Volume XXVII, No. 15 (No. 714)
Friday, January 2, 2026
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:
Welcome to 2026. Happy New Year from Scottsdale, AZ, the Land of the Golden Martinis.
Do you have a situation? We love situations.
The Bills are heading to the playoffs, and the Sabres have won 10 in a row. For a hockey team that hasn’t been in the playoffs since 2011, it’s nice to see them in a wildcard spot.
Wishing you the happiest and healthiest of New Years as we usher in 2026 from Scottsdale, Arizona. Weather is just a tad better here than the winds and snows of Buffalo.
Coverage Pointers University
REGISTRATION IS NOW OPEN FOR OUR
THIRD COURSE OFFERING
January 15, 2026
1:00 PM Eastern
A Risk Transfer Primer
Isabelle H. LaBarbera, Instructor
All you need to know to unravel contractual liability and
additional insurance claims
The AVOID Act – Significant Changes in the Timing of Third Party Lawsuits for Contribution and Indemnity
We wrote to you last week about this legislative disaster. In case you missed it, here’s a short summary,
Dramatic changes in timing of third party actions (impleaders) enacted. Most significant change in third party practice in many decades. Governor Hochul just signed this bill into law into law as Chapter 704 of the Laws of 2025 to be effective in 120 days.
Third party actions sounding in contractual indemnification must be filed within 60 days after serving an answer or 60 days after learning of potential common law liability. Otherwise, the third party action will be severed or dismissed without prejudice. Second third party actions are to be filed within 45 days and subsequent third party actions within 30 days.
For third party actions alleging “grave injuries” and seeing common law contribution and indemnity against employers, the time to file is 120 days.
Way too short to secure medical records, conduct independent medical exams and assess, for example, the extent of TBI’s.
No impleaders will be allowed after Note of Issue has been filed except with court permission.
Think of the impact of this change on premises and Labor Law risk transfer cases. No longer is there any significant time to negotiate the assumption of defense in additional insured/contractual liability claims or to secure agreements by excess carriers to follow the lead of the underlying insurer in picking up indemnity for additional insureds. Often, excess carriers want to wait until depositions are completed, at least, to make that decision. Will no longer be able to give that courtesy.
The Governor has indicated that by agreement with legislative leaders, there will be some changes enacted after the first of the year. But, unless these Chapter Amendments are significant – and I am not optimistic – New Year’s will bring a lot of new litigation activity.
Watch our website and our publications for up-to-the minute news.
If you want to discuss the impact of this new change on insurance coverage and risk transfer claims generally, do reach out to me at [email protected] . If you’re particularly interested in how this will impact Labor Law/construction cases, contact David Adams, who heads our Labor Law Team at [email protected]. To discuss premises claims, Chris Potenza, [email protected] is available as well.
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.
If a Woodchuck Could Chuck Wood, He’d Chuck the Wood He Could – 100 Years Ago:
The Buffalo News
Buffalo, New York
2 Jan 1926
$100,000 LOSS IN WYOMING
COUNTY BY WOODCHUCKS
Farm Bureau Plans War on the
Burrowing Pest.
WARSAW, Jan. 2.—One of the features of the program of the Wyoming county Farm bureau for 1926 will be the woodchuck eradication campaign during May and June. The estimated damage caused by woodchucks in the county each year is $100,000. This is on a basis of each woodchuck doing a dollar’s worth of damage during the season and estimating 20 woodchucks a farm in the county.
Continued emphasis will be placed on the control of bean and potato diseases, particularly bean anthracnose, bacterial blight of beans, bean root rot, potato leaf hopper, and late blight of potatoes.
More economical production of milk also will be given attention. The growing of more legume hay and the production of oats, barley, and peas as home grown feed will be urged.
Features of last year’s program will be continued, including soil tests, spray information service for fruit growers, cow testing associations, tuberculosis eradication campaign, and poultry culling.
Peiper on Property (and Potpourri):
We close out 2025 with an interesting decision on everyone’s favorite anti-indemnity statute, General Obligations Law 5-321. Unlike its cousin, GOL 5-322.1 which applies to construction agreements, Section 5-321 does not, categorically, prohibit a landlord from being indemnified for its own negligence. Rather, it simply prohibits the landlord from absolving itself from liability at the cost of the tenant. As a caveat, however, several appellate level decisions have ruled that a claim for one’s own negligence can be countenanced, particularly, where the parties agreed to allocate their respective risks through sophisticated insurance procurement clauses.
In the case we review below (Akeed, Inc. v. Barcomb), however, the Court draws a distinction between commercial leases and residential leases. The former, apparently, being negotiated at arm’s length between sophisticated parties. The latter, however, not indicative of a sophisticated transaction. Thus, the Fourth Department appears to be announcing that a landlord may not be entitled to indemnity for its own negligence under a lease agreement if the lease is residential in nature. We’re not sure we see such a clear distinction, but it is worth noting the next time this issue comes up.
That’s it for this year. We’ll see you in two weeks. In the meantime, we remind you to sign up for the next installment of Coverage Pointers University on Risk Transfer/Additional Insured issues. See you in 2026.
Steve
Steven E. Peiper
[email protected]
Radio Has Promise – 100 Years Ago:
The Buffalo News
2 Jan 1926
WORLDWIDE RADIO
When the second quarter of the nineteenth century opened, weeks were required to communicate across the oceans. Days were required to send a message from state to state. New Year’s day, 1926, music played in a long club and the singing of John McCaormack and the messages of consults of many nations in a New York studio were heard throughout the world in a hook-up of the powerful radio broadcasting stations of the United States, England, continental Europe and South America.
The experiment did not prove a perfect success, but the results of it carried a promise of wonderful things in the years to come. As an agency to develop good will and understanding among the peoples of the earth the radio has great possibilities. This means of communication should assist materially in bringing to the world an era of good feeling.
Lee’s Connecticut Chronicles:
Feliz año nuevo desde Cacun.
Lee
Lee S. Siegel
[email protected]
Predictions for Today – 100 Years Ago:
Wisconsin State Journal
Madison, Wisconsin
2 Jan 1926
The New York of the Future
DR. FRANK CRANE
In a series of dramatic paintings by Willie Posany at the Wanamaker Department store in New York City there is depicted a vision of the future.
What will New York be one hundred years from now?
The artist has shown us a New York full of towering buildings, some of which have aircraft landings on them.
When we look back on the history of the city and think that it is but a few years ago, comparatively speaking, that it was a Dutch trading post inhabited by only a few human huts, and compare that situation with its present case today, it is not such a vigorous stretch of the imagination to visualize a New York of the future that shall as completely outstrip the New York of today.
We are living in an age of progress. New inventions are constantly being made. More and more people are pouring into the city.
When New York contains ten times as many people as it does today and when invention has made still further progress we may indeed look for amazing things.
Wonderful as are the conceptions of the artist in this case, they do not outrun our imagination.
We may well look for the greatest center of human population in the world to be located on Manhattan Island. When that time comes the aircraft as a new means of communication will have to be reckoned with.
The traffic problem, handling the immense crowds in the streets, is already upon us.
We have difficulty now in arranging for the multitude of foot passengers, and automobiles that throng the down-town district at noon hour, and in the nature of the case our streets can hardly be made wider.
What we shall do when we pour a million or so more people into the chasms between the buildings no man can say.
Perhaps the best answer to the question will be two or three decker streets, but these streets will cost a vast amount of money.
The most acute problem of civilization is the handling of the immense multitudes that gather in the various large cities of the world, and New York is foremost among them.
Ruffner’s Road Review:
Dear Readers,
I hope everyone had a great Christmas, on to the New Year! We are just one week away from the NFL playoffs and are hoping for the Bills to make another playoff run – on the road from the wild card position this year. The Buffalo Sabres also are looking strong, recently extending their win streak to nine games.
In this week’s case, the insurer commenced a CPLR Article 75 proceeding to vacate the award of a master arbitrator in favor of the medical provider in a no fault claim. While the Supreme Court remanded to arbitration for limited reconsideration, on appeal, the Appellate Court denied the insurer’s petition as the arbitrator’s decision was rational and did not contain an error of law.
Until next time,
Kyle
Kyle A. Ruffner
[email protected]
Even Then – 100 Years Ago:
The Buffalo News
Buffalo, New York
2 Jan 1926
WRECKED AUTO IN FRAUD
FOR INSURANCE, IS CLAIM
David Nugent, 34 years old, 18 Ganson street, North Tonawanda, is alleged by police of that city to have confessed that he wrecked an automobile owned by Herman Havens, 27 Ranson street, North Tonawanda, to perpetrate an insurance fraud.
Police charge Nugent told them he received $100 for driving the machine over a cliff. Havens, the authorities allege, reported the car as stolen and collected $1500 insurance.
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers Subscribers:
2026 is upon us and I wish you a heartfelt Happy New Year! Here is to be hoping that you accomplished everything you set out to in 2025 and, assuming you’re like me, and you didn’t, here is to a fresh start towards new (or the same) goals in the year ahead. It will be a challenge, but challenges are worth overcoming…they build better people in the world around us.
Nothing from me for this edition, but I look forward to covering the decisions that have piled up over the holidays in the next one!
Until next time,
Ryan
Ryan P. Maxwell
[email protected]
Hate When That Happens – 100 Years Ago:
The Buffalo News
Buffalo, New York
2 Jan 1926
BELL KILLS ORGANIST.
Providence, Jan. 2 (AP).—When the big bell at Saint Adelbtert’s Polish Catholic church failed to call the congregation to mass, Walter Chamienie, 44 years old, organist, climbed to the tower to see what the trouble was. When the bell was released it carried the man off his feet and his body went hurtling to the church yard 90 feet below. Death was instantaneous.
Storm’s SIU:
Hi Team:
Three very practical and interesting cases for you in this edition:
- Insurer’s Referral of Insured to the Attorney General for Suspected Insurance Fraud in the Application Was Absolutely Privileged from Defamation Liability Regardless of Motive for the Reporting -- Public Policy Concerns Outweigh the Right of the Defamation Plaintiff to Seek Redress for Harm Caused by the Statements.
- Insurer Obligated Under the Policy to Indemnify Only for Siding Damaged in the Loss Even if it Results in Mismatched Appearance with Undamaged Siding -- “like kind and quality” Means Similar Rather than Identical Materials.
- Public Adjuster’s Suit Dismissed in Case Where Insurers Invoked Anti-Public-Adjuster Clause Used by Excess-Line Insurers.
I hope you have a most excellent Happy New Year! Go Bills, Bandits and Sabres!
Scott
Scott D. Storm
[email protected]
Hot Dog! – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
2 Jan 1926
JUICY HOT DOG BRINGS
RICHES TO GOTHAM MAN
New York, Jan. 1 (A. P.).—the hot dog, which for many years fed hungry sports fans at the old Madison square garden, bought a small fortune in Brooklyn real estate today.
David Latinberg, who started life as a newsboy, later began to sell food to hungry sports mobs at the Sheepshead Bay racetrack and then became a fixture at the hot dog stand in the old garden, made his first venture in housing crowds with the purchase of a block of apartment houses on Tenth avenue with an estimated value of $275,000.
Latinberg is 40 years old. At one six-day bicycle race in the old garden he sold six tons of hot dogs.
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
Hope you all had a wonderful holiday season. I gave my niece a pack of baby sized “Very Hungry Caterpillar” socks, which she immediately tried to eat. How fitting.
This week’s case from the Louisiana Supreme Court looked at whether a tortfeasor has a legal right to deduct for betterment in connection with a tort victim’s claim for property damages to a vehicle and, if not, whether the tortfeasor is liable for penalties for asserting such a right.
Happy New Year!
Kate
Katherine A. Fleming
[email protected]
Tough Penalty – 100 Years Ago:
The Buffalo News
Buffalo, New York
2 Jan 1926
15 ARRESTED IN MOP-UP ON
1925 LICENSE PLATES
Intensive Campaign Is Planned Against
Delinquent Motorists During Next Few Days –
Three Bureaus Are Open to Care for Late Comers.
Almost twice as many auto license plates were issued up to December 31, 1925, as in the corresponding period in 1924, figures at the county clerk’s office show. The total Thursday evening was 78,894, which compares with 42,308 in 1924. On the last day 8149 lates were distributed.
Arrests of 15 persons having cars without the 1926 plates were made on New Year’s day in outlying districts by state motor vehicle inspectors. A mopping-up campaign against delinquents will be carried on within the city limits during the next few days it was announced by Henry Seilheimer, district deputy tax collector.
It is expected that about 10,000 plates will be issued next week. Offices at the county clerk’s office, 11 West Swan street and in the 165th armory were crowded with late applicants Saturday morning. They will remain open until 5 P.M. Each of the bureaus will remain in operation until most of the plates have been issued.
Of the total number of plates issued, 42,126 were obtained at the county clerk’s office, 21,781 at 11 West Swan street and 14,987 in the 165th armory.
Gestwick’s Garden State Gazette:
Dear Readers:
I hope everyone enjoyed the Holidays and was able to get away from work for a while to spend some quality time with loved ones. I know I sure did. I am particularly excited for the year ahead, because it is the year in which I get married!
A very important update from the Garden State: the minimum financial responsibility auto insurance limits, as of the new year, are up to $35,000 per person and $70,000 per accident. That’s up from $25,000/$50,000 which became effective January 1, 2023. Note: this does NOT change the limits available under any policies now in existence. Rather, it only applies to policies that are renewed (or issued new) today (1/1/26) or after.
You may be thinking that this is not all that important. But it is. New Jersey is a “deemer state,” which means that out-of-state auto policies are deemed to include the mandatory minimum levels of coverage required by New Jersey law when the insured auto is driven in the State of New Jersey. So, let’s say a New Yorker takes his or her car for a drive across the George Washington Bridge for a visit to the Garden State and gets into an accident there. And let’s say that New Yorker had only the minimum liability limits required by New York law (still $25,000/$50,000). Per the deemer statute, the New Yorker’s policy may be deemed to provide the new minimum limits required by New Jersey law ($10,000 more coverage than that for which the New Yorker bargained and paid, or $20,000 more if more than one person was injured).
Another interesting case involves a jury’s determination on witness credibility and its relationship to a residence premises issue.
Here’s to a happy, healthy new year!
Evan
Evan D. Gestwick
[email protected]
Good to Hear – 100 Years Ago:
The Buffalo News
Buffalo, New York
2 Jan 1926
HOSPITAL TO GET RADIO.
WELLAND, Ont., Jan. 2.—Welland Lion club is to install a radio in Welland County Hospital in January. The set will cost between $500 and $550. Nine loudspeakers will be placed with the instrument and earphones will be placed in all wards.
O’Shea Rides the Circuits:
Happy New Year,
I hope everyone enjoyed the holiday season and received an opportunity to rest. While I hoped for a white Christmas, that wish did not come true. Instead, we were battered with snow for the past week. Better late than never.
The Circuit Courts have been quiet for the past few weeks. However, I was able to find a quick unpublished decision from the Eleventh Circuit that applied South Carolina Law to a gunshot injury caused by alleged reckless driving.
Until Next Time,
Ryan
Ryan P. O’Shea
[email protected]
Aged? 65? – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
2 Jan 1926
AGED MAN ENDS LIFE BY
TURNING ON GAS IN ROOM
Tony Fusco, 65 years old, of No. 85 Lloyd street committed suicide in his room yesterday by turning on the gas. Lodgers in the building broke into the room when they detected the gas. Fusco was found lying on the floor. According to the police the man had been robbed of a sum of money about three weeks ago and had evidently become melancholy. He had been dead about eight hours when found.
LaBarbera’s Lower Court Library:
Dear Readers:
Hoping everyone had a happy and healthy holiday season!
This week I am reporting on a New York County decision finding that the Uber car involved in the subject accident classifies as a for-hire vehicle. As a result, the court permanently stayed the arbitration demand made by the driver, finding that Uber was not obligated to provide UM/SUM coverage for the accident.
Until Next Time…
Isabelle
Isabelle H. LaBarbera
[email protected]
Cosmo Kramer? – 100 Years Ago:
Brooklyn Daily Times
Brooklyn, New York
2 Jan 1926
MRS. WALKER’S CAR
KILLS MAN IN CRASH
Accident Halts Auto Going
for Mayor and Wife.
The automobile owned by Mrs. Janet A. Walker, wife of the mayor, and a taxicab driven by Harry Singer, collided yesterday at Seventh avenue and 137th streets, Manhattan, causing the death of Joseph Kramer of 1,283 Morris Avenue, the Bronx.
Kramer was thrown on his head from the running board of the taxi, upon which he had been standing, and he died an hour later at Harlem Hospital.
The Walker car was bound for the Hotel Commodore to take the Mayor and Mrs. Walker to the inauguration ceremonies at City Hall. It was driven by Ernest Ellifser, Mrs. Walker’s chauffeur.
Lexi’s Legislative Lowdown:
Dear Readers,
Happy New Year! I am looking forward to heading into 2026, a busy year filled with weddings and celebrations!
Lots to report on this week as the Governor has acted on many Bills in the last couple of weeks
Thanks for Reading,
Lexi
Lexi R. Horton
[email protected]
Different Coke – 100 Years Ago:
The Buffalo News
Buffalo, New York
2 Jan 1926
WEIDIGER, AGAIN CONVICTED
FOR SHORT WEIGHT IN COKE
For the second time in two months, Carl Weidiger, who runs the Eagle Coal and Ice company at 149 Shenandoah road, was found guilty of delivering short weights in coke by Judge Keeler in City court Friday. On his former conviction Weidiger was fined $25. His latest offense cost him $50.
He was arrested by Inspectors Stall and Best of the department of weights and measures, and they testified that Weidiger had sold Mrs. C. J. McNealy, 2174 Seneca street, coke for $33.75, which was 921 pounds short of the two and one-half tons. Weidiger claimed that he delivered the coke just as he received it from the trestle and that he had no knowledge of its short weight. He charged that if it was short, the shortage must have been created in the trestle.
Victoria’s Vision on Bad Faith
Dear Readers,
I hope you are staying warm. We are currently hunkering down in WNY trying to wait out a wind/winter storm mix. Hoping this leads to good conditions for skiing this New Year and weekend.
This week I have a case from the District Court of New Jersey, discussing the standard for a first party bad faith claim and when a New Jersey court decides to sever a bad faith claim from an underlying coverage claim.
Have a good weekend and Happy New Year!
Victoria
Victoria S. Heist
[email protected]
Protecting the Unsuspecting Male – 100 Years Ago:
The Buffalo News
Buffalo, New York
2 Jan 1926
Protecting the Unsuspecting Male
“Most of the old blue laws aimed at courtship were designed to prevent members of one sex from setting lures, snares, and nets for the other. Sometimes it was the male who received the official protection.
“In light of the bob and helplessness of this day, the citation of an act of the English parliament of 1770, in Tinker’s ‘The American Days of Lafeadio Hearn’ is quite amusing. It is said that this act provided that any woman who shall entice into marriage any of His Majesty’s subjects by means of perfume, false hair, or false hips shall be condemned as a sorceress and that the marriage shall be declared null and void.’
“Long before that, in 1634, Massachusetts, probably with an eye to the vampire of the day, passed a law forbidding any apparel, either woolen, silk, or linen, with any lace on it, silver, gold or silver thread, under penalty of forfeiture of such clothes.’”
Shim’s Serious Injury Segment
Hi Readers,
Hope everyone enjoyed the holiday season and is ready to start 2026 in a great way. I’m grateful for 2025 for my growth both personally and professionally. I hope that 2025 was a great year for you. If not, I wish you a successful and enjoyable New Year. I am excited to see where 2026 takes us and build on a great 2025.
In this column, I have shared a Kings County Supreme Court decision which denied defendants’ motions for summary judgment on the basis that plaintiffs failed to meet the “serious injury” threshold as defined by Insurance Law § 5102(d).
Wishing you all a very happy and healthy New Year!
See you in the next issue!
Stephen
Stephen M. Shimshi
[email protected]
Speeding Cars at 25 MPH – 100 Years Ago:
Yonkers Statesman
Yonker, New York
2 Jan 1926
The Letterbox
SPEEDING AUTOMOBILES
To the editor of The Yonkers statesman: With automobiles proceeding at the rate of 25 miles per hour through the streets of Yonkers, especially in the crowded business section, a pedestrian must be very alert and quick to move if he wishes to cross the street without being run down by an automobile. The many auto accidents that have occurred during the past year, some of them fatal, indicate that the rate of 25 miles per hour is too high speed. Yet, it is said that the present traffic regulations permit that speed anywhere within the city limits. A new city administration is in office. It will confer a boon on the public if it revises the traffic regulations so that automobiles will no longer be permitted to go at the rate of 25 miles an hour through the business sections. May the old saying, “A new broom sweeps clean” apply to our new Mayor. If he is able to secure a reasonable reduction in the rate of speed of automobiles as they go through the crowded streets of the city, he will sweep to a good purpose and deserve the thanks of the community. O. T. C.
North of the Border:
2025 was a year defined by variety, complexity, and the reminder that coverage work sits at the crossroads of people’s hardest problems and the market’s most technical solutions. Each file seemed to test a different fault line in the liability landscape, but together they underscored why this practice continues to be both demanding and deeply worthwhile.
Identity and historical wrongs
This year ended with a novel coverage dispute rooted in corporate and personal identity fraud, forcing close attention to how policies respond when the “insured” itself is impersonated. From there, work on historical sexual abuse claims required unraveling multiple coverage issues across layers of historical policies, time periods, and wordings, with all the human consequences that sit behind abstract questions of trigger, limits, and allocation.
Social media and modern risks
Coverage questions arising from social media class actions highlighted how quickly traditional liability concepts are being stretched by platform design, algorithms, and alleged addictive harms to users, particularly minors. These matters demand not only a close reading of claims‑made and occurrence‑based language, but also a willingness to think creatively about how emerging theories of public nuisance and product liability map onto long‑standing coverage framework.
Limits, leases, and policy wording
Several files turned on the fine print: an intricate dispute about aggregate limits under manuscript wordings, where a few phrases carry enormous financial consequences. Another involved a difficult additional insured issue under a badly drafted lease, illustrating again how imprecise contract language can reverberate through priority of coverage, defence obligations, and the relationship between primary and excess insurers.
Looking ahead
Taken together, these files were as varied as they were engaging, blending new technologies with old injuries, bespoke manuscript policies with boilerplate leases, and word puzzles with real‑world stakes. They leave a sense of cautious optimism and genuine curiosity about what 2026 will bring to the ever‑shifting intersection of liability, coverage, and the stories that sit behind each claim.
See you next year.
Heather
Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
Makes One Want to Drink – 100 Years Ago:
The Buffalo Times
Buffalo, New York
2 Jan 1926
100-Year-Old Citizen, Heavy Drinker, Is Dead
WASHINGTON, Jan. 22.—A 100-year-old citizen of Washington, who attributed his longevity to “good tobacco and good liquor,” took his last drink of cognac and fell dead in the arms of his son. His briar pipe, still warm, was beside him.
Ambrose Hinds, who would have been 101 January 19th, was the oldest citizen of Washington. Just before the end, he whispered to his son to come in.
“Give me just a little drink of cognac; I am afraid I’m going.” He tossed off the drink and died. Death was attributed to age and heart disease. He has been smoking since he was 12 and said he had been drinking moderately since. “I was small enough to reach a bottle from my father’s sideboard in Portland, Me.”
Headlines from this week’s issue, attached:
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
- No cases to report during this holiday week. Courts were quiet. But, since you need something important to review, read David Adams summary of the AVOID Act on third party practice, from the perspective of our Labor Law team.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- See you in two.
RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]
- Appellate Court Reverses Order of Supreme Court and Confirms the Master Arbitrator’s Award in Favor of Medical Provider
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- Happy New Year! Nothing from me this edition. See you in two weeks.
STORM’S SIU
Scott D. Storm
[email protected]
- Insurer’s Referral of Insured to the Attorney General for Suspected Insurance Fraud in the Application Was Absolutely Privileged From Defamation Liability Regardless of Motive for the Reporting -- Public Policy Concerns Outweigh the Right of the Defamation Plaintiff to Seek Redress for Harm Caused by the Statements
- Insurer Obligated Under the Policy to Indemnify Only for Siding Damaged in the Loss Even if it Results in Mismatched Appearance With Undamaged Siding -- “Like Kind and Quality” Means Similar Rather Than Identical Materials
- Public Adjuster’s Suit Dismissed in Case Where Insurers Invoked Anti-Public-Adjuster Clause Used by Excess-Line Insurers
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- Tortfeasor Not Entitled to Reduce Tort Victim’s Property Damage Recovery for Betterment
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
- New Jersey Increases Mandatory Minimums for Auto Liability Insurance
- Court Finds Jury Rightfully Concluded That Insured Made Material Post-Loss Misrepresentations During Claims Investigation, Vitiating Coverage
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- Auto Policy Does Not Provide Coverage for Passenger Shot by Bystander
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Court Finds Uber’s Insurance Carrier Not Responsible for UM/SUM Coverage in New York City, Finding That the Vehicle Classified as For-Hire
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- Governor Vetoes Bill S5170 and S8185 Related to Direct Recovery Against a Third-Party Defendant’s Carrier and Settlement of Claims Within 30 Days
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- New Jersey Court Denies 12(b)(6) Motion, Grants Motion to Sever Bad Faith Claim
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
- Kings County Supreme Court Denies Defendants’ Summary Judgment Motion on the Basis That Plaintiffs Failed to Meet the “Serious Injury” Threshold as Defined by Insurance Law § 5102(D)
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- The Québec Court of Appeal Has Upheld Canadian Control of the Claims Against Asbestos Corporation Limited as well as its Rights to Claim Insurance Coverage.
While in the US, the standard greeting may be “Hi. How are you”, or is some nations an ais kiss on the cheeks or a bow or a Shalom aleichem,, if you ever come Buffalo, there is only acceptable greeting:
Go Bills!
And the only acceptable response?
Go Bills!
See you in two.
Dan
Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.
In addition, Dan D. Kohane is a Foreign Legal Consultant, Permit No. 0119144, issued by the Law Society of Upper Canada, and authorized to provide legal advice in the Province of Ontario on matters of New York State and federal law.
NEWSLETTER EDITOR
Dan D. Kohane
[email protected]
ASSOCIATE EDITOR
Agnes A. Wilewicz
[email protected]
COPY EDITOR
Evan D. Gestwick
[email protected]
INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
[email protected]
Steven E. Peiper, Co-Chair
[email protected]
Michael F. Perley
Agnieszka A. Wilewicz
Lee S. Siegel
Brian F. Mark
Scott D. Storm
Ryan P. Maxwell
Kyle A. Ruffner
Katherine A. Fleming
Evan D. Gestwick
Ryan P. O’Shea
Isabelle H. LaBarbera
Lexi R. Horton
Victoria S. Heist
FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
[email protected]
Michael F. Perley
Scott D. Storm
NO-FAULT/UM/SUM TEAM
Dan D. Kohane
[email protected]
Ryan P. O’Shea
[email protected]
Kyle A. Ruffner
[email protected]
APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Topical Index
Peiper on Property and Potpourri
Lee’s Connecticut Chronicles
Ruffner’s Road Review
Gestwick’s Garden State Gazette
LaBarbera’s Lower Court Library
Lexi’s Legislative Lowdown
Victoria’s Vision on Bad Faith
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
01/01//26 The AVOID Act – Through the Eyes of the Labor Law team
No cases to report during this holiday week. Courts were quiet. But, since you need something important to review, read David Adams summary of the AVOID Act on third party practice, from the perspective of our Labor Law team.
We spearheaded a robust discussion on this statute in LinkedIn, with over 10,000 impressions and 33 reposts. Want to see what the world is thinking? Here’s the post and you can follow, or participate in, the chatter.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
12/23/25 Akeed, Inc. v. Barcomb
Appellate Division, Fourth Department
Residential Leases May Not Indemnity Landlord for Its Own Negligence; No GOL 5-321 Protections
Plaintiff, a residential landlord, commenced this action against its tenant, Barcomb, after a fire in Barcomb’s apartment caused damage. Plaintiff argued that Barcomb had gone to bed with a lit cigarette, and that was the cause of the fire. The origin and cause report, however, ruled the fire inconclusive. Where, as here, defendant rejects the notion that he was the cause of the fire and the plaintiff is unable to proffer any proof pointing to defendant’s negligence, plaintiff clearly cannot meet its burden.
Unable to conclusively establish defendant Barcomb’s negligence, plaintiff next argued that it is still entitled to recovery by operation of the doctrine of res ipsa loquitor. However, to meet its burden, plaintiff needed to demonstrate that (a) the event did not ordinarily occur absent negligence (2) the purported tortfeasor had exclusive control over the instrument causing damage and (c) the party seeking damages must not have contributed, in any way, to the events leading to the loss. Again, plaintiff’s proof failed demonstrate that Barcomb had exclusive control over the cause of loss and/or that plaintiff, itself, did not have some apportionment of fault.
Finally, the Court affirmed the trial court’s decision voiding the indemnification clause found within the operative lease. The lease required, in relevant part, that Barcomb would obtain insurance covering the premises for damage and, also, agree to indemnify plaintiff Akeed for any loss or damage regardless of the cause. The Court concluded that the indemnity clause contemplated indemnifying Akeed for its own negligence and thus was void by operation of General Obligations Law 5-321.
Akeed argued that the protections of Section 5-321 did not apply because the parties agreed, in an arm’s length transaction, that Barcomb would indemnify plaintiff Akeed. This was the case even if Akeed was the negligent party. While the Appellate Division recognized that parties to commercial leases may, indeed, agree to broad indemnity clauses if they are supported by a concurrent insurance procurement agreement. Here, however, the Court ruled that agreement in question here (a residential lease) did not qualify as a commercial lease that was negotiated by sophisticated parties.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
Nothing this week.
RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]
12/24/25 In the Matter of Am. Transit Ins. Co. v. Atlantic Medical Care
Appellate Division, Second Department
Appellate Court Reverses Order of Supreme Court and Confirms the Master Arbitrator’s Award in Favor of Medical Provider
Atlantic Medical Care, P.C., a medical provider, was the assignee of a no-fault claim for treatment of the assignor after a motor vehicle accident. The insurer, American Transit, denied the claim and the provider brought the underlying arbitration to challenge the denial. The arbitrator awarded the provider the full amount of the claim, the insurer appealed, and a master arbitrator confirmed the award.
The insurer commenced this proceeding pursuant to CPLR article 75 to vacate the master arbitrator's award and the provider cross-petitioned to confirm the award and for attorney’s fees. The Supreme Court remanded arbitration for the consideration of the effect of executive orders issued in connection with the COVID-19 pandemic and denied the cross-petition of the provider.
On appeal by the provider, the Appellate Court explained that an arbitrator's rulings, unlike a trial court's, are largely unreviewable. A court reviewing the award of a master arbitrator is limited to the grounds set forth in CPLR article 75. For example, a master arbitrator's determination is not subject to vacatur on the basis of an error of law unless the master arbitrator's determination is irrational.
The Court determined, regardless of any errors of law the arbitrator and master arbitrator made regarding burdens of proof, the master arbitrator's determination to affirm the award to the provider was rationally based on the conclusion that the assignor’s minor delay in providing the insurer with notice of the accident was reasonably justified because she was a passenger in the vehicle involved in the accident. Therefore, the passenger was not making a claim to her own insurance company. As such, the appellate court held it was not for a court to decide whether the master arbitrator erred in applying the applicable law and the insurer’s petition to vacate the master arbitrator's award should have been denied.
Further, the court held the provider was entitled to an award of reasonable attorneys' fees pursuant to 11 NYCRR 65-4.10[j][4]. Accordingly, the matter was remitted to the Supreme Court for a determination of the amount of reasonable attorneys' fees to be awarded to the provider.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
Happy New Year! Nothing from me this edition. See you in two weeks.
STORM’S SIU
Scott D. Storm
[email protected]
12/19/25 Blecher v. Progressive Select Ins. Co.
United States District Court, Eastern District of Pennsylvania
Insurer’s Referral of Insured to the Attorney General for Suspected Insurance Fraud in the Application Was Absolutely Privileged From Defamation Liability Regardless of Motive for the Reporting -- Public Policy Concerns Outweigh the Right of the Defamation Plaintiff to Seek Redress for Harm Caused by the Statements
In October 2024, Alan and Jonathan Blecher purchased a 2022 Dodge Challenger Hellcat from a Delaware dealer with delivery in Philadelphia. Alan Blecher purchased a Florida auto insurance policy from Progressive Select, representing that the vehicle would be garaged in Florida more than 50% of the time. However, the car remained in Philadelphia due to Alan's hernia and Jonathan's demanding job, was never taken to Florida. In April 2025, the car was stolen from Philadelphia. Progressive Select denied the claim, citing fraud and misrepresentation in the policy application regarding where the vehicle was garaged.
The Blechers sued Progressive Select Insurance Company, Progressive Casualty Insurance Company and the Progressive Corporation for breach of contract, bad faith, and defamation under Pennsylvania law. Defendants moved to dismiss for lack of personal jurisdiction and failure to state a claim.
There are two types of personal jurisdiction: general and specific. General jurisdiction permits a defendant to be sued in a particular forum for any claim, regardless of whether the claim has any connection to the forum State. Relevant here, a court may assert general jurisdiction over a defendant in its home State-where the defendant is incorporated or headquartered, or where the defendant has such systematic contacts to the forum that it is essentially at home.
Specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction. A court may exercise specific jurisdiction over a defendant if the plaintiff's claims arise out of or relate to the defendant's contacts with the forum State. Specific jurisdiction has three requirements. First, the defendant's contacts with the forum State must show that it purposely availed itself of the privilege of conducting activities within the forum. Second, the plaintiff's alleged injury must arise out of, or relate to, the defendant's contacts with the forum State. And finally, any exercise of personal jurisdiction must comport with traditional notions of fair play and justice.
To satisfy the purposeful availment test for specific jurisdiction, the court must determine whether there are minimum contacts between the defendant and the forum State. A necessary component of this standard is the deliberate targeting of the forum.
The critical finding that the defendant purposefully availed itself of the privilege of conducting activities within the forum requires contacts that amount to a deliberate reaching into the forum state to target its citizens. A defendant's relationship with a third party, standing alone, is an insufficient basis for jurisdiction. Due process requires that a defendant be hauled into court in a forum State based on the defendant's own affiliation with the State. Deliberate contact with a third-party in the forum State is not the same thing as deliberate contact with the State itself.
The court found no general jurisdiction over Progressive Select as it was incorporated and headquartered in Ohio. Pennsylvania law on specific personal jurisdiction requires purposeful availment of conducting business in the forum state. Specific jurisdiction was lacking because Progressive Select did not purposefully avail itself of Pennsylvania of the privilege of conducting business in Pennsylvania merely because the insured unilaterally stored the vehicle there and a related company's employee investigated the claim in Pennsylvania.; it issued a Florida policy from its Florida office for a car represented to be primarily garaged in Florida.
In regard to the contract claims, the Blechers failed to allege a contract with Progressive Casualty or Progressive Corporation. Pennsylvania contract law requires mutual assent between parties with capacity to contract. Progressive Casualty and Progressive Corporation could not be liable for breach of contract or bad faith where the insurance policy was between the Blechers and Progressive Select only.
The defendants' referral of Alan Blecher to the Pennsylvania Attorney General for suspected insurance fraud was absolutely privileged from defamation liability, even if allegedly made to intimidate him. Pennsylvania has an absolute privilege doctrine for communications to law enforcement regarding suspected crimes regardless of motive. Thus, even if a statement ultimately proves to be false or maliciously motivated, public policy concerns outweigh the right of the defamation plaintiff to seek redress for harm caused by the statements.
As for the claims of bad faith, Progressive Casualty and Progressive were not insurers under the policy.
The court granted defendants' motion to dismiss with prejudice. The breach of contract and bad faith claims against Progressive Select were dismissed for lack of personal jurisdiction. The contract and bad faith claims against Progressive Casualty and Progressive Corporation were dismissed for failure to state a claim. The defamation claims against all defendants were dismissed for failure to state a claim based on absolute privilege.
The court declined to transfer the case, noting the Blechers could refile their claims against Progressive Select in Florida.
12/19/25 Jackson v. Allstate Indemnity Company
United States District Court for the Western District of Pennsylvania
Insurer Obligated Under the Policy to Indemnify Only for Siding Damaged in the Loss Even if it Results in Mismatched Appearance With Undamaged Siding -- “Like Kind and Quality” Means Similar Rather Than Identical Materials
Plaintiffs owned a rental duplex insured by Allstate. Wind damaged the siding on the right-hand side of the Jacksons’ duplex, and Allstate determined the loss was covered. Allstate valued the covered loss at $6,353 and informed the Jacksons that their policy and Pennsylvania insurance regulations entitled them only to replacement of the damaged siding.
The Jacksons hired Stephen Hnat and Associates, whose report assessed $37,457.02 in damages and argued that full siding replacement was required because the original siding had been discontinued and replacement would result in mismatched appearance. The Jacksons filed suit asserting breach of contract and bad faith.
The policy contains a "[s]ettlement [o]ptions" provision which states that, in the event of a covered loss, Allstate may either "repair, rebuild or replace all or any part of the damaged, destroyed or stolen covered property with the property of like kind and quality within a reasonable time[,]" or, alternatively, "pay for all or any part of the damaged, destroyed or stolen property[.]" The settlement options provision further provides that, if Allstate chooses to pay for the damaged property in lieu of replacing it, the total payout will not exceed the smallest of: (1) "the actual cash value of the damaged, destroyed, or stolen property at the time of loss[,]" (2) "the amount necessary to repair or replace the damaged, destroyed or stolen property with other of like kind and quality[,]" or (3) the policy limit "applicable to the damaged, destroyed or stolen property."
The Court held the policy language was clear and unambiguous and limited coverage to property that was actually damaged, destroyed, or stolen.
The Court relied on Greene v. United Services Automobile Association to conclude Allstate was obligated to replace only the damaged siding and rejected Plaintiffs’ attempts to distinguish Greene, explaining that “like kind and quality” means similar rather than identical materials and that availability of identical materials is not required.
The court rejected the Jacksons' attempts to distinguish Greene, finding no meaningful difference between policy language providing for replacement with property of “like kind and quality” versus “like construction.” The court also noted multiple federal district court decisions applying Greene to similar policy provisions, consistently interpreting such language as requiring insurers to replace only damaged portions of property.
The Court dismissed the breach of contract claim, finding Allstate had discharged its obligations under the policy and that amendment would be futile.
The Court dismissed the bad faith claim because resolution of coverage in Allstate’s favor provided a reasonable basis for denying additional benefits, and amendment would likewise be futile.
The Court granted Allstate’s Motion to Dismiss and dismissed the Complaint with prejudice.
12/15/25 Barbato v. Interstate Fire & Casualty Co.
United States District Court, S.D. New York
Public Adjuster’s Suit Dismissed in Case Where Insurers Invoked Anti-Public-Adjuster Clause Used by Excess-Line Insurers
The plaintiffs are Peter Barbato and North Jersey Public Adjusters, Inc. (NJPA), and the defendants are Interstate Fire & Casualty Company, Independent Specialty Insurance Company, Certain Underwriters at Lloyd's of London—Syndicate 2357, and other insurers.
The action was removed from New York State Supreme Court, New York County, under the Class Action Fairness Act, 28 U.S.C. § 1332(d).
The complaint alleges that defendants issued insurance policies with an Anti-Public Adjuster Endorsement (APA clause) prohibiting insureds from hiring public adjusters, and asserts five claims: tortious interference with contract (Count I), tortious interference with economic advantage (Count II), restraint of trade under N.Y. Gen. Bus. Law § 340 (Count III), and two putative class claims mirroring Counts II and III (Counts IV & V).
The policy at issue was allegedly issued on or about April 1, 2022, to 122-20 Ocean Promenade Owner LLC, covering an apartment building at 158 West 27th Street, New York, New York 10001, which later suffered a fire loss.
NJPA and the insured executed a public adjuster agreement on March 19, 2023, with no fixed end date, and on or about March 22, 2023 defendants invoked the APA clause and demanded the insured cancel its contract with Barbato within ten days.
Plaintiffs claim they lost a prospective fee equal to five percent of the insurance proceeds paid to the insured as a result of the cancellation.
The doctrine of primary jurisdiction is a prudential doctrine that applies where a claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body. The Court invited the New York Department of Financial Services (DFS) to address primary jurisdiction, and DFS submitted a letter on November 7, 2025. The Court rejected defendants’ primary-jurisdiction argument, concluding the issues are within the conventional expertise of federal courts and that DFS lacks direct authority over excess-line insurers’ policy forms, which are not subject to DFS review or approval.
Courts generally decline to apply the doctrine of primary jurisdiction when the issue at stake is legal in nature and lies within the traditional realm of judicial competence. Specifically, the Court of Appeals of the Second Circuit has determined that statutory interpretation, applying reasonably settled definitions in a statute to the facts of a case, and issues involving the application of common law principles fall within the daily fare of federal judges.
To state a claim for tortious interference with contract under New York law, a plaintiff must allege (1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of the contract; (3) the defendant's intentional procurement of the third party’s breach of the contract without justification; (4) actual breach of the contract; and (5) damages resulting therefrom. On the tortious interference with contract claim, the Court held that although at-will contracts can be interfered with only upon a showing of wrongful means, plaintiffs failed to allege wrongful conduct because the APA clause violates no New York statute and defendants merely exercised valid contractual rights.
An at-will contract may be the object of a tortious interference claim, although liability based on at-will contracts can be imposed only on proof of more culpable conduct on the part of the interferer. Accordingly, New York courts sustain claims for tortious interference with at-will contracts only upon a showing of wrongful means. The law is clear that interference with a voidable contract or an at-will arrangement is actionable if the interference was motivated by malice or was accomplished by tortious means. Wrongful means include physical violence, fraud or misrepresentation, civil suits and criminal prosecutions, and some degrees of economic pressure.
On the tortious interference with economic advantage claim, the Court found plaintiffs did not plausibly allege defendants acted solely to harm them or used dishonest, unfair, or improper means tantamount to a crime or independent tort.
On the Donnelly Act restraint-of-trade claim, the Court dismissed the claim because plaintiffs failed to define any relevant product or geographic market or describe the nature and effects of a conspiracy. Under the Donnelly Act, any contract, agreement, or arrangement that forms a monopoly or restrains competition in trade is illegal. N.Y. Gen. Bus. Law § 340(1). To state a claim, a plaintiff must (1) identify the relevant product market; (2) describe the nature and effects of the purported conspiracy; (3) allege how the economic impact of that conspiracy is to restrain trade in the market in question; and (4) show a conspiracy or reciprocal relationship between two or more entities. The threshold pleading requirement is to define the relevant geographic and product market - without which there is no way to measure a defendant's ability to lessen or destroy competition. Plaintiff's failure to allege a geographic market and product market is thus fatal to its Donnelley Act claim.
Because the individual claims failed, the Court dismissed the class claims (Counts IV and V), which were premised on Counts II and III.
The Court granted defendants’ motion to dismiss without prejudice and allowed plaintiffs twenty-one days to file an amended complaint, warning that if no amended complaint is filed within twenty-one days, the dismissal will be with prejudice.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
12/18/25 Troung v. Sanders
Louisiana Supreme Court
Tortfeasor Not Entitled to Reduce Tort Victim’s Property Damage Recovery for Betterment
Sanders, insured by Old American Indemnity Company (“Insurer”), rear-ended a vehicle driven by Troung, rendering Troung’s vehicle inoperable due to the damage. Insurer assigned the matter to an appraiser for review, he prepared an initial estimate for the repairs, and the amount was promptly paid to Troung. Troung’s vehicle was delivered for repair, and the shop requested supplementations of the initial estimate. The supplementations reflected a betterment deduction, and when Troung went to retrieve his vehicle, the repair shop refused to release it because of the unpaid balance attributed to the betterment deduction. The appraiser indicated the betterment, the process of applying a deduction to the cost of a component due to the fact that it is replacing a part or component on a vehicle with a newer, unused part, is a common industry standard for third-party claims. Troung’s attorney paid the balance on Troung’s behalf to get the vehicle, but Insurer refused to reimburse the amount of the betterment deduction.
Troung filed suit, alleging that Louisiana law does not provide for betterment and does not permit a tortfeasor’s liability insurer to withhold any amounts from the full amount of money required to fix the damages caused to a tort victim’s vehicle. Troung sought penalties because he asserted Insurer’s refusal to pay the full amount of the required repairs was baseless and thus also arbitrary and capricious and without probable cause. Insurer then issued a check for doble the amount of the betterment deduction while maintaining the right to the deduction. The trial court found that betterment as that term is used to establish a credit against the amount due by the tortfeasor to the tort victim in connection with third-party automobile property damage claim is allowed, as it is not expressly prohibited by Louisiana law, the jurisprudence, or regulation.
The court of appeal disagreed, finding that the insured tortfeasor is legally bound to repair the damage he has caused because nothing in the law authorizes a tortfeasor or insurer to adjust a tort victim’s repair cost for betterment. Further, the allegedly better items were neither desired nor requested by the injured party and do not increase the value of the vehicle in any meaningful way. The appellate court also found that Insurer had acted in bad faith in failing to repair the damage caused by its insured and was therefore liable for the damages sustained as a result of the breach of the duty of good faith, which included the betterment deduction paid on behalf of Troung as well as a penalty.
The Louisiana Supreme Court considered whether the tortfeasor and his insurer were entitled to assert a betterment deduction against the repair cost of a tort victim’s vehicle and whether an award of statutory penalties was proper under the facts of the case. The policy’s insuring agreement provided that Insurer agreed to pay damages for property damage arising out of an auto accident for which the insured was legally liable, and the court considered the purpose of liability insurance to provide compensation for persons injured by the operation of insured vehicles. Based on the relevant precedent, the court determined that the proper measure of damage was the amount necessary to fully repair or restore the vehicle as near as possible to its pre-accident condition. Although there is legal authority in other states for a deduction for betterment, there is no similar authority in Louisiana to pass a portion of repair costs through a betterment deduction. The court reasoned that an insurer could not limit its liability and impose conditions on its obligations that conflict with the law or the public policy established by the legislature. Here, the repair shop did not go beyond the repair or restoration and simply returned the vehicle to service. Accordingly, the court affirmed the court of appeal’s decision that the defendants were not entitled to a betterment deduction. As for the penalties, the court found that Troung had not established Insurer knowingly misrepresented or failed to disclose pertinent facts so as to warrant an award of penalties, and the question of a tortfeasor’s entitlement to a betterment deduction in the third-party context was a matter of first impression involving an interpretation of the law and an insurer’s obligation to pay. As Insurer had a reasonable basis for asserting a betterment deduction and acted in good-faith reliance on its defenses, the court found that statutory penalties were inappropriate.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
01/01/26 N.J.S.A. 39:6B-1
New Jersey Legislature
New Jersey Increases Mandatory Minimums for Auto Liability Insurance
A new year often means new regulations. This year is no different for New Jersey motorists and their insurers.
Effective today, any new or renewed automobile liability insurance policy covering an auto registered or principally garaged in New Jersey must include bodily injury and property damage liability limits of no less than $35,000 per person and $70,000 per accident. This is the first increase of the mandatory liability insurance minimums in three years (effective January 1, 2023, New Jersey motorists were required to procure the minimum limits of $25,000/$50,000).
Now for the twist: The statute, on its face, only applies to autos that are registered principally garaged in the State of New Jersey. But, New Jersey is a "deemer" state, such that out-of-state policies are construed as providing the minimum level
of coverage required by the statute when the insured auto is operated within the State of New Jersey. See N.J.S.A. 17:28-1.4.
Editor’s Note: Assume a person works in New Jersey, but lives in New York. The auto is registered and principally garaged in New York, and the policy bears the insured's New York address. Also assume that the policy provides the New York minimum liability limits of $25,000/$50,000. One day, the insured, after crossing the George Washington Bridge into New Jersey, had an accident, injuring someone else. Assuming the policy was issued or renewed today or later, the policy may be deemed to provide $35,000 in coverage, despite only $25,000/occurrence listed in the declarations page, by operation of New Jersey's deemer statute, combined with today's hike in mandatory minimum coverage.
12/26/25 Shaw v. Palisades Prop. & Cas. Ins. Co. et al.
Superior Court of New Jersey, Appellate Division
Court Finds Jury Rightfully Concluded That Insured Made Material Post-Loss Misrepresentations During Claims Investigation, Vitiating Coverage
Shaw purchased a multi-family home in Newark, New Jersey in 2017. In her application for insurance (a homeowners policy), she represented to Palisades that she would be residing in one of the three units at the premises to be insured, and that she neither owned nor rented any other residences in which she resided.
The premises were destroyed by a fire in November 2019. At that time, all three of the units were rented to tenants, with Shaw residing in none of them. Shaw explained to investigators, during the investigation of the claim, that she resided at the premises from 2017until May 2019, having moved out only a few months prior to the fire loss. Other tenants of the premises, however, told investigators that Shaw never resided at the premises at any time. Shaw then explained that, when she acquired the premises, she intended for it to serve as her primary residence but delayed her move-in date due to necessary renovations to the unit she intended to occupy, and that her move-in date was further delayed due to ongoing family health issues. It was eventually confirmed, through investigation of the claim, that Shaw eventually rented out the unit at the premises she perhaps once intended to occupy, and in fact never occupied any of the units at the premises.
The liability part of the homeowners policy covering the premises issued by Palisades provided that it applied only to bodily injury arising out of an “insured location,” defined as the “residence premises.” “Residence premises,” in turn, was defined, in pertinent part, as a multi-family home in which Shaw resides in at least one of the units.
Palisades denied coverage based on the notion that the premises did not meet the policy’s definition of a “residence premises,” and further denied coverage on the basis that Shaw violated the policy’s fraud provision, which barred coverage for claims in which the insured was determined to have made material misrepresentations in conjunction with either: (1) procuring the policy; or (2) the investigation of the claim.
At trial, the jury determined that Shaw never resided at the premises. However, the jury also determined that Shaw did not make any material misrepresentations at the time she applied for the policy, based on Shaw’s testimony that, at that time, she intended to occupy the premises in the near future. Despite that, the jury found that Shaw nevertheless violated the policy’s fraud provision, since she materially misrepresented whether she, at any time, resided at the premises during the claim investigation.
On appeal, the Appellate Division upheld the jury’s findings, noting that the materiality of a misrepresentation, as required by the policy’s fraud provision, can be established through inferences from policy terms, underwriting practices, and the nature of the misstatement. As the Appellate Division noted, the jury considered the testimony of several tenants of the premises, who all testified that the insured never resided at the premises, as well as the testimony of a representative of Palisades’ underwriting department, who testified that Palisades would not have issued a homeowners policy had it been made aware that the insured did not reside at the premises. The Appellate Division found no reason to disturb the credibility determinations of the jury, based on the evidence contained in the record.
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
12/22/25 State Fram Mut. Auto. Ins. Co. v. Progressive Select Ins. Co.
United States Court of Appeals, Eleventh Circuit
Auto Policy Does Not Provide Coverage for Passenger Shot by Bystander
Sieben was a passenger in a motor vehicle operated by Hurley. State Farm insured the Hurley vehicle under a South Carolina auto policy. As Hurley operated his vehicle in an alleged erratic manner, a bystander shot at Hurley’s vehicle. The bystander was Sieben’s neighbor who previously told Hurley not to drive in a reckless manner. The neighbor was fed up with Hurley’s driving shot at Hurley’s vehicle. Hurley then stopped the vehicle, Sieben exited and was promptly shot by his neighbor. Sieben sued both Hurley and the neighbor in Florida, where the location of the shooting. He alleged that Hurley negligently caused the shooting by driving recklessly which led to the confrontation.
The court applied South Carolina law which holds that “it is not reasonable to conclude that the parties to an insurance contract intended gunshot injuries to be covered by an automobile insurance policy.” In addition, South Carolina precedent holds coverage is inapplicable where there is an independent act so significant that it breaks the chain of causation. The act of firing a weapon into another vehicle constitutes such an independent significant act. The court further noted that the South Carlonia Supreme Court previously held that gunshot injuries do not arise out of the use of an automobile.
As Sieben’s injury arose out of a gunshot, the State Farm auto policy did not provide coverage. For this reason, the court affirmed the grant of State Farm’s motion for summary judgment.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
12/05/25 Old Republic Ins. Co. v. Stile
New York Supreme Court, New York County
Court Finds Uber’s Insurance Carrier Not Responsible for UM/SUM Coverage in New York City, Finding That the Vehicle Classified as For-Hire
Steven Stile (“Respondent”) was involved in a hit-and-run accident in March of 2022. He subsequently served a demand for UM/SUM arbitration on Uber’s insurance provider, Old Republic Insurance Company (“Old Republic”).
Old Republic brought a proceeding to permanently stay the arbitration, on the grounds that the Toyota Uber vehicle (the “Vehicle”) was a New York City Taxi & Limousine Commission (“TLC”) vehicle. Old Republic contended that under the relevant policy, Old Republic is not required to provide coverage for TLC related accidents.
The dispositive issue currently before the court is whether the Vehicle was classified as a “for-hire” or “TLC” vehicle. The Court began their analysis by identifying that if the Vehicle is classified as “for-hire” or “TLC,” it is the driver’s responsibility to maintain UM insurance. However, if the Vehicle was a TNC or transportation network company vehicle, then certain financial obligations are imposed on Uber, and the arbitration should proceed.
The court first analyzed statutory definitions, looking to NYC Admin. Code, which defines for-hire vehicles as “a motor vehicle carrying passengers for hire in the city, with a seating capacity of twenty passengers or less, not including the driver, other than a taxicab…”
Vehicle and Traffic Law defines a TNC vehicle as one that is used, “by a transportation network company driver to provide a TNC prearranged trip originating within the state of New York,” not including those vehicles defined in NYC Admin. Code. N.Y. VTL § 1691. VTL imposes certain financial obligations on TNC vehicles but contains a carveout for “entities operating as vehicles for hire in a city with a population of one million or more.” VTL § 1693(12).
Old Republic argued that the Vehicle should be classified as for-hire because of the fact it obtained a taxi and limousine commission. Respondent, in turn, argued that although at times the Vehicle operates as a for-hire vehicle, at the time of the collision it was operating as a TNC vehicle.
The court initially agreed that the simple presence of a taxi and limousine commission approved insurance license does not remove the vehicle form the TNC definition, which is tied to the use of the vehicle. Further, the court acknowledged that the Uber car would “appear to be a classic example of a TNC vehicle, given that it provides prearranged trips through the use of a digital network.” However, the court turned to the sparse case law existing on the subject, to find that Uber cars that operate within NYC are considered a for-hire vehicle.
The court relied on Second Department decisions, which recently found that Lyft cars operating in New York City are considered for-hire vehicles, rather than TNC vehicles. The Court reasoned that Lyft and Uber operate on very similar business models, and therefore, the same line of reasoning that led the Second Department to consider Lyft cars for-hire would presumably apply to Uber vehicles.
In addition, the court cited to Singh v. City of New York, a Court of Appeals decision noting that Uber cars in New York City were considered “black cars” by the Taxi and Limousine Commission. 40 N.Y.3d 138 [2023]. Although Singh did not address the same issues, the court cited to Singh since “black cars” are classified as for-hire vehicles under Section 19-502(u) of the Administrative Code.
Since the Vehicle was operating as a for-hire vehicle at the time of the collision, the court found that Old Republic, Uber’s insurance carrier, had no obligation to provide UM/SUM benefits to the Respondent. As such, the court permanently stayed the arbitration, finding no arbitrable controversy existed amongst the parties.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
01/02/26 Veto and Passage of Various Legislation by the Governor
Governor Vetoes Bill S5170 and S8185 Related to Direct Recovery Against a Third-Party Defendant’s Carrier and Settlement of Claims Within 30 Days
The Governor vetoed Bill S5170 which sought to permit a plaintiff to recover directly against a third party defendant in certain cases, such as when a plaintiff has entered judgment against a defendant who is unsatisfied thirty days after service on the defendant.
The Governor also vetoed Bill S8185 which sought to prohibit the negotiation or settlement releasing any entity from liability for a tortious act within thirty days of such act.
Additionally, the Governor vetoed Bill S5304 which sought to amend insurance law to enact the “New York State travel insurance act” regulating the licensing and registration of limited lines travel insurance producers and retailers and the sale and marketing of travel insurance and related products.
Notably the Governor signed Bill S8071A, enacting the AVOID act, avoiding vexatious overuse of impleading to delay act. This legislation will shorten the timeframe available to bring third-party actions. For example, third party actions sounding in contractual indemnification must be filed within 60 days after serving an answer or 60 days after learning of the potential common law liability.
For more information on the AVOID Act, here is a link to Dan’s article discussing the Act and the implications: Time Shortened for Commencing Third Party Actions in New York – Impacting Risk Transfer Strategy
Also signed by the Governor, Bill S6953B, the legislation will require safety reports for powerful frontier artificial intelligence models in order to limit harm.
The justification provides that there are significant risks posed by large AI models aiding in cyberattacks, production of bioweapons, and circumventing controls imposed by developers.
Outlined in the Bill Justification, the Bill will require that companies training the most advanced AI models to take the following steps:
1. Have a safety plan to prevent severe risks (as most of them already do);
2. Conspicuously publish a redacted version of the safety plan;
3. Disclose major security incidents, so that no one has to make the same mistake twice.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
12/23/25 Solimine v. Chubb Custom Ins. Co.
United States District Court, District of New Jersey
New Jersey Court Denies 12(b)(6) Motion, Grants Motion to Sever Bad Faith Claim
In November 2020, the Plaintiff filed a claim with Chubb Custom Ins. Co. ("Chubb") for damage to his home from an HVAC leak. Plaintiff relocated for three years during the restoration of his home from the loss. The Plaintiff now alleges that his Smart Home System was damaged from the construction at his home. As a result, Plaintiff revised his claim to include damage to the Smart Home System, claiming hundreds of thousands of dollars in damage.
Chubb hired an electrical engineering and computer science firm to investigate the loss and prepare a report on the damage to the Smart Home System. The firm ultimately concluded that the damage to the system was not due to construction: the accumulation of sheetrock dust on the system was consistent with household dust of equipment of its age and the sheetrock work did not occur near the AV room. The report also concluded there was no evidence of water or moisture damage to the system. The Plaintiff alleges the report was directly contradicted by images, and Chubb failed to conduct any performance or load bearing capability testing.
Plaintiff filed suit against Chubb alleging they breached the insurance contract by not providing coverage for the system, and they breached the covenant of good faith and fair dealing by relying on an "unreliable and flawed expert opinion" in denying coverage.
Chubb filed a partial motion to dismiss for failure to state a cause of action for breach of the implied covenant of good faith and fair dealing because "the Complaint is devoid of facts as to how Chubb allegedly acted in reckless disregard of its obligations under the Policy." In the alternative, Chubb argued the bad faith claim should be severed and stayed pending resolution of the first allegation.
To establish bad faith in New Jersey, the plaintiff must show "(1) the insurer lacked a 'fairly debatable' reason for its failure to pay a claim, and (2) the insurer knew or recklessly disregarded the lack of a reasonable basis for denying the claim." The review of bad faith focuses on the conduct of the insurer in processing the claim. Negligence and mistake are insufficient to show bad faith.
The Court found the Plaintiff sufficiently lead bad faith. The Plaintiff alleged Chubb exclusively on the expert report, alleged to be unreliable and fundamentally flawed. The allegations stated the report improperly dismissed the confirmed presence of sheetrock dust in the components, ignored photographic evidence of water damage, and failed to conduct a functionality test. Further, the complaint alleges the firm retained was not competent to opine on the flow of construction dust/debris at a construction site. Based on these allegations, the Court found the Plaintiff pleaded a plausible claim that Chubb's actions demonstrated at least reckless indifference towards denying Plaintiff's claims.
Courts in New Jersey often sever the claims of coverage from bad faith, since the “fairly debatable” standard first requires a ruling on the coverage dispute. New Jersey considers certain factors in determining whether to sever a complaint: (1) whether the issues are significantly different from one another, (2) whether the separate issues require the testimony of different witnesses and different proof, (3) whether the party opposing severance will be prejudiced if it is granted, and (4) whether the party requesting severance will be prejudiced if denied.
The Court agreed to sever and stay discovery for the bad faith claim, though the Court refused to adopt a blanket rule severing a bad faith claim from a coverage claim in every lawsuit. The Court held while the claims have some overlapping acts; the claims are premised on somewhat different conduct. That is, the bad faith claim is based on Chubb's investigation, its reliance on the report, and its general claims handling procedures. Further, the witnesses and evidence will be different, and neither party appears to be prejudiced if the Court denies the motion to sever, though additional discovery required for the bad faith claim may "distract from the coverage question."
Accordingly, the Court denied Chubb's partial motion to dismiss but granted its request to sever and stay discovery on the bad faith claim.
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
12/18/25 David St. Louis v. Revishvili
Kings County Supreme Court
Kings County Supreme Court Denies Defendants’ Summary Judgment Motion on the Basis That Plaintiffs Failed to Meet the “Serious Injury” Threshold as Defined by Insurance Law § 5102(d)
This matter concerns personal injuries suffered by plaintiffs, David St. Louis and Kareem Braxton ("plaintiffs"), in connection with a motor vehicle accident that occurred on March 6, 2021. Plaintiffs were passengers inside the vehicle owned and operated by Defendant Germline Charlot, in which they came into contact with a vehicle owned and operated by Defendant Vakhtang Revishvili.
Plaintiff Braxton alleged injuries to the cervical, lumbar and thoracic spines, and right shoulder. He also alleged to be confinement for 13 weeks and home for approximately 14 weeks following the accident. Plaintiff Braxton alleged the following serious injury categories: (1) permanent loss of use of a body organ, member, function or system; (2) permanent consequential limitation of use of a body organ or member; (3) significant limitation of use of a body function or system; and (4) 90/180.
In his bill of particulars, Plaintiff St. Louis alleged injuries to his cervical and lumbar spines as a result of the subject accident. Plaintiff St. Louis alleged that his injuries constituted a “serious injury” under the categories of: (1) permanent loss of use of a body organ, member, function or system; (2) permanent consequential limitation of use of a body organ or member; and (3) significant limitation of use of a body function or system; and (4) 90/180. Defendants moved for summary judgment dismissing the complaint, claiming that both Plaintiffs failed to meet the “serious injury” threshold as defined by Insurance Law § 5102(d).
Plaintiff Braxton:
Moving for summary judgment, Defendant Revishvili relied on: (1) an affirmed IME report prepared by Dr. Nipper, an orthopedic surgeon; (2) affirmed reports prepared by Dr. Setton, radiologist; and (3) a certified transcript of the examination before trial deposition of Plaintiff Braxton.
Dr. Nipper examined plaintiff Braxton’s cervical and lumbar spines for flexion, extension, and right and left rotation, which he found to be within normal ranges. The straight leg raise test was also negative bilaterally. Examination of Plaintiff Braxton's left shoulder revealed flexion, abduction, adduction, rotation to be all within normal ranges. Dr. Nipper concluded that Plaintiff’s alleged injuries to the cervical and lumber spines, and left shoulder had “fully resolved.” However, Plaintiff Braxton’s bill of particulars identified the right shoulder as injured, and Dr. Nipper did not examine or measure Plaintiff Braxton’s right shoulder.
Dr. Setton reviewed MRIs of Plaintiff Braxton’s cervical and lumbar spines, and right shoulder which were taken one month after the subject accident. Dr. Setton observed “degenerative changes” and concluded that no evidence of an acute fracture was present. Thus, he opined that the MRI findings were not causally related to the subject accident.
Plaintiff Braxton’s testified that he went to the emergency room following the accident and was discharged the same day. Thereafter, he sought treatment at a physical therapy facility but stopped treatment after a few months and did not undergo any surgeries. At the time of the accident, Plaintiff Braxton was employed as an auto technician for U-Haul. Plaintiff Braxton testified that he did not miss work as a result of the accident.
The Court denied Defendants’ motion with respect to Plaintiff Braxton. Defendants failed to establish prima facie that Plaintiff Braxton's alleged spinal and shoulder injuries were not causally related to the subject accident. Plaintiff Braxton alleged injuries to the cervical, lumbar and thoracic spines, and right shoulder in his bill of particulars. However, Dr. Nipper examined Plaintiff’s left shoulder instead of the right shoulder and did not address the thoracic spine. “Where a defendant’s medical expert fails to address all the injuries alleged in the bill of particulars, the motion must be denied, as defendants have failed to meet their prima facie burden” (see Biancospino v Gonzalez, 105 AD3d 985 [2d Dept 2013]; Robinson v Lawrence, 99 AD3d 980 [2d Dept 2012]; Bright v Moussa, 72 AD3d 859 [2d Dept 2010]; Encarnacion v Smith, 70 AD3d 628 [2d Dept 2010]). The Court also indicated that the forgoing also applies to Dr. Setton, who also failed to address Plaintiff Braxton’s thoracic spine (see Menezes v Khan, 67 AD3d 654 [2d Dept 2009]; Takaroff v A.M. USA, Inc., 63 AD3d 1142 [2d Dept 2009]; Jensen v Nicmanda Trucking, Inc., 47 AD3d 769 [2d Dept 2008]).
Plaintiff St. Louis:
In support of their motions for summary judgment, Defendants relied on: (1) an affirmed IME report prepared by Dr. Nipper; (2) affirmed MRI reports of Dr. Setton; and (3) a certified transcript of the examination before trial deposition of Plaintiff St. Louis.
In his IME report, Dr. Nipper found normal ranges of motion in Plaintiff St. Louis’ cervical and lumbar spines. Dr. Nipper concluded that Plaintiff St. Louis’ injuries were fully resolved, and he “did not sustain any significant or permanent injury as a result of the motor vehicle accident.”
In his reports, Dr. Setton found Plaintiff St. Louis’ April 17, 2021, MRIs to show no soft tissue injury to Plaintiff St. Louis’ cervical spine related to the subject accident. Dr. Setton also found no evidence of a soft tissue injury causally related to the subject accident in Plaintiff St. Louis’ lumbar spine based on the April 17, 2021, MRI.
Defendant Revishvili argued that at Plaintiff St. Louis' examination before trial, his testimony that he did not miss work as a result of the subject accident was dispositive of the 90/180 claim. Based on the foregoing, Defendant Revishvili argued that Plaintiff St. Louis did “not qualify for a serious injury determination as Plaintiff does not meet the standard requiring he be ‘prevent[ed] . . . from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the occurrence of the injury or impairment.’”
The Court denied Defendants’ motion with respect to Plaintiff St. Louis. Although Defendants’ papers were sufficient to establish that Plaintiff St. Louis failed to meet the permanent loss, permanent limitation, and significant limitation categories, they did not establish a prima facie case that Plaintiff St. Louis failed to meet the 90-day requirement (see Jong Cheol Yang v Grayline N.Y. Tours, 186 AD3d 1501 [2d Dept 2020].
Defendants alleged that Plaintiff did not miss any work as a result of the accident. However, when asked at his deposition, Plaintiff St. Louis stated that he could not recall whether he missed time from work as a result of the accident. Defendants failed to ask any specific questions regarding the 180-day period. Defendants also failed to ask specifically about the 18 weeks of incapacitation alleged in Plaintiffs St Louis’ bill of particulars. Defendants also failed to sufficiently question Plaintiff St. Louis about these limitations in relation to the 180-day period to establish that Plaintiff did not meet the 90-day burden.
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
The content of this column also appears in the “Liability & Insurance,” a monthly newsletter focusing on Canadian coverage and published by Heather Sanderson. Contact her for a subscription.
10/03/25 Forman v. Asbestos Corporation Limited
Québec Court of Appeal
The Québec Court of Appeal Has Upheld Canadian Control of the Claims Against Asbestos Corporation Limited as well as its Rights to Claim Insurance Coverage.
I thought I would take this opportunity between Christmas and New Year's to perhaps imperfectly, and at a high level, summarise decades of litigation and insurance claims against the Asbestos Corporation Limited. This summary, which does not pretend to be complete, is partly inspired by an October 3, 2025, judgment of the Québec Court of Appeal that I will explain, but my true motivation to write this piece comes from a 15-year personal interest in the deadly impact of asbestos.
My Story
You see, in the late 1950’s, before I was school age, my family lived in Thetford Mines, Québec.
Thetford Mines lies in the heart of a chrysotile ore body that was the home of the King, Beaver, and Bell open-pit asbestos mines. In the 1950’s and 1960’s asbestos was one of Canada’s most economically important resource industries: It made Québec the dominant global producer and exporter of asbestos. That mining operation generated very large export revenues, and sustained thousands of well‑paid mining and processing jobs in Québec’s Eastern Townships. In those years, asbestos was often described politically and in the press as Québec’s “white gold,” symbolizing both provincial economic pride and a key pillar of Canada's overall postwar, export-driven economy.
My family lived in a two-storey, clapboard house on the middle of Alfred Street. At the bottom of Alfred Street was the Beaver Mine. In those years, the Beaver Mine was owned and operated by Asbestos Company Limited (ACL), which became Asbestos Corporation Limited. ACL was incorporated in Québec in 1925 and mined asbestos in several mines within Thetford Mines, in addition to the Beaver Mine. Our neighbours worked for ACL or, Johnson Mines, which was another asbestos mining company that was eventually acquired by ACL. In the main, the houses on Alfred Street (and other streets that ended at the mine) were owned by ACL or Johnson Mines and rented to their respective employees. When the mine needed to expand, the houses on Alfred Street closest to the mine were physically moved from the bottom of the street and placed on new foundations at the top of the street.
But I was oblivious to all that … what I knew was that we lived on the best street in the best town. You see mining families were transient and large - most households had three to six kids. Roving gangs of multi-aged kids, would go from one house to the other, play street hockey and ride bikes. But best of all were the ‘dumps’. The ‘dumps’ were behind the houses on each side of Alfred Street. They were formed by the continual dumping of the overburden from the mine. The dumps (which looked like barren hills) were the year around playground for us Alfred Street kids – in the winter we built and defended snow forts and tobogganed down the slopes and, in the summer, from early morning until dark, they were the site of endless games of hide and seek and treasure hunting – we found all kinds of rusty things in the dumps.
ACL would set off a blast at the mine each night at midnight, and, in the morning, the streets, lawns and roofs were covered in white, powdery, asbestos. We would brush it off as if it were powder snow and get on with our day. If my mom had not brought in the washing from the line, it would be covered in asbestos, and she would have to wash it again.
After almost three years, like our neighbours, we moved to another Québec town, and my brother, and I reluctantly said goodbye to Thetford Mines.
Just under fifty years after we left Thetford Mines, and therefore within the incubation period for asbestos disease, my mother contracted mesothelioma. By then, she was in her mid-80’s and had other health issues, but none of them on their own were fatal. Mesothelioma was her last straw. Did she contract the disease from ambient community exposure to asbestos when we lived in Thetford Mines, or was it from the many house renovations we undertook after leaving that might have released asbestos that was used in insulation? We will never know.
Public‑health and environmental reports acknowledge that asbestos mine tailings were used widely in Thetford Mines (roads, rail beds, fill on residential and commercial properties), and that asbestos residues are present “practically everywhere in the city.” Although there are documented elevated rates of community-level asbestos disease, to my knowledge, no direct attribution of the increased disease rate to the mines themselves has been made.
Existing Québec asbestos class actions and compensation structures have focused on workers’ compensation (CNESST), wrongful‑death and occupational‑exposure claims, or administrative issues around benefits, rather than a certified class action targeting mine operators for ambient community exposure in Thetford Mines.
Nonetheless, in the years after my mom’s diagnosis and death from the disease, I have been following, as an interested observer, the asbestos litigation in Canada and the United States against Asbestos Corporation Limited.
The ACL Insurance Coverage Claims
ACL ceased asbestos mining in 1986 but has faced thousands of asbestos‑related personal‑injury claims and class actions over subsequent decades, many of which have been brought in American courts by exposed workers or their estates. These claims have resulted in bankruptcy proceedings in both Canada and the United States, as well as insurance coverage disputes in both countries.
ACL is facing essentially the same underlying asbestos‑exposure liabilities and litigation in both Canada and the United States, but they are organized into somewhat different categories in the Canadian proceedings versus the American tort and receivership proceedings. I believe that this is largely due to the workers’ compensation scheme that is in place in Québec. Broadly, the claims in both jurisdictions involve historical asbestos bodily‑injury claims (mesothelioma, lung cancer, asbestosis and other pleural disease), derivative or wrongful-death claims, and related insurance and creditor third party claims and direct claims tied to those liabilities. But to understand the Québec Court of Appeal decision that sparked this particular article, it is necessary to provide a high-level overview of the American claims.
The American claims can also be placed into three categories. There are the core injury claims: Individual personal-injury and wrongful-death actions in state courts (for example, South Carolina, New Jersey, and others), for mesothelioma, lung cancer, asbestosis, and so forth. Then there are the procedural claims. The procedural claims consist of fragmented tort suits, a hotly contested South Carolina receivership over ACL's insurance assets, and issues regarding the coordination of the claims and Chapter 15 proceedings. However, my focus is on another category of litigation: The American coverage disputes. The claims against ACL's insurers have been largely pursued by ACL’s court-appointed South Carolina receiver, Charles Forman, who was appointed in South Carolina as the receiver over ACL’s American insurance assets. Forman is seeking to realise on ACL's rights to insurance coverage in the United States.
In the meantime, coverage proceedings are transpiring in Québec. Like the American situation, ACL is in receivership in Québec. Its Québec court‑appointed receiver is Peter Protopapas. Like Forman, Protopapas has made similar claims against ACL’s historical insurers who are referred to in the proceedings as “CLMI”. CLMI is shorthand for Certain Underwriters at Lloyd’s, London, Tenecom Limited, The Ocean Marine Insurance Company Limited, NRG Victory Reinsurance Limited, and The Scottish Lion Insurance Company Limited. Collectively, CLMI wish to centralize the North American mass tort and coverage disputes in a single forum, Québec, pending the implementation of a centralized claims process under the Canadian Companies’ Creditors Arrangement Act (CCAA), as opposed to having the underlying disputes and coverage actions decided in the United States.
The Initial May 2025 CCAA Order
In May 2025 CLMI obtained an order from the Commercial Division of the Québec Superior Court granting a broad stay of “creditor claims” and “litigation pending against the Company”, which captures asbestos bodily injury and related coverage actions that seek to realize on ACL’s assets, including its insurance rights. Raymond Chabot Inc. was appointed as the court-appointed Monitor for ACL with these chief responsibilities:
- To assist ACL with its restructuring efforts.
- To report to the Superior Court of Québec (Commercial Division).
The practical effect of this May 2025 Quebec Superior Court order is that any insurance coverage claim filed in Québec that (a) asserts liability by ACL for asbestos exposure, and (b) seeks indemnity or defence under policies in ACL’s historic asbestos insurance program (or proceeds of those policies through CLMI or similar insurers), is treated as an “affected” claim and is stayed and channelled into the CCAA proceedings, unless the supervising CCAA judge grants leave to proceed.
Raymond Chabot was also given authorization to act as ACL’s representative in the filing of a petition seeking recognition of the CCAA proceedings in the United States under Chapter 15 of the US Bankruptcy Code. That petition was filed in the United States Bankruptcy Court for the Southern District of New York.
Forman’s Opposition to the Initial Order
Forman and aligned U.S. asbestos claimants characterized the May 2025 Québec Superior Court order as an insurer‑driven attempt to funnel thousands of American mass‑tort claims into a forum viewed as more favourable to insurers and less protective of American claimants. Forman argues that ACL’s real operational, financial, and litigation centre of gravity was in the United States and that its “nominal, legacy ties” to Québec were being leveraged to shield insurers and limit recoveries. In filings in the Southern District of New York, Forman is urging the American courts to refuse recognition on “centre of gravity grounds” and public‑policy grounds and thereby prevent the Québec stay from extending to key U.S. proceedings and insurance assets. At the same time, Forman continued to pursue U.S. insurance‑coverage and enforcement litigation (including efforts tied to a significant “previously unknown” policy with very large limits), taking the position that those rights should remain directly available to U.S. asbestos creditors rather than being subsumed into the Québec‑controlled CCAA process.
Forman also appealed the May 2025 initial order to the Québec Court of Appeal. That appeal was heard September 25, 2025. That Court issued its reasons on October 3, 2025.
The Québec Appeal
In May 2025, the Québec Superior Court found that ACL met the criteria for a CCAA stay and that a stay against CLMI was also appropriate. Regarding CLMI, that court held that a stay against CLMI is both necessary and essential to ACL’s restructuring. In particular, CLMI’s financial participation is rationally connected to, and necessary for, the contemplated plan; without a stay the CCAA process would likely fail. CLMI has already committed temporary financing of US$20 million and advised the court that it intends to extend significant future funding to the settlement plan. The plan is expected to benefit ACL, genuine asbestos victims and all stakeholders, and the stay was therefore found to be in the broader public interest. The Court noted that the stay is temporary; Asbestos claimants will be heard at several stages (claims process, evaluation, plan approval) and they will vote on any settlement plan, so no irreparable prejudice arises from this temporary stay in favour of CLMI.
On appeal, Forman’s chief argument was that there is a fundamental principle that third‑party victims have a distinct direct action against liability insurers that survives the insured’s insolvency; staying their actions against CLMI violates this principle.
In reply, CLMI & ACL argued that Québec courts have done this before – in particular, it was done in the CCAA proceedings regarding the claims against Montréal, Maine & Atlantique Canada Co. (MMAC). MMAC was the Canadian subsidiary of Montreal, Maine & Atlantic Railway that sought CCAA protection after the July 2013 Lac‑Mégantic train derailment that killed 47 people and caused extensive property and environmental damage. Like this proceeding, the CCAA process involving MMAC was coordinated with a parallel U.S. Chapter 11 proceeding for the U.S. railway entity, using a cross‑border protocol between the Québec Superior court and the American bankruptcy court. Similar to CLMI’s efforts here, the purpose of the MMAC order was to create a centralized restructuring/liquidation and claims process to deal with hundreds of wrongful-death, personal‑injury, property and governmental claims arising from the rail disaster.
In MMAC, the principal liability insurer agreed early on to deposit the full policy limits into the court‑supervised process, a point specifically noted by Forman as distinguishing that case from the situation under appeal. The Court of Appeal held that there are genuine coverage questions and those are better addressed later, at the plan and claims‑evaluation stages, not at the preliminary stay stage:
The Court of Appeal concluded that the proposed appeal does not meet the strict criteria for leave in CCAA matters and would risk unduly delaying a process aimed at resolving litigation that has already lasted more than 20 years. Therefore, Forman’s appeal was rejected; the temporary CCAA stay remains in place; Forman was directed to pay court costs to ACL & CLMI. There is no indication that Forman has sought leave to appeal this Order to the Supreme Court of Canada. Therefore, in Canada, this order is final.
American Proceedings
After ACL and Raymond Chabot (as Foreign Representative) filed their Chapter 15 petition in the United States Bankruptcy Court for the Southern District of New York, an evidentiary hearing took place on October 8, 2025, to address recognition and the extensive objections filed by Forman. In a decision released October 29, 2025, that Court granted recognition of the Québec CCAA proceeding as a “foreign main proceeding” under Chapter 15 and overruled Forman’s objections.
The court found that ACL’s centre of main interests was Québec. That court emphasized that ACL is a Québec‑based company with its headquarters, management, and primary assets in Canada and that the Canada/Québec CCAA is the central restructuring forum, satisfying Chapter 15’s foreign‑main criteria. With that, recognition of the CCAA order was granted. Unless and until the Recognition Order is stayed, or reversed on appeal, the Québec CCAA proceeding is treated as the foreign main proceeding in the United States, and the American courts are expected to cooperate with and not undermine the Québec court’s control over ACL’s restructuring, including insurance‑asset and asbestos‑claims handling.
Forman has appealed that Order to the United States District Court; ACL and CLMI are opposing the appeal. According to Raymond Chabot’s fourth monitoring report to the Québec Superior Court, dated December 12, 2025, the decision of that Court may be appealed to the U.S. Court of Appeals for the Second Circuit. The report notes that the appeal process in the Second Circuit often takes at least a year from the filing of a notice of appeal to the issuance of an opinion resolving the appeal. That is where the appeal will likely end (unless the initial Order is overturned). The same monitoring report states that “[a] party aggrieved by the Second Circuit’s decision in a bankruptcy appeal can seek U.S. Supreme Court review by filing a petition for a writ of certiorari. Certiorari review is discretionary and rarely granted.” And so, the 20+ years of litigation of ACL’s underlying liability and coverage issues in the United States will likely continue well into 2028.
Next Steps in Canada
In the meantime, Raymond Chabot is taking concrete steps to put an international claims submission and evaluation process in place to handle the resolution of the world-wide claims. The issue of insurance coverage to resolve those claims will await further court process in Québec. In the meantime, the claimants and their families contend with the impact that asbestos has had on their lives.
Concluding Thoughts
As this brief account suggests, the legacy of asbestos in Québec—celebrated as “white gold” in the mid‑twentieth century—has left a long tail of human harm, legal complexity, and cross‑border litigation that continues to unfold. My early childhood in Thetford Mines and my mom’s later mesothelioma underscores what the epidemiology and public records have long stated: Asbestos fibres dispersed into everyday life can have consequences that surface decades later, even if definitive attribution in individual cases remains elusive.
The bankruptcy and coverage proceedings unfold against that human backdrop. The bankruptcy proceedings aim to address ACL’s financial obligations arising from numerous personal-injury and wrongful-death claims. These proceedings are crucial for organizing and prioritizing the claims of the asbestos claimants.
Coverage litigation, on the other hand, focuses on determining the extent of insurance coverage available to ACL. The resolution of coverage disputes will define the financial resources available to the bankruptcy process, thereby dictating ACL’s ability to compensate claimants and potentially facilitating a more comprehensive settlement of ACL’s liabilities. The two processes are intertwined, with successful coverage litigation providing the necessary liquidity to support the resolution of the claims through the bankruptcy process.
The path forward will continue to test courts, insurers, creditors, and claimants as they reconcile decades‑old exposures against modern notions of responsibility and compensation. In the end, the available insurance coverage will fund the mechanisms that will ultimately close this chapter of asbestos litigation on both sides of the border. But when the litigation ends, the intergenerational public-health reality will endure.
© Hurwitz Fine P.C. 2026
All rights reserved
