Coverage Pointers - Volume XXVI No. 16

Volume XXVI, No. 16 (No. 689)
Friday, January 17, 2025
A Biweekly Electronic Newsletter

 

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

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

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

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

HF Coverage Pointers header

Do you have a situation? We love situations.

We send our heartfelt sympathy and support to those facing the terrible fires in California.  Thanks to the insurance industry for their help in rebuilding.

We love our Buffalo Bills, the only New York football team.

 

. A blue and red buffalo logo

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It’s CP Lite today – the courts were very quiet over the last two weeks.  My editors never sleep (well perhaps they do) but there was little to report on since last issue.  Don’t blame the messengers.  As Heather reminded me this week, this is one of those rare months when we publish three issues, January 3, 17, and 31.

Greetings from Scottsdale.  Better here in the warmer weather than at home in the snow.

Congratulations to the newest member of our Coverage Team, Victoria Heist

Victoria Heist

Victoria Heist was sworn into the Bar this week.  She has been an active member of our coverage team since she arrived but is now an admitted lawyer and adds to our growing ranks.

Victoria earned her J.D. at the University at Buffalo School of Law, graduating cum laude. She received her undergraduate degree from the State University of New York at Oswego, graduating summa cum laude with a Bachelor of Arts in Economics. Prior to law school, she worked in the banking industry.

While in law school, Victoria served as the Head Note & Comment Editor of the Buffalo Law Review. She gained practical experience as the court clerk in the Village of Williamsville, and as an intern with the Erie County Attorney’s Office.

Victoria also participated in the New York Bar Association Mediation Competition, and the IBA-VIAC CDRC Vienna Mediation Competition. This year, Victoria will be coaching the UB Law team in the ABA Regional Mediation Competition.

Victoria grew up in Alden, New York and currently lives in Buffalo with her husband. She is a cat mom to Moo and her new kitten, Sasha. In her spare time, she enjoys reading, being outdoors, and spending time with her friends and family.

Hurwitz Fine Expands Rochester Presence with Two Great Lawyers and a Brick-and-Mortar Office

We are pleased to announce that the firm is expanding our presence in Rochester! We have been very fortunate to have Tim Welch as our Rochester attorney over the past five years. Having Tim in Rochester has allowed us to grow our Rochester legal work since he joined the firm. Tim has played a key role supporting numerous firm clients by handling work in Rochester and the surrounding areas.

Therefore, we are excited to announce the addition of two new Rochester attorneys and one legal assistant/paralegal.

The team joining the firm consists of attorneys, Elizabeth Ognenovski and Bradon Carlson, and legal assistant/paralegal, Heather Aultman, all of whom previously worked for the Law Office of Janice M. Iati until Janice’s passing last August. 

We are also hanging a Hurwitz Fine shingle in Pittsford, New York, where the entire Rochester team will work! Our new office will be located at 100 Office Park Way.

Mediation Services – New Judicial Panel Added

I am now on the mediation panels for the US District Court for the Western District of New York, and the court-annexed mediation panels for Bronx County, Kings County, Richmond County, Nassau County, and this week, was added to the Panel for the Ninth Judicial District, covering Dutchess, Orange, Putnam, Rockland, and Westchester counties.

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.

 

Newsletters:      

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

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

     

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

     

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

     

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

 

Ford Has a Better Idea – 100 Years Ago:

The Buffalo News
Buffalo, New York
17 Jan 1925

RUSSIA ORDERS 2000
TRACTORS FROM FORD

DETRIOT, Jan. 17. – the receipt of a million-dollar order for 2000 tractors and their parts for immediate shipment to Russia was announced today by the Ford Motor company.

A shipment of 900 tractors was made to Russia last August, according to the company.

The company also announced domestic retail deliveries for 1924 totaled 1,873,581 cars and trucks, an increase of 87,736 over 1923.

 

Peiper on Property (and Potpourri):

The first two weeks of 2025 bring us at least one interesting decision.  In a lengthy decision from Judge Troutman, the Court of Appeals provides some long-awaited clarification on what damages are available for a potential violation of General Business Law, Section 349.  As you likely know, GBL 349 is a deceptive practices statute which was intended to protect consumers from predatory/fraudulent conduct.  It imposes sweeping applicability but has limited damages which include the actual damage or $50 whichever is greater.  A successful litigant is also entitled to attorneys’ fees and treble damages.  The treble damages, however, appear to be limited to $1,000 per the language of the statute. 

Parties, for years, have been trying to expand the amount of punitive damages beyond the monetary threshold.  In Hobish, the Court makes it very clear that punitive damages for breach of contract are still subject to the Rocanova/NYU test which requires proof that “(1) defendant’s conduct is actionable as an independent tort;  (2) the tortious conduct is of the egregious nature…; (3) the egregious conduct is directed to the plaintiff; and (4) it is of a pattern directed at the public generally.” 

Further, regardless of the size of the compensatory damages, treble damages cannot exceed the $1,000 threshold established by the legislature when the bill was enacted in 1980. 

The upshot of this remains that while General Business Law, Section 349 claims remain an issue to be dealt with by insurance coverage counsel, the primary exposure remains the potential imposition of attorneys’ fees.  This, however, is a significant issue.  Recall that under New York law, a carrier is not responsible for fees incurred to challenge a coverage denial.  However, if a GBL violation is also affirmed, those litigation costs may well be taxed against the carrier.  A penalty that far exceeds the $1,000 cap on treble damages. 

That’s it for this week.  I know most of the country has been cold for weeks, but we’ve been quite seasonal here in the Great Lakes. That, it appears, is about to change.  Stay warm and stay safe. 

Oh, and one more thing.  Go Bills.  We’ll meet you in Kansas City in ten days!

Steve
Steven E. Peiper

[email protected]

 

For Better or for Worse – 100 Years Ago:

The Buffalo News
Buffalo, New York
Jan 17, 1925

WOULD HELP PARENTS
BY RAISING BACHELOR TAX

PARIS, Jan. 17. – Bachelors and childless couples are to be still more heavily taxed for the benefit of large families under the terms of a bill introduced in the chamber of deputies and backed by members belonging to almost all the parliamentary groups.

The bill proposed to raise the monthly allowance to parents with large families from 90 francs, as provided by the law passed in July 1923, to 360 francs. To provide the necessary funds the incomes of bachelors of both sexes would be taxed on a sliding scale.

 

Lee’s Connecticut Chronicles:

Dear Nutmeggers:

Been on the go-again. No time to tell you about all the important Connecticut insurance decisions, so tune in next edition for a Connecticut double-dip. On the home front, we are preparing to send the kids back to college and welcome being empty nesters once again. Someone needs to explain to me why college winter break goes on seemingly forever. On the construction front, we’re finally in the home stretch and we might even have working appliances by my next report. We’ll keep you updated.

Until then, keep keeping safe (and warm!).

Lee
Lee S. Siegel

[email protected]

 

Race Problem Solutions? – 100 Years Ago:

The Buffalo News
Buffalo, New York
17 Jan 1925

ASKS NEGRO COMMISSION
TO MEET RACE PROBLEM

WASHINGTON, Jan. 17.—Creation of a negro industrial commission to work out plans for the solution of the different problems confronting the negro race of the country has been proposed in a resolution introduces in congress by Senator Cummins of Iowa, president pro tempore of the senate.

Formulation of a policy for mutual understanding between the races, the encouragement of the general promotion of his general welfare in industrial pursuits would be some of the duties of the commission.

 

Ruffner’s Road Review:

Dear Readers,

Buffalo is off to a good start in the playoffs and, once again, are headed to the Divisional round, our arch nemesis the past few years. Hopefully, they can finally pull through this year against a tough Ravens team. Go Bills!

I have one no-fault case and one SUM case for this week. In the no-fault matter, the Appellate Division reversed the Supreme Court, holding the insurer’s summary judgment motion should have been denied, as they did not provide sufficient evidence that the insured’s misrepresentations were material. In the SUM matter, the Appellate Division upheld the Supreme Court’s decision to stay the insured’s demand for supplemental uninsured motorist benefits pending a framed issue hearing as to whether the other driver’s insurer properly disclaimed liability coverage.

Kyle
Kyle A. Ruffner

[email protected]

 

Prevention of Wild Fires in California – 100 Years Ago:

The Whittier News
Whittier, California
17 Jan 1925

PLANS APPROVED
FOR PREVENTION
OF FOREST FIRE

SAN FRANCISCO, Jan. 17. – Plans for forest fire prevention and control in Southern California tentatively approved by Colonel W. B. Greeley, chief of the United States foreign service is announced here.

The plans involved creation of a new national forest, wider distribution of recreational activities, extension of fire lines, communication roads and telephone lines and new methods of financing.

The plan was drawn up by the board of fire review for Southern California after extended investigation of the San Gabriel fire of last summer.

The board recommended that the Angeles national forest be divided into two separate unites, the San Gabril division of the forest to continue under the present organization, and the eastern division to be organized as the new San Bernardino national forest, with headquarters at San Bernardino. The new forest would have an area of 510,000 acres.

It was also recommended that about 10,000 acres of Indian reservation lands and private property, lying along the southern boundary of the present Angeles forest, be excluded from the federal area.

The system of roads, trails and fires lines in all southern forests would be enlarged, with a dual purpose, first to allow better access to fires; second to stimulate recreationists to penetrate father into the higher country thus relieving congestion in the foothill country.

The board also suggested that a special bill be introduced into congress providing for an appropriation of $1,000,000 for the protection of these brush and forest areas contingent on the expenditure of an equal amount by private agencies.

These private agencies were urged in times of fire stress to submit to direction of the forest service, for the general protection of valuable watershed lands to the end that firefighting may be “systematic and not chaotic.”

 

Ryan’s Federal Reporter:

Go Bills! Beat Baltimore (please).     

Nothing from my column this week.

Until next time …

Ryan
Ryan P. Maxwell

[email protected]

 

Better Fire Service in California – 100 Years Ago:

Los Angeles Evening Post-Record
Los Angeles, California
17 Jan 1925

BETTER FIRE SERVICE

Protests by residents of territories annexed to Long Beach has resulted in action taken by the Long Beach city council to provide better fire and police protection.

Virginia City as well as the other territory have been without fire or police protection for all telephone calls were made by long distance. It has now been authorized to string telephone lines from the communities to the police and fire stations in Long Beach, along the Postal Telegraph company poles.

 

Storm’s SIU:

Nothing this week.  Go Bills!

Scott
Scott D. Storm

[email protected]

 

It Took Eight More Years for Mayor’s Dream to Come True – 100 Years Ago:

The Buffalo News
Buffalo, New York
17 Jan 1925

MAYOR WANTS TROLLEY
TAKEN OFF MAIN STREET

Substitution of bus service for street cars in Main street is advocated by Mayor Schwab. The tracks could be torn up and the trolley wires and poles removed, and Buffalo would have a clean wide street like New York’s fifth avenue, the mayor contended.

A committee of Main street businessmen recently conferred with the mayor regarding the removal of poles and wires from Main street. There are overhead signals for the police and fire departments in Main street and it would cost the city a considerable sum, according to the mayor, to put these underground.

 

Fleming’s Finest:

Hi Coverage Pointers Subscribers:

It has been chilly this January, but I suppose the cold is better than the snow. Of course, the football has kept us entertained.

In this week’s case from the South Carolina Supreme Court, the Court considered two issues: (1) whether a first-party insured can bring both a negligence and bad faith claim against their UIM insurer; and (2) whether the court of appeals erred in holding the insurer did not act in bad faith during settlement negotiations of the insured’s UIM claim or in taking a disparate position on a key factual issue in two underlying tort actions.

Catch you later. Go Bills.

Kate
Katherine A. Fleming

[email protected]

A Scotch Verdict – 100 Years Ago:

The Herald Statesman
Yonkers, New York
17 Jan 1925

Why do We Say
A Scotch Verdict

A “Scotch verdict” may mean a decision which decides nothing, because both parties are declared to be right, or else one that affirms the full guilt of the accused yet holds him free from culpability.

The phrase is based upon one of two anecdotes. You may take your choice. According to one, the plaintiff had been heard and the judge said, “You are right.” Then the defendant presented his case so cleverly that the judge said to him, too, “You, too, are right.” Then the prosecutor remarked, “Your honor, it is quite impossible for both to be right.” Whereupon the judge said, “You are right, too.”

The other story tells of a judge who, after listening to a man whose defense was as excellent as his guilt was obvious, rendered this decision. “Not guilty, but don’t do it again.”

 

Gestwick’s Garden State Gazette:

Dear Readers:

The Buffalo Bills time to break through what has been the barrier in recent years has arrived—the Divisional Round. We’re up against the Baltimore Ravens, who creamed us the first time around this season. However, with the likes of Matt Milano, Terrell Bernard, and Taron Johnson in the lineup—all of whom were unavailable due to injury the first go-around—perhaps the result will be different.

Unfortunately, I do not have a case to report on this time around. See you in two weeks.

Evan
Evan D. Gestwick

[email protected]

 

Love Costs – 100 Years Ago:

International Gazette
Black Rock, New York
17 Jan 1925

YAX GETS $1000 VERDICT

Heart balm in the Shape of a $1000 verdict was given to Albert C. Yax, foreman at the American Body company, who brought a $50,000 alienation of affections suit against James W. Morris, structural engineer. He claimed the loss of his wife’s love was due to Morris. The suit was tried before Justice O’Malley and a jury in Supreme court.

 

O’Shea Rides the Circuits:

Hey Readers,

As the weather has been persistently cold, it may be time to check if the ponds are frozen for skating. I’m a proponent of pond hockey, as it is the game in its natural state.

On another note, one of my dogs developed a habit on his walks. He likes to find the largest stick possible (basically a tree branch), and strut through the village. He then deposits it either in our neighbor’s yard or at the side door. So, a steady collection has developed in the side yard. I think he is developing a hoarding habit.

This week I have a quick read from the Tenth Circuit affirming the denial of an insurer’s liability denial regarding a §1983 judgment. The claimant received a $4 million jury award, which included punitive damages. Oklahoma’s punitive damage standard established the denial.

Ryan
Ryan P. O’Shea

[email protected]

 

Education of Insurers in the UK – 100 Years Ago:

Liverpool Daily Post
Liverpool, Merseyside, England
17 Jan 1925

LINKING UP WITH UNIVERSITIES.

EDUCATION OF
INSURANCE STAFFERS.

A scheme to bring the educational training of insurance staffs into definite association with the universities was foreshadowed at the annual dinner of the Insurance Institute of Liverpool, at the Exchange Station Hotel, last evening. Mr. A. O. Roberts (president of the institute) presided over a large gathering, the visitors including the presidents of the Yorkshire, Leeds, Manchester, and Nottingham institutes.

A Scholarship Suggestion.

Mr. Ernest Self (president of the Insurance Institute of Yorkshire), in proposing “The Charted Insurance Institute and the Insurance Clerks’ Orphanage,” suggested that the institute should extend the educational side if its activities by linking up with the universities. The trend of modern education was to make a man feel he was a waster if he did not give as well as receive. It would be a fine thing if the Council of the Institute could arrange for universities to organize classes in insurance work, and if some of the leading insurance offices would endow university scholarships for their staffs.

 

Rob Reaches the Threshold:        

Dear Readers,

As a football fan, I am genuinely looking forward to some upcoming Divisional Round playoffs games. As a football fan who lives in Buffalo, New York, I am genuinely terrified to watch the Bills defense attempt to tackle Derrick Henry on Sunday night in temperatures forecasted to be below 10 degrees. Ever since moving to the Western New York area, I have become infatuated with Bills Mafia, and the overall level of devotion this community has for its team. This city is truly more alive when the Bills are circlin' the wagons and hopefully they keep this thing going at least another week. 

Unfortunately, there is nothing new to report from the Appellate Division on Serious Injury Threshold this time around. We will try again in two weeks. 

Please enjoy the articles from my colleagues.

Rob
Robert J. Caggiano

[email protected]

 

Women? What Women? – 100 Years Ago:

The Indianapolis Star
Indianapolis, Indiana
17 Jan 1925

STATE INSURANCE
MEN TO MEET HERE

Eight Underwriter Organizations
Plan Three-Day Session Here.

A three-day program, the chief observance of which will be Indiana Insurance day, has been arranged by eight Indiana insurance organizations to be held at the Claypool hotel Jan. 19, 20, and 21.

 

LaBarbera’s Lower Court Library:

Dear Readers:

Another two weeks zoom by. Last weekend, I made my very first vision board with a few friends to plan our goals for the next year. After nearly three hours of work meticulously cutting each picture from the magazines, I had a final product. My dog must not have liked it so much, because in thirty minutes, he shredded it to pieces.  

This week I am discussing a New York County decision reminding us all that under an insurance policy, bodily injuries are not necessarily limited to physical injuries in New York. This case further highlights that even if certain claims are excluded from coverage, there remains a duty to defend those claims potentially covered under the policy. Hope you enjoy the read. 

Until next time…

Isabelle
Isabelle H. LaBarbera

[email protected]

 

How Much is Your Life Worth? – 100 Years Ago:

The Evening Times
Sayre, Pennsylvania
17 Jan 1925

How much insurance do you carry? The American people start 1925 with their lives insured for a total of 64,000 million dollars.

This amounts to about $560 of insurance for every man, woman, and child. All records were broken during 1924, when 13,500 million dollars of new life policies were taken out by the people.

The public has three times as much life insurance as it has money in the savings banks. The two are closely related. Life insurance is an approved method of saving money.

A considerable part of the population lacks the thrift instinct. They are unable to save systematically. To such people, life insurance is doubly a blessing. It is equivalent to buying a savings account and paying for it on the installment plan.

A nation that has 64,000 millions of dollars of life insurance, a third as much in savings banks, and savings invested in homes, certainly cannot be accused of being a spendthrift.

The main purpose of life insurance, of course, is protection for dependents in event the breadwinner dies. The fear that his death would bring financial suffering to his family haunts the man who has not provided for the future.

 

Lexi’s Legislative Lowdown:

Dear Readers,

Not much on the agenda this weekend, other than watching the Bills game, of course.

This week we discuss a proposed amendment to Insurance Law that would allow for alternative forms of identification for renters insurance.

Have a nice two weeks.

Thank you,

Lexi
Lexi R. Horton

[email protected]

 

Buy Insurance! – 100 Years Ago:

Democrat and Chronicle
Rochester, New York
17 Jan 1925

He knocked on wood;
He never had an accident

A man bought a new auto for $1,600. The dealer advised him to insure it. He didn’t—because he had never had an accident.

Several insurance agents tried to induce the man to carry insurance on the machine. He told them: “I never had an accident.”

So instead of purchasing he bought $150 worth of accessories -  stoplight, spotlight, motometer, gauges and balloon tires.

A few days later he skidded off the state road into a little girl. His lawyer advised him to settle for $3,000.

MORAL: Spotlights, motormeters, gauges and balloon tires are all very fine by they won’t pay the piper, Automobile insurance is the most important accessory. It should come first after the purchase of the car.

AN UNINSURED AUTO IS A DISTINCT LIABILITY. It is a lien on your real estate; it is an attachment on your bank account; it is a mortgage on your future.

 

North of the Border:

This past weekend, my two-year-old grandson told me with a mournful sigh, “Christmas is over.” Indeed, it is. We have even slid into mid-January … and we are back in full gear with new claims and issues mixed with moving the older pieces of litigation forward. All is good. In this week’s column I have reached back to November to discuss an Ontario case that used the commercial context in which the policy was negotiated as an interpretive aid in a coverage dispute. Until next time.

Best,

Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada

[email protected]

 

Headlines from this week’s issue, attached:

KOHANE’S COVERAGE CORNER
Dan D. Kohane

[email protected]

  • Not a single coverage case upon which to report during this two-week period.  Perhaps the fourth or fifth time in 26 years.  Sniff

 

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]

  • High Court Clarifies Penalties Available Under Section 349 of the GBL 

 

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel

[email protected]

  • Nothing from the Connecticut courts this week. See you in two.

 

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner

[email protected]

  • Appellate Court Upholds Stay of SUM Arbitration Pending a Framed Issue Hearing on Validity of Coverage Disclaimer
  • Appellate Court Reverses Supreme Court, as Insurer Did Not Establish Material Misrepresentations

 

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell

[email protected]

  • Nothing for me this time around. Until next time …

 

STORM’S SIU
Scott D. Storm

[email protected]

  • Nothing this Week

 

FLEMING’S FINEST
Katherine A. Fleming

[email protected]

  • First-Party Insured’s Negligence Claim Was Duplicative of Her Bad Faith Claim Against Her UIM Insurer. Carrier Did Not Act in Bad Faith During Settlement Negotiations or Take Disparate Positions on Key Factual Issues

 

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick

[email protected]

  • Nothing new from the New Jersey courts this time around. See you all in two weeks.

 

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea

[email protected]

  • “Reckless” Not Ambiguous, so Policy Is Not Illusory Barring Recovery of $4 Million Judgment Received by Claimant in § 1983 Action

 

ROB REACHES the THRESHOLD
Robert J. Caggiano

[email protected]

  • Nothing new from the Appellate Division on Serious Injury Threshold in 2025 - we will try again in two weeks. Enjoy the articles from my colleagues!

 

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera

[email protected]

  • Court Holds That Commercial General Liability Insurers Had Obligation to Defend Insured in Action for Claims of Emotional Distress, Fear, and Anxiety

 

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton

[email protected]

  • Proposed Legislation to Allow for Alternative Forms of Identification for Renters Insurance

 

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada

[email protected]

  • When Asked to Interpret an Insurance Policy, a Court Will Consider the Terms Used in Light of the Surrounding Circumstances of the Policy, in Order to Protect the Reasonable Expectations of Both the Insurer and the Insured

 

Our heart goes out to those suffering in California.

Dan

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 and New Jersey.

In addition, Dan D. Kohane is a Foreign Legal Consultant, Permit No. 0119144, issued by the Law Society of Upper Canada, and authorized to provide legal advice in the Province of Ontario on matters of New York State and federal law.


NEWSLETTER EDITOR
Dan D. Kohane

[email protected]

ASSOCIATE EDITOR
Agnes A. Wilewicz

[email protected]

COPY EDITOR
Evan D. Gestwick

[email protected]

 

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
[email protected]

Steven E. Peiper, Co-Chair
[email protected]

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Brian F. Mark

Scott D. Storm

Domenica D. Hart

Ryan P. Maxwell

Kyle A. Ruffner

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

 

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

Michael F. Perley

Scott D. Storm

 

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

Ryan P. O’Shea
[email protected]

Kyle A. Ruffner
[email protected]

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

 

Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri
Lee’s Connecticut Chronicles

Ruffner’s Road Review

Ryan’s Federal Reporter

Storm’s SIU

Fleming’s Finest

Gestwick’s Garden State Gazette

O’Shea Rides the Circuits

Rob Reaches the Threshold

LaBarbera’s Lower Court Library

Lexi’s Legislative Lowdown

North of the Border

 

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


Not a single coverage case upon which to report during this two-week period.  Perhaps the fourth or fifth time in 26 years.  Sniff.

 

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper

[email protected]

01/14/25       Hobish v. AXA Equit. Life Ins. Co.
New York Court of Appeals
High Court Clarifies Penalties Available Under Section 349 of the GBL 

Plaintiff purchased a universal life insurance policy from defendant in 2007.  The plan purchased required that plaintiff’s trust remit premium payments which would cover the cost of insurance.  Essentially, money was held by defendant in an interest-bearing account, and the “premium draw” would be taxed against the account.  In exchange for a lower cost of insurance deduction, the policy indicated that any monies in the account at the time of the insured’s death would be kept by defendant.  There was a second option which would revert premiums back to the trust, but it required a higher cost of insurance calculation. 

The cost of insurance debits was determined by a formula adopted by defendant in 2004.  The policy was purchased in 2007 and provided a $2,000,000 death benefit.  In late 2015, defendant advised that the cost of insurance debit was increasing for members of certain classes.  The classes were participants holding policies with a benefit in excess of $1,000,000 and either 70-70 or 80 and above. Although the policy permitted amendments to the cost of insurance debits, the changes increased plaintiff’s monthly contribution rate approximately $3,500 per month.

Faced with the increase in cost, plaintiff elected to cancel the policy “under protest.”  In so doing, plaintiff recovered the $412,688.01 being held in the plaintiff’s account with defendant; less a $35,586.49 early termination fee. 

Plaintiff immediately, then, commenced an action alleging breach of contract, bad faith, and violations of General Obligations Law, Section 349.  Plaintiff argued that defendant breached the policy by improperly raising cost of insurance debits on classes that were otherwise not defined at the time the policy incepted.  Plaintiff posited that he was entitled to $1,600,000 in damages.  Essentially, the full policy limit of $2,000,000 less the approximately $400,000 which would have been rightly kept by the defendant upon plaintiff’s death.  Plaintiff also sought approximately $250,000 in restitution because, under his theory, the account with defendant would have been less than $400,000 at the time of death.

For the breach of contract, plaintiff argued that she was placed in the “class” of Standard, Non-Smoker at that time policy incepted.  As she was not placed in an age-related class, plaintiff argued it was improper to do so for purposes of raising cost of insurance debits.  Further, because the policies were marketed to elderly people, it was submitted that the bait and switch of class certifications was a deceptive business practice.

As for the breach of contract question, the Court of Appeals affirmed the trial court and Appellate Division who had previously held a question of fact existed on the definition of “class.”  Because the court concluded that the term “class” could be interpreted in at least two different ways, it was ambiguous.  Further, because extrinsic evidence did not resolve the ambiguity, the matter had to be set to a jury for determination. It is noted that the Court of Appeals rejected plaintiff’s argument that the term should be construed against defendant under principles of contra preferentem.     

Plaintiff’s theory of damages for the breach of contract, however, was rejected.  The Court observed that defendant did not breach, at all, the terms of the agreement.  Rather, plaintiff elected to trigger the cancellation benefit and withdraw from the program.  Plaintiff’s claims for actual damages under the GBL 349 claim were also rejected for the same reason.  The decision to cancel the policy meant that plaintiff elected a remedy that was beyond the $2,000,000 policy limit that could have been realized had she remained in the program.  

With regard to the claims of bad faith, the Court reiterated the long-standing rule that punitive damages on a breach of contract are only available where “the fraud, aimed at the public generally, is gross and involves high moral culpability … or when it evinces a high degree of moral turpitude and demonstrates such wanton dishonesty as to imply criminal indifference to civil obligations.”  The Court, not surprisingly, took precious little time to determine that there were no allegations rising to the level required to successfully maintain a bad faith/punitive damages claim.

The Court also specifically addressed the measure of damages available under GBL 349.  As an initial matter, the Court specifically noted that punitive damages, in the traditional sense, were not available under Section 349.  What is available, however, is treble damages (of proven compensable damages).  However, that limit is subject to the statutory cap of $1,000 as provided by the statute.  Although the Court seemed to recognize the relatively paltry cap of $1,000, it was unwilling to change the threshold which was set by the legislature in 1980. 

In a quick, but direct, dissent, Judge Halligan disagreed with her colleagues on the breadth of damages available for violations of GBL 349.  In short, she would have passed on the question of whether punitive damages are available under the statute because it was not fully briefed on the Record in her opinion and did not need to be decided under the particular circumstances of this case. 

 

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel

[email protected]

Nothing from the Connecticut courts this week. See you in two.

 

RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]

01/08/25       In the Matter of Nationwide Gen. Ins. Co. v. Discolo
Appellate Division, Second Department
Appellate Court Upholds Stay of SUM Arbitration Pending a Framed Issue Hearing on Validity of Coverage Disclaimer

The respondent, Francis P. Discolo, was involved in a motor vehicle collision with a vehicle owned by additional respondent Xudong Ping. The Ping vehicle was insured by Country-Wide Insurance Company, which denied Discolo's bodily injury claim because its investigation had revealed that the Ping vehicle was in "a state of theft" on the date of loss. Respondent served his insurer, Nationwide, with a demand for arbitration of his claim for SUM benefits. Nationwide commenced this proceeding to permanently stay arbitration, arguing the Ping vehicle was insured on the date of the collision. In an order entered July 6, 2023, the Supreme Court granted the branch of the petition to temporarily stay arbitration pending a framed-issue hearing. Respondent appealed.

The Appellate Court held the Supreme Court properly granted the petition to temporarily stay arbitration pending a framed-issue hearing as to whether Country-Wide properly disclaimed coverage of the Ping vehicle. The uninsured motorist endorsement of an insurance policy does not operate unless and until it has been established that the offending vehicle was uninsured on the date of the accident. An insurance carrier seeking to stay the arbitration of an uninsured motorist claim has the burden of establishing that the offending vehicle was insured at the time of the accident. Once such a prima facie case of coverage is established, the burden shifts to the opposing party to come forward with evidence to the contrary.

In this case, the court determined that Nationwide established a prima facie case with respect to the existence of insurance coverage for the Ping vehicle by producing a police accident report, which contained the Ping vehicle's insurance code. Country-Wide's letter to Respondent’s counsel, stating that it was denying Respondent’s bodily injury claim because its investigation had revealed that the Ping vehicle was in "a state of theft" on the date of loss, merely raised an issue of fact as to whether the disclaimer by Country-Wide was proper. Under these circumstances, the Court held the Supreme Court properly determined that a framed-issue hearing was necessary to determine whether Country-Wide properly disclaimed coverage and therefore upheld the temporary stay of the arbitration.

 

01/14/25       State Farm Mut. Auto. Ins. Co. v. Able Chiropractic, P.C.
Appellate Division, First Department
Appellate Court Reverses Supreme Court, as Insurer Did Not Establish Material Misrepresentations

In this case, the Supreme Court granted plaintiff's motion for summary judgment as against defendant medical providers Full Psychology, P.C., Metro Pain Specialists Professional Corporation, Big Apple Medical Group Corp., ERF Physical Therapy, P.C., and Michele Glispy, LAC. The Appellate Division unanimously reversed and remanded for further proceedings.

The First Department determined that the Supreme Court should have denied plaintiff's motion for summary judgment as against defendant medical providers. The court determined that, even assuming plaintiff established that the insureds misrepresented their residence and the primary garaging location of the insured vehicle, plaintiff failed to establish, as a matter of law, that the misrepresentations as to the insureds' correct address and garaging location were material misrepresentations. This was because the affidavit of plaintiff's underwriter was merely "conclusory and not supported by relevant documentary evidence such as underwriting manuals, rules, or bulletins" sufficient to establish the materiality of the misrepresentations. Accordingly, the Appellate Court remanded the matter for further discovery. 

 

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

Nothing for me this time around. Until next time.

 

STORM’S SIU
Scott D. Storm

[email protected]

Nothing this week.

 

FLEMING’S FINEST
Katherine A. Fleming

[email protected]

01/08/25       Hood v. United States Auto Ass’n
South Carolina Supreme Court
First-Party Insured’s Negligence Claim was Duplicative of Her Bad Faith Claim Against Her UIM Insurer. Carrier Did Not Act in Bad Faith During Settlement Negotiations or Take Disparate Positions on Key Factual Issues

Hood was involved in a three-car accident in which she (car two) was t-boned by car one and then collided with oncoming traffic (car three). The driver of car three sued Hood and car one, and USAA, Hood’s UIM carrier, provided Hood with counsel. The main issue concerning Hood’s liability was whether she had headlights on or not at the time of the accident. Hood argued they were on, and the other cars argued that they were off.

Hood sued car one for her damages, and after car one’s insurer paid its policy limits, USAA stepped into car one’s shoes and defended the suit under Hood’s UIM policy. Before trial, USAA and Hood mediated the claim but failed to settle. At trial, USAA stipulated that Hood’s headlights were off, but Hood argued they did not need to be on because it was not dark out yet. Hood won the UIM suit with the jury finding her 49% at fault. The verdict exceeded Hood’s UIM limits even with the reduction, and USAA paid that sum to Hood.

While the UIM Action was still pending, Hood brought the third lawsuit against USAA, alleging bad faith, negligence, breach of contract, negligence per se, barratry, and outrage, alleging USAA took disparate positions on Hood's headlight use in the UIM Action and the action against Hood by car three. She claimed she suffered emotional distress and incurred the costs of prosecuting the UIM action. Before trial, the court granted USAA summary judgment on (1) the barratry cause of action because no evidence supported the claim; (2) the outrage cause of action because the conduct did not rise to the level of outrage; (3) the breach of contract cause of action because the award had been paid and the UIM limits tendered; and (4) the negligence per se cause of action. During trial, USAA made a directed verdict motion on the remaining causes of action, which the trial court granted in part. It held Hood was not entitled to excess verdict damages, that the jury could not consider USAA's conduct during mediation because USAA did not have a duty to offer the full amount of its settlement authority, and there was insufficient evidence of emotional distress. Thus, the court submitted only the claims of bad faith and negligence to the jury. The jury found in favor of Hood for both claims. USAA moved for JNOV, arguing a first-party insured could only bring a bad faith claim. The trial court granted USAA’s motion for JNOV on the negligence claim.

Hood appealed, and the court of appeals affirmed the trial court's decision, holding that a first-party insured has no separate cause of action in negligence under the duty of good faith and fair dealing. It also held that as an additional sustaining ground, no reasonable jury could find USAA acted in bad faith, explaining that USAA had no duty to offer its full reserves or settlement authority during mediation of the UIM Action and there was no evidence of USAA taking disparate positions as to Hood's headlights.

The South Carolina Supreme Court granted certiorari on two issues: (1) whether a first-party insured can bring both a negligence and bad faith claim against their UIM insurer; and (2) whether the court of appeals erred in holding USAA did not act in bad faith during settlement negotiations of Hood's UIM claim or in taking a disparate position on a key factual issue in two underlying tort actions. For the first issue, the Supreme Court disagreed with the lower court, reasoning that courts have specifically rejected a freestanding negligence claim as being duplicative of a bad faith claim.  the relevant case law. Furthermore, South Carolina's case law contemplates negligence as merely evidence for a bad faith claim. For the second issue, the Supreme Court found Hood’s arguments were meritless. The Supreme Court noted that its bad faith precedent has never required an insurance company to disclose or offer its reserves or full settlement authority to an insured. Instead, the insurance company must act in good faith in paying an uncontested claim and in claim processing. Once car one settled with Hood, USAA was allowed to step into car one’s shoes to litigate the UIM Action for its own benefit; it was not required to simply hand over the UIM policy limits to Hood. Further, courts in South Carolina have found that when an insurance company has a valid defense, it can offer and settle for less than the claim's objective value as long as the offer is reasonable. As for the headlights argument, USAA defended Hood in the action against her by car one. USAA was not a party to that action, and once it stepped into car one’s shoes in the UIM action, it was allowed to contest liability for UIM benefits. Further, Hood ended up conceding that her headlights were not on. Accordingly, the Court affirmed the lower court’s decision.

 

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick

[email protected]

Nothing new from the New Jersey courts this time around. See you all in two weeks.

 

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea

[email protected]

01/14/25       Ousterhaut v. Morgan
United States Court of Appeals, Tenth Circuit
“Reckless” Not Ambiguous, so Policy Is Not Illusory Barring Recovery of $4 Million Judgment Received by Claimant in § 1983 Action

Osterhout was the victim of beating during a traffic stop by LeFlore County Undersheriff Morgan. Ousterhout filed a §1983 action for excessive and received a $4 million jury award. After the judgment Ousterhout commenced a garnishment proceeding against ACCO-SIG based upon its liability policy with LeFlore County. ACCO-SIG moved for summary judgment based upon the portions of the liability policy that disclaimed coverage for “reckless conduct.”

The district court granted ACCO-SIG’s motion and Ousterhout’s challenged that decision on whether the conduct was “reckless” and that the policy was unambiguous, thereby rendering Oklahoma’s reasonable expectations doctrine applicable.

Like other states, Oklahoma employs the “reasonable expectations” doctrine only where the contested is ambiguous or exclusions use technical, obscure language, as well as where exclusions are hidden. Thus, if a term is ambiguous and the insurer, or its agent, creates a reasonable expectation of coverage which is not supported by the policy, then the expectation prevails over the policy.

The appellate court identified five places within the policy where liability coverage is excluded for “reckless” conduct. It noted the jury awarded punitive damages, which is available only for malicious or reckless conduct. Thus, the jury must have found Morgan’s conduct either malicious or reckless, something both litigants agreed upon. Ousterhout’s agreement was unappealing since he cited no authority that the term “reckless” is ambiguous, and the court affirmed the district court’s finding on this ground.

It also rejected the secondary argument that the policy is an illusory contract in instances where a police officer uses excessive force. Since the policy was unambiguous, the court determined LeFlore County and ACCO-SIG agreed for themselves what conduct would and would not be covered. Accordingly, the court could not rewrite the terms of the policy.

 

ROB REACHES the THRESHOLD
Robert J. Caggiano

[email protected]

Nothing new from the Appellate Division on Serious Injury Threshold in 2025 - we will try again in two weeks. Enjoy the articles from my colleagues!

 

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera

[email protected]

12/26/24       Aspen Specialty Ins. Co. v. Associated Indus. Ins. Co., Inc.
New York State Supreme Court, New York County
Court Holds That Commercial General Liability Insurers Had Obligation to Defend Insured in Action for Claims of Emotional Distress, Fear, and Anxiety

Aspen Specialty Insurance Company (“Aspen”), Falls Lake National Insurance Company (“Falls Lake”), and HDI Global Specialty SE (“HDI”), brought suit against Associated Industries Insurance Company (“Associated Industries”), Greater New York Mutual Insurance Company (“Greater New York”), and Green Skyline Apartments, LLC (“Green Skyline”). The Plaintiffs sought a declaration that Associated Industries and Greater New York owed a duty to defend Green Skyline in a class-action lawsuit filed in Onondaga County (the “Underlying Action”).

Greater New York issued a commercial general liability policy to Green Skyline from December 2016 to February 2017. Associated Industries later assumed the risk and issued multiple commercial general liability (“CGL”) policies to Green Skyline from February 2017-2019.

The Associated Industries policies defined  “bodily injury” as “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”

The Greater New York policy defined “bodily injury” as “bodily injury, sickness or disease sustained by a person, including mental anguish or death resulting from any of these at any time.” “Occurrence” is defined identically under the Greater New York policy as the Associated Industries policies.

The Underlying Action alleged that Green Skyline caused damages to the residential tenants asserting causes of action sounding in a breach of the warranty of habitability and the covenant of quiet enjoyment. It is further alleged that because of Green Skyline’s failure to provide adequate security, the tenants were regularly harassed, assaulted, robbed, and on one occasion, murdered. The plaintiffs in the Underlying Action allege to have suffered emotional distress, fear and anxiety. The Underlying Action sought compensatory damages, including rent abatement. After receiving notice of the Underlying Action, Associated Industries and Greater New York disclaimed coverage to Green Skyline.

In the motion for summary judgment, Plaintiffs argued that because of the exceedingly broad duty to defend, Associated Industries and Greater New York owed an obligation to participate in the defense of Green Skyline in the Underlying Action. Plaintiffs argued that the Underlying Action sought compensatory damages and contained allegations of “bodily injury” as defined under the Associated Industries and Greater New York policies. Plaintiffs argued that the claims of emotional distress, fear, and anxiety satisfy the definition of “bodily injury” under the Associated Industries and Greater New York policies.

The Defendants cross-moved for summary judgment, and argued for an obligation to defend to arise, the complaint in the Underling Action must seek damages that would compensate a claimant directly for alleged bodily injuries. Further, Defendants alleged that the only compensatory damages for breach of the warranty of habitability sought in the Underlying Action are for rent abatement and/or rent credit, not directly related to any alleged claims of bodily injury.

In their analysis, the Court identified that the Underlying Action sought damages for rent abatement, compensatory damages and attorneys’ fees because of “bodily injury” caused by an “occurrence.” Citing to the Court of Appeals holding in Lavanant v. General Acc. Ins. Co. of Am., the Court wrote that it is clear “that claims for rent abatement and the breach of the warranty of habitability can be covered under a standard commercial liability policy such as the ones at issue here even if the requested relief is something other than straight monetary compensation for those covered injuries.” The Court identified that it is the nature of the injury, not the type of relief sought, which is relevant in determining a duty to defend.

The Court makes clear that under New York law, the duty to defend goes beyond what the insurer might be expected to have to indemnify at the conclusion of the Underlying Action. The Court further writes that even assuming the breach of the warranty of habitability is proven to be an uncovered claim, where no indemnity is owed, the duty to defend is not diminished. As long as any of the facts or grounds that may potentially bring the claim within coverage are alleged,  an insurance carrier must defend their insured for the entirety of the action.

To sum up the discussion, the Court identifies that the allegations in the Underlying Action are sufficient to trigger the duty to defend under the Associated Industries and Greater New York policies. As such, the Court granted Plaintiffs’ motion for summary judgment and denied Defendants’ cross-motion. The Court declared that Associated Industries and Greater New York have a duty to defend Green Skyline in the Underlying Action and must reimburse Plaintiffs for their allocated share of attorneys’ fees, costs, and disbursements incurred in the defense of Green Skyline in the Underlying Action.

 

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton

[email protected]

01/17/25       New York Assembly Bill A125B
New York State Assembly
Proposed Legislation to Allow Alternative Forms of Identification for Renters Insurance

The proposed legislation was introduced on January 4, 2023, and was delivered to the Senate on March 4, 2024. A125B seeks to amend Insurance Law by adding a new section § 3423 which would allow for alternative forms of identification to be used to obtain renters insurance. Alternative forms include a municipal identification card, or a state or local government issued identification card.

 

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada

[email protected]

11/25/24       Pryce v. Lawyers’ Professional Indemnity Company
Ontario Superior Court of Justice
When Asked to Interpret an Insurance Policy, a Court Will Consider the Terms Used in Light of the Surrounding Circumstances of the Policy, in Order to Protect the Reasonable Expectations of Both the Insurer and the Insured

In order to practice law in any Canadian province or territory, one must be a member of the law society of a provincial or territorial law society.  These societies, known in Quebec as the Barreau, and elsewhere as ‘law societies’ regulate the legal profession in each province and territory.

Canadian lawyers must maintain at least $1 million in professional liability insurance in order to be a member in good standing in any of these law societies. In the Province of Quebec, the minimum limits are $10 million.

The primary layer of mandatory professional liability insurance is offered through affiliates of the law societies. It also includes basic cyber coverage. Many lawyers obtain excess liability coverage and excess cyber coverage purchased through the private market to supplement their basic policies. In short, there is no exception to the rule that lawyers carry professional liability insurance: “One way or another, every lawyer in private practice in Canada has professional liability insurance – and must have it in order to practice,” says Dan Pinnington, Vice-President Claims Prevention and Stakeholder Relations of LawPRO (Lawyers' Professional Indemnity Company), which provides professional liability insurance to Ontario lawyers.

And so, when a client of Law Society of Ontario member Jamie Bruce, a partner with the Oshawa, Ontario firm, Kelly Greenway Bruce, sued Bruce and his paralegal Michael Pryce for errors and omissions associated with accident benefits and tort claims arising from a motor vehicle accident, Bruce reported the action to LawPRO. LawPRO confirmed coverage for Bruce and appointed counsel to defend him.

In Ontario, paralegals are also regulated by the Law Society of Ontario. As part of their licensing requirements, they must hold professional liability insurance. Pryce was insured under a mandatory Paralegal Professional Liability policy issued by Lloyd’s Underwriters.

Lloyd’s was notified and agreed to defend Pryce. However, Pryce also tendered the action to LawPRO and asked that he be defended under Bruce’s policy. LawPRO declined coverage for Pryce. Not taking ‘no’ for an answer, Pryce sued LawPRO. The issue of whether LawPRO was correct in its position was heard by Mr. Justice Lee Akazaki in the Ontario Superior Court in October 2024 and the reasons for judgment were issued in December 2024.

Pryce argued that as there was no dispute that throughout, he was employed by Bruce’s firm as a paralegal; that he was acting within the course and scope of his duties with Bruce; and, as there was also no dispute that Bruce was vicariously liable for his conduct; LawPRO, being the insurer of Bruce, was required to defend him.

In response to this argument, the Court held that the Canadian common law applicable to employment contracts does not give rise to a duty on the employer to defend those for whom the employer is vicariously liable in litigation. Even if it did (which is not the case) Pryce failed to establish that he is covered under Bruce’s LawPRO policy.  That is because the LawPRO policy covers the errors and omissions of individual lawyers, not the errors and omissions of paralegals.

From a coverage point of view, what is significant about this decision is that the Court discussed how the “commercial atmosphere in which the insurance was contracted” influenced the Court’s interpretation of the LawPRO policy. The Court analyzed the applicable Law Society of Ontario by-law requiring member lawyers to obtain mandatory professional liability insurance through LawPRO; took judicial notice of the history and formation of LawPRO; that the LawPRO policy is a policy of adhesion to be interpreted broadly but in doing so the Court stated that it cannot extend the plain words of the coverage agreement to individuals who are not lawyers as the Court cannot rewrite the terms of insurance contracts.

(Prior to his appointment to the bench in December 2022, Mr. Justice Lee Akazaki was a long-time director of Canadian Defence Lawyers.)

 

 

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