among the newcomers from overseas progresses steadily, if slowly, and there can be no question of its value not only to the immigrants but also to the Americanization workers themselves and to their communities. The problem of the South is, in the last analysis, somewhat similar, and persistent effort toward its solution cannot fail to be productive of gratifying results, however slowly those results may come.

Circumstances beyond the South’s control have hampered the work for too long. The shift in population should make the endeavor to this end increasingly productive, and the whole nation will profit with the South as it develops.


Gestwick’s Greatest:

Hi Readers!

Fresh from a wonderful time at Dan Kohane’s house on Crescent Beach in Canada, where we enjoyed drinks, Canadian bacon, and great conversation, I am now gearing up for apartment hunting. If anyone knows of availability in the Buffalo area for around September 1st, let me know.

I have a useful case out of New York County this week. It stands for the proposition that privity requires privity. What? Yes, privity-based additional insured provisions require the party seeking additional insured coverage to have been in direct privity of contract with the named insured on the policy. What about intended third-party beneficiaries, like when the general contractor agrees with the subcontractor that the subcontractor will add the general contractor and the owner as additional insureds? Isn’t the owner in privity with the subcontractor? No. Only signatories to the trade contract are in privity with each other. These very questions were encountered in this week’s case, where it was held that only the general contractor, not the owner, and not a company related to but separate from the general contractor, was entitled to additional insured coverage.

A simple yet important lesson this week. I like simple lessons. See you in two!



Evan D. Gestwick

[email protected]


Milk on Tap, Here to Stay? – 100 Years Ago:

Times Union

Brooklyn, New York

21 JUL 1923

New Milk Station

Proving Popular

The new milk station on Fourth Avenue, near Nineteenth Street, of the Mayor's Committee of Women, is well patronized these warm days and that it was a necessity is attested by the number of babies and children who are regular customers. The milk is put up in small bottles and served to the little ones with straws. The daily average consumption is between sixteen and seventeen crates of forty-two bottles each.

Many of the little customers inquire of the attendants as to whether the booth will be open during the winter, which is an indication of the popularity of the station and its necessity.


On the Road with O’Shea:

Hey Readers,

I’m back from vacation, and somewhat rested. I hope everyone is enjoying this summer so far as winter is in the back of my and every WNYer’s mind.

This week I have a case from the Second Department concerning an insured’s failure to receive an insurer’s consent prior to settling an uninsured motorist claim. In the auto policy world that is a no-no, especially where there is regulation regarding such.


Ryan P. O’Shea
[email protected]


You Can Get Away With Murder – 100 Years Ago:


The Times

Munster, Indiana

21 JUL 1923

Murder Now Safe Trade Say Insurance Men,

Who Cite Unsolved Mysteries


NEW YORK, July—Where is the old-time detective of fiction—Holmes, Kennedy, and Carter?

"Vacationing," say American insurance men through their official organ here, announcing the murder record for the United States for 1922.

"Murder has indeed become a safe trade," the investigators for the leading insurance companies of the country charge.

They point to the figures they have compiled, showing the murder rate to be 9 for every 100,000 population.

But say the insurance men through their joint official publication, “The Spectator," "it is not the number which alarms so much as it is the ease with which the murderers appear to escape the law.

Attention is called to the number of unsolved crimes of recent months.       


Louttit’s Legislative and Regulatory Roundup:


Dear All,

New York’s legislative activity is minimal in the last two weeks of this summer month. I’ll report back to you two weeks from now, hopefully with some news on New York’s insurance industry.




Robert P. Louttit

[email protected]


In-Laws, Lovers, and Affairs…Oh My! – 100 Years Ago:

The Fort Wayne Sentinel

Fort Wayne, Indiana

21 JUL 1923

Advice of the


(By Beatrice Fairfax).

Family Interferes.

Dear Miss Fairfax:

          I am a girl of 23 and met a young man who is five years my senior at my cousin’s house last April.  We have been going out since.  Last week he told me he had quarreled at home.  This young man was keeping company with a girl and broke off before he met me.

          Now his people want him to make up and marry this girl.  He refused.  I told him he shouldn’t come to see me anymore and that he should make up with the other girl.  We parted, but a week later he came to see me again and said it was impossible to leave me, as it would break his heart.  Do you think I did wrong by telling him to go back to the other girl?  I love him very much, but I am afraid that if I do marry him his people will make it hard for me.


Dear reader:  The man’s people don’t know you, so naturally they take no interest in you.  But don’t conclude that they would not grow fond of you if they knew you.  Since the man and you care for each other and are mature enough to understand your own feeling, why martyr yourself by trying to force him to return to a sweetheart in whom he had lost interest even before he came to know and love you?


Rob Reaches the Threshold: 

Dear Readers,

It has been a trying few weeks since we last touched base. My golf game has gone in the wrong direction, my beloved Yankees currently sit in last place in the division standings, and so-called “medical experts” denied my request to donate my big toe to Aaron Judge so he can save our season … it’s tough out here. On the bright side, HF recently had their best win of the season on the softball diamond.

Much like Aaron Judge, the judges of New York’s Appellate Divisions have not been active recently. That means that I have nothing worthwhile to share with you all this issue on Serious Injury.

I’ll be back in two weeks. Until then, take care.


Robert J. Caggiano

[email protected]


Minn. Men, Fewer Every Year – 100 Years Ago:

The Miami News

Miami, Florida

21 JUL 1923



(By Associated Press)


          STILLWATER, Minn., July 21.—Thirty-four place arranged at one long table about which 34 chairs, all but four of them draped with black, was the setting in the low ceiling dining room of the old Sawyer house here today, the scene of the 39th annual sad banquet of the “last man’s club.”

          Three surviving members of this quaint organization, which for 38 years have met on the anniversary of the battle of Bull Run, July 21, sat at that table today.  The fourth member, Emil Graff, of St. Cloud Fla., who was unable to attend, wrote his companions he must spend the remainder of his years in a wheelchair.

          The unopened bottle of wine, a gift to the club in 1886, which will be drunk by the last survivor in a toast to his departed comrades of the Company B., First Minnesota Infantry, was brought from the safety deposit vault of a bank and graced the center of the table where it has reposed during each banquet for the last 37 years.

          John S. Goff of the Minnesota solders’ home; Peter Hall of Atwater, Minn., and Charles Lockwood of Chamberlain, S.D., attended the banquet today.  Last year there were five.


North of the Border:

As I type these words, I am on my way to the FDCC Annual Meeting in Colorado Springs. It will be a great time to catch up with friends, enjoy top notch CLE and have some fun. Very much looking forward to it.

When you are travelling this summer, are you tempted to take that scheduled jewellery out of the safety deposit box and travel with it? Have a look at my column before you do.



Heather A. Sanderson

Sanderson Law, Calgary, Alberta

[email protected]


Headlines from this week’s issue, attached:

Dan D. Kohane

[email protected]

  • Unclear Whether Project Fell within Master Agreement Requiring AI Coverage and Indemnification of whether Project Stood Alone and Apart



Steven E. Peiper

[email protected]



Agnes A. Wilewicz

[email protected]



Brian D. Barnas

[email protected]

  • Primary Insurer’s Delayed Investigation and Failure to Tender Policy Constituted Bad Faith in Equitable Subrogation Action



Lee S. Siegel

[email protected]

  • Growth of Trees, Shrubs Exclusion Bars Water Backup Claim 
  • Connecticut UM/UIM is Person Focused, Not Vehicle Focused 


Kyle A. Ruffner

[email protected]

  • Court Grants Insurance Company’s Motion for Summary Judgment Where Plaintiff Assignor Failed to Appear for Four Examination’s Under Oath


Ryan P. Maxwell

[email protected]

  • Extra Expense Coverage Found for Pre-Pandemic Business Interruption Claim Involving Audit Expenses After Data Loss Due to Power Surge



Patricia A. Rauh

  • On Parental Leave


Scott D. Storm

[email protected]

  • First-Party Property Action Based Upon Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing are Subject to a Two-Year Limitations Period.  Insured’s Equitable Estoppel Argument Fails


  • Court Denies Defendants’ Motions to Dismiss Indictments Under Federal Criminal Fraud Statutes Against Medical Providers for Conspiring to Commit Healthcare Fraud by Materially Misrepresenting to No-Fault Insurers That They are Owned and Controlled by a Physician, Thereby Wrongfully Obtaining Payment for Medical Services


Katherine A. Fleming

[email protected]

  • Based on Policy Language, Subjective Intent Irrelevant for Person Committing Assault or Battery



Evan D. Gestwick

[email protected]

  • Privity Endorsement Requires Privity of Contract

ON the ROAD with O’SHEA

Ryan P. O’Shea

[email protected]

  • Settling Without Consent Is A No-No


Robert P. Louttit

[email protected]

  • Nothing new to report except the amendments to the Wrongful Dealt act, the so-called Grieving Families Act, has not yet been sent to the Governor for consideration.  We continue to wait.



Robert J. Caggiano

[email protected]

  • Nothing worth reporting on this issue. I’ll be back in two weeks.


Heather A. Sanderson

Sanderson Law, Calgary, Alberta

[email protected]

  • Insureds are not Required to Prove Ownership and Insurable Interest as Part of the Claim Process to Claim the Value of Scheduled Property that is Proven on a Balance of Probabilities to Have Been Stolen


See you in August.  The summer is flying by.


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

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

Dan D. Kohane

[email protected]


Agnes A. Wilewicz

[email protected]


Evan D. Gestwick

[email protected]

Dan D. Kohane, Chair
[email protected]

Steven E. Peiper, Co-Chair

[email protected]

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Brian D. Barnas

Eric T. Boron

Robert P. Louttit

Ryan P. Maxwell

Patricia A. Rauh

Diane F. Bosse

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea


Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley

Scott D. Storm

Brian D. Barnas

Dan D. Kohane

[email protected]

Alice A. Trueman


Jody E. Briandi, Team Leader
[email protected]

Diane F. Bosse
Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri
Wilewicz’s Wide World of Coverage

Barnas on Bad Faith

Lee’s Connecticut Chronicles

Kyle’s Noteworthy No-Fault

Ryan’s Federal Reporter

Rauh’s Ramblings

Storm’s SIU

Fleming’s Finest

Gestwick’s Greatest

On the Road with O’Shea

Loutit’s Legislative and Regulatory Roundup

Rob Reaches the Threshold

North of the Border


Dan D. Kohane

[email protected]


07/19/23       Skrok v. Grand Loft Corp.

Appellate Division, Second Department

Unclear Whether Project Fell Within Master Agreement Requiring AI Coverage and Indemnification or Whether Project Stood Alone and Apart

In January 2018 CNR Group ECS, LLC (“CNR”), and “GRT Construction Corp. (“GRT”) entered into a Master Subcontract Agreement. The Master Subcontract Agreement provided that CNR "intend[ed] to engage [GRT] in connection with one or more construction and/or maintenance projects." The Master Subcontract Agreement further provided: "CNR and [GRT] recognize that the projects and/or the scopes thereof are not sufficiently defined to allow the recitation thereof in this Agreement, but that the parties have agreed that this Agreement shall serve as a 'Master Agreement,' the terms of which shall apply to all Projects for which a Work Order (as defined herein) has been executed by CNR and [GRT]."

The Master Subcontract Agreement contained provisions requiring GRT, inter alia, to procure commercial [general liability insurance naming CNR as an additional insured and to defend and indemnify, among others, CNR and the "Owner" for any claims "arising out of [GRT's] activities on the Project, pursuant to a Work Order and/or under this Agreement."

In October 2018, CNR retained GRT to perform chimney renovation work on premises allegedly owned by Grand Loft under a Chimney Rebuilding Agreement. On January 11, 2019, the plaintiff, an employee of GRT, allegedly was injured while performing work on the chimney renovation project. Subsequently, the plaintiff commenced this action against Grand Loft and CNR, alleging common-law negligence and violations of the Labor Law. Grand Loft commenced a third-party action against CNR, asserting causes of action for contribution and common-law indemnification. CNR commenced third-party action against GRT, asserting causes of action for contribution, common-law indemnification, contractual indemnification, and breach of contract based on GRT's alleged failure to procure insurance. Grand Loft commenced a third third-party action against GRT for contractual indemnification.

GRT moved for summary judgment dismissing the third-party complaint claiming that the contractual indemnification and failure to procure insurance causes of action should be dismissed because the Chimney Rebuilding Agreement was not a "Work Order" under the terms of the Master Subcontract Agreement, and, therefore, the Master Subcontract Agreement, including its indemnification and insurance procurement provisions, did not apply to the chimney renovation project. GRT contended that the chimney renovation project was a stand-alone project, governed exclusively by s Chimney Rebuilding Agreement. Additionally, GRT argued that the plaintiff did not allege that he suffered a "grave injury," and, therefore, the causes of action in the second third-party complaint for common-law indemnification and contribution were barred by Workers' Compensation Law § 11.

The court found that the Master Subcontract Agreement is ambiguous as to whether its terms apply to the Chimney Rebuilding Agreement. However, the court should have dismissed the common law claims because the bill of particular established that the plaintiff did not suffer a “grave injury”.



Steven E. Peiper

[email protected]


07/12/23       Yan v. Kalikow Mgt., Inc.

Appellate Division, Second Department

Rule Providing Authorization for Ex Parte Discussion with Treating Physician Does Not Extend to Issues Related to the Factual Cause of the Accident

Plaintiff sustained injury when she fell in or about a tree well on the sidewalk directly in front of defendant’s building.  As a result of the fall, plaintiff sustained injury to her right arm, and commenced the instant action seeking recovery under the theory that the area where she fell was unsafe due to “poorly maintained paver blocks, loose and out of place pavers and exposed tree roots.” 

However, a notation on the medical report detailing her initial evaluation at Presbyterian Hospital states she “tripped over a tree branch” while attempting to enter her automobile.  Defendant, armed with this statement, sought an authorization to speak to the attending physicians’ assistant, and plaintiff’s counsel objected.

The trial court noted that while the Court of Appeals in Arons v. Jutkowicz confirmed opposing counsel had a right to conduct ex parte conversations with a plaintiff’s treating physician, that limited discovery extension did not apply to the circumstances at bar.  The Appellate Division affirmed.

In so holding, the Second Department noted that Arons only discussed the opportunity to explore plaintiff’s medical condition which was at issue by nature of the lawsuit. Here, defendants seek to probe any discussions over how/why plaintiff fell, not what was injured as a result thereof.  As such, it was beyond the scope of Arons and the trial court appropriately denied defendant’s motion to compel



Agnes A. Wilewicz

[email protected]


07/14/23       Weyehaeuser Co. v. Burlington Ins. Co.

United States Court of Appeals, Fifth Circuit

Fifth Circuit Finds No Duty to Defend, Nor Duty to Indemnify, Where There Was No Written Agreement to Add Additional Insured Under Manufacturing Contract

In March 2015, Weyerhaeuser NR Company (“NR”) entered a manufacturing contract with Simsboro. Under the contract, Simsboro was required to obtain CGL coverage and to name “Weyerhaeuser and its Subsidiaries” as additional insureds. Simsboro obtained coverage from Burlington Insurance Co. (“BIC”) and Evanston Insurance Co. (“EIC”), but NR’s parent company, Weyerhaeuser Company, was never added to the policy as an additional insured. Weyerhaeuser and Simsboro were sued in three personal injury cases related to the manufacturing work under the contract. After reaching settlements, Weyerhaeuser commenced an action against BIC and EIC, demanding defense and indemnity costs, and in the alternative, asserting the contract qualified as an “insured contract” under which Weyerhaeuser and NR were intended to be third-party beneficiaries.

The Court recognized the duty to defend under Louisiana law is limited to the “eight-corners rule,” meaning the pleadings in the four corners of the petition or the four corners of the policy trigger the duty to defend. The Court recognized the duty to defend is broad and requires a distinct exclusion of coverage before denying defense. Here, the Court found because Weyerhaeuser was not named as an additional insured in either policy and NR was not mentioned in the underlying lawsuits, there was no duty to defend.

The Court also concluded there was no duty to indemnify. The Court recognized that when determining whether there is a duty to indemnify, extrinsic evidence can be used to show actual liability to recover under the policy. Potential liability need only be shown when (1) there is a written contract; or (2) if the defense is tendered to the indemnitor. The Court found there was no duty to indemnify because there was no written agreement, no duty to defend, NR was never named in the lawsuit, and NR did not participate in the settlement.

The Court rejected the assertion that Weyerhaeuser was left out as an additional insured by “mutual mistake” because Weyerhaeuser did not prove a mutual mistake by clear and convincing evidence. The Court also rejected the assertion that Weyerhaeuser and NR were owed defense and indemnity because they are third-party beneficiaries. The Court found Weyerhaeuser failed to plead facts showing a clear intention for the policies to benefit it under the Louisiana Supreme Court’s test of stipulation pour autrui which requires that “1) the stipulation for a third party is manifestly clear; 2) there is certainty as to the benefit provided the third party; and 3) the benefit is not a mere incident of the contract between the promisor and promise.” Thus, the Court affirmed the District Court’s decision to grant the defendants’ motions for failure to state a claim.

07/07/23       Westminster Am. Ins. Co. v. Sec. Nat’l Ins. Co.

United States Court of Appeals, Third Circuit

Third Circuit Court of Appeals Holds that Additional Insured Endorsement was Ambiguous and Thus Construed Against Carrier Following a Balcony Collapse Case

Two construction workers, Argenis Reyes and Waldy Reyes, sustained serious injuries after a third-floor fire escape balcony collapsed while they were performing maintenance on a building. 4207 Chester Ave owned the property and hired Altman Management Co. to maintain the property. Altman in turn hired AM Marlin to repair a leak in the ceiling. Westminster issued a CGL policy to 4207 Chester Ave. and SNIC issued a CGL policy to AM Marlin. Westminster, brought an action against SNIC, seeking a declaratory judgment that SNIC was required to defend and indemnify 4207 Chester Ave. The District Court granted SNIC’s motion to dismiss for failure to state a claim on the basis that the Employer’s Liability Exclusion precluded coverage for the workers. Westminster appealed.

SNIC issued a CGL policy to AM Marlin containing an Employer’s Liability Exclusion, excluding coverage for injuries to “any insured” arising out of their employment or duties related to the insured’s business. The policy included a Blanket Additional Insured Endorsement and listed Altman in the Additional Insured Schedule. The District Court found the ELE applied and precluded coverage for Argenis because Altman employed Argenis and Altman qualified as an additional insured because it was listed on the Additional Insured Schedule. Thus, it qualified as “any insured” under the ELE and precluded coverage.

On appeal, the Court found the language of the Additional Insured Endorsement ambiguous and construed the language against SNIC. As a result, the Court held additional insured status depended on “whether (1) they are listed in the Schedule and (2) they are “held liable” for AM Marlin’s acts or omissions arising out of work AM Marlin has performed for them.” The Court recognized the terms may be open to more than one interpretation, but because the policy was ambiguous, the terms were to be construed against SNIC. The Court held Argenis was not an additional insured under the policy because he was not liable for AM Marlin’s acts. Thus, because Argenis is not an additional insured, the ELE could not preclude coverage for his loss.


07/03/23       Signor v. Safeco Ins. Co. of Ill.

United States Court of Appeals, Eleventh Circuit

Eleventh Circuit Court of Appeals Analyzes ACV Calculation Under Florida Law

Gina Signor’s 2014 Lexus was a total loss after a car accident. She submitted a claim to her insurer, Safeco, who paid Signor its calculated actual cash value of her vehicle. Signor filed suit, claiming she was entitled to greater payment than she received, asserting Safeco’s calculation of actual cash value violated Florida law and Safeco’s failure to pay her $899 dealer fees breached the policy. Safeco determined the actual cash value of Signor’s vehicle by using the Certified Collateral Corporation ONE Market Valuation system, the “CCC System.” The CCC System found 12 dealer-advertised prices of the same make, model, and year Lexus, accounted for wear and tear, and averaged the prices. Safeco paid Signor $18,701.71 for the actual cash value of the vehicle and $1,235.71 for taxes and state fees, minus her deductible.

Florida statute § 626.9743(5) states an insurer must use an enumerated method to determine actual cash value, which includes using comparable motor vehicles available within the past 90 days, the retail cost from a generally recognized motor vehicle industry source, or the retail cost using two or more quotes obtained by two or more detailers in the area. Signor challenged the actual cash value because (1) it adjusted the prices of comparable vehicles; (2) used the advertised prices of comparable vehicles instead of their actual sale prices; and (3) the Florida statute requires that the electronic database used is a generally recognized source in the motor vehicle industry. Further, she claimed that Safeco must pay the $899 dealer fees she incurred because a policyholder is reasonably likely to incur dealer fees when purchasing a new vehicle.

The Court rejected Signor’s assertions. First, the Court found the “price of a comparable vehicle” does not mean the cost must be equal to the actual price of a comparable vehicle, but rather that the calculation is based on a comparable price. Second, an insurer can use a comparable cost of vehicles available within the past 90 days. It does not require that the comparable cost be based on a purchased vehicle. Third, it found the subsection that provides that the retail cost may be derived from a “generally recognized motor vehicle industry source” provides an example of an electronic database, so the CCC System qualifies. Finally, the Court rejected Safeco’s contention that she was entitled to dealer fees. Citing Mills v. Foremost Ins. Co., the Court found while a policyholder may be likely to incur dealership fees while purchasing a vehicle, they are not “reasonably likely to need to purchase a replacement vehicle from a dealer.”



Brian D. Barnas

[email protected]


06/20/23       Am. Builders Ins. Co. v. Southern-Owners Ins. Co.

United States Court of Appeals, Eleventh Circuit

Primary Insurer’s Delayed Investigation and Failure to Tender Policy Constituted Bad Faith in Equitable Subrogation Action

Ernest Guthrie was an employee of Ernest Gurthrie, LLC. He was performing work for Beck Construction on April 1, 2019, when he slipped from the roof of a house and crashed to the ground. He became paralyzed from the waist down.

Beck was insured by American Builders under a policy with $1 million in liability coverage. Guthrie’s lawyer, Stuart Cohen, put Beck on notice of a claim, and Beck notified American Builders. Cohen determined that Beck had instructed Guthrie to climb on the roof without fall protection, and that his claim was worth between $4-$5 million. On September 5, Cohen demanded that American Builders pay its $1 million policy limit within thirty days in exchange for a release of Beck Construction from liability. American Builders requested an extension, and Cohen granted ten days, placing the deadline on October 14.

Cohen conditioned that demand on the lack of other available insurance.  However, there were two other relevant policies: Evanston provided an excess policy worth $1 million per occurrence to Beck Construction, and Southern Owners sold Ernest Guthrie, LLC a policy that covered $1 million. Southern Owners’ policy contained an endorsement naming Beck Construction as an additional insured for any work Ernest Guthrie, LLC performed for Beck Construction, and making its policy the primary insurer for claims arising from Beck Construction’s work.

American Builders tendered to Southern Owners. A couple weeks later, on September 25, Southern Owners’ counsel sent letters to Cohen, American Builders, and Beck Construction, requesting information and a forty-five-day extension on the September 5 demand. Cohen provided some information requested and granted an extension for American Builders until November 4.  Cohen also explained that he recently became aware of the additional coverage, and indicated Guthrie would only execute a release of American Builders that reserved the right to pursue claims against Evanston and Southern Owners.

Southern Owners requested additional extensions and attempted to meet with the principal of Beck Construction. It eventually met with Beck on December 10 and learned that Guthrie had not requested fall protection and admitted that he “f***ed up” and “stepped off the roof.” Based on that conversation, Southern Owners believed it had a strong liability defense.

American Builders and Evanston eventually tendered their policy limits. Prior to doing so, American Builders asked Southern Owners to do so as the primary insurer. Southern Owners confirmed it would not by the then December 19 deadline. American Builders paid the policy on December 19, and Guthrie provided a release for Beck Construction, American Builders, and Evanston the next day. At that point, Southern Owners ended its investigation.

American Builders sued Southern Owners in Florida state court for common law bad faith under Florida’s doctrine of equitable subrogation. The case was removed, and Southern Owners moved for summary judgment, in part because it claimed its policy did not cover Gurthrie’s injury. The district court denied the motion.  The case then proceeded to trial. The jury returned a verdict in favor of American Builders, and the district court entered final judgment for $1,091,240.82.  Southern Owners moved for judgment as a matter of law arguing that it could not have settled Guthrie’s demand, and that American Builders, standing in the insured’s shoes, breached Southern Owners’ contract by failing to receive its consent before settling with Guthrie. The court denied the motion.
The Eleventh Circuit held that the court below properly denied the motion. It found there was enough evidence to allow the jury to reasonably find that Southern Owners acted in bad faith because it delayed acting on its duty to investigate and settle Guthrie’s claim. Southern Owners unnecessarily delayed its investigation into liability by delaying reasonable efforts to meet with Beck and other employees.

The court next concluded that a reasonable jury could also find that Southern Owners’ bad faith caused American Builders’ damages. The court found that American Builders had no choice but to pay its limits to meet the $2 million demand (along with the $1 million tendered by Evanston) because Southern Owners declined to do so.

The court also rejected Southern Owners’ argument that a reasonable jury should have found that it had no duty to act in good faith because American Builders breached Southern Owners’ contract by not receiving consent before settling the claim.  It reasoned that a reasonable jury could find that American Builders’ failure to receive consent did not substantially prejudice Southern Owners, and a reasonable jury could also find that Southern-Owners did not act diligently or in good faith in attempting to obtain consent.

Finally, in its decision the court considered whether the district court erred in denying Southern Owners’ motion for summary judgment regarding coverage under the policy. The court stated that it normally would not have considered the argument because it was not raised in post-trial motions. However, a recent United States Supreme Court Decision in Dupree permits consideration of arguments denied at summary judgment on appeal if they raise purely legal issues.  However, the court declined to consider the denial of summary judgment because the applicability of the exclusion did not present a purely legal issue.



Lee S. Siegel

[email protected]


07/11/23       Marzo v. Liberty Mut. Group, Inc. 

Superior Court of the State of Connecticut, Hartford 

Growth of Trees, Shrubs Exclusion Bars Water Backup Claim 

Following a bench trial, the court held that a homeowners policy exclusion unambiguously barred a water damage claim. The plaintiff’s home had a water management system surrounding the house which discharges water at a higher height than the connecting pipe which leads to the curtain drain that takes the water into wetlands on an adjacent property. Because the land surrounding the plaintiffs’ house slopes downward and because of the depths at which the portions of the drainage system are located, gravity normally moves the water to the curtain drain. But, following very heavy rains, the curtain drain was blocked and the water backed up through the connecting pipe to the footing drain and then entered the basement through the joint between the concrete wall and floor, damaging the home.  

The policy contained an exclusion for loss caused by “(10) Growth of trees, shrubs, plants or lawns whether or not such growth is above or below the surface of the ground;” The court held that since the blockage in the piping was caused by the growth of organic roots and not by debris, the exclusion applied to preclude coverage. Having found that Liberty’s denial was not erroneous, the court dismissed the bad faith counts. 


07/10/23       Grandpre v. Am. Modern Home Ins. Co. et al.

Superior Court of Connecticut, Litchfield 

Connecticut UM/UIM is Person Focused, Not Vehicle Focused 

The plaintiff was injured in a collision with an uninsured driver. The plaintiff was driving a Mack Truck and he and his wife sought UM benefits from Ohio Casualty. Ohio Casualty insured the plaintiff’s Ford truck under a “business automobile” policy and denied coverage. Significantly, the policy was issued in the plaintiff’s name and not in the name of a business. 

The plaintiffs sued Ohio Casualty seeking underinsured motorist coverage, bad faith, and a violation of the Connecticut Unfair Trade Practices Act/Connecticut Unfair Insurance Practices Act, as to each plaintiff. The Connecticut UM/UIM endorsement described who is an insured as: 

B.  Who is an Insured 

If the Named Insured is designated in the Declarations as 

1.  An Individual, then the following are insureds; 

a.  The Named Insured and any family members. 

b.  Anyone else occupying a covered auto or a temporary substitute for a covered auto. 


Ohio Casualty argued that since the insured was occupying a non-insured auto at the time of the accident, he (and his wife) are not entitled to access to policy’s $1 million limit. Ohio Casualty stated that its policy provides underinsured motorist coverage only for a covered auto, which was the Ford, not the Mack Truck plaintiff was driving at the time of the accident. The plaintiffs countered that they are insureds and covered under the plain language of the underinsured provision in the policy.  

The court easily agreed with the plaintiffs, denying Ohio Casualty summary judgment on both breach of contract and bad faith. Ohio Casualty’s policy interpretation, the court pointed out, would render the definition of who is an insured unworkable. As argued, if the plaintiff was only an insured when occupying a covered auto, then section B.1.a. would be unnecessary and have no meaning.  

Here, to construe the underinsured coverage as applying to Robert Grandpre only if he was occupying the covered auto would render paragraphs B (1) (a) and (b) from the Uninsured motorist's coverage section meaningless. That is, if a named insured was only covered while he was occupying a covered auto—there would be no need for the two separate provisions which currently exist. One stating that the named insured and his family members were insureds, and another stating insured also meant “anyone else occupying a covered auto.” Rather, there would be only one provision specifying anyone occupying a covered auto. 

The court pointed out that, in Connecticut, UM/UIM coverage follows the insured and not the vehicle. “The Connecticut Supreme Court has ‘repeatedly held that uninsured/underinsured motorist coverage is person oriented, not vehicle oriented and applies wherever a person may be…” (Citations omitted.) Under the Connecticut construct, an insured's status at the time of the injury, whether passenger, pedestrian, or driver of an insured or uninsured vehicle, is irrelevant to recovery. The court was not persuaded by Ohio Casualty’s argument that, since the coverage was a business policy and not personal policy, the mandate does not apply.  

Since Ohio Casualty relied on the argument that in the absence of coverage there can be no bad faith, the court also denied that aspect of the motion.  

[Ed. Note: In a previous ruling, the court granted summary judgment to American Home, finding that it’s UM/UIM policy afforded no coverage. That policy insured a 1932 Ford truck and the specialty policy afforded UM/UIM coverage only “for a person in, upon, or getting in, on, out or off the covered vehicle or as a pedestrian struck by motor vehicle designed for use mainly on public roads or a trailer.” Different policy language, different result.]  



Kyle A. Ruffner

[email protected]


06/30/23       MLG Medical P.C. v. Nationwide Mut. Ins. Co.

Civil Court of the City of New York, Queens County

Court Grants Insurance Company’s Motion for Summary Judgment Where Plaintiff Assignor Failed to Appear for Four Examination’s Under Oath

In this matter, the defendant insurer filed a motion for summary judgment on the grounds that plaintiff’s assignor, Tracy Thomas, failed to appear for four duly and timely scheduled examinations under oath. The plaintiff argued that the defendant failed to establish timely denial, in that the insurer’s denial exceeded the thirty-day time period from the second EUO no show of Tracy Thomas.

Courts have held that "the 30-day period for an insurer to pay or deny a claim based upon a failure to appear for an EUO begins to run on the date of the second EUO nonappearance." Quality Health Supply Corp. v Nationwide Ins., 69 Misc. 3d 133(A), 2020 NY Slip Op 51226(U) [App Term, 2d Dept 2d, 11th & 13th Jud Dists 2020]). The court explained the reasoning behind the rule outlined in that case is that an insurer cannot indefinitely extend its toll of the time to pay or deny a claim after a second nonappearance at a scheduled EUO by scheduling successive additional EUOs until the insurer unilaterally decides that it has offered enough opportunities to appear and end its toll.

However, the court in this case pointed out that it has previously found that a timely denial issued after a fourth missed EUO was sufficient to support defendant's request for summary judgment (see NGM Acupuncture, P.C. v Nationwide Ins. Co., Civ Ct, Queens County, Decision/Order, June 15, 2021, index no. 706015/2019). To hold otherwise would put defendants at a disadvantage for offering plaintiffs additional opportunities to appear for an EUO, and disincentivize diligent and thorough investigations. Further, it would give plaintiffs an advantage if they did appear at a third or fourth scheduled EUO. Similarly, the Second Department in Quality Health Supply Corp. v. Nationwide Insurance (216 A.D.3d 1013 [2d Dept 2023]), which reversed the lower court’s decision, found that a denial for non-appearance issued after the last scheduled EUO, and in that case there were three, was timely and proper.


The plaintiff in this case did not deny receipt of the scheduling letters or that the assignor failed to appear on all four occasions. Rather, plaintiff highlighted that it responded to defendant's scheduling letters by objecting to the location of the EUO but, also, expressing its assignor's willingness to attend. Despite these responses, plaintiff sought to penalize defendant for extending multiple opportunities to its assignor to appear for an examination under oath. Further, the court pointed out that a failure to appear for an EUO is a condition precedent to coverage. Therefore, as the court explained, a plaintiff's failure to appear for a duly scheduled EUO, barring any issues of timeliness, should be the predominate consideration in disputes such as the one before this court.


Accordingly, the court found that the defendant demonstrated its prima facie entitlement to judgment as a matter of law dismissing plaintiff's Complaint by showing that its scheduling letters were timely and properly mailed, that the assignor failed to appear on each of the four scheduled dates, and that it ultimately issued a timely and proper denial following a failure to appear on the last scheduled date.


Ryan P. Maxwell

[email protected]

07/17/23       Arizona Beverages USA, LLC v. Hanover Ins. Co.

Eastern District of New York

Extra Expense Coverage Found for Pre-Pandemic Business Interruption Claim Involving Audit Expenses After Data Loss Due to Power Surge

In accordance with the terms of a credit agreement, Arizona Beverages USA (“Arizona”) was required to undertake an independent audit of its financial position every year, and engaged Deloitte and Touche LLP (“Deloitte”) for that purpose.

On October 29, 2017, Arizona suffered a power surge at its corporate headquarters, which damaged multiple disc drives, resulting in a catastrophic failure of its account operating system and leaving the company unable to access its computer software and applications, including account balances, receivables, inventory, and order information. The data and functions for 2016 and 2017, however, were never recovered, which included the data used by Deloitte to complete its annual audit. Accordingly, Deloitte was required to dramatically revise its normal audit procedures in accordance with accepted accounting principles to the tune of an additional 2,200 hours of work above the original quote.

Arizona was insured by Hanover, which reimbursed Arizona “$250,000, the sublimit for data restoration under the Policy,” but denied Arizona’s claim for extra expense coverage for additional audit expenses, totaling $552,573.25.

Finding coverage owed, the EDNY first summarized the relevant question as follows:

The Policy covers “extra expenses that are necessary during the ‘restoration period’ that [Plaintiff] would not have incurred if there had been no [Loss],” including “any extra expense to avoid or reduce the interruption of ‘business’ and continue operating at [Plaintiff's headquarters].” . . . The Policy defines “restoration period” as beginning “immediately following” the Loss and ending “on the date the property should be rebuilt, repaired, or replaced,” while defining “business” as “usual business operations occurring at [Plaintiff's headquarters].” . . . These provisions suggest that if the Audit was part of Plaintiff's usual business operations and the Audit Expenses were incurred during the restoration period, then the Policy provides coverage. Therefore, the Court finds that the relevant Policy provisions are unambiguous and will give them their “plain and ordinary meaning.”

Continuing, the EDNY noted that “[w]hether the Audit Expenses and the resulting provision of continued cashflow for operations were part of Plaintiff's ‘usual business operations’ is fairly self-evident.” These operations plainly encompass “activities undertaken on a regular basis that are essential to the company's continued existence,” such as “activities to increase profits, expand brand recognition, and monitor staffing needs,” or “managing financial obligations such as maintaining cashflow, servicing debt, and filing tax returns.” Here, Arizona’s “annual audit falls squarely within its usual business operations.”

Rejecting Hanover’s argument to the contrary that Arizona “is in the business of ‘producing, marketing, selling and distributing beverage products,’ not auditing,” the EDNY stressed that the language does not limit the coverage so narrowly, and had Hanover wished to restrict coverage in that way, it could have written the policy in that way, but did not. And although Hanover alternatively argues that the audit was completed by another entity entirely was equally incorrect, since the audit must be completed by an independent entity and further, Arizona is required to assist with the audit in order to maintain a line of credit with its bank.

Relative to the “restoration period,” the EDNY notes that “[t]he Policy clearly anticipates alternative means of restoration in circumstances in which property proves unrecoverable,” including “the date business is resumed at a new permanent location.” Here, “Deloitte's enhanced Audit procedures constituted a reasonable form of ‘repairing, replacing, or rebuilding’ the lost data to satisfy acceptable accounting principles,” which “created a functional simulacrum of the lost data throughout its modified Audit process, ultimately finalizing its repair on October 24, 2018, when it completed the Audit.” Absent evidence of dilatory conduct in delaying such “repair,” there was no need to resort to any theoretical end point of the restoration period as advocated for by Hanover.

Rounding out the decision the EDNY found that:

“the Audit Expenses fall squarely within the “extra expense” provisions of the Policy. First, the Audit Expenses were incurred to avoid the interruption of its usual business operations. As discussed above, Plaintiff's annual audit is included in its usual business operations and the Audit Expenses were incurred to prevent a grave financial threat, to wit: a potential liquidation of the company, thus ‘avoid[ing] the interruption’ of Plaintiff's business. And second, but for the Loss, Plaintiff would not have incurred the Audit Expenses. Indeed, the sole cause for these additional expenses was because the financial records necessary to complete the Audit were destroyed in the Loss.”

Given that a copy of this decision is not publicly-available, please contact me at [email protected] for a copy if you would like to read it.



Patricia A. Rauh

On Parental Leave



Scott D. Storm

[email protected]


06/21/23       Endemann v. Liberty Ins. Corp.

U.S. Court of Appeals 2nd Circuit

First-Party Property Action Based Upon Breach of Contract and Breach of the Implied Covenant of Good Faith and Fair Dealing are Subject to a Two-Year Limitations Period.  Insured’s Equitable Estoppel Argument Fails

[Abridged] Kyle Endemann's basement flooded on February 21, 2014. He submitted a claim under his homeowners insurance policy to his insurer, Liberty, which paid him $10,500, the policy limit under an endorsement capping recovery for damage from sump pump overflows. The insurance policy contained a limitations clause requiring that an “action ... brought against” Liberty be “started within two years after the inception of the loss,” where “inception of the loss means the date on which the direct physical loss or damage occurred.” The parties agree that this limitations period expired on February 21, 2016. Between April and June of 2017, Endemann unsuccessfully requested that his original claim be “widened” and “re-examined.”

He then sued Liberty on January 18, 2018, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and a violation of New York General Business Law § 349’s prohibition of deceptive business practices. The district court (Hurd, J.) granted summary judgment to Liberty, finding that all of Endemann's claims were barred by the policy's limitations clause or New York's three-year statute of limitations on section 349 actions. Endemann appeals, arguing that Liberty was equitably estopped from asserting limitations-period defenses and, in the alternative, that the policy's limitations clause did not apply to the implied-covenant claim.

First, we agree with the district court that Endemann failed to show a genuine dispute as to any fact material to his equitable estoppel argument, and that his breach-of-contract and section 349 claims were barred by their respective two- and three-year limitations periods. Endemann concedes that his breach-of-contract and section 349 claims were untimely absent an equitable-estoppel exception. “Equitable estoppel is an extraordinary remedy,” that precludes a defendant who has “taken affirmative steps to prevent a plaintiff from bringing a claim ... from asserting the statute of limitations as a defense”. A plaintiff invoking equitable estoppel must show that (1) the “plaintiff was induced by fraud, misrepresentations or deception to refrain from filing a timely action,”; (2) the plaintiff reasonably relied on the defendants’ misrepresentations; and (3) the plaintiff exercised “ ‘due diligence ... in bringing an action’ ... within a reasonable period of time after the facts giving rise to the ... equitable estoppel claim ‘have ceased to be operational,’”. 

Endemann provides no evidence that Liberty induced his failure to sue on time. As the district court explained, “one of the evidence ... suggests at any point that Liberty was still considering paying Endemann more than the $10,500.” Liberty's further communications with Endemann regarded its subrogation action against Endemann's neighbor, not Endemann's first-party claim against Liberty. Additionally, Endemann fails to point to evidence indicating that he relied on Liberty's alleged misrepresentations. Instead, the record indicates that he relied on the advice of his advisors in pursuing recovery from his neighbor instead of Liberty. Thus, Liberty was not equitably estopped from raising its limitations-period defenses.

Second, Endemann's implied-covenant claim was subject to the same two-year limitations period as his breach of contract claim. The limitations period broadly applied to any “action ... brought against” Liberty and as measured from “the date on which the direct physical loss or damage occurred.” The limitations period for the implied-covenant claim was thus two years and began to run on February 21, 2014. This is consistent with the principles that a “breach of the implied covenant ... is a contract claim” and that such a claim “may not be used as a substitute for a nonviable claim of breach of contract.” Thus, Endemann's implied-covenant claim is also untimely because it was filed after the expiration of the applicable statute of limitations.


07/11/23       United States v. Pierre

United States District Court, S.D. New York

Court Denies Defendants’ Motions to Dismiss Indictments Under Federal Criminal Fraud Statutes Against Medical Providers for Conspiring to Commit Healthcare Fraud by Materially Misrepresenting to No-Fault Insurers That They are Owned and Controlled by a Physician, Thereby Wrongfully Obtaining Payment for Medical Services

[Abridged] The Indictments charge Defendants with, inter alia, conspiring to commit healthcare fraud in violation of 18 U.S.C. §§ 1347 and 1349. Defendants have moved to dismiss the healthcare fraud conspiracy counts arguing that — to the extent those counts are predicated on allegations that Defendants falsely represented to insurers that their medical clinics were owned, operated, and controlled by physicians in accordance with New York law — they fail to allege a crime. According to Defendants, this alleged conduct does not violate the federal healthcare fraud statutes.  Defendants' motions to dismiss will be denied.

The Pierre Indictment alleges that, while purporting to be legitimate medical care clinics specializing in treating patients, Defendant Bradley Pierre's No-Fault Clinics were not owned, operated, and controlled by licensed medical practitioners as is required under the New York No-Fault Insurance Law.  Patients could assign their right to reimbursement from an insurance company to others, including, but not limited to, medical clinics that provided medical services to treat their injuries. All medical clinics in New York State must have been incorporated, owned, operated, and/or controlled by a licensed medical practitioner in order to be eligible for reimbursement under the No-Fault Law. Pierre accordingly arranged for the No-Fault Physicians to falsely state under oath in depositions conducted by insurance companies, among other things, that Pierre was solely a lender for the No-Fault Facilities and Pierre played no role in referring patients to the No-Fault Facilities.

Count One of each Indictment alleges that the defendants, together with others known and unknown, did willfully and knowingly combine, conspire, confederate, and agree together and with each other to commit health care fraud, in violation of Title 18 United States Code, Section 1347.  Defendants moved to dismiss the healthcare fraud conspiracy charges insofar as they rely on Defendants' alleged misrepresentations about the ownership and control of medical clinics.

Between 1992 and 2001, reports of suspected automobile insurance fraud increased by 275%, the bulk of the increase occurring in no-fault insurance fraud. Reports of no-fault fraud rose from 489 cases in 1992 to 9,191 in 2000, a rise of more than 1700%. No-fault fraud accounted for three quarters of the 16,902 reports of automobile-related fraud received by the Insurance Department's Frauds Bureau in 2000, and more than 55% of the 22,247 reports involving all types of insurance fraud. In 1999, the Superintendent established a No-Fault Unit within the Frauds Bureau to focus specifically on no-fault fraud and abuse. By one estimate, the combined effect of no-fault insurance fraud has been an increase of over $100 per year in annual insurance premium costs for the average New York motorist.

The New York Superintendent of Insurance became particularly concerned with "medical mills, which would . . . generate stacks of medical bills for each passenger, detailing treatments and tests that were unnecessary or never performed."  "In an effort to combat this widespread abuse," Regulation 68 contains provisions aimed at "medical mills" and their fraudulent practices.

In one such provision, Regulation 68 excludes from the definition of "basic economic loss" any medical expense incurred at a medical practice that is owned or controlled by non-physicians. This provision effectively incorporates the New York Business Corporation Law, which provides that "a professional service corporation may issue shares only to individuals who are authorized by law to practice in this state a profession which such corporation is authorized to practice and who are or have been engaged in the practice of such profession in such corporation or a predecessor entity, or who will engage in the practice of such profession in such corporation within thirty days of the date such shares are issued."

Moreover, "no individual may be a director or officer of a professional service corporation unless he is authorized by law to practice in this state a profession which such corporation is authorized to practice and is either a shareholder of such corporation or engaged in the practice of his profession in such corporation." N.Y. Bus. Corp. Law §§ 1507(a), 1508(a).  "Medical professional corporations" are within the scope of these provisions.

Regulation 68, in turn, defines the "measurement of no-fault benefits," including "medical expenses" — which, as explained above, are part of "basic economic loss" under the New York Insurance Law, see N.Y. Ins. Law § 5102(a)(1) — in a manner consistent with the Business Corporation Law. Pursuant to the definition of "medical expenses" in Regulation 68, "a provider of health care services is not eligible for reimbursement under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed." N.Y.C.R.R. § 65-3.16(a)(12).

In sum, medical expenses incurred at medical clinics that are owned or operated by non-physicians are not considered "medical expenses" or "basic economic loss" within the meaning of the New York Insurance Law, and are thus outside the scope of no-fault insurance policies.

The New York Superintendent of Insurance has explained that Regulation 68 excludes such claims from the legal definitions of "medical expenses" and "basic economic loss" because non-physician-owned and -operated clinics are associated with "medical mills".  Medical mills are commonly "doc-in-a-box" clinics in which businessmen essentially pay for the use of physicians' licenses so that they can fraudulently incorporate as medical PCs, skirting State laws proscribing the corporate practice of medicine.

An interpretation of Section 65-3.16(a)(12) that allows insurers in carefully circumscribed circumstances to inquire into whether a medical PC was fraudulently formed is consistent with one of the cardinal purposes underlying the Superintendent's promulgation of the revised Regulation 68. That regulation was intended to combat No-Fault fraud and abuse perpetrated largely by medical mills, which . . . often are fraudulently formed medical PCs. Such PCs use sophisticated structures to create an appearance of compliance, often "renting" physicians' licenses in order to obtain facially valid certificates of authority.

Accordingly, New York Insurance Form NF-3, which healthcare providers must submit to insurers to collect reimbursement for assigned claims, see 11 N.Y.C.R.R. § 65-3.11(b), requires that healthcare providers provide the following information: "If the provider of service is a professional service corporation or doing business under an assumed name (DBA), list the owner and professional licensing credentials of all owners."  Form NF-3 warns a medical clinic that where it misrepresents to an insurer that it is owned or controlled by a physician — and thereby obtains payment from an insurer for medical services — it is committing "a fraudulent insurance act, which is a crime."

Following the implementation of Regulation 68, State Farm sued certain no-fault doctors and medical clinics in the Eastern District of New York. State Farm sought a declaration that, per Regulation 68, it did not have to pay any claim that had been submitted by a non-physician-owned practice, because any such claim was fraudulent. The dispute reached the Second Circuit, which concluded that New York law was ambiguous as to whether clinics owned by non-physicians were entitled to reimbursement. The Second Circuit therefore certified the following question to the New York Court of Appeals:

Is a medical corporation that was fraudulently incorporated under N.Y. Business Corporation Law §§ 1507, 1508, and N.Y. Education Law § 6507(4)(c) entitled to be reimbursed by insurers, under New York Insurance Law §§ 5101 et seq., and its implementing regulations, for medical services rendered by licensed medical practitioners?

The New York Court of Appeals determined that the answer to the certified question was no.  It goes on to hold that insurers may withhold reimbursement from fraudulently incorporated medical clinics.  Mallela thus teaches that where a medical clinic misrepresents to an insurer that it is owned or controlled by a physician in order to obtain payment for medical services, the clinic defrauds the insurer.

Defendants contend that "it is well established in the Second Circuit that an alleged misrepresentation suffices to establish the intent to harm requisite for a mail fraud conviction only if the misrepresentation `went to an essential element of the bargain between the parties.' The core of the `bargain between parties' in determining the intent to injure element of mail fraud is the commercial exchange between them."  Defendants argue that here, any misrepresentations regarding clinic ownership do not demonstrate an intent to harm, because the insurers were obligated in any event to reimburse the patients who had assigned their rights to the clinics.

Defendants' arguments are not persuasive, because (1) this Circuit's precedents recognize the "fraudulent incorporation" theory of no-fault insurance fraud; (2) the nature and purpose of the alleged misrepresentations evince a scheme to defraud insurers of money or property within the meaning of Section 1347. 

Defendants' arguments for dismissal fail because courts in this Circuit have consistently acknowledged that the same "fraudulent incorporation" theory charged here provides the basis for a federal fraud conviction.  The fact that Mallela was a civil case is simply beside the point, as New York law, as construed by the New York Court of Appeals in Mallela, does not create the substantive federal offenses at issue. Rather, the Court here looks to New York law simply to determine whether a material misrepresentation has been made and whether it was made with the intent to defraud. On those issues, Mallela is crystal clear. 

There are numerous decisions from other courts in this Circuit holding that the fraudulent incorporation theory sets out a predicate act of mail or wire fraud for purposes of a civil RICO claim.  The law in this Circuit supports the Government's argument that where a clinic misrepresents to an insurer that it is owned and controlled by a physician — and thereby wrongfully obtains payment for medical services — it commits a fraud actionable under federal criminal fraud statutes.

Even if this Court were writing on a blank slate, however, it would conclude that the nature and purpose of the alleged misrepresentations evince a "scheme or artifice to defraud a health care benefit program . . . of . . . money or property." 18 U.S.C § 1347(a).

The Government alleges that the Defendant physicians and Defendant owner-operators conspired to misrepresent that their clinics were not subject to the New York State regulation that excludes expenses incurred at non-physician-owned clinics from the definition of "basic economic loss." Defendants' alleged purpose in making these misrepresentations was, of course, to obtain payments from the insurers. Defendants allegedly knew that "[i]nsurance companies would deny all billings for medical treatments from a medical clinic that was not actually owned, operated, and controlled by a licensed medical practitioner." Accordingly, the Defendants had to misrepresent the ownership status of their clinics in order to obtain payment from the insurers.

While this case arises in the statutory context of New York's no-fault insurance law, it presents straightforward allegations of insurance fraud — i.e., intentional misrepresentations to insurers about whether claims are for covered loss, in order to obtain payments that would otherwise be denied. The Indictments thus adequately allege "a scheme or artifice to defraud a health care benefit program, or to obtain by means of false or fraudulent pretenses, representations, or promises, . . . money or property owned by, or under the custody or control of, a health care benefit program." 18 U.S.C. § 1347(a).

In arguing that the Government's fraudulent incorporation theory is insufficient to allege a crime under Federal law, Defendants cite to cases in which courts rejected fraud claims where the misrepresentations at issue did not go to the "core of the bargain" between the defendants and their victims.

The teaching of the Second Circuit's "core of the bargain" cases is that in order to determine whether false representations, standing alone — even those misrepresentations which induce a party to enter an agreement — are sufficient to establish the intent to injure element of mail fraud, it is necessary to identify the core economic exchange between the parties.

The "core of the bargain" cases have no application here. Those cases involve misrepresentations made as part of a sales pitch or contract negotiation. In such circumstances, a court must determine whether the misrepresentation goes to a core element of the parties' agreement — typically, a matter that relates to the quality or nature of the product or service at issue.

Here, by contrast, Defendants were not involved in any sales pitch or negotiation. The contracts at issue — no-fault insurance policies — were issued by the insurers to insured drivers, on terms mandated by New York law. There was no negotiation about whether clinics owned and operated by non-physicians could obtain payments from insurers, because New York law mandated that they could not.  The "core of the bargain" cases do not alter this Court's conclusion that the Indictments adequately allege a conspiracy to commit healthcare fraud. 






Katherine A. Fleming

[email protected]

07/12/23       Krewina v. United Specialty Ins. Co.

Supreme Court of Ohio

Based on Policy Language, Subjective Intent Irrelevant for Person Committing Assault or Battery

Brown County Care Center (the “Center”), an adult-care facility, contracted with United Specialty Insurance Company (“United”), for commercial general liability insurance. The insurance policy specifically excluded coverage for bodily injury “arising out of or resulting from any actual, threatened or alleged assault or battery.” The policy did not define “assault” or “battery.” Austin Krewina lived at the Center when a fellow resident, Colin Doherty, attacked him with a knife. Among other alleged offenses, the state of Ohio charged Doherty with felonious assault, but he was found not guilty by reason of insanity.

Krewina sued the Center, and the parties settled the matter. As part of the settlement agreement, Krewina and the Center entered into a stipulation for entry of final judgment in which the Center consented and stipulated to a final judgment in favor of Krewina. The stipulation provided that at the time Doherty inflicted serious bodily injury on Krewina, Doherty suffered from a derangement of his intellect which deprived him of the capacity to govern his conduct in accordance with reason. Krewina then brought a declaratory judgment action against United to collect the judgment.

Krewina argued that the United policy covered his injuries because the assault or battery exclusion did not apply. Krewina reasoned that Doherty did not have the mental state necessary under the law to commit and “assault” or “battery” at the time of the attack. The trial court disagreed and determined that there was no coverage under the United policy.

The appellate court reversed and held that because Doherty suffered from a derangement of his intellect which deprived him of the capacity to govern his conduct in accordance with reason, Doherty did not act intentionally, knowingly, or recklessly.

The Ohio Supreme Court reversed the appellate court’s decision, holding that when a commercial general liability policy excludes coverage for injuries arising out of an “assault or battery,” the subjective intent of the person who committed the assault or battery is irrelevant. The Supreme Court accepted jurisdiction to review United’s sole proposition of law that liability insurance exclusions and limitations for harm arising from assault and battery or abuse are subject-matter provisions that are triggered when an ordinary person would believe that assault and battery or abuse had taken place rather than by the subjective intent of the assailant. The Supreme Court concluded that the civil law definitions of “assault” and “battery” applied. The Supreme Court distinguished policy language that excludes coverage for bodily injuries “expected or intended” by the insured because an “insane” assailant does not have the requisite intent.

A provision in a liability policy which excludes coverage to an insured where the insured expected or intended to cause bodily injury does not apply under circumstances where the insured was mentally incapable of committing an intentional act. Based on the facts and the Supreme Court’s definition of “assault,” the attack on Krewina was an “assault” under the policy’s exclusion. Attacking someone with a knife is a willful attempt to harm or a use of force, but it would also cause a reasonable person to be in fear or apprehension of such harm or force. Accordingly, the Supreme Court held that Krewina could not recover his judgment from United because Doherty’s conduct fit within the plain and ordinary language of the United policy’s assault or battery exclusion.



Evan D. Gestwick

[email protected]


07/13/23       Mt. Hawley Ins. Co. v. Wesco Ins. Co., et al

New York State Supreme Court, County of New York

Privity Endorsement Requires Privity of Contract

AGBH owned a premises upon which a construction project was to be performed, and hired Foundations Group Inc. as its general contractor to oversee the completion thereof. Foundations Group Inc., in turn, hired P&H, a painting company, as a subcontractor to perform painting and wallcovering work in connection with said project. The subcontract between Foundations Group Inc. and P&H provided that P&H would procure liability coverage for the project and add Foundations Group Inc. and AGBH as additional insureds.

An employee of P&H was injured in the course of performing work at the construction site, and sued AGBH, as the premises owner, and Foundations Group Inc., as the general contractor, for his injuries.

Pursuant to the terms of the subcontract it had with Foundations Group Inc., P&H procured a primary general liability policy from Wesco, as well as an excess policy from Mt. Hawley. The Wesco policy provided, in relevant part, that an “insured
 is anyone for whom P&H performs operations, when P&H and such other person or entity have agreed in a written contract or agreement that such person or organization be added as an additional insured. The Mt. Hawley policy, on the other hand, defined “insured” as any person or organization that qualified as an “additional insured” under the terms of the “underlying insurance” (i.e., the Wesco primary policy). Thus, any party qualifying as an additional insured on the Wesco policy would qualify as an additional insured under the Mt. Hawley policy.

Wesco agreed to defend and indemnify its named insured, P&H, as well as Foundations Group Inc. and a company related to Foundations Group Inc., called Foundations Group Interior Design Corp. (“Foundations Interior”) and AGBH. Mt. Hawley objected to Wesco’s decision to defend and indemnify AGBH and Foundations Interior, on the ground that those entities should not be considered additional insureds on the Mt. Hawley policy. This declaratory judgment action ensued.

Wesco moved to dismiss Mt. Hawley’s complaint against it, and Mt. Hawley cross-moved for partial summary judgment declaring that it was obligated to indemnify neither AGBH nor Foundations Interior as additional insureds under its policy. In support of its motion to dismiss, Wesco asserted that Mt. Hawley’s action against it was not yet ripe, since Mt. Hawley had not yet been ordered to indemnify any party. In rejecting this argument, the Court reasoned that a justiciable controversy existed between Wesco and Mt. Hawley because declaratory judgment actions against carriers, even excess ones, are permitted prior to adjudicating of the underlying dispute if a judgment in favor of any party therein might implicate the coverage at issue in said declaratory judgment action. Thus, although Mt. Hawley had not yet been ordered to indemnify any party against any judgment, since no judgment was yet reached, it was still permitted to bring this lawsuit against Wesco ahead of time, since the underlying action implicated coverage under its policy.

In support of its motion for summary judgment, Mt. Hawley took the position that neither AGBH nor Foundations Interior were additional insureds under its excess policy. As above, Mt. Hawley’s policy provides that a person or organization qualifying as an insured under the terms of “underlying insurance” (i.e., the Wesco policy) qualifies as an insured under its own policy. Take another look at the Wesco policy’s definition of “insured:”

Section II – Who is An Insured is amended to include as an insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy. Such person or organization is an additional insured only with respect to liability arising out of your ongoing operations performed for that insured. A person’s or organization’s status as an insured under this endorsement ends when your operations for that insured are completed.

This insurance applies on a primary basis if that is required by the

written contract, written agreement or permit.”

The key words in this provision are those underlined and italicized. They stand for the notion that, to be an additional insured under the Wesco policy, P&H (“you”) must have agreed in writing with the proposed additional insured (“such person or organization”) to add such person or organization as an additional insured on P&H’s policy. That is, this provision requires privity of contract (these provisions are colloquially called “privity endorsements”). The key words to look for in determining whether an additional insured provision requires privity of contract are the words “with whom,” or, in this case, “you and such person or organization.” Thus, to be an additional insured under the Wesco policy (and the Mt. Hawley policy), one must have agreed in writing directly with P&H.

As argued by Mt. Hawley, the only party to have contracted directly with P&H was the general contractor, Foundations Group Inc. This is presumably why the court recognized that it was indisputable that Foundations Group Inc. was an additional insured under the Mt. Hawley policy (and why Mt. Hawley did not argue otherwise). However, Mt. Hawley did argue, correctly so, that neither AGBH, the project owner, nor Foundations Interior, an entity related to but separate and distinct from Foundations Group Inc., were additional insureds, since neither of those entities had written contracts directly with P&H, as required by the above-quoted provision.

In granting Mt. Hawley’s motion for partial summary judgment, the Court agreed that since AGBH and Foundations Interior were not signatories to the subcontract between P&H and Foundations Group Inc., those parties were not entitled to additional insured coverage under the Mt. Hawley policy.


ON the ROAD with O’SHEA

Ryan P. O’Shea

[email protected]


07/19/23       Matter of Travelers Home & Mar. Ins. Co. v. Delgado

Appellate Division, Second Department

Settling Without Consent Is a No-No

Delgado was injured in a five vehicle collision. In April 2019, he served Travelers with a demand for uninsured motorist benefits (a “SUM claim”). In April 2020, Delgado settled his claims against the Browns, the aforementioned “uninsured motorists.” Travelers moved pursuant to Article 75 to permanently stay arbitration of the UM claim on the ground that Delgado violated the Travelers’ policy by settling the claim his claim with the Browns without Travelers’ consent. The trial court granted the petition and Delgado appealed.

Unsurprisingly, the Second Department affirmed. A general rule regarding UM claims, if the auto policy requires the insurer’s consent prior to settling claims with a tortfeasor, the failure obtain the insurer’s consent constitutes a breach of the policy’s conditions. Additionally, the Appellant division reasoned that failure to obtain such consent disqualifies the insured from seeking the pertinent benefits of the policy, “unless the insured can demonstrate that the insurer, either by its conduct, silence, or unreasonable delay, waived the requirement of consent or acquiesced in the settlement.” The Court further reasoned that once a settlement and release occurs, then the burden is on the insured to show the release did not prejudice the insurer’s right of subrogation.

Here, Travelers submitted sufficient proof that it had not given its consent to Delgado. In opposition, Delgado did not attempt to show that Travelers waived the requirement of consent or somehow acquiesced to the release, nor did Delgado argue that the release did not operate to prejudice Travelers’ subrogation rights.

If one ever gets curious about what requirements a SUM policy endorsement requires, then look to 11 NYCRR 60-2.3. This regulation provides the exact guidelines an insurer must meet. While I do not have the Travelers policy at hand, I safely presume Conditions 9 and 12 found within 11 NYCRR 60-2.3 are what Travelers relied on in staying Delgado’s claim.



Robert P. Louttit

[email protected]

Nothing new to report.



Robert J. Caggiano

[email protected]

Nothing worth reporting on this issue. I’ll be back in two weeks.



Heather A. Sanderson

Sanderson Law, Calgary, Alberta

[email protected]

07/05/23       Truong v. Jeweler's Mutual Insurance Company

Ontario Superior Court (trial level)

Insureds are not Required to Prove Ownership and Insurable Interest as Part of the Claim Process to Claim the Value of Scheduled Property that is Proven on a Balance of Probabilities to Have Been Stolen

After almost two weeks of trial, a claim on a property policy for the loss of scheduled jewellery was finally resolved. The story is how it got there.

The insureds are a married couple in their 60’s, both of whom are Ontario residents who immigrated to Canada from Vietnam as kids. Their extended family lives in Vietnam. Every two or three years they travel to Vietnam for visits. Over their married lives they acquired many pieces of valuable jewellery. At the urging of friends (and as they travel with it), they decided to insure it. They had the jewellery appraised. Then, responding to an ad in a Vietnamese newspaper, they placed an online application for coverage for their jewellery with an American insurer that specializes in this area. The application was accepted, and the insureds held a policy insuring a half million dollars of jewellery. The policy was in place for several years.

During the most recent policy period, the insureds traveled to Vietnam with the jewellery which was kept in the female insured’s purse. The insureds were walking on a sidewalk when a motorcycle passed them. The passenger on the motorcycle did a snatch and grab and the purse and the jewellery was gone. The theft was reported to local police and, on return to Ontario, the insurer. 

The claim was denied.  The insurer, stated in their defence that the insureds held an insurable interest in the jewellery but claims it does not know if they truly owned it (despite accepting about $9,000 in annual premium). However, and this is critical, the insurer did not declare the policy void for misrepresentation.  Given that the insurer was not relying on misrepresentation to void the policy, and despite some questionable evidence as to the provenance of the jewellery, the Court held as the insurer accepted that the insureds owned the jewellery and had an insurable interest in the jewellery when the policy was issued; that the insurer was not arguing that they were defrauded in any way, that the insureds were not required through the claim process to prove that they owned the jewellery or that they held an insurable interest in it.

Ownership and insurable interest is to be investigated during the underwriting process. If the insurer can prove that the insureds committed a misrepresentation or are attempting to defraud them, then they have a defence to this claim, otherwise, as the claim was proven on a balance of probabilities, the insureds were entitled to the scheduled value of their stolen jewellery.

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