Volume XXVIII, No. 11 (No. 736)
Friday, November 6, 2026
A Biweekly Electronic Newsletter
As a public service, Hurwitz Fine P.C. is pleased to present its biweekly newsletter, providing summaries of and access to the latest insurance law decisions from the New York, New Jersey, and Connecticut appellate courts and Canadian appellate courts. The primary purpose of this newsletter is to provide timely educational information and commentary for our clients and subscribers.
In some jurisdictions, newsletters such as this may be considered Attorney Advertising.
If you know of others who may wish to subscribe to this free publication, or if you wish to discontinue your subscription, please advise Dan D. Kohane at [email protected] or call 716-849-8900.
You will find back issues of Coverage Pointers on the firm website listed above.
Dear Coverage Pointers Subscribers:
Do you have a situation? We love situations. Our bi-weekly issue is attached.
The Rule of Law
Pardon my indulgence today. I am still reflecting on Election Day and what it really means to me. It is particular important as we approach Veterans Day when we honor and salute those who have sacrificed so much in service to our nation in order to preserve the rights and privileges we enjoy.
Election Day has come and gone and our nation, lately steeped in political chaos, has risen to the task – it has demonstrated to the world that we can have free elections and that we can, as a nation, embrace the pe
I cannot tell you how relieved I was that the elections went off without much of a hitch. Whether you are pleased with the results or wished for something different, the most important lesson learned – and one which can never forget – is that as a citizen, we must respect, preserve and revere the Rule of Law. We are a democracy, we belief the unalienable rights of life, liberty, and the pursuit of happiness. We must believe in protecting the Rule of Law for all citizens, no matter their race, their gender, the background, the preferences or identity.
The Rule of Law is the foundation upon which every free and democratic society rests. It is the principle that no person, regardless of wealth, position, political influence, or power, stands above the law, and that every person, regardless of circumstance, is entitled to its protection. It is what separates a government of laws from a government of individuals, where rights depend upon the whims of those who happen to hold authority. The Rule of Law demands an independent judiciary, the fair and impartial administration of justice, and a commitment to due process, even when the results are unpopular or inconvenient. It protects the powerless from the powerful, safeguards individual liberties, and ensures that the promises embedded in our Constitution are more than words on parchment. Without it, freedom becomes fragile, justice becomes selective, and democracy itself is placed at risk.
But the Rule of Law is not self-sustaining. It survives only because each generation accepts the responsibility to defend it. It requires judges who have the courage to decide cases according to the law rather than public pressure, lawyers who respect the judicial process even when they disagree with its outcomes, and citizens who understand that the legitimacy of our institutions depends upon their independence and integrity. We must be particularly vigilant when the Rule of Law produces results with which we personally disagree, for it is precisely at those moments that our commitment to principle is tested. We cannot demand judicial independence only when decisions favor our preferred positions, nor can we defend constitutional protections only for those with whom we agree. The true measure of our devotion to the Rule of Law is our willingness to protect the rights of others as fiercely as we protect our own.
The Rule of Law is not a partisan ideal. It is an American promise, and its preservation is a responsibility we all share.
COVERAGE POINTERS UNIVERSITY
CLAIMS FILE DISCOVERY – ATTORNEY CLIENT AND WORK PRODUCT PRIVILEGE PROTECTIONS
Thursday, November 19th
1:00 PM Eastern, Noon Central
Via Zoom
Join Hurwitz Fine New England Insurance Coverage attorneys Barbara O'Donnell and Iryna Dore for a webinar examining available tools to limit the scope of claims file discovery.
Drawing on instructive court decisions and real-world scenarios, this session will explore the line-drawing factors courts apply to distinguish between discoverable materials generated in the ordinary course of an insurer's claims handling responsibilities and materials protected from disclosure by the work product doctrine and/or attorney client privilege.
Barbara and Iryna will discuss strategies to shield claims file materials prepared in anticipation of litigation and preserve applicable privileges, as well as the potential waiver consequences of delegating claim investigation functions to counsel. The program will also examine emerging privilege concerns surrounding the use of artificial intelligence tools, highlighting lessons from early court decisions concerning discovery disputes over AI-generated content prepared for litigation.
Attendees will gain practical guidance on safeguarding sensitive claims file information, navigating discovery disputes, and understanding how evolving technology may impact privilege protections.
For those who need to keep up to date on insurance coverage between issues of Coverage Pointers, we’re happy to help. Just follow me on LinkedIn and we’ll keep you up to date. I’m easy to find – my linked in name is (ready for this unusual and unexpected name): Kohane and you can find me here: https://www.linkedin.com/in/kohane/
Need a Mediator or Arbitrator, Give a Call – Now, a NAM Neutral:
I am pleased to announce that I am now a part of NAM (National Arbitration and Mediation) as a Hearing Officer. NAM is one of the nation's leading full-service providers of Alternative Dispute Resolution (ADR) services and as a member of their esteemed panel, I will be available to arbitrate and mediate cases throughout New York State. Reach out to NAM My NAM bio is here.
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.
Need a Drink? – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
6 Nov 1926
MONTANA STOPS
ALL ENFORCING
OF LIQOUR LAW
Voters repeal state law and
Orders are given to make no
More raids or arrests
Helena, Mont., Nov. 5(AP) - Montana's state prohibition law enforcement officers, halted in their activities by the majority given the measure providing for repeal of the state liquor lax, in Tuesday's election, have been instructed to make no more raids and report no more arrests.
Attorney General L. A. Foot declared repeal of the state liquor law makes conviction Impossible. When cases are called in the December term of the district court, the dry squad will devote its attention to cleaning up old cases.
Cases now before the courts, which cannot be disposed of before December, probably will be dismissed, in as much as there will be no law under which they can be prosecuted, the attorney general said.
"It is my belief," he said, "that the repeal makes possible sale of liquor to minors. The law refers to such a transaction as 'unlawful sale, but with the repeal there is no penally attached.
Peiper on Property (and Potpourri):
We start the Winds of November with a good Protective Safeguard Endorsement case this week. That’s right, an honest-to-goodness first party case. It’s been a while, so enjoy.
See you in two weeks.
Steve
Steven E. Peiper
[email protected]
Saved by the Bell – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
6 Nov 1926
Negro, Waiting for Chair,
Elated at Commutation
“God bless everybody!” condemned man cries on
Hearing news; joyously dons striped garb
Little Rock, Ark., Nov. 5 (AP) - "Bless God, white folks - I am ready to go."
The shout came from the cell of George Alexander, negro, condemned to die today for the murder of Nelson Watson, conjuror of his own race, as he heard the footfalls of the guard approaching his hour had come.
"All right, Cap'n, good mawning, Cap'n," he mumbled as the key rattled in the death cell do door.
The cap'n was Clifton Evans, penitentiary warden. He brought the news that governor had commuted the death sentence. George would not be strapped into the monstrous, chair.
"God bless, everybody!" he yelled, and his joyful cry echoed through the gray stone prison. "God bless everybody- not just somebody."
His first request was to be rid of the death suit, and he scrambled quickly into the regulation ion garb of stripes - his uniform for life.
Warden Evans, designated in Alexander's will to receive a farm valued at $6,000 and proceeds of a $900 life insurance policy, as the negro's estate, headed a group which called on Governor Terrall early today with the successful request for commutation. They pleaded that Alexander had served in the World War, that his family lad deserted him and that not even appeal to the supreme court had been filed in his belief.
Lee’s Connecticut Chronicles:
No case this week, see you in two more. Keep keeping safe.
Lee
Lee S. Siegel
[email protected]
Not a Bad Job – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
6 Nov 1926
Gets Job to See
If Short Skirts
Divert Attention
New York, Nov. 5 – Councilman Henry Ernst of Roseland, N.J., is envied by every male member of the city’s population.
He has been appointed to the job of finding whether or not the skirts worn by teachers in Roseland grammar school are so short as to interfere with schoolwork.
Ernst in a recent complaint to the principal of the school said that so much of the teacher was showing that the lessons really amounted to nothing.
The board of education is shocked and wants to know all the facts.
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers’ Subscribers:
A couple weeks ago I helped a high school friend of mine adopt his first dog since childhood. I know what it feels like to foster (and adopt) new dogs, but it was a great feeling to help spring a pup in a different way. And the updates! I love a good dog-adoption update, and this dog is loving her new yard. What a fit!
This edition, my column is less insurance centric and more federal practice centric. More specifically, it’s a lesson in what not to do when a district court tells you exactly what to do. The simple answer? Do it.
Until next time…
Ryan
Ryan P. Maxwell
[email protected]
Destined to End His Life in a Car Accident – 100 Years Ago:
The Buffalo News
Buffalo, New York
8 Nov 1926
STEALS 50 AUTOS TO
TAKE OUT HIS GIRLS
Police Accuse Gardenville Youth,
Saying He Admits Thefts
For Joyrides.
Clarence Aures, 19 years old. Clinton street, Gardenville, has confessed, according to police of the Fillmore Avenue station, to the theft of between 42 and 50 high-priced automobiles during the last two months.
According to Captain Jeremiah O'Brien, the prisoner said he took the cars to go joyriding with girlfriends. He abandoned the cars after the joyrides. Police said Aures told them that when he made dates, he always asked the young woman what make of machine she preferred. He stole that make of car from a downtown street, the police say.
Editor’s Note: Cheaper than renting -- He married at age 22 and died at age 29 in an auto accident, trying to save his young daughter who was slipping out of his car.
Storm’s SIU:
Hi Team:
I had an awesome several days last week in Gatlinburg, Tennessee, and the Smoky Mountains. Beautiful time of year there.
Four interesting case digests for you this edition:
- In Pennsylvania homeowners’ claims, where the insurer admits coverage for the peril, but the parties dispute the amount or scope of damage, appraisal is typically mandatory before litigation. Bad-faith complaints must contain specific, grounded facts showing why the insurer’s valuation or investigation was unreasonable and that it acted without a reasonable basis, not merely conclusory disagreements with line items or totals. Exhibits showing an insurer’s willingness to review additional documentation can undermine bad-faith allegations at the pleadings stage.
- Even at the summary judgment stage—where transparency interests are at their peak, the court will permit tailored redactions when parties demonstrate compelling reasons grounded in third-party privacy and protection of confidential business information. The court underscored that identities of nonparty clients and employees may be of limited relevance to adjudication and can be protected when the balance favors privacy.
- Thorough investigation of a legitimate coverage issue—here, residency and garaging at policy inception—does not constitute bad faith, particularly where the insured fails to cooperate with reasonable requests and an EUO required by the policy. The court’s ruling turned on the reasonableness of the insurer’s investigative steps and the absence of clear and convincing evidence of knowing or reckless lack of a reasonable basis, combined with the insured’s noncooperation and litigation posture before a coverage decision was made.
- The Second Circuit affirmed preliminary injunction staying and enjoining no‑fault collection proceedings and dismissed an appeal of a counterclaim dismissal for lack of jurisdiction. Key takeaways:
- In no‑fault insurance fraud suits alleging unlawful lay ownership/control and fraudulent billing, the Second Circuit continues to approve stays of mass arbitrations while the merits are litigated, often without evidentiary hearings where the record presents no essential factual disputes, and without security where an insurer’s ability to pay is unquestioned.
- Mayzenberg does not foreclose insurer defenses based on lay ownership/abdication of control; evidence of such control can sustain the “serious questions” standard for preliminary relief.
- Partial dismissals of counterclaims without Rule 54(b) certification are ordinarily not immediately appealable; attempts to bootstrap them to an interlocutory injunction appeal will fail absent a recognized exception.
Have a great two weeks.
Scott
Scott D. Storm
[email protected]
Beginning of the End – 100 Years Ago:
The Buffalo News
Buffalo, New York
6 Nov 1926
DUCE PLACES
ITALY UNDER
MARTIAL LAW
Mussolini Possesses Power of
Commander-in-chief in Wartime
Holds Seven Cabinet
Jobs Fight Against
Anti-fascists on in Earnest.
ROME, Nov. 6 (AP) – Italy awoke this morning to find Benito Mussolini holding seven of the cabinet’s 13 portfolios and in exclusive personal control of a new formidable mechanism for the protection of the regime against all attacks, conspiracies, and insults.
Having added the ministry of the interior to his responsibilities the premier called his cohorts to support him in carrying into effect two of his favorite maxims – two eyes for one eye and for one tooth an entire set of teeth,” and “the best way to defend is to attack”
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
Hope you had a good Halloweekend! I went down to NYC to volunteer at the marathon, and it was gorgeous and sunny with lots of people running in wild costumes. The whole weekend was like a giant Halloween party.
This edition’s case comes from the Supreme Court of Virginia. The Court considered whether a contractor and subcontractor for a county project on a communications tower had to indemnify the owner/operator of an overhead high voltage power line that electrocuted one of the subcontractor’s employees. As the work fell within an exemption, the relevant statute did not require the contractor or subcontractor to abide by its safety or indemnification requirements.
See you in a fortnight,
Kate
Katherine A. Fleming
[email protected]
GOP Warned to Take Moral High Ground – 100 Years Ago:
Poughkeepsie Eagle-News
Poughkeepsie, New York
6 Nov 1926
DR. BUTLER WARNS
REPUBLICAN PARTY
New York, Nov. 5 – (AP) - Republicans will follow the Whigs into political oblivion unless they "take the righteous side of the great moral and political Issue of prohibition," Dr. Nicholas Murray Butler, president of Columbia University, declared tonight in a statement.
The public has approved of what has been done in the way of tax reduction and government economy, he said, but it now wishes to move on to the solution of other problems.
"If the Republican party does not rise to the emergency," he added, “and take the righteous side of the moral and political issue of great prohibition, it will go down just as the Whig party went down two generations ago of its inability Ito face with courage and determination, the question of slavery." that the 18th amendment and the Volstead act clash with the "remainder, of the constitution and the whole body of American tradition and principle." It is Impossible, he asserted, to enforce conflicting laws.
Gestwick’s Garden State Gazette:
Dear Readers:
Who said homeownership wasn’t fun? Last week, instead of watching the Buffalo Sabres on their western road trip heater like I had intended, I had the distinct pleasure of attending to a minor gas leak in my furnace, compounded only by a clandestine bird’s nest clogging up the ventilation to my hot water heater. All has been rectified and is fine now (and hey, the Sabres went 3-for-3 out west).
Other than that incident, the new house has been awesome. We had about 30 trick-or-treaters (and overprepared with 180 pieces of candy). Leftovers, anyone?
The case I have for you this week is one of common sense (I love when that happens). Although a commercial auto policy provided coverage on an “any autos” basis, the Third Circuit wisely ruled that the auto still needs to be used in furtherance of the insured’s business to qualify.
That’s all I have for this week—see you in two more.
Evan
Evan D. Gestwick
[email protected]
Dear Miss Fairfax – 100 Years Ago:
Rochester Journal and the Post Express
Rochester, New York
6 Nov 1926
DEAR MISS FAIRFAX:
I live next door to a girl whom I have known for only two weeks; but I care a great deal for her. I’ve seen her almost every night. Do you think I should keep on going to see her in order to make her care for me. M.R.
“Almost every night” is a little too often to go to see a girl to whom you are not engaged, my friend. If you admire her and wish to win her friendship and love, you might call on her or invite her out once a week. Prove yourself a devoted and considerate friend, and in time you may win her affection.
O’Shea Rides the Circuits:
Hey Readers,
Halloweekend rolled by fast. My wife and I donned the classic Hamburglar-Grimace combination only to be let down by my younger peers who did not know the reference. Alas, I realized I am headed into the beyond as the generational reference gaps only continue to grow. On another note, I was able to take in the Buffalo Sabres v. Ottawa Senators game last night. It was a good night with W for the visitors.
This week I have no case reviews but will do a double dip for next issue.
Until Next Time,
Ryan
Ryan P. O’Shea
[email protected]
Tough Love – 100 Years Ago:
The Buffalo News
Buffalo, New York
6 Nov 1926
YOUTHS SENT TO PEN FOR
BEATING HOTEL BILLS
Thomas Moxon, 19 years old, and Philip McLaughlin, 21 years old, both of Toronto, Ont., Friday were sent to the Penitentiary for defrauding a Buffalo hotel out of board bills aggregating $41.55. The youths, police say, are wanted in Canda for passing bad checks and they will be deported when they are released from the penitentiary.
LaBarbera’s Lower Court Library:
Dear Readers:
Not much out of the Supreme Court the last few weeks, so we are taking a look at the City Court of Yonkers for this edition. In this case, the court found that an insurance broker was entitled to a complete dismissal of the claims, because of the fact that the signed application page and declarations page conclusively rebutted the failure to procure insurance claims. A copy of the decision is available upon request.
Until next time…
Isabelle
Isabelle H. LaBarbera
[email protected]
That Had to Hurt – 100 Years Ago:
The Buffalo News
Buffalo, New York
6 Nov 1926
MASON GETS $20,000 FOR
TROWEL’S 14-STORY DROP
NEW YORK, Nov. 6. – Robert Smith, a mason, received a verdict yesterday for $20,000 for injuries suffered when a trowel dropped 14 stories and hit him on the head. The verdict was handed up by a jury in the Queens Supreme court before Justice Burt J. Humphrey.
Smith sued William B. Moore’s Sons, Inc., contractors. He testified that on May 6 last his skull was fractured by the falling trowel while he was working on a building.
Lexi’s Legislative Lowdown:
Dear Readers,
I am planning to shop for Holiday décor this weekend. Hopefully, the house will be decorated by next week and full of Holiday spirit. Of course, we will wait until the Friday after Thanksgiving to get our real tree.
This week we discuss a bill that seeks to require electric scooter service platforms to maintain liability insurance and provide proof of insurance. The bill is currently in the Senate Transportation Committee.
Thanks for reading,
Lexi
Lexi R. Horton
[email protected]
Where Have I Heard This Before? – 100 Years Ago:
The Buffalo News
Buffalo, New York
6 Nov 1926
COOLIDGE PLANS TAX
REBATE NEXT SPRING
Payment Then Would Eliminate Book-keeping
Proposal Described as President’s Own Idea – Temporary Plan.
WASHINGTON, Nov 6 (AP). – A White House plan for a 10 per cent. tax refund was described at the Treasury today as President Coolidge’s own idea, uninspired by Secretary Mellon but regarded by the treasury officials as unlikely to cause serious embarrassment to the government’s fiscal policies.
At the same time, it developed that if accepted by congress the President’s proposal probably would take the form of an early spring bouquet to the taxpayer, not a Christmas present.
Victoria’s Vision on Bad Faith
Dear Readers,
This weekend we are finally painting the downstairs of our house. And, yes, dear readers, I have been talking about painting for months, but I really mean it this time. Turns out, the best motivation for house projects is inviting out-of-town guests to stay for the holidays. My sister, her husband, and my two niece-dogs will be here before we know it.
We (I) decided on the color blanched thyme. My husband told me I needed to let him choose at least one color for a room in our house, so our guest room is painted robust orange, which looks exactly like it sounds. Suffice to say, that will be the last time he chooses a color.
This week I have a case from the Colorado District Court, denying an insurer's motion for summary judgment on bad faith claims.
Have a great weekend,
Victoria
Victoria S. Heist
[email protected]
There Are Worse Crimes – 100 Years Ago:
The Herald Statesman
Yonkers, New York
6 Nov 1926
TWO MEN ARE FINED
FOR INTOXICATION
Found guilty of a charge of intoxication made against him by Patrolman David Whalen of the First Precinct, Charles Lilly, 40, of 34 Buena Vista Avenue, was fined $10 by city Judge Charles W. Boote this morning. Eugene Kears, a seaman on a boat tied up at one of the local sugar refineries was also found guilty of a charge of intoxication. Judge Boote imposed a fine of $15. Kearns informed the court that he had only $9 whereupon Judge Boote reduced the fine to that amount.
Shim’s Serious Injury Segment
Hi Readers,
Hope all has been well since our last issue.
We have unfortunately reached the end of the baseball season with the Milwaukee Brewers having defeated the Tampa Bay Rays 4-1 in the World Series. The same marks the first championship in Brewers’ history. Congratulations to them. On to the long offseason we go …
In this week’s issue, I have shared yet another Appellate Division, Second Department, decision wherein the Appellate Division, Second Department, reversed the Order of the Supreme Court thereby denying defendant’s summary judgment motion on the basis that the plaintiff did not sustain a “serious injury” within the meaning of Insurance Law § 5102(d) and also granted the plaintiff’s summary judgment motion.
See you in the next issue!
Stephen
Stephen M. Shimshi
[email protected]
What A Way to Go – 100 Years Ago:
Daily News
New York, New York
6 Nov 1926
SHE DRESSED HER PRETTIEST
FOR DEATH RENDEZVOUS
Miss Charlotte Vogel, Newark public school teacher, adorned herself for her rendezvous with death as carefully as though she were going to meet the love she probably had waited for over long.
Miss Vogel was 44. Yesterday She patted the permanent wave freshly placed in her hair for the occasion, donned frivolous lingerie and an expensive kimono, seated herself in her kitchen at 1162 Broad st., and inhaled illuminating gas.
Her body was discovered by Frank J. Hall, a neighbor. On a nearby table were found two notes. The spinster's last request, contained in a note addressed to the county physician, was: "Kindly do not disarrange my permanent wave, and please take good care of my clothes.”
New England Almanack
Dear Readers,
Today, we bring to your attention two decisions issued by the District Court for the District of Massachusetts in the same matter. First, the Court held that a conversion, misappropriation, commingling, improper use, theft, embezzlement or defalcation of funds, account information or other property exclusion does not apply to the claim of copyright infringement where the exclusion specifically addresses funds and account information, i.e., financial information.
Thereafter, following the plaintiff’s request for attorneys’ fees, the Court engaged in assessment of their reasonableness. Ultimately, confirming that “block-billing” is never a good idea, the Court decreased the entire invoice (which contained extensive block-billing entries) by 15%.
Happy Reading.
Barbara
Barbara A. O’Donnell
[email protected]
Alex
Alexander G. Henlin
[email protected]
Iryna
Iryna N. Dore
[email protected]
North of the Border:
On the road this week.
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]
- In UM Claim, Framed Issue Hearing Necessary to Resolve Factual Dispute Implicating Coverage
- In Educator’s Policy, No Coverage for Claims of Return of Tuition and Fees, But Other Claim for Damages, and Injunctive Relief Trigger Duty to Defend
- Insufficient Proof of Spoliation of Evidence
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
- Lack of “Operational” Smoke Detectors Violated PSE on Property Policy
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- No cases this week; see you in two more. Keep keeping safe.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- Federal Discovery Orders Should Be Complied With, Court Hold
STORM’S SIU
Scott D. Storm
[email protected]
- In Pennsylvania Homeowners’ Claims, Where the Insurer Admits Coverage for the Peril, But the Parties Dispute the Amount or Scope of Damage, Appraisal Is Typically Mandatory Before Litigation. Bad-Faith Complaints Must Contain Specific, Grounded Facts Showing Why the Insurer’s Valuation or Investigation Was Unreasonable and That it Acted Without a Reasonable Basis, Not Merely Conclusory Disagreements with Line Items or Totals. Exhibits Showing an Insurer’s Willingness to Review Additional Documentation Can Undermine Bad-Faith Allegations at the Pleadings Stage
- Even at the Summary Judgment Stage—Where Transparency Interests Are at Their Peak—the Court Will Permit Tailored Redactions When Parties Demonstrate Compelling Reasons Grounded in Third-Party Privacy and Protection of Confidential Business Information. The Court Underscored That Identities of Nonparty Clients and Employees May Be of Limited Relevance to Adjudication and Can Be Protected When the Balance Favors Privacy
- Thorough Investigation of a Legitimate Coverage Issue—Here, Residency and Garaging at Policy Inception—Does Not Constitute Bad Faith, Particularly Where the Insured Fails to Cooperate with Reasonable Requests and an EUO Required by the Policy. The Court’s Ruling Turned on the Reasonableness of Progressive’s Investigative Steps and the Absence of Clear and Convincing Evidence of Knowing or Reckless Lack of a Reasonable Basis, combined with the Insured’s Noncooperation and Litigation Posture Before a Coverage Decision Was Made
- The Second Circuit Affirmed Preliminary Injunction Staying and Enjoining No‑Fault Collection Proceedings and Dismissed an Appeal of a Counterclaim Dismissal for Lack of Jurisdiction
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- Contractor and Subcontractor’s Work on Communications Tower Exempted by Statute; Not Subject to Statute’s Safety or Indemnification Requirements
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
- Even Where Coverage Is Provided for “Any Auto,” the Auto Must Still Be Used in Connection with the Insured’s Business
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- No case this week; see you in two more.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Court Dismisses Claims Against Broker Based on Authentic Signed Application and Declarations Page
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- Proposed Bill Would Require Electric Scooter Service Platforms to Maintain Liability Insurance and Provide Proof of Insurance
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- Colorado Federal Court Finds Question of Fact for Bad Faith Claim Regarding Insurer's Reasonableness in Handling UM/UIM Coverage
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
- Appellate Division Finds Plaintiff Sustained Serious Injury Within the Meaning of Insurance Law § 5102(d)
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
Alex G. Henlin
Iryna N. Dore
- Conversion, Misappropriation, Commingling, Improper Use, Theft, Embezzlement or Defalcation of Funds, Account Information or Other Property Exclusion Does Not Apply to the Claim of Copyright Infringement
- “Block-Billing” Caused Redaction of Attorneys’ Fees by 15%
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- On the road this week.
Peace be with you.
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, New Jersey, and across New England.
In addition, Dan D. Kohane is a Foreign Legal Consultant, Permit No. 0119144, issued by the Law Society of Upper Canada, and authorized to provide legal advice in the Province of Ontario on matters of New York State and federal law.
NEWSLETTER EDITOR
Dan D. Kohane
[email protected]
ASSOCIATE EDITOR
Evan D. Gestwick
[email protected]
INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
[email protected]
Steven E. Peiper, Co-Chair
[email protected]
Michael F. Perley
Agnieszka A. Wilewicz
Lee S. Siegel
Barbara A. O’Donnell
Brian F. Mark
Scott D. Storm
Alexander G. Henlin
Iryna N. Dore
Ryan P. Maxwell
Katherine A. Fleming
Evan D. Gestwick
Ryan P. O’Shea
Isabelle H. LaBarbera
Lexi R. Horton
Victoria S. Heist
FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
[email protected]
Michael F. Perley
Scott D. Storm
NO-FAULT/UM/SUM TEAM
Jessica L. Deren
Ryan P. O’Shea
[email protected]
APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Topical Index
Kohane’s Coverage Corner
Peiper on Property and Potpourri
Ryan’s Federal Reporter
Storm’s SIU
Fleming’s Finest
Gestwick’s Garden State Gazette
O’Shea Rides the Circuits
LaBarbera’s Lower Court Library
Lexi’s Legislative Lowdown
Victoria’s Vision on Bad Faith
Shim’s Serious Injury Segment
New England Almanack
North of the Border
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
10/29/26 Progressive Direct Insurance Company v. Vargas
Appellate Division, First Department
In UM Claim, Framed Issue Hearing Necessary to Resolve Factual Dispute Implicating Coverage
Physical contact is a condition precedent to an uninsured motorists arbitration based on a 'hit and run' accident and the burden of proof to demonstrate physical contact is upon the insured. Here the EMS Report provided conflicting accounts of whether there was physical contact between respondent and another vehicle.
On the one hand it said that respondent "almost collided with a car, causing him to panic and fall of his bike," while on the other it listed the "Dispatch Reason" as "Pedestrian Struck.". A framed issue hearing is necessary to resolve these discrepancies as well as to determine if respondent complied with the 24-hour reporting requirement in the policy.
10/29/26 Hofstra University v. United Educators
Appellate Division, First Department
In Educator’s Policy, No Coverage for Claims of Return of Tuition and Fees, But Other Claim for Damages, and Injunctive Relief Trigger Duty to Defend
In this insurance coverage dispute, exclusions paragraph 15(q) of the policies defendant issued to plaintiffs states that defendant is not liable for any loss "related to or arising out of . . . any demand for the return of funds." The court correctly found that the plain meaning of the term "funds" is sufficiently clear on its face to include the sums paid by students in the form of tuition and fees Moreover, the definition of damages under the policies explicitly excludes "the value of tuition or scholarships."
However, while the return of funds is a significant portion of the relief requested in the underlying actions, a review of the underlying complaints indicates that the plaintiffs also seek damages beyond solely a return of tuition and fees. The underlying class action complaints seek compensatory, punitive, and/or statutory damages; injunctive relief; restitution; and such other relief as the court deems just and proper.
At this stage of the proceedings, dismissal based on the exclusion is premature, as the record does not establish that the only available damages consist of a return of money paid.
The policies are not traditional duty to defend policies. Rather, they provide for payment of defense costs when those costs and expenses are "incurred." Nevertheless, defendant is estopped from arguing that the court improperly applied a duty to defend standard in denying its motion to dismiss.
The defendant's duty to pay defense costs is triggered whenever underlying claims raise the possibility of coverage. In other words, the duty to pay defense costs arises in the same circumstances as the duty to defend whenever there is a possibility of coverage.
10/28/26 Gharti v. 33 Plaza, LLC,
Appellate Division, Second Judicial Department
Insufficient Proof of Spoliation of Evidence
In March 2015, the plaintiff allegedly was injured when he tripped and fell at a parking lot owned by the defendant and brought a lawsuit to recover damages, 18 months later, in September 2016. In June 2024, the plaintiff moved pursuant to CPLR 3126 to strike the defendant's answer as a sanction for spoliation of (i) insurance reports allegedly sent by the defendant's insurance company to the defendant recommending repairs to the subject parking lot from 2011 through March 2015; (ii) purported records pertaining to repairs made to the subject parking lot from 2013 through March 2015; (iii) purported surveillance video footage depicting the subject parking lot at the time of the plaintiff's accident; and (iv) a purported incident report prepared by the defendant documenting the plaintiff's accident.
When a party negligently loses or intentionally destroys key evidence, the party responsible may be sanctioned under CPLR 3126 for spoliation of evidence. However, there must be a showing that the party having control over the evidence possessed an obligation to preserve it at the time of its destruction, that the evidence was destroyed with a culpable mind, and that the destroyed evidence was relevant to the party's claim or defense such that the trier of fact could find that the evidence would support that claim or defense.
Here, the plaintiff failed to establish that the defendant intentionally or negligently failed to preserve the purported insurance reports or repair records pertaining to the subject parking lot, or that the defendant's failure to do so deprived him of the ability to prove his claim. Moreover, the plaintiff failed to establish that spoliation sanctions were warranted as to the purported surveillance video footage or the incident report, given the lack of concrete evidence that the plaintiff's accident was recorded by a surveillance camera, or that an incident report was prepared.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
10/29/26 Seneca Ins. Co. v. Cobleskill Enterprise, LLP
Appellate Division, Third Department
Lack of “Operational” Smoke Detectors Violated PSE on Property Policy
Cobleskill owned a hotel and restaurant complex that was damaged in a 2018 fire. Shortly thereafter, Cobleskill filed a claim with its first party insurer, Seneca, seeking coverage. Seneca responded by denying the claim for, inter alia, a violation of the protective safeguard endorsement and misrepresentations in the policy application. Seneca then commenced a declaratory judgment action against Cobleskill seeking confirmation of its decision to disclaim coverage.
In the ensuing litigation, Cobleskill counter-claimed against Seneca seeking a declaration that coverage was owed and for breach of contract. Cobleskill also commenced a third-party action against its broker, Links, arguing that coverage was lost it was due to the negligence of Links in preparing the application for coverage. Not to be outdone, Seneca then amended its Complaint to assert a direct action against Links for fraudulently submitting a claim under a policy that it knew was cancelled.
Despite the many machinations, the decision focused first on the application of Seneca’s Protective Safeguard Endorsement. The Court noted that the Seneca Policy required, as a condition precedent to coverage, the existence of operational smoke detectors in the building’s units and common areas. A PSE, however, is considered a warranty under Section 3106 of the insurance Law, and the carrier must not only demonstrate non-compliance with the requirements but that the non-compliance materially increased the risk of the property.
The Court noted that, generally, failure to maintain adequate smoke detectors can be a violation of a PSE. The Court the reviewed the evidence submitted by Seneca in support of its motion for summary judgment. This included proof that the premises had been flagged by the Village of Cobleskill as having insufficient carbon monoxide monitors, and further that those monitors did not interface well with the building’s existing smoke detectors and fire detection systems.
Seneca also introduced proof that Cobleskill retained a fire equipment firm who was retained to assess the building’s compliance issues with local code enforcement. This included an assessment of the building’s smoke detectors. It was determined in later depositions that the building did not have active smoke detectors in the banquet room, the kitchen, pool area, basement area and bowling alley. Deposition testimony appeared to confirm that said areas are considered “common areas” at the premises.
The fire at issue occurred as Cobleskill was attempting to upgrade the various deficiencies. Thus, the Court ruled that Seneca had demonstrated violations of the PSE and that such violations materially increased the risk of loss. In so holding, the Court found that “operational” meant that the smoke detectors had to be “ready for or in condition to undertake a destined function.” That, to the Appellate Division, means the smoke detector had to be in a condition to alert occupants of smoke and/or a fire.
The Court went on to hold that smoke detectors that were non-audible were not considered to be “operational” in that they would not alert occupants in a manner so as to positively reduce the risk of fire loss.
The Court also found that the term “common area” necessarily meant spaces that “all tenants could use” at the premises. The Court noted that it was clear that some spaces identified without proper smoke alarm protections (e.g., the bowling alley) were clearly common spaces and, thus, with the scope of the PSE.
Having determined several violations of the PSE were present on the date of loss, the Court very quickly pivoted to explain that the lack of smoke detectors was clearly a material increase in risk. And, accordingly, Cobleskill’s claims for coverage were property dismissed under the protections created by the PSE’s inclusion into the policy.
The Cour next addressed Seneca’s claim for fraud against Links, as Cobleskill’s broker. But, to state a valid claim for fraud, Seneca needed to demonstrate the existence of a fiduciary duty owned by Links. Here, acting only as a broker who facilitated an arm’s length transaction, Seneca could not meet that burden.
Finally, the Court also dismissed Cobleskill’s negligence claim against Links. Because coverage was lost due to non-compliance with the PSE, and negligence that may have been directed to Links was a not a proximate cause of the ultimate loss of coverage, and thus there was no viable pass through available.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
No column this time around. Until next time, keep keeping safe.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
11/04/26 Quhshi v. Hartford Underwriters Insurance Co.
Second Circuit Court of Appeals
Federal Discovery Orders Should Be Complied With, Court Holds
Before the Second Circuit Court of Appeals was an Eastern District of New York judge’s Rule 37 dismissal of the plaintiff’s complaint with prejudice and a fee sanction against plaintiff’s counsel.
A March 28 order required the plaintiff to amend written discovery responses, identify which produced documents corresponded to each of Hartford’s requests for production, and certify that all responsive information had been produced. Despite the clarity of this order, the plaintiff instead supplemented only seven requests and served unsigned, unverified interrogatory responses. The plaintiff also conceded that he did not comply with an April 10 order, with the district court rejecting as “unbelievable” his claim that he misunderstood that plain, unambiguous order. All told, the plaintiff missed four consecutive court‑ordered deadlines without bringing his production into compliance, despite repeated judicial directives.
The district court had warned the plaintiff at least three times that continued noncompliance could lead to sanctions, and a May 6 order expressly warned that sanctions could include dismissal.
Based on the record, the district court determined that lesser sanctions would be ineffective, dismissed the case with prejudice under Rule 37, and ordered plaintiff’s counsel to pay Hartford’s reasonable attorney’s fees caused by the violations.
The Second Circuit reviewed the district court’s application of the four factor test for dismissal as a discovery sanction—(1) willfulness/reason for noncompliance, (2) efficacy of lesser sanctions, (3) duration of noncompliance, and (4) whether the party was warned—and held each supported dismissal here. It emphasized the district court’s findings of willful noncompliance across multiple orders, the inadequacy of lesser sanctions given the pattern of defiance, the several‑month duration of noncompliance measured from earlier orders (not just a single later deadline), and repeated warnings that included an express dismissal warning.
While recognizing dismissal is a drastic remedy, the Second Circuit confirmed a district court need not impose or exhaust lesser sanctions first when the overall record shows they would be ineffective.
The Second Circuit also affirmed the fee sanction against plaintiff’s counsel, explaining that when a party disobeys a discovery order, the court must award the reasonable expenses—including attorney’s fees—caused by the failure unless the failure was substantially justified or an award would be unjust; those exceptions did not apply on this record. The Second Circuit found that it could review the monetary sanction against counsel because the notice of appeal made counsel’s intent to challenge that award “objectively clear,” satisfying Federal Rule of Appellate Procedure 3(c)(7).
STORM’S SIU
Scott D. Storm
[email protected]
10/20/26 Bouvenzier v. Amica Mutual Insurance Company
United States District Court for the Eastern District of Pennsylvania
In Pennsylvania Homeowners’ Claims, Where the Insurer Admits Coverage for the Peril, But the Parties Dispute the Amount or Scope of Damage, Appraisal Is Typically Mandatory Before Litigation. Bad-Faith Complaints Must Contain Specific, Grounded Facts Showing Why the Insurer’s Valuation or Investigation Was Unreasonable and That it Acted Without a Reasonable Basis, Not Merely Conclusory Disagreements With Line Items or Totals. Exhibits Showing an Insurer’s Willingness to Review Additional Documentation Can Undermine Bad-Faith Allegations at the Pleadings Stage
Plaintiff is Mark Bouvenzier, as attorney-in-fact for insureds George W. Bouvenzier, III and Lynn S. Bouvenzier, homeowners. Defendant is Amica Mutual Insurance Company.
Plaintiffs sued for breach of contract and statutory bad faith under 42 Pa. Cons. Stat. § 8371; and Amica argued appraisal was required under the policy and the bad-faith count was inadequately pled. The court granted Amica’s motion, dismissing Count I without prejudice and Count II with dismissal (no leave specified).
A fire-suppression sprinkler burst in the master bedroom, causing water damage to the dwelling and personal property. Amica determined the loss was covered under the policy.
Plaintiffs’ estimate was $328,141.11; Amica’s specialists valued repairs at $113,587.50 and omitted certain line items (kitchen cabinets, master bath vanity, hardwired A/V system).
Disputes encompassed: (a) moving/storage charges—plaintiffs’ vendor invoiced $109,364.84 while Amica’s contractor produced a comparative figure of $51,876.22; and (b) scope/valuation—plaintiffs’ contractor estimated $671,334.37 for roughly 7,000 items, whereas Amica’s adjuster valued $12,814.42 for 868 items. Plaintiffs’ list included a “substantial model-train collection and its display layouts.”
Plaintiffs’ public adjuster (Hillis Adjustment Agency) repeatedly told Amica that its estimates were inadequate. Amica responded on May 5, 2026, that it typically does not conduct in-person inspections for salvageable contents, relies on documentation reviewed by its contractor, and invited submission of additional documentation for reassessment. Amica later formally demanded appraisal and named its appraiser on June 22, 2026. Plaintiffs did not proceed with appraisal and instead filed suit
Appraisal clause (Section I – Conditions) states that if the parties fail to agree on the amount of loss, either may demand appraisal; each side selects an appraiser, and an umpire resolves differences. The policy’s “Suit Against Us” clause bars suit absent full compliance with Section I conditions.
The issues include:
- Whether the dispute is a “loss” (amount-of-damage/valuation) dispute requiring mandatory appraisal before litigation, or a “coverage” dispute allowing suit to proceed immediately.
- Whether plaintiffs stated a plausible bad-faith claim under § 8371 with sufficient factual specificity.
Count I (breach of contract) was dismissed without prejudice for failure to complete appraisal. The court held the dispute is about “loss,” not “coverage,” because Amica admitted the loss was covered and did not invoke any exclusion; the disagreement concerned the extent and valuation of damage. Once appraisal is demanded in a loss dispute, the appraisal clause is mandatory and must be exhausted before suit.
The court emphasized the public policy favoring appraisal to resolve insurer–insured valuation disputes and the consistent enforcement of appraisal clauses for “loss” disputes. A “coverage” dispute exists where the insurer denies liability based on policy terms or exclusions; a “loss” dispute exists where liability is admitted but the parties contest the extent or causation of particular damage. Here, Amica conceded coverage for the water-damage event and did not assert an exclusion; the parties disagreed over line items, scope, and pricing—classic “loss” issues. Therefore, the appraisal clause controlled, and suit was premature. Count I was dismissed without prejudice to allow appraisal, which is subject to limited judicial review.
Count II (bad faith) was dismissed for failure to state a claim. Plaintiffs’ allegations were largely conclusory and lacked concrete facts showing an unreasonable investigation, unreasonable delay, misrepresentations, or a lack of a reasonable basis coupled with knowledge or reckless disregard. The exhibits attached to the complaint also undermined certain allegations by showing Amica’s willingness to reassess upon receipt of additional documentation.
To state a § 8371 claim, a plaintiff must allege facts showing the insurer lacked a reasonable basis for its position and knew or recklessly disregarded that lack of a reasonable basis; mere negligence or poor judgment is insufficient. Conclusory recitations do not satisfy pleading requirements. Plaintiffs must plead specific facts describing what was unfair and why the investigation or conduct was unreasonable.
The court found that plaintiffs’ general allegations (e.g., unreasonable delay, underpaying benefits, reckless indifference) lacked supporting facts such as timelines, correspondence details, or concrete investigative deficiencies. Allegations about Amica’s “remote comparative review” of contents lacked when, what it entailed, and why it was unreasonable. Accusations of “misstating/mischaracterizing” facts (including references to Mason-Dixon Restoration’s cooperation and Wardlaw Claims Service’s reductions) did not specify who said what, when, or which reductions were unreasonable. Further, attached correspondence showed Amica reviewed submitted estimates and invited additional documentation for further review, evidencing a good-faith effort rather than an unreasonable refusal. Given the pending appraisal and Amica’s acknowledgment of coverage, the court could not infer a frivolous or unfounded refusal to pay. Accordingly, Count II was dismissed.
10/14/26 Marsh & McLennan Agency, LLC v. Alliant Ins. Services, Inc., et al.
United States District Court for the Southern District of New York
Even at the Summary Judgment Stage—Where Transparency Interests Are at Their Peak—the Court Will Permit Tailored Redactions When Parties Demonstrate Compelling Reasons Grounded in Third-Party Privacy and Protection of Confidential Business Information. The Court Underscored That Identities of Nonparty Clients and Employees May Be of Limited Relevance to Adjudication and Can Be Protected When the Balance Favors Privacy
This is an order resolving sealing applications connected to summary judgment briefing. The plaintiff moved to file limited redactions to certain exhibits attached to the Declaration of David W. Garland in support of plaintiff’s motion for partial summary judgment, specifically to remove non-party client-identifying information from Exhibits. Separately, the plaintiff requested to seal the unredacted version of three pages from the January 29, 2026, deposition of defendant Travis Davis, submitted with defendants’ partial summary judgment motion.
The court applied the Second Circuit’s common-law and First Amendment rights of public access framework, relying on Lugosch v. Pyramid Co. of Onondaga and United States v. Amodeo. Under the common-law test, the court asked whether the materials are “judicial documents,” assessed the weight of the access presumption based on the material’s role in the exercise of Article III power, and then balanced that presumption against competing interests such as privacy and confidential business information. For the First Amendment, the court referenced the “experience and logic” approach and recognized that summary judgment filings carry the strongest presumption of access, citing Joy v. North for the principle that such materials should not be sealed absent “the most compelling reasons.”
The court acknowledged that documents submitted with summary judgment motions are judicial documents to which a strong common-law and First Amendment presumption of access attaches, and that the presumption is at its highest at this stage. Even so, the court found “compelling reasons” to permit targeted redactions and sealing here, emphasizing: (1) substantial privacy interests of third parties; (2) personal identifying information such as non-public addresses and phone numbers; and (3) confidential business information, including the identity of a nonparty client and its employees, which the court deemed of marginal relevance to the issues to be decided at summary judgment. In balancing, the court held these privacy and confidentiality interests outweigh the qualified First Amendment presumption of access in this instance.
The motions to seal and to file with limited redactions are granted.
10/21/26 Wisseh v. Progressive Direct Insurance Co.
United States District Court for the Eastern District of Pennsylvania
Thorough Investigation of a Legitimate Coverage Issue—Here, Residency and Garaging at Policy Inception—Does Not Constitute Bad Faith, Particularly Where the Insured Fails to Cooperate With Reasonable Requests and an EUO Required by the Policy. The Court’s Ruling Turned on the Reasonableness of Progressive’s Investigative Steps and the Absence of Clear and Convincing Evidence of Knowing or Reckless Lack of a Reasonable Basis, Combined With the Insured’s Noncooperation and Litigation Posture Before a Coverage Decision Was Made
The court granted Progressive’s motion for partial summary judgment on Count II (statutory bad faith), entering judgment for Progressive on that count. Count I (breach of contract) remained; the opinion addresses only the bad faith claim.
On December 31, 2024, Wisseh applied for a Massachusetts motor vehicle policy for his Cadillac Escalade, representing he lived at “Hanscom AFB, MA 01731” and that the principal garaging address was in that ZIP code. The policy took effect January 7, 2025. The policy allowed Progressive to refuse to pay claims if the insured provided false, deceptive, misleading, or incomplete information, including about the vehicle’s garaging location. The policy also required the insured to cooperate in any claim investigation, including appearing for an examination under oath (EUO), and provided that failure to cooperate could permit denial of the claim.
On March 15, 2025, Wisseh was in an automobile accident in Philadelphia. He reported the claim to Progressive the next day, stating his car was being repaired in Fredericksburg, Virginia. In a March 18 phone interview, he said he was in Virginia and planning medical treatment soon. Progressive opened a PIP claim on March 20.
A Progressive representative investigated garaging and found associations for Wisseh with residential and mailing addresses in Woodbridge, Virginia, dating to at least 2022. On April 3, Wisseh said he was receiving medical treatment in Virginia. Progressive requested PIP documentation and medical authorizations on April 11; Wisseh did not respond. On July 29 he inquired about medical bill reimbursement; Progressive again requested records, which were not provided until October 29. Those records reflected all medical treatment occurred in Virginia and Maryland, prompting further questions about Massachusetts residence. On October 29, when asked to confirm his address, Wisseh replied he was “in the process of moving to Virginia” and provided the same Virginia mailing address he had long used. His claim application also listed the Woodbridge, Virginia home address, which Progressive later confirmed through a LexisNexis search.
On November 7, Progressive transferred the matter to its Coverage Verification Team. Progressive informed Wisseh it needed specific information to verify Massachusetts residency at the time the policy incepted in January 2025, before considering payment of medical costs; he threatened legal action. Rather than deny the claim, Progressive scheduled an EUO as permitted by the policy, instructing him to appear on December 2 and to bring documents that would establish Massachusetts residency (e.g., social media posts, pay stubs, cell phone bills, proof of employment, other insurance information). The letter emphasized the need to “complete its comprehensive investigation” and reminded him of his duty to cooperate; it indicated failure to participate would be treated as noncooperation. Wisseh did not appear for the EUO. Progressive then rescheduled a second EUO, but instead of cooperating, Wisseh filed suit.
After roughly nine months of investigation and before Progressive rendered a coverage decision, Wisseh sued in the Philadelphia County Court of Common Pleas. Progressive removed to federal court. The Second Amended Complaint alleged breach of contract (Count I) and statutory bad faith (Count II). Progressive moved for summary judgment on Count II.
The court applied Rule 56 and the Celotex/Anderson standards, emphasizing that a non-movant must make a sufficient showing on essential elements and that a mere scintilla is insufficient.
Under 42 Pa. C.S. § 8371, bad faith is “any frivolous or unfounded refusal to pay proceeds of a policy,” and a plaintiff must prove (1) lack of a reasonable basis for denying benefits and (2) knowledge or reckless disregard of that lack, by clear and convincing evidence (Rancosky). Courts also recognize a duty to investigate fairly and objectively, but thorough investigation of legitimate coverage issues is not bad faith.
The court found Progressive had a reasonable basis to investigate potential misrepresentations regarding residence and vehicle garaging at policy inception—a material issue because garaging location affects risk and premiums. The record showed multiple indicators tying Wisseh to Virginia around the time of the accident and before his application, conflicting with the Massachusetts representations.
The court emphasized that Progressive repeatedly sought relevant, policy-permitted information (medical records, residency documentation, EUO) to resolve coverage questions, but Wisseh delayed production for months, refused some requests, did not appear for the first EUO, and then sued rather than attend the rescheduled EUO, despite his policy obligation to cooperate. The court noted that even though noncooperation could have justified denying the claim, Progressive instead continued to investigate and attempted to obtain an EUO, which undermined any claim of bad faith. The court also cited authority that an insurer’s aggressive protection of its interests is not bad faith.
Given the evidentiary record and the heightened clear-and-convincing standard, no reasonable jury could find Progressive acted in bad faith in investigating the claim. The court granted Progressive’s motion for partial summary judgment on Count II and entered judgment for Progressive on that count.
10/29/26 Gov’t Emps. Ins. Co. v. Clarke
United States Court of Appeals, Second Circuit.
The Second Circuit Affirmed Preliminary Injunction Staying and Enjoining No‑Fault Collection Proceedings and Dismissed an Appeal of a Counterclaim Dismissal for Lack of Jurisdiction
Key takeaways:
- In no‑fault insurance fraud suits alleging unlawful lay ownership/control and fraudulent billing, the Second Circuit continues to approve stays of mass arbitrations while the merits are litigated, often without evidentiary hearings where the record presents no essential factual disputes, and without security where an insurer’s ability to pay is unquestioned.
- Mayzenberg does not foreclose insurer defenses based on lay ownership/abdication of control; evidence of such control can sustain the “serious questions” standard for preliminary relief.
- Partial dismissals of counterclaims without Rule 54(b) certification are ordinarily not immediately appealable; attempts to bootstrap them to an interlocutory injunction appeal will fail absent a recognized exception.
Defendants Colin Clarke, M.D., and Colin Clarke MD P.C. appealed two district court orders: (1) a May 23, 2024 preliminary injunction staying all pending no‑fault collection arbitrations and enjoining new collection proceedings against GEICO, and (2) a June 20, 2024 order dismissing defendants’ counterclaims. The Second Circuit issued a summary order affirming the preliminary injunction and dismissing the counterclaim appeal for lack of appellate jurisdiction.
The dispute arises out of New York’s no‑fault automobile insurance regime, which requires insurers to pay “basic economic loss,” including medical expenses, and permits insureds to assign benefits to providers for direct payment. Providers can arbitrate if claims are not paid; reimbursement is unavailable if a provider fails to meet licensing requirements. GEICO alleged that unlicensed laypersons owned, operated, and controlled the “Clarke Providers,” which submitted bills for medically unnecessary or unrendered services and filed hundreds of no‑fault arbitrations to collect on those charges.
GEICO filed suit in 2023 asserting common‑law fraud, unjust enrichment, and RICO claims; it sought damages and a declaratory judgment that defendants had no right to payment on any pending bills. The district court granted a preliminary injunction staying pending arbitrations and barring new collection actions, and later dismissed defendants’ counterclaims. Defendants appealed both orders.
Under 28 U.S.C. 1292(a)(1), the court had jurisdiction to review the preliminary injunction and applied abuse‑of‑discretion review (legal error, clearly erroneous fact‑finding, or a decision outside the range of permissible outcomes). To obtain a preliminary injunction, a plaintiff must show: (1) irreparable harm absent relief; (2) likelihood of success on the merits, or serious questions going to the merits with the balance of hardships tipping decidedly in the plaintiff’s favor; and (3) that the public interest favors relief. The panel acknowledged that when the “serious questions” standard is applied, district courts have greater flexibility to decide on the papers without an evidentiary hearing.
The district court did not abuse its discretion by deciding the injunction motion on the papers. Defendants failed to identify essential factual disputes requiring live testimony. Their submissions (including a medical article on trigger‑point injections and a declaration from Dr. Clarke about medical necessity) did not undermine GEICO’s broader allegations, and did not address lay ownership/control or abdication of professional control—key points supporting the injunction.
Although Rule 65(c) contemplates security, courts may require no bond depending on circumstances. Because GEICO “undoubtedly” could pay damages if later found to have wrongfully enjoined the providers, waiving the bond was within the district court’s discretion.
Defendants argued that the New York Court of Appeals’ decision in Government Employees Ins. Co. v. Mayzenberg barred GEICO’s request for a declaratory judgment on pending bills because insurers cannot deny reimbursement based on “professional misconduct.” The panel held defendants overstated Mayzenberg’s reach: even if some professional‑misconduct theories are unavailable, reimbursement may still be denied when misconduct involves surrendering control to unlicensed laypersons. GEICO’s evidence showed non‑licensed laypersons were paid over $1 million for “billing services” that took about one hour per day, supporting a serious question on unlawful lay ownership/control and thus on eligibility for reimbursement. On this record, the district court did not abuse its discretion in finding serious questions going to the merits.
The panel relied on its recent no‑fault fraud precedents, concluding the district court reasonably weighed the hardship to relatively small provider entities against the burden of thousands of piecemeal arbitrations GEICO would otherwise face. The court also rejected defendants’ “policy exhaustion” defense because they failed to identify any specific policies at risk of exhaustion or claims at risk of becoming uncollectible, tracking the Second Circuit’s reasoning in similar cases.
Protecting the integrity of the no‑fault system by detecting and preventing insurance fraud is strongly in the public interest; insurers are uniquely positioned to combat such fraud, and a global stay of no‑fault arbitrations against GEICO during the litigation serves that interest. The panel therefore held that the public‑interest factor favored the injunction.
The Second Circuit affirmed the preliminary injunction in full, concluding there was no abuse of discretion on any ground raised by defendants.
The court dismissed the appeal from the order dismissing defendants’ counterclaims for lack of appellate jurisdiction. Under 28 U.S.C. 1291, appeals lie from final decisions; the order dismissing counterclaims resolved only part of the case, and no Rule 54(b) certification was sought. The counterclaims were not “inextricably bound up with” the preliminary‑injunction ruling, and the collateral‑order doctrine was not satisfied. Accordingly, the court granted GEICO’s motion to dismiss that portion of the appeal.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
10/29/26 A&N Electric Coop. v. Dietzel Enterprises, Inc.
Supreme Court of Virginia
Contractor and Subcontractor’s Work on Communications Tower Exempted by Statute; Not Subject to Statute’s Safety or Indemnification Requirements
Accomack County began a project to drill new supporting foundations for guy wires (tensioned cables used to stabilize structures) attached to a communications tower. The County hired Allstate as its general contractor, and Dietzel was the subcontractor hired to drill the new guy wire foundations. Finck, an employee of Dietzel, walked a steel cable into an overhead high voltage power line within ten feet of the drilling site, and the overhead power line electrocuted Finck, who later died. A&N owned and operated the overhead power line which caused Finck’s death, and the power line was unconnected and unrelated to the Country’s communications tower and its guy wire foundations. Neither the contractor nor the subcontractor did any work on the power line that electrocuted Finck or on any other overhead power lines connected to the tower. Finck’s estate sued A&N, Allstate, and Dietzel in the Circuit Court of Accomack County, alleging the defendants were negligent in failing to establish sufficient safety measures protecting against electrocution by the overhead high voltage line and failed to abide by the requirements of the OHVLSA (Overhead High Voltage Line Safety Act). Relying on the exclusivity provision of Virginia’s Workers’ Compensation Act, the circuit court dismissed the subcontractor, and then the contractor settled with the estate before trial. The estate settled with A&N, and A&N’s insurer, Federated Rural Electric Management Corp., agreed to pay an amount to the estate on its insured’s behalf.
The insurer, as subrogee, sued the contractor and subcontractor in federal court for indemnification under the OHVLSA. In its federal complaint, A&N alleged that Allstate and Dietzel’s failure to notify A&N of their work on the communications tower and their failure to negotiate safety measures with A&N resulted in Finck’s injuries. The contractor and subcontractor argued that the statute exempted their work on the communications tower, so they had no obligation to abide by it or indemnify A&N. Allstate and Dietzel further contended that even if their work on the tower was not exempt from the OHVLSA’s requirements, the OHVLSA required A&N to establish first that it had been found liable to Finck’s estate. Because A&N settled the underlying action without a finding of liability, Allstate and Dietzel argued that A&N was barred from indemnification. The district court granted both Allstate’s and Dietzel’s motions to dismiss, concluding that the exemption applied to Allstate and Dietzel’s work on the tower even though the work on the County’s guy wire anchor was unrelated to the overhead line. On appeal, the Fourth Circuit certified questions to the Supreme Court of Virginia addressing whether the OHVLSA exempted Allstate and Deitzel’s work on the communications tower and whether a finding of liability to Finck’s estate prior to indemnification was necessary.
For the first question, the Supreme Court of Virginia considered whether a communications tower is an “overhead electrical or communication circuit[] or conductor[]” and whether that communications tower connected to one of the “systems” enumerated elsewhere in the Code. The contractor and subcontractor argued that the exemption applies to work on structures—like the guy wire foundations—in addition to overhead power lines themselves. The plain language of the OHVLSA’s exemption demonstrates that a communications tower is an “overhead electrical or communication circuit[] or conductor[]” connected to one of the enumerated systems. Accordingly, the Court concluded that the OHVLSA exempted the contractor and subcontractor’s work on the communications tower. As a result, the OHVLSA did not require Allstate or Dietzel to abide by the OHVLSA’s safety or indemnification requirements. Having answered the first question in the affirmative, the Court concluded that the second question was moot.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
10/26/26 C.J. Hesse, Inc. et al. v. Am. Family Home Ins. Co.
United States Court of Appeals, Third Circuit
Even Where Coverage Is Provided for “Any Auto,” the Auto Must Still Be Used in Connection With the Insured’s Business
Hesse and Atlantic Pier had a commercial auto policy with American Family. Atlantic owned a plot of land that it leased to Ocean County Landfill Co. Ocean County used that land to operate a landfill.
Over a period of time, six distinct motor vehicle accidents occurred on the landfill, causing bodily injury and/or property damage. Although each accident involved garbage trucks over which neither Hesse nor Atlantic had any ownership or control, each injured person sued Hesse and Atlantic, alleging that the landfill was negligently maintained.
Hesse and Atlantic sought coverage for each lawsuit under their common commercial auto policy with American Family. American Family denied coverage on the basis that the autos involved in the accidents—the garbage trucks—were not being used in the course of Hesse or Atlantic’s business. This declaratory judgment action followed.
The American Family policy contained a schedule of covered autos, whereby certain described categories of autos were assigned a particular symbol. This particular policy was written on Symbol 1, described as “any auto.” Meanwhile, the liability insuring agreement provided coverage for claims for bodily injury and property damage caused by an accident and resulting from the ownership, maintenance, or use of a “covered auto.”
American Family did not contest the insureds’ assertion that the garbage trucks, at face value, met the policy’s definition of “any auto.” Instead, American Family argued that the term “any auto” had a limited scope when considered in the context of the entire policy. American Family pointed to other categories of covered autos, including one for autos used in connection with the insureds’ business, to argue that even where coverage is provided under an “any auto” basis, the auto must still be used in furtherance of the insureds’ business in order to qualify for coverage.
On appeal, the Third Circuit held that the garbage trucks are not covered autos, despite the fact that coverage under the Main Street policy was provided on an “any auto” basis. The Court reasoned that even this broad category of covered autos still applied to vehicles owned or operated by the insureds, and to any other vehicles used to further the insured’s business purposes. The Court rejected the insureds’ contention that third-party vehicles driven by third parties for their own business purposes—like the garbage trucks—could also qualify as covered autos, ruling that any expectation to the contrary would be unreasonable.
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
No column this week; see you in two more.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
10/22/26 Chico v. D.C. Ranieri Ins. Ag., et al
City Court of Yonkers, New York State
Court Dismisses Claims Against Broker Based on Authentic Signed Application and Declarations Page
An insured, Abraham Chico (the “Insured”), brought an action against his insurance broker, D.C. Ranieri Insurance Agency (“Broker”) and automobile insurance carrier, Integron Insurance Company (“Insurer”). The action asserted negligence and breach of contract claims against the Broker. In sum, the Insured argued that he requested his Broker find “full coverage” on a financed vehicle.
Instantly before the Court, the Broker moved to dismiss the action, arguing (1) a request for “full coverage” is too indeterminate to be considered a specific request for coverage; (2) the signed application constitutes the insured’s specific request for coverage; and (3) the insured has a duty to read the obtained coverage.
In support of the motion to dismiss, the Broker attached a signed application page, a signed spousal liability declination page, and the automobile policy’s declaration page. In opposition, the Insured did not contest the authenticity of the documents but instead argued that the documents do not “utterly refute” the Insured’s claims that the broker failed to procure the requested coverage. However, the Insured did not deny signing the application.
The court found that the documentary evidence produced “conclusively disposed” of the claim that the broker procured coverage in an amount different from what the insured requested. More specifically, the court found that each document unambiguously showed that the Insured acquired liability-only coverage, with no collision or comprehensive coverage.
Accordingly, the court granted the motion in full and dismissed all claims against the Broker.
A copy of this decision is available upon request.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
11/06/26 New York Senate Bill S9054A
Proposed Bill Would Require Electric Scooter Service Platforms to Maintain Liability Insurance and Provide Proof of Insurance
Senate Bill S9054A, introduced on January 28, 2026, and amended on February 25, 2026, seeks to require electric scooter service platforms to maintain liability insurance and provide proof of insurance. The bill, sponsored by Senator Leroy Comrie, was referred to the Senate Transportation Committee. The Assembly companion bill is A9568.
The legislation would amend the Vehicle and Traffic Law by adding a new Article 34-E, which defines key terms including “digital network,” “electric scooter service platform,” and “trip.” The bill is aimed at companies that make electric scooters available to the public through a digital network, such as an app used to unlock, operate, and pay for a scooter.
Under proposed Section 1291, electric scooter service platforms would be required to maintain liability insurance coverage for scooters offered for public use. According to the sponsor’s memo, the section establishes minimum coverage amounts, specifies the scope of coverage during a trip accessed through a digital network, requires that the coverage be primary, and sets forth requirements for producing proof of insurance. Section 2 provides the effective date and authorizes necessary rulemaking.
The justification provides that electric scooter usage has increased dramatically in recent years, and that there is currently no uniform statewide requirement ensuring that electric scooter service platforms maintain insurance coverage for injuries or property damage arising from scooter use. The bill seeks to close that gap by requiring platforms to carry liability insurance covering operators, pedestrians, and property owners for the duration of a scooter trip.
The status of Bill S9054A has not changed since it was amended and recommitted to the Senate Transportation Committee on February 25, 2026. We will continue to monitor the Bill.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
10/29/26 Williams v. State Farm Mut. Auto. Ins. Co.
United States District Court for the District of Colorado
Colorado Federal Court Finds Question of Fact for Bad Faith Claim Regarding Insurer's Reasonableness in Handling UM/UIM Coverage
Selena Williams was involved in two motor vehicle accidents. At the time of the accidents, she was insured with State Farm with uninsured and underinsured limits of $250,000 and $500,000.
The first accident occurred in 2018 with a driver who was insured with USAA with limits up to $100,000. Williams settled her BI claim against Moore for $100,000. State Farm received notice of the accident and requested medical bills and records for the accident. State Farm learned of the accident in August 2021, requested records in October 2021, January 2022, and March 2022, and completed its evaluation in May 2022. State Farm then notified counsel that Williams had been compensated by the $100,000 paid by USAA.
The second accident occurred in 2021 with an uninsured driver. State Farm received notice of the loss in July 2022, a medical record review was completed in August 2022, and four days later, State Farm offered Williams $37,350 in uninsured motorist benefits. State Farm also requested updated treatment information for her pre-accident medical providers and a status update on her injuries and treatment. In October 2023, State Farm requested five years of complete prior records prior to the accident, and a few weeks later, Williams sued State Farm for both lawsuits alleging wrongful delay and denial of fair and reasonable payment.
State Farm moved for summary judgment on Williams' bad faith claim arguing that Plaintiff has no evidence that State Farm acted unreasonably in its handling of the claims, and the claims are solely over value. Under Colorado statutory law, an insurer may not unreasonably delay or deny payment of a claim for benefits, and its delay is unreasonably if it delayed or denied authorizing payment of a covered benefit without a reasonable basis for that action. Further, under Colorado common law bad faith claim, the plaintiff must demonstrate that the insurer's conduct was unreasonable, and the insurer knew or recklessly disregarded the fact that its conduct was unreasonable.
Here, the Court found that the Plaintiff showed evidence in the first accident that the letter of representation was received by State Farm on January 6, 2021, and State Farm did not complete its evaluation until May 22, 2022. For the second accident, the Court found that the Plaintiff provided evidence that State Farm did not issue a revised UM evaluation for more than a year after its August 20222 offer.
The court found genuine issues of material facts as to whether State Farm acted reasonably and denied State Farm's motion for summary judgment.
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
11/04/26 Eagan v. Gingo
Supreme Court of New York, Appellate Division, Second Department
Appellate Division Finds Plaintiff Sustained Serious Injury Within the Meaning of Insurance Law § 5102(d)
The plaintiff, Lisa Ann Eagan ("plaintiff"), commenced the subject action to recover for personal injuries allegedly sustained when her vehicle was struck in the rear by defendants’ vehicle, owned by North Shore University Hospital and Northwell Health, Inc. ("North Shore"), and operated by Robert John Gingo ("Gingo"). Plaintiff moved for summary judgment on the issue of liability and to dismiss the defendants’ affirmative defense alleging comparative negligence. Defendants opposed the motion and also cross-moved for summary judgment to dismiss the complaint on the ground that plaintiff did not sustain a “serious injury” in accordance with Insurance Law § 5102(d) as a result of the accident. The Supreme Court denied the plaintiff’s motion and granted the defendants’ cross-motion pursuant to an Order dated March 25, 2024.The plaintiff appealed to the Appellate Division, Second Department.
On appeal, the Appellate Division determine that the defendants failed to meet their prima facie burden of showing that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) in connection with the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). Defendants failed to proffer sufficient medical evidence establishing that the plaintiff did not sustain a serious injury to the cervical and lumbar portion of her spine under the permanent consequential limitation of use or significant limitation of use categories of Insurance Law § 5102(d) (see Zennia v Ramsey, 208 AD3d 735, 735; Melika v Caraballo, 187 AD3d 1173, 1173; Staubitz v Yaser, 41 AD3d 698, 699). Defendants’ experts found significant range of motion deficits of the cervical and lumbar portions of plaintiff’s spine and failed to adequately substantiate their opinions that the limitations were voluntary (see Z.H.B. v Sica, 221 AD3d 575, 576; Matveieva v Metropolitan Transp. Auth., 212 AD3d 726; Mondesir v Ahmed, 175 AD3d 1291). The defendants’ submissions also failed to address the plaintiff's claims that the accident exacerbated preexisting injuries to the cervical and lumbar regions of her spine (see Weber v Kalisky, 218 AD3d 629, 630; D'Augustino v Bryan Auto Parts, Inc., 152 AD3d 648, 650; Sanclemente v MTA Bus Co., 116 AD3d 688, 689).
According to the Appellate Division, plaintiff established her prima facie burden to judgment as a matter of law on the issue of liability by submitting, evidence that her vehicle was stopped at a red light when it was struck in the rear by the defendants’ vehicle (see Maurice v Donovan, 235 AD3d at 634; Martin v Copado-Esquivel, 226 AD3d at 670). The Appellate Division also determined that plaintiff established her prima facie burden to dismiss the defendants’ affirmative defense of comparative negligence by demonstrating that she was not at fault in the happening of the accident (see Maurice v Donovan, 235 AD3d at 634; Martin v Copado-Esquivel, 226 AD3d at 670).
In opposition, defendants relied on the deposition testimony of Gingo that the plaintiff suddenly stopped, which caused him to strike the rear of her vehicle despite his efforts to stop his vehicle. Defendants also relied upon an affidavit from Benjamin Kurian, a passenger in defendants' vehicle, who stated that both vehicles were traveling at approximately one (1) mile per hour in when the plaintiff suddenly stopped her vehicle, thereby causing the accident. This foregoing failed to raise a triable issue of fact as to Gingo's negligence or whether the plaintiff was comparatively at fault in the happening of the accident (see Perez v Persad, 183 AD3d at 772; Buchanan v Keller, 169 AD3d 989, 992).
Accordingly, the Appellate Division, Second Department, overturned the Supreme Court’s decision, thereby denying defendants’ cross-motion and granting plaintiff’s motion for summary judgment.
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
[email protected]
Alexander G. Henlin
[email protected]
Iryna N. Dore
[email protected]
02/10/26 Nicole Sliney Realty Team, Inc. v. Mount Vermon Fire Ins. Co.
U.S. District Court - Massachusetts
Conversion, Misappropriation, Commingling, Improper Use, Theft, Embezzlement or Defalcation of Funds, Account Information or Other Property Exclusion Does Not Apply to the Claim of Copyright Infringement
The plaintiff had been sued for copyright infringement based on the use of an architect’s drawing in marketing materials. It requested coverage under a Real Estate Agents Errors and Omissions Liability Policy that required a carrier to defend and indemnify the plaintiff against legal claims arising from "any negligent act, error, omission, or Personal Injury committed by the Insured in the rendering or failure to render Professional Services for others." The carrier had declined to defend or indemnify based on: (i) A.3 - which excludes claims based on violations of “anti-trust, price-fixing, restraint of trade or deceptive trade practice laws;” and (ii) A.8(b) - which excludes claims for "personal profit or advantage to which the Insured is not legally entitled.”
Later on, the carrier asserted Exclusion A.8.(d) in support of its position. It excluded coverage for:
disputes involving . . . (d) conversion, misappropriation, commingling, improper use, theft, embezzlement or defalcation of funds, account information or other property ....
The plaintiff disputed the disclaimer and filed claims for declaratory judgment and breach of contract. The plaintiff filed a motion for judgment on the pleadings. The carrier responded with the motion for summary judgment. The carrier based its request on Exclusion A.8.(d) only. It argued that the term “other property” included intellectual property.
The Court disagreed and held that “the words immediately preceding the term ‘other property’ – ‘funds’ and ‘account information’ - clearly refer to financial assets (or passwords or PINs to access ‘accounts,’ which are financial assets). In context, therefore, the term ‘other property’ should be interpreted to refer only to other types of property that are similar to the ones enumerated - that is, other forms of financial assets.” The Court ruled in favor of coverage and granted the plaintiff’s dispositive motion.
The plaintiff requested that the Court award it reasonable attorneys’ fees and costs.
10/16/26 Nichole Sliney Realty Team, Inc. v. Mount Vernon Fire Ins. Co.
U.S. District Court - Massachusetts
“Block-Billing” Caused Redaction of Attorneys’ Fees by 15%
While addressing the plaintiff’s request for attorneys’ fees, the Court reiterated the so-called “lodestar” method for evaluating the reasonableness of fees, i.e. “multiplying the number of hours productively spent by a reasonable hourly rate to calculate a base figure.” In determining that base figure, the first step is to calculate the number of hours reasonably expended by the attorneys for the prevailing party, excluding those hours that are “excessive, redundant, or otherwise unnecessary.” At this step, “the court has a right - indeed, a duty - to see whether counsel substantially exceeded the bounds of reasonable effort.”
The second step is to determine a reasonable hourly rate as benchmarked to the “prevailing rates in the community” for lawyers of like “qualifications, experience, and specialized competence.” In determining a reasonable hourly rate, a court must consider “the type of work performed, who performed it, the expertise that it required, and when it was undertaken.”
The court may then adjust the lodestar amount upward or downward based on the factors that include, but are not limited to the following: (i) the time and labor required; (ii) the novelty and difficulty of the questions; (iii) the skill requisite to perform the legal service properly; (iv) the preclusion of employment by the attorney due to acceptance of the case; (v) the customary fee; (vi) whether the fee is fixed or contingent; (vii) time limitations imposed by the client or the circumstances; (viii) the amount involved and the results obtained; (ix) the experience, reputation, and ability of the attorneys; (x) the ‘undesirability’ of the case; (xi) the nature and length of the professional relationship with the client; and (xii) awards in similar cases.
The Court further observed that “clerical or secretarial tasks ought not to be billed at lawyers’ rates, even if a lawyer performs them.” However, “[a]s time spent on administrative and clerical tasks has at least some value . . . courts are advised against discounting entries for such activities in their entirety.” As a result, the Court allowed only half of the normal rate for sending certified mail, formatting responses, e-filing, filling out summons, and combining prior invoices.
Finally, the Court held that the requested attorneys’ fees should be reduced because of the pervasive use of “block-billing.” More than half of the plaintiff's hours were block-billed in this case. The Court decided that, considering extensive “block-billing,” a 15% global reduction in attorneys’ fees was reasonable and warranted.
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