Volume XXVI, No. 26 (No. 699)
Friday, June 6, 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, New Jersey, 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.
Dear Coverage Pointers Subscribers:
Do you have a situation? We love situations. HF celebrated its 48th anniversary on June 1. Congratulations to our professional staff and THANK YOU to our clients and friends for the great support we’ve received from you over the decades.
Welcome to the final issue of our 26th year of continuous publication. Have no fear, Volume XXVII, No. 1, will be in your mailbox in two weeks.
Firm Promotions and Accolades
We have exciting news this month, as three members of our Labor Law Team, Ashley M. Cuneo, Patrice C.S. Melville, and Eric D. Andrew, have been elevated to Member of the Firm.
- Eric D. Andrew has been a member of Hurwitz Fine’s Labor Law team for nearly a decade. In addition to his work in Labor Law, Eric also focuses on toxic tort/environmental law and other insurance defense matters.
- Patrice C.S. Melville, a key member of our Melville litigation team, focuses on defending businesses and individuals in complex litigation matters, primarily New York Labor Law claims.
- Ashley M. Cuneo has also played a pivotal role in our Melville office’s growth. Her practice is focused on New York Labor Law. She also handles other complex litigated matters.
All three are experienced Labor Law attorneys, and the firm is stronger with them as Members. Congratulations, we appreciate all you do! I am personally thrilled to work with each of the three of you and am glad you are on the Labor Law Team.
We’re also proud to recognize two of our attorneys who were recently accepted into nationally respected legal defense organizations:
- Brian M. Webb has been accepted into the Trucking Industry Defense Association (TIDA), an exclusive organization of attorneys and industry professionals who specialize in the defense of the trucking and transportation sector.
- Anastasia M. McCarthy was recently accepted into the National Retail and Restaurant Defense Association (NRRDA), a prestigious organization dedicated to defending retail and hospitality-related claims. This recognition underscores her professional excellence and growing leadership in the industry.
Our firm is truly composed of dedicated and experienced attorneys. Membership in these organizations is not given out like candy at Halloween; it requires a real understanding of the area of law and a comprehensive peer review. Great attorneys but perhaps more important, great people. Proud to be their partner and friend.
“Serious Injury” Training for your Claims Staff Available
Damages in lawsuits arising out of motor vehicle accidents in the State of New York are often subject to a unique aspect of New York Law contained in Article 51 of the Insurance Law – the “No Fault statute.” These concepts, both the “serious injury threshold” for noneconomic damages and “basic economic loss” for economic damages are often misunderstood by both claims professionals and personal injury attorneys alike. Understanding how Article 51 works to limit the damages available to plaintiffs in automobile claims is necessary in order to properly handle such cases. Upon request, Brian Webb from our office who heads our transportation team (and, as noted above, was just elected to TIDA membership), is available to put on a presentation giving an overview of Article 51, as well as some of the nuances and pitfalls of it. Please reach out to him – [email protected].
One Hundred Years Ago – What Insurance Issues were Facing the United States
As we bring this Volume XXVI to a close, and as you review this cover note and the attached issue of Coverage Pointers, you will see the usual array of 100 Years Ago stories. When we first started including the 100 years ago clippings, I’d guess a decade ago, I focused on insurance coverage decisions, but over the years I changed my focus to stories that may have some relevance to what is going on in the world today (or articles that I found reflective of the times).
I thought, though, it might make sense to peek back, 100 years ago, to see what insurance issues faced our nation. With the help of AI, I offer the following:
A century ago—in the mid-1920s—the United States was experiencing a period of economic expansion, industrialization, and social change following World War I. Insurance was evolving rapidly to meet the demands of a transforming society. The most important insurance issues around 1925 included:
- Industrial Accidents and Workers' Compensation
- Context: As factories and mechanized labor increased, workplace injuries became common.
- Issue: States were still in the process of implementing and standardizing workers' compensation systems. By 1925, nearly every state had adopted some form of workers’ comp, but insurers and employers were still adjusting to the legal and financial burdens.
- Debate: How to fairly compensate injured workers without exposing employers to ruinous liability.
- Automobile Insurance and the Rise of Personal Liability
- Context: Car ownership exploded in the 1920s, but insurance lagged behind.
- Issue: Few states mandated auto liability insurance, and many drivers were uninsured.
- Concern: Courts were starting to see a surge of litigation from car accidents. Insurers had to quickly develop new products to cover liability, collision, and theft.
- Life Insurance Growth and Public Trust
- Context: Life insurance was a booming industry—often seen as a savings vehicle or moral duty.
- Issue: There were concerns about misleading sales tactics, policy forfeitures, and lack of consumer education.
- Trend: The major mutual life companies were expanding rapidly, with regulatory scrutiny increasing.
- Fire Insurance and Urban Development
- Context: Fire insurance was still one of the largest lines of property coverage.
- Issue: Large urban fires in cities like Baltimore and San Francisco in the early 20th century led to concerns about rating standards, building codes, and insurer solvency.
- Development: The National Board of Fire Underwriters was pushing for uniform fire codes and better risk classification.
- Insurance Regulation and Solvency
- Context: States regulated insurance independently, with no federal oversight.
- Issue: Lack of consistency and solvency oversight led to consumer risk. Some insurers failed or operated fraudulently.
- Solution: The National Association of Insurance Commissioners (NAIC), founded in 1871, was pushing for model laws and cooperation between state regulators.
- Fraud and Moral Hazard
- Context: Fraudulent claims, arson-for-profit, and staged accidents were already known problems.
- Issue: Insurers were concerned about the cost of fraud and began creating internal investigative units—early precursors to today's special investigative units (SIUs).
7. Health Insurance: Largely Nonexistent
- Context: Health insurance was virtually unheard of; most medical expenses were paid out-of-pocket or covered by fraternal benefit societies.
- Future Flashpoint: While not a major issue yet, the groundwork was being laid for employer-sponsored health insurance, which would arise in the 1940s.
For those who need to keep up to date on insurance coverage between issues of Coverage Pointers, we’re happy to help. Just follow me on LinkedIn and we’ll keep you up to date. I’m easy to find – my linked in name is (ready for this unusual and unexpected name): Kohane (now there’s a shock) and you can find me here: https://www.linkedin.com/in/kohane/
Need a Mediator or Arbitrator, Give a Call
A growing percentage of my practice has been a mediator (and sometimes as an arbitrator) in insurance coverage, commercial, personal injury, and other disputes. With a robust national client base, I am regularly called on by friends and colleagues from around the country, folks who know me and trust me, to help resolve disputes. Often, particularly in mediated matters, I know the insurers and lawyers on both (or several) sides of the dispute. Since they all trust me as a fair dealer, they feel comfortable having me try to help close the file (and avoid precedent). Just pick up the phone, 716.849.8942 or send an email to [email protected] and I’ll try to help.
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:
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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.
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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.
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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.
Quiet Night – 100 Years Ago:
Buffalo Post
Buffalo, New York
6 June 1925
Only Six Drunks.
Only Six drunks were arraigned before Judge Lamson this morning. Daniel Daley, a one-armed man, known to the police as a drunken panhandler, lodging at 146 East Eagle Street, drew 30 days, as did James O’Brien of 85 Llyod Street, who is an old timer.
Peiper on Property (and Potpourri):
A quiet start to a traditionally quiet time of the year. Nothing to report this week.
If you have lived in Upstate New York, or really anywhere in the Upper Midwest, this Spring, you deserve a beautiful, long, hot summer. This week has been a nice start to what we hope will follow. Wishing you nothing but fairways and greens for the rest of the Summer. And energy efficient air conditioning.
That’s it for this week. See in you two more.
Steve
Steven E. Peiper
[email protected]
Kardashian Doppelganger – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
6 June 1925
INDIC PLOTTERS
Men who planned to kidnap Mary
Pickford are Jailed
Los Angelese, Cal., June 5 – Three men were indicted on a conspiracy charge in connection with an alleged plot to kidnap Mary Pickford, moving picture actress, and hold her for $200,000 ransom.
They are Charles F. Stevens, Adrian J. Wood, and Claude E. Holcomb.
Douglas Fairbanks, husband of the actress appeared before the grand jury. The men were jailed in the absence of $50,000 bail each.
Lee’s Connecticut Chronicles:
Dear Nutmeggers:
Thanks to all of you who offered your condolences and kind words on the passing of my mother. It was meaningful to feel the love of the Coverage Pointers community.
On the Connecticut coverage front, we have an important decision courtesy of our friend, Wystan Ackerman. There, the court granted Standard Fire’s (Travelers) motion to strike statutory and common law bad faith counts, recognizing the “general trend” by our state courts to hold these causes of action to a higher pleading standard than simply parroting the “magic words” of the CUTPA/CUIPA statutes. Although we’re still waiting for an appellate court to weigh in, the Superior Courts’ coalescence around a stricter standard seems to have taken hold.
Until next time, keep keeping safe.
Lee
Lee S. Siegel
[email protected]
American Ancestry – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
6 June 1925
CITIZENSHIP OF
AMERICAN’S WIFE
PROVES MYSTERY
Canadians reject passport plea
and American State Department
Refuses answer.
Bridgeburg, Ont., June 5. – A native American citizen who has lived in Canada since he married a girl born in Scotland is having great difficulty procuring a passport for his wife who for several years has been planning to spend this summer in Scotland.
The Ottawa government declined to issue the passport because Canadian law says that a women is of the citizenship of her husband. After three trips to Niagara Falls, Ont., the United States vice consul there forwarded the application for a passport to Washington. That was three weeks ago, and nothing has been heard of it yet. The United States law, as amended a few years ago declared that a wife remains of her native nationality until she has lived at least a year in the states and has gone through the process of naturalization.
Incidentally, the United State citizen had to produce a birth certificate from the clerk of a small town in New England and a Niagara Falls (Ont.) lawyer charged his $5 for completing it in affidavit form.
Ruffner’s Road Review:
Dear Readers,
It finally feels like Summer is here, with a high of 80 degrees in Buffalo, a great day to be golfing after work! In other sports news, I’m excited for both the Stanley Cup and NBA finals to get underway this week and, of course, for our Hurwitz Fine Softball team to continue to fight for our first win of the year this Thursday.
I have two cases this week stemming from motor vehicle accidents. In the first, the appellate court reversed the lower court’s decision, holding MVAIC's motion for summary judgment dismissing the complaint should have been granted, as the injured party was not a "qualified person" pursuant to Insurance Law 5202(b) because she was an owner of the vehicle in which she was a passenger at the time of the accident. In the second, the insurer’s motion for summary judgment was granted against the medical provider assignee’s as (1) the claimant’s failure to sign and return their examination under oath transcripts, breaching a condition precedent to coverage, and (2) the insurer established a founded belief that the accident was intentionally caused or a result of fraud.
Until next time,
Kyle
Kyle A. Ruffner
[email protected]
President on Ice – 100 Years Ago:
The Republican
Springfield, Massachusetts
6 June 1925
Rice Cakes Keeping Car
Cool for Coolidge
Washington, June 6 – The car President Coolidge is scheduled to occupy on his trip to Minnesota today is parked in the coolest shed in the Washinton railway yards crammed with huge cakes of ice.
By keeping the compartments iced until 20 minutes before the train is scheduled to leave at 3 p.m. railway officials hope to prove the President with the coolest accommodations possible.
The compartments to be occupied by Secretary of State and Mrs. Kellogg and Senator Lenroot are likewise packed.
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers Subscribers:
I had the opportunity to volunteer yesterday as part of our local school district’s Distraction Free Schools Committee, providing input to the district as it prepares its Students and Personal Electronic Devices Policy—a New York State requirement following the recent passage of an amendment to its education law restricting student use of internet-enabled devices during the school day. Much different hat to wear than I am used to, but the discussion was equally robust. What I found most interesting was the variance of issues faced at all levels of K-12 education. My kids are of elementary school age and my input was from that perspective. And the younger the kids, the lesser the impact of this new law. Who knew that separating iPhones from kindergarteners was less controversial than doing so from High School teenagers? While I’m kidding, it is true. But while elementary school administrators will have little issue eliminating iPhones from classrooms, smartwatches are another story. Only time (and a couple more meetings) will tell what the final policy will look like.
In this edition of Ryan’s Federal Reporter, I tackle a motion to compel disclosure of materials requested of an insured that might bear upon an insurer’s rescission of coverage due to misrepresentations. How broad is overbroad?
Until next time,
Ryan
Ryan P. Maxwell
[email protected]
Wonder How They Found Out? – 100 Years Ago:
The Buffalo News
Buffalo, New York
6 June 1925
SENTENCED AS “MAN;”
PROVES TO BE WOMAN
ALBANY, June 5. – Mary Agnes Mitchell of Lowell, Mass., who had been confined in the Albany County jail for two weeks as a man under the name of James F. Schaefer, today revealed that she has been masquerading when she was sentenced to from one and a half to five years in Dannemora prison on a charge of theft of an automobile. Official steps will be taken immediately to have the sentence changed, it was said, as Dannemora is exclusively a man’s prison.
The woman with Margaret MeCann and Grace Schaeffer, who posed as Miss Mitchell’s wife. Fred Burnette and George Prince were arrested in Batavia two weeks ago for theft of an automobile.
Storm’s SIU:
Hi Team:
Two PIP cases for you this week:
- Insufficient Evidence of a Staged Accident for Summary Judgment; Denial of Request for Injunctive Relief to Stay Medical Provider Actions in Other Courts.
- In No-Fault RICO Action, Insurer Granted Preliminary Injunction to Stay all of Defendant Medical Providers’ Pending Collection Arbitration and State Court Collection Lawsuits.
Well, the Buffalo Bandits are the 2025 National Lacrosse League Cup Champions! The 3rd straight NLL Cup! Awesome, that’s my team!
Until next time,
Scott
Scott D. Storm
[email protected]
Their Marriage Lasted Eight Years, his Second of Three – 100 Years Ago:
The Buffalo News
Buffalo, New York
6 June 1925
WANTS PAY ENVELOPE
FOR BEING A WIFE
“Only Slaves Work Without
Pay,” says Women’s Party
Vice President
DETROIT, June 6. – A weekly pay envelope for wives on a pro rate basis of their husband’s earnings, the right of married women to continue in occupations outside the home, and birth control were advocated by Doris Stevens, of New York and Paris, vice president of the National Women’s party, who addressed the Midwestern Equal Rights conference yesterday.
Asked if she were not the wife of Dudley Field Malone, New York Lawyer she said:
“Mr. Malone is my husband. Or, you might say that I married Mr. Malone.”
Miss. Stevens contended that wives and mothers were always and would continue to be slaves until they received pay in dollars for the management of the home and the care of children.
“Only slaves work without pay,” she said. “Homemakers are slaves. Homemaking should be a profession. I would like to see women go on working outside their homes after marriage. They should have fewer children, and they would not be slaves. Women have many gifts to bestow on society besides the function of reproduction.
“We cannot live any longer in this devastating atmosphere of sex antagonism. This idea that because we bear the children we should be penalized, set aside, sanctified, put on a pedestal is false. Men are afraid of us, so they have passed laws for our protection.”
Miss Stevens is a member of the Lucy Stone League of Women who retain their maiden names after marriage.
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
It seems like just yesterday that we were waiting for spring. Now, it is starting to feel like summer. I’ve been enjoying the running conditions and additional daylight after work.
This week’s case from the Arizona Supreme Court considered whether Arizona law requires an insurer to provide coverage under an underinsured motorist (UIM) policy for an accident involving an all-terrain vehicle that did not occur on a public road.
Catch you later,
Kate
Katherine A. Fleming
[email protected]
Obituary for Doris Stevens – 100 Years Ago:
The Star Press
Muncie, Indiana
24 Mar 1925
Feminist Crusader
Doris Stevens Dies
NEW YORK (AP) – Feminist Doris Stevens, who spent her life fighting for equal rights for women, died Friday night two weeks after suffering a stroke. She was 70.
She was sentenced to 60 days imprisonment in 1917 for her audacity in attempting to petition President Woodrow Wilson on behalf of national suffrage. She served only part of the sentence.
She clung to her maiden name although she married twice, first to celebrated attorney Dudley Malone and the second time to writer Jonathan Mitchell.
Gestwick’s Garden State Gazette:
Dear Readers:
Buffalo Bandits are three-peat champs! And now that the weather has finally broken, I am heading to Alleghany State Park this weekend for some wilderness relaxation with my fiancé.
The case I have for you this week concerns the definition of “surface water.” Does it mean natural water coming from the sky? The ground? Water from unnatural sources? More importantly, after it’s been found ambiguous by courts past (and it has), does that mean it’s ambiguous in every subsequent case? Read on to find the answers to all your burning questions.
See you in two weeks!
Evan
Evan D. Gestwick
[email protected]
Predictions for the Future – 100 Years Ago:
Mount Vernon Argus
White Plains, New York
6 June 1925
Radio’s Future As
Seen By a Leader
New York – Here’s a “conservative” prediction for the future of radio. It’s made by General James G. Harbord, who was in charge of the service of supplies for the American Expeditionary forces during the war and is now president of a large radio corporation.
General Harbord’s prediction includes:
“1. Photographs by radio over long distances
“2. Telegraphing a complete newspaper page across the oceans in a fraction of the time required by present telegraphic methods.
“3. Two-way telephone conversations between a passenger on board a ship at mid-ocean and any point on land where an ordinary telephone is available.
“4. International broadcasting
“5. A universal radio ticker service; the actual printing in words on paper of certain daily information or news sent out from a central point at stated intervals much in the same manner as the wire stock and news ticker of today, but on a national basis rather than local, and reaching points not now readily accessible by other means.”
O’Shea Rides the Circuits:
Readers,
There is a mutiny occurring within the household. My wife is a teacher and enjoys a long summer break where she is with the dogs every day. Some would say because of this, the dogs are more attached to her. But the tables are turning. For the past few weeks, the dogs have now focused their attention on me. When I come home from work, a literal dog pile occurs, and my wife is left out. While my ego enjoys this shift, my soul knows it is actually just the fact I feed them dinner.
This week I have case from the Ninth Circuit regarding a suit limitation clause and cooperation condition.
Until Next Time,
Ryan
Ryan P. O’Shea
[email protected]
Predictions – the Aeroplane – 100 Years Ago:
The Herald Statesman
Yonkers, New York
6 June 1925
DOLEFUL PREDICTIONS
When the automobile came it was predicted it would make the horse extinct. Horseflesh costs more than ever and equestrianism continues to grow in favor. Now the oracles say the aeroplanes will eliminate both automobile and horse, but like the horse the automobile grows in number and favor. The saturation point in the automobile industry is always being predicted but never reached. It will be found that horse, automobile, and airship each have their purpose and will increase in number as new needs are found for them, and the population grows.
From an article in a current magazine are taken a few quotations on the subject of the automobile:
“The automobile stands unique as the most extravagant piece of machinery ever devised for the pleasure of man.”
“The people are becoming car-poor as their ancestors become land-poor.”
“In this craze for automobile ownership the joy of security in the future is sacrificed for the pleasure of the moment.”
“The whole scheme of domestic life centers in the motor car.”
“Once the man who borrowed in order to buy a car was looked upon as dangerous.”
With some of these statements some will agree, but it is invariably the carless who predict disaster and chaos because so many of their neighbors are on wheels and exchange old cars for new every year.
It is manifest from the popularity of the auto, from the universality of its use and from the jealous tenacity of all car owners cling to their cars, whether palaces on wheels or decrepit derelicts, that there is satisfaction derived from the automobile which the critics of the automobile-age have not discerned.
LaBarbera’s Lower Court Library:
Dear Readers:
After a few busy weekends of travel, I am looking forward to having a few days at home to finish getting it ready for summer nights. The final two projects are the porch and the vegetable garden. Looking forward to being able to sit back and enjoy everything for the next few months.
Another New York County decision this week. Here, the court identifies whether a bolt left at a construction site qualifies as abandoned material under the products-completed operations hazard.
Until next time…
Isabelle
Isabelle H. LaBarbera
[email protected]
Heavy Panting – 100 Years Ago:
The Buffalo Times
Buffalo, New York
6 June 1925
Trousers Bought
On His Honeymoon
Last For 41 Years
WASHINGTON, N.J., June 6. - The world’s record for trousers endurance is claimed by Lemual Whitfield Gardner of this city, 74 years old.
Forty-one years ago, while on his honeymoon in Easton, Pa., Gardner, and his wife were looking at some patterns in the window of a tailor’s shop. One pattern in particular caught Gardner’s eye and at his wife’s suggestion he ordered a pair of trousers from the material.
From that time until today these same trousers have served Gardner as his “Sunday best.” They have outlasted three coats, two vests and a dozen pair of suspenders, he says, without even losing a button.
Lexi’s Legislative Lowdown:
Dear Readers,
I am hoping that the rain will hold off this weekend, and we can enjoy a weekend outdoors and get my wildflower garden started!
This week we discuss Bill S5052 which addresses rescission/cancellation of automobile polices in an effort to deter staged automobile accidents.
Thanks for reading,
Lexi
Lexi R. Horton
[email protected]
Monkey See, Monkey Do – 100 Years Ago:
Finger Lakes Times
Geneva, New York
6 June 1925
DARWIN’S SON
INTERESTED IN
SCOPES’ TRIAL
Rises to Defense of
Father’s Evolution Theory
Calls Attack Retrograde
Movement Which Will
Soon Pass Away
Cripps Corner, Sussex, England June 6. – Another Darwin arose today in the defense of evolution. It was Major Leonard Darwin, 76-year-old son of Charles Darwin, father of the theory.
The son of the famous scientist has shown keen interest in the approaching trial of John Scopes, Tennessee school master on the charge of teaching evolution. He smiled when asked his opinion. But his replies crackled with youthful vigor.
Seated in a huge armchair in his Tudor home five miles from the railroad, Major Darwin gave his views in an interview today.
“This attack on evolution is a retrograde movement,” he said. “But it is only a passing phase which will fade away. No scientific man disputes evolution, although he may argue in regard to the manner in which evolution came about.
“Every human being originates from a child and originally from a germ or small particle of organic matter. In the process of development from original germ there is no break in the series. We cannot say where mind or consciousness begins, yet no one thinks that in this development we find anything contrary to spiritual ideals.”
Victoria’s Vision on Bad Faith
Dear Readers,
This week marked my return from a short trip to Virginia to visit my younger sister. Great visit, but not so good weather. This weekend, I’m heading to a bachelorette in Syracuse, New York, to celebrate a law school friend.
This week I have a decision from the New York County Supreme Court denying a motion to dismiss a cause of action alleging the insurers’ breach of the covenant of good faith and fair dealing.
Have a great weekend,
Victoria
Victoria S. Heist
[email protected]
You Will Know Love When You See It – 100 Years Ago:
The Times
Shreveport, Louisiana
6 June 1925
Advice to the Lovelorn
Breaking an Engagement.
DEAR MISS FAIRFAX:
I’ve been going about with a young man for two years. He is steady and kindhearted and tries his best to get along. But as yet he hasn’t enough money to get married. Lately I don’t seem to be as happy in his company, so I am in the company of my other friends. When he’s away a few days I don’t miss him very much.
Shall I break the engagement? I’ve never met anyone so considerate, but I’ve met other men I could like just as well. I am 20 years old.
GEORGINA
Without being a mind-reader, Georgina, I suspect that you have met some man who you like better than your fiancé, I wouldn’t break that good young man’s heart by playing fast and loose with him. Unless you’re positive that you love him, why not tell him that you have decided you’re too young to know your own mind, thus setting yourself free, and also freeing him.
Talk it all over quietly and kindly with him, you may be actually helping him by taking the first step. For it’s possible that he also in “hanging on” as a matter of habit and from a sense of obligation. Ask him to be your good friend.
You’ll know well enough when you’re in love. You won’t have to ask.
North of the Border:
Amid the relentless news cycle—marked by harrowing wildfires and the far-reaching consequences of increased steel and aluminum tariffs—there’s a welcome respite unfolding on the ice: The Stanley Cup Finals are in full swing. This year, the Edmonton Oilers stand poised to reclaim hockey’s most coveted prize.
Despite hockey’s Canadian origins and ongoing dominance by Canadian players, a Canadian NHL team has not won the Stanley Cup since the Montreal Canadiens in 1993—a drought that has lasted over three decades. The Edmonton Oilers’ current run in the finals has united fans across the country, with many cheering for the team not just as Oilers supporters, but as Canadians hoping to reclaim the Cup for the nation – even though about a third of the Florida Panthers team are Canadian and about the same number on the Edmonton Oilers’ roster are American.
Go Oilers.
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]
- Collateral Estoppel and Res Judicata Does Not Bar Litigation of a Question Not Previously Litigated by a Party that was Not Part of the Earlier Proceeding
- An Issue Which Has Been Discussed by Rarely Litigated on Appeal. With a Greater than Two Year Delay in Providing Notice of an Accident and Claim, Purported Additional Insured Failed to Establish that Named Insured’s Carrier was not Materially Prejudiced
- Seems to be the Week of Insurance Procurement Decisions. Here, Insurance Coverage is Limited to that Required in the Contract. Other Decisions Summarized Below
- Not Named on Scheduled Policy as an Additional Insured? No AI Coverage Available
- Show Me the Money. To Succeed in a Motion for Summary Judgment on an Insurance Procurement Claim, Party Seeking Relief Needs to Prove it Secured All the Coverage
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- Court Recognizes “General Trend” for Strict Bad Faith Pleading Requirements
- Undeclared and Anti-Stacking Provisions Preclude UIM Coverage
RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]
- Owner of the Vehicle was not a Qualified Person Under the Motor Vehicle Accident Indemnification Corporation Act
- Summary Judgment Granted Based on Failure of Claimants to Sign EUO Transcripts and Founded Belief the Accident was Intentionally Caused
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- District Court Agrees that 10 Years Worth of Documents Demanded by Insurer was Overbroad
STORM’S SIU
Scott D. Storm
[email protected]
- Insufficient Evidence of a Staged Accident for Summary Judgment; Denial of Request for Injunctive Relief to Stay Medical Provider Actions in Other Court
- In No-Fault RICO Action, Insurer Granted Preliminary Injunction to Stay all of Defendant Medical Providers’ Pending Collection Arbitration and State Court Collection Lawsuits
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- Insurer Not Required to Provide UIM Coverage for an Accident Involving an All-Terrain Vehicle That Did Not Occur on a Public Road
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- Suit Limitation Clause and Cooperation Condition Preclude Coverage for Two First-Party Claims
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Bolt Unintentionally Left at Construction Site Does Not Qualify as Abandoned Material Under the Products-Completed Operations Hazard.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- Proposed Legislation to Amend Insurance Law and Vehicle and Traffic Law to Permit an Insurer to Rescind or Retroactively Cancel a Policy in an Effort to Deter Staged Accidents
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- Supreme Court (Lower Court) Denies Insurers’ Motion to Dismiss Claims Alleging Breach of Good Faith and Fair Dealing
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- Waiver in the Context of Insurance Coverage Requires an Unequivocal and Conscious Intention to Abandon Legal Rights
See you in a couple of weeks.
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
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
Peiper on Property and Potpourri
Lee’s Connecticut Chronicles
Ruffner’s Road Review
Gestwick’s Garden State Gazette
LaBarbera’s Lower Court Library
Lexi’s Legislative Lowdown
Victoria’s Vision on Bad Faith
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
06/04/25 Harco Construction, LLC v. Scottsdale Insurance Company
Appellate Division, Second Department
Collateral Estoppel and Res Judicata Does Not Bar Litigation of a Question Not Previously Litigated by a Party That Was Not Part of the Earlier Proceeding
There were several underlying actions commenced against Harco Construction, LLC (“Harco”), and 301-303 West 125th, LLC (“301-303”), relating to the collapse of a building and adjoining scaffold that occurred on September 20, 2011. 301-303 was the owner of that building. Harco was the general contractor on a construction project that was taking place at the time of the collapse. Disano Demolition Co., Inc. (“Disano”), was the demolition contractor on that project. Disano's workers had cut open the building's elevator shaft, which caused the elevator shaft, and then the building itself, to collapse.
Harco tendered the matter to Disano’s insurers soon after the collapse and before the lawsuits were commenced. First Mercury Insurance Company (“FMIC”) had issued a “primary policy” with limits of $1 million per occurrence to Disano, and Scottsdale issued an “excess policy”. Mt. Hawley Insurance Company as Harco's direct insurer, tendered to FMIC and Scottsdale the defense and indemnification for the underlying actions as an additional insured on the primary policy.
FMIC sent a letter to Mt. Hawley stating that FMIC disclaimed coverage for Harco on various grounds, particularly on the basis of a "work height" exclusion contained in the primary policy. Because the excess policy "follows form," Scottsdale joined FMIC in disclaiming coverage for the underlying actions on the ground that the "work height" exclusion barred coverage.
In August 2013, Harco and 301-303 commenced an action against FMIC, Scottsdale and Disano (“prior action”) seeking a judgment declaring, inter alia, that FMIC and Scottsdale were obligated to defend and indemnify Harco and 301-303 and reimburse them for all costs incurred by them in connection with the underlying actions. The Supreme Court held that FMIC's disclaimer was valid as to Harco in that the "work height" exclusion applied. The court also held that 301-303 was not an additional insured under the primary policy.
Harco and 301-303 appealed from the order, arguing, among other things, that FMIC's disclaimer was invalid as to Harco, that the "work height" exclusion relied on by FMIC in its disclaimer was inapplicable under the facts or was otherwise ambiguous, and that 301-303 qualified as an additional insured under the primary policy. Scottsdale was not a party to the appeal, and while the appeal was pending, Harco, 301-303, and Scottsdale stipulated that the prior action insofar as asserted against Scottsdale would be discontinued without prejudice to Harco re-filing its claims against Scottsdale once the issues regarding FMIC's obligations were resolved.
In the appeal of that prior order, a decision and order dated March 15, 2017, this Court, inter alia, modified the order entered October 9, 2014, by deleting the provision thereof granting that branch of FMIC's motion which was, in effect, for summary judgment declaring that it was not obligated to defend and indemnify Harco (see our review of this decision in the March 24, 2017 edition of Coverage Pointers). In the decision and order, the Court determined that 301-303 was not an additional insured, and thus, FMIC was not required to disclaim coverage as to 301-303 (see id. at 873).
The Court also determined that since FMIC failed to provide timely notice of its denial of coverage on the basis of a policy exclusion to Harco, it was estopped from disclaiming insurance coverage on that ground. The Court did not address the issue of the applicability of the "work height" exclusion and determined that Harco's and 301-303's remaining contentions were "either without merit or not properly before this Court" (id.).
In September 2021, Harco, 301-303, and Mt. Hawley commenced this action pursuant to Insurance Law § 3420 seeking satisfaction of certain judgments obtained by them against Disano and for a judgment declaring that Scottsdale has a duty to indemnify Harco with respect to the underlying actions. Scottsdale moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against it, contending, inter alia, that it was entitled to dismissal based upon documentary evidence and the doctrine of collateral estoppel.
Here, Scottsdale failed to establish that the issues necessarily decided in the prior action were identical to the issues raised in this action (see Villaver v Paglinawan, 230 AD3d at 535). The only issues necessarily decided by this Court in the decision and order dated March 15, 2017, were whether FMIC's disclaimer was valid as to Harco and whether 301-303 was an additional insured on the primary policy.
Although Harco and 301-303 raised the issue of the applicability of the "work height" exclusion on the appeal from the order entered October 9, 2014, Scottsdale failed to establish that the issue was "actually litigated, squarely addressed, and specifically decided" by this Court in the prior action (id. [internal quotation marks omitted]). Moreover, Mt. Hawley was not a party to the prior action and thus did not have an opportunity to litigate the issue. Further, the specific claims asserted against Scottsdale in this action are distinct from those asserted in the prior action and were not litigated in the prior action.
05/29/25 Hartford Fire Insurance Co. Hudson Excess Insurance Co.
Appellate Division, First Department
An Issue Which has Been Discussed but Rarely Litigated on Appeal. With a Greater Than Two Year Delay in Providing Notice of an Accident and Claim, Purported Additional Insured Failed to Establish That Named Insured’s Carrier Was Not Materially Prejudiced
This declaratory judgment action concerns coverage for an underlying action brought by a worker, Chen, who alleges that he sustained injuries on September 20, 2017, when, while employed by TS Group, he fell off a ladder while performing work at a construction site. The owner, Mayer, was insured by plaintiff Hartford Fire Insurance Company, and TS Group, a subcontractor, obtained a policy from Hudson which provided additional insurance coverage under specified circumstances.
Chen commenced an action against Mayer in October 2017, and Mayer subsequently commenced a third-party action against TS Group in March 2018.
Although plaintiffs learned of TS Group's coverage in October 2017, they did not tender coverage to Hudson until May 2020. Hudson disclaimed coverage "at this time," because Mayer was not an additional insured and due to the late notice, which was a material breach of the policy.
Because plaintiffs gave notice more than two years after it was practical to do so, plaintiffs had the burden of showing that Hudson was not prejudiced by the delay (see Insurance Law § 3420 [c] [2] [A] [ii]). Plaintiffs' showing that Mayer defended the Chen action "vigorously" is insufficient to meet their burden.
The delay prevented Hudson from examining the accident site near the time of the incident, locating, and inspecting the ladder, and interviewing witnesses while their memories were still fresh. Furthermore, counsel representing Mayer did not locate, interview, or depose witnesses from TS Group, including its owner and foreman, and, since the note of issue had already been filed when plaintiffs provided notice, Hudson would not have the ability to access that evidence itself.
Plaintiffs' contention that Hudson was not prejudiced by the late notice because it also asserted an alternative ground for disclaimer lacks merit and is speculative. Plaintiffs contend that if [*2]notice had been timely provided along with full information concerning the basis for Mayer's claim that it was entitled to additional insured coverage, Hudson still would have disclaimed on the ground that Mayer was not an additional insured. However, when Hudson issued the disclaimer within the statutory time provided (Insurance Law § 3420[d]), plaintiffs had not responded to its request for a full copy of the subcontract that was the basis for Mayer's claim. Hudson preserved its right to disclaim on the basis that Mayer was not entitled to additional insured coverage by stating that Hudson had not established it was entitled to coverage at that time and requested any additional information on coverage. When, during discovery in this action, Hudson received the subcontract demonstrating that Mayer was an additional insured under the policy, it did not pursue that ground for disclaimer. Thus, there is no basis for concluding that "earlier notice would have resulted only in an earlier denial."
05/29/25 Byrnes v. RP1185 LLC
Appellate Division, First Department
Seems to Be the Week of Insurance Procurement Decisions. Here, Insurance Coverage Is Limited to That Required in the Contract. Other Decisions Summarized Below
The court denied the general contractor’s motion insofar as it sought judgment on its cause of action alleging that the subcontractor breached an insurance procurement clause. The subcontract required the provision of insurance coverage "in connection with [the] subcontract," and the subcontractor fulfilled this requirement.
The GC argued that the sub was obliged to obtain coverage that included coverage for the work of material manufacturers and suppliers, as the contract provision relied on does not so state. Because the subcontract was only for installation of the panels and not their design or manufacture, there was no obligation to purchase insurance covering the panels' design and manufacture.
05/28/25 Nino & Nino Corp., v. Utica First Insurance Company
Appellate Division, Second Department
Not Named on Scheduled Policy as an Additional Insured? No AI Coverage Available
In July 2019, Granville Wiltshire (“decedent”), an employee of Door Restaurant died after sustaining injuries in an accident while working at the subject premises. The administrator of the decedent's estate commenced a wrongful death action against, among others, Daniel Nino, and the plaintiff Nino & Nino Corp. (“corporation”) to recover damages for personal injuries and wrongful death (“underlying action”).
At the time of the accident, a lease agreement for the premises was in effect between Nino, as owner, and Door Restaurant, as tenant. In December 2019, more than five months after the accident, Nino transferred ownership of the premises to the corporation. Nino died in January 2020.
At the time of the accident, Door Restaurant had a business owners' insurance policy with Utica First Insurance Company . That policy (hereinafter the Utica policy) contained an endorsement designating "Daniel Nino, c/o Community Realty Corp" and "Firtsultus Inc c/o Daniel Nino" as additional insureds.
The corporation and its insurance carrier, Seneca Insurance Company commenced this action against Utica seeking a judgment declaring that the corporation is an additional insured under the Utica policy and that Utica has a duty to defend and indemnify the corporation in the underlying action.
A party is not entitled to coverage if it is not named as an insured or additional insured on the face of the policy as of the date of the accident for which coverage is sought. Where a third party seeks the benefit of coverage, the terms of the policy must clearly evince such intent.
Through its submission of the Utica policy, Utica conclusively established that the corporation was not a named insured or an additional insured under that policy. Under the circumstances, the defendant had no duty to defend or indemnify the corporation in the underlying action.
05/27/25 Nyanteh v. 590 Madison Avenue, LLC
Appellate Division, First Department
Show Me the Money. To Succeed in a Motion for Summary Judgment on an Insurance Procurement Claim, Party Seeking Relief Needs to Prove It Secured All the Coverage
In connection with a claim for failure to procure coverage, Eclipse, the party that contended it provided the required coverage and moved for summary judgment dismissing the procurement claim, did not provide the proper proof of compliance.
In support of its motion, Eclipse identified the contract provision requiring the procurement of insurance, which required Eclipse to procure commercial general liability insurance with $1 million/$2 million policy limits, $5 million of excess liability coverage, and additional insured coverage. However, Eclipse only produced the endorsement covering additional insureds, and did not establish that it procured the required commercial general liability or excess liability insurance. Not a shocking result.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
See you in two weeks.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
05/07/25 King v. Reid and Standard Fire Ins. Co.
Superior Court of Connecticut, Hartford
Court Recognizes “General Trend” for Strict Bad Faith Pleading Requirements
While the underlying coverage issue is mirky, the court’s ruling is not: It is the general trend among Connecticut trial courts to strike (i.e., dismiss) causes of action for bad faith, CUIPA, and CUTPA where the pleadings merely repeat the “magic words” of the statute but fail to assert specific acts. A plaintiff must plead more than broad industry practices in order to survive a motion to strike.
Here, the plaintiff claimed that Standard Fire acted in bad faith and in violation of CUTPA/CUIPA. The court struck the three counts finding that the complaint failed to allege the carrier’s dishonest purpose, that there is no private right of action for a CUIPA violation, and, as discussed above, cursory, and conclusory allegations of an unfair practice were insufficient. “King has alleged in a conclusory fashion that the alleged unfair practices by Standard Fire were undertaken with other insureds. This mention of other insureds is very limited and non-specific.”
The key takeaway from this decision is the growing trend, now acknowledged as the “general trend,” for a higher level of specificity in a bad faith pleading in order to survive a motion to dismiss. Connecticut courts have seemed to coalesce against the concept that every coverage dispute should engender a bad faith claim.
[Standard Fire was represented by our good friend, Wystan Ackerman, at Robinson & Cole. Congrats!]
05/13/25 Szymczyk v. Old Dominion Ins. Co.
Superior Court of Connecticut, New Britain
Undeclared and Anti-Stacking Provisions Preclude UIM Coverage
The court granted Old Dominion summary judgment, finding that it owed no coverage to its insured for a motorcycle accident. The insured, living with his grandparents, owned a motorcycle that was insured by GEICO. Following an accident in which he collected the full $50,000 limit of the tortfeasor’s policy, he made a UIM claim against Old Dominion. The court found that coverage was expressly precluded by the undeclared vehicle and anti-stacking exclusions.
The grandparent’s policy precluded coverage for an insured “while occupying any motor vehicle owned by the Insured which is not insured for coverage under this Policy.” Since the motorcycle was insured with GEICO and not declared under the grandparent’s policy, the court held that the exclusion precluded coverage. In addition, the policy included an anti-stacking provision in the other insurance clause, which precludes UM/UIM coverage being stacked on top of another UM/UIM policy.
RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]
05/14/25 Med. Supply Depot Grp. Corp. a/a/o Shamecka v. MVAIC
Supreme Court, Appellate Term, Second Department
Owner of the Vehicle Was Not a Qualified Person Under the Motor Vehicle Accident Indemnification Corporation Act
The medical provider commenced the subject action to recover assigned first-party no-fault benefits. Defendant, Motor Vehicle Accident Indemnification Corporation (MVAIC) filed a motion for summary judgment and to dismiss the provider’s complaint on the basis that the injured party was not a covered person under the no-fault law. The Civil Court denied the insurer’s motion and the MVAIC appealed.
In support of its motion for summary judgment, MVAIC included a copy of the application for no-fault benefits where plaintiff's assignor stated she was the owner of the vehicle in which she was a passenger at the time of the accident. As a result, MVAIC made a prima facie showing that she was not a "qualified person" because she was an owner of the vehicle in which she was a passenger at the time of the accident. Pursuant to Insurance Law 5202(b) a qualified person is “a resident of this state, other than an insured or the owner of an uninsured motor vehicle and his spouse when a passenger in such vehicle”. Therefore, MVAIC argued the injured party was not eligible to be deemed to be a covered person entitled to recover no-fault benefits from MVAIC. In opposition, the plaintiff failed to raise a triable issue of fact, and the appellate court held MVAIC's motion for summary judgment dismissing the complaint should have been granted.
05/22/25 St. Farm Mut. Auto. Ins. Co. v. All City Fam. Healthcare Ctr., Inc.
Supreme Court, New York County
Summary Judgment Granted Based on Failure of Claimants to Sign EUO Transcripts and Founded Belief the Accident Was Intentionally Caused
State Farm insured non-parties Jose Ordonez and Jose Ordonez Auto Repair and Body Shop for the insured vehicle. The three defendants were allegedly in the insured vehicle when they were involved in an accident, after which each extensive medical treatment from the numerous named medical provider defendants. To investigate the claims, requested the three claimants submit to an examination under oath ("EUO"). However, two claimants failed to return subscribed transcripts, causing Plaintiff to disclaim coverage for them. State Farm disclaimed coverage for the third claimant on the basis that he made false statements with the intent of concealing certain circumstances related to the claim. State Farm filed this declaratory judgment action seeking a declaration that it owed no coverage for the subject claims.
First, the court held it is well established that the failure to return a subscribed EUO transcript is a breach of a condition precedent to coverage, which also applies to assignees of an insured. Here, it was undisputed that the medical provider defendants were assigned Evelyne and Peterson's rights under the applicable automobile policy. Moreover, it is undisputed that these two claimants failed to sign and return the transcripts of their examinations under oath. Therefore, the court held this was a breach of a condition precedent to coverage warranting summary judgment in the insurer’s favor.
Similarly, State Farm’s motion for summary judgment against the third claimant, based on its founded belief that the accident was intentionally caused or a result of fraud, was granted. State Farm’s evidence, including the affidavit of the claims investigator, as well as the default of the three claimants in this action, which is construed as an admission that their EUO statements were false, and their injuries were not the result of the accident establishes its prima facie burden on its founded belief defense. In response, the court determined that none of the defendants presented evidence sufficient to raise an issue of fact because they did not provide an affidavit of a person with knowledge supporting the legitimacy of their claims.
Therefore, the insurer’s motion for summary judgment was granted in its entirety and all of the defendant provider’s counterclaims were dismissed.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
06/03/25 Colony Ins. Co. v. Oz Sols.
United States District Court, SDNY
District Court Agrees That 10 Years Worth of Documents Demanded by Insurer was Overbroad
In August 2016, Colony Insurance Company issued an insurance policy to Oz Solutions effective from August 2016 through August 2017 (the "2016 Policy"). Colony alleges that it relied upon representations made in the insurance application that no coverage was necessary for "concrete, drilling, excavation, and demolition" services, and that Oz Solutions performed "'debris removal after construction' or 'debris removal only.'" The policy renewed in August 2017 and similarly described Oz Solutions’ operations as "cleanup of debris at construction sites,” which was consistent with a 2017 renewal application indicating that its operations did not involve demolition or drilling.
On New Years’ Eve, 2018, a non-party, 470 4th Avenue Fee Owner, LLC, filed a state-court action against Oz Solutions for defects arising out of a contract in which Oz Solutions was to staff a construction project involving a mixed-use building in Brooklyn, New York. Colony here alleges that Oz Solutions’ principal admitted during a state-court deposition that Oz Solutions had engaged in drilling and demolition activities that the company was not insured to perform. Colony further asserts that, had Oz Solutions disclosed that it intended to perform such activities, Colony would not have issued the same policy at the same premium. Colony sought rescission and a declaration of non-coverage.
This decision concerned, for our purposes, a demand for production sought by Colony, which included a request for certain documents spanning a 10-year period, sweeping far beyond the two-year period in which the insurance policies at issue were in effect. Oz Solutions objected, labeling the requests overbroad and unduly burdensome and the SDNY agreed.
Specifically, Colony sought "all construction projects, contracts, daily report logs, tax returns, loans, Venmo accounts, loans to family or friends, and lists of names of people involved or with knowledge of ten (10) years of unrelated construction projects for Policies which were in effect," but failed to provide the Court with an explanation “how 10 years' worth of the documents it demands . . . are relevant to whether defendants, during the two-year period covered by the policy, performed services outside those represented.” Such demands were deemed “not ‘proportional to the needs of the case,” and Colony did not carry “its burden of showing that such evidence ‘bears on, or [] reasonably could lead to other matters that could bear on, any issue that is or may be in the case.’"
Colony’s demands were narrowed to the relevant two year window, with a caveat that “[i]f, improbably, Colony has a good-faith basis to seek such discovery for an expanded time horizon, Colony is at liberty . . . to make a particularized showing how discrete materials outside the period authorized by the Court are relevant to the allegation that defendants made misstatements in their 2016 and 2017 insurance applications.”
Maxwell’s Minute: Colony was thrown a bone in the last paragraph above, which appears to open the door for limited post-deposition demands, assuming Colony is able to elicit testimony from Oz Solutions tending to show that Oz Solutions had engaged in concrete, drilling, excavation, and demolition" services prior to its 2016 application on various projects.
STORM’S SIU
Scott D. Storm
[email protected]
05/12/25 Lancer Ins. Co. v. Thompson
Supreme Court, Nassau County
Insufficient Evidence of a Staged Accident for Summary Judgment; Denial of Request for Injunctive Relief to Stay Medical Provider Actions in Other Courts
Lancer moved for summary judgment that as a matter of law: (1) the subject incident was not the product of a covered event; and (2) the individual Defendants made material misrepresentations of fact in the presentation of the claims. The court denied Lancer’s motion for summary judgment, finding that the evidence presented did not conclusively establish the accident was intentional or non-accidental as a matter of law. Lancer also moved by Order to Show Cause for a stay of several actions by medical providers in a number of Civil Courts within the five boroughs. The court denied Lancer’s request for injunctive relief.
A car accident occurred in Brooklyn between vehicles driven by defendants Smalls and Thompson. Lancer conducted examinations under oath of some defendants, which raised suspicions of potential fraud. The testimony established that the occupants of the Thompson Vehicle were unrelated and apparently did not know one another prior to the accident but nevertheless sought medical treatment at the same clinic and retained the same personal injury attorney. Some defendants failed to appear for scheduled EUOs.
The EUO testimonies raised suspicions but did not conclusively prove the accident was staged or intentional. The accident was reported to the police and documented in a police report. There was no independent corroborative evidence presented to the Court, such as through eyewitnesses or others with actual knowledge of the accident, which tends to prove that the motor vehicle encounter was an intentional loss.
There were significant inconsistencies between the EUO testimonies on the question of whether the Defendant Thompson operated his vehicle as a vehicle for hire which would be in violation of the insurance policy. However, such concerns raise questions of fact and cannot be resolved by mere contradicting testimonies.
In addition, Lancer failed to establish that the claim denials were properly and timely mailed to providers as required by regulations. Conclusory allegations cannot establish that an insurance carrier utilized practices and procedures designed to ensure that the EUO letters were properly addressed to the proper party and properly mailed. An insurance company employee without personal knowledge that a claim form had been mailed to a provider and who makes conclusory representations as to the insurance company's office practices cannot establish as a matter of law that the insurer followed office practices geared to ensure the likelihood that denial of claim forms were always properly addressed and mailed on the date issued.
Lancer failed to establish that its denial of medical provider claims was in fact timely mailed to the medical providers in question, and in conformity with no fault regulation, where it failed to submit a proper affidavit of service to establish that fact in support of its motion.
The court also held that there was insufficient basis for granting injunctive relief to stay proceedings in other courts.
Lancer had not raised any evidence which tends to establish the operator of the Smalls Vehicle had participated in staging a motor vehicle accident in concert with Thompson.
05/19/25 Govt. Empls. Ins. Co. v. Akiva Imaging Inc.
United States District Court, Eastern District of New York
In No-Fault RICO Action, Insurer Granted Preliminary Injunction to Stay All of Defendant Medical Providers’ Pending Collection Arbitration and State Court Collection Lawsuits
GEICO alleges the defendants engaged in a fraudulent scheme to obtain No-Fault insurance benefits through unnecessary medical services and unlawful financial arrangements. GEICO alleges that Defendants committed civil violations under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), common law fraud, unjust enrichment, and aiding and abetting fraud. Additionally, GEICO seeks a declaratory judgment that Defendants may not recover on any of the outstanding bills submitted to it.
GEICO brought RICO claims against the defendants in federal court. GEICO moves for a preliminary injunction to: (1) stay all of Defendants' pending No-Fault insurance collection arbitration and state-court collection lawsuits against GEICO pending disposition of GEICO's declaratory judgment and RICO claims; and (2) to enjoin Defendants from commencing new no-fault insurance collection arbitration or state-court collection lawsuits against GEICO pending resolution of this action.
The court granted GEICO's motion and denied the defendants' motions to stay or dismiss the federal action.
The defendants have filed over 600 state court cases and 8 arbitrations against GEICO to collect on insurance claims. The court granted GEICO's motion for a preliminary injunction to stay pending arbitrations and lawsuits and prevent new ones from being filed.
The "effective vindication" exception to the Federal Arbitration Act applies, allowing the court to enjoin pending arbitrations because the arbitrations interfere with GEICO's ability to pursue its RICO claims.
The "expressly authorized" exception to the Anti-Injunction Act applies, allowing the court to enjoin pending state court proceedings because RICO can only be given its intended scope by staying the state court proceedings.
GEICO's RICO claims have statutory ripeness as the damages are clear and definite, even if they may increase over time. For RICO statutory ripeness, what matters is that the amount of damages will not decrease. A plaintiff's damages are not clear and definite so long as they could be mitigated or abated in pending litigation.
The balance of hardships tipped in GEICO's favor as it would have to defend hundreds of fragmented proceedings absent an injunction. The injunction serves the public interest by preventing fraud and preserving GEICO's ability to prove its allegations.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
05/29/25 State Farm Auto. Ins. Co. v. Orlando
Arizona Supreme Court
Insurer Not Required to Provide UIM Coverage for an Accident Involving an All-Terrain Vehicle That Did Not Occur on a Public Road
Orlando was a passenger on an ATV when it overturned in California’s Imperial Sand Dunes, seriously injuring her leg. The driver’s insurer paid Orlando the liability policy limit, which was insufficient to cover the extent of her injuries. Orlando then filed a claim with her insurer, State Farm, under her UIM policy. State Farm denied coverage on the basis that the ATV was not an underinsured motor vehicle under the policy. The policy provided that “underinsured motor vehicle” did not include a land motor vehicle designed for use primarily off public roads except while on public roads. State Farm commenced an action for a declaratory judgment that the policy did not provide UIM coverage for the ATV accident. Orlando counterclaimed that State Farm’s denial breached the policy. State Farm moved for summary judgment based on the ATV not meeting the definition of an underinsured motor vehicle. State Farm also asserted the exclusion was nearly identical to the exclusions approved of in the uninsured (UM) coverage case law. Orlando argued that UM coverage was separate and distinct from UIM coverage. Further, Orlando argued that the Policy could not limit UIM coverage because exceptions to UIM coverage not permitted by statute are void.
The superior court granted State Farm’s motion, concluding the ATV was not an underinsured motor vehicle under the policy because it was designed for use primarily off public roads and the accident did not occur on a public road. The court also found that the Uninsured/Underinsured Motorist Act did not bar the policy’s limitation of UIM coverage. Orlando moved for a new trial, arguing that the cases relied on by the superior court addressed UM, not UIM, coverage and were therefore inapplicable. The court denied the motion.
The court of appeals reversed, concluding that the UIM provision of the UMA did not permit excluding coverage for the ATV accident. The court observed that: (1) UM coverage is “subject to the terms and conditions of that coverage,” whereas UIM coverage contains no such limitation; and (2) UM coverage applies where a “motor vehicle” caused injury or death, but UIM coverage covers injuries “resulting from [an] accident” without referencing a motor vehicle.
The Arizona Supreme Court held that the UMA does not require coverage for all-terrain vehicles not operated on public roads and that an insurer may preclude such coverage in a UIM policy. The court noted that the UMA would only require coverage if the ATV were a motor vehicle that the state’s Financial Responsibility Act requires to be insured. Under the FRA, a motor vehicle is “a self-propelled vehicle” that is “operated on a highway” and does not include an “[a]ll-terrain vehicle or off-road recreational motor vehicle operating” off-road. As a result, the arguments regarding the textual distinctions between the UM and UIM coverage provisions and what the UMA requires were irrelevant. Applying the FRA definition of motor vehicle, the court held that UIM coverage of an off-road ATV accident is neither required nor prohibited under the UMA. Therefore, the Policy’s definition of “underinsured motor vehicle,” resulting in preclusion of UIM coverage, is permissible under Arizona law. Accordingly, the court vacated the court of appeal’s opinion and affirmed the superior court’s entry of summary judgment in favor of State Farm.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
05/22/25 Shemen et al. v. The Cincinnati Insurance Company
United States District Court, District of New Jersey
The Term “Surface Water” Held Unambiguous and Applicable to the Facts of the Case, Despite Being Found Ambiguous As Applied to the Facts of a Prior Case
Cincinnati insured the Shemens under a homeowners policy. In September 2021, the Shemens’ basement flooded with water, damaging the basement and its contents. Cincinnati retained an engineer to inspect the loss, who found that the damage was caused by surface water accumulating in window wells on the side of the house, and that surface water, clay, and other debris entered the dwelling through these window wells. Cincinnati denied coverage under a policy exclusion for loss caused directly or indirectly by water, including by flood, surface water, and waterborne material, regardless of any other cause or event contributing to the loss.
The Shemens retained their own engineer, who opined that, given the extent and intensity of rainfall, it was reasonable to conclude that the water causing the damage consisted of both rainwater and water flowing in from the surrounding land. This lawsuit followed.
The Shemens challenged Cincinnati’s coverage denial, advancing the argument that the policy does not exclude any and all damage caused directly or indirectly by water, and that the term “surface water” as used in the policy was ambiguous.
In support of their argument, the Shemens cited to a prior New Jersey District Court opinion, finding that the term “surface water” has been defined to possess a permanent nature, such as a body of water. See Sosa v. Mass. Bay, 458 N.J. Super. 639 (N.J. App. Div. 2019). That Court also found that “surface waters” are those falling onto land from the sky, or arising in springs, and are eventually lost by being diffused over the ground through percolation, evaporation, or natural drainage. The Shemens used this dichotomy to advance the argument that the phrase “surface water” is inherently ambiguous.
The Court disagreed with the Shemens’ ambiguity argument. The Court noted that the Sosa court was not tasked with determining whether there was a plain and ordinary meaning of “surface water” that could exclude rainwater hitting the ground—the type of water at issue here. Rather, the Sosa Court was tasked with determining whether “surface water” could water from unnatural sources, such as a water-main break.
In the end, the Court found that the term “surface water” was unambiguous as used in this situation, and indeed, encompassed the type of water at issue here—water hitting the ground, entering the property, and causing damage.
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
05/28/25 Lennox Carwash, Inc. v. Amco Ins. Co.
United States Court of Appeals, Ninth Circuit
Suit Limitation Clause and Cooperation Condition Preclude Coverage for Two First-Party Claims
Amco insured Lennox under a first party property damage policy. Lennox submitted claims to Amco regarding two losses that occurred in 2018 and 2019. Amco began its investigation and requested several pieces of documentation and information from Lennox. By letter dated February 24, 2022, Amco denied the claims.
Lennox then filed a breach of contract action that sought recovery for both claims. Amco moved for summary judgment reliant upon the policy’s suit limitation clause for the 2018 loss and the cooperation condition for the 2019 loss.
On the 2018 loss, Amco’s grant of summary judgment was affirmed. California law departs from New York in that the Western State applies an equitable toll to suit limitation clauses. Amco’s policy contained a one-year suit limitation from the date of direct physical loss. But California tolls the clause from the date the insured gives notice of a claim to the date the insured receives notice of the claim’s denial. Amco’s disclaimer letter for the 2018 loss was dated March 1, 2022. And Lennox filed suit on April 13, 2023, which was more than a year from the date of the denial. Since Lennox failed to rebut the presumption of mailing, the suit limitation clause applied and precluded coverage.
Moving to the 2019 loss, Amco was also successful in applying the cooperation condition. The motion record, and uncontested evidence, showed the Amco requested documentation and material on several occasions. But Lennox failed to provide any of the relevant material. The appellate court determined Lennox’s failure to do so substantially prejudiced Amco. Similar to New York, California law holds that cooperation clauses, on the first-party property part, allow insurers to procure all information material to its rights and obligations.
Author’s Note: Confusion arises amongst counsel and courts when insurers apply the cooperation clause regarding first-party property claims. Many believe the willful and avowed standard announced in Thrasher applies, but it does not. Rather, the standard is whether the information requested was material and necessary for an insurer’s claim investigation. Scott Storm authored an excellent article on first-party non-cooperation. A link to the article is here.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
05/28/25 Certain Underwriters at Lloyd’s, London v. Southwest Mar. & Gen. Ins. Co.
New York State Supreme Court, New York County
Bolt Unintentionally Left at Construction Site Does Not Qualify as Abandoned Material Under the Products-Completed Operations Hazard
Certain Underwriters at Lloyd’s, London (“Underwriters”) commenced a declaratory judgment action against Southwest Marine and General Insurance Company (“Southwest”), seeking additional insured status in connection with a personal injury action concerning a construction project in Manhattan.
Southwest had issued a commercial liability policy to Arsenal, who was retained to perform work in relation to the construction site. In turn, Arsenal retained JGR to perform work at the construction site in relation to the construction and dismantling of sidewalk sheds at the construction site. As part of the contract between Arsenal and JGR, Arsenal acquired JGR to obtain commercial liability insurance, and name Arsenal as an additional insured on a primary and non-contributory basis.
In the underlying action, the claimant alleges that she tripped and fell on a sidewalk shed bolt left sticking out of the sidewalk at the project. JGR is a defendant in the underlying action, and the pleadings allege that JGR’s negligence in leaving the bolt caused the injuries.
After receipt of the underlying action, Arsenal tendered to Southwest, seeking additional insured coverage. Southwest never responded, and the declaratory judgment action ensued.
Underwriters moved for partial summary judgment, seeking a declaration that Southwest is obligated to provide additional insured status, and defense to Arsenal. Underwriters seeks reimbursement of defense costs for Arsenal incurred from the date of tender in December 2022.
Southwest alleges that the exclusions and conditions of the policy preclude coverage, insisting that an exclusion precludes coverage for bodily injury airing out of tools or abandoned materials. Southwest alleges that JGR finished its work on September 13, 2022, two days prior to the underlying claimant’s fall.
The question before the court was whether the cause of the underlying incident, the sidewalk shed bolt, falls under an exclusion to the policy issued by JGR. The policy contained an exclusion which precludes coverage for bodily injury arising out of the existence of tools, uninstalled equipment or abandoned or unused material.
The court identifies that there is little dispute that the allegations raise a reasonable possibility that JGR may be at fault for the underlying claimant’s bodily injuries. There was no dispute between the parties that the underlying action arises out of JGR’s work at the site, and the underlying claimant alleges that she tripped over a bolt left by JGR.
The court glosses over the fact that the bolt does not qualify as a tool, uninstalled equipment, or unused material. The court takes a closer look at case law across New York to determine whether the bolt qualifies as abandoned materials. The court looks toward Fourth Department law, First Department law, and Black’s Law Dictionary to determine whether the bolt qualifies as abandoned material.
Under Fourth Department law, abandonment contains an element of intent, including the relinquishment of title, possession, or claim. Under this definition, intent cannot be presumed, and there must be proof to support the affirmative action of throwing away. Black’s Law Dictionary further supports this definition, defining intent as “the voluntary relinquishment of all rights, title, or claim to property that rightfully belongs to the owner of the property.” Accordingly, the court agreed with Underwriters that abandonment requires some amount of intentionality. JGR would have been required to notice the bolts and intentionally leave them on the ground for the exclusion to apply.
Based on the evidence submitted, the court found that the exclusion does not apply. JGR’s witness testified that the type of bolt which allegedly caused the incident is typically removed from the sidewalk after a job is complete. They identified that there is no reason to leave the bolt, supporting the determination that the bolt was left accidentally.
In addition, pointing to First Department law, the court observed that the fact the bolt was left at the site means that JGR was technically not finished with their work. Part of JGR’s job was to deconstruct and dismantle the sidewalk shed, which entailed the removal of sidewalk bolts. Failure to remove the bolts, under First Department law, can lead to a finding that work was ongoing because certain tasks had not been performed.
Accordingly, the court found that Arsenal is entitled to additional insured coverage, and a defense in connection with the underlying action. The court granted the partial motion for summary judgment, in favor of Underwriters.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
06/06/25 New York Assembly Bill S5052
Proposed Legislation to Amend Insurance Law and Vehicle and Traffic Law to Permit an Insurer to Rescind or Retroactively Cancel a Policy in an Effort to Deter Staged Accidents
Senate Bill S5052, just introduced on February 18, 2025, would amend insurance law and vehicle and traffic law to permit insurers to rescind or retroactively cancel a policy in certain circumstances.
The bill removes the incentive for staged automobile accidents by allowing for the retroactive cancellation of newly issued private passenger automobile insurance policies.
Section one of the proposed amendments to 3457 provides, within the first 60 days of an automobile, commercial automobile or assigned risk plan policy being issued, an insurer could rescind the policy if the initial premium payment is dishonored due to
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The nonexistence of a bank account,
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The unauthorized use of an account, or
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The unauthorized use of a credit card
Section B provides that a person injured during this sixty-day period and could have recovered under an insurance policy that was cancelled may recover under his or her own policy, or if uninsured, the motor vehicle indemnification corporation.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
05/06/25 Archdiocese of New York v. Century Indemnity Co.
Supreme Court, New York County
Court Denies Insurers’ Motion to Dismiss Claims Alleging Breach of Good Faith and Fair Dealing
This is a declaratory judgment action in which both parties, the Archdiocese of New York, and its insurers, seek a determination of the scope of coverage for policies the Archdiocese obtained between 1956 and 2003. The Archdiocese seeks defense and indemnity for the nearly 1,700 lawsuits brought against it since the enactment of the Child Victims Act and Adult Survivors Act, alleging sexual abuse of the clergy and the Archdiocese's employees during the applicable policy dates.
The insurers moved to dismiss two of the Archdiocese's causes of action, one alleging breach of the covenant of good faith and fair dealing, and the other alleging violations of General Business Law § 349. The insurers agreed to defend the Archdiocese under a reservation of rights, disclaiming coverage because the allegations were "expected and/or intended from the standpoint of the Archdiocese."
The Archdiocese alleges that the insurers undermined their efforts to settle claims, and employed a "wait and see" approach by refusing to participate in mediations, pay claims, waive consent to settle provisions in the policies, and provide indemnity for payments already made. The Archdiocese claims the insurers are putting their own financial interests over its policyholders.
In the motion to dismiss, the insurers argue that the allegation of the breach of the covenant of good faith and fair dealing is duplicative of the breach of contract claim. In the alternative, the insurers argue the Archdiocese failed to state a cause of action by failing to allege that the insurer's conduct constitutes a gross disregard of the insured's interests.
The Court denied the motion to dismiss in its entirety. Discussing the standard for the breach of the covenant of good faith, the Court recognized that "[a] cause of action for breach [of] the implied covenant may be found where an insurer is alleged to have frustrated the purpose of an insurance policy . . . ."
In deciding the motion to dismiss, the Court found that the breach of the covenant of good faith and fair dealing is not duplicative of a breach of contract claim, because each relies on distinct factual allegations. Next, the Court found the Archdiocese did satisfactorily allege gross disregard of the insured's interest, by alleging (1) that the insurers "grossly disregarded their policyholders' interests and repeatedly sought to elevate their own interests to the serious detriment of the Archdiocese," (2) unfair claim settlement practices, and (3) that the insurers improperly elevated their "own financial interests and industry concerns" own their obligations to the policyholders.
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
The content of this column also appears in the ‘Liability & Insurance,” a monthly newsletter focusing on Canadian coverage and published by Heather Sanderson. Contact her for a subscription.
05/07/25 Kashin v. G.E.S. Construction Limited
Ontario Court of Appeal
Waiver in the Context of Insurance Coverage Requires an Unequivocal and Conscious Intention to Abandon Legal Rights
G.E.S. Construction is a high-end general contractor with a specialty in custom homes and renovations. Its 2016 contract to renovate a condo at the corner of Avenue Road and Lonsdale in Toronto, in the desirable Casa Loma area of Toronto, was a construction contract like any other … until it wasn’t.
G.E.S. subcontracted demolition work to Land Pride Group Inc. Land Pride held an insurance policy with Lloyd’s. G.E.S. insisted that it be added as an additional insured with respect to the demo work. Land Pride agreed.
On April 27, 2016, a water pipe burst during the demolition. Land Pride claimed that it was the fault of the property manager for not turning off the correct water pipes. But, apparently, Land Pride didn’t check. The damage was extensive. Land Pride notified its broker within days of the event.
Lloyd’s investigated the claim and noted that on its application for coverage, Land Pride described itself as a snow removal and landscaping company. There was no mention that it also performs demolition work.
G.E.S. never saw that application. Also, G.E.S. did not ask to see the declarations or the policy itself.
Lloyd’s retained coverage counsel who advised Lloyd’s that they could void the policy on the basis of misrepresentation.
On July 6, 2016, just over three weeks after Lloyd’s received its coverage opinion, Land Pride applied to renew the policy. On July 11, 2016, coverage counsel sent Lloyd’s a draft letter to be sent to the insured which voids the 2015 Policy ab initio but indicates that Lloyd’s might be prepared to issue a new policy to cover just the snow removal and landscaping business – excluding all construction and demolition work. That letter was never sent.
On July 15, 2016, Lloyd’s billed Land Pride for the renewed policy. Land Pride paid that invoice. On July 28, 2016, Land Pride cancelled the new policy. The cancellation was processed, and the unearned premium was returned.
On September 13, 2016, Lloyd’s advised Land Pride that it was voiding both the 2015 policy and the 2016 policy and returned the whole of the 2015 premium and the portion of the 2016 premium that it had retained.
The Issue: Did Lloyd’s waive the Misrepresentation? Is Lloyd’s Estopped by its Conduct?
G.E.S. and Land Pride brought this duty to defend application stating that once Lloyd’s learned of Land Pride’s misrepresentation, it had three options: advise the insured that it was voiding the policy and return the premium; cancel the policy unilaterally under the Ontario Insurance Act; or, treat the policy as valid and subsisting. G.E.S. argued that Lloyd’s elected to treat the policy as valid and subsisting.
The Motion Court /Trial Decision
The Supreme Court of Canada was clear in the Saskatchewan River Bungalows decision that waiver in the insurance context requires an expression of an unequivocal and conscious intention to abandon legal rights under a policy.
The trial judge held that even though Lloyd’s knew that it had the right to void the policy, the evidence does not indicate an unequivocal and conscious intention to abandon the right to void the policy. There was sufficient affidavit evidence before the court that Lloyd’s told Land Pride in the course of phone calls and emails that it had the right to void the 2015 policy under which the claim was reported. When the 2015 policy expired, Lloyd’s stated that “For now, we are binding renewal at expiry terms and conditions.” “For now,” means that their position could change. The renewal took place under discussions that had begun with Lloyds stating that they were ‘holding cover’ until a replacement policy could be arranged, and evolved to a request by Lloyd’s that for the renewal to proceed, the current claim would have to be withdrawn and that exclusionary wording for construction and demolition work must be inserted. The trial judge held that at the time Land Pride cancelled the 2016 policy, Lloyd’s had not communicated an unequivocal and conscious intention to abandon its legal right to void the policy.
As for estoppel, there was no evidence that neither Land Pride, nor G.E.S. relied upon Lloyd’s conduct to its detriment. Without detrimental reliance, there can be no estoppel.
Lloyd’s received an award of $20,000 in costs as against Land Pride. G.E.S. appealed.
The Appeal Decision
The Court of Appeal held that the trial judge applied the correct legal test. The trial judge held that Lloyd’s actions in renewing the 2015 Policy and accepting premiums occurred in the context of resolving Lloyd’s obligation to respond to the claim made under the 2015 Policy. The motion judge carefully reviewed all the relevant circumstances and communications and found that Lloyd’s always maintained the position that the appellant must withdraw the claim if the renewal was going to work. The motion judge was entitled to conclude that, although Lloyd’s timing was not perfect, its brief delay did not preclude it from voiding the 2015 Policy for misrepresentation. There is no error here, let alone palpable and overriding error that would permit this court to intervene.
Equally, the estoppel analysis in the court below was correct.
On appeal, G.E.S. argued that Lloyd’s improperly pressured Land Pride to withdraw its claim for coverage in exchange for Lloyd’s agreement to maintain the 2015 Policy and offer to renew for the 2016-17 term. G.E.S. describes this as bad faith conduct that ought to have precluded Lloyd’s from voiding the 2015 Policy:
There is no merit to this submission. The motion judge carefully reviewed the evidence. He found that Lloyd’s sought to reach an agreement to withdraw the claim. Lloyd’s never deviated from its position as to […Land Pride’s…] misrepresentation. The appellant offers no reason why Lloyd’s was not entitled to act as it did beyond bald suggestions that its actions were taken in bad faith.
As Lloyd’s was wholly successful on the appeal, it received an award of $12,500 for additional costs.
Comment
The motion court’s judgment emphasizes that risk management for an additional insured begins at the time of contracting. An additional insured ought to obtain and review the full insurance policy and its declarations at the time of contracting. This is an important step in determining if the policy aligns with the contract's requirements, helping to avoid a coverage dispute like this one that G.E.S. Construction faced.
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