Volume XXVII, No. 20 (No. 719)
Friday, March 13, 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:
Do you have a situation? We love situations. This week’s issue of your favorite insurance coverage newsletter is attached;
Happy Friday the 13th. Sounds oxymoronic, no? Is walking under a ladder a violation of Section 240(1) of the Labor Law. Not sure.
Need a Risk Transfer/ Coverage Mediator 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.
AVOID Act – Can’t Avoid it For Long
The AVOID Act is right around the corner, dramatic and impactful changes to New York’s third practice protocols. If you haven’t learned much about it or haven’t thought about developing a strategy for both contractual and additional insured risk transfer, remember that the statute goes in effect in just about a mid-April. Read about the changes here. Some may not know that by amendments passed on January 7, there were some changes to the original act signed into law. Sign up for our March 27th program.
Hurwitz Fine Expansion into New England
As you may be aware, three stellar New England lawyers have joined our ranks:
Barbara O’Donnell
Alex Henlin
Iryna Dore
Feel free to reach out to any of them.
We are now providing coverage counsel in the follow states:
New York
New Jersey
Connecticut
Massachusetts
Rhode Island
New Hampshire
Our New England lawyers have added a new column to Coverage Pointers starting this issue – called “New England Almanak.” They will include cases from one or more of our New England states. There are several offered in this week’s issue.
Coverage Pointers University
Registration is Open for our Fourth Program
Presented by Evan Gestwick
Across the George Washington Bridge:
Key Differences in New York and New Jersey’s Auto Insurance and Bad Faith Laws
March 19, 2026
Via Zoom
Join Insurance Coverage Attorney Evan Gestwick as he discusses the key differences between New York and New Jersey Insurance Law. This seminar will detail the different bad faith standards between the two states, timing requirements of disclaimer letters, recent changes to auto coverage requirements and their implications, and reviews the required language in Reservation of Rights letters. This primer acts as an assistive tool in identifying and distinguishing some of the most common points of confusion between states and includes practical insight on the implications of such differences.
For more information and to register, click here.
Beyond Avoidance: Preparing for the AVOID Act’s Transformation of Third-Party Practice in New York
March 27, 2026
Via Zoom
Like it or not, as of April 18, New York’s law governing third-party practice will change significantly as the AVOID Act becomes effective. Claims for contribution and indemnity asserted in a third-party action must now be commenced within 90 days of service of the defendant’s answer—or they may be lost and unable to proceed as part of the underlying lawsuit.
While this legislation was primarily aimed at NYS Labor Law/construction accident claims, its impact will be felt across the litigation spectrum, including products and premises liability claims. They will also require early, strategic decision-making by insurers and litigants regarding risk transfer, tenders, additional insured status, and indemnity obligations.
David Adams, Hurwitz Fine’s Labor Law Chair, and Dan Kohane, the firm’s Insurance Coverage Chair, will team up to provide a practical and strategic roadmap for navigating the procedural and coverage challenges that parties and insurers will confront in actions commenced after the effective date.
For more information and to register, click here.
Litigation Strategies – Removing Cases to Federal Court
April 16, 2026
Via Zoom
After that, our Retail & Hospitality team will be back on April 16th to host “Litigation Strategies: Removing Cases to Federal Court,” where we will focus on navigating the removal of civil actions from state court to federal court. This webinar will focus on the legal bases for removal, key procedural requirements and timing considerations, and the strategic advantages federal court can offer. Attendees will gain practical insight into how removal can serve as more than a procedural step—it can be a meaningful litigation advantage.
For more information and to register, click here.
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/
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.
Woodlawn Beach Has Been Maintained for a Century – 100 Years Ago:
Buffalo Courier
Buffalo, New York
13 Mar 1926
A Lake Shore Park.
The announcement by the Erie County park commissioners that they are considering purchase of property along Woodlawn beach for development by the state as a Lake Shore park, holds possibilities that command public attention.
There can be no question that general interest in the preservation of outdoors for recreational purposes has increased greatly in recent years. It began to be manifested in a large way shortly after the 1920 census revealed that urban population, for the first time in the country's history, exceeded rural population. The federal government was quick to recognize the social problem which was indicated in this change from country to town. Vital issues, including that of the nation's health, were felt to be involved. A result of study of the situation was the holding three years ago of the first national conference on outdoor recreation.
The movement thus. started has been continued by a permanent national organization. It has gone along with, and given impetus to, the local and federal undertakings for development of parks.
Peiper on Property (and Potpourri):
No case this week. See you in two more.
Steve
Steven E. Peiper
[email protected]
Not Sure How This One Turned Out – 100 Years Ago:
The Buffalo News
Buffalo, New York
13 Mar 1926
SUICIDE’S ESTATE IS
SUED FOR HEART BALM
BOSTON, March 12 (AP) - A $250,000 breach of promise suit has been filed in Suffolk Superior court against the estate of a man who committed suicide a few hours before the time set for his wedding.
The plaintiff, Sophie Stanion of Hyde Park, claimed in her bill that the estate of John Jackimovicz is responsible to her as Jackimovicz himself would have been had he lived and failed to carry out his promise to marry her.
The wedding was to have taken place October 24. 1925. Guests arrived only to find that Jackimovicz had committed suicide by inhaling gas. He left a note which said: "Sophie is a good girl. I am no good.”
Lee’s Connecticut Chronicles:
Dear Nutmeggers:
We’ve been on a Grapefruit League tour, taking in some spring training baseball. Even the bad seats are great seats. Beautiful, warm weather, day, and early evening baseball. Can’t beat it. We’ll be back with our regular column in the next edition.
Until then, keep keeping safe.
Lee
Lee S. Siegel
[email protected]
Weather Forecast on the Radio, Not Quite Ready – 100 Years Ago:
The Buffalo News
Buffalo, New York
13 Mar 1926
WEATHER BUREAU UNREADY
TO FORECAST FOR RADIO
WASHINGTON, March 12 (AP) – the Weather Bureau will make no attempt for the present at least, at forecasting favorable or unfavorable conditions of radio reception.
Experts of the bureau hold that weather conditions which affect broadcasting are as yet so little known that any attempt to forecast reception conditions on the basis of weather would be inadvisable.
Further study of the problem was urged with the suggestion that it be undertaken by the Bureau of Standards.
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers’ Subscribers:
The Sabres are hot and while it has been a while since I have watched a series of hockey games in Buffalo, back-to-back, they have quickly turned into must-see TV. I have had the pleasure of attending several games this year, and I think their winning percentage when I attend is somewhere around .800. I guess what I’m saying is that I’m their good luck charm. With playoff hockey just around the corner, this team has more than luck it seems. But can they sustain their run into the playoffs? That’s a different beast and only time will tell. Well, time and the Jumbotron.
In this edition, I have tackled a Second Circuit decision involving “packages” lost at sea. While a common carrier is liable for $500 per “package,” whether there were 24 packages or 480 packages makes a huge difference. And, while much depends upon who you ask, the Second Circuit has the last say.
Until next time…
Ryan
Ryan P. Maxwell
[email protected]
Ten Years for False Promises and Improper Proposals – 100 Years Ago:
The Chattanooga News
Chattanooga, Tennessee
12 Mar 1926
LURES GIRLS FOR RIDE;
GETS TEN-YEAR TERM
Clint Matthews Convicted on
Abduction Charge.
Sparta, March 13. (I. N. S.) - Clint Matthews, 31, a married man, was under sentence of ten years in state prison here today, following his conviction on 8+ charges of abducting a 17-year-old schoolgirl.
Testimony was to the effect that Matthews and James Crowder, also married, induced two high school girls go for an automobile ride with them, promising to return them to their homes by dark.
They remained out all night, however, the girls testified, and made improper proposals, the jury was told.
Crowder's trial is set for next week.
Storm’s SIU:
Hi Team:
Four interesting cases for you this edition:
- Certified EUO Transcript Admissible Even Though Not Signed. Vehicle Qualified as a “Motorcycle” Under Insurance Law § 5102(m) and the Vehicle and Traffic Law Such That the Assignor was Ineligible for First‑Party No‑Fault Benefits. Lack‑Of‑Coverage Defense Was Not Precluded, even if the Denial Was Untimely.
- Summary Judgment Granted to Insurer Where Two Claimants Failed to Appear for EUOs. Summary Judgment Denied on Another Claim Where Insurer's Investigation Revealed Suspicious Circumstances but Claimant's EUO Testimony Provided Explanations and Corroborated Accident Details, the Evidence Was Insufficient to Establish Founded Belief that Collision Was Not a Covered Event.
- Where a 170-Year-Old Decorative Slate Roof with Different Tile Designs was Damaged by a Storm, the Jury Could Reasonably Find it Constituted “Custom” Construction Under a Functional Replacement Cost Endorsement, and that Asphalt Shingles Were Functionally Equivalent Given the Slate Roof's Age and End-of-Useful-Life Condition, Limiting Recovery to Asphalt Replacement Rather than Slate Restoration Costs.
- EUO Attendance Reimbursement Disputes By providers are Arbitrable in the No-Fault Forum. The Court Ordered AAA to Modify its Request Form to Include Space for Listing Compensation for EUO Attendance as a Disputed Matter. Attorney’s Fees and Statutory Interest Do Not Attach to EUO Reimbursement Even if Awarded, Because Such Reimbursement is Not a First Party Benefit Under § 5106(a).
I’m hoping to see U.S. v. Japan in the World Baseball Classic Finals. That would be a fun game. Spring is finally in the air in Western New York. The robins are singing and I almost stepped on a toad the other night.
Have a great two weeks!
Scott
Scott D. Storm
[email protected]
I'd Buy It if It's Still for Sale – 100 Years Ago:
Finger Lakes Times
Geneva, New York
13 Mar 1926
AUTOMOBILES
CHEVROLET COUPE for sale, 1923 model, run 10,000 miles. Liability Insurance. Price $300.00. A-25 Times Office.
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
Sadly, we were faked out by what appeared to be an early Spring (one more week!), but last weekend was stunning for the local St. Patrick’s Day race. I also had time to catch up with family and learned that my niece now has three teeth. They grow up so fast!
No case this week. See you in a fortnight.
Kate
Katherine A. Fleming
[email protected]
Politically Correct Headlines Not Yet in Style – 100 Years Ago:
Finger Lakes Times
Geneva, New York
13 Mar 1926
BINGHAMTON CRIPPLE
REAPS RICH HARVEST
New York, March, 13 - Arthur Buckingham, of Binghamton, whose legs have been amputated above the knees, arrested yesterday for panhandling, told Magistrate Farrell that he had made $250 a week here by begging. He said checked his artificial legal at a railroad station and made his way about on a small platform fitted with roller skates. He said he had "lived high" since coming to New York and had spent the money as fast as he received it.
On a promise that he would return to Binghamton, he was fined $5 and released. He had 20 cents left.
Gestwick’s Garden State Gazette:
Dear Readers:
I have been watching hockey for as long as I have been old enough to watch TV, and I witnessed, in person, the single best hockey game I have ever seen in my life this past Sunday. Sabres vs. Lightning, here in Buffalo. Final score? 8-7 Sabres. Total penalty minutes among both teams? 102 (mind you, dear reader, there are only 60 minutes in a standard hockey game). FIVE fistfights, a bazillion more scrums, and a whole lot of trash talking, one can imagine (I was in the nosebleeds, out of earshot). Wow.
I have two cases for you this week. The first discusses what “damages” are covered in a lawyer’s errors and omissions policy. The second discusses whether the suit limitations clause applies to suits by the insurer against the insured. Read on to find out what’s transpired in the Garden State these past few weeks.
One more thing before I go – as our Newsletter Editor said, I am giving a free presentation on March 19 on the key differences between New York and New Jersey Insurance Law. We will be discussing things such as the differences in the duty to defend, SUM coverage, mandatory auto minimums, which state’s law applies, bad faith standards, and more. Feel free to join!
That’s it for two more weeks. Have a happy St. Patrick’s Day.
Evan
Evan D. Gestwick
[email protected]
Apparently, Newspaper Ads are for Women – 100 Years Ago:
Finger Lakes Times
Geneva, New York
13 Mar 1926
“Me and the boy friend”
You know them, bless their hearts. A pair of youngsters, really, in spite of their self-reliant air and their fast-vanishing teens. The girl-slim, clear-eyed, merry; the boy -flippant, a bit arrogant, full of secret, earnest plans for success.
They like each other. They go to the movies together, dance, quarrel a bit. They don't believe in early marriages. But her eyes shine when she speaks of him. "Me and the boy friend."
One of these days, suddenly, they'll be grown up, Man and wife, those fearless youngsters. A home to plan, life to face. A budget, a savings account, economies.
They'll make mistakes, but they'll learn quickly. She'll begin to be canny in the spending of money-to question prices and values. She'll begin to read about the things she plans to buy, to find out all she can about them. She'll become a regular reader of advertisements.
They'll help her to become the capable, wise housewife he wants so much to be. They'll tell her what clothes are best and what prices to pay for them. They'll the tell her about the foods to buy, the electric appliances, linoleums, and draperies. They'll help her, as the advertisements in this newspaper can help you.
And she'll meet her responsibilities and fulfill her "duties easily and well. She won't become a tired, flustered, inefficient drudge. Because her home will be modern, attractive, well-run, she'll keep young through the speedy years she'll retain much of that shining eyed, merry freshness. She and the "boy friend."
Advertisements are wise counselors for housewives, young and old.
O’Shea Rides the Circuits:
Readers,
As the rolling stone rolls, we are headed towards Spring and thus the close of the NHL season. In a surprising change, the Sabres are firmly planted in a playoff spot. Contrastingly, the Ottawa Senators are in a final push to also qualify. Even if the Senators miss the playoffs, I take solace in the fact the Maple Leafs are eliminated from contention.
This week I have a quick unpublished decision (I know, but times are lean) that addresses whether an independent adjuster can be held liable for negligent misrepresentation under North Carolina law.
Until Next Time,
Ryan
Ryan P. O’Shea
[email protected]
Pay Your Dentist! – 100 Years Ago:
Daily Sentinel
Rome, New York
13 Mar 1926
Your Dentist Pays
For His Supplies,
Do You Pay Him?
YOUR dentist, day after day, works hard for his patients. He alleviates pain, he corrects bad conditions of the teeth, in fact, reconstructs your priceless pearls so that you can masticate your food as nature intended you should. In most cases he uses a considerable amount of gold and silver for fillings, for bridge work, etc. He has to pay for this gold and silver that goes into your mouth, and for many, other costly supplies used in the business. Do you pay him promptly in return?
Maybe you are like most patients and pay your dentist at the end of each appointment. Maybe you wait until the work is completed and pay, him in part. Maybe you are one who kids him along and pays nothing.
Your dentist is human. His part in life is identical to yours. He has to eat, clothe himself and family, and besides maintaining his home, he has to maintain suitable offices properly equipped to serve you.
Be honest. Be honest with yourself and your dentist. If you owe him. something, go to him, as an honest man or woman, and pay him something.
Remember- your dentist is reading this article also. Don't let him think you don't care, because he can use other means to secure what money is due him which would be most embarrassing to you.
LaBarbera’s Lower Court Library:
Dear Readers:
Thinking about booking a last-minute vacation to soak in some sun and sand. If all works in my favor, next time you hear from me, I will be sitting on the beach. Wish me luck!
This week I am reporting on a Westchester County decision involving additional insured status for entities owned and operated by a parent company. The court ultimately found that affidavit testimony established the entities’ relationship, and additional insured status was owed.
Until next time (hopefully, from somewhere a wee bit warmer than Buffalo)…
Isabelle
Isabelle H. LaBarbera
[email protected]
When We Got Along with Iran – 100 Years Ago:
Albany Democrat-Herald
Albany, Oregon
13 Mar 1926
Orient Gives Way
To Motorization,
Word from Persia
The motoring of the orient is rapidly becoming an actuality. Further the majority of the automobiles and trucks which are crowding the picturesque caravans to the side of the roads are American made. Performance and sturdiness characteristic of American manufacture have "sold" the orient on the trademark "Made in U. S. A."
This interesting bit of motor news comes from a party of Persian student engineers who have just arrived in Detroit to make a study of Ford production and service methods. Those students, twenty-two in number, were picked by the Persian government as best qualified to learn the Ford system. They will spend two years in the Ford industry. Others will follow as soon as they have re-Americanization schools in Persia.
Lexi’s Legislative Lowdown:
Dear Readers,
I write to you on a flight to Austin, Texas, for my bachelorette celebration. I am looking forward to spending the long weekend celebrating and attending the Rodeo on Saturday!
This week we discuss a recent bill signed by the Governor to clarify the requirements for glass repair and calibration of advanced driver assistance systems.
Thanks for reading,
Lexi
Lexi R. Horton
[email protected]
Protecting the Car – 100 Years Ago:
The Vancouver Sun
Vancouver, British Columbia, Canada
13 Mar 1926
STOP THIEF
BEFORE HE
GETS AWAY
Make IT Hard for Man Who
Steals Cars
One motorist who has experienced hard luck with automobile thieves and petty accessory pilferers, has contributed a number of preventive rules for the benefit of fellow sufferers
"Never leave car for an Instant with motor running.
"Never park your car in place where thieves can work on it unobserved.
"Lock the car in several ways. The ignition switch is not sufficient.
"Remove distributor arm or some other part of the motor so that the thief must replace it before he can start the machine."
After observing the foregoing rules precaution, and the motorist still fails to thwart the thief, there are suggested several rules of preparedness, which should assist materially in catching the rascal and clinching prosecution:
"Be sure your own motoring credentials are correct.
"Never buy a car unless the title to it is absolutely clear.
"Mark your car by some secret sign known only to yourself. Then if the thief changes the car and engine numbers, you may still identify it
"Report the theft promptly and give the officers every assistance.
"Take an interest in the prosecution. Do not stop the case in event of restitution."
Victoria’s Vision on Bad Faith
Dear Readers,
In Austin, Texas this weekend celebrating bride-to-be and fellow Coverage Pointers columnist, Lexi Horton! ?
This week, I have an interesting case for you from the EDNY, discussing an insurer’s failure to provide its insured with a duty to defend which resulted in a $10 million default judgment being entered against the insured.
Have a great weekend,
Victoria
Victoria S. Heist
[email protected]
Private Wireless Phone Calls! – 100 Years Ago:
The Buffalo News
Buffalo, New York
13 Mar 1926
Outsiders Cannot Listen To
Automatic Wireless Phone
Has Three Intermittent Wave Lengths Changing 60,000
Times a Second and Needs No Exchange.
VIENNA, March 13 - A new wireless telephone system invented by Emil Marek, an engineer In Moedling, near Vienna, is described as a sensational innovation because it permits wireless telephoning which cannot be overheard by outsiders.
Marek employs a sender with three intermittent wave lengths, changing 60,000 times within one second, and the party receiving must have a receiver constructed on the same principle. Furthermore, it is necessary for receiving apparatus to be set in action by a caller, otherwise the intermittent wavelength would not harmonize with the wave intervals of the receiver.
The probability that the outsider will overhear is said to be one to 1,000,000.
The new telephone needs no exchange. All parties to the system have sending and receiving apparatus. The person calling looks up a number in the directory, for instance 926. On the sender are dented wheels, the first of which is moved to the figure nine, the second to two and the third to six. Since the directory figure corresponds by a special wave arrangement with the receiver, this brings the sender in exact harmony with the one receiver desired out of thousands.
A little light flame up on the receiver called. If the party is not present, the receiver automatically registers the caller's number.
It Is stated that the sender, which is no bigger than an ordinary telephone, has a range covering the whole of Austria. Experiments on a big scale will be started shortly.
Shim’s Serious Injury Segment
Hi Readers,
I hope that everyone has been well since our last column. Today I’d like to share a YouTube channel that I came across and have come to appreciate greatly. It is called, "Memoirs of WWII." The channel is a “short film series dedicated to preserving the history of the Second World War and the memory of those who served.” Each post features a personal account of a WWII veteran or Holocaust survivor, who tells his or her story. It may not be something that crosses your mind often, but we are living in the last generation that will have the honor and privilege to obtain such personal accounts and speak with these individuals, the youngest of whom are now in their nineties. If you can, please take a few moments to view their channel and watch some of their videos as we honor the Greatest Generation.
This week I have shared a case decided by the Appellate Division, First Department, which overturned a Supreme Court, Bronx County, decision, thereby granting defendants’ summary judgment motion on grounds that plaintiff did not suffer a serious injury within the meaning of Insurance Law § 5102(d).
See you in the next issue!
Stephen
Stephen M. Shimshi
[email protected]
Women Did Not Get the Right to Vote in Italy Until February 1, 1945, 19 Years Later – 100 Years Ago:
The Buffalo News
Buffalo, New York
13 Mar 1926
GRANTING VOTE TO WOMEN
UNNECESSARY, SAYS PAPER
By RENZO RENDI
ROME, March 13. – The granting of an administrative vote to Italian women was a chivalrous gesture, but unnecessary, says Popolo d’Italia, which is Premier Mussolini’s personal newspaper.
Only 120,000 Italian women would have been entitled to vote but a little more than 5 per cent of these cared to vote. According to the newspaper, this is another evidence of the necessity if suppressing any form of parliamentarism and people’s self-government.
New England Almanack
Greetings!
We joined Hurwitz Fine at the start of February, and it has been a whirlwind as we’ve gotten settled. Having gotten our bearings, though, it’s time for this merry trio to join in the fun as we share some of ourselves and what we’re following with each of you who read Coverage Pointers.
We hope you find the grab-bag of cases that will appear every two weeks helpful. Almanacs, historically, have been collections of wide-ranging miscellaneous information. As we seek to distill decisions from across the New England region into our biweekly column, we’re struck by the fact that our cases can come in all shapes and sizes, on all kinds of different issues. You’ll see that in this inaugural discussion, where we review a quick-moving homeowners’ claim from New Hampshire and a slow-moving Rhode Island bad-faith claim that may finally (blessedly?) have run its course after nearly 17 years. There are also two good decisions out of the Massachusetts courts that warrant a look.
Our friends from New York, New Jersey, and Connecticut are blessed with a variety of decisions and topic areas to sustain unique columns. Perhaps that means that they get to have a little more fun with specialization. We’ll do our best to be purveyors of the interesting, the unusual, and the necessary as decisions come down from the courts in Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. And, in a nod to the history of the New England region, we decided to call ours an “Almanack” – a classical spelling that’s not quite hopelessly archaic, and that will distinguish us from the “Old Farmer’s” variety of publications that you might see on store shelves near you.
As I write these words, we’re in the first week of daylight savings time. That means that the professional hockey season is starting to approach its end, and the playoff picture is coming into focus with my beloved Boston Bruins sitting far behind Buffalo’s Sabres in the standings. It’s a reminder that baseball season might not be able to come soon enough.
Anyway, here’s to brighter evenings and the forthcoming promise of spring. Until next time…
Alex
Alexander G. Henlin
[email protected]
Barbara A. O’Donnell
[email protected]
Iryna N. Dore
[email protected]
Ten Days in Jail for Letter Writing – 100 Years Ago:
Buffalo Courier
Buffalo, New York
13 Mar 1926
LETTER WRITER
ANNOYS POLICE
CHIEF; 10 DAYS
When the average citizen receives an annoying letter in his daily mail he simply throws it in the wastebasket. But, when the same kind of a letter is received by the chief of police it is something else. Several times in, the last few months Chief James W. Higgins has been forced to read what would be done if action were not taken against an Oak street house occupied by Sadie Haviland.
Eventually Chief Higgins turned the letters over to Captain Harvey Fogelsonger, Franklin Street station. A week of investigation brought arrest of Michael Nowaknoski, 128 Seneca street. Nowaknoski admitted writing the letters because Mrs. Haviland owed him $3 for cleaning the sidewalk in front of her place.
He was locked up on a charge of annoying the chief of police and yesterday was sent to the penitentiary for ten days by Judge Maul in city court.
North of the Border:
Since my last column, I managed a brief escape from the Alberta winter and flew to Costa Rica. Conservation of the natural environment is a top priority in that country which disbanded its military after the Second War and invested the resources to main the military into health care and education.
I took several guided walks through the rainforest and was struck by how everything living there survives through an intricate web of relationships. The fig tree, for example, depends on a tiny wasp that can penetrate and pollinate its enclosed flowers; without that specific wasp, the tree cannot reproduce, and without the fig, the wasp has nowhere to lay its eggs.
This pattern repeats everywhere you look. Certain butterflies rely on particular host plants for their caterpillars, and those plants in turn benefit when the butterflies and other insects help with pollination. Small lizards hunt insects that would otherwise overrun the forest floor, while those same lizards become food for larger reptiles and birds, keeping populations in balance. Even the seemingly inconsequential leafcutter ants, endlessly carrying green fragments overhead, feed fungi that they cultivate underground; the fungi is a key soil nutrient and plays a role in allowing the rainforest to survive occasional drought.
Costa Rica is a reminder that survival is rarely a solo act. Each species depends on others—often in ways that are invisible at first glance—to keep the whole system functioning. There is a lesson here for our legal and commercial communities: Our work depends upon cooperation, trust, and the recognition that we are part of a shared ecosystem. We need one another in order to do our own part.
This week’s column deals with the enforcement of a foreign arbitral award in Ontario.
Until next time.
Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
Headlines from this week’s issue, attached:
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
- Under California Law, Contractual Indemnitees May Also Be Omnibus Insureds
- Allegations Broad Enough to Justify a Defense to the Purported Additional Insured, but Premature to Determine Indemnity
- Lead Exclusion Rules the Day
- Extrinsic Proof Established the Identity of the Party Who Was Promised Additional Insured Coverage – And Wasn’t Provided It
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
- No case this time, see you in two more.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- See you in two weeks.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- Court Finds the Number of “Packages” for Which a Common Carrer Was Liable Included Twenty-Four Pallets Rather Than 480 Cartons on Pallets
STORM’S SIU
Scott D. Storm
[email protected]
- Certified EUO Transcript Admissible Even Though Not Signed. Vehicle Qualified as a “Motorcycle” Under Insurance Law § 5102(m) of the Vehicle and Traffic Law Such That the Assignor Was Ineligible for First‑Party No‑Fault Benefits. Lack‑Of‑Coverage Defense Was Not Precluded, even if the Denial Was Untimely
- Summary Judgment Granted to Insurer Where Two Claimants Failed to Appear for EUOs. Summary Judgment Denied on Another Claim Where Insurer's Investigation Revealed Suspicious Circumstances but Claimant's EUO Testimony Provided Explanations and Corroborated Accident Details, the Evidence Was Insufficient to Establish Founded Belief that Collision Was Not a Covered Event
- Where a 170-Year-Old Decorative Slate Roof with Different Tile Designs Was Damaged by a Storm, the Jury Could Reasonably Find it Constituted “Custom” Construction Under a Functional Replacement Cost Endorsement, and That Asphalt Shingles Were Functionally Equivalent Given the Slate Roof's Age and End-of-Useful-Life Condition, Limiting Recovery to Asphalt Replacement Rather Than Slate Restoration Costs
- EUO Attendance Reimbursement Disputes by Providers Are Arbitrable in the No-Fault Forum. The Court Ordered AAA to Modify Its Request Form to Include Space for Listing Compensation for EUO Attendance as a Disputed Matter. Attorney’s Fees and Statutory Interest Do Not Attach to EUO Reimbursement Even if Awarded, Because Such Reimbursement Is Not a First Party Benefit Under § 5106(a).
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- No case this week. See you in two.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
- No Coverage for Return of Funds Transferred by Lawyer Without Property Authorization, and No Coverage for Consequential Damages Claim Flowing Therefrom, Either
- Suit Limitations Clause Only Applies to Suits Brought by the Insured Against the Insurer, Not the Other Way Around
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- North Carolina Does Not Recognize Duty Owed by Independent Adjusters to Claimants Thereby Barring Negligent Misrepresentation Against Independent Adjuster
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Court Finds Duty to Defend Additional Insured Entity
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- Governor Signs Bill S8824 Related to Glass Repair and Calibration of Advanced Driver Assistance Systems for Motor Vehicle Glass Repair Facilities
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- EDNY Finds Question of Fact for Bad Faith for Insurer Failing to Defend the Insured
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
- Appellate Division, First Department, Overturns Supreme Court, Bronx County, Decision Thereby Granting Defendants’ Motion for Summary Judgment on the Basis that Plaintiff Did Not Sustain a “Serious Injury” Within the Meaning of Insurance Law § 5102(d)
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
[email protected]
Alex G. Henlin
[email protected]
Iryna N. Dore
[email protected]
- Homeowners’ Policy Limits are Not Increased by Value of Stone Wall, but Carrier Must Pay Cost of Articles of Personal Property Worth Less than $500 Prior to Their Replacement
- Carrier Did Not Act in Bad Faith Where Coverage Was “Fairly Debatable” in Sixteen-Year-Old Claim
- General Liability Insurer Does Not Owe Coverage for Models’ Claims That Their Images were Misappropriated to Advertise “Gentlemen’s” Clubs
- Insured’s Purported Difficulty in Comprehending Insurance Policy Rider Does Not Render it Ambiguous
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- The Enforcement of a Chilean Arbitration Award in Ontario Requires a Pit-Stop in Italy to Decide Liability
That’s all she wrote.
See you in two.
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
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
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]
APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Topical Index
Peiper on Property and Potpourri
Lee’s Connecticut Chronicles
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]
03/12/26 Lexington Ins. Co. v. New York Marine and General Ins. Co.
Appellate Division, First Department
Under California Law, Contractual Indemnitees May Also Be Omnibus Insureds
After a tour bus accident in San Francisco, California, multiple lawsuits were filed against New York Marine’s (“NYM”) named and permissive insureds and other underlying defendants. These cases were consolidated, and a settlement was reached. Following its own investigation, NYM determined that none of plaintiff Lexington's insureds, who were defendants in the underlying lawsuits, could be considered "insureds" under the NYM policy because they could not be vicariously liable for any of the named or permissive insureds' conduct.
However, NYM also determined that the underlying defendants could be contractual indemnitees under one of the named insured's operating agreements. Therefore, NYM funded the defense. NYM asserts that it exhausted the policy limit on these defense costs and therefore did not contribute towards the eventual settlement. Lexington covered the sum that it believes NYM should have paid towards the settlement and brought suit to recover those funds.
Under California law, the determination whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy. Conversely, where the extrinsic facts eliminate the potential for coverage, the insurer may decline to defend even when the bare allegations in the complaint suggest potential liability.
Lexington bases its coverage position on NYM's omnibus clause, which states that NYM will cover "[a]nyone liable for the conduct of an 'insured' described above but only to the extent of that liability." Under California law, this language "cover[s] vicarious insureds," which makes them "as much an 'insured' as a named insured or a permissive insured" (id. at 33-34 [emphasis omitted]). Vicarious liability may arise under several different theories, including traditional relationship-based theories, such as respondeat superior and principal-agent
Lexington met its initial burden as the underlying complaints sufficiently allege that Lexington's insureds may be vicariously liable for the torts committed by NYM's insureds in this instance. Specifically, the allegations were sufficient to raise the possibility that Lexington's insureds may be vicariously liable under a theory of respondeat superior, based on an agent-principal relationship, or even as an alter ego.
NYM did not meet its burden on its summary judgment motion, as the extrinsic evidence it submitted failed to conclusively and did not establish that Lexington's insureds would not be liable based on any theory of vicarious liability. Even if we were to consider the questionnaires that NYM failed to include with its motion papers (but see CPLR 3212 [b]), they were insufficient for NYM to satisfy its burden. They consisted of unsworn statements, and while several were relayed from an attorney, the source of the information is not clear, the responses largely contained one-word denials, and the questionaries did not contain information necessary to address all forms of vicarious liability. Indeed, there is some evidence in this record suggesting that NYM's and Lexington's insureds' operations were heavily intertwined, and such evidence may be relevant to assessing agency and alter ego.
03/11/26 Kedex Properties, LLC v. Trisura Specialty Insurance Company
Appellate Division, Second Department
Allegations Broad Enough to Justify a Defense to the Purported Additional Insured, but Premature to Determine Indemnity
Kedex), owns of certain real property located in Jackson Heights. Trisura issued a commercial general liability policy of insurance to Kedex, which was effective from December 10, 2020, to December 10, 2021. Following a fire that occurred at the property on April 6, 2021, Kedex hired First Response Cleaning Corp.to complete emergency mitigation and restoration of the property. Thereafter, First Response hired Core Scaffolding Systems, Inc. to furnish and install a scaffold at the entrance of the property.
On April 8, 2021, the Ochoa allegedly was injured when he fell from a scaffold while "engaged in the performance of construction, renovation, demolition, painting, repair and/or alterations" at the property. Ochoa, alleging he was an employee of Core, sued Kedex and First Response (the “underlying action”), alleging common-law negligence and violations of various sections of the Labor Law. In a verified bill of particulars in the underlying action,
Trisura disclaimed coverage to Kedex under the policy based on certain exclusions, including an employer's liability exclusion, a construction exclusion, a workers' compensation exclusion, and a medical payments exclusion. Thereafter, Kedex commenced this action, inter alia, for a judgment declaring that Trisura is obligated to defend and indemnify Kedex in the underlying action.
In general, the insured has the initial burden to establish that an insurance policy covers the subject loss, and the carrier has the burden to prove that an exclusion defeats coverage. When an insurer seeks to disclaim coverage on the basis of an exclusion, the insurer will be required to provide a defense unless it can demonstrate that the allegations of the complaint cast that pleading solely and entirely within the policy exclusions, and, further, that the allegations, in toto, are subject to no other interpretation
Here, in support of its motion, Kedex submitted, among other things, a copy of the policy, which provides coverage, inter alia, due to "bodily injury" that is caused by an "occurrence," that is, "an accident," at the property during the policy period. Kedex also submitted a copy of a letter authored by counsel for Trisura's third-party administrator, in which counsel determined that the "bodily injury" sustained by Ochoa fell within the definition of an "occurrence" under the policy and, therefore, triggered coverage under the policy.
Based upon this evidence, Kedex established, prima facie, that Ochoa's injury as alleged in the complaint in the underlying action constituted an "occurrence" within the meaning of the policy (see Automobile Ins. Co. of Hartford v Cook, 7 NY3d at 137-138). In opposition, Trisura failed to raise a triable issue of fact as to whether the allegations in the pleadings in the underlying action cast those pleadings solely within the exclusions relied upon by Trisura.
However, the Supreme Court properly denied that branch of Kedex's motion which was for summary judgment declaring that Trisura is obligated to indemnify Kedex in the underlying action. Here, Kedex's submissions failed to eliminate triable issues of fact concerning, among other things, whether the scope of work at the property included demolition, such that the construction exclusion applied, and whether Ochoa was an employee of Kedex within the meaning of the policy, such that the employer's liability and workers' compensation exclusions applied.
03/11/26 25-01 Newkirk Avenue, LLC, v. Everest National Ins. Co
Appellate Division, Second Department.
Lead Exclusion Rules the Day
25-01 Newkirk Avenue, LLC, (“Newkirk”) engaged the services of an insurance broker, Stern Agency, Inc. (“Stern”), to obtain insurance coverage, including coverage for liability for exposure to lead, for a residential building in Brooklyn owned by the plaintiff. The Brownstone Agency, Inc. (“Brownstone”), acting as the agent of the defendant Everest National Insurance Company (“Everest”), provided Stern with an Indication for insurance coverage for the building (“policy”). The policy provided, in relevant part, the following: "IMPORTANT: . . . All lead inspection reports must be received and reviewed by our office within 30 days of binding. The lead exclusion will be added back to policy inception if the inspection is unfavorable or the 30-day period has expired."
After the inspection did not occur within that time period, the defendants issued a change endorsement removing lead liability coverage from the policy and incorporated an "absolute lead exclusion" into the policy. Subsequently, a resident of the building commenced an action in the Supreme Court, Kings County, entitled G.M. v 25-01 Newkirk Avenue, LLC, (the “underlying action”), against, among others, the plaintiff in the instant action, to recover damages for personal injuries allegedly sustained through exposure to lead on the premises.
Brownstone, on behalf of Everest, sent a notice of disclaimer to the plaintiff, informing the plaintiff that Everest would not indemnify the plaintiff for any judgment rendered in the underlying action against it because the absolute lead exclusion endorsement in the policy precluded coverage. Several months later, the plaintiff commenced this action against the defendants seeking, inter alia, a judgment declaring that Everest was obligated to defend and indemnify the plaintiff in connection with the underlying action.
Here, the absolute lead exclusion endorsement to the policy, which the defendants submitted in support of their motion, unequivocally excludes coverage for, inter alia, bodily injury "arising out of the existence or control of the hazardous properties of lead, irrespective of the form or source of such lead." Thus, the exclusion clearly applies to the cause of action brought against the plaintiff in the underlying action to recover damages for personal injuries allegedly sustained by exposure to lead (accordingly, the defendants established their prima facie entitlement to a declaration that (1) the plaintiff is not entitled to coverage under the policy for the cause of action asserted in the underlying action, (2) the absolute lead exclusion is properly included in the policy and excludes coverage for the underlying action, and (3) the defendants are not obligated to defend or indemnify the plaintiff in the underlying action .
03/05/26 Schiff v. Intersystem S&S Corp.
Appellate Division, First Department
Extrinsic Proof Established the Identity of the Party Who Was Promised Additional Insured Coverage – And Wasn’t Provided It
There were a number of non-insurance issues in this opinion, which you can read about if you click on the case name above.
With respect to this column, the First Department held that the lower court should have addressed the merits of Apple Bank's request for summary judgment on its newly added cross-claim against Intersystem for breach of contract for failure to procure insurance. The proposed amended pleading containing the cross-claim contained no demand for an answer, and was therefore deemed denied.
On the merits, Apple Bank should have been awarded summary judgment on that cross-claim, as it sustained its prima facie burden by submitting the relevant contract requiring Intersystem to name "the Customer" as an additional insured Although the contract does not define "the Customer," the documentary and testimonial evidence that Apple Bank submitted in support of its motion — including the deposition testimony of Intersystem's principal indicating that "the Customer" referred to Apple Bank — established that Apple Bank was "the Customer" within the meaning of the contract. Intersystem did not submit any insurance policy naming Apple Bank as an additional insured and, thus, failed to raise an issue of fact in opposition.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
No case this time, see you in two more.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
See you in two weeks.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
03/02/26 HDI Glob. Ins. Co. v. Kuehne + Nagel, Inc.
Second Circuit Court of Appeals
Court Finds the Number of “Packages” for Which a Common Carrer Was Liable Included Twenty-Four Pallets Rather Than 480 Cartons on Pallets
HDI Global Insurance Co. was Mahle Behr Charleston, Inc.’s cargo insurer and brought this subrogation action against Kuehne + Nagel, Inc. (trading as Blue Anchor America Line), a non-vessel-operating common carrier retained to transport Mahle’s goods. In 2022, Mahle ordered electrical wire harnesses from Electrical Components International S.L.U. The cargo was to move from ECI’s warehouse in Spain to Mahle’s facility in South Carolina under four sea waybills prepared by K+N. It was packed in 480 cartons secured on 24 pallets.
While being loaded in Spain in October 2022, the cargo fell into the sea and was destroyed. HDI paid for the loss and filed the subrogation suit in July 2023 for the value of the destroyed cargo.
Because the Carriage of Goods by Sea Act (COGSA) limits a carrier’s liability to $500 per “package,” the central factual question was whether the relevant packages were the 480 cartons or the 24 pallets. Although the sea waybills listed the number of cartons in the “Number of Packages” column on the front, that number was only a starting point. The district court found—and the Second Circuit affirmed—that the pallets were the relevant packages based on the sea waybills’ terms and conditions defining “package” for U.S. carriage as any palletized assemblage prepared for the merchant’s convenience, as well as evidence of the parties’ course of dealing and how the shipment was actually handled. This clause “plainly contradict[ed]” the front-page count and identified pallets as the relevant packages for COGSA purposes.
While HDI argued clause 1 (defining “package” as the number entered on the face of the waybill) conflicted with clause 6.1(c). The court held clause 1 applies when clause 6.1(c) doesn’t (e.g., cargo not palletized or palletized for the carrier’s convenience), which gave reasonable effect to all terms.
HDI’s reliance on Monica Textile, a Second Circuit case expressing skepticism as to boilerplate definitions of containers as packages on the back of a bill of lading, was rejected because that was a non-container case, and the court generally defers to the parties’ intent as shown by the bill of lading/waybill.
The Second Circuit also found that the district court permissibly relied on parol evidence in light of apparent ambiguity, including the longstanding course of dealing showing the cartons were palletized at Mahle’s request for safety and efficiency, and K+N was obligated to pick up, load, and deliver the pallets regardless of carton count—further confirming pallets were the intended shipping unit.
Because pallets were the relevant packages, COGSA’s $500-per-package cap applied to each of the 24 pallets, leading to the $12,000 award that the Second Circuit affirmed.
STORM’S SIU
Scott D. Storm
[email protected]
01/16/26 Kalitenko v. Nationwide Mutual Fire Insurance Co
Supreme Court of New York, Appellate Term, Second Department.
Certified EUO Transcript Admissible Even Though Not Signed. Vehicle Qualified as a “Motorcycle” Under Insurance Law § 5102(m) of the Vehicle and Traffic Law Such That the Assignor Was Ineligible for First‑Party No‑Fault Benefits. Lack‑Of‑Coverage Defense Was Not Precluded, Even if the Denial Was Untimely
Recovery of assigned first‑party no‑fault benefits following a motor vehicle accident; Nationwide asserted lack of coverage because the assignor was operating a motorcycle at the time of the accident, rendering him ineligible for New York no‑fault benefits. Appeal by a medical provider (assignee of the injured party) from an order of the Civil Court of the City of New York, Richmond County, granting defendant insurer’s motion for summary judgment dismissing the no‑fault benefits suit. The Appellate Term affirmed.
The Plaintiff was Sergey Kalitenko, M.D., a provider seeking assigned first‑party no‑fault benefits, as assignee of Hernandez. The assignor repeatedly described the vehicle he operated at the time of the accident as a “moped” or “motorcycle” during an examination under oath. He testified the vehicle had a seat and a floorboard, lacked pedals, and had a maximum speed greater than 40 mph. He admitted he did not have a driver’s license and carried no insurance for the vehicle.
Nationwide insured the other individual involved in the accident. Its policy excluded first‑party benefits for persons occupying a “motorcycle, moped or similar‑type vehicle.”
The issues were:
- Whether the certified, unsigned EUO transcript was admissible evidence on summary judgment.
- Whether the vehicle qualified as a “motorcycle” under Insurance Law § 5102(m) and the Vehicle and Traffic Law such that the assignor was ineligible for first‑party no‑fault benefits.
- Whether any alleged untimeliness in the insurer’s denial could preclude the lack‑of‑coverage defense.
The court held the certified EUO transcript was admissible notwithstanding the absence of the assignor’s signature, citing Appellate Division and Appellate Term cases allowing reliance on certified transcripts at summary judgment.
For New York no‑fault claims, vehicles capable of speeds exceeding the statutory limits and requiring financial security may be deemed “motorcycles” even if colloquially described as “mopeds,” rendering occupants ineligible for first‑party benefits. A policy exclusion for motorcycles/mopeds will reinforce this result when the statutory definitions are met.
The vehicle was a “motorcycle” for purposes of New York’s no‑fault scheme: it had a seat, used gas and electricity, had three or fewer wheels, and, critically, had a maximum speed exceeding 40 mph—triggering financial security requirements under the Vehicle and Traffic Law and bringing it within Insurance Law § 5102(m)’s “motorcycle” definition. Therefore, occupants were not “covered persons” entitled to first‑party benefits, and the insurer established its prima facie entitlement to summary judgment on lack of coverage.
Insurance Law § 5102(j) defines “covered person”; motorcycles are excluded from “motor vehicle” in § 5102(f)/(m). As a result, motorcycle occupants are not entitled to first‑party no‑fault benefits under Insurance Law § 5103(a)(1)–(2) and 11 NYCRR 65‑1.1(d). The court cited authorities confirming this point.
The Insurance Law incorporates Vehicle and Traffic Law § 123’s definition and ties “motorcycle” status to whether the vehicle must carry financial security under articles 6, 8, or 48‑A of the VTL. The assignor’s description supported that the vehicle required financial security and thus qualified as a motorcycle under § 5102(m). That classification made the assignor ineligible for no‑fault benefits and aligned with the policy’s explicit exclusion for “motorcycle, moped or similar‑type vehicle” occupants.
Because the accident was not a “covered incident,” any contention that the claim denial was untimely was immaterial. Because there was no coverage to begin with, the lack‑of‑coverage defense was not precluded, even if the denial was untimely, citing Court of Appeals precedents on non‑precludable lack‑of‑coverage defenses.
02/03/26 Infinity Auto Insurance Co. v. Luna
Supreme Court of New York, New York County
Summary Judgment Granted to Insurer Where Two Claimants Failed to Appear for EUOs. Summary Judgment Denied on Another Claim Where Insurer's Investigation Revealed Suspicious Circumstances but Claimant's EUO Testimony Provided Explanations and Corroborated Accident Details, the Evidence Was Insufficient to Establish Founded Belief That Collision Was Not a Covered Event
Infinity sought a declaratory judgment that it owed no duty to pay No‑Fault (PIP), UM/UIM, or SUM benefits arising from a collision involving individual defendants Luna, Lopez, and Rodriguez, and numerous medical-provider defendants who submitted or might submit related bills. Infinity moved for summary judgment against a subset of provider defendants; some opposed, and others did not appear or oppose.
Infinity asserted two theories: (1) Luna and Rodriguez breached a condition precedent to coverage by twice failing to appear for Examinations Under Oath, and (2) Infinity had a founded belief the injuries did not arise from a covered event.
Basis for EUO requests included: magnitude of claims; the insured was not the driver; the vehicle was older (purportedly often used as a “crash car”) and last registered in Florida in 2018; garage location represented as Pennsylvania though accident and treatment were in New York; lack of cooperation from the named insured; no police report; inconsistency between the MV‑104 listing injuries (only Lopez and Luna) and an NF‑2 later submitted by Rodriguez; and “mirroring” injuries/treatment at the same clinics by all three claimants.
Lopez’s EUO testimony both raised questions and corroborated aspects of the accident: she described a medium impact with no airbag deployment, did not seek emergency care, began clinic treatment three days later on a friend’s recommendation (and told Luna and Rodriguez about that clinic), and confirmed details consistent with the MV‑104 regarding location and the adverse vehicle running a stop sign and striking the driver’s side. She also had limited knowledge about the involved vehicle and circumstances (e.g., could not identify whether the insured vehicle was a sedan or SUV), but some testimony supported the occurrence as reported. These points were emphasized by Infinity but also viewed by the court as providing explanations for some “suspicious” factors (e.g., use of the same providers).
Infinity obtained a declaratory judgment cutting off No‑Fault benefits for Luna and Rodriguez (and related provider claims) based on their failure to attend EUOs—a breach of a condition precedent. However, Infinity did not establish, at the summary judgment stage, a founded belief that Lopez’s injuries did not arise from a covered accident, so her related No‑Fault claims remain pending for further litigation.
Failure to appear for duly scheduled EUOs can bar No‑Fault benefits if the insurer demonstrates proper notice and nonappearance. Infinity supported this with EUO scheduling letters and service affidavits, plus the attorney’s affirmation that he was present at the scheduled EUOs and Luna and Rodriguez did not appear (prima facie breach of a condition precedent).
Infinity met its prima facie burden that Luna and Rodriguez twice failed to appear for properly noticed EUOs, supported by letters, service proofs, and counsel’s affirmation. Defendants offered only attorney affirmations without affidavits from anyone with personal knowledge; such affirmations lack evidentiary value. The record also did not support the contention that EUO requests were untimely under 11 NYCRR 65‑3.5(b) (the verification forms in the record were dated after the EUO notices). As such, the court granted summary judgment to Infinity as to claims for treatment of Luna and Rodriguez, declaring no obligation to pay their No‑Fault claims or any provider claims for their treatment related to the collision.
Even if an insurer does not reject a claim within 30 days, it may assert a lack-of-coverage defense based on a fact or founded belief that injuries did not arise out of an insured incident; mere speculation is insufficient. The standard is preponderance of the evidence, not full common-law fraud. The insurer must produce admissible evidence of the fact or foundation for its belief.
Infinity did not carry its burden to show, by admissible evidence, a founded belief that Lopez’s injuries did not arise from a covered event. The court noted Lopez’s testimony corroborated key accident details and offered benign explanations for several “suspicious” features (e.g., shared providers). The insurer’s affidavit identified factors that justified EUO requests but did not connect those factors to proof that the loss was not covered. Compared to cases where summary judgment was granted on a founded-belief theory, Infinity’s showing here “fell far short.” As such, summary judgment denied as to claims for treatment provided to Lopez.
The court granted summary judgment declaring that Infinity has no obligation to pay No‑Fault claims of Luna and Rodriguez, and no obligation to pay any medical-provider claims for treatment allegedly provided to Luna or Rodriguez for the collision. As to Lopez, the motion was denied, leaving those claims unresolved for further proceedings.
02/27/26 Emerick v. Erie Insurance Exchange.
Superior Court of Pennsylvania
Where a 170-Year-Old Decorative Slate Roof With Different Tile Designs Was Damaged by a Storm, the Jury Could Reasonably Find It Constituted “Custom” Construction Under a Functional Replacement Cost Endorsement, and That Asphalt Shingles Were Functionally Equivalent Given the Slate Roof's Age and End-of-Useful-Life Condition, Limiting Recovery to Asphalt Replacement Rather Than Slate Restoration Costs
Emerick owned an 1849 home with its original decorative slate roof. A windstorm felled tree branches; one penetrated the roof of a nearby “spring house,” and a large branch hung from the home’s slate roof. Water leaked into the third floor/attic.
Erie adjuster inspected and estimated $5,020.50 in damages. The estimate allocated $1,726.56 for slate roof repair. Emerick retained public adjuster Pfister, who submitted a $121,598.77 repair estimate for the home and spring house. A follow-up site visit with Erie’s adjuster and structural engineer Hunt occurred; Erie issued a revised estimate and an additional $7,751.75, bringing total payments to $12,272.25. Erie believed four missing slate tiles could be repaired and the spring house needed only a non-slate roof replacement; Pfister and Emerick sought full slate roof replacement and demolition/rebuild of the spring house.
Emerick replaced the entire slate roof with asphalt shingles for $19,380.
Erie’s homeowners policy included a “functional replacement cost loss settlement” endorsement. Defined terms included:
- “Functional actual cash value”: depreciation deducted from the cost to repair/replace using less costly common materials/methods functionally equal to obsolete, antique, or custom materials/methods in the original construction.
- “Functional replacement cost”: cost to repair/replace using less costly common materials/methods functionally equal to obsolete, antique, or custom materials/methods in the original construction.
- Loss settlement limited payment to the smallest of: functional replacement cost amount or actual amount spent to repair/replace on a functional replacement cost basis.
Emerick commenced suit asserting breach of contract and statutory bad faith under 42 Pa.C.S.A. § 8371. Before trial on breach of contract, Emerick moved in limine to preclude Erie from introducing evidence of the functional replacement cost endorsement, arguing the endorsement was inapplicable and/or never invoked. The trial court denied the motion.
Trial occurred. The jury struggled to reach a verdict, sending approximately 12 questions and deliberating roughly nine hours over two days; after an inquiry on whether they were deadlocked, the court instructed on consequences, and the jury returned a verdict for Emerick awarding $19,380 (the cost of the asphalt roof).
In a post-trial motion Emerick sought a new trial limited to damages, arguing admission of the endorsement improperly capped recovery to the asphalt roof’s cost. The trial court denied the motion.
At trial Property specialist Buck testified slate is an antique/custom roofing method today; the home’s roof had decorative design features (rectangular tiles upper/lower; curved tiles in the middle), supporting that it was “custom.” She explained Erie would pay to repair four slate tiles on a slate roof but, if full replacement were needed, the endorsement limited recovery to an asphalt roof cost. Engineer Hunt opined damage was limited to four slate tiles and those could be repaired.
Pfister believed the roof required full replacement and prepared a slate estimate using another insurer’s software; Emerick testified slate lasts 50–250 years, asphalt ~25 years. Pfister acknowledged the roof was 170 years old and near the end of its useful life.
The issue on appeal was whether the trial court erred in refusing a new trial on damages after allowing Erie to present evidence of the functional replacement cost endorsement and argue that damages should be limited to the cost of an asphalt roof rather than a slate roof.
It was held that the trial court did not err or abuse its discretion in denying the motion in limine, admitting evidence of the functional replacement cost endorsement, and denying a new trial on damages. The endorsement’s terms (obsolete, antique, or custom) were unambiguous, and whether the slate roof fit within those terms was a factual question for the jury. The jury’s verdict was supported by the evidence, including findings that the roof was custom and that an asphalt roof was the functional equivalent given the slate roof’s age and condition.
The terms “obsolete,” “antique,” and “custom” are common and unambiguous; the trial court properly allowed the jury to decide if the 1849 slate roof—decorative and near end-of-life—fell within the endorsement. Emerick’s argument that slate is still used today did not render the terms ambiguous or resolve whether this particular roof was custom/antique/obsolete.
Although slate’s typical lifespan may exceed asphalt’s, all witnesses agreed the 1849 roof was at or near the end of its useful life. On that record, the trial court concluded—and the Superior Court agreed—that a new asphalt roof projected to last 25 years was the functional equivalent of Emerick’s existing, end-of-life slate roof.
The trial court’s credibility and weight assessments are “least assailable” on appeal; the court found Buck’s testimony credible regarding the roof’s custom features, and Hunt’s testimony supported repair of four tiles. The Superior Court declined to reweigh.
The court noted Erie did not deny the claim; it paid and disputed only the scope and amount. Thus, the regulation requiring citation to policy provisions in a denial did not bar Erie’s reliance on the endorsement at trial.
A functional replacement cost endorsement can cap recovery to the cost of less expensive, common materials if the insured property’s original materials/methods are obsolete, antique, or custom—and whether they are is typically a fact question for the jury when terms are unambiguous.
Functional equivalence can be assessed relative to the damaged item’s remaining useful life, not its original or theoretical lifespan. An older, near end-of-life feature may be functionally replaced by a shorter-lifespan material.
2/12/26 Ens Medical v. Nationwide
Sup Ct, Kings County
EUO Attendance Reimbursement Disputes By Providers Are Arbitrable in the No-Fault Forum. The Court Ordered AAA to Modify Its Request Form to Include Space for Listing Compensation for EUO Attendance as a Disputed Matter. Attorney’s Fees and Statutory Interest Do Not Attach to EUO Reimbursement Even if Awarded, Because Such Reimbursement Is Not a First Party Benefit Under § 5106(a)
ENS Medical, P.C. (owned by Dr. Omar Ahmed), submitted claim forms for four assignors (Merced, Mohammed, Lewis, Cruz). Nationwide requested “additional verification,” specifically an EUO of Dr. Ahmed as ENS’s principal. Dr. Ahmed appeared and testified.
ENS (through counsel) invoiced Nationwide for $20,000, seeking “lost earnings” reimbursement for Dr. Ahmed’s EUO attendance. Nationwide asked for documentation substantiating the lost earnings; none appears to have been provided.
ENS filed AAA arbitration seeking the $20,000. Arbitrator Tali Philipson denied the claim, concluding the EUO lost-earnings reimbursement was not arbitrable under Insurance Law § 5106(b) because it did not concern “first party benefits.” A master arbitrator (Alfred J. Weiner) affirmed.
ENS commenced a CPLR Article 75 proceeding to vacate the master arbitration award and sought an order compelling the DFS Superintendent to promulgate arbitration procedures to cover EUO lost-earnings claims.
DFS Superintendent moved to dismiss; granted to the extent the petition was denied and the proceeding dismissed as to the Superintendent, with the court holding mandamus did not lie to compel promulgation of specific procedures in this context.
Nationwide cross-moved to confirm the arbitration and master arbitration awards and to dismiss based on service defects and misnomer; granted to the extent the court confirmed the awards and dismissed as against Nationwide, while correcting the caption to reflect Nationwide Property & Casualty Insurance Company.
ENS cross-moved to cure service defects nunc pro tunc and sought fees/costs; granted only insofar as deeming service timely and proper nunc pro tunc, but fees/costs denied because ENS did not prevail.
The issues included whether disputes over reimbursement of a health service provider’s lost earnings occasioned by attending an EUO (requested as “additional verification” under the no-fault regulations) are arbitrable in the AAA no-fault forum under Insurance Law § 5106(b) and the DFS’s Regulation 68 (11 NYCRR Part 65); whether the court can or should compel DFS to promulgate procedures specific to EUO lost-earnings claims.
The court answered the arbitrability question in the affirmative, holding that disputes over reimbursement for lost earnings incurred by attending an EUO as part of the “additional verification” process are within the scope of the no-fault arbitration forum’s subject matter jurisdiction. The court relied on the expansive statutory and regulatory structure favoring arbitration of no-fault disputes and the broad historical interpretation of what may be arbitrated, even though such reimbursement is not itself a “first party benefit” as that term is used in § 5106(a) and (b).
Despite the court’s view that such disputes are arbitrable, it declined to vacate the arbitrator’s and master arbitrator’s awards, despite being legally incorrect. Applying the deferential standard of review for master arbitration awards, the court found the awards were not irrational, arbitrary, or capricious; their legal conclusion—though the court disagreed—was at least plausible. Therefore, the master arbitration award was confirmed, and ENS’s petition to vacate was denied.
The court reasoned that EUO attendance is integral to the claim verification process, and since proof of claim is not complete until all verification is supplied, disputes over EUO reimbursement fall within “any other matter” arising under the statute. This broad construction aligns with No-Fault law's purpose of reducing court burdens and the regulatory mandate for EUO reimbursement. However, the arbitrators' contrary interpretation was plausible given the statutory ambiguity.
The court ordered the AAA (as the designated organization under the no-fault system) to modify its prescribed no-fault arbitration request form to include a space specifically accommodating disputes over compensation for attendance at an EUO, reasoning the issue is capable of repetition yet evading review and that directing a ministerial modification of the form was within the court’s authority even though AAA was not a party to the proceeding.
The court denied mandamus relief against DFS, holding that whether to promulgate specific regulations is discretionary, and ENS failed to show a clear legal right to compel such action or a corresponding nondiscretionary duty on the part of the Superintendent.
The court held that attorney’s fees and statutory interest under § 5106(a) apply to overdue payments of first party benefits; EUO lost-earnings reimbursement is not a first party benefit. There is no 30-day payment deadline for such reimbursement, and thus fees/interest are not available even if reimbursement is awarded. In any event, the issue was academic because the master arbitration award was confirmed and ENS did not prevail.
Although Nationwide challenged service under CPLR 312-a and the caption misnamed the insurer, the court deemed the commencement papers properly served nunc pro tunc and corrected the caption, noting lack of prejudice and Nationwide’s participation on the merits. Still, because the award was confirmed, Nationwide’s cross-motion was granted to that extent.
The court confirmed the master arbitration award in full; denied and dismissed the petition against DFS and Nationwide except for ordering AAA to modify its form; granted ENS’s nunc pro tunc service relief; and directed counsel to serve the decision on AAA to implement the form change.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
No case this week. See you in two.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
02/28/26 Callaghan v. Gen. Star. Indem. Co.
District Court of New Jersey
No Coverage for Return of Funds Transferred by Lawyer Without Property Authorization, and No Coverage for Consequential Damages Claim Flowing Therefrom, Either
Keating & Associates hired a law firm to assist it with its purchase of a casino. As part of their agreement, Keating transferred over $800,000 into a trust account, the funds of which were to be used exclusively for the purchase of the casino. Keating, the first named partner in the company, was to be the only authorized signatory with respect to the account.
Later, at the direction of Carl Sealey, the law firm transferred almost all of the money in the trust account for purposes other than the purchase of the casino. Keating & Associates sued the firm in malpractice, alleging that the transfer was unauthorized, and that Keating was not even notified after the fact.
The law firm notified General Star, its Errors and Omissions liability insurer, of the incident and the resulting suit. That policy’s insuring agreement provided that General Star would pay all sums in excess of the deductible for which the insured became legally obligated to pay as “damages” for “claims.” The policy defined the word “claim” as a “written demand for monetary damages, including service of suit or institution of arbitration proceedings by reason of a Wrongful Act.” “Damages” was defined as “the monetary portion of any judgment, award or settlement, provided always that Damages shall not include [ . . . ] the amount of funds, money, securities, or property than an insured transferred or failed to transfer as a result of false, fraudulent, or unauthorized instructions.”
As General Star argued, Sealey was not authorized to instruct the law firm to make withdrawals from the trust account; only Keating had that authority. Therefore, General Star’s argument continued, the underlying legal malpractice action does not allege any “damages,” as that term is defined in the policy. Indeed, the policy excluded from the definition of “damages” any amount of money transferred (or not transferred) by the insured as a result of false, fraudulent, or unauthorized instructions.
The law firm tried an end-run around this by arguing that the plaintiff in the malpractice case also sought interest, attorney’s fees, and costs related to the action, which, according to the firm, constitute “damages,” even if the main claims did not.
The Court disagreed. The Court first recognized that the damages sought by Keating & Associates in the malpractice action was the exact amount of money allegedly transferred from the trust account without authority by the firm. The Court found that this request for damages falls directly into the exception of the policy’s definition of “damages,” and therefore, that the policy’s insuring agreement was not triggered. While the Court recognized that, in some circumstances, consequential damages may be covered under this insuring agreement, even where direct damages are not covered, that is only true if the consequential damages are independent from the claim for direct damages. Here, the Court reasoned, the request for attorney’s fees and costs (the consequential damages) was purely derivative of the direct damages, and was likewise uncovered.
03/11/26 Cincinnati Ins. Co. v. Zeltzer
District Court of New Jersey
Suit Limitations Clause Only Applies to Suits Brought by the Insured Against the Insurer, Not the Other Way Around
On September 3, 2021, Zeltzer claimed that he lost four jewelry items on his vacation in Italy. After an initial investigation, on October 18, 2021, Cincinnati paid him $454,052.50 for the lost/stolen items, and closed its file.
On December 6, 2024 (over three years later), Zeltzer found three of the four jewelry pieces at his home in Puerto Rico. Based on its belief that Zeltzer had possession of the missing jewelry all along, Cincinnati obtained possession of the jewelry and re-opened its file to bring this action, in an effort to recover the money it originally paid to Zeltzer. It is unclear how Cincinnati knew that Zeltzer had the jewelry all along.
Zeltzer brought a motion to dismiss this action, on the basis that the policy’s two-year suit limitations clause made the action untimely. Cincinnati argued that the suit limitations clause only applies to suits brought by the insured against the insurer, and not the other way around. In response, Zeltzer argued that, under the doctrine of mutuality, the clause applies to both the insured and the insurer.
The doctrine of mutuality holds that if one party is bound by a contract term, both parties are bound. The Court recognized this. However, the Court also recognized that if there is other consideration—aside from the rights relinquished and gained in the contract itself—to support the contract, then mutuality is not necessary in order to have a valid and binding contract. Here, as the Court noted, Zeltzer paid premium—an outside source of consideration. Thus, the Court held, the doctrine of mutuality was inapplicable, and only the insured is bound by the suit limitations clause.
Editor’s Note: A lot of people—including this Court—call the suit limitations clause a “statute of limitations.” That is not technically correct. While it does modify the statute of limitations for breach of contract (six years from the date of breach in most jurisdictions), it does not act as a statute itself; rather, it is still only a policy provision, and should be referred to as the “suit limitations clause.”
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
03/10/26 Env't Hydrogeological Cons., Inc. v. N. Am. Risk Servs., Inc.
United States Court of Appeals, Fourth Circuit
North Carolina Does Not Recognize Duty Owed by Independent Adjusters to Claimants Thereby Barring Negligent Misrepresentation Against Independent Adjuster
Legacy operated a facility that sustained a methane leak due to hog waste. The leak threatened to contaminate a nearby watershed. Upon notice of the leak, Legacy contacted Environmental Hydrogeological Consultants, Inc. (“EHC”) to remediate the leak. Legacy also contacted Admiral Insurance insured Legacy under an Environmental Impairment Liability Policy, which provided coverage for cleanup costs and third-party claims arising out of pollution events. Legacy notified Admiral of the claim through submission of an incident report.
Admiral assigned the claim to is third-party administrator North American Risk Services (“NAR”). NAR then assigned the claim to its employee Scroggs. Scroggs then spoke to Legacy and stated that Admiral would pay the clean-up costs. Legacy then informed EHC who began the remediation. The work began on June 6, 2022, and EHC contacted Scroggs the following day for payment. Scroggs stated he would address the issue with EHC once he received confirmation from Admiral.
On June 8, 2022, Scroggs sent a letter to Legacy that stated Admiral would pay clean-up costs in excess of Legacy’s self-insured retention limit. EHC then began to submit invoices to Scroggs, who told Legacy that the invoice remained under review. Scroggs also instructed EHC to request payment from Legacy directly. Admiral never paid the claim nor did it deny coverage.
EHC then sued both NARS and Scroggs in North Carolina State Court. The suit contained a single count of negligent misrepresentation regarding Scrogg’s assurance that Admiral would pay the claim. Under North Carolina law, a claim of negligent misrepresentation occurs where a party justifiably relies to its detriment on the information prepared without reasonable care by the one who owed a duty of care to the reliant party. Noting, the North Carolina Supreme Court is yet to determine whether a duty care exists between a claimant and an independent insurance adjuster, the court looked to the North Carolina Appellate Courts.
The Court reviewed Koch v. Bell, Lewis & Assocs., 627 S.E.2d 636 (N.C. Ct. App. 2006) to analyze the issue. In Koch, the North Carolina Court of Appeals addressed the issue as to whether an independent adjuster owed a duty, if any, to a claimant against an underlying policy in a negligence action. The Koch court embraced the majority position that there is no duty owed by an independent adjuster to an insured. Thus, Koch held negligence claims cannot be brought against independent adjusters by a claimant, whether it be a third-party or the insured.
Since there was a lack of countervailing North Carolina precedent that suggested the North Carolina Supreme Court would reach a different determination, the court applied Koch. Since the tort of negligent misrepresentation requires a duty and under Koch no such duty exists, EHC’s claim failed against NARS and Scroggs. Although Koch addressed a pure negligence claim, the court found this distinguishment immaterial as both theories require a duty of care owed to the plaintiff.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
03/03/26 RD Am., LLC v. Farm Family Cas. Ins. Co.
Supreme Court, Westchester County
Court Finds Duty to Defend Additional Insured Entity
A declaratory judgment action was filed by RD America LLC (“RD”), against Farm Family Casualty Insurance Co. (“Farm Family”), seeking additional insured status in relation to an action styled Rosalie Dellicarpini and Antonio Dellicarpini v. JMDH Real Estate of Newburgh, LLC et al. (the “Underlying Action”). Instantly, RD moves for summary judgment in relation to a duty to defend, and recovery of past defense costs in connection with defending the Underlying Action, including interest.
In relevant part, the Underlying Action alleges that the underlying plaintiff sustained personal injuries after she slipped and fell in a parking lot owned and operated by RD. RD filed a third-party complaint against Farm Family’s insured, Foley Landscaping Contractors, Inc. (“Foley”). It is alleged that Foley was retained, pursuant to a snow removal contract, to perform snow removal at the loss location. The contract required Foley to name, “JRD Unico, Inc., its Subsidiaries and Affiliates, and the Subsidiaries and Affiliates thereof…as well as any companies or entities that the above companies, DBA’s etc. are required to indemnify…as additional insured with respect to General Liability Coverage.”
The Farm Family policy issued to Foley contains an additional insured endorsement, providing, in pertinent part, additional insured coverage for bodily injury, cased in whole or in part, by the acts or omissions of Foley, or those acting on Foley’s behalf, in the performance of ongoing operations for [JRD UNICO INC. AND ALL OTHERS PER WRITTEN CONTRACT].
In opposition to the motion, Farm Family argues that RD is not entitled to additional insured status, because no document (the contract, or the policy) refers to RD. In addition, Farm Family argues that the injury was not caused, in whole or in part, by Foley’s acts or omissions.
In the analysis, the court first looked toward the defendants in the Underlying Action, which include: JMDH Real Estate of Newburgh LLC, Restaurant Depot LLC, Jetro Holdings, LLC, JRD Unico, Inc., RD America, LLC, and Jetro Cash & Carry Enterprises, LLC.
The complaint in the Underlying Action alleged that the defendants were careless, negligent, and reckless for allowing, causing, and/or permitting icy, slippery, dangerous, hazardous, and unsafe conditions to exist on the parking lot. The Third-Party complaint further alleges that if Restaurant Depot and/or any other named entity is liable to the underlying plaintiff, that liability arises out of the performance of work by Foley.
Next the court analyzed the policy language, and the contracts produced by RD. Here, the policy provides additional insured coverage to all subsidiaries/affiliates of JRD Unico, Inc. In support of the motion, RD submitted an affidavit of the CFO of JRD Unico, which identifies that JRD Unico and another company are the parent companies of “all Restaurant Depot entities” and that “RD America, LLC is a wholly owned subsidiary of Jetro Holdings, LLC, which is a subsidiary owned by JRD Unico.”
As such, the court found that RD met its prima facie burden, demonstrating that it is entitled to be defended by Farm Family as an additional insured. Interestingly, the court found that the defense is owed, despite the fact that Foley was granted summary judgment dismissing the third-party complaint – showing that its acts or omissions, did not cause, in whole or in part, the conduct complained of by the underlying plaintiff. Regardless, the court held that Farm Family owes a continuing defense to RD for the Underlying Action.
In addition, the court granted the portion of the motion seeking reimbursement of past defense costs, plus prejudgment interest.
Note: I will be interested to watch if this one gets appealed. The duty to defend is broader than the duty to indemnify and does not rest on ultimate liability. However, for additional insured status to be triggered in the first instance, the liability of the additional insured entity must be caused, in whole or in part, by the Named Insured’s acts or omissions. A finding that Foley’s acts or omissions did not lead to the underlying injury seemingly should cut off any future defense obligation by Farm Family.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
03/13/26 New York Assembly Bill S8824
Governor Signs Bill S8824 Related to Glass Repair and Calibration of Advanced Driver Assistance Systems for Motor Vehicle Glass Repair Facilities
On February 13, 2026, the Governor signed into law an act to amend the general obligations law. Bill S8824 clarifies the requirements for glass repair and calibration of advanced driver assistance systems.
A new subdivision is added to General Obligations Law 392-k and provides that if a motor vehicle is equipped with an advanced driver assistance system, a glass repair shop that conducts safety glass or vehicle repair, replacement or recalibration shall inform the consumer (1) if a recalibration of the advanced driver assistance system is required and (2) if a recalibration of the advanced driver assistance system is performed that such system shall comply with the motor vehicle manufacturer’s specifications.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
03/02/26 McCord v. Gov't Emps. Ins. Co.
United States District Court, Eastern District of New York
EDNY Finds Question of Fact for Bad Faith for Insurer Failing to Defend the Insured
This lawsuit arises out of an underlying personal injury action commenced by Mario Umana ("Umana") in September 2016. Umana alleges he was injured in a June 2016 automobile accident when Ameer Haniff ("Haniff") struck him, a pedestrian, with his vehicle, resulting in the loss of his leg. At the time of the accident, Haniff was insured by GEICO with limits of $25,000. On the day of the accident, the vehicle’s physical damage was reported to GEICO, and a no-fault benefits application was submitted by Umana's attorney.
Haniff and GEICO failed to appear in the personal injury action. Umana's attorney informed GEICO in April 2017 that the underlying action was filed and he believed they won their default judgment motion. A GEICO claims professional was advised to contact the insured to see if he was served but did not hire defense counsel to defend the named insured in the action. In June 2017, Umana moved for entry of default against Haniff. On August 21, 2018, the court had an inquest and rendered a verdict in excess of $10 million.
In April 2019, GEICO issued a disclaimer of coverage to the named insured, denying coverage for late notice and lack of cooperation stating Haniff failed to give timely notice of the underlying action. In May 2019, GEICO paid its $25,000 policy limit to Umana.
In October 2019, Ameer Haniff filed for Chapter 7 bankruptcy protection under Chapter 7 of Title 11 of the United States Code in New York Bankruptcy Court. In October 2022, McCord as Trustee of the estate of Ameer Haniff, filed a lawsuit against GEICO alleging breach of contract and bad faith for failing to defend Haniff in the underlying action. This decision decides McCord's motion for judgment as a matter of law and GEICO's cross-motion in the October 2022 action.
The Court found GEICO failed to establish it was entitled to any of its coverage defenses (late notice and non-cooperation) because GEICO was not prejudiced by Haniff's late notice because it was notified of the lawsuit before default judgment was entered and the Defendant failed to establish the high burden of proof required for non-cooperation under Thrasher.
The Court ultimately held McCord could recover the full $10 million default judgment of the personal injury action as consequential damages if GEICO acted in bad faith but found a genuine dispute of material fact as to whether GEICO acted in bad faith.
The Court discussed how under New York, there is a strong presumption against finding bad faith by an insurer, which "can be rebutted only by evidence establishing that the insurer's refusal to defend was based on 'more than an arguable difference of opinion' and exhibited 'a gross disregard for its policy obligations.'" The Court ultimately found "numerous issues of material facts disputed amongst the parties" regarding whether GEICO was properly put on notice of the lawsuit, and details discussing its claims handling.
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
03/10/26 Cooke v. Jean-Baptiste
Appellate Division, First Department
Appellate Division, First Department, Overturns Supreme Court, Bronx County, Decision Thereby Granting Defendants’ Motion for Summary Judgment on the Basis that Plaintiff Did Not Sustain a “Serious Injury” Within the Meaning of Insurance Law § 5102(d)
This matter arises from personal injuries alleged sustained by Plaintiff Cooke in connection with a motor vehicle accident that occurred on December 12, 2018. In her bill of particulars, plaintiff alleged that the subject accident caused, aggravated, or exacerbated injuries to her wrists, cervical spine, lumbar spine, shoulders, and knees. Plaintiff was involved in a prior, unrelated motor vehicle accident, which occurred on June 8, 2017. In her bill of particulars, plaintiff pleaded that she sustained “a significant limitation of use of a body organ or member” and “a significant limitation of use of a body function or system” and asserted a 90/180-day claim under Insurance Law § 5102(d).
Defendants filed a summary judgment motion on the issue that plaintiff did not suffer a “serious injury” within the meaning of Insurance Law § 5102(d). The Supreme Court, Bronx County, denied defendants’ motion. Defendants appealed to the Appellate Division, First Department.
The Appellate Division determined that the defendants met their burden of proof and established that there were no medical findings of resulting limitations in plaintiff's cervical spine, lumbar spine, right shoulder or wrists through their expert orthopedist’s report finding normal ranges of motion in each body part (see e.g. Solano v American United Transp. Inc., 243 AD3d 497, 498 [1st Dept 2025]; Rodriguez v Santos, 235 AD3d 564, 564 [1st Dept 2025]; Brito v Bethlehem Haulage, LLC, 232 AD3d 533, 534 [1st Dept 2024]). Regarding the left shoulder, defendants also established that plaintiff's alleged left shoulder injury was not causally related to the accident. Defendants’ expert attributed plaintiff’s left shoulder range of motion limitations to a degenerative joint disease. This opinion was evidenced by MRI reports revealing said degenerative conditions (see e.g. Krmic v Corrie, 235 AD3d 450, 450-451 [1st Dept 2025]; Burgos v Diamond Bricks Inc., 231 AD3d 529, 530 [1st Dept 2024]). The Appellate Division held that Defendants met their burden with respect to all of plaintiff’s alleged injuries by submitting MRI reports prepared by plaintiff's doctors, which identified degenerative conditions on each body part (see Alvarez v NYLL Mgt. Ltd., 120 AD3d 1043, 1044 [1st Dept 2014], affd 24 NY3d 1191 [2015]).
The Appellate Division found that plaintiff failed to raise an issue of fact. Plaintiff failed to submit her expert chiropractor’s report in admissible form. Nevertheless, plaintiff’s chiropractor did not address any of defendants’ experts’ opinions regarding plaintiff's injuries (see e.g. Brito, 232 AD3d at 534) or any of the degenerative findings identified on her diagnostic imaging (see e.g. McKenzie-Moses v Lelcaj, 238 AD3d 415, 416 [1st Dept 2025]; Krmic, 235 AD3d at 451-452; Giap v Hathi Son Pham, 159 AD3d 484, 486 [1st Dept 2018]). Furthermore, plaintiff’s chiropractor did not explain how the subject accident may have aggravated or exacerbated plaintiff’s injuries from the 2017 accident or any of her preexisting degenerative conditions (see e.g. Burgos, 231 AD3d at 530-531).
Upon review of the foregoing, Appellate Division, First Department, overturned the Supreme Court, Bronx County, decision, thereby granting defendants’ summary judgment motion on grounds that plaintiff did not suffer a serious injury within the meaning of Insurance Law § 5102(d).
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
[email protected]
Alexander G. Henlin
[email protected]
Iryna N. Dore
[email protected]
01/08/26 Harvey v. Union Mutual Fire Insurance Company
United States District Court, New Hampshire
Homeowners’ Policy Limits are Not Increased by Value of Stone Wall, but Carrier Must Pay Cost of Articles of Personal Property Worth Less than $500 Prior to Their Replacement
The Harveys’ home in New Boston, New Hampshire, caught fire on July 4, 2022, resulting in substantial damage. Their homeowners’ carrier determined that the actual cash value of the damage caused to the dwelling exceeded the policy’s limits, so it tendered the full limit of $457,000 to them.
The Harveys sued, claiming that they were entitled to an additional 10% of their limit ($45,700) under an endorsement that required the carrier to add that sum to the dwelling limit “[i]f there is no detached structure with a replacement cost exceeding $1,000.” The carrier took the position that a stone wall that Mr. Harvey had built himself (he had previously worked in construction) over the space of about 20 hours on successive weekends defeated the condition in the endorsement. They also sought payment for the replacement cost of certain individual articles of personal property valued at less than $500, even though they had not yet replaced them. The carrier had denied their request citing an endorsement that stated: “If the cost to repair or replace the property [subject to Coverage C] is more than $500, we will pay nor more than the actual cash value for the loss until the actual repair or replacement is complete.”
The Harveys sought declaratory relief and damages for breach of contract. The court construed a separate count for “bad faith breach of insurance contract” as a claim for breach of the implied covenant of good faith and fair dealing in the insurance contract.
On the carrier’s motion for partial summary judgment, the Court agreed with the insurer that the stone wall was a “structure” that defeated the Harveys’ position to additional coverage. The Court recited that, under New Hampshire law, policy construction is a question of law, with the goal of effectuating the contracting parties’ intent. To determine that the intent, courts must look to the “plain and ordinary meaning of the policy’s words in context.” Those terms will construed “as would a reasonable person in the position of the insured upon more than a casual reading of the policy as a whole,” which is an objective standard. Policy terms are give their “natural and ordinary meaning” when they are “clear and unambiguous.” Mere disagreement as to the proper interpretation of policy language does not demonstrate that the language is ambiguous, and a court may not “perform amazing feats of linguistic gymnastics to find a purported ambiguity simply to construe the policy against the insurer and create coverage where it is clear that none was intended.”
Looking to dictionary definitions of the term “structure” (“something…that is constructed”), the Court held that the stone wall fell within the plain meaning of the endorsement, and that the language did not embrace only buildings. It granted partial summary judgment to the insurer on that point. The Court found that the policy’s personal property coverage was ambiguous, however, holding that the term “the property” could reasonably be construed as implying either an aggregate loss or a per-article loss. The court therefore found that the policy was obligated to pay the replacement cost even for articles that had not yet been replaced, so long as the value of each was less than $500. It discounted an “absurd results” argument from the carrier on grounds that the carrier had drafted the endorsement.
02/06/26 IDC Properties, Inc. v. Chicago Title Insurance Company
U.S. District Court, Rhode Island
Carrier Did Not Act in Bad Faith Where Coverage Was “Fairly Debatable” in Sixteen-Year-Old Claim
Goat Island is a small island in Narragansett Bay, and is part of the city of Newport, Rhode Island. Formerly the site of the U.S. Naval Torpedo Station, the island was sold to a private developer in the 1960’s. In the 1990’s, another private developer called Island Development Corp. (“IDC”) sought to develop condominiums and an event venue on the island.
The venture was snakebitten. Those with a morbid interest in the history of the development and the sixteen years of title-insurance litigation, decisions, appeals, bench trial, and rulings on the merits should refer to the decision itself. In broad summary, though, Chicago Title issued a $10 million title insurance policy to IDC in October 1994. It insured IDC’s interests in the South and West units, its development and special declarant rights, and the 59 residential condominiums. One of the development rights was the right to declare certain reserved areas as an airspace master unit, which IDC did in December 1994.
In December 1997, IDC requested title insurance for the North Unit. Chicago Title declined to issue the coverage because it knew that individual condominium owners threatened litigation over a number of disputed issues. IDC obtained a title policy for the North Unit from another insurer before developing and building a restaurant and banquet venue called the Regatta Club.
As Chicago Title had anticipated, vexed litigation by the condo owners against IDC followed in both the Rhode Island superior and supreme courts. In 2005, the Rhode Island Supreme Court concluded that all three condominiums (North, South, and West) had not been properly created. For the first time, in July 2005, six years after the condo owners’ case was first filed but three months after the Rhode Island Supreme Court’s decision, IDC made a claim under its Chicago Title policy.
Chicago Title acknowledged the claim four times in July 2005 and requested documents from IDC. After multiple requests went unanswered, IDC belatedly provided certain information in November 2005. Seven days later, Chicago Title opened IDC’s claim and identified late notice as a potential issue, if the carrier had been prejudiced by the delay. Chicago Title continued to investigate the claim and conducted a partial EUO of IDC’s designee (it was suspended before completion, and it was not rescheduled).
In January 2008, Chicago Title disclaimed coverage on grounds of late notice, that the policy did not insure the North Unit, and that the claims were created after the date of the policy. IDC filed suit in 2009. Discovery battles, summary judgment motions, an appeal to the First Circuit, and a bench trial ensued. After fifteen years of litigation, in 2024, IDC won a judgment for $1.1 million plus interest and costs.
The decision here addresses the only remaining issue in the litigation: IDC’s bad-faith claim against Chicago Title. Ruling on both a motion in limine to exclude testimony about an unsigned draft endorsement from 1997 (granted) and summary judgment, the Court concluded that Chicago Title did not act in bad faith when it disclaimed coverage to IDC.
Rhode Island implies an obligation upon all insurers doing business in the state to respond to their insureds promptly and fully, and to investigate claims and subject those claims to appropriate review. The responsibility includes an obligation “to assemble all facts necessary for a fair and comprehensive investigation before it refuses to pay a claim” and may not base a defense to bad faith upon later-acquired information. It is the insured’s burden to “demonstrate an absence of a reasonable basis in law or in fact for denying the claim or an intentional or reckless failure to properly investigate the claim and subject the result to cognitive evaluation.”
On the facts of the claim, the court concluded that Chicago Title’s assertion of a late-notice defense was reasonable, that there was a reasonable basis for Chicago Title to disclaim based on a failure to cooperate, and that the claim investigation was not evidence of the carrier acting “unreasonably, recklessly, or in bad faith.” The claim was “fairly debatable,” as evidenced by the fact that the suit has persisted for almost 17 years after it was first filed. As a matter, of law, the court concluded that the carrier did not act in bad faith.
02/10/26 Patrick v. Blackboard Specialty Insurance Company
U.S. District Court, Massachusetts
General Liability Insurer Does Not Owe Coverage for Models’ Claims That Their Images Were Misappropriated to Advertise “Gentlemen’s” Clubs
Twenty professional models sued three Massachusetts-based strip clubs in 2019, alleging that the clubs used their images in commercial advertisements without their consent and without compensating them. The models’ case settled, and they secured an assignment of rights to pursue the club’s general liability insurer. The parties cross-moved for summary judgment.
The essence of the models’ claim was that the clubs inserted their images into Facebook and Instagram posts on the clubs’ respective social media pages. They asserted claims under the Lanham Act, for breach of various Massachusetts statues (including the consumer protection act, codified at Chapter 93A of the Massachusetts General Laws), and for a variety of common-law torts. Blackboard, the carrier, disclaimed under Coverage B (personal and advertising injury) based on exclusions for material first published prior to the start of the policy period and for infringement of copyright, patent, trademark, or trade secret.
The decision offers a good primer on the basic rules that govern insurance-coverage claims in Massachusetts. Policies are construed under general rules of contract interpretation, construing the words of the policy “in their usual and ordinary sense,” considering what an “objectively reasonable insured, reading the relevant policy language, would expect to be covered.” Whether a provision is ambiguous is a question of law; if the court determined that a term is ambiguous, the terms is construed against the insurer and in favor of the insured.” It is the insured’s burden to prove that a claim is covered in the first instance; thereafter, the burden shifts to the carrier to show that an exclusion applies. If the carrier meets that burden, then it shifts back to the insured to prove any exception to an exclusion.
The Court granted summary judgment to Blackboard. It quickly disposed of arguments that a duty to indemnity attached to images that were published outside of the policy period. Turning to the publication of images that fell within the time that the policy was in effect, the Court accepted that the policy’s exclusion for infringement of copyright “or other intellectual property rights” precluded coverage.
The models’ argument for coverage relied on an exception to the exclusion for the “use of another’s advertising idea.” In Massachusetts, that means that the models had to show that the clubs “took an idea for soliciting business or an idea about advertising” – the inquiry focuses on how the public’s attention is drawn to a business or a product, and not the business or the product itself. A non-advertising idea that is later repurposed for advertising is not, according to the Court, an “advertising idea.” The Court concluded that the allegations in the models’ complaint essentially alleged that the misappropriation of images themselves were not tantamount to the use of the models’ advertising ideas.
Finally, the Court construed a provision in a separate policy that precluded coverage for “personal and advertising injury” “arising out of the actual or alleged use of another’s images, photographs, likenesses, or personal attributes.” The Court noted that, in Massachusetts, “arising out of” “indicates a wider range of causation than the concept of proximate causation in tort law” and means “originating from, growing out of, flowing from, incident to, or having connection with.” The court found that this was what the models’ complaint alleged, and therefore that the claims fell outside of coverage.
The Court rejected an argument that the heading of the exclusion could be used to vary the exclusion’s terms. “As long as the meaning of the particular exclusion remains clear, its language must be given effect.” The court found that the exclusion’s text applied according to its plain terms and declined “to read the heading as a limitation on that plain language or to find that it renders the provision ambiguous.”
03/04/26 Maryanne Bombaugh v. Unum Life Insurance Co. of America
Massachusetts Appeals Court
Insured’s Purported Difficulty in Comprehending Insurance Policy Rider Does Not Render it Ambiguous
Bombaugh purchased a disability income policy in 1992. The policy provided replacement income to Bombaugh in the event that she became unable to perform the duties of her occupation due to a disability. The base policy provided her with a disability benefit of $9,371 per month. Two additional riders expanded the coverage. One of them specified that her maximum benefit would be increased with a cost-of-living adjustment:
On each anniversary of the first day of a period of disability which began while this rider was in effect, we will increase the Maximum Disability Benefit by multiplying the Maximum Disability Benefit in effect on the first day of the disability by the [Consumer Prive Index for All Urban Consumers] Factor to determine the new Maximum Disability benefit if:
1. you are disabled;
2. the disability is caused by an injury that occurs, or by a sickness that begins, after this rider became effect; and
3. the policy anniversary when your age is 65 has not occurred.
The rider went on to state: “If you are disabled on the policy anniversary when your age is 65, future payments for that disability will be based on the Maximum Disability Benefit in effect on that policy anniversary.”
Bombaugh became disabled in 2008. Unum paid her claim, raising her disability benefit each year with a cost-of-living increase. Unum, however, ceased to make cost-of-living increases after the anniversary of the policy following Bombaugh’s 65th birthday. Bombaugh sued. The Superior Court granted her summary judgment, and Unum appealed.
The Appeals Court reversed. It held that the interpretation of an insurance policy is a question of law that it reviews de novo, under rules that are the same as those governing the interpretation of any other contract. The objective is to construe the insurance policy “as a whole, in a reasonable and practical way, consistent with its language, background, and purpose.” Where the language is unambiguous, the insurance policy’s words are construed according to their plain meaning. The language of an insurance policy “is ambiguous only of it is susceptible of more than one meaning and reasonably intelligent persons would differ as to which meaning is the proper one.” “Controversy between the parties does not alone create an ambiguity, nor does difficulty in comprehension.”
Based on the grammatical structure of the rider, the Court concluded that the condition for a cost-of-living increase was that Bombaugh had to satisfy it at each recurrence, meaning that she had to be under the age of 65 at each policy anniversary. The Court also found that her proffered construction did not read the policy as written, and would render some of the language superfluous.
While the Court did acknowledge that there were ways that Unum could have made it clearer that it would cease to increase the amount of the disability benefit after Bombaugh turned 65, that fact did not render the language that was used ambiguous. “[D]ifficulty in comprehension does not equate with ambiguity.”
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.
01/20/26 Sociedad Concesionaria Metropolitana de Salud S.A. v. Webuild
Ontario Court of Appeal
The Enforcement of a Chilean Arbitration Award in Ontario Requires a Pit-Stop in Italy to Decide Liability
As there was no interesting coverage cases decided in Canada over the last two weeks, I thought I would discuss a case that considered whether the Ontario Courts will enforce a Chilean arbitral award. The Ontario Court of Appeal stated that it can usually recognize and enforce those awards but, this one is an exception. In this case, there is an underlying liability issue that has to be decided in Italy before there can be enforcement in Ontario.
Sociedad Concesionaria Metropolitana de Salud S.A. (“Sociedad”) is an entity that undertakes health care related infrastructure projects in Chile. News reports state that in 2015, an Italian company, Astaldi S.p.A. (Alstadi) signed a contract with Sociedad for the construction of the Félix Bulnes Hospital in Santiago, Chile. A dispute between Sociedad and Alstadi resulted in a 2021 arbitral award against Astaldi. That dispute and others forced Alstadi into insolvency proceedings in Italy. Webuild, which per various sites, is the largest engineering and general contractor group based Italy,is a global player in the construction sector. Socieded alleged that WeBuild assumed some of Alstadi’s liabilities. Sociedad took the position that WeBuild assumed Alstadi’s debt under the arbitral award and demanded payment from WeBuild. WeBuild contested its liability to pay the arbitral award on the basis that it did not assume that debt.
WeBuild is involved in several ongoing infrastructure projects in Ontario. In view of the fact that WeBuild is receiving revenues in Ontario, Sociedad brought this application in the Ontario Courts to enforce the Chilean arbitral award against WeBuild. WeBuild contested the factual assertion that it assumed liability for the Chilean arbitral award; whether it assumed that liability is a question that involves Italian law; that Ontario is not the jurisdiction to hear that liability dispute.
The motion or trial judge held that Webuild’s liability to pay the Chilean arbitral award is to be decided in Italy. Enforcement can occur in Ontario only if the Italian court confirms that WeBuild is liable to Sociedad. The motion judge characterized the proceeding as going beyond ordinary recognition and enforcement: There was no prior adjudication that Webuild owed Sociedad anything. Sociedad’s application requires Ontario to decide primary liability, not simply to enforce an existing judgment against Webuild. The core issues—how the Astaldi debt was treated under Italian insolvency law and whether Webuild assumed that debt—were questions of Italian law embedded in Italian restructuring proceedings.
Applying the forum non conveniens test, the motions court held that Italy was clearly the more appropriate forum to decide liability, given the concentration of the parties, proceedings, and applicable law in Italy, and stayed the Ontario enforcement application pending an Italian determination as to WeBuild’s liability to pay the award.
Socieded appealed.
The Ontario Court of Appeal held that in the usual case Ontario Courts will recognize and enforce a foreign arbitral award. However, this is not “a usual case”. There is a preliminary issue as to whether WeBuild is liable to pay the arbitral award. The Court of Appeal held that the motion judge properly separated the liability question from any eventual enforcement in Ontario and applied the usual forum non conveniens factors. Given the centrality of Italian law, the locus of the insolvency and restructuring processes in Italy, and the limited Ontario connection beyond potential assets, the Court found no basis to interfere with the motion judge’s conclusion that Italy was the more appropriate forum. The appeal was dismissed and the stay of the enforcement claim was maintained.
This decision leads to a few ‘takeaways’ for litigators:
- Canadian courts may decline jurisdiction to enforce a foreign judicial or arbitral award if the enforcement proceeding requires a first‑instance liability determination that is better suited to a foreign forum.
- Enforcement vs. liability must be separated: Liability for a debt is a merits dispute that is subject to the principles of forum non conveniens.
- Centre of gravity beats enforcement convenience: where the core liability issues turn on foreign insolvency and contract law, unfolding in foreign court‑supervised proceedings, a Canadian court is unlikely to displace that forum even if the alleged debtor has assets in the Canadian province or territory in issue.
