Volume XXVII, No. 12 (No. 711)
Friday, November 21, 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.
Happy Thanksgiving from your pals at Hurwitz Fine. We are blessed to have you as our friends and subscribers and always look forward to hearing from you, whether you have a situation, a question, or just want to say “hello”.
Looking for solid continuing education or continuing legal education programming. We are delighted to offer you registration at:
COVERAGE POINTERS UNIVERSITY
Steve Peiper’s inaugural course on First Party coverage is in the books. Well over 200 registered for the program, held on November 20.
REGISTRATION IS NOW OPEN FOR OUR SECOND COURSE OFFERING
Keep Truckin'!
Motor Carrier Liability Insurance and the MCS-90
Ryan P. Maxwell, Esq. Instructor
Don’t get carried away by insurance risks on the road. Learn more about the fundamental intricacies of liability insurance for commercial truckers. More specifically, discover the nuances of when traditional commercial auto insurance ends and where the MCS-90 endorsement begins, including its origin, its application, and its purpose. Explore what the MCS-90 covers and when, as well as the limitations where everything can (and will) go wrong. For the long haul ahead, expect to take away practical advice on how to approach these claims from investigation through litigation and beyond.
December 18, 2025, 1:00 PM Eastern, 12:00 PM Central
When Coverage Pointers first launched back in 1999—before the internet had even reached “school-age”—our goal was simple: to bring you timely and thoughtful updates on insurance coverage decisions from across New York and, eventually, across the country. For more than 27 years, every second Friday, you’ve joined us on that journey. Now, we’re excited to take the next step together.
Hurwitz Fine is proud to announce the second course offered by of Coverage Pointers University (CPU) — a new educational initiative designed to deliver practical, engaging insurance-law programming on the third Thursday of every month.
Taught by our own experienced Hurwitz Fine faculty, CPU features four Colleges — Property, CGL, SIU/Fraud, and Coverage Litigation — each focused on providing actionable insights, updates, and training for today’s insurance professionals.
***
Thank you, NYIA
The firm was proud to receive New York Insurance Association’s first Pillars of Partnership Award at its annual meeting in Albany last week We are delighted to serve as NYIA”s partner in it many superb endeavors.
New York’s First Department Finds Litigation Funding Documents Discoverable
In a decision handed down today, New York’s First Department, Appellate Division, found that the lower court providently exercised its discretion in allowing defendants to seek materials related to the funding of plaintiffs’ litigation. In the decision, Lituma v Liberty Coca-Cola (available here), the defendants to an automobile lawsuit had asserted an affirmative defense and counterclaims predicated upon potential fraud.
In this short, but important decision, the First Department found that the defendants established that litigation funding documents were material and necessary to their defense of the case by explaining that they could reveal a financial motive for fabricating the accident. In support, an affidavit from the defendants’ insurance agent was submitted that provided a chronology of the events and detailed the links among plaintiffs, medical providers, and other individuals involved in other suspicious accidents.
While it was argued that the defendants may not seek discovery based on their affirmative defense and counterclaim premised on fraud, because those claims do not lie in a personal injury action, the First Department noted the plaintiffs failed to appeal an order allowing defendants to include a fraud affirmative defense and counterclaim in their amended answer, and failed to raise the argument in opposition to this motion. Still, had the First Department considered the issue, defendants appear to have argued that they plead fraud with particularity, such that the claim could withstand a motion to dismiss and discovery would be permitted anyway.
Hurwitz Fine will continue to keep you updated on the latest regarding staged accident litigation and discovery of litigation funding materials.
___
Hurwitz Fine Ranked by Chambers USA in the 2026 New York Spotlight Guide
Hurwitz Fine P.C. is proud to announce that the firm has been ranked in the third annual Chambers New York Spotlight Guide for General Commercial Litigation.
According to Chambers, “Buffalo-based firm Hurwitz Fine P.C. handles an array of disputes. Working with local and regional business clients, the firm advises on sexual misconduct, toxic tort, securities, insurance and labor & employment litigation. The group is active in the healthcare and construction industries.” This is the third time that Hurwitz Fine has made the Chambers' Spotlight guide, having ranked the past two years in this practice area.
Hurwitz Fine is one of only eight Buffalo law firms featured in the Spotlight, and one of only three featured in this area. The Spotlight rankings are awarded at firm-wide level, recognizing firms that are well-known for their expertise in certain selected practice areas.
This ranking recognizes firms that do “remarkable work which results in an impressive regional reputation” and offer a “credible alternative to Big Law.” Chambers' insight into the legal market has seen a trend of large companies seeking specialized support from smaller firms at a state or local level, who can respond more effectively and efficiently to in-house counsel needs. Chambers Regional Spotlight builds bridges between in-house counsel, who want more choice when purchasing legal services, and small to medium size firms.
A Chambers Spotlight ranking is achieved through an independent research process conducted by Chambers USA. The firms ranked in the USA Regional Spotlight Guide were selected based on in-depth market analysis, coupled with an assessment of their experience, expertise and caliber of talent. Chambers’ conclusions were supported by comparative analysis drawing on their decades of knowledge of the U.S. legal market.
Chambers Spotlight specifically champions outstanding boutique and mid-size firms that deliver partner-level attention, deep regional knowledge, and cost-effective solutions for sophisticated legal work. Their dedicated Spotlight research team identifies firms that punch above their weight across key legal markets. These firms combine the personal service and competitive rates of smaller practices with the sophisticated expertise typically associated with larger firms. In New York State in 2026, 262 firms were ranked across seven regions in 31 unique practice areas.
***
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 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:
- 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.
Until Debt Due We Part – 100 Years Ago:
Buffalo Post
Buffalo, New York
21 Nov 1925
Bridegroom Is Arrested
After Marriage Service
Paul Karpec, 30 years old, 286 Miami street, was this morning arrested on the steps of Saint Valentine’s church, Elk and Alabama streets, as he was leaving the church with his bride, Rose Biankowski, 19 years old, 133 Louisiana street, on his arm.
The arrest was made on a warrant sworn out by Mrs. Zofia Jagiela, 87 Chicago Street with whom Karpec formerly lodged and who charges the groom with owing her a board bill of $86.
Clad in all his finery, Karpec was taken to city court and arraigned before Chief Judge George W. Woltz and his trial adjourned until Friday. He was released in $500 bail furnished by the best man.
Peiper on Property (and Potpourri):
We kick off this week with an update on Coverage Pointers University. Our first class is in the history books, and we are humbled so many of you who joined us. Hopefully, today will be the first of many, many presentations. Your support and feedback are more appreciated than you can possibly know.
If you missed us, don’t fret. There is video. We’d be happy to send you a link to review at your convenience. Or watch this space for a link to access on our website.
On the case review front this week, we take a look at an interesting matter involving Wesco Insurance Company. We feel for counsel on that one. Depositions of claims adjusters are rarely useful in a first party insurance case. The reality is that anything worthy of summary judgment is a legal issue, and, thus, the claims professional’s opinion is utterly irrelevant. Yet, when Wesco moved for summary judgment on plainly legal issues, plaintiff opposed on the basis of prematurity. The Court agreed, and (along with other reasons) remanded the matter back to the trial court with the understanding that Wesco had to produce a witness for deposition.
As we move on toward Thanksgiving, we also give a shout out to the skilled chefs of the law firm. In our second annual “Partners Make Thanksgiving Lunch” festival, the firm’s partners prepared a full Thanksgiving Dinner for everyone else. Five Turkeys, 40 pounds of mashed potatoes, a dozen or so pies, an industrial sized green bean casserole were all present. You get the picture. Yours truly prepared two turkeys (one roasted and one smoked ala the Big Green Egg) and 20 pounds of mashed potatoes.
Shout out to David Adams who took home the crown of best turkey. If this law thing doesn’t work out for David, he’s got a future in holiday catering.
That’s it for this week. Please take advantage of our next class for CPU which will take a deep dive into Commercial Trucking Issues and the vexating impact of the MCS-90 endorsement. I’ll be there eagerly soaking up the knowledge from Ryan Maxwell, Hurwitz’s own trucking guru.
Be well and Happy Thanksgiving to all in the meantime!
Steve
Steven E. Peiper
[email protected]
Editor’s Note: Peiper didn’t mention my two turkeys, obviously below par! David’s and Steve’s were superb. Mine were a distant third.
Crueler and More Unusual? – 100 Years Ago:
Buffalo Post
Buffalo, New York
21 Nov 1925
SEEK RETURN
TO WHIPPING
Georgia Prison Wardens Devise
Particularly Brutal
Means of Punishment.
TORTURES REVIVED
Commission to Seek uniform
Methods
Atlanta, Ga., Nov. 21 (A.P.) -Desire for a return to the lash, in the opinion of E. I. Rainey, member of the Georgia prison commission, is prompting wardens to" devise methods of convict punishment which appear particularly brutal.
Flogging was abolished by a recent legislature and in recent months there has been some agitation among the wardens for a repeal of the statute. Uniform punishment methods will be sought at a December meeting of the prison commission, Mr. Rainey said.
Reports from subcommittees to Representative Emmett Williams, chairman of the house penitentiary committee, tell of many peculiar modes of punishment devised since abolition of the lash.
One camp, Mr. Williams said, has revived in modified form what the old Assyrians called "the torture by boats." Prisoners are fastened in a shallow box and molasses is smeared on their exposed faces to attract flies, their arms being bound to prevent their brushing the insects away. Honey was used by the Assyrians.
At other camps, he said, prisoners are backed up to a post with their arms chained behind them. Their arms are then raised as high as possible and suspended from nails, the prisoners being left in this strained position for hours.
Lee’s Connecticut Chronicles:
Dear Nutmeggers,
No poetic prose this edition—straight to the point. We have two cases for your consideration. The first is a UM/UIM breach of contract action with bad faith add-ons. The court, continuing the recent trend, struck the bad faith counts where the allegations were merely conclusory and established nothing more than a breach of contract. In the second case, The Hartford defeated a class action claim by successfully compelling appraisal. Now instead of an aggregated case of thousands of claims over a controversial business practice, the case will resolve within the three-figure range.
From all of us in the Connecticut office, we wish you and yours a Happy Thanksgiving!
Lee
Lee S. Siegel
[email protected]
An Early Version of IM – 100 Years Ago:
Press and Sun-Bulletin
Binghamton, New York
21 Nov 1925
INSTANT MESSENGER
SERVICE IS IMPROVED
The Instant Messenger Service of 80 Court street announced today that it has added improvements and innovations. All charges are predetermined before the boy is sent upon calls and the customer is acquainted with this charge. This insures a perfect understanding as to the cost of delivery both for the boy and the customer. A receipt is obtained for each delivered package, and this receipt is kept on file at the office at 80 Court street for reference in case of dispute over delivery.
All boys employed by the Instant Messenger Service are tidy in appearance and are schooled particularly in politeness and promptness. The service is proving of real satisfaction to customers, it is said, especially among retailers and individuals who from time to time need a special delivery service.
Ruffner’s Road Review:
Dear Readers,
Thanksgiving is quickly approaching, and I hope everyone enjoys the holiday and, of course, a lot of good food! I look forward to running the Buffalo Turkey Trot for the first time in many years and visiting with family the rest of the day. This year we will also be heading out to Pittsburgh on Friday for the Bills game on Sunday.
In this week’s case, the Appellate Division considers a cross-petition of a Respondent who, after prevailing against an arbitration and Article 75 proceeding to vacate the arbitration award, moved for additional attorney’s fees pursuant to 11 NYCRR 65-4.10(j)(4).
Kyle
Kyle A. Ruffner
[email protected]
She Died of Natural Causes – Conviction Overturned, then Retried, Sentenced to 20 Years and then Released – 100 Years Ago:
Democrat and Chronicle
Rochester, New York
21 Nov 1925
ESSEX WOMAN
SENTENCED TO
ELECTRIC CHAIR
Mrs. Soper Hears Order
Of Court with Usual
Lack of Emotion
Elizabethtown, N.Y., Nov. 20. – (By the Associated Press). – Mrs. Fannie Soper. 48 years old, convicted of murder, first degree, for the killing of her third husband, Henry Soper, was sentenced to death in the electric chair by Supreme Court Justice Whitmyer to-day.
The date of the execution Was set for the week beginning January 3d.
Shows No Emotion.
Mrs. Soper received the sentence with the same stolidity and lack of emotion which has characterized her demeanor throughout the trial.
As soon as court opened Patrick J. Tierney, Mrs. Soper's attorney, moved that the verdict be set aside and that a new trial be granted on the ground that the court did not properly instruct the jury as to the credibility of Dr. Albert Hamilton of Auburn, an expert witness for the prosecution, and that the verdict was contrary to law. The motion was temporarily denied. District-Attorney Brewster then asked that the record of the defendant be taken and at the instruction of Justice Whitmyer, Mrs. Soper walked calmly toward the clerk's desk where she gave the required biographical facts.
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers Subscribers:
It’s indoor travel baseball practice season, and I must say that I never realized quite how much work it is to throw batting practice to an entire roster of players. It will be good for me (and them) in the long run, but boy oh boy does my body hurt after 400 pitches, although I have my speed regulator turned way down to match the 8-year-olds to whom I’m throwing. Now if I could stop hitting three or more a practice, we would be in great shape. At least they know not to crowd the plate when Coach Maxwell is on the bump.
My younger son has started karate, and he has taken well to the structured classes and its teachings. He is certainly raw from the looks of it, but I remember when his older brother started and to see where he is now, I know it will do my 6-year-old wonders in the long run. Now, if only they had the same class start time…
This edition, I have an additional insured coverage case involving a traditional duty to defend analysis as to proximate cause. Back to the basics.
Until next time…
Ryan
Ryan P. Maxwell
[email protected]
The Horse, Replaced – 100 Years Ago:
Poughkeepsie Eagle-News
Poughkeepsie, New York
21 Nov 1925
HORSE DISPLACED
BY MOTOR VEHICLES
Records Show That Only One
Wagon Passed Over New
Bridge in First Year
The extent to which the automobile is superseding the horse for purposes of pleasure trans is indicated by the fact that only once has a horse drawn vehicle travelled over the Bear Mountain Bridge during its first year of operation. This is shown in a report recently made by the Bear Mountain River Bridge Company.
The bridge will have been open for one year on Thanksgiving November 26. During that period thousands of motorists have passed over the structure and the three-mile scenic highway approach without any serious accidents.
The bridge, as hoped when planned, has become an important link in the national highway system and has furnished great traffic relief by supplying motorists with a gateway to New England and a means of entering or leaving New York City and the Metropolitan District without delay.
An interesting development has been the constant growth of the travel across the bridge in buses on daily and semi-weekly schedules. Such lines have operated from New York City, Bridgeport, Waterbury, Peekskill, Staten Island, Long Island and elsewhere.
Storm’s SIU:
Hi Team:
Happy International Fraud Awareness Week!
Two interesting cases of you this week:
- The Interests of Justice Require a Stay of Civil case Pending the Outcome of a Related Criminal Case.
- In Calculating Premium, “Gross Receipts” Unambiguously Includes All Revenues Received During the Policy Period Regardless of When the Work Was Performed.
Have a great two weeks and Happy Thanksgiving!
Scott
Scott D. Storm
[email protected]
$555,000 in 2025 Dollars – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
21 Nov 1925
VERDICT OF $30,000
RETURNED FOR WIDOW
OF DR, THOMAS ALLEN
Lawyer proves crossing was
Obscured by autos and that train
Was speeding.
A verdict of $30,000 was reported by a supreme court jury to Justice Charles H. Brown yesterday in the case of Mrs. Lida M. Allen, widow of Dr. Thomas Allen of No. 439 Elk Street, against the Erie Railroad company. The suit was for damages for the death of the late Dr. Allen, well-known practitioner on the south side.
Hamilton Ward, attorney for the Allen family, proved that Dr. Allen was killed when his automobile was struck by an Erie train at the Tifft street crossing on May 6, 1925. Dr. Allen was on his way to attend patients at the Mercy hospital when the accident occurred.
Mr. Ward established that Dr. Allen's view was blocked by other automobiles and that he did not see the train, which was running at the rate of 40 miles an hour, in violation of the city ordinance regulating the speed.
Dr. Allen is survived by a widow and two sons. He was 66 years old.
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
This week’s case from the Nebraska Supreme Court looked at whether an aircraft owner’s claim that it was dispossessed of the aircraft by an airport owner, who held the aircraft pending the payment of storage fees that the aircraft owner allegedly owed on the aircraft, was within the policy’s coverage. Because the airport owner’s acts were not intentional from the insured’s standpoint, and the aircraft owner was physically dispossessed of the aircraft, the court concluded that the aircraft owner experienced the direct physical loss of the aircraft as a result of an accident.
Happy Thanksgiving!
Kate
Katherine A. Fleming
[email protected]
Framed – 100 Years Ago:
Buffalo Courier
Buffalo, New York
21 Nov 1925
FRAME SALESMAN “FRAMES”
WOMAN; COURT EVENS SCORE
Pleading guilty to a petit larceny charge, Frank Slattery, forty-four years old, No. 234 West Delavan Avenue, a picture frame salesman, was sentenced to the penitentiary for three months by Chief Judge Woltz of the city court yesterday. Mrs. Agnes Fox, No. 122 Ludington Street, asserted she gave Slattery a $10 bill to be changed and that he left her house without returning the money. Slattery contended he was struck by an automobile and slightly injured while on the way to a nearby store to have the bill changed and was forced to go home for medical attention.
Gestwick’s Garden State Gazette:
Dear Readers:
Christmas is upon us—at least in our household! Decorations have adorned our apartment for two weeks already. My fiancé and I were each raised in households where it was considered unacceptable to decorate for Christmas until after Thanksgiving. We’re squashing that one, with one caveat—I’m just not ready for “actual” Christmas movies quite yet. What is an “actual” Christmas movie anyway? To me, that list includes: A Christmas Story, National Lampoon’s Christmas Vacation, Elf, Polar Express, A Santa Clause (any of them), Grinch, Home Alone, Frosty the Snowman, and A Charlie Brown Christmas. Those ones go live in the Gestwick household only after December 1st. What is not too early to watch, you might ask? Why, the Hallmark Christmas movies, of course! (make fun of me all you want; I’ll keep watching them).
I have one quick case for you this week, involving whether fraud claims arising out of the receipt of PIP benefits are subject to arbitration. In other words, what wins: the statute mandating arbitration of PIP claims, or the anti-fraud statute which does not mandate arbitration of fraud claims? Read on to find out.
Until next time!
Evan
Evan D. Gestwick
[email protected]
Plan on an Explosion? Buy Insurance – 100 Years Ago:
Democrat and Chronicle
Rochester, New York
21 Nov 1925
Explosion and Soot
Losses Not Covered
By Fire Insurance
Explosion of oil heaters, stoves and other heating and cooking devices is not covered under fire insurance policies.
If fire ensues the insurance company is liable for the damage by fire only. In no event is the company liable for straight explosion damage, or damage by soot thrown about the premises by explosion or by defective apparatus.
Direct loss by fire and lightning is alone covered under the standard fire insurance policy.
Explosion insurance is issued as a separate contract at a separate rate.
Don’t expect your agent to pay for explosion losses under fire insurance policies.
O’Shea Rides the Circuits:
Readers,
As you well know, next week is Thanksgiving. Rather than wax poetically on the issue, I will look forward to leftover biscuit, turkey, and stuffing sandwiches that will follow. In other news, we were blessed with a winter snow last week and the weather is markedly cooler. Thus, it appears it may be a heavy winter.
The Circuit Courts have been quiet the last two weeks, but I do have an unpublished Ninth Circuit decision. The decision reiterates that COVID-19 does not constitute physical loss or damage as required under an all-risk property insurance policy. The decision also addresses the applicability of a Contamination Exclusion.
Happy Thanksgiving,
Ryan
Ryan P. O’Shea
[email protected]
Or Else . . . – 100 Years Ago:
Middletown Daily Herald
Middletown, New York
21 Nov 1925
Insurance
When you have a fire loss or accident you will need me. Better insure with me now for your protection. Geo E. Bradnack, Cor. North and John St. Phone 1354.
LaBarbera’s Lower Court Library:
Dear Readers:
Despite the fact that we repainted nearly every room in my house less than a year ago – I decided the colors just won’t do. Not nearly enough dark green. I am currently in the process of attempting to complete this task before Thanksgiving arrivals this coming Wednesday. Even as an optimist, the task is daunting.
This week, I have a New York County decision finding that Plaintiff was entitled to supplemental discovery, such as claims manuals, based on the likelihood that the discovery would resolve a dispute regarding ambiguity under the subject property insurance policy.
Happy Thanksgiving!
Isabelle
Isabelle H. LaBarbera
[email protected]
A Little Harsh, No? – 100 Years Ago:
The Daily Times
Mamaroneck, New York
21 Nov 1925
Three Days Per Dollar is
Awarded Texas Gallagher
Charles Gallagher, formerly of Texas but more recently of the construction camp of the Westchester and Boston railroad extension in Mamaroneck, will have three days to meditate upon each dollar he stole from John Tomsetti, also a laborer at the camp, this week, for Judge Frederick P. Shafer sentenced Gallagher of Texas to 30 days in the Westchester county “pen” for stealing $10.
Gallagher had been held at the Larchmont jail since his arrest Wednesday and was brought to trial Friday night where he pleaded guilty to the charge of petit larceny. Tomsetti was the complainant.
Lexi’s Legislative Lowdown:
Dear Readers,
We’re gearing up to host my family for Thanksgiving for the second year in a row, and I’m so excited to keep this tradition going while honing my cooking skills. We’re even trying a new turkey recipe this year in hopes of nailing the perfect turkey!
This week we discuss the Governor signing the Online Insurance Verification Bill. This will allow for real time verification of automobile insurance.
Thanks for reading,
Lexi
Lexi R. Horton
[email protected]
Flirting with Litigation – 100 Years Ago:
Brooklyn Eagle
Brooklyn, New York
21 Nov 1925
Youth, Cleared of Flirting
Sues Principal and Teacher
John Connelly, 139 Academy St., Long Island City, is bringing a suit for $10,000 in the Queens Supreme Court against Dr. Peter E. Demarest, principal of the Bryant School, against, Long Island City, and Charles Vogt, a teacher in the school. Connelly was acquitted recently on a charge of disorderly conduct in the Long Island City Police Court on the charge made jointly by Dr. Demarest and Mr. Vogt.
Connelly was arrested with another Long Island City youth, Harry Molese, of Sept. 30 last, charged with whistling to girls and annoying them outside the school building. The youths allege that Dr. Demarest and the teacher took them inside the office of the school and locked them in there while a policeman was being summoned. Neither of the boys attended the school but were working in the vicinity. They were dismissed after four girls, who said they attended a business school near the high school testified that they were talking to the boys that day just previous to the time they were apprehended and they were not annoyed by them in the least.
Victoria’s Vision on Bad Faith
Dear Readers,
Over the next month or so, I’m focused on fixing up my house to get ready for my sister’s visit from Virginia in mid-December. That, and deciding which pies I should make for Thanksgiving.
I have two cases for you this week, from the Southern District of New York, discussing discovery of loss reserves, and the Eastern District of Pennsylvania, addressing the line between bad faith and imperfect claims handling.
Have a good weekend,
Victoria
Victoria S. Heist
[email protected]
Pardon Me for Disagreeing – 100 Years Ago:
Los Angeles Evening Post-Record
Los Angeles, California
21 Nov 1925
Two Governors
Three thousand miles and several ages of human progress separate the governors of California and of New York.
Governor Richardson of California declines to pardon Charlotte Anita Whitnet, who was sentenced to jail because of her political belief, and says:
“While I had no part in the passage of this law, still I have taken an oath to support the constitution and the laws of the state. The law penalizing criminal syndicalism is just as solemn and binding as are the laws against murder, robbery, treason, arson and other crimes.”
Governor Smith of New York pardoned Jim Larkin, convicted of a similar offense, and doing so, said:
“Political progress results from the clash of conflicting opinions. The public assertion of an erroneous doctrine is perhaps the surest way to disclose the error and make it evident to the electorate. And it is a distinct disservice to the state to impose, for the utterance of a misguided opinion, such extreme punishment as may tend to deter, in proper cases, that full and free discussion of political issues which is a fundamental of democracy.”
The first governor talks of the constitution. The second understands its spirit and obeys.
Shim’s Serious Injury Segment
Hi Readers,
Hope all has been well since our last column. We are now within a week of Thanksgiving and down to our final six weeks of 2025. I hope everyone is excited to spend the holiday season with family and friends and enjoy some much-needed time off to recharge and do some enjoyable things. I know that I certainly am.
In this column, I have shared an appeal decided by the Appellate Division, Second Department, which overturned a Westchester Supreme Court’s decision granting defendants’ summary judgment on the serious injury issues. There have not been many decisions concerning the issue of serious injury. Hopefully, there will be more to choose from in the next issue.
Happy Thanksgiving! See you in the next issue!
Stephen
Stephen M. Shimshi
[email protected]
Want Support? Give up Your Boyfriend – 100 Years Ago:
Elmira Star-Gazette
Elmira, New York
21 Nov 1925
Hubby Loses Battle of Words.
Is Ordered to Support Wife
Ernest Dailey is Instructed
by Recorder Gardner to
Contribute to Maintenance
Of Spouse, Who
Must Give up Friend.
Recorder Otis H. Gardner’s court for a few moments this morning became the arena in which Mr. and Mrs. Ernest Dailey of 155 Cotton street fought out their marital troubles in a wordy battle. Recorder Gardner finally ruled Dailey should make regular payments of $7 weekly to his wife.
This settlement, however, was directed only on the condition that the woman rid herself of the company of another man with whom, it was declared in court, she has recently been consorting. The husband flatly refused to make any effort toward adjusting their difficulties and declared that he was “through.”
The occasion was the hearing of Dailey, 36, on charges of non-support brought by his wife. He was arrested in Corning Thursday by Detective John Wilmot. Recorder Gardner found the defendant guilty this morning and suspended sentence on condition that he support his wife.
North of the Border:
I am spending this week in Cambridge, MA, attending the one-week Mediation Intensive Program offered through the Harvard Law School. It is an amazing experience, learning mediation skills through lectures and role playing. It is immersive, challenging and totally stimulating. It is fitting that my column this week considers the mediation function of an umpire appointed to act under the Appraisal section of the provincial insurance acts. Until next time.
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]
- Wrong. First Department Holds That, if Requested Reinsurance Policies Must Be Disclosed under the Comprehensive Insurance Disclosure Act
- There Is Inherent Harm, When One Throws Cup of Urine at Someone from a Moving Car. No Coverage
- Common Law Indemnification Claims Dismissed Against Tenant as Were Claims for Contractual Indemnification and Breach of Covenant to Provide Insurance. Unsigned Lease, Entered into Two Months After Accident, Just Doesn’t Cut It
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
- Summary Judgment Motion Premature When Carrier Representatives Were Not Produced for Deposition
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- Court Strikes Bad Faith and CUTPA/CUIPA Claims
- Court Grants Insurer’s Motion to Compel Appraisal, Killing Class Action Claims
RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]
- Judgment of Lower Court Awarding Additional Attorney’s Fees Affirmed, as Determination Was Within Court’s Discretion
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- Court Finds Additional Insured Entitled to Defense Where It Was Reasonably Possible That Named Insured Proximately Caused Accident
STORM’S SIU
Scott D. Storm
[email protected]
- The Interests of Justice Require a Stay of Civil case Pending the Outcome of a Related Criminal Case
- In Calculating Premium, “Gross Receipts” Unambiguously Includes All Revenues Received During the Policy Period Regardless of When the Work Was Performed
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- Being Dispossessed of an Aircraft by an Airport Owner Pending Payment of Storage Fees Constitutes Direct Physical Loss of the Aircraft
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
- Fraud/RICO Claims Fall Outside the Ambit of Statute Mandating Arbitration of PIP Claims
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- Contamination Exclusion Precludes Coverage for COVID-19 Business Losses
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Court Finds That Plaintiff Is Entitled to Discovery to Determine Disputed Interpretations of a Policy’s Vacancy Provision, Granting Request for In-Camera Review of Privilege Log
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- Governor Signs Bill S5331A Establishing an Online Insurance Verification System for Motor Vehicle Insurance
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- Reserve Information Is Discoverable When Bad Faith Alleged
- Court Grants Insurer's MSJ, holding "Weak Customer Service Is Not the Same as Bad Faith"
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
- Appellate Division Finds That Defendant Failed to Show Lack of Serious Injury Within the Meaning of Insurance Law § 5102(d)
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- An Umpire Appointed Under the Appraisal Provisions of the Provincial Insurance Acts has the Dual Role of a Mediator and an Arbitrator
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]
11/20/25 The Archdiocese of New York v. Century Indemnity Co.
Appellate Division, First Department
Wrong. First Department Holds That, if Requested, Reinsurance Policies Must Be Disclosed Under the Comprehensive Insurance Disclosure Act
Reinsurance agreements are subject to automatic disclosure under CPLR 3101(f). CPLR 3101(f)(1) applies broadly to "any insurance agreement," and a reinsurance agreement is a type of insurance. If the legislature wished to exclude reinsurance agreements from CPLR 3101(f), it could have done so explicitly. The legislature's failure to add a straightforward exclusion when it amended CPLR 3101(f) is strong evidence that it did not disagree with the conclusion of those courts that reinsurance agreements were included within the scope of CPLR 3101(f). In a 2009 decision, the court had compelled the production of reinsurance agreements when requested although that case appeared to apply to claims handling decisions. Why would these be relevant in a traditional tort lawsuit?
11/19/ 25 Unitrin Auto and Home Insurance Company v. Sullivan
Appellate Division, Second Department
There Is Inherent Harm, When One Throws Cup of Urine at Someone From a Moving Car. No Coverage
This 20-year odyssey has finally come to an end. We were involved in the matter 15 years ago.
In 2005, the defendant Ciminello commenced an action to recover damages for personal injuries against, among others, the defendants Sullivan and Harford due to an incident where Ciminello was struck by a cup thrown out of a window of a vehicle operated by Sullivan. In October 2014, the plaintiff, Unitrin Auto and Home Insurance Company (“Unitrin”), commenced this action against, among others, Sullivan, Harford, and Ciminello for a judgment declaring that it is not obligated to indemnify Sullivan in the underlying action. Unitrin alleged, inter alia, that the incident was not an "occurrence" within the meaning of an insurance policy issued to Sullivan. Ciminello joined issue with service of an answer, and Sullivan and Harford failed to appear or answer.
In May 2015, Unitrin moved, among other things, for summary judgment declaring that it is not obligated to indemnify Sullivan in the underlying action. In an order dated January 4, 2016, the Supreme Court, inter alia, granted that branch of Unitrin's motion. Ciminello appealed. In a decision and order dated January 22, 2020, the Second Department, among other things, reversed the January 4, 2016, order insofar as appealed from and denied that branch of Unitrin's motion, concluding that a triable issue of fact existed as to whether the harm was inherent in the intentional act committee.
Thereafter, the Supreme Court conducted a nonjury trial on the question of whether the incident qualified as an accident within the meaning of the insurance policy.
In a judgment dated March 1, 2022, after the trial, the Supreme Court found that the incident was not an accident within the meaning of the insurance policy and declared that Unitrin is not obligated to indemnify Sullivan in the underlying action. Ciminello appeals.
"The duty to indemnify on the part of an insurer requires a determination that the insured is liable for a loss that is covered by the policy In deciding whether a loss is the result of an accident, it must be determined, from the point of view of the insured, whether the loss was unexpected, unusual and unforeseen. Accidental results can flow from intentional acts, and, thus, a loss may be unintended even though the original act or acts leading to the loss were intentional. However, under certain circumstances, where harm is inherent in the nature of the intentional act, such intentional act will be deemed to have intentionally caused such harm.
Here, Unitrin established that the incident was not an accident within the meaning of the insurance policy. In the underlying action, prior to proceeding to trial on the issue of damages, Sullivan and Harford conceded liability on the intentional tort cause of action asserted in the second amended complaint, which alleged, inter alia, that Ciminello's injuries were the result of "willful, wanton and intentional acts."
Further, at his deposition in the underlying action, Sullivan testified that he and Harford planned to fill a cup with liquid and "and throw it at somebody." The evidence established that Sullivan and Harford did, in fact, execute this plan as intended when Sullivan drove his vehicle to within 2 to 10 feet of Ciminello at approximately 30 miles per hour, and Harford, with his arm extended outside the vehicle, struck Ciminello's face with the cup, which was found "[s]plintered and cut into pieces" after the incident. Moreover, Sullivan's and Harford's reactions immediately following the incident further indicated that the contact was not unintentional. Contrary to Ciminello's contention, the harm was inherent in the nature of the intentional acts. Since Unitrin established that the harm was inherent in the nature of the intentional acts, the assault was not an accident within the meaning of the insurance policy.
11/12/25 Lorusso v. M & S Levy Realty, LLC
Appellate Division, Second Department
Common Law Indemnification Claims Dismissed Against Tenant as Were Claims for Contractual Indemnification and Breach of Covenant to Provide Insurance. Unsigned Lease, Entered Into Two Months After Accident, Just Doesn’t Cut It
The plaintiff commenced this action to recover damages for personal injuries he allegedly sustained when he slipped and fell while ascending an exterior metal staircase on property owned by the defendant third-party plaintiff, M & S Levy Realty, LLC (“M & S”). M & S commenced a third-party action against
Advanced Transit Mix Corp. (“Advanced”), the plaintiff's employer and a tenant at the property, and the All American Transit Mix Corp. (“All American”), asserting third-party causes of action for contribution, common-law indemnification, and contractual indemnification, and alleging breach of contract for failure to procure insurance.
Liability for a dangerous condition on property is generally predicated upon ownership, occupancy, control, or special use of the property. In order to establish a claim for common-law indemnification, a party must prove not only that it was not negligent, but also that the proposed indemnitor's actual negligence contributed to the accident.
Here, the third-party defendants demonstrated, prima facie, that All American did not own, occupy, control, or make special use of the area where the accident occurred, and that it did not create the alleged dangerous condition so the claim for common law indemnification against All American are dismissed
The branches of the third-party defendants' motion which were for summary judgment dismissing the third-party causes of action for contractual indemnification and alleging breach of contract for failure to procure insurance insofar as asserted against All American. The third-party defendants established, prima facie, that All American did not enter into a lease or contract with M & S during the relevant time period. An unsigned lease agreement between All American and M & S, submitted by M & S in opposition to the motion, was unenforceable under the statute of frauds and the lease began on January 1, 2017, more than two months after the plaintiff's accident.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
11/18/25 470 4th Avenue Fee Owner, LLC v. Wesco Ins. Co.
Appellate Division, First Department
Summary Judgment Motion Premature When Carrier Representatives Were Not Produced for Deposition
Plaintiff presented a claim for damage which stemmed from a leaking terminal air conditioner. Upon inspection, Wesco denied the claim on the basis that the loss, and therefore damage, predated the inception of the policy. Even if not, however, Wesco cited a number of exclusions which otherwise precluded coverage for the loss. Plaintiff sued, and ultimately Wesco moved for summary judgment. The trial court found questions of fact abound, and the instant appeal followed.
On appeal, First Department affirmed the trial court’s findings. As an initial matter, Wesco’s application was deemed premature because it was filed before the completion of discovery and, as relevant, before the deposition of any witnesses from Wesco could be produced. It is noted that prior to the filing of the motion, plaintiff had repeatedly requested the deposition of Wesco witness and were apparently rebuffed.
With regard to the timing of the loss, the Court ruled that a question of fact existed as to when the damage occurred. In opposition to Wesco’s motion, plaintiff presented affidavits of witnesses swearing to damage occurring within the policy term written by the insurer. Further, Wesco’s reliance on the faulty workmanship exclusion failed when plaintiff demonstrated the possibility of “ensuing loss” that was outside the breadth and scope of the exclusion. The Court found possible ensuring mold loss too which precluded application of the fungus exclusion on the policy.
Lastly, the Court also rejected Wesco’s denial based upon late notice. Despite Wesco’s arguments that the damage happened much earlier, plaintiff argued that the damage became known in August or September of 2018. Notice was provided to Wesco on September 25, 2018, which was close enough, apparently, to create a question of fact on the timeliness of notice.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
11/06/25 Reyes-Martinez v. State Farm Mut. Auto. Ins. Co.
Superior Court of Connecticut, Danbury
Court Strikes Bad Faith and CUTPA/CUIPA Claims
The plaintiff, insured by State Farm, was involved in an automobile accident with an at fault driver. When State Farm failed to promptly settle the underinsured motorist claim, plaintiff brought this suit alleging breach of contract, common law bad faith, violations of CUTPA/CUIPA, and intentional infliction of emotional distress. State Farm moved to dismiss the complaint. The court granted the motion, in part, striking the bad faith and emotional distress counts. It is unclear what State Farm’s basis to move against the breach of contract claim, as it is not discussed by the court.
Significantly, the court held that the plaintiff’s conclusory allegations and restating of the bad faith statutes was insufficient. To plead common law bad faith, an insured must allege the insurer’s dishonest purpose or sinister motive. The court wrote, “Bad faith in general implies . . . actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive. . . . Bad faith means more than negligence; it involves a dishonest purpose." (Internal quotation marks omitted.)”
The court held that the plaintiff failed to allege anything more than breach of contract. “The plaintiff did not specifically allege that the defendant acted with a dishonest purpose or engaged in a series or pattern of misconduct rising to the level of bad faith. Nor has the plaintiff set forth sufficient allegations from which bad faith could be reasonably inferred. Additionally, the plaintiff's allegations that the defendant "failed to investigate in a timely manner" and "did not attempt in good faith to effectuate a prompt, fair and equitable settlement" are conclusory statements without any factual allegations to support the assertions. The plaintiff does not make factual allegations showing how the defendant failed to properly investigate the plaintiff's claim, how that conduct rose to the level of bad faith, or what the defendant's duties are in investigating an insurance claim under the plaintiff's policy. Therefore, the plaintiff has not sufficiently pleaded the necessary elements of breach of the implied duty of good faith. Accordingly, the motion to strike the complaint as to count three is granted.”
The court held similarly in dismissing the CUTPA/CUIPA cause of action. “In each allegation, the plaintiff simply quotes the statutory language. The plaintiff does not allege facts that support the conclusion that the defendant engaged in conduct which violated CUIPA. Additionally, the plaintiff does not allege that the defendant engaged in improper conduct beyond the plaintiff's individual claim. Therefore, the plaintiff has not sufficiently pleaded a CUIPA claim.”
Finding that the plaintiff did not allege any conduct upon which a fact finder could conclude that State Farm acted with extreme or outrageous conduct, the court dismissed the IIED cause of action.
11/10/25 Rodriguez v. Trumbull Ins. Co.
United States District Court, Connecticut
Court Grants Insurer’s Motion to Compel Appraisal, Killing Class Action Claims
The plaintiff’s Pittsburgh based counsel brought a putative class action against this Hartford subsidiary, alleging that the company fails to pay the full actual cash value owed to insureds when a vehicle is declared a total loss. The insurer moved to compel appraisal. The court agreed, ordering the parties to arbitrate the property loss claim and stayed the breach of contract claim. The court also dismissed another Hartford subsidiary, finding that the insured lacked standing.
According to the pleading, The Hartford entities directed a third-party vendor to determine the actual cash value ("ACV") of total loss automobiles by applying a Projected Sold Adjustment ("PSA"). The PSA results in a downward adjustment to the value of each comparable vehicle used in the report to determine the ACV to account for what the carriers described as typical consumer purchasing behavior, i.e., that vehicles sell for less than their listed prices. Here, the named plaintiff’s 2007 Ford Focus was declared a total loss following a 2020 accident. Application of the PSAs to the comparable vehicles resulted in plaintiff being paid approximately $437.60 less than the full ACV.
In response to the pleading, the carrier moved to compel appraisal under the insurance contract. The court concluded that the appraisal provision is an enforceable agreement to arbitrate, governed by the FAA. Because the appraisal provision contemplated that an independent third-party’s ruling to be binding, the provision is an agreement to arbitrate within the scope of the FAA. The court also found that plaintiff’s breach of contract allegations are within the scope of the appraisal process. “The Court finds the allegations in the Complaint squarely fit within matters covered by the Appraisal Provision. The breach of contract claim brought by Plaintiff arises out of a disagreement about the amount of loss suffered by Plaintiff. Plaintiff not only alleges that she was injured because she did not receive the full total loss benefits under a contract, but also that Trumbull's conduct in breaching Plaintiff's insurance contract by applying a "baseless" PSA reduced the value of Plaintiff's total automobile and thus constituted a breach of the implied covenant of good faith and fair dealing. Because the pertinent language of the Appraisal Provision unambiguously provides that "[i]f we and you do not agree on the amount of loss, either may demand an appraisal of the loss," the Court must find that dispute here fall within the scope of the agreement to arbitrate.” (internal citations omitted).
Accordingly, by compelling appraisal the insurer forestalled any class action risks.
RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]
11/05/25 American Transit Ins. Co. v. Michelle Preffer
Supreme Court, Second Department
Judgment of Lower Court Awarding Additional Attorney’s Fees Affirmed, as Determination Was Within Court’s Discretion
The insurer commenced this proceeding against Respondent pursuant to CPLR article 75 to vacate a master arbitration award. Respondent cross-petitioned pursuant to 11 NYCRR 65-4.10(j)(4) for an award of additional attorney's fees. The Supreme Court denied the petition, confirmed the master arbitration award, and awarded additional attorney's fees pursuant to 11 NYCRR 65-4.10(j)(4). The court issued a judgment awarding these additional fees in the sum of $500, and the Respondent appealed.
Pursuant to Insurance Law § 5106(a), if a valid claim or portion of a claim for no-fault benefits is overdue, the claimant shall also be entitled to recover his or her attorney's reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated by the superintendent in regulations. The recoverable attorney's fees include those related to representation in a CPLR article 75 proceeding to vacate or to confirm a master arbitration award. In these cases, the attorney's fees are within the discretion of the court and "shall be fixed by the court adjudicating the matter" 11 NYCRR 65-4.10[j][4].
On appeal, the court confirmed that the Supreme Court acted within its discretion in awarding additional attorney's fees pursuant to 11 NYCRR 65-4.10(j)(4) in the sum of $500 without first conducting a hearing. The Respondent did not submit an affirmation or affidavit in support of her petition to describe the nature of the work performed and the amount of time expended on the matter and did not request a hearing on the issue. Therefore, it was within the court's discretion to determine a reasonable amount of attorney's fees. Under these circumstances, given the legislative intent of the no-fault insurance law to promptly resolve no-fault reimbursements, the court was not required to conduct a hearing prior to awarding the additional attorney's fees pursuant to 11 NYCRR 65-4.10(j)(4).
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
11/12/25 U. S. Specialty Ins. Co. v. Am. Empire Surplus Lines Ins. Co.
United States District Court, SDNY
Court Finds Additional Insured Entitled to Defense Where It Was Reasonably Possible That Named Insured Proximately Caused Accident
Evelyn Sanchez Natal alleged that she was injured on May 9, 2016, after tripping on debris and an improperly placed cement parking barrier in the parking garage at Keith Plaza. Natal sued the owners of Keith Plaza and its management company. The owners then sued MDG Design & Construction LLC ("MDG"), a contractor hired to perform work at Keith Plaza, alleging MDG negligently caused Natal's injuries and was required to indemnify the owners. MDG, in turn, sued AMB Construction, Inc. ("AMB"), a subcontractor, alleging AMB's negligence caused Natal's injuries and that AMB was contractually obligated to indemnify MDG.
MDG's construction manager testified that AMB was performing work in the garage on the day of Natal's injury and had completed work over the accident site only days before. Natal herself had complained about debris in the garage for months prior to the accident.
The subcontract between MDG and AMB required AMB to keep the work site free of debris, obtain general liability insurance naming MDG as an additional insured, and indemnify MDG for liability arising from AMB's acts. AMB held a general liability policy from American Empire Surplus Lines Insurance Company ("American Empire"), which covered bodily injury occurring in the performance of AMB's operations for additional insureds like MDG. However, American Empire denied requests to defend and indemnify MDG, so United States Specialty Insurance Company (“USSIC”) (MDG's excess insurer) defended MDG and incurred costs, leading to this action for declaratory relief and reimbursement.
The decision turned on whether the allegations and evidence in the underlying action created a "reasonable possibility" that AMB's actions proximately caused Natal's injuries, thus triggering American Empire's duty to defend MDG as an additional insured under its policy. The SDNY ultimately found that there was a reasonable possibility and thus American Empire owed MDG a defense.
The Owners' third-party complaint against AMB specifically alleged that if Natal sustained damages as alleged, those damages were caused in whole or in part by AMB's negligence or breach of contract. The court found that this allegation, read in the context of the underlying action, raised a "reasonable possibility" that AMB was the proximate cause of Natal's injuries. The court also noted that similar allegations appeared in MDG's third-party complaint against AMB, and that Natal's original complaint alleged negligence by "agents, servants, and/or employees" of the defendants, which New York courts have held can give rise to a reasonable possibility that subcontractors like AMB were the proximate cause of the plaintiff's injuries—even if the complaint does not name the subcontractor directly.
Looking beyond the pleadings, the court considered deposition testimony showing that AMB performed demolition work in the garage beginning April 8, 2016, continuing through the date of Natal's injury, and was responsible for cleaning up debris from its work. The portion of AMB's work that took place immediately above the site of Natal's injury concluded only six days before the accident. The court found that such evidence, along with testimony about AMB's obligations to keep the site clean, supported a reasonable possibility of liability and thus triggered the duty to defend, which is exceedingly broad.
While American Empire argued that no facts developed to date supported a finding that AMB was truly at fault, the court rejected this, noting that the evidence was not so clear as to eliminate all possible factual or legal bases for liability. The court concluded that inferences about AMB's liability could fairly be drawn from the facts and that the underlying action was ongoing, so the duty to defend remained triggered.
STORM’S SIU
Scott D. Storm
[email protected]
11/10/25 Natl. Specialty Ins. Co. v. James Gang Charters, LLC
Southern District of New York
The Interests of Justice Require a Civil Case Pending the Outcome of a Related Criminal Case
Defendants requested a stay in this civil case pending the appeal of a criminal conviction. See State of Florida v. Jesse James Mayer, No. 19-10939-CF (Fla. Dist. Ct. App. 2023). Plaintiff consented.
A court may decide in its discretion to stay civil proceedings when the interests of justice seem to require such action. In deciding whether to enter a stay, courts generally consider: the interests of the defendant, the interests of the plaintiffs in proceeding with the litigation, the public interest, and the interests of the court and third parties. Courts also look to the degree to which the civil issues overlap with the criminal issues.
In this case there was a high degree of overlap between the criminal and civil claims as they both arise out of the same boating accident. Both parties consent to the stay, and both acknowledge that a stay will serve the ends of judicial economy and efficiency.
11/07/25 Am. Emp. Surplus Lines Ins. Co. v. Cyncal Steel Fabricators Inc.
Eastern District of New York
In Calculating Premium, “Gross Receipts” Unambiguously Includes All Revenues Received During the Policy Period Regardless of When the Work Was Performed
The dispute concerns unpaid insurance premiums under two CGL policies issued by American Empire to Cyncal. Premiums for these policies are calculated as a percentage of Cyncal's "gross receipts" during the respective policy periods. After audits of Cyncal's gross receipts for both policy periods, American Empire determined that Cyncal owed additional premiums. Cyncal refused to pay. American Empire moved for partial summary judgment on its breach of contract claim.
The premium calculation involves an initial "Advance Premium" based on Cyncal's estimate of gross receipts, subject to adjustment after an audit of actual gross receipts. The audits were conducted by a forensic accounting firm, which found Cyncal's gross receipts for the 2021 Policy period to be $3,183,416 and for the 2022 Policy period to be $3,297,478. Based on these audits, American Empire calculated that Cyncal owed an additional premium of $143,641 for the 2021 Policy and $192,388 for the 2022 Policy.
Cyncal disputed the audit figures and the inclusion of $439,155 in retainage payments from prior policy years but did not provide admissible evidence or alternative calculations.
Cyncal argued that "gross receipts" should only include payments for work performed during the policy period and exclude payments for work performed prior to the period, specifically retainage payments.
The court found the term “gross receipts” unambiguous based on dictionary definitions and case law from multiple jurisdictions and includes all revenues received during the policy period, regardless of when the work was performed. The court’s decision was based on the lack of admissible evidence from Cyncal to support its interpretation of "gross receipts" and the plain meaning of the contract terms under New York law.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
11/07/25 US Specialty Ins. Co. v. D.S. Avionics Unlimited LLC
Nebraska Supreme Court
Being Dispossessed of an Aircraft by an Airport Owner Pending Payment of Storage Fees Constitutes Direct Physical Loss of the Aircraft
D S Avionics Unlimited LLC (DSA) had an insurance policy issued by U.S. Specialty Insurance Company (USSIC) that covered the “direct physical loss of or damage to [DSA’s] aircraft caused by an accident while the aircraft [was] not in motion,” subject to specific exclusions. One exclusion encompassed physical loss or damage to the aircraft resulting from the embezzlement, conversion, or secretion of the aircraft by anyone to whom DSA relinquished possession of the aircraft.
DSA delivered the aircraft to a mechanic for maintenance. The mechanic operated out of a rented airport hangar. Shortly after the mechanic received the aircraft, he was locked out of the hangar in a dispute with the airport owner over allegedly overdue rent for his apartment, which was also at the airport. The mechanic was eventually able to access the hangar and move the aircraft outside. When DSA tried to retrieve the aircraft, the airport owner refused to move a truck blocking the aircraft until he was paid a sum of money in rent. The money was not paid, and several days later, the aircraft disappeared from view. DSA then reported the aircraft stolen to the county sheriff’s office and USSIC. However, the airport owner told the sheriff’s office and USSIC that he was holding the aircraft pending the payment of fees that DSA allegedly owed him for storing the aircraft. DSA disputed that it owed any such fees and declined to pay. DSA submitted a sworn statement in proof of loss in which it alleged a theft loss as the aircraft was unlawfully seized, distrained, converted, and stolen so as to hold it ransom to extract payment. USSIC denied the claim because DSA knew where the plane was, who had it, and why but had not taken action against the mechanic.
USSIC filed suit against DSA in the district court for Douglas County, seeking a declaration that the policy did not cover the alleged loss of the aircraft. In its answer, DSA asserted a counterclaim alleging that USSIC had breached the parties’ contract and acted in bad faith in denying DSA’s claim. DSA then sued USSIC for breach of contract and bad faith, and that case was consolidated with the declaratory judgment action. On summary judgment, the district court ruled in favor of USSIC and against DSA, reasoning that there was no “loss” and no “accident” within the meaning of the policy because the airport owner held the aircraft “under demand of payment” until the court found that he had no right to a lien on the aircraft. The court found that DSA did not establish the requisite intent for conversion of the aircraft or theft, but the court found that the Conversion Exclusion applied. The court also found that there was no evidence of damages and that USSIC had an arguable basis for its denial. DSA appealed.
On appeal, the Nebraska Supreme Court sided with DSA. DSA argued that the claim fell within the scope of coverage because an “accident” caused the “permanent physical loss” of the aircraft. Specifically, DSA argued that an “accident” occurred when the airport owner “suddenly and unexpectedly used his truck as a barricade to seize DSA’s aircraft.” As a result, DSA was dispossessed of the aircraft. USSIC argued that any loss of the aircraft was not due to an “accident” because the airport owner acted intentionally in parking or causing the truck to be parked in front of the aircraft. USSIC also argued that there was no “direct physical loss” of the aircraft because DSA ultimately recovered it. The Nebraska Supreme Court agreed with DSA that the parking of the truck in front of the aircraft was not expected or intended from DSA’s standpoint, so it was an “accident” within the meaning of the policy. The Nebraska Supreme Court also agreed with DSA that it did not need to be permanently deprived of the aircraft to have suffered direct physical loss of the aircraft. As a result, the court reversed the district court’s conclusion that DSA’s claim was not within the policy’s coverage and remanded for further proceedings.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
11/13/25 Allstate Fire & Cas. Ins. Co. v. Pennsauken Spine & Rehab et al.
New Jersey Superior Court, Appellate Division
Fraud/RICO Claims Fall Outside the Ambit of Statute Mandating Arbitration of PIP Claims
Allstate, through various subsidiary companies, filed a complaint against an Orthopedic and Neurodiagnostic medical practice, alleging, in part, that the practice engaged in a coordinated scheme involving kickbacks on Personal Injury Protection (“PIP”) benefits, and in other cases, used “runners” to fraudulently obtain such benefits.
The trial court dismissed Allstate’s fraud-related claims, on the basis that PIP claims are subject to mandatory arbitration under the New Jersey Automobile Insurance Cost Reduction Act (AICRA). Allstate appealed on the basis that claims made under the Insurance Fraud Prevention Act (NJIFPA) are not subject to mandatory PIP arbitration, even if the fraud was related to obtaining PIP benefits.
In deciding the appeal, the Appellate Division explained that mandatory PIP arbitration is limited to disputes “regarding the recovery of PIP benefits.” That is, disputes over whether an insured or assignee is entitled to coverage for medical expenses, and if so, in what amount, must be arbitrated. However, the Fraud Act is much broader in scope, as it is designed to eliminate “a broad range of fraudulent conduct.” The Appellate Division also noted that, with respect to fraud claims, the commissioner may join the action to seek judgment in the form of a civil penalty payable as a result of the fraud. Thus, the Court held that compelling claims falling under the Fraud Act to arbitration would impede the overall purpose of the Fraud Act.
In the end, the Appellate Division found that the trial court improperly compelling the plaintiffs’ fraud-based claims to arbitration, despite the fact that they arose out of the unjust recovery of PIP benefits.
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
11/17/25 Sacramento Downtown Arena, LLC v. Factory Mut. Ins. Co.
United States Court of Appeals, Ninth Circuit
Contamination Exclusion Precludes Coverage for COVID-19 Business Losses
The series of COVID-19 related cases continues. Sacramento Downtown Arena, LLC, and the other entity plaintiffs are affiliated with the NBA’s Sacramento Kings. The Plaintiffs sought recovery for business losses incurred at the Kings’ arena, as well as the surrounding hotel and retail spaces due to COVID-19. Factory Mutual issued the Plaintiffs an all-risk insurance policy under which it denied coverage except for an endorsement that provided a separate $1,000,000 coverage limit for losses attributed to communicable diseases.
As with all-risk policies, the policy insured the covered properties for physical loss or damage. Absent any physical loss or damage, the policy did not afford coverage. In addition, the policy contained a Contamination Exclusion that excluded coverage for “any condition of property due to the actual or suspected presence of any . . . virus.”
Plaintiffs argued an exception to the Contamination Exclusion that reads, “directly resulting from other physical damage not excluded” applied. The court rejected this argument. The Supreme Court of California previously addressed the exception and held that the exception does not apply where the contamination itself is the physical damage. Since Plaintiffs could not identify any other physical damage aside from the viral contamination, the exception did not apply.
The court further rejected Plaintiffs’ argument that the prior state decision limited its determination to “lost earnings” only. Rather, the prior decision recognized that the contamination losses are excluded even though the contamination is a condition “from which diverse losses may flow.” San Jose Sharks, LLC v. Super. Ct., 316 Cal. Rptr. 3d 393, 403-06 (Ct. App. 2023).
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
10/22/25 120 Main Hotel LLC v. Sompo Am. Ins. Co.
Supreme Court, New York County
Court Finds That Plaintiff Is Entitled to Discovery to Determine Disputed Interpretations of a Policy’s Vacancy Provision, Granting Request for In-Camera Review of Privilege Log
Plaintiff, 120 Main Hotel LLC (“Main Hotel”), filed a lawsuit against Sompo American Insurance Company (“Sompo”), seeking coverage under a commercial property insurance policy following a fire. After initial paper discovery was exchanged, Plaintiff moved for an order to compel supplemental discovery responses. The Plaintiff requested sanctions.
Plaintiff argued that supplemental discovery was necessary, to resolve the major dispute in the matter, regarding the interpretation of the Vacancy Provision in the subject Sompo policy issued to Main Hotel. Plaintiff further contends that the supplemental, requested discovery will establish a mishandling of Main Hotel’s property damage claim.
Sompo argued that the information sought is irrelevant, and that the materials requested were not reviewed in determining whether to provide coverage, and thus, is irrelevant. Sompo additionally requested an in-camera review of the privilege log prior to requiring a disclosure of the previously withheld documents.
Ultimately, the Court found that Plaintiff established that a majority of the discovery it sought was relevant and/or reasonably calculated to lead to the discovery of relevant information. The Court held that the test to determine whether discovery must be produced is not whether the material would be admissible, but rather whether the information sought is material. As such, the Court agreed that based on the dispute as to the ambiguity of the language in the Sompo policy, the documents requested are discoverable.
However, the Court determined that Plaintiff did not establish its entitlement to, “the amounts paid by defendant to various consultants, advisors, adjusters, and others used for the purposes of investigating the underlying claim.” The Court found that Plaintiff failed to offer an explanation as to why the information sought is relevant and/or reasonably calculated to lead to the discovery of relevant information.
In addition, the Court agreed with Sompo in relation to its plea for an in-camera review of the privilege log. The Court held that at this juncture it was not clear whether the communications withheld were made in the regular course of the insurers business, or whether the communications were prepared by counsel acting as counsel, and thus, an in-camera review was necessary.
Lastly, the Court found that Sompo’s conduct was not willful, contumacious, or that counsel has acted in bad faith. As such, the request for sanctions was denied.
The Court Ordered Sompo to serve supplemental written responses to Plaintiff’s Interrogatories and Requests for Production. Within 20 days of service of the Notice of Entry, Sompo is required to make available to the Court all documents Sompo has withheld or redacted on grounds of attorney-client privilege or protection, or as otherwise reflected on its privilege log so that the Court may conduct an in-camera review for privilege.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
11/21/25 Online Insurance Verification Bill
New York State Senate
Governor Signs Bill S5331A Establishing an Online Insurance Verification System for Motor Vehicle Insurance
On November 12, 2025, the Governor signed into law Bill S5331A which established an online insurance verification system for motor vehicle insurance.
The Bill’s justification explains that New York’s current system for auto insurance verification relies on a manual process using old technology. The Act creates the Online Verification system (OLV) which allows for real-time verification of automobile insurance. The system will be used by law enforcement during roadside stops and accident investigations, and within the court system. The system will reduce the likelihood of drivers being falsely accused of driving without insurance coverage.
New York joins eighteen other states which have adopted a version of the OLV system.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
11/12/25 Berkley Ins. Co. v. Weddle L. PLLC
United States District Court, Southern District of New York
Reserve Information Is Discoverable When Bad Faith Alleged
In this case, Weddle Law PLLC ("Weddle") filed a motion to compel Berkley Insurance Company ("Berkley") to produce two sets of documents pertaining to the investigation and loss reserves of Weddle’s claims. Berkley withheld the documents citing the attorney-client privilege and/or work product.
Here, the Court ordered Berkley to submit unredacted copies of the documents to the Court for an in camera review but required the three documents pertaining to loss reserves to be produced to Weddle, stating "[c]ourts in this District have found reserve information relevant where bad faith has been alleged."
11/10/25 Frasca v. Allstate Vehicle
United States District Court, Pennsylvania Eastern District
Court Grants Insurer's MSJ, Holding "Weak Customer Service Is Not the Same As Bad Faith"
On January 9, 2024, a windstorm caused a tree to fall on Plaintiffs Jennifer and Nicolas Frasca's ("Plaintiffs") home, which was covered by an Allstate homeowner's insurance policy. The Plaintiffs timely notified Allstate of the loss and retained Royal Adjustment Group ("Royal") for their claim.
Allstate and Royal scheduled an inspection of the property for January 17, which was pushed to January 30 due to snow. Royal communicated that they may have an engineer come to the property, and an Allstate representative later told Royal he would discuss possibly getting an engineer. Allstate made an initial payment of $79,269.38 for structural damage on February 27. On March 6, Allstate requested additional photographs from Royal and discussed a second inspection. The second inspection of the property was scheduled for March 15, but occurred on April 2, due to a reassignment of the claim. Allstate then retained an engineer, who inspected the premises April 23, and provided the report less than four weeks later. Allstate then met with Royal to discuss the engineering report and provided two additional payments under the policy for structural damage, for a total of $235,900.72 in payments to Plaintiff under the Dwelling and Other Structures Policies.
The Plaintiffs contacted a contractor to rebuild the Premises in April or May 2024 and contracted with them in November 2024. Construction began in January 2025, and Plaintiffs stated the delay on the permit application process and Allstate's "requirement" that the damaged personal property stay within the premises. As of July 2025, the Plaintiffs have not moved back into their home.
On February 1, 2024, Allstate sent Royal a spreadsheet to identify the damaged personal property and requested photographs where possible. Allstate followed up with Royal and the Plaintiffs multiple times, and the Plaintiffs returned the spreadsheet to Allstate on July 16. On July 22, Allstate requested photos of certain items to determine whether certain items would be cleaned, repaired, or replaced. Allstate followed up again on August 5, and on August 16, Royal requested a $50,000 advance for personal property damage, which Allstate declined. Allstate followed up multiple times thereafter for photos or supporting evidence of the damage.
Plaintiffs brought this action against Allstate, alleging that Allstate acted in bad faith in its claims handling both Dwelling Protection and Personal Property Protection coverage. Allstate moved for summary judgment.
To succeed on a bad faith, claim against an insurer under Pennsylvania law, a party must show by clear and convincing evidence that the insurer (1) had no reasonable basis for denying benefits under the policy; and (2) knew or recklessly disregarded its lack of reasonable basis in denying the claims. "[A]ll that is needed to defeat a claim of bad faith under § 8371 is evidence of a reasonable basis for the insurer's actions or inactions. Gibson v. State Farm Mut. Auto. Ins. Co., 994 F.3d 182, 191 (3d Cir. 2021)."
The Court found the Plaintiffs failed to establish bad faith. Though it took Allstate months to retain an engineer, engineers are not retained for every claim and Allstate was continuing to move the claim forward shown by issuing partial payment and conducting a reinspection. The Court stated, "Allstate's performance was not exceptional, but that does not amount to bad faith as it is defined by Pennsylvania law." The Plaintiffs also alleged that Allstate acted in bad faith by providing payments that were minimal compared to the cost to restore the property, but the Court found the amount paid is within distance of Plaintiffs' estimates.
The Plaintiffs also argued that Allstate acted in bad faith in handling the damaged personal property, by ignoring the content loss and delaying removal of the personal property. The Court found that Allstate followed up with the Plaintiffs multiple times, and Allstate was delayed in scheduling inspections and vendors. Ultimately, the Court granted Allstate's motion for summary judgment stating “[w]eak customer service is not the same as bad faith.”
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
11/12/25 Holliday v. City of New Rochelle
Appellate Division, Second Department
Appellate Division Finds That Defendant Failed to Show Lack of Serious Injury Within the Meaning of Insurance Law § 5102(d)
This case involves personal injuries suffered by plaintiff, Dorian Holliday ("plaintiff"), in connection with a motor vehicle accident. Defendants moved for summary judgment to dismiss the complaint on the basis that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the accident. The Westchester Supreme Court granted defendants’ motion on August 29, 2023.
Defendants demonstrated that plaintiff did not sustain a serious injury under the following categories of Insurance Law § 5102(d): (1) permanent consequential limitation of use; (2) significant limitation of use; and (3) and 90/180-day categories (see Staff v Yshua, 59 AD3d 614, 874 N.Y.S.2d 180). Plaintiff raised a triable issue of fact as to whether he sustained serious injuries to the cervical and lumbar spines under the permanent consequential limitation of use and significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 960 N.E.2d 424, 936 N.Y.S.2d 655).
The Appellate Division found that defendants failed to establish that the alleged injuries to plaintiff’s cervical and lumbar spines were not caused by the accident (see Zennia v Ramsey, 208 AD3d 735, 735, 171 N.Y.S.3d 921; Luigi v Avis Cab Co., Inc., 96 AD3d 809, 949 N.Y.S.2d 61; Reyes v Diaz, 82 AD3d 484, 917 N.Y.S.2d 632; see generally Jilani v Palmer, 83 AD3d 786, 787, 920 N.Y.S.2d 424). Defendants’ failed to eliminate all triable issues of fact as to whether, as a result of the defendants' negligence, the accident exacerbated preexisting injuries to the cervical and lumbar regions of the plaintiff's spine (see Weber v Kalisky, 218 AD3d 629, 630, 192 N.Y.S.3d 248; D'Augustino v Bryan Auto Parts, Inc., 152 AD3d 648, 650, 59 N.Y.S.3d 104; Sanclemente v MTA Bus Co., 116 AD3d 688, 689, 983 N.Y.S.2d 280). As such, the burden never shifted to plaintiff to raise a triable issue of fact as to causation or to explain any gap in treatment (see Valdez v Classic Hauling, LLC, 233 AD3d 959, 960, 223 N.Y.S.3d 283; Skeldon v Faessler, 219 AD3d 851, 853, 195 N.Y.S.3d 277; Isidor v Banks, 208 AD3d 462, 463, 171 N.Y.S.3d 359).
Based on the foregoing, the Appellate Division, Second Department, ordered that the Supreme Court’s order be reversed, on the law, with costs, and denied defendants’ motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident.
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
09/16/25 Harris v Co-Operators General Insurance Company
Alberta Court of King’s Bench (trial)
An Umpire Appointed Under the Appraisal Provisions of the Provincial Insurance Acts Has the Dual Role of a Mediator and an Arbitrator
On May 1, 2016, a wildfire began southwest of Fort McMurray, Alberta. On May 3, it swept through the community, forcing the largest wildfire evacuation in Alberta's history, with upwards of 88,000 people forced from their homes. The wildfire destroyed approximately 2,400 homes and buildings. Another 2,000 residents in three communities were displaced after their homes were declared unsafe for reoccupation due to the side effects of the fire.
The Harris family, Tracy and Gary and their two boys then aged 14 and 6 who lived on the edge of the city were among the displaced. Their home escaped destruction but was damaged by heat, smoke, and soot from the fire. The smell of smoke permeated the property. They were insured by The Co-operators General Insurance Company. Co-operators spent over $790,000 for remediation of that damage. The Harris family returned to their home in September 2016.
In article that appears on the Covenant Health website, Tracy Harris is quoted as saying “It took months after returning home to find that the boys may have been harmed by fire-related pollutants in the home… My eldest son often has tremors, headaches, and all kinds of pain. Aside from physical and mental health challenges, he also developed learning difficulties.”
The Harrises believed that heavy metals and other pollutants deposited by the fire had contaminated their home. Extensive testing by multiple testing companies was conducted between October 2016 and June 2021. There were conflicting reports as to the continued presence of contaminants and what must be done to eliminate them. In the meantime, the Harrises bought and moved into a mobile home that they placed on their property. Their home sat empty.
In view of the continued dispute as to the presence of contaminants within the home and outbuildings, the Harrises sued Co-operators. The Harris’s claimed a total replacement cost for their home of $1,313,951.25 or, rather than replacing, a remediation cost (further cleaning and drywall replacement) of $1,089,104.80. In response, Co-operators agreed that further cleaning was necessary and had quantified that cleaning at $87,064.41 plus $8,022.99 to clean contents.
Co-operators invoked the appraisal process under the Alberta Insurance Act to resolve the amount of the loss. The Harris family appointed an appraiser and Co-operators appointed their own appraiser. Together the two appraisers chose an Umpire. The three-member panel deliberated. The Umpire provided a written decision that details the many expert reports received and performed a careful evaluation of the repair costs submitted by The Co-operators and the Harris family. He concluded that the Co-operators had presented the most reasonable estimate and cleaning protocol. The Harrises disputed the Umpire’s decision and filed this application for judicial review
The Standard of Review
Judicial review is uncontroversially governed by the Supreme Court of Canada’s decision in Vavilov v Canada (Minister of Citizenship and Immigration), 2019 SCC 65. A court reviewing a tribunal’s decision, including that of an Umpire following the Insurance Act appraisal process, must determine whether that decision provides “internally coherent reasoning” and is “justified in relation to the constellation of law and facts that are relevant.” It must not, however, comb through the Umpire’s work, conducting a “line-by-line treasure hunt for error.” The Umpire’s factual determinations and resolutions of competing evidence must be respected unless they are tainted with pervasive or critical errors that render them unreasonable: Vavilov.
Flaws relied on by a party to challenge a decision must be “sufficiently central or significant to render the decision unreasonable.” Vavilov. Fundamental flaws include a failure of rationality internal to the reasoning process and a failure of justification given the legal and factual constraints bearing on the decision: Vavilov.
Analysis: Was the Umpire’s Decision Unreasonable?
In this case, the court stated that “The comprehensive Decision rendered by the Umpire clearly demonstrates that he grappled with the evidence before deciding whether to side with the Harris family or Co-Operators. He was presented with a plethora of scientific reports written over the course of five years and clearly paid careful attention to their contents and methodologies. His task was considerably complicated by the fact that each of the experts used different testing methods, tested and found different contaminants, and recommended different remediation methods. The Umpire evaluated and weighed all this evidence in a process that discloses neither error nor unreasonableness of approach…The Umpire’s conclusion that cleaning was the most reasonable remediation measure was supported by the reports presented. The Umpire’s Decision was well within the realm of the reasonable on the evidence before him.
The Role of An Umpire Under the Alberta Insurance Act
The precedential value of this decision lies in the Court’s description of the role of an Umpire under the section of the Insurance Act that deals with appraisals. In that regard the Court stated that the appraisal section of the Insurance Act encourages the insurer and the insured to come to a consensus regarding the dispute at issue as the statute mandates the parties’ representatives to resolve matters “by agreement.” In keeping with this and the fundamental purpose of the appraisal provisions of the Insurance Act which is to create a fair, cost-effective, and expeditious dispute resolution mechanism, umpires appointed under this process have a dual mediator/arbitrator role.
Within their mediative function, umpires can and should point the parties towards principled compromises that accord with the evidence where they perceive these as fair and reasonable settlements to the claim. If an agreement is reached between one of the parties and the umpire, that outcome, as memorialized in writing, fulfils the requirements the appraisal provision. The nature of the claim, and the dispute arising over it, will define where opportunities to settle the case in this manner are available or appropriate.
The Umpire’s arbitral role is engaged if the umpire does not see fit to propose a compromise position lying between the parties’ positions as advocated by the appraisers, or if neither party agrees to a compromise from their base position. When performing this adjudicative function, they are limited by the statutory language to choose between the competing positions of the insurer and insured. The court emphasised that the Umpire is not permitted to impose a ‘third way’ solution to which neither of the parties subscribe. Such an outcome would, by definition, lack the agreement of one of the appraisers and the Umpire and therefore it would be off side of the Act.
Conclusion
Despite the belief of the Harris family that their home is contaminated, unsafe, and was making them sick, the factual determination as to whether and to what extent the home required further work to be fully restored to pre-fire safety for habitation fell to be determined on the expert reports prepared for both sides that was evaluated by the Umpire. The Court concluded that the Umpire’s approach was fair, comprehensive, and statutorily compliant. There is no basis for this Court to intervene.
© Hurwitz Fine P.C. 2025
All rights reserved
