Volume XXVII, No. 5 (No. 704)
Friday, August 15, 2025
A Biweekly Electronic Newsletter
As a public service, Hurwitz Fine P.C. is pleased to present its biweekly newsletter, providing summaries of and access to the latest insurance law decisions from the New York, New Jersey, and Connecticut appellate courts and Canadian appellate courts. The primary purpose of this newsletter is to provide timely educational information and commentary for our clients and subscribers.
In some jurisdictions, newsletters such as this may be considered Attorney Advertising.
If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at [email protected] or call 716-849-8900.
You will find back issues of Coverage Pointers on the firm website listed above.
Dear Coverage Pointers Subscribers:
Do you have a situation? We love situations.
Hey, don’t forget, we have a Long Island office staffed with terrific lawyers, a Rochester office with another great group, we have folks in Albany, and practice in Connecticut and New Jersey as well. Keep those cards and letters coming in!
For those who know me best, you know that I have a passion for US presidential history. Theodore Roosevelt became president when President William McKinley was assassinated at the Pan American Exposition held in Buffalo, in 1901. The site of the inauguration, Buffalo’s only national park, together with the building and its grounds, are overseen by the TR Site Foundation. I was just selected as a Trustee of that Foundation. Here’s a picture of TR welcoming me. Very kind of him to return, 106 years after his death, for that purpose. The TR Inaugural website was just updated this week
Fascinating case reported on by Ryan Maxwell in his column. It’s a case where a carrier stipulated to certain facts in a case, which came back to haunt them in a subsequent decision.
You will also find, in my column, a timely case on policy rescission which discusses, in a case which may be of first impression, the impact of assigned consent judgments. Lee has blessed us with a whole bunch of Connecticut coverage cases and Evan Gestwick offers New Jersey opinions and summaries.
LinkedIn:
For those who need to keep up to date on insurance coverage between issues of Coverage Pointers, we’re happy to help. Just follow me on LinkedIn and we’ll keep you up to date. I’m easy to find – my linked in name is (ready for this unusual and unexpected name): Kohane (now there’s a shock) and you can find me here: https://www.linkedin.com/in/kohane/
Need a Mediator or Arbitrator, Give a Call:
A growing percentage of my practice has been a mediator (and sometimes as an arbitrator) in insurance coverage, commercial, personal injury, and other disputes. With a robust national client base, I am regularly called on by friends and colleagues from around the country, folks who know me and trust me, to help resolve disputes. Often, particularly in mediated matters, I know the insurers and lawyers on both (or several) sides of the dispute. Since they all trust me as a fair dealer, they feel comfortable in having me try to help close the file (and avoid precedent). Just pick up the phone, 716.849.8942 or send an email to [email protected] and I’ll try to help.
Newsletters:
We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:
- Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at [email protected] to be added to the mailing list.
- Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at [email protected] to subscribe.
- Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework, and governmental agencies. Contact V. Christopher Potenza at [email protected] to subscribe.
- Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at [email protected] to subscribe.
Gas Prices Plunge – 100 Years Ago:
Buffalo Post
Buffalo, New York
15 Aug 1925
PRICE DOWN
TO 18 CENTS
Surplus Stocks Believed Reason
For Fight Between the
Standard-Independents.
AWAIT NEW MOVES
Battle Rages Though East
And south.
The gasoline rate war that has been on for the past week will probably result in the drop of the price of the fuel another cent today. A week ago, the Standard Oil company cut the price of its gasoline to 23 cents a gallon. The independent competitors followed suit by making even greater reductions until yesterday the newest low mark was reached, the gas selling at some of the curb pumps for as low as 18 cents.
The Standard Oil is still selling at 23 cents hereabouts, but it is expected that the New York division of Standard will order another reduction this week to meet the slashes of the independents.
Surplus gas stocks are believed to be the cause for the newest price war. Many dealers predict that the end of the summer and the early fall will find gas prices at their lowest level in many years giving as their reasons the tremendous increase in the use of the fuel and the great number of autos being turned out.
The Standard Oil of New Jersey last night made their second cut since they precipitated the war a week ago by cutting one more cent off the price, to take effect all along the eastern seaboard.
Peiper on Property (and Potpourri):
Greetings from a very quiet column this week. We do have a potpourri offering on evidentiary thresholds for a motion to dismiss. If that doesn’t entice to read on, we understand. Next time, we’ll include anachronistic AI images for our Editor greeting someone else from history’s past. Watch this space.
Speaking of watching this space, we are putting the finishing touches on a series of webinars which we hope to kick off as soon as next month. We do look forward to interacting with you on a wide array of insurance topics starting with a Property 101 as written, produced, and recorded by yours truly. Hope to see you all very soon.
That’s it for this week. It has been a remarkably good Summer here in the Northeast. Soak up the last two weeks before the kids return to school. Football is right around the corner!
Steve
Steven E. Peiper
[email protected]
What Was It? – 100 Years Ago:
Finger Lakes Times
Geneva, New York
15 Aug 1925
General Motors Denies
New Type of Auto Fuel
Detroit, Aug. 15 0 Reports of the discovery of a new automobile fuel that would revolutionize the motor car industry are characterized as ridiculous by A.P. Sloane, Jr., president of the General Motors Corp. Mr. Sloane took cognizance of reports published on the strength of a statement reported to have been made before the annual convention of the American Chemical society at Los Angeles.
“My attention has been called to recent statements in the public press relative to revolutionary inventions in the way of a type of automobile for new motor fuel or something else new or radical.
“These reports are ridiculous on their face for General Motors has recently announced new series of cars which should be a sufficient answer. In addition to this there is absolutely nothing to form even the slightest foundation for such a statement.
Lee’s Connecticut Chronicles:
Dear Nutmeggers:
Making up for lost time, the Connecticut courts pumped out a number of insurance coverage decisions over the last month. We’ve picked a few for your review this edition. I’m most interested in the final coverage outcome of Buley v. Plymouth involving theft of cryptocurrency. The HO-3 Special Form provides nominal sublimits for theft of money, bank notes, securities, accounts, and other commercial paper-type items. It will be an uphill battle for the insured to argue that its stolen cryptocurrency account is not an “account” or other form of money or security within the meaning of the policy subject to a sublimit. If there’s a reported decision, you’ll read about it here.
Looking forward to the kids going back to college in a few weeks. It’s a been a long, hot summer.
Until next edition, keep keeping safe.
Lee
Lee S. Siegel
[email protected]
Not That! – 100 Years Ago:
The Chat
Brooklyn, New York
15 Aug 1925
$10,000 Verdict
How would you like to have it rendered against you on account of an accident on your property?
Insurance policies are written for as low as $5.00 a year.
Without obligation, get particulars from
Albert S. Schwarz
Insurance
BULKLEY & HORTON CO.
57 Lafayette Avenue
______
Telephone, Nevins 5400
Ruffner’s Road Review:
Dear Readers,
It seems like just yesterday that football season came to a disappointing end but going to the first preseason game and watching the Bills Training Camp get featured on Hard Knocks has me excited for this season to start!
In our first case this week, Chinn v. MVAIC, the court considered whether a triable issue of fact was raised as to whether the petitioner established that he was not operating an uninsured motor vehicle at the time of the alleged hit-and-run incident, as a qualified person under Insurance Law § 5202 is defined to exclude the owner of an uninsured motor vehicle. In the next case, the Appellate Court upheld the Supreme Court’s decision vacating a default judgement, as the defendant demonstrated reasonable excuse and a potentially meritorious defense.
Until next time,
Kyle
Kyle A. Ruffner
[email protected]
A Tip of the Hat – 100 Years Ago:
The Kansas City Post
Kansas City, Missouri
15 Aug 1925
My Dear Miss Fairfax – I am a girl 16 years old and do not make “dates” because I don’t consider myself old enough to do so yet. Now, I have many boy friends and there is one who is very nice to me, but he very seldom tips his hat when greeting me and he’ll often walk on the inside of the sidewalk I’m sure that he knows better. Now, Miss Fairfax, why doesn’t he do it? I would think a lot more of him if he did so, as it is very embarrassing at times. It would be difficult for me to tell him as I know it would hurt him deeply. What do you advise? – Mickey.
It is surprising the many boys who should know better that really are not aware of these little necessary proprieties. By a little maneuvering you can arrange to be always on the inside of the walk. You can treat the matter jokingly but cause him to realize that your proper place is there. In the matter of tipping the hat, can you not ask some mutual boy friend to inform him of this necessary courtesy?
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers Subscribers:
I’ll cut to the chase. Today’s column has a Second Circuit decision you won’t want to miss.
Until next time,
Ryan
Ryan P. Maxwell
[email protected]
Not That! – 100 Years Ago:
The Punxsutawney Spirit
Punxsutawney, Pennsylvania
15 Aug 1925
U.S. Senate Likely to
Have Woman Member
WASHINGTON, D.C., Aug 15. – United States Senate, which has been called the “most exclusive gentlemen’s club in the world,” is likely to have a woman member soon – the second in its history.
Mrs. Edwin F. Ladd, widow of the late Senator from North Dakota, is to be appointed by Governor Sorlie to fill out the unexpired term of her husband according to reports reaching North Dakotans in Washington.
The Governor is quoted as stating to friends of Mrs. Ladd that “while I have not finally made up my mind to appoint Mrs. Ladd to the vacancy, I am of the opinion she is best fitted to fill at this time the position left vacant by her husband.” …
Storm’s SIU:
Two interesting case digests for you:
- Insured’s Fraudulent Misrepresentation Claim Barred by the “Gist of the Action Doctrine;” and Statutory Bad Faith Claim Dismissed.
- Insurer Granted Summary Judgment as it Provided Expert Testimony Attributing the Property Damage to Poor Maintenance and Drainage Issues, Whereas the Insured Offered No Expert testimony of Alleged Storm Damage.
Have a great two weeks!
Scott
Scott D. Storm
[email protected]
A Poetic Sentence – 100 Years Ago:
The Buffalo News
Buffalo, New York
15 Aug 1925
JUDGE TAKES JOB OF
MAKING AN AMERICAN
NEWBURGH, N.Y., Aug. 14. – Morris Marks, found guilty of using an American flag to clean his automobile, was sentenced by Recorder Decker yesterday to visit Washington’s headquarters once each week until Thanksgiving, learn the history of the United States and its flag and memorize a poem on the flag.
Poems suggested by the recorder were the “American Flag” by Drake, and ‘When Freedom form Her Mountain Height.”
The probation officer will see that Marks, who is 19 years old, carries out the provisors of the sentence.
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
Summer is flying by! Since we are halfway through August, I am crafting an elaborate schedule to squeeze in our remaining summer activities between weddings. Next up is finding a good vegetarian wellington recipe.
This week’s case from the Minnesota Supreme Court considered whether an insurer was required to cover the cost of repairs in compliance with the state code as well as overhead and profits under Minnesota Statutes section 65A.10, subdivision 1. Only the roof shingles were damaged, but the installation of new sheathing was required under the state code. The Minnesota Supreme Court clarified that the statute required the insurer to cover the new sheathing to bring it up to code, but the insured did not establish that the overhead and profits fell within the scope of the statute.
See you in a fortnight,
Kate
Katherine A. Fleming
[email protected]
This Bud’s for You – 100 Years Ago:
The Buffalo News
Buffalo, New York
15 Aug 1925
POLICE HOLD JAMESTOWN
MEN FOR HAVING BEER
SALAMANCA, Aug. 14. – Felix S. Serio and Augustine Serio, 757 East Second street, Jamestown, were arrested here by State Troopers and arraigned before U.S. Commissioner W.J. Simms on charges of possessing and Transporting liquor. Troopers stopped the automobile in which they were driving from Olean to Jamestown and found concealed within the car 20 cases of beer. The men were released by Commissioner Simms on bail of $5000 each, for hearings on August 19. Both furnished bail.
Gestwick’s Garden State Gazette:
Dear Readers:
Fresh off a tremendous flight delay, in which my flight (originally scheduled to land in Buffalo at 7:17 p.m.) did not so land until approximately 1:15 a.m.), I bring you an interesting New Jersey coverage case considering the timeliness of a plaintiff’s UIM claim.
Not all is bad—tonight, we have our annual summer party as a Firm. Work is always more fun with colleagues like the ones we have here!
Stay cool out there.
Evan
Evan D. Gestwick
[email protected]
Apparently Five Years After a Divorce One Still Needed Gov’t Permission to Remarry – 100 Years Ago:
Buffalo News
Buffalo, New York
15 Aug 1925
EX-BUFFALONIAN GIVEN
RIGHT TO WED AGAIN
Major John K. White, former Buffalonian now residing in London, where he expects to study for the English bar, is at liberty to remarry, according to an order signed Friday by Justice Lytle in Supreme court. Major White was a member of the A.E.F., afterward being appointed one of the admiralty attorneys for the United States shipping board.
Mae S. White obtained a divorce from Major White in 1920. Five years having lapsed since the final decree, Justice Lytle granted Major White’s petition “to marry again in the same manner as though the said Mae S. White were actually dead.”
Court attendants termed the appeal an unusual one, the first of its kind in more than five years.
O’Shea Rides the Circuits:
Hey Readers,
Not much going on in my neck of the woods other than avoiding the heat. The dogs have officially usurped my parents’ pool and clogged the filter on several occasions. But it beats being trapped inside all day.
This week I have a case from the Sixth Circuit regarding an intentional exclusion found in a homeowners policy. The conduct giving rise to the claim was a deadly shootout. Based upon the common intentional act exclusion.
Ryan
Ryan P. O’Shea
[email protected]
Still Too Much Traffic – 100 Years Ago:
The Heral Statesman
Yonkers, New York
15 Aug 1925
BRONX PARKWAY IS FINALLY
COMPLETED AND IN USE TODAY
Engineer-Secretary of the County Park Commission
Without Ceremony Opens Span Between Bronx
Park and The Kensico Dam – No Detours
At 11 o’clock this morning, Jay Downer, engineer, and secretary of the Westchester Count Park Commission informally opened the new bridge constructed by the Commission spanning the New York Central Railroad tracks near Valhalla.
Immediately following the opening of the new structure, traffic was permitted to course along the 15 ½ mile Bronz River Parkway without detour. With the completion of the bridge, the last of the grade-crossings along the thoroughfare are eliminated and the bridge closes the last remaining gap in the parkway which follows the Bronx River from Bronx Park to Kensico Dam. The parkway drive has heretofore been used by large numbers of automobiles as far as North White Plains.
A bridge crossing the railroad tracks at Scarsdale was recently opened to traffic.
Some finishing work still remains to be done and a celebration to formally open the Parkway is contemplated in the latter part of October. George Gordon Battle is chairman of the committee in New York City having charge of the proposed celebration.
LaBarbera’s Lower Court Library:
Dear Readers:
Some of you may remember that my goal this year was to keep the greenhouse plants alive for the entire summer. Proud to report that nothing has withered away. That being said, I was unaware that in closed environments, apparently, one is supposed to hand pollinate vegetable plants. Suffice it to say, despite the daily waterings, the yield this year is not looking promising.
Nothing new from the trial courts from the last three weeks. I was, however, able to find a case from July, granting a motion to consolidate a negligence action with a subrogation action. Although insurance coverage actions are ordinarily never consolidated with negligence actions based on the inherent prejudice, the court discussed the circumstances in which consolidation would be beneficial, such as a subrogation action.
Until next time…
Isabelle
Isabelle H. LaBarbera
[email protected]
Bounced Because of Belief in Evolution – 100 Years Ago:
The Herald Statesman
Yonkers, New York
15 Aug 1925
Miss Scopes Sister of Dayton
Man, to Teach at Tarrytown
Young Woman, Who Lost Her Position in Kentucky
Because Of Evolution Views, To Be
An Instructor at Private School for Girls
Lexington, Ky., Aug. 15. – Miss Lela V. Scopes, sister of John T. Scopes, convicted violator of the Tennessee anti-evolution law, announced yesterday she had signed a contract to teach at the Highland Manor School for Girls at Tarrytown, N.Y. Miss Scopes was refused reappointment to her position in the Paducah, Ky., Schools because she, like her brother, accepted the evolution theory.
Lexi’s Legislative Lowdown:
Dear Readers,
I can’t believe we are nearing the end of summer. I am planning to spend this weekend outdoors while it’s still warm!
This week we discuss legislation seeking to regulate Consumer Litigation Financing.
Thanks for reading,
Lexi
Lexi R. Horton
[email protected]
Rescission Lawsuits, Even Then. By the Way, I Checked. Eventually the Insurer Paid the $$ – 100 Years Ago:
The Ithaca Journal
Ithaca, New York
15 Aug 1925
Sues to Prevent the Payment of $75,000
Insurance Policy
Jackson, Tenn., Aug. 15. – Suit to prevent the payment of an insurance policy for $75,000 on the life of the late Judge J.W. Ross, of Federal Court, for the Western District of Tennessee, on the grounds that the recent death of Judge Ross was caused by “self-destruction by drowning,” was filed in United States District Court yesterday by the International Life Insurance Company at St. Louis. The bill alleges that fraudulent statements were made at the time application was made for the insurance, which was of the joint type, by Judge Ross, Thomas B. Carroll, and J.L. Lamping.
Physicians who examined the body of Judge Ross after his automobile had plunged into a creek near Jackson July 8, for alleged irregularities in connection with the failure of the People’s Savings Bank. Carroll, former cashier of the bank, was indicted with Judge Ross and is now at Liberty under bond to appear for trial next month on a charge of embezzlement of more than $300,000.
Victoria’s Vision on Bad Faith
Dear Readers,
One more wedding this weekend to close out the 2025 wedding season, though it is going to be another hot one (86 degrees).
This week I have a decision from the Northern District of Indiana, where the Court denied the insurer’s motion to dismiss claims for breach of contract and bad faith.
Have a great weekend,
Victoria
Victoria S. Heist
[email protected]
Love Dem Foxes – 100 Years Ago
Daily Sentinel
Rome, New York
15 Aug 1925
Annual Convention
Of Fox Breeders
Utica, Aug. 15. – Dr. W. A. Young, Boonville, was re-elected president of the New York State Fox Breeders’ Association at the annual convention held yesterday at Hotel Utica. About 50 members of the organization were present. The gathering closed with a banquet, during which several speakers were introduced, all of the authorities on different phases of the fox industry. Dr. L.J. O’Reilly national chairman, presided.
Editor’s Note: I Checked. In Case You Wanted to Join, the Association No Longer Exists. No Reports Since 1935.
Shim’s Serious Injury Segment
Hi Readers,
Since our last column, things have not looked promising for the New York baseball clubs. Despite their numerous trade-deadline acquisitions, the Mets have gone 8-13 since the All-Star Break and lost eleven of their last twelve games including seven in a row dating back to August 3rd. The Yankees have lost seven of their last ten games as well, and Devin Williams’ struggles in the 9th inning have continued. It may not be long before newcomers, David Bednar and Camilo Doval, start seeing save opportunities. With the Yankees just one (1) game ahead of the Guardians, and the Mets just two (2) games ahead of the Reds in the Wild Card standings, there is little margin for error the rest of the season.
In this column I have shared another case decided in New York County Supreme Court. The Court granted defendant’s summary judgment motion, in part, based on plaintiff’s alleged failure to prove a serious injury in accordance with the threshold requirements of Insurance Law § 5102(d). However, the defendant’s summary judgment motion failed with respect to permanent consequential limitation and significant limitation of use due to quantifiable limits on plaintiff’s range of motion.
See you next time!
Stephen
Stephen M. Shimshi
[email protected]
Beats Adhesive Tape, Any Day of the Week – 100 Years Ago:
The Buffalo Times
Buffalo, New York
15 Aug 1925
QUICKEST WAT TO
REPAIR AUTOS
Time Has Pren Superiority
Of Welding Over
Other Auto Repair Methods
For a number of years there were many persons skeptical about the manner in which welding could be used to effect permanent repairs on automobiles and other pieces of broken machinery. But autos in particular. Years of actual demonstrations of the superiority of this form of repair work have shown the most skeptical how successful this is and one plant in Buffalo where this has been demonstrated time and again is at the Niagara Welding Company at No. 352 Niagara Street.
North of the Border:
I’m writing this from the Brussels Airport while enroute to Entebbe, Uganda, for a three-week safari. What we will see, and experience can only be imagined. See you on the other side of fabulous.
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]
- Another Win for an Insurance Broker
- Lots of Good Stuff in this One. A Fine Discussion About Policy Rescission Based on Material Misrepresentation, A Very Interesting Holding — One of First Impression Finding That a Consent Judgment Against a Policyholder with an Assignment of Claims and Promise Not to Recover from the Insured is Not a Release and Can Be Enforceable. The Court Did Not Discuss Whether the Amount of the Confessed Judgment Was Subject to Attack
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
- Insurer’s Motion to Dismiss Doomed by Insufficient Evidence
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- Failure to Procure Insurance Not a Basis for Apportionment Claim
- Auto Carrier Owes No Duty to Adverse Driver
- Claim that Insurer Intentionally Failed to Update HO Policy to Account for Cryptocurrencies, Sufficient to Plead Bad Faith
- Residence Relative Determination Destined for Trial
- Employers Liability Exclusion Precludes Coverage
RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]
- Court Finds Triable Issue of Fact as to Whether Petitioner Was Operating an Uninsured Motor Vehicle at the Time of the Accident
- Appellate Court Upholds Decision Vacating an Order Compelling MVAIC to Pay Judgment Pursuant to Insurance Law § 5210
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- Stipulated Facts Leads to Proximate Cause Finding at Bench Trial That Requires Additional Insured Coverage. Both Parties Pay Their Own Way
STORM’S SIU
Scott D. Storm
[email protected]
- Insured’s Fraudulent Misrepresentation Claim Barred by the “Gist of the Action Doctrine;” and Statutory Bad Faith Claim Dismissed
- Insurer Granted Summary Judgment as it Provided Expert Testimony Attributing the Property Damage to Poor Maintenance and Drainage Issues, Whereas the Insured Offered No Expert Testimony of Alleged Storm Damage
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- Insurer Required to Cover the Cost of Repairs in Compliance with the State or Local Code that Governs the Damaged Portion of the Property. Overhead and Profit Not Within the Scope of the Statute
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
- Appellate Division Upholds Dismissal of Uninsured Motorists Claim as Untimely
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- Neighborhood Shootout Is Not an Accident, No Coverage Afforded Where Passenger Vehicle Is Fatally Injured
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Court Grants Motion to Consolidate Negligence Action with Subrogation Action
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- Bill S1104A Seeks to Enact the Consumer Litigation Funding Act to Promote Consumer Protections Related to Consumer Litigation Funding
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- Indiana Court Denies Insurer's Motion to Dismiss Finding Bad Faith Sufficiently Pleaded
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
- A New York Court Finds that a Plaintiff Failed to Establish a “Serious Injury” Within the Meaning of Insurance Law § 5102(d) With Respect to “Permanent Loss of Use” and “90/180 Days” Categories
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- Insurance Broker Liability in Saskatchewan
That’s all she wrote. See you in two.
Dan
Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut and New Jersey.
In addition, Dan D. Kohane is a Foreign Legal Consultant, Permit No. 0119144, issued by the Law Society of Upper Canada, and authorized to provide legal advice in the Province of Ontario on matters of New York State and federal law.
NEWSLETTER EDITOR
Dan D. Kohane
[email protected]
ASSOCIATE EDITOR
Agnes A. Wilewicz
[email protected]
COPY EDITOR
Evan D. Gestwick
[email protected]
INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
[email protected]
Steven E. Peiper, Co-Chair
[email protected]
Michael F. Perley
Agnieszka A. Wilewicz
Lee S. Siegel
Brian F. Mark
Scott D. Storm
Ryan P. Maxwell
Kyle A. Ruffner
Katherine A. Fleming
Evan D. Gestwick
Ryan P. O’Shea
Isabelle H. LaBarbera
Lexi R. Horton
Victoria S. Heist
FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
[email protected]
Michael F. Perley
Scott D. Storm
NO-FAULT/UM/SUM TEAM
Dan D. Kohane
[email protected]
Ryan P. O’Shea
[email protected]
Kyle A. Ruffner
[email protected]
APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Topical Index
Peiper on Property and Potpourri
Lee’s Connecticut Chronicles
Ruffner’s Road Review
Gestwick’s Garden State Gazette
LaBarbera’s Lower Court Library
Lexi’s Legislative Lowdown
Victoria’s Vision on Bad Faith
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
08/13/25 Spa Castle, Inc. v. Choice Agency Corp.
Appellate Division, Second Department
Another Win for an Insurance Broker
In March 2019, the plaintiffs commenced this action against the defendant Solomon Agency Corp., an insurance broker alleging that the broker failed to procure appropriate insurance coverage for the insured.
As a general principle, insurance brokers have a common-law duty to obtain requested coverage for their clients within a reasonable time or inform the client of their inability to do so). Absent a specific request for coverage not already in a client's policy or the existence of a special relationship with the client, an insurance agent or broker has no continuing duty to advise, guide, or direct a client to obtain additional coverage.
Here, the broker established its prima facie entitlement to judgment as a matter of law dismissing the complaint insofar as asserted against it by submitting transcripts the deposition testimony of the plaintiffs' CEO and president and the defendant's vice president of operations, which demonstrated that the plaintiffs did not make a specific request for a particular kind of insurance coverage that the defendant failed to procure. The insured’s testimony among other things confirmed that he did not remember discussing specific risks that the insureds were seeking to insure against, only that the insureds needed general liability insurance.
GL coverage was purchased and the case dismissed.
08/07/25 Geiger v. Hudson Excess Insurance Company
Appellate Division, First Department
Lots of Good Stuff in this One. A Fine Discussion About Policy Rescission Based on Material Misrepresentation, a Very Interesting Holding—One of First Impression Finding That a Consent Judgment Against a Policyholder with an Assignment of Claims and Promise Not to Recover from the Insured Is Not a Release and Can Be Enforceable. The Court Did Not Discuss Whether the Amount of the Confessed Judgment Was Subject to Attack
Hudson Excess Insurance Company and Lancer Indemnity Company, each issued CGL policies to Vola Corp., which operated a night club/restaurant under the name Sorry not Sorry in Forest Hills, Queens. The underlying plaintiffs, all professional models and social media influencers, allege that Vola improperly and knowingly used their images and likenesses in advertising without their consent and without payment.
Both carriers denied requests for coverage. The underlying cases were settled with a consent judgment which Vola assigned to plaintiffs its right to prosecute its coverage claims against Hudson and Lancer and to recover the amount of the judgment and defense costs. Plaintiffs then commenced this action against Hudson and Lancer seeking, among other things, a declaration that Hudson and Lancer had a duty to defend and indemnify Vola in the underlying federal action.
The evidence proffered by Hudson was sufficient to meet its burden on a motion for summary judgment. Hudson's submissions established that in its insurance application Vola asserted that the insured premises was a restaurant and bar with 70% of its income derived from food sales and 30% from the sale of alcoholic beverages; had restaurant operating hours of 12 p.m. to 9 p.m.; did not provide entertainment or have a stage or dance floor; did not involve hookahs or other communal smoking devices; lacked consumption promotions such as "happy hour" and "ladies night"; and did not close later than 2 a.m. On its application, Vola left the boxes for DJ, exotic/go-go dancers/adult entertainment, live bands, stage/floor show or contests unchecked.
That simply wasn’t true. The evidence submitted by Hudson establishes that, contrary to its application representations, Vola advertised Sorry Not Sorry on social media as opening "at 10PM with an open bar between 11PM and 1AM," offering "$150 bottles of alcohol until 4AM," and featuring exotic dancing, DJs, a hookah bar/lounge, and drink specials.
Hudson's senior underwriter's he affirmed that "[b]ut for Vola's concealments and misrepresentations, Hudson Excess would not have issued the Policies to Vola because Hudson Excess' underwriting guidelines prohibited doing so." There was insufficient proof submitted by the bar in response.
As to Lancer, the court found that it had a duty to defend the bar, . "If any of the claims against [an] insured arguably arise from covered events, the insurer is required to defend the entire action.
Plaintiffs also alleged that their images were used negligently and, as Lancer acknowledges, Lancer's policy provided coverage for at least two of the instances alleged in the Vola action. Thus, based on these allegations, the complaint did not discharge Lancer's duty to defend, as the motion court correctly found.
As to the duty to indemnify, the underlying Vola action was resolved by a settlement agreement including a consent judgment, by which plaintiffs agreed to forgo execution of the judgment in consideration for Vola's assignment of its rights against its insurers to plaintiffs. Lancer argues that because the language of the settlement agreement contains a "release," it relieves its insured (Vola) of any liability, thereby extinguishing any duty Lancer had to indemnify.
Plaintiffs, however, argue that the agreement not to execute the judgment in exchange for the assignment of the rights of the insured did not constitute a "release" and did not mean that Vola was still not "legally obligated" to pay the judgment, and therefore Lancer still had a duty to indemnify. A release is an executed agreement that requires no further performance, effecting an outright cancellation or discharge of the entire obligation. "[A] valid release [generally] constitutes a complete bar to an action on a claim which is the subject of the release".
A covenant not to execute a judgment is not a complete release from liability. Rather, a covenant not to execute constitutes an agreement to exercise forbearance from asserting any claim which either exists, or which may accrue regardless of any potential liability. A covenant not to execute is distinguishable from a release, since a release eliminates or destroys liability while the covenant . . . does not relinquish a right or claim or extinguish a cause of action, but recognizes the continuation of the obligation or liability, and the party making the covenant agrees only not to assert any right or claim based upon the obligation".
Contrary to Lancer's allegations, we do not read the settlement agreement constituting a general release. The settlement agreement, with its assignment and covenant not to execute, was intended to be read and interpreted together with the consent judgment. In the absence of anything to indicate a contrary intention, instruments executed at the same time, by the same parties, for the same purpose, and in the course of the same transaction will be read and interpreted together, it being said that they are, in the eyes of the law, one instrument.
The consent judgment, so ordered in the Vola action on January 22, 2020, incorporated the settlement agreement by reference and, therefore, these documents must be read together. Although the document is entitled "Settlement Agreement and Release, “it cannot be read as a release, but rather should be considered as a covenant not to execute. Unlike a release, "[a] covenant not to [execute] is not a present abandonment or relinquishment of a right or claim . . . but is an agreement whereby an injured party promises not to assert a claim against others in exchange for some consideration; [and] unless the consideration given fully satisfies the injured party's claim, the covenant not to [execute] does not release the others from liability".
A stipulated judgment, accompanied by a covenant not to execute and an assignment of claims can be enforced against an insurer. It is not difficult to find justification for the prevailing view when we consider that any scenario wherein an insured is assigning its claims against its insurer to a plaintiff, in exchange for a covenant not to execute, necessarily takes place when the insured has been abandoned by its insurer. In New York, an insurer that breaches its duty to defend a claim for loss that is covered under its policy will be held liable for the insured's reasonable settlement of that claim, regardless of whether the insurer consented to such settlement. Thus where, like here, the insurance provider is the one potentially in breach of the insurance contract, the insured is justified in taking affirmative steps to limit its own liability by assigning its claims against its insurer to the plaintiff in exchange for a covenant not to execute on the consented to judgment, as long as the insured has acted reasonably and in good faith (which is not in dispute here).
In sum, since the settlement and consent judgment did not relieve Lancer from legal liability, they did not preclude a finding that Lancer had a duty to defend and indemnify, limited to those instances which occurred during the policy period (March 31, 2015, through March 31, 2016). Accordingly, Supreme Court should not have found that Lancer had no duty to indemnify. However, contrary to plaintiffs' contention, neither the settlement agreement nor the consent judgment constituted an admission of liability against the insurer, only the right to attempt to enforce the judgment against Lancer. Thus, the issue of whether Lancer has a duty to indemnify is denied at this time pending the resolution of liability.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
08/13/25 Fabi v. Prudential Ins. Co. of America
Appellate Division, Second Department
Insurer’s Motion to Dismiss Doomed by Insufficient Evidence
Plaintiff commenced this action against Prudential asserting that she was the intended beneficiary of a life insurance policy that Prudential issued to the decedent. Upon receiving notice of the suit, Prudential immediately moved to dismiss under CPLR § 3211(a)(1) and 3211(a)(7).
With regard to Prudential’s Section 3211(a)(1), the court noted that the movant needed to produce “documentary evidence” to show that the plaintiff’s claims were utterly refuted. To qualify as “documentary evidence,” the material proffered needed to show that it was “unambiguous, authentic and undeniable.” Here, Prudential did not meet that burden when it attempted to introduce an insurance form and an audio recording of the decedent in support of its motion.
In addressing the Section 3211(a)(7) portion of the motion, the Court noted that movant must demonstrate that the operative pleading does not support a cognizable legal theory. Here, too, the Court ruled that Prudential did not meet its burden.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
07/23/25 Maro v. Merrill [decision not yet available]
Superior Court of Connecticut, Stamford
Failure to Procure Insurance Not a Basis for Apportionment Claim
The Superior Court dismissed the defendant’s apportion cause of action that alleged that the third-party defendant-insurers failed to provide adequate insurance. Because the claim was not one for bodily injury, wrongful death or property damage, the court lacked subject matter jurisdiction under the apportionment statute.
Here, the plaintiff alleged he had been injured at a league hockey game at Chelsea's skating rink, in Stamford, and claimed Chelsea was negligent because it failed to require the hockey league "to maintain adequate insurance coverage." In the apportionment complaint against its broker and insurer, Nationwide, Chelsea alleged that they failed to provide adequate coverage and to disclose to Chelsea and the league the coverages and exclusions in the policy.
The third party, i.e., apportionment, defendants, moved to dismiss the claim, arguing that the court lacked subject matter jurisdiction. The apportionment defendants argued that the claim for which Chelsea sought apportionment was an economic claim not "a negligence action to recover damages resulting from personal injury, wrongful death or damage to property" for which there is jurisdiction to apportion liability pursuant to C.G.S. §§ 52-572h and 52-102b(a). The court agreed, finding that the claim for failure to procure adequate insurance, even though brought in the context of personal injury claim, does not satisfy the requirement of the statute. Lacking jurisdiction, the court dismissed the apportionment action.
07/22/25 Clark v. Hanover Ins. Grp., Inc.
United States District Court, Connecticut
Auto Carrier Owes No Duty to Adverse Driver
In July 2023, Clark and Orengo were involved in a motor vehicle accident. Orengo was given a written warning for "Failure to Maintain Proper Lane." Following the accident, Clark complained of neck, head, shoulders, and back pain. Plaintiff did not have health insurance. Hanover, Orengo's insurer, refused to accept liability for the damage and filed a claim against Clark, claiming that Clark’s vehicle had sideswiped Orengo's vehicle.
Clark, pro se, brought suit against Hanover and Orengo for personal injury and property damage; Section 1983 negligence; intentional infliction of physical, mental, and emotional distress, pain, and suffering; negligent infliction of physical, mental, and emotional distress, pain, and suffering; insurance fraud; assumption of duty; breach of the implied covenant of good faith and fair dealing; Section 1983 malice claim; and violation of the Connecticut Unfair Trade Practices Act ("CUTPA"). The defendants moved to dismiss.
The federal court dismissed with prejudice the claim alleging that “Defendants breached their lawful duty to not personally injure nor [sic] damage their fellow man's/woman's body and/or property," finding that there is no such legally cognizable cause of action. The negligence counts were dismissed against the insurer but not the driver. The court, spilling more ink than perhaps warranted, detailed how Hanover lacked any duty to Clark and that the plaintiff failed to claim how it was injured by Hanover’s conduct.
The claims for intentional and negligent infliction of emotional distress were dismissed as to both the driver and Hanover. In Connecticut, plaintiffs are held to a "stringent standard" for demonstrating that a defendant's conduct was "extreme and outrageous." To rise to the level of extreme and outrageous, a defendant's conduct must be "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community." Carrol v. Allstate Ins. Co., 262 Conn. 433, 443, 815 A.2d 119 (2003). The Court concluded that the IIED claim against Hanover was insufficient. The amended complaint merely alleged that Hanover denied liability for the accident and filed an insurance claim against Plaintiff, and that Hanover's conduct caused Plaintiff to suffer "physical, mental, and emotional distress, pain, and suffering."
An insurer's failure to "conduct a thorough or reasoned investigation" and hasty determination that the claimant was at fault are "not so atrocious as to trigger liability for intentional infliction of emotional distress." In addition, Hanover had no duty to settle with a third-party claimant. And because Hanover did not owe that duty to Plaintiff, "it cannot be liable to [P]laintiff for negligent infliction of emotional distress.” Alleging the denial of an insurance claim, without more, cannot suffice to maintain a negligent infliction of emotional distress claim, the court wrote.
Fraud was not alleged with specificity and no facts were alleged that Hanover assumed any duty to Clark. The court also breached the bad faith claim, because it is well-settled that insurers owe no fiduciary duty to third-party claimants because "such a duty would interfere with the insurer's ability to act primarily for the benefit of its insured." Macomber v. Travelers Prop. & Cas. Corp., 261 Conn. 620, 641-42, 804 A.2d 180 (2002). Connecticut law is clear that [*36] the duty of good faith and fair dealing exists only between an insurer and its insured; that duty does not extend to a third party like Plaintiff. Carford v. Empire Fire & Marine Ins. Co., 94 Conn. App. 41, 46, 891 A.2d 55 (2006) (citing cases. Finally, the CUTPA claim was dismissed because there is no private right of action under the statute.
In the end, only the negligence count against the adverse driver remained.
08/01/25 Buley v. Plymouth Rock Home Assur. Corp.
Superior Court of Connecticut, Ansonia
Claim that Insurer Intentionally Failed to Update HO Policy to Account for Cryptocurrencies, Sufficient to Plead Bad Faith
The plaintiff sued his homeowner’s insurance company for failing to pay an alleged theft of a cryptocurrency by the company to which he entrusted them. The plaintiff owned Bitcoin and Ethereum which he stored with Beurax. Beurax took down its website and disappeared, along with the plaintiff's access to his cryptocurrency, causing him to lose the value of that personal property. The plaintiff made a claim and Plymouth refused to pay. Buley alleges that Plymouth improperly and arbitrarily labeled the plaintiff's cryptocurrency as "investment," "money," "security interest," and/or a "security," in order to deny coverage. The insured alleged breach of contract, bad faith, and CUTPA/CUIPA; Plymouth moved to strike.
The court recognized the still unresolved split in authority among Connecticut trial courts as to the proper pleading standard for a claim of common law bad faith. Accepting the stricter pleading standard as “persuasive,” importantly, the court noted that this position is consistent with the emphasis on the deliberate intent refuse coverage discussed in Napolitano v. Ace American Ins. Co., 219 Conn. App. 110, 293 A.3d 915. Applying the stricter standard, however, the court found that the plaintiff had met the pleading standard by asserting that Plymouth had furtive design or ill will, engaging in conduct designed to mislead or deceive, and abusing the power to specify terms.
The court, however, struck the CUTPA/CUIPA cause of action finding that the plaintiff had failed to adequately plead that Plymouth engaged in a general business practice to deny cryptocurrency claims. The court also dismissed the standalone CUTPA claim. Finally, the court struck the plaintiff’s common law indemnity claim, finding that none of the elements for indemnity are met. “The liability relationship between the plaintiff and Beurax required by common law does not exist,” the court wrote.
[See also Mercuri v. State Farm Auto Ins. Co., Superior Court, Stamford, July 15, 2025, recognizing same split in authority, but inferring sinister motive based on allegations that State Farm ignored UIM claim for more than a year.]
07/15/25 Martin v. Integon Nat’l Ins. Co.
United States District Court, Connecticut
Residence Relative Determination Destined for Trial
The district court found questions of fact necessitating trial on the issue of whether an at-fault driver was a resident relative under his grandparent’s auto policy. The 17-year-old driver, Hugh Ireland, hit a pedestrian, Natalia Martin, while driving his mother’s car. The tort parties stipulated to a $4.5 million judgement for Martin and a $500,000 loss of companionship claim on behalf of her husband. Th driver assigned his right to the Plaintiffs.
The Plaintiffs contend that Integon is directly liable for the stipulated judgment, pursuant to Conn. Gen. Stat. § 38a-321, because Ireland was covered under his grandparents' insurance policy with Integon, as a resident of their household. Plaintiffs also alleged that Integon acted in bad faith in refusing to provide coverage (but withdrew the claim in response to Integon’s summary judgment motion).
Integon insured Hugh Ireland's paternal grandparents, William D. Ireland III and Jane Ireland for auto liability coverage with bodily injury limits of $250,000 per person and $500,000 per accident. Under the policy, the covered parties included the named insured policyholders, William D. Ireland III and Jane Ireland of 2 Allen Court, Norwalk, Connecticut 06851, and their "family members," as well as any person using the insureds' "covered auto." "Family members" are defined as "a person related to [the policyholder] by blood, marriage, or adoption who is a resident of [the policyholder's] household."
As Hugh was driving his mother’s car, he was not operating a covered auto. The dispute centers on whether Hugh was a resident relative of his paternal grandparents. The parties presented competing affidavits.
The Integon Affidavits generally affirm that Hugh Ireland visited his grandparents' house, but did not have a room there, did not spend the night there, did not keep clothes or belongings there, and did not receive mail there…. Hugh Ireland also affirmed that he erroneously listed his grandparents' house as one of his residences on the Settlement Affidavit and that his subsequent statements indicating that he did not ever reside there were accurate.
The Plaintiffs countered that the affidavits are inconsistent and raise a question of fact and the court agreed.
The Court identified the factors used by Connecticut courts in determining residency: the intent of the individual; the frequency of contact between the individual and other household inhabitants; the frequency with which the individual spends time at the household; the maintenance of a separate residence for the individual; whether the individual is emotionally and financially capable of establishing and maintaining a residence independent of the household; the location of personal belongings; the location of and address used for personnel and business records; the address at which mail is received; and the address used for formal purposes such as voting, licenses, and income tax filings. This is a non-exhaustive list.
Because of the conflicting affidavits from the underlying settlement and the Integon investigation, the court punted the issue to a jury. “The Agreement Affidavits conflict with the Integon Affidavits on this issue, creating a genuine dispute of material fact. In the Agreement Affidavits, Hugh Ireland listed his grandparents' residence as one of his addresses. Additionally, William Ireland IV's affidavit stated that Hugh Ireland was a "member of the household" at Hugh's grandparents' address. In the Integon Affidavits, on the other hand, Hugh Ireland and William Ireland IV stated that Hugh was in fact not a resident of his grandparents' home on the date of the accident, and that the former statement of residency in the Settlement Affidavits was made in error.”
07/28/25 Atain Spec. Ins. Co. v. Nordic Builders of Tolland, LLC
United States District Court, Connecticut
Employers Liability Exclusion Precludes Coverage
The Court held that there is no genuine dispute of material fact that underlying tort plaintiff, Mr. Visuma, was an employee of a subcontractor and therefore his injuries were excluded from coverage under the Policy's Employee Endorsement.
Visuma alleged that Nordic, a construction company, was the owner, agent, and/or was in possession and control of property in Coventry, and that while on the premises he attempted to negotiate some stairs, but he fell because the stairs were covered with improperly secured cardboard. Nordic was the general contractor, building a single-family home. Nordic subcontracted flooring to Dalene Hardwood Flooring Company, which then subbed carpeting installation to JMCS Flooring who employed Visuma.
Atain insured Nordic and that policy included an Employer’s Liability exclusion, providing that the policy did not apply to:
e. Employer's Liability
1. "Bodily injury" to an "employee", subcontractor, employee of any subcontractor, "independent contractor", employee of any "independent contractor", "temporary worker", "leased worker", "volunteer worker" of any insured or any person performing work or services for any insured arising out of and in the course of employment by or service to any insured for which any insured may be held liable as an employer or in any other capacity;
***
This exclusion applies to all causes of action arising out of "bodily injury" to any "employee", subcontractor, employee of any subcontractor, "independent contractor", employee of any "independent contractor", "temporary worker", "leased worker", "volunteer worker" or any person performing work or services for any insured because of "bodily injury" including care and loss of services.
Nordic’s attempt to defeat the motion was torpedoed by its one Rule 56(a)(2) statement. There, Nordic admitted that that (1) it subcontracted the Project's flooring work to Dalene; (2) Dalene subcontracted carpet installation on the Project to JMCS; (3) Visuma was employed by JMCS Flooring at the time of the Incident; and (4) on the date of the incident, Visuma was installing carpeting on the Premises as part of the Project and, while carrying a vacuum that he had used during the course of that installation, he fell down the stairs. This constituted a binding judicial admission that cannot be contradicted to create genuine issues of material fact.
As a result, since the court found that the Policy's Employee Endorsement language was clear and unambiguous in excluding bodily injury to employees, employees of subcontractors, and independent contractors, coverage was not owed.
RUFFNER’S ROAD REVIEW
Kyle A. Ruffner
[email protected]
07/30/25 John Chinn v. Motor Vehicle Accident Indemnification Corp.
Appellate Division, Second Department
Court Finds Triable Issue of Fact as to Whether Petitioner Was Operating an Uninsured Motor Vehicle at the Time of the Accident
The petitioner commenced this proceeding pursuant to Insurance Law § 5218 for leave to commence an action against the Motor Vehicle Accident Indemnification Corporation (“MVAIC”) to recover damages for personal injuries allegedly sustained when struck by an unidentified vehicle. The police report indicated the petitioner was operating a Kawasaki "motorcycle" and that the unidentified vehicle left the scene.
The petitioner asserted that, at the time of the accident, he was operating "a pedal bike with a motor to assist," which had "a maximum speed of 13 miles per hour." MVAIC argued there was an issue of fact as to whether petitioner established he was not operating an uninsured motor vehicle at the time of the accident. The Supreme Court granted the amended petition, and MVAIC appealed.
The court explained that MVAIC was created to compensate innocent victims of hit-and-run motor vehicle accidents and, under Insurance Law § 5218, a petitioner seeking leave of court to commence an action against MVAIC has the initial burden of demonstrating that he or she is a qualified person within the meaning of Insurance Law § 5202. Under that statute, a "qualified person" is defined to exclude the owner of an "uninsured motor vehicle". A "motor vehicle" includes motorcycles, but excludes any vehicle operated by "muscular power," including bicycles with electric assist as defined by Vehicle and Traffic Law § 102. In a special proceeding, to the extent that no triable issues of fact are raised, the court is empowered to make a summary determination, however, if triable issues of fact are raised, an evidentiary hearing must be held.
Here, the court held the petitioner's submissions raised a triable issue of fact as to whether the petitioner was operating an uninsured motor vehicle at the time of the accident. His assertion that he was operating a "motorized bike" was contradicted by the police report, which set forth that the petitioner was operating a 2011 Kawasaki "motorcycle." Although the police report was uncertified, the petitioner waived any objection to its admissibility by submitting it with the petition.
Accordingly, the appellate court reversed the order and remitted the matter to the Supreme Court for an evidentiary hearing.
07/30/25 Abraham Torres v. Jason A. Sawyers, et al.
Appellate Division, Second Department
Appellate Court Upholds Decision Vacating an Order Compelling MVAIC to Pay Judgment Pursuant to Insurance Law § 5210.
The plaintiff commenced this action against the defendants to recover damages for personal injuries allegedly sustained in a motor vehicle collision. The defendants failed to file an answer, and a default judgment was entered in favor of the plaintiff in the sum of $25,000. The plaintiff moved to compel MVAIC to pay the value of the unpaid judgment pursuant to Insurance Law § 5210, which the Supreme Court granted, directing MVAIC to pay plaintiff the maximum limit of MVAIC's liability under the Insurance Law. However, the court then granted MVAIC’s motion to vacate the order, and the plaintiff appealed.
A party seeking to vacate a default in opposing a motion must demonstrate both a reasonable excuse for the default and a potentially meritorious opposition to the motion. Courts have held that whether there is a reasonable excuse for a default is a “discretionary, sui generis determination to be made by the court based on all relevant factors, including the extent of the delay, whether there has been prejudice to the opposing party, whether there has been willfulness, and the strong public policy in favor of resolving cases on the merits" (McCarey v. Offshore Trophy Room, Inc., 223 AD3d 893, 893 [internal quotation marks omitted]).
In this case, MVAIC submitted an affidavit of a tort examiner employee, who stated that due to an oversight he mistakenly believed the plaintiff's motion pertained to a different case and failed to forward the motion to MVAIC's counsel. Under the circumstances the court determined that considering the relevant factors, that MVAIC moved immediately to cure the default, the lack of willfulness on the part of MVAIC, the absence of prejudice to the plaintiff, and the strong public policy in favor of deciding cases on the merits, the Supreme Court did not improvidently exercise its discretion in accepting MVAIC’s excuse for default and demonstration of a potentially meritorious opposition.
Accordingly, the Appellate Court held the Supreme Court properly granted MVAIC's motion to vacate the default judgment.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
08/14/25 Liberty Insurance Corp. v. Hudson Excess Insurance Co
United States Court of Appeals, Second Circuit
Stipulated Facts Leads to Proximate Cause Finding at Bench Trial That Requires Additional Insured Coverage. Both Parties Pay Their Own Way
A subcontractor’s employee brought the underlying action against the owner and general contractor for injuries he sustained when the scaffold on which he was performing demolition work collapsed. In this related declaratory judgment action, the owner’s insurer, Liberty Insurance Corporation (“Liberty”), sought a declaration that the subcontractor’s insurance company, Hudson Excess Insurance Company (“Hudson”), is obligated to defend and indemnify the owner against the employee’s claims, as an additional insured.
With the parties settling Liberty’s duty to defend on the eve of trial, the district court at a bench trial entered a judgment declaring that Hudson owed a duty to defend and indemnify the owner for the underlying state court action and that, pursuant to New York Insurance Law § 1213(d), Hudson must reimburse Liberty for its reasonable attorney’s fees incurred in bringing this declaratory-judgment action.
The Second Circuit found that the district court properly determined that Hudson owes a duty to indemnify Liberty’s insured. After a bench trial on stipulated facts and evidence, the district court appropriately determined that Hudson’s insured
proximately caused the injuries that are the subject of the underlying litigation. The district court found that it is undisputed that Juarez was a Skittles employee, that Skittles was employed on the Project at 45 John, that Skittles built the scaffold from which Juarez fell, that a Skittles’ employee directed Juarez to mount the scaffold to perform work on the Project, that no Skittles employee provided Juarez with protective gear, and that no external force acted upon the scaffold to cause it to collapse and injure Juarez.
Hudson argued that here are disputed factual issues that must be resolved in the underlying state court action, but “[t]his argument overlooks the simple fact that the district court made its determinations after a bench trial and ignores the parties’ joint pretrial stipulation, in which Hudson and Liberty agreed that “the [district court] may determine any issues of fact and conclusions of law based on” the parties’ stipulations, proposed findings of fact and conclusions of law, deposition transcripts, and other documents before the court.” The district court did consider deposition testimony that created a potential factual issue as to the subcontractors potential responsibility—but made a determination at trial that the subcontractor was a proximate cause, as the stipulated facts permitted it to do.
Hudson also argued that a summary judgment decision in the underlying action as to contractual and common law indemnity entered after the district court’s judgment at trial, the Second Circuit found that that does not change the result. The Second Circuit specifically noted that “Hudson fails to explain why the state court’s later-issued summary judgment decision mandates vacating the district court’s judgment,” especially since the parties asked for the Second Circuit to make such a decision. While the underlying court found that the contract was invalid and thus void, that cannot change the fact that the parties in the declaratory judgment action agreed that additional insured coverage was owed, at the very least, for a defense. Hudson did not raise the issue of a potentially invalid contract in front of the district court.
However, the Second Circuit found that the district court erred in granting Liberty attorney’s fees in connection with the declaratory judgment action under New York Insurance Law § 1213(d). A simple comma added during recodification of the statute is determinative of whether Hudson is entitled to a statutory safe-harbor provision that would exempt it from paying attorney’s fees, with the district court erroneously determining that the presence of the comma in Section 1113(a)(13) meant that Hudson was not eligible for the statutory safe-harbor provision. While the district court based its conclusion on a reasonable interpretation of Section
1113(a)(13)’s plain text, the Second Circuit found that that interpretation yields an absurd result:
“The New York Insurance Law would not authorize policies covering legal liability for bodily injury resulting from causes other than negligence in rendering expert, fiduciary, or professional service.”
Accordingly, the personal injury liability insurance provided for in Section 1113(a)(13) is not limited to that caused by negligence in rendering expert, fiduciary, or professional service.
Maxwell’s Minute: Stipulated facts are a great way to simplify issues for a court relative to a pure issue of law. However, as this case provides examples , it can backfire if and when the facts stipulated to potentially touch upon issues remaining to be litigated in underlying litigation. Timing is often important in declaratory judgment actions, and this case appears to showcase issues that can arise when the timeline between resolution of coverage issues and resolution of underlying tort issues run too close together.
STORM’S SIU
Scott D. Storm
[email protected]
07/15/25 McGuigan v. Am. Strategic Ins. Corp.
United States District Court, E.D. Pennsylvania
Insured’s Fraudulent Misrepresentation Claim Barred by the “Gist of the Action Doctrine;” and Statutory Bad Faith Claim Dismissed
The Court granted Defendant's Motion to Dismiss Counts II (statutory bad faith) and III (fraudulent misrepresentation) of the Amended Complaint. The breach of contract claim (Count I) remained.
Plaintiffs purchased a homeowners policy from Defendant. Plaintiffs' residence suffered significant property damage. The Amended Complaint does not specify the nature of the property damage or why Defendant denied the claim.
The Court held that Plaintiffs' fraudulent misrepresentation claim is barred by Pennsylvania's “gist of the action doctrine” because it merely duplicates their breach of contract claim. Specifically, the gist of the action doctrine bars a tort claim: (1) arising solely from a contract between the parties; (2) where the duties allegedly breached were created and grounded in the contract itself; (3) where the liability stems from a contract; or (4) where the tort claim essentially duplicates a breach of contract claim or the success of which is wholly dependent on the terms of a contract. Where the alleged misrepresentation or fraud concerns the performance of contractual duties, then the alleged fraud is generally held to be merely collateral to a contract claim for breach of those duties. The Court determined that Plaintiffs' fraudulent misrepresentation claim arose solely from the parties' contractual relationship defined in the policy. The claim was essentially about Defendant's alleged breach of its obligations under the policy, making it duplicative of and collateral to the breach of contract claim.
Pennsylvania's bad faith statute, 42 Pa. Cons. Stat. § 8371, permits policyholders to recover damages if they can show an insurance company knowingly denied benefits without a reasonable basis. The Pennsylvania Superior Court defines bad faith as any frivolous or unfounded refusal to pay the proceeds of a policy. The Third Circuit's two-part test for bad faith claims is: (1) whether the insurer lacked a reasonable basis for denying benefits; and (2) whether the insurer knew or recklessly disregarded the lack of a reasonable basis. The Court held that Plaintiffs failed to state a bad faith claim because they did not plead specific facts showing Defendant lacked a reasonable basis for denying benefits or knew or recklessly disregarded the lack of a reasonable basis. The Court found that Plaintiffs' allegations consisted only of conclusory statements without specific factual details to support the two required elements of a bad faith claim. Plaintiffs failed to provide specific examples of how Defendant handled their claim, the methods and procedures of any investigation, or any correspondence between the parties. Without additional facts regarding the investigation, negotiations, or communications, the Court could not infer bad faith on Defendant's part.
01/17/25 Amaar Holding Inc. v. Travelers Cas. Ins. Co. of Am.
United States District Court, E.D. New York
Insurer Granted Summary Judgment as it Provided Expert Testimony Attributing the Property Damage to Poor Maintenance and Drainage Issues, Whereas the Insured Offered No Expert Testimony of Alleged Storm Damage
The court granted Travelers' motion for summary judgment, dismissing Amaar Holding's claims.
Plaintiff’s building sustained water damage during Hurricane Ida. The plaintiff claimed the damage was caused by a storm-created opening in the roof, which is covered under its policy. However, Travelers denied the claim, asserting the damage was caused by improper roof maintenance and insufficient drainage, which are not covered.
Under New York Law, the elements of a breach of contract claim are: (1) the existence of a contract; (2) performance by the party seeking recovery; (3) breach by the other party; and (4) damages suffered as a result of the breach. Where the breach of contract claim is based upon an insurance contract, and coverage depends upon the cause of the underlying injury falling within the policy coverage, the plaintiff bears the burden of proof. An insured seeking to recover for a loss under an insurance policy has the burden of proving that a loss occurred and also that the loss was a covered event within the terms of the policy.
The plaintiff only provided testimony from an employee about seeing metal debris on the roof, with no photos or documentation of the alleged storm damage. It did not provide any expert testimony to support its claim or to rebut Travelers' expert. Travelers provided expert testimony attributing the damage to poor maintenance and drainage issues. A party may not rely on mere conclusory allegations nor speculation but instead must offer some hard evidence showing that its version of the events is not wholly fanciful.
The Court held that the issue of whether water damage was caused by a storm-created opening or existing maintenance issues is beyond the knowledge of lay jurors and requires expert testimony to establish causation. Without favorable expert evidence to prove causation, the plaintiff cannot defeat summary judgment. Parties bearing the burden of proof on causation must offer expert testimony. If they fail to do so, and the opposing side offers an admissible expert opinion, they cannot defeat a summary judgment motion.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
07/30/25 Great Northwest Ins. Co. v. Campbell
Minnesota Supreme Court
Insurer Required to Cover the Cost of Repairs in Compliance With the State or Local Code that Governs the Damaged Portion of the Property. Overhead and Profit Not Within the Scope of the Statute
A hailstorm damaged the shingles on Campbell’s roof but not the decking. Campbell’s home was insured under a replacement cost insurance policy with Great Northwest. Great Northwest approved the removal and replacement of the damaged shingles. Campbell hired a contractor to conduct repairs. While replacing the damaged shingles, the contractor discovered that the roof’s decking had gaps between the wood planks larger than permissible under state code governing the installation of the replacement shingles. The contractor was required to follow the state code, which did not allow the contractor to install the replacement shingles directly on Campbell’s existing roof decking due to the gaps. The contractor installed a new layer of oriented strand board sheathing on top of the deficient decking and affixed the new shingles to the new sheathing. However, Great Northwest denied coverage for the contractor’s installation of the new layer of sheathing material and for the contractor’s overhead and profit based on the Roof Damage Limitation Endorsement and the Overhead and Profit Endorsement. Campbell’s insurance policy excluded coverage for roofing repairs beneath the outermost layer of roofing material as well as coverage for overhead and profit in all cases except those involving fire and lightning. Campbell argued that the endorsements were invalid because they conflicted with Minnesota law.
Great Northwest brought a declaratory judgment action to determine its coverage obligations. The district court determined that the insurer’s denial of coverage for the sheathing violated the statute, which requires, in the event of a partial loss, replacement cost insurance to cover the cost of replacing or repairing the damaged portion of the property “in accordance with the minimum code as required by state or local authorities.” But the district court granted summary judgment to Great Northwest on the overhead and profit issue, concluding that Campbell’s policy “clearly and unambiguously” barred coverage for those costs. The court of appeals agreed, reasoning that it was impossible for a roofer to install new shingles in accordance with the state building code unless the new sheathing was installed. The court of appeals also concluded that Campbell had not demonstrated how the statute supported his argument that overhead and profit coverage was required.
The Minnesota Supreme Court clarified that the statute requires insurers to cover the cost of all repairs necessary to ensure that the damaged portion of the property can be repaired, replaced, or rebuilt in compliance with the state or local code that governs the damaged portion of the property. The Court concluded that the statute required Great Northwest to provide coverage for the new sheathing because installing the sheathing was a cost of replacing the damaged shingles in accordance with the state building code governing shingle installation. Therefore, the limitation provision in Campbell’s policy that excluded such coverage is invalid under the statute. As for the overhead and profit, the Court agreed that Great Northwest could deny coverage because Campbell failed to show that the provision excluding coverage for overhead and profit violates the statute. Specifically, Campbell did not establish that the contractor’s overhead and profit costs fell within the scope of the statute and constituted part of the “cost of replacing, rebuilding, or repairing any loss or damaged property in accordance with the minimum code as required by state or local authorities.”
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
08/06/25 Vanrell v. United Services Automobile Association
Superior Court of New Jersey, Appellate Division
Appellate Division Upholds Dismissal of Uninsured Motorists Claim as Untimely
On January 10, 2018, Vanrell was rear-ended by a tortfeasor, causing her to sustain serious and permanent injuries. The tortfeasor’s auto liability limits were $50,000 per person and $100,000 per accident, which were insufficient to cover the extent of Vanrell’s injuries. This prompted Vanrell to make a claim with her own insurer, the defendant (USAA) for personal injury protection benefits (PIP), as well as property damage.
Vanrell also sued the tortfeasor for her damages. On May 2, 2022, plaintiff sent USAA a letter seeking permission to settle her claims against the tortfeasor. USAA approved this request, agreeing to waive its potential right of subrogation against the tortfeasor, but preserving its right to deny uninsured motorists coverage (UIM).
After settling with the tortfeasor, plaintiff made a May 5, 2022, demand with USAA to settle the UIM portion of her claim. From May 2022 until late February 2023, the plaintiff provided USAA, at its request, with various updated medical records. On February 24, 2023, USAA offered to settle the plaintiff’s UIM claim for $85,000. That offer was later increased to $100,000 in response to a lowered demand from plaintiff.
After the parties were unable to reach a settlement of plaintiff’s UIM claim, plaintiff sued USAA on May 17, 2023. USAA filed an answer on July 2, 2023, asserting an affirmative defense that the complaint was time-barred by the suit limitation clause within the policy.
After discovery was exchanged, USAA made an October 5, 2023, motion to dismiss plaintiff’s Complaint as untimely under the terms of the policy.
The policy required the plaintiff to file a UIM claim, if at all, either: (1) within four years of the date of the accident; or (2) within one year from when plaintiff was aware or should have been aware of her UIM claim, whichever was later.
In opposition to the motion, the plaintiff argued that the general six-year statute of limitations provided in N.J.S.A. 2A:14-1(a) (statute of limitations applicable to breach of contract actions) applied to her UIM claim, since the shortened period provided under the policy was, as plaintiff described it, inconsistent with New Jersey law. In making this argument, the plaintiff relied on a separate provision within the policy, colloquially known as a “conformity to law” provision, which provided that if any of the policy terms conflict with state or local law, the state or local law governs.
Plaintiff also argued that USAA should be equitably estopped from denying her claim based on the timeliness of her complaint, since it spent several months requesting renewed records from her, and more time engaging in settlement negotiations with respect to her claim.
The Appellate Division rejected the plaintiff’s claim that the limitations period under the policy was inconsistent with New Jersey law. While it is true that New Jersey law provides a six-year statute of limitations for breach of contract actions, New Jersey law also provides that parties are free to contractually shorten statutes of limitation. Because parties are free to agree that a shorter statute applies, the Appellate Division agreed that the policy’s suit limitations provision was not repugnant to New Jersey law. Thus, the Appellate Division found that the policy’s conformity to law provision was not triggered, because the parties were free to contractual shorten the generally applicable statute of limitations.
Applying the policy’s suit limitations provision, the Court found that the plaintiff’s UIM complaint was untimely under both the four-year standard as well as the one-year standard. The accident occurred on January 10, 2018. Four years from that date is January 10, 2018, and plaintiff’s complaint was not filed until May 17, 2023. Although the suit limitation provision provided that plaintiff had until the later of four years after the accident or one year after she knew or should have been aware that she had a UIM claim, the Court noted that plaintiff did not sustain her burden in showing when she was or should have been aware of her UIM claim. Thus, as the Court noted, four years following the date of the accident was the only operative date from which the Court could measure plaintiff’s timeliness in this instance. However, the Court noted in dicta that the absolute latest plaintiff was or should have been aware of her UIM claim was May 2, 2022—the date she sought USAA’s permission to settle with the tortfeasor. Since the Complaint was filed 15 days after this date, the Complaint would have been untimely in any event.
The Appellate Division also found that USAA was not equitably estopped from denying coverage. While the Court recognized that USAA spent significant time repeatedly requesting updated medical records from the plaintiff, and more time engaging in settlement negotiations with the plaintiff, the Court noted that plaintiff did not even make her UIM claim until the four-year suit limitation period provided by the policy had expired. As the Court explained, this situation is different from other cases where, unlike here, the suit limitation period was still active when the UIM claim was made, and the insurer engaged in a course of conduct that “lulled the insured into inactivity.”
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
08/05/25 State Farm Fire & Cas. Co. v. Giannone
United States Court of Appeals, Sixth Circuit
Neighborhood Shootout Is Not an Accident, No Coverage Afforded Where Passenger Vehicle Is Fatally Injured
Mr. Mollicone believed his wife, Ms. Mollicone engaged in an affair with Giannone. Mr. Mollicone, with his wife in his vehicle, drove to Giannone’s home, walked to Giannone’s garage and flashed a firearm. Giannone drew his own gun and fired a warning shot at Mr. Mollicone. A gunfight ensued. During the gunfight, Giannone was shot in the foot and knee, upon entering his home there was a pause. Giannone then heard Ms. Mollicone scream, so he retrieved another firearm in his garage and began to fire at Mr. Mollicone’s exiting vehicle. When Giannone fired at the vehicle, he fatally struck Ms. Mollicone in the neck.
Mr. Mollicone was criminally charged, but Giannone was not. Ms. Mollicone’s Estate filed a civil suit against the decedent’s husband and Giannone that contained causes of action for negligence, assault, and battery. State Farm denied coverage and commenced a declaratory judgment action.
On appeal, the Sixth Circuit noted Michigan law holds an accident is an unforeseen, unanticipated casualty from the standpoint of the insured. However, there is no unforeseen consequence when the intended act created a direct risk of harm from which the injury should have reasonably be expected. Based upon this standard, Ms. Mollicone’s Estate and Giannone could not show an accident occurred.
Notably, the Michigan Supreme Court is yet to determine whether actions taken in self-defense create intended, but nevertheless accidental injuries. However, the Sixth Circuit noted Michigan Appellate Courts have held actions taken in self-defense are not accidents and thus, are uncovered occurrences.
As Giannone subjectively intended to shoot at the Mollicone’s vehicle and cause harm, the court found the decedent’s death was not accidental and not a covered occurrence. For these reasons the Sixth Circuit affirmed the order granting State Farm’s motion for summary judgment.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
07/16/25 Earley v. Salim
Supreme Court, Bronx County
Court Grants Motion to Consolidate Negligence Action with Subrogation Action
A suit asserting negligence arising from the operation of a motor vehicle was filed in Bronx County. The defendants moved for an order pursuant to CPLR § 602(a) to consolidate the negligence action with an action for subrogation pending in Queens County, titled, Geico General Insurance Company as Subrogee of Shontaj Cline v. H&S Taxi Inc., et al.
The defendants argued that both actions involve common questions of law and fact, so joinder would serve judicial economy and avoid the prospect of inconsistent verdicts. The plaintiff opposed the motion, asserting that the actions involve different damages, and allowing the cases to be tried together would confuse the jury.
CPLR § 602(a) gives the court discretion to consolidate or join actions involving common questions of fact of law. Consolidation is preferred in instances where the decision making process is eased, or if it serves judicial economy. Consolidation or joinder of cases involving common questions of law or fact is appropriate unless the party opposing consolidation demonstrates that doing so will prejudice a substantial right.
Under New York law, applications seeking to consolidate negligence actions with an action involving a dispute over insurance coverage must be denied, because the dispute over coverage for the very negligence alleged would affect the jury and prejudice the defendants. Similarly, claims regarding insurance coverage should be severed from negligence causes of action, as should claims for contractual indemnification or payment of no-fault benefits.
However, with respect to negligence claims and subrogation claims, provided that the actions share common questions of law and fact, consolidation is warranted.
Here, the court found that there was a substantial identity of facts, as both actions arose from the same accident, involved the same vehicles, and the same defendants. Further, subrogation involves an equitable doctrine which allows an insurer to stand in the shoes of its insured and seek indemnification from third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse.
Therefore, the court found that the claims in the negligence action and the subrogation action have the same claims of negligence, injuries, and the same legal burden.
In opposition, the plaintiff failed to demonstrate actual prejudice.
Accordingly, based on the similarity of law and fact, the court granted the application to consolidate the subrogation claim with the negligence action.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
08/15/25 New York Senate Bill S1104A
New York State Senate
Bill S1104A Seeks to Enact the Consumer Litigation Funding Act to Promote Consumer Protections Related to Consumer Litigation Funding
This bill seeks to enact the consumer litigation funding act to promote consumer protections related to consumer litigation funding transactions.
This justification provides that the Consumer Litigation Financing emerged as an industry in the 1990s. Currently, there is no regulation of the industry and as a result there have been several instances where lenders have acted in bad faith and charged exorbitant fees for services provided.
If enacted, financing companies’ recovery would be limited to 25% of the gross recovery of the case. Further, the consumer would have a ten-day rescission right. The bill further provides that litigation finance companies must submit registration applications to the Department of State for evaluation of the character, fitness, and financial stability of the applicant.
Bill S1104A passed both houses and will be considered by the Governor.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
08/06/25 Pokropinski v. Farmers Direct Prop. and Casualty Ins. Comp.
United States District Court, Northern District of Indiana
Indiana Court Denies Insurer's Motion to Dismiss Finding Bad Faith Sufficiently Pleaded
The Plaintiffs owned a home in Crown Port, Indiana and purchased a homeowners policy with Farmers. The Plaintiffs allege the policy provides coverage for accidental direct physical loss to the residence.
Around June 24, 2023, the Plaintiffs' home was damaged by a windstorm, which involved a tree falling on the home and the septic tank. The Plaintiff submitted a claim with Farmers for the loss for coverage for an accidental, physical loss. This suit followed, where Plaintiffs Pamela and Adam Pokropinski filed a complaint against Farmers alleging breach of contract and bad faith/breach of the covenant of good faith.
The Plaintiffs alleged the damage made the home uninhabitable, and Farmers refused to provide additional living expenses. The Complaint alleges Farmers wrongfully delayed and refused to pay the Plaintiffs under their Policy.
Farmers moved to dismiss the action in its entirety stating the allegations of the complaint contain a bare recital of the elements of each cause of action and lacks factual content.
The Court denied Farmers' motion to dismiss, citing Twombly and Iqbal. The Court found that the Plaintiffs properly plead a case for bad faith against Farmers. The four duties an insurer owes to its insured under Indiana law includes: (1) to refrain from an unfounded refusal to pay policy proceeds; (2) to refrain from unfounded delay in payment; (3) to avoid deceiving the insured; and (4) to avoid exercising any unfair advantage to pressure the insured into settling the claim.
The Court found that because the complaint alleges that the house was uninhabitable, Farmers refused to provide Plaintiffs with additional living expenses when they could not stay in the home, and Farmers wrongfully delayed and refused to pay Plaintiffs, bad faith was sufficiently pleaded. Further, the Court found the Complaint alleges that Farmers misrepresented the facts and their policies, unreasonably delayed coverage, and failed in good faith to effectuate prompt, fair, and equitable settlements.
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
07/22/25 Yun v. Nyssens
New York County Supreme Court
A New York Court Finds That a Plaintiff Failed to Establish a “Serious Injury” Within the Meaning of Insurance Law § 5102(d) With Respect to “Permanent Loss of Use” and “90/180 Days” Categories
Plaintiffs, Marina A. Yun and Leonard Gueye, alleged injuries suffered in connection with a motor vehicle accident that occurred on August 1, 2020, at a traffic light at or near 121st – 122nd Street, New York, New York. Plaintiffs’ vehicle was operated by plaintiff Yun when it was struck in the rear by defendant’s vehicle. At his deposition, plaintiff Gueye testified that he felt two (2) impacts. The first impact was “heavy,” and the second impact was “moderate.” Defendant filed a motion for summary judgment pursuant to Insurance Law 5104(d) on the basis that plaintiffs did not suffer serious injuries in accordance with the statutory requirements.
Plaintiff Yun alleged the following injuries: straightening of the cervical lordosis suggesting muscle spasm; C3-C4 midline disc herniations causing mild spinal stenosis abutting the ventral cord; C4-C5 midline disc herniations, disc bulge; and C5-C6 midline disc herniations resulting in mild spinal stenosis abutting the ventral cord; L4-L5 tear disc herniation, loss of disc height, disc bulge and left-sided endplate marrow edema, moderate facet arthropathy and mild grade I retrolisthesis, moderate spinal stenosis, compression of descending L5 nerve root, encroaching on the exiting left L4 nerve root; L3-L4 arthropathy and mild grade I retrolisthesis, broad-based posterior disc bulge; and T12-L1 disc herniation, disc bulge. Treatment included physical therapy, acupuncture, electrical stimulation, pain management, and injections, including medial branch blocks.
Defendant’s IME doctor reported that examinations of Yun’s cervical and lumbar spines did not reveal spasms, any tenderness to palpitation or any “atrophy, deformity or soft tissue swelling.” Additionally, no range of motion deficits were detected. Defendant’s IME doctor concluded that Yun's cervical and lumbar sprains had been resolved and there was no objective evidence of ongoing orthopedic impairment.
Plaintiff Gueye alleged the following injuries: mild facet arthropathy and grade I retrolisthesis; mild loss of disc height; severe spinal stenosis compressing the left half of the cervical cord; severe left lateral recess and neural foraminal narrowing compressing the exiting left C4 nerve root, disc bulges and herniated discs at C3-C4, C4-C5 and C5-C6, L5-S1, L4-L5, L3-L4 as well as losses to his lumbar spine, comprised of disc herniations and bulging discs. Plaintiff received a C7-T1 injection in May 2021.
Defendant’s IME doctor reported that examinations of Gueye’s cervical spine did not reveal any muscle spasms, atrophy, deformity or soft tissue swelling. Gueye’s active range of motion with respect to flexion was to 50 degrees (50 degrees normal), extension to 40 degrees (60 degrees normal), right lateral flexion to 45 degrees (45 degrees normal) and left lateral flexion to 45 degrees (45 degrees normal), and right rotation to 60 degrees (80 degrees normal) and left rotation to 60 degrees (80 degrees normal). Passive range of motion was full. With respect to Gueye’s lumbar spine, no muscle spasm, non-tender to palpation, no atrophy, deformity or soft tissue swelling was detected. However, active range of motion was in flexion to 40 degrees (60 degrees normal), extension to 15 degrees (25 degrees normal), and right lateral rotation to 25 degrees (25 degrees normal) and left lateral rotation to 25 degrees (25 degrees normal). In light of the foregoing, defendant’s IME doctor opined that Gueye did not suffer from any “orthopedic disability,” and that his cervical and lumbar conditions had resolved.
Permanent Loss of Use:
To meet the threshold requirements of Insurance Law 5104(d), plaintiff must submit objective medical evidence from objective tests, not subjective. Rangel v. Lama, 77 Misc 3d 1207(A), 2022 NY Slip Op 51161(U)(Sup Ct, NY County 2022); Gaddy v. Eyler, 79 NY2d 955(1992). The Court determined that if a plaintiff has a limited range of motion in his or her neck, back or other body part from an accident, then “by definition the party has not suffered a total loss of use of such body part(s).” Gjoleka v. Caban, 188 AD3d 458, 459 (1st Dept 2020); Riollano v. Leavey, 173 AD3d 494, 495 (1st Dept 2019). Based on the foregoing, the Court held that the medical evidence submitted by the plaintiffs did not establish that they suffered the permanent loss of use of a body organ, member, function, or system. As such, the Court granted defendant's motion on the serious injury category of plaintiffs' permanent loss of use of a body organ, member, function, or system.
Permanent Consequential Limitation & Significant Limitation of Use:
“The permanent consequential limitation category requires a plaintiff to establish that the injury is ‘permanent,’ and that the limitation is of consequence or ‘significant’ rather than slight.” Altman v. Gassman, 202 AD2d 265 (1st Dept 1994). Permanency must be determined based on objective medical evidence.
The Court determined that both defendant’s IME doctor and plaintiffs treating physicians used objective methods. Plaintiffs’ treating physicians’ affirmations “show[ed] quantifiable limits on the range of motion of [Yun’s] cervical spine and lumbar spine, as well as positive tests.” Similarly, Gueye’s treating physicians found that his injuries were permanent and consequential based on the same objective measures. The Court held that the foregoing sufficiently raised issues of material fact to make granting defendant's motion premature. As such, the Court denied defendant’s motion on the category of permanent consequential limitation of use of a body organ or member.
90/180 Days Category:
A defendant can cite to a plaintiff's own deposition testimony showing that plaintiff was not confined to bed or home for the requisite amount of time. Windham v. New York City Tr. Auth., 115 AD3d 597, 599 (1st Dept. 2014); Pakeman v. Karekezia, 98 AD3d 840 (1st Dept. 2012). Here, Yun testified that she was confined to her home/bed for approximately one (1) to three (3) days after the accident, and that she drove every day after said confinement.
In his affirmation, Gueye stated that he "was held up in [his] own bed and home for the first three months after the crash and was unable to run [his] business which was a mechanic shop.” He further testified he was confined to his bed for approximately "ninety days" after the accident and to his home for approximately "five [to] six months" following the accident. Gueye also testified that he was unable to walk his two dogs, play soccer, or ride his motorcycle. He explained that he loved walking his dogs but was unable to because they “are large and will just pull while walking.” However, the Court found no evidence in the medical reports that restrictions were placed on plaintiffs’ activities. As such, plaintiffs’ injuries fell short of the 90/180requirements. The Court granted summary judgment to defendant on this 90/180 issue.
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.
06/18/25 Kushniruk v. O'Reilly Insurance Ltd.
Saskatchewan Court of King’s Bench
Insurance Broker Liability in Saskatchewan
The Rural Municipality of Cana No. 214 sits in southeastern Saskatchewan between Melville and Yorkton. In early to mid-August, those plains are dotted with fields of golden yellow canola with the never-ending blue sky stretching overhead. But, in June one sees a patchwork of lavender/purple alfalfa fields interspersed with the pink, red clover that blooms at approximately the same time under that same blue sky. Once the alfalfa flowers bloom, leafcutter bees go to work to pollinate the alfalfa and the clover enabling the production of alfalfa seed. Following pollination, alfalfa seed produces a high protein forage crop for livestock and the grocery staple known as, alfalfa sprouts (which have high concentrations of just about everything that is good for you). Red clover returns nitrogen to the soil and is also used in natural health pharmaceuticals.
Russell Kushniruk is a farmer in RM Cana who owns an apiary – in other words, he dedicates an area of his land dedicated to beekeeping. Leafcutter bees to be exact. He has about 190 huts containing nests in which the bees lay their larvae. Kushniruk’s business model involved renting a hut of bees to area farmers to pollinate their alfalfa and red clover. During the day, the female bees leave the hut and pollinate the alfalfa and clover flowers. The bees eat the nectar from the flowers and take a section of the leaf from the alfalfa plant which they then take back to the hut as bedding material for their larvae. By the end of August (or thereabouts) Kushniruk collects the huts which are full of larvae. Kushniruk then sells the larvae throughout Canada and the United States.
The larvae are, in essence, Kushniruk’s seasonal ‘crop.’ He would typically rent out roughly 710 gallons of bees at the beginning of the season and by season’s end, he would have roughly 1300 gallons of bees and larvae.
Wind is a significant risk in the leafcutter bee business. Wind can break stems on clover and alfalfa leading to reduced flower production. Reduced flower production means less nectar. A reduction in nectar reduces the production of larvae.
Kushniruk’s Farm Guard Policy
From 2017-2019 Kushniruk had two, consecutive, annual “Farm Guard policies that were issued by the Co-operators Insurance Company of Canada. That policy insured his bees. Kushniruk did not renew with the Co-operators in 2020 but elected to do so in 2021. Kushniruk contacted the O’Reilly Insurance Agency and asked for the same insurance that he had from 2017-2019. A policy was issued.
A windstorm damaged the crops in 2021, reducing the alfalfa and red clover flowers. As a result, the rented bees did not produce the usual quantity of larvae. Kushniruk made a claim for the loss of the larvae production. Co-operators denied the claim, citing the loss adjustment clause which stated that there is no loss where the number of adult bees or cocoons recovered during the season is equal to or greater than the number of adult bees and/or cocoons released at the beginning of the season.
The Prior Claim
Kushniruk was surprised by this denial. He had made an identical claim under the identical policy in 2017 and received compensation for the reduced ‘yield’. Co-operators stated that the policy coverage was not applied properly in 2017, and the improper claim adjustment does not determine how the policy would be applied in 2021. Co-operators plainly stated that it did not write the type of coverage that Kushniruk evidentially was looking for.
Claim Against O’Reilly
Kushnikruk told the O’Reilly agent when he bought the insurance for the 2021 season that he wanted the same coverage that he had in 2017 to apply to 1300 gallons of production bees at $65/gallon. However, three endorsements that he had in 2017 could be dropped. As far as Kushnikruk was concerned, that was what he purchased. In response to the Co-operators coverage denial, he argued that the agent that he dealt with at O’Reilly owed him a duty of care to give him advice regarding the nature of the insurance that he was buying and that at the very least he should have been told that the type of coverage that he sought was not available from the Co-operators.
This argument caused the Court to consider whether insurance brokers and agents can only be sued in contract or in both contract and tort. The conclusion that they can be sued in both then triggered a further lengthy discussion of the duties of care of insurance brokers and agents in Canada; the difference between a broker and an agent; as well as the different type of agents and their differing duties of care to those looking to obtain insurance.
In this case, O’Reilly was a recording / selling agent for the Co-operators as O’Reilly could not place insurance with any other insurance company. Throughout, O’Reilly acted as the agent of the Co-operators. This is not a case of Kushnikruk asking O’Reilly to ‘shop the market’ to find the coverage. The court found that any liability upon O’Reilly would be grounded in negligence, not contract.
In response to that finding, O’Reilly (wisely) did not dispute that they owed Kushniruk a duty of care but the did dispute whether that duty was breached. Following a further discussion of the Canadian cases that describe the standard of care of an insurance agent, the Court concluded that although no evidence was led by Kushniruk as to what that standard is, at a minimum, the O’Reilly agent had a duty to provide accurate information which included telling Kushnikruk that the coverage he was looking for was not available through Co-operators. As a result, O’Reilly failed to meet the standard of a reasonably prudent insurance agent.
Damages
The damages claimed totalled $123,100. Kushniruk’s damages claim proceeded on the premise that he ought to receive the compensation that would have been paid had he obtained the coverage that he sought. O’Reilly pointed out and the Court agreed that Kushniruk did not offer any evidence that the coverage he sought was available.
Further, assuming that coverage was available, Kushniruk provided his own uncorroborated evidence as to how the windstorms resulted in the loss of the anticipated yield from his ‘crop’ and the lost revenue as a result of that loss. O’Reilly argued and the Court agreed that even though this evidence was not refuted, the evidence that was lead was not satisfactory both as to how O’Reilly’s negligence caused the loss and the amount of the loss.
In the end, the Court awarded Kushniruk reimbursement for the premiums that he paid for the Co-operators policy which totalled $963.00. He was also awarded court costs of $4,400 payable by O’Reilly.
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