Volume XXVIII, No. 1 (No. 726)
Friday, June 19, 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. Thanks, as always, to Garden State Gestwick for his editorial work on this newsletter. Evan does a great job in helping round up the stray cats (our hard-working editors) to make certain they article are in place, on time. And our article editors? The BEST. They love to provide you with their case law summaries.
Welcome to the first issue of Volume XXVIII (or for those who don’t speak in Roman numerals, Volume 28 of Coverage Pointers. One of our column editors (and I won’t identify her to protect her identity – ha), turns 28 tomorrow. She was celebrating her first birthday about the same time as our first issue.
We also acknowledge and appreciate about 100 new subscribers to CP, many of whom joined our subscription list either before or after our recent presentations. The actual issue of Coverage Pointers is attached to this coverage letter.
We were so delighted to welcome over 500 attendees to our New York Coverage Protocol and AVOID Act program on Thursday. For those who missed it and want a copy of the video or slide deck, just send me a note at [email protected]. Likewise, if you had a question that wasn’t answered or if you have a question that has since percolated, reach out.
If you only select one case to read from today’s issue, I direct your attention to the Fourth Department’s somewhat understandable but somewhat disturbing opinion in Shadduck v. Dryden Mutual Insurance Company. For those who attended my program, you may recall that I spoke about Lang v. Hanover. In that decision handed down a few year ago, our high court warned liability insurers that if they choose not to defend an insured when they should, and fail to commence a declaratory judgment action to resolve coverage issues and the insured is found liable in damages, the carrier may (will) not be able to contest a liability determination against the insured nor relitigate the issue of damages assessed.
In this case, that’s what happened. Dreyden, the Fourth Department found, refused to defend its insured and a default judgment was orchestrated (perhaps) against it. Not only did the Fourth Department find that the insurer was precluded from contesting liability and damages, but it reinstated a cause of action in bad faith, allowing that claim to proceed.
Danger lurks. We have a very difficult time reconciling the bad faith claim under current law, but nonetheless, that was the court’s ruling. Note, there was no finding of bad faith, only a reinstatement of the cause of action.
Two articles of interest My law partner Mike Williams and I produced an article examining the growing risk of artificial intelligence hallucinations in legal practice, just published on in the most recent edition of the American College of Coverage Counsel’s quarterly publication. It’s available here. The article starts on page 31.
Along with my colleague Brigette Whitmore, our article summarize the new NY motor vehicle tort reform changed was published in the New York Law Journal on June 8. If you want to download and read that article, the link is here.
Finally, if you missed Scott Storm’s wonderful SIU presentation, last month, as part of Coverage Pointers University, his key takeaways are here.
Coverage Pointers University – Next Program
Connecticut Coverage and Bad Faith Avoidance
For information: [email protected]
Link coming next issue.
New York Tort Reform
If you haven’t heard about it yet, significant NY tort reform changes were adopted by the legislature and signed into law on April 26. Read all about them here.
For those who need to keep up to date on insurance coverage between issues of Coverage Pointers, we’re happy to help. Just follow me on LinkedIn and we’ll keep you up to date. I’m easy to find – my linked in name is (ready for this unusual and unexpected name): Kohane and you can find me here: https://www.linkedin.com/in/kohane/
Need a Mediator or Arbitrator, Give a Call:
A growing percentage of my practice has been a mediator (and sometimes as an arbitrator) in insurance coverage, commercial, personal injury, and other disputes. With a robust national client base, I am regularly called on by friends and colleagues from around the country, folks who know me and trust me, to help resolve disputes. Often, particularly in mediated matters, I know the insurers and lawyers on both (or several) sides of the dispute. Since they all trust me as a fair dealer, they feel comfortable having me try to help close the file (and avoid precedent). Just pick up the phone, 716.849.8942 or send an email to [email protected] and I’ll try to help.
Newsletters:
We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:
- Premises Pointers: This monthly electronic newsletter covers current cases, trends and developments involving premises liability and general litigation. Our attorneys must stay abreast of new cases and trends across New York in both State and Federal Court and will now share their insight and analysis with you. This publication covers a wide range of topics including retail, restaurant and hospitality liability, slip and fall accidents, snow and ice claims, storm in progress, inadequate/negligent security, inadequate maintenance and negligent repair, service contracts, elevator and escalator accidents, swimming pool and recreational accidents, negligent supervision, assumption of risk, tavern owner and dram shop liability, homeowner liability and toxic exposures (just to name a few!). Please drop a note to Jody Briandi at [email protected] to be added to the mailing list.
- Labor Law Pointers: Hurwitz Fine P.C.’s Labor Law Pointers offers a monthly review and analysis of every New York State Labor Law case decided during the month by the Court of Appeals and all four Departments. This e-mail direct newsletter is published the first Wednesday of each month on four distinct areas – New York Labor Law Sections 240(1), 241(6), 200 and indemnity/risk transfer. Contact Dave Adams at [email protected] to subscribe.
- Products Liability Pointers: Whether the claim is based on a defective design, flawed manufacturing process, or inadequate instructions/warnings, product liability litigation is constantly evolving. Products Liability Pointers examines recent New York State and Federal cases as well as high court decisions from other jurisdictions, keeping our readers up to date with the latest developments and trends, and providing useful practice tips and litigation strategies. This monthly newsletter covers all areas of product liability litigation, including negligence, strict products liability, breach of warranty claims, medical device litigation, toxic and mass torts, regulatory framework, and governmental agencies. Contact V. Christopher Potenza at [email protected] to subscribe.
- Medical & Nursing Home Liability Pointers. Medical & Nursing Home Liability Pointers provides the latest news, developments, and analysis of recent court decisions impacting the medical and long-term care communities. Contact Elizabeth Midgley at [email protected] to subscribe.
Thank Goodness. Hate to Have to Share – 100 Years Ago:
The Buffalo News
Buffalo, New York
19 June 1926
WOMAN M.P. TO HAVE
SMOKE ROOM ALL HER OWN
LONDON, June 19 (AP) – A smoking room all to herself is to be assigned to Miss Susan Lawrence, one of the four women members of parliament. Lady Astor and the three other commanders do not smoke, but the Laborite member for East Ham greatly enjoys the nicotine solace.
Peiper on Property (and Potpourri):
All quiet here—see you in two weeks.
Steve
Steven E. Peiper
[email protected]
Pretty Good Prediction – He Lived to 98 – 100 Years Ago:
The Moncton Transcript
Moncton, Moncton Parish, New Brunswick, Canada
19 June 1926
JOHN D. ROCKEFELLER WILL
LIVE TO BE ONE HUNDRED YEARS
OLD HIS PHYSICIAN DECLARES
Pat and Mike Stories, Plus Careful Dieting, Exercise,
Piety and Freedom from Worries Keep Aged Oil King
Healthy – His Simple Daily Routine
By Allene Sumner, NEA Service Writer.
Cleveland, O., June 19 – June D. Rockefeller, modern Midas whose hand has always turned all that it touched to gold, will live to be 100 years old.
This is the decisive statement of his physician of nearly half a century, Dr. Hamilton Fisk Biggar of Cleveland, who has lived and played with Rockefeller for months at a time.
And the attainment of a century of life by the world’s richest man will be largely due to Pat and Mike, those two Irishmen who have contributed much to the joy of the world.
Lee’s Connecticut Chronicles:
I'm out on the road exploring the world and will report back next edition.
Lee
Lee S. Siegel
[email protected]
Running Out of Gas? Nah. – 100 Years Ago:
Illinois State Register
Springfield, Illinois
19 June 1926
WILL MEET PROBLEM
Predictions that increasing millions of automobiles will exhaust the gasoline supply in a few years are being made with increasing frequency. Fortunately, no one pays any attention.
There is no cause for alarm. Production still exceeds demand by a comfortable margin. When it ceases to do so remedies will be found. America will not give up her automobiles. Nor will she pay excessively for their operation. The nation’s mechanical experts will see to that.
Improvement will come from both ends. Refining methods will extract more gasoline from crude oil. It will be better fuel for internal combustion engines and give more mileage. Automobile engines will become more efficient. It will take less fuel to cover the same ground.
Don’t give heed to alarmists. Even if the gasoline supply should give out it is certain a substitute will be found. But that’s a problem for a coming generation.
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers’ Subscribers:
My oldest son has really taken to pitching in his first year of player-pitch level little league. While he does struggle to find the strike zone at times, he has learned that it is better to throw a hittable ball for a swing, than to throw it as fast as possible (at this level, at least). And in his last travel game, he ripped a line drive up the middle, which was a huge confidence booster for him.
My youngest son continues his improvement at machine pitch and seems, more and more, to consistently make contact and sprint down the line to first. I have always viewed him as our artist and performer, but he certainly knows how to have fun on the diamond with his friends (and looks forward to it).
Cannot leave out my daughter. Her personality shines brighter each and every day. She just jumped classrooms at daycare and has taken to her new digs. Smiles for miles on that one, always.
This edition of my column tackles a motion to dismiss a consequential damages claim. While all damages are consequences of something, some consequential damages are worth more than others and it is important to know how courts draw that dividing line. Foreseeability is key (among other things).
Until next time…
Ryan
Ryan P. Maxwell
[email protected]
Dodgers for Sale – 100 Years Ago:
The Brooklyn Daily Times
Brooklyn, New York
19 June 1926
Fugazy Bid for Share
In B’klyn Baseball Club
Must Better McKeever’s
“Judge” Has Made offer
Which Has Been Declined, and
May Go Higher
By THOMAS W. MEANY
Humbert J. Fugazy, whose ventures as a pugilistic promoter have made him the most talked of impresario in sportsdom in the past decade, has entered the lists in what promised to be the stiffest combat of the many in which he has tried his band. For Mr. Fugazy is making a bid to buy out the Ebbets interests in the Brooklyn Baseball Club.
Since the deaths of Charles H. Ebbets, sr., and Edward J. McKeever, which followed each other closely last spring, there has been a curious unsteadiness to the business affairs of the Dodgers, which was only half righted when Wilbert Robinson was elected president and Stephen W. McKeever, vice president and treasurer. The unsteadiness has caused a considerable output of rumors as to the ultimate disposition of the 50 per cent of the club which is held by the heirs of the late Charles H. Ebbets.
Storm’s SIU:
Vacationing. Check back next edition for more case digests.
Scott
Scott D. Storm
[email protected]
In Love With a "Slightly" Older Woman – 100 Years Ago:
New Orleans States
New Orleans, Louisiana
19 June 1926
Go After Her
DEAR MISS FAIRFAX:
I am in love with a girl four months my senior. She loves me too. Is it proper to love her and to take her out?L.L.
Of course it is. A few months or years for that matter need not affect friendship or love.
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
Nothing from me this week. Looking forward to a 10k in Boston this long weekend followed by afternoon tea with family at the Boston Public Library.
See you in a fortnight,
Kate
Katherine A. Fleming
[email protected]
Jim Boyle, a One Inning Wonder – 100 Years Ago:
The Cincinnati Enquirer
Cincinnati, Ohio
25 Dec 1958
James J. Boyle, 55,
Dies In Covedale
James J. Boyle, who became sales manager of two companies after a baseball career that included catching for the New York Giants, died yesterday at his home, 1037 Belvoir Ln., Covedale. He was 55 years old.
Mr. Boyle had been director of sales for the Zollner Machine Works, Ft. Wane, Ind., since June 1953. Earlier he had served for 26 years as sales manager for Aluminum Industries, Inc. Burial will be Calvary Cemetery, Evanston.
The Witt, Good & Kelsch funeral home, Oakley Square, is in charge of arrangements.
Editor’s note. Jim Boyle came in to catch for one inning in a game 100 years ago today. He never got to bat. That was the extent of him “catching for the New York Giants”. One of the most interesting parts of his baseball career is that he never played in the minor leagues, coming straight out of college for his one inning cup of coffee up in the bigs.
Jim Boyle's Major League Career
Jim Boyle's Major League Baseball career was brief and unusual. He played for the New York Giants for one inning in 1926, making his debut and his last bow in the ninth inning of a game against the Pittsburgh Pirates, one hundred years ago, tomorrow. He never played in the minor leagues, going straight from college to the major leagues
Gestwick’s Garden State Gazette:
Dear Readers:
I am now on the other side of my bachelor party, which was a blast. If you have not visited Ellicottville, New York, I highly recommend you do so. If you ski, visit Holiday Valley; if not, visit during the summertime for a nice main strip filled with bars, restaurants, and all kinds of things to do. We went golfing, hatchet throwing, and enjoyed each other’s company and the scenery. I am a lucky guy to have such great friends.
This week I circle back to our February 28, 2025, edition of this newsletter, where I reported on the Mist Pharmaceuticals v. Berkley case, which the New Jersey Supreme Court had recently granted certification to review. The decision is live read on to find out how it all shook out.
Over the next two weeks, I am going to be moving, and wedding planning. Wish me luck, and I’ll report back on how it went next edition.
Evan
Evan D. Gestwick
[email protected]
Insurance Fraud Isn't New – 100 Years Ago:
The Herald Statesman
Yonkers, New York
19 June 1926
INSURANCE FORGERIES
New York, June 19 (UP). – Richard J. Peterson, 37, former agent of the Metropolitan Life Insurance Company, was under arrest today charged with forging false death certificates and collecting $30,000 to $40,000 on his client’s insurance.
Police said Peterson made a full confession soon after his arrest, although he refused to name his accomplices.
Peterson, who lives at Pleasant Plan, S. L. is said to have forged certificates in the name of 50 of his clients when he was gent of the insurance company at its Great Kills branch.
O’Shea Rides the Circuits:
Dear Readers,
It was a strong finish for the Hurricanes down the stretch to win the Stanley Cup. Kudos to them on a strong post-season. While I am not an NBA fan, congrats are in order for the Knicks too. As everyone else looks forward to vacations, I will be watching the World Cup as I review policy language.
Unfortunately for this edition, my column will be a donut. I’ll circle back in two weeks.
Until Next Time,
Ryan
Ryan P. O’Shea
[email protected]
Where Was RICO a Century Ago? – 100 Years Ago:
Elmira Star-Gazette
Elmira, New York
19 June 1926
Probers Urge Arrest of 32
For Ambulance Chasing
NEW YORK (AP) – Ambulance chasers in Brooklyn have helped cheat insurance companies out of many millions of dollars a state Supreme Court justice reports.
Prosecutions of 32 persons, including several lawyers and doctors, is recommended.
Justice George A. Arkwright, who conducted an 18-month secret investigation, said in a report yesterday:
“A sordid picture of unethical, unlawful and sometimes criminal practices by certain lawyers and persons acting in concert with them has been developed.
“Unlawful patterns of solicitation of cases have involved collaboration between attorneys, doctors, auto repair men, insurance brokers and other persons.
“A great number of instances of collusion between attorneys and doctors to defraud insurance carriers by the issuance of forged fraudulent and exaggerated medical certificates and medical bills has been uncovered…”
The investigation was ordered by the Second Department of the Appellate Division of the state Supreme Court, which sits in Brooklyn. The report was compiled by Arkwright and Dennis M. Hurley, special prosecutor in the inquiry.
The investigation is continuing. In addition to recommending criminal prosecutions, the investigators urged that professional disciplinary proceedings be started against 14 lawyers and eight doctors.
LaBarbera’s Lower Court Library:
Dear Readers:
A lovely June so far – filled with lots of celebrations and family time. Thanks to my wonderful colleagues, I have recently come into possession of a Porch Goose, and countless outfits. Hopefully my neighbors will enjoy the new addition just as much as I do.
A troubling case out of Schenectady County this weekend. In relevant part, the Court denied an insurer’s Order to Show Cause, seeking a preliminary injunction. In doing so, the Court identified that the evidence submitted in support of the preliminary injunction was not sufficient to show success on the merits under Ins. Law § 3105, requiring denial of the Order to Show Cause.
Until next time…
Isabelle
Isabelle H. LaBarbera
[email protected]
MYOB, or Else – 100 Years Ago:
The Montgomery Advertiser
Montgomery, Alabama
19 June 1926
YOUNG WIFE GIVEN
$100,000 VERDICT
Breaking Up Home of Son Costs
Parents Big Sum in Alienation
Damage Suit
WASHINGTON, June 18. – (AP) – A verdict of $100,000 the largest ever awarded in Washington, for alienation of affections, was returned by a jury here today in favor of Mrs. Hilda C. Voigt, wife of Edward Voigt, Jr., former president of a bank.
The defendants were Mr. and Mrs. Edward Voigt, Sr., who were accused among other things of telling their son that Mrs. Voigt, Junior, was not good enough for him. There were also allegations surrounding the younger woman’s treatment at the home of her parents-in-law. She received the maximum amount she asked after the jury had deliberated more than two hours.
Lexi’s Legislative Lowdown:
Dear Readers,
Life is getting back to normal after a beautiful wedding weekend and a quick trip to Lake Placid right after. Now I am on to planning our honeymoon in St. Lucia!
This week we discuss proposed legislation that will waive the written exam requirements for independent adjusters if they hold a claim certification from a national or state-based claims association.
Thanks for reading,
Lexi
Lexi R. Horton
[email protected]
That Rule Still Exists – 100 Years Ago:
The New York Age
New York, New York
19 June 1926
Killed Husband,
Now Can’t Get Insurance
Washinton, D.C. – An interesting ruling was handed down by Comptroller General McCarl, the past week in the case of Florence Williams of Vernona Pa., who is now under suspended sentence, after having been convicted of the killing of her husband. The comptroller General decided, that although designated the beneficiary, she could not collect on the adjusted compensation certificate of her husband. He ruled further that the certificate cannot be cashed for Williams’ estate and therefore must be canceled.
Victoria’s Vision on Bad Faith
Dear Readers,
Headed to Crystal Beach, Ontario, for the long weekend.
This week, I have a decision from the Pennsylvania Superior Court discussing whether an insurance entity qualifies as an “insurer” under the Pennsylvania bad faith statute. Also, be sure to check out Dan’s report on Shadduck v. Dryden Mutual Insurance Company discussing bad faith in New York.
Have a good weekend and happy Juneteenth!
Victoria
Victoria S. Heist
[email protected]
Well, Not Quite Right, But it's the 17th Most Populous in the US – 100 Years Ago:
San Francisco Bulletin
San Francisco, California
19 June 1926
S.F. World’s
Largest City
In 100 Years
San Francisco will be the largest city in the world 100 years from now.
This is the statement made this week at the regular luncheon of the Down Town Association at the Hotel St. Francis, by Miss G. A. Shaffer, well-known San Francisco realtor, who quoted no less an authority than “Babson” for the prediction.
Miss Shaffer was telling her audience that property in this city and down the peninsula was extremely reasonable. The limited territory for the city, she declared, enhances values.
She declared Babon’s prediction sound, as two-thirds of the population of the world live on shores of the Pacific and that San Francisco was destined for great world trade.
Shim’s Serious Injury Segment
Hi Readers,
Hope everyone has been well since our last column. Unfortunately, there have not been many new cases decided on “serious injury” since our last issue. Nevertheless, I have found a helpful case to write about this week.
Congratulations to all New York Knicks fans on their team winning its third NBA Championship last weekend! It truly feels like the impossible just happened. After 53 years the Knicks finally did it. I am not a basketball fan, but I can certainly root for and appreciate a New York championship – especially when most living members of the fan base have never seen it.
Now we just need the other New York team in orange and blue to win its first championship in 40 years … that’ll be the day … let’s make sure to build the casino next door first … [sarcasm emphasized]
This week I have shared a case that calls attention to a technical reason a defendant’s summary judgment motion, on the basis that plaintiff did not sustain a “serious injury” may be denied. In this case, the Supreme Court, Queens County, denied a defendant’s motion to dismiss the complaint on the basis that his expert affirmations failed to comply with CPLR 2106.
See you in the next issue!
Stephen
Stephen M. Shimshi
[email protected]
Thank Goodness. – 100 Years Ago:
The Buffalo News
Buffalo, New York
19 June 1926
BRIAND DEFEAT
IS CHARGED TO
“YOUNG TURKS”
Force Harriot Not to Accept the
Minister of Foreign Affairs
Portfolio – Now He Is to Try
To Form Cabinet of Left Wing
Republicans
By WILBUR FORREST
PARIS, June 19. – Aristide Briand was beaten by party politics yesterday in his effort to combine the country’s greatest talent in a ministry, non-political in character, for the salvation of the nation’s finances and has retired from the picture.
Last night Edouard Herriot, president of the chamber, mayor of Lyons and chief of the Radical Socialist party, assumed the task of giving France a new government.
Herriot’s offer to Briand of the portfolio of minister of foreign affairs in his projected government, was declined by the former premier who is bitter at the intervention of the Radical Socialist party which brought his cabinetmaking to an end at noon. This action was led by a band of the younger radical Socialist deputies known as Young Turks, who threatened Herriot’s leadership of the party.
New England Almanack
Dear Readers,
For this issue, we report on a D. MA decision that examines the Restatement factors applied to establish whether Pennsylvania or Illinois law governs the outcome of a dispute over a pollution exclusion application in CGL policies covering multi-state risks and a Rhode Island Supreme Court decision that declines to depart from its prior holding that the per person, rather than per accident, limit in an auto policy applies to loss of consortium claims by individuals who were not directly involved in the accident.
Alex
Alexander G. Henlin
[email protected]
Barbara A. O’Donnell
[email protected]
Iryna N. Dore
[email protected]
Do Away with Sex and Nudity – 100 Years Ago:
The Brooklyn Daily Times
Brooklyn, New York
19 June 1926
PLAY JURY SYSTEM
WITH ‘TEETH’ URGED
Rabbi Sachs Would Increase Its
Powers to Stamp Out
Sex Plays.
Declaring producers of plays carrying “a sex appeal and a display of nudity” are looking only to their box office receipts, Rabbi Maxwell L. Sachs, speaking last night to his congregation at Temple Sinal, Arlington Ave. and Bradford St.. urged that “teeth be put into the powers of the play jury system.”
“The need for a play jury system at this time,” Rabbi Sachs said, “is felt all the more, because of certain depictions on the stage. Of course, it is to be expected, the producer will insist that the public is desirous of that kind of a play. He undoubtedly feels that his box office receipts will thereby increase if his play carries a sex appeal and the procedure of nudity. I personally believe that the time has come when the thinking classes in our American commonwealth will arise in revolt against such despicable practice.
North of the Border:
I began the month in Toronto, attending the Canadian Defence Lawyers’ President’s Dinner and the Annual Litigation Conference on June 4 and 5. It was an exceptionally enriching experience. Coming on the heels of the Insurance Coverage Symposium, the events offered a valuable opportunity to reconnect with colleagues I have known for nearly two decades through committee work, panel appearances, and service on the board of directors. Those longstanding relationships are at the heart of the organization; they not only drive its continued strength and relevance but also bring a genuine sense of enjoyment to the practice.
This week’s article deals with causation in property insurance – an issue that reminds us of that old proverb –
- The shoe was lost for want of a nail,
- For want of the shoe, the horse was lost,
- For want of the horse, the rider was lost,
- For want of the rider, the battle was lost,
- For want of the battle, the kingdom was lost,
- And all for the want of a horseshoe nail.
Until next time.
Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
Headlines from this week’s issue, attached:
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
- Prior Acts Exclusion Requires That All Causes of Action Arise Out of the Excluded Misconduct to Defeat the Advancement of Defense Expenses
- Exclusion in Educator’s Policy Limits – But May Not Eliminate, Recovery in Class Action Lawsuit
- Dangerous Case – Where Carrier Failed to Defend Insured by Considering Extrinsic Evidence, Default Against Insured Will Not Be Disturbed (based on Lang v. Hanover) and Bad Faith Claim Against Insurer Allowed to Proceed. Disclaimer Letter Constituted Repudiation
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
- All quiet this week. See you in two weeks.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- Communications and Documents by In-House Insurance Lawyers Are Not Per Se Protected from Disclosure
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- Overlapping Claims for Consequential Damages and Bad Faith Dismissed
STORM’S SIU
Scott D. Storm
- Vacationing. Check back next edition for more case digests.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- Nothing to report on this week.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
- New Jersey’s High Court Upholds Finding That Dual Capacity Exclusion, Which Requires No Causal Nexus, Precludes Coverage for Self-Dealing on Behalf of Multiple Companies
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- Nothing this week, see you in two.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Court Denies Order to Show Cause Seeking Preliminary Injunction Based on a Finding That Plaintiff Was Unlikely to Prevail on the Merits of the Action
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- Proposed Legislation Relating to Licensing of Independent Insurance Adjusters
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- PA Court Addresses Who Is an “Insurer” Under Statutory Bad Faith Statute
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
- Supreme Court, Queens County, Denies Defendant’s Motion to Dismiss the Complaint on the Basis That His Expert Affirmations Failed to Comply with CPLR 2106
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
Alex G. Henlin
Iryna N. Dore
- Pennsylvania Law Governs Dispute Over Pollution Exclusion’s Application to Claims Against Insured in Three Underlying Illinois Lawsuits
- Auto Policy’s Per Person Bodily Injury Limit Applies to Derivative Loss of Consortium Claims by Any Individuals Who Were Not Directly Involved in Accident
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- Ontario Court of Appeal Sends Greenhouse Crop Loss Coverage Fight Back for Trial on Causation
Stay well. With your health, you have everything.
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]
06/09/26 Certain Underwriters at Lloyds v. NU Ride, Inc.
Appellate Division, First Department
Prior Acts Exclusion Requires That All Causes of Action Arise Out of the Excluded Misconduct to Defeat the Advancement of Defense Expenses
Thanks to Lee Siegel for this review.
The Appellate Division reversed the trial court, holding that Lloyds is required to advance defense costs under a D&O policy. The coverage row centered over whether an SEC subpoena and certain lawsuits involved conduct taking place prior to the policy’s retroactive date (which appears to have coincided with the policy’s inception date). For claims made policies, even if a claim is first made during the policy period, if the alleged misconduct occurred before the retroactive date, then there is no coverage and the insured is often left without coverage.
Here, multiple actions alleged that the insured and its directors and officers misrepresented the status of vehicle orders. The complaints alleged misrepresentations both before and after the date plaintiffs' policy was issued, together with claims of insider trading. Other allegations concerned actions or statements that were made during the policy period, which were separate from the statements about orders. For example, the complaints alleged that the insured concealed testing failures in January 2021, which, had they been reported, would have revealed that the insured could not meet its expected production goals as represented. The complaints also alleged that the directors and officers mismanaged the company and were unjustly enriched by lucrative salary and bonuses.
Lloyds denied coverage, arguing that the actions were based, in whole or in part, on factual allegations for pre-policy inception coverage.
The Appellate Division disagreed, holding that only if “all the causes of action arise out of or necessarily rely upon excluded acts that took place before the commencement date” can a denial of coverage be warranted under a prior acts exclusion. Under the Xerox test, the court noted that where many of the alleged acts may fall within the exclusion, the insurer may obtain summary judgment only if it establishes that all the otherwise covered causes of action cannot exist but for the excluded acts.
Lloyds, the court concluded, did not meet its burden. While many of the acts alleged against the insureds took place prior to the inception of coverage, the carrier did not establish that each cause of action in the various proceedings falls within the ambit of the exclusion. The failing of Lloyds’ approach, according to the court, was to rely on the pleading as a whole and not look at each cause of action independently. In fact, the court noted that certain causes of action might be viable even in the absence of the excluded acts.
However, the court affirmed that there was no right to coverage for the SEC investigation for the entity because subpoena was not a securities claim.
06/09/26 Hofstra University v. United Educators
Appellate Division, First Department
Exclusion in Educator’s Policy Limits May Not Eliminate, Recovery in Class Action Lawsuit
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. The definition of damages under the policies explicitly excludes "the value of tuition or scholarships."
Given that the policies remain enforceable with respect to other covered losses, they are not illusory.
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.
Defendant's argument that the damages sought in the underlying class action lawsuits are based on wrongfully acquired funds such that public policy bars plaintiffs' claims is unavailing Furthermore, defendant's duty to defend under the terms of these policies is triggered whenever the underlying claims raise the possibility of coverage, which is the case here. The class action seeks damages beyond tuition and fees that fall under the scope of defendant's duty to defend.
06/05/26 Shadduck v. Dryden Mutual Insurance Company
Appellate Division, Fourth Department
Dangerous Case – Where Carrier Failed to Defend Insured by Considering Extrinsic Evidence, Default Against Insured Will Not Be Disturbed (based on Lang v. Hanover) and Bad Faith Claim Against Insurer Allowed to Proceed. Disclaimer Letter Constituted Repudiation
Plaintiff was injured while performing construction work using the tools and equipment of Cory Lisinski, doing business as CNL Construction and Maintenance (Lisinski). Lisinski was insured by Dryden Mutual Insurance Company. Lisinski notified defendant of the accident but Dryden disclaimed coverage based on, inter alia, lack of coverage for liability under the Workers' Compensation Law.
Plaintiff commenced a personal injury action naming Lisinski as a defendant and, following a damages inquest, obtained a default judgment in the amount of $2,841,782. Lisinski assigned to Shadduck any and all rights, claims, and interests that Lisinski had against defendant arising from the personal injury action.
Plaintiff then brought a direct action against defendant, suing individually and as assignee of Lisinski, as an injured person/judgment creditor pursuant to Insurance Law § 3420 (a) (2) and (b) (1). He moved for summary judgment on the complaint, seeking, inter alia, a finding of liability under section 3420 (a) (2) for damages up to the policy limit. Supreme Court concluded that defendant was liable under section 3420 (a) (2) but directed a new damages inquest in the interest of justice to allow the participation of defendant's counsel.
The court further dismissed plaintiff's bad faith claims.
Dryden contends in its appeal that the court should have granted its cross-motion to dismiss the complaint in its entirety because Lisinski failed to forward to defendant the papers concerning the underlying default proceeding. The court rejected Dryden’s contention.
The complaint in the underlying personal injury action alleged that plaintiff was an employee of Lisinski but also included the alternative allegation that plaintiff was an independent contractor. Thus, defendant was required at least to provide Lisinski with a defense. Instead, defendant disclaimed coverage on the ground, inter alia, that plaintiff was an employee and therefore a policy exclusion precluded coverage inasmuch as plaintiff would be covered by a workers' compensation claim.
The court found that the disclaimer constituted a repudiation by defendant inasmuch as "[a]n anticipatory breach of contract by a promisor is a repudiation of [its] contractual duty before the time fixed in the contract for . . . performance has arrived" Repudiation requires "some express and absolute refusal to perform . . . that is positive and unequivocal" and it "may result in numerous ways; among others, from the sending of a letter denying all liability and refusing to pay the loss" Note that the disclaimer letters advised the insured to provide copies of other papers filed in the case,
Here, in light of defendant's repudiation, Lisinski was excused "from further performance on his part of the conditions of the [insurance policy]," including forwarding to defendant the suit papers regarding the default proceeding
Dryden further contends in its appeal that the court should have granted its cross-motion to dismiss the complaint in its entirety for the additional reason that the default judgment is invalid and unenforceable because it was procured through misconduct. But that too was rejected.
Here, the court found there was no evidence in the record—not that the judgment was obtained through fraud, misrepresentation, or other misconduct inasmuch as there was no proof that Lisinski was promised a portion of the recovered damages or that the parties withheld information from the court.
Under Lang v. Hanover, the court found that Dryden could not challenge the judgment.
But surprisingly, the Fourth Department then reinstated the bad faith claim. In order to establish a prima facie case of bad faith, the plaintiff must establish that the insurer's conduct constituted a 'gross disregard' of the insured's interests—that is, a deliberate or reckless failure to place on equal footing the interests of [the] insured with [the insurer's] own interests. Here, the court found that Dryden did not meet its initial burden on that part of its cross-motion with respect to its alleged bad faith and improper conduct.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
All quiet this week. See you in two weeks.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
06/15/26 Conn. Gen. Life Ins. Co. v. Biohealth Labs, Inc.
United States District Court, D. Conn.
Communications and Documents by In-House Insurance Lawyers Are Not Per Se Protected From Disclosure
This case, involving a payment dispute, provides a much-needed reminder that the work of insurance lawyers is not necessarily privileged. Here, a special master reviewed 953 documents that Cigna claimed were protected from disclosure by the attorney-client privilege, overruling the privilege claim for the vast majority of the documents.
The parties’ fee dispute is immaterial. Nevertheless, the discussion is helpful. During discovery, Cigna withheld and redacted documents. Cigna claimed the documents were protected by the attorney-client and work product privileges. Cigna produced a privilege log. As the court noted, Cigna once employed a large in-house legal team. Nine Cigna lawyers were listed in the logs. Biohealth moved to compel production and impose sanctions.
The court started with the non-controversial proposition that “[t]he business of insurance companies is the payment of claims. A necessary part of this business is the investigation of claims. When lawyers have been employed to perform this function, courts have not considered these services to be legal advice." (citation omitted). Indeed, this is the rule in the Second Circuit. Bank Hapoalim B.M. v. American Home Assur Co., 1993 WL 37506 at *4 (S.D.N.Y. Feb. 8, 1993) (where in-house attorneys participate in claims investigation work for insurance companies, their work may not be legal advice).
Connecticut judges have held likewise. An insurance company, Judge Dorse wrote in 2001, "may not insulate itself from discovery by hiring an attorney to conduct ordinary claims investigation. . .. . To the extent an attorney acts as a claims adjuster, claims process supervisor or claims investigation monitor, and not as a legal advisor, the attorney-client privilege does not apply." First Aviation Servs. v. Gulf Ins. Co., 205 F.R.D. 65, 60 (D. Conn. 2001) (internal citations omitted).
The court, applying these precepts, found that Cigna’s claim of privilege was not supported. “Most of the documents on Cigna's privilege list simply are not privileged because they concern business advice, status reports, transmittal emails or administrative, logistical or non-substantive matters.” The court further stated that the documents contain business advice, not legal advice. The court warned that, “Communications do not become privileged, simply because the emails is (sic) addressed or copied to an attorney.”
Although the opinion addressed in-house counsel, the rules apply equally to outside counsel.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
06/12/26 Nandalall v. Liberty Insurance Corp.
Eastern District of New York
Overlapping Claims for Consequential Damages and Bad Faith Dismissed
Plaintiffs owned a residence in Jamaica, New York that suffered two fires in March and April of 2023. They were insured by Liberty Insurance Corp. under a homeowners policy and submitted claims, alleging damage to the building and personal property. Plaintiffs disagreed with Liberty’s claim handling and filed a lawsuit to recover unpaid policy benefits for the March 20 and April 4, 2023 fire losses and to obtain a declaration of Liberty’s obligations under the policy. Their Summons with Notice and Complaint sought damages for breach of contract (including breach of the duty of good faith and fair dealing), declaratory relief, interest, costs, and other appropriate relief; the Complaint sought in excess of $200,000 on the contract claim
A threshold motion to dismiss was filed on various grounds, but pertinent for our discussion, a motion was made to dismiss an inadequately plead claim for consequential damages. Specifically, in addition to seeking coverage under the policy, plaintiffs asked for consequential damages “beyond policy limits,” asserting Liberty engaged in bad-faith claim handling—protracted delays in investigation, failure to timely pay undisputed amounts, and undervaluation of their losses. The complaint alleges Liberty failed to carry out a good-faith investigation, significantly underpaid each claim, and had failed to fully indemnify both losses.
The EDNY found the complaint’s assertions of bad-faith tactics conclusory and lacking detail. Critically, the complaint did not plausibly allege any additional, foreseeable losses distinct from the covered fire losses that would not be remedied by the payment of indemnity under the policy. The court distinguished general (expectation) damages from consequential damages, noting general damages are the “natural and probable consequence” of the breach, while consequential damages compensate for additional losses beyond the value of the promised performance and are available only if those losses were foreseeable at the time of contracting. This foreseeability inquiry looks to the nature, purpose, and circumstances of the contract and what liability the defendant can fairly be supposed to have assumed when the contract was made.
Nor did plaintiffs plead a separate, viable implied covenant claim supported by different allegations from the breach-of-contract claim. The court noted plaintiffs did not assert a separate cause of action for breach of the implied covenant of good faith and fair dealing, but even if they had, such a claim would not survive unless supported by allegations different from those underlying the breach of contract claim. Here, the allegations overlapped entirely with the contract claim and lacked the necessary particularized, distinct harm.
Because plaintiffs failed to plead particular consequential losses that were foreseeable at the time of contracting and distinct from the covered loss itself (i.e., losses not remedied by full payment of policy coverage), the court dismissed the consequential damages claim under Rule 12(b)(6).
Maxwell’s Minute: If you have any interest in threshold procedural issues such as the application of a two year suit limitation clause in the context of an insured’s service of a summons with notice, or the validity of requests to extend the time for service of same, certainly read the entire decision for yourself. I decided to cut to the more interesting issue (from my perspective, at least).
STORM’S SIU
Scott D. Storm
[email protected]
Vacationing. Check back next edition for more case digests.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
Nothing to report on this week.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
05/11/26 Mist Pharmaceuticals, LLC v. Berkley Insurance Company
Supreme Court of New Jersey
New Jersey’s High Court Upholds Finding That Dual Capacity Exclusion, Which Requires No Causal Nexus, Precludes Coverage for Self-Dealing on Behalf of Multiple Companies
In our February 28, 2025, edition of Coverage Pointers, I reported that the Supreme Court granted certification to hear this case from the Appellate Division. A link to that edition is here.
Well, the time has come, and we have a decision. If you have been following this one, you may recall that a certain Mr. Krivulka was both a director of Akrimax Pharmaceuticals and was also a board member and manager of Mist Pharmaceuticals. Mist, and other companies, were sued in two underlying actions, both alleging that Krivulka engaged in a scheme of self-dealing by which Krivulka inserted Mist, Akrimax, and other entities into the middle of certain deals in such a way that each company would receive an illegal kickback from the deal revenue.
At the time the underlying lawsuits were filed, Berkley insured Mist under a Directors & Officers liability policy. That policy contained the following “dual capacity exclusion:”
[T]he Insurer shall not be liable to make any payment for Loss in connection with a Claim made against any Insured:
G. based upon, arising out of, directly or indirectly resulting from or in consequence of, or in any way involving any Wrongful Act of an Insured Person serving in their capacity as director, officer, trustee, employee, member or governor of any other entity other than an Insured Entity or an Outside Entity or by reason of their status as director, officer, trustee, employee, member or governor of such other entity.
Berkley eventually denied coverage to Krivulka personally under the dual capacity exclusion, specifically for the allegations pertaining to his roles with non-Mist entities. However, initially, Berkley agreed to pay 10% of Krivulka’s defense costs in each underlying action, since some of the allegations pertained to Krivulka’s role with Mist.
After defending Krivulka in that capacity for nearly a year, Berkley learned that the wrongful acts asserted against Krivulka in connection with his role with Mist occurred prior to the Berkley policy period. Berkley swiftly supplemented its denial of coverage, and pulled the defense, “effective immediately.”
Mist sued Berkley, seeking affirmative declarations of coverage. Berkley asserted a counterclaim, seeking restitution of its defense costs. As the underlying claims inched closer to trial, Mist sought Berkley’s involvement in negotiating a settlement, which Berkley refused.
After settling both underlying actions on its own, summary judgment motions were filed in the coverage action. The trial court ordered Berkley to fund the settlements in full, as, in the trial court’s view, Berkley unreasonably withheld consent to settle. The trial court reasoned that Mist’s allocation of the global settlement amount was in excess of the Berkley policy limit, but below Mist’s potential liability, Berkley had a duty to participate in settlement discussions.
The Appellate Division overruled the trial court’s ruling, on the ground that the trial court failed to consider the application of the dual capacity exclusion. However, the Appellate Division found that the dual capacity exclusion applied to the allegations in both underlying actions, which alleged that Krivulka engaged in the offending conduct on behalf of more than one entity that did not qualify as an insured under the Berkley policy.
The Supreme Court upheld the Appellate Division’s ruling, finding that the claims asserted against Krivulka and Mist fell squarely within the dual capacity exclusion. Importantly, the Supreme Court’s decision drew a distinction between policy exclusions that require a causal link between the excluded activities and the harm alleged.
The Supreme Court compared the dual capacity exclusion to one for injuries “arising out of the use, sale, manufacture, delivery, transfer, or possession” of a controlled substance. That exclusion, the Supreme Court found, required a causal nexus between the excluded activities and the harm alleged, because, per that exclusion’s terms, the injuries alleged had to arise out of the distribution of drugs to fall within the exclusion. However, because the dual capacity exclusion applies to claims “based upon, arising out of, directly or indirectly resulting from or in consequence of, or in any way involving” wrongful acts committed by a person acting in a dual capacity, the dual capacity exclusion does not require any causal nexus between the harm and the excluded activity in order to apply. The Supreme Court reasoned that the disjunctive use of the word “or,” as underlined above, meant that each phrase must be considered separately, any one of which would be independently sufficient to trigger the exclusion’s application.
Because the allegations in each underlying complaint, at a minimum, involved wrongful acts allegedly committed by Krivulka while he was acting on behalf of more than one company, the Supreme Court found that Berkley’s denial of coverage, and refusal to participate in the settlement, was proper.
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
Nothing this week, see you in two.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
05/29/26 Palisades Ins. Co. v. Boodram
Supreme Court, Schenectady County
Court Denies Order to Show Cause Seeking Preliminary Injunction Based on a Finding That Plaintiff Was Unlikely to Prevail on the Merits of the Action
In April 2025, the Boodrams were allegedly involved in an automobile accident in Queens, New York. During the investigation and through examination under oath testimony, the insureds made fraudulent statements regarding their address.
Accordingly, Palisades disclaimed coverage and filed suit against the Nateram and Sanicharie Boodram (the “Insureds”), and all medical providers whom the Boodrams sought treatment with related to the accident (the “Medical Provider defendants”). During the lawsuit, Palisades brought two applications. First, an Order to Show Cause seeking a preliminary injunction pending the outcome of a declaratory judgment action, enjoining all proceedings (litigation and arbitration) seeking No-Fault benefits, uninsured motorist benefits, or underinsured benefits under a certain policy of insurance issued to the Insureds.
In addition, Palisades sought leave to amend their complaint, to add additional Medical Provider defendants.
In support of the application, Palisades submitted affidavit testimony from an underwriting, detailing the amount of premium change that would have resulted had the Palisades correctly reported their address (a double in premium). In addition, Palisades submitted examination under oath testimony, under the penalties of perjury, of the Boodrams making false statements regarding their residency. In addition, Palisades submitted an affirmation of the owner of the property listed as the insured’s address – confirming that the Boodrams did not ever reside at the premises.
In opposition, the Boodrams argued that Palisades has not proven a likelihood of success in the declaratory judgment action, which requires denial of a Preliminary Injunction. The Boodrams argued that the affidavit testimony of an underwriter, without evidentiary support, was insufficient to establish a material misrepresentation.
The Court agreed with the Boodrams and denied the preliminary injunction request. In doing so, the Court found that Palisades was unable to show success on the merits under Insurance Law § 3105(b), thereby requiring dismissal of the Order to Show Cause.
To support its finding the Court The court identified that “to the extent that the Appellate Term and trial-level opinions cited in the Liberty Mutual decision are offered for the proposition that misrepresentation for the purpose of obtaining a lower premium is material – without a showing that the policy would not have been issued if the truth had been known – those decisions run counter to the face of Insurance Law §3105(b).”
The Court declined to follow Appellate Term and trial-level opinions which stand for the proposition that misrepresentation for the purpose of obtaining a lower premium is material, without a showing that the policy would not have been issued at all, if the truth had been known. The Court opined that these decisions run afoul to Insurance Law §3105(b), because, in the Court’s view, Insurance Law § 3105(b) is only intended to apply if the insurance carrier would not have contracted with the insured at all, had the true residence been known.
In addition, the Court granted Palisades motion for leave to amend the Complaint, because the application was meritorious and will not prejudice any existing party.
Editor’s Note: This decision is troubling for a few reasons, with the discussion regarding “materiality” of increased premiums triggering multiple alarm bells. Appellate Courts across New York have been uniform in holding that a change in premium is sufficient to establish materiality under Ins. Law § 3105. This line of case law stems from the Court of Appeals precedent, finding that “[m]aterial facts are those likely to influence the decisions of underwriters; facts which, had they been revealed by the reinsured, would have either prevented a reinsurer from issuing a policy or prompted a reinsurer to issue it at a higher premium.” See Mich. Nat'l Bank-Oakland, 89 N.Y.2d 94 (1996).
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
06/19/26 New York Senate Bill S5049A
New York State Senate
Proposed Legislation Relating to Licensing of Independent Insurance Adjusters
Bill S5049A, which was referred to the Assembly on May 28, 2026, seeks to establish that the written examination requirements are met if the individual holds a claim certification from a national or state-based claims association.
The justification provides that independent adjusters usually do business in multiple states and the process of seeking licenses can be a barrier to entry that ultimately impacts the consumers. The legislation intends to streamline the process for individuals who have completed a certification course offered by nationally recognized claims association. The certifications will be approved by DFS.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
06/15/26 Oil City Hosp. v. Amalgamated Ins. Underwriters, LLC
Pennsylvania Superior Court
PA Court Addresses Who is an “Insurer” Under Statutory Bad Faith Statute
Plaintiff Oil City Hospitality owned a Days Inn Hotel in Oil City, Pennsylvania, that sustained water damage in February 2021. Oil City alleges in this action that Defendant Amalgamated was an insurance entity that issued an insurance policy to Oil City Hospitality that covered the loss, but Amalgamated states it is not an insurer and did not issue the policy to Oil City Hospitality, but rather a representative of insurance carriers.
Oil City Hospitality submitted its water damage claim to its broker, and received a disclaimer of coverage for the loss. In August 2021, Oil City Hospitality brought this action against Amalgamated, alleging breach of contract and bad faith under 42 Pa.C.S.A. Sect. 8371. Amalgamated answer stated it acted as a representative of the insurers underwriting the policy but did not regularly issue policies.
In December 2024, Amalgamated filed a motion for summary judgment which was granted, and Oil City Hospitality Agreed.
On Appeal, Oil City Hospitality argued that there is a question of fact as to Amalgamated ‘s contractual relationship with Oil City Hospitality, and even if there wasn't a question of fact, the Court failed to properly weight the evidence in the light most favorable to Oil City Hospitality. The Court upheld the trial court's decision, finding Oil City Hospitality did not provide evidence showing Amalgamated is the insurer under the policy nor that Amalgamated was otherwise an insurer.
The Court also upheld the trial court's decision in dismissing the bad faith claim against Amalgamated. Under Section 8371, if an insurer is found to have acted in bad faith, the court may (1) award interest from the date the claim was made by the insured; (2) award punitive damages; (3) assess court costs and attorneys' fees against the insurer.
On appeal, Oil City Hospitality maintains the trial court erred in finding that Amalgamated did not qualify as an insurer under the statute, because the bad faith statute does not define "insurer". Oil City Hospitality asked the Court to recognize section 221.3 which defines "insurer" to include any person licensed to do an insurance business, which includes solicitation of applications for insurance or other negotiations. The Court upheld the trial court's decision, finding that Amalgamated ‘s only role in the loss was to forward the claim to the claim adjuster and it did not otherwise act as an insurer.
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
06/03/26 Villegas v. Tseten
Queens County Supreme Court
Supreme Court, Queens County, Denies Defendant’s Motion to Dismiss the Complaint on the Basis That His Expert Affirmations Failed to Comply With CPLR 2106
Edison A. Villegas ("Villegas") and Karla Johanna Cayambe Flores ("Flores") (collectively, "plaintiffs") commenced the subject action in November 2021 seeking to recover damages for personal injuries allegedly suffered in connection with a motor vehicle accident that occurred on March 15, 2021. Villegas was the operator and Flores was the passenger of the plaintiffs’ vehicle. The plaintiffs’ vehicle was struck in the rear by the vehicle owned and operated by Yeshi Tseten ("defendant").
Pursuant to an Order, dated March 12, 2026, the Court granted the plaintiffs’ motion for summary judgment on the issue of liability and to dismissed defendant’s First through Sixth Affirmative Defenses. At present, defendant has moved for summary judgment to dismiss the complaint on the grounds that the plaintiffs failed to meet the serious injury threshold in accordance with Insurance Law § 5102(d).
In opposition, the plaintiffs contend that the defendant’s motion must be dismissed because the affirmations of the defendant’s medical experts are not in compliance with CPLR 2106. See, Grandsard v Hutchison, 2024 N.Y. Misc. LEXIS 72914, 2024 WL 1957086 [Sup Ct, New York County 2024], affd 227 A.D.3d 491, 208 N.Y.S.3d 608 [1st Dept 2024]; Slade v Brodie, 88 Misc. 3d 1244[A], 252 N.Y.S.3d 447, 2026 NY Slip Op 5043[(U] [Sup Ct, Kings County 2026]; Torres v Pharney Group, LLC, 252 N.Y.S.3d 917, 88 Misc 3d 1255[A], 2026 NY Slip Op 50550[U] [Sup Ct, Westchester County 2026]; Yacinthe v Pamdh Enters. Inc., 2025 N.Y. Misc. LEXIS 10117, 2025 NY Slip Op 34752[U], 2025 WL 3553632 [Sup Ct, New York County 2025]; Hernandez v Interior Masters Group of NY Inc., 244 N.Y.S.3d 47, 87 Misc. 3d 1242[A], 2025 NY Slip Op 51875[U] [Sup Ct, Queens County 2025].
The affirmation of defendant’s expert, Dr. Mazzie, dated January 5, 2025, states that: “I, Joseph Mazzie, D.O., being a doctor duly licensed to practice medicine in the State of New York, pursuant to [CPLR 2106], hereby affirm under penalties of perjury that the statements contained herein are true and accurate.”
Upon review, the Court determined that the "affirmations were sufficient under the older CPLR 2106, but effective January 1, 2024, they are no longer legally sufficient to comport with this rule, as amended" (Torres v Pharney Group, LLC, 252 N.Y.S.3d 917, 88 Misc. 3d 1255(A), 2026 NY Slip Op 50550(U) [Sup Ct, Westchester County 2026]). The Court found that defendant’s expert affirmations failed to acknowledge the possible penalties of fine or imprisonment if the statements made therein are not true, nor did they acknowledge that the document provided may be filed in an action or proceeding in a court of law. Further, the “mere reference to CPLR 2106 in an affirmation does not import by reference the required language of the statute nor demonstrate an appreciation for the ‘gravity’ and ‘seriousness’ of the statements made in the affirmation and the consequences of making false statements” (see Grandsard v Hutchison, 2024 NY Misc. LEXIS 72914, 2024 WL 1957086 [Sup Ct, New York County 2024], affd 227 A.D.3d 491, 208 N.Y.S.3d 608 [1st Dept 2024]; Zhou v Cent. Radiology, P.C., 84 Misc 3d 410, 220 N.Y.S.3d 580 [Sup Ct, Queens County 2025]; see also G.B. v J.M.B., 88 Misc. 3d 1254[A], 2026 NY Slip Op 50538[U] [Sup Ct, Westchester County 2026] [affirmation that "affirm[ed] the following under penalty of perjury pursuant to Rule 2106 of the CPLR" was insufficient]; Capital One, N.A. v Heusner, 252 N.Y.S.3d 447, 88 Misc. 3d 1236[A], 2026 NY Slip Op 50354[U] [Sup Ct, Kings County 2026] [affirmation made "'under penalties of perjury pursuant to CPLR § 2106'" is "inadmissible as it lacks the mandatory language required for affirmations on or after January 1, 2024"]).
In reply, defendant argued that notwithstanding the above, the affirmations were admissible because they indicated that the truth of the statements contained therein were affirmed under the penalties of perjury. The Court held that “the relevant amendment to CPLR 2106 effective as of January 1, 2024, which mandates the inclusion of additional acknowledgments.” Mere acknowledgement is insufficient. See, Grandsard v Hutchison, 2024 N.Y. Misc. LEXIS 72914, 2024 WL 1957086 [Sup Ct, New York County 2024], affd 227 A.D.3d 491, 208 N.Y.S.3d 608 [1st Dept 2024].
Because the expert affirmations submitted by defendant failed to comply with CPLR 2106, the Court found that they were of no probative value. As such, defendant failed to meet his initial burden of establishing that the plaintiffs did not suffer a serious injury within the meaning of Insurance Law 5102(d). Accordingly, the Court denied the defendant’s motion on that ground.
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
[email protected]
Alexander G. Henlin
[email protected]
Iryna N. Dore
[email protected]
06/05/26 Arnold Eng’g Co. v. Liberty Mutual Ins. Co.
United States District Court, Massachusetts
Pennsylvania Law Governs Dispute Over Pollution Exclusion’s Application to Claims Against Insured in Three Underlying Illinois Lawsuits
Several years after the initiation of three (3) Illinois state court lawsuits concerning its alleged liability for groundwater contamination linked to its magnet manufacturing facilities in Illinois, The Arnold Engineering Co. filed a declaratory judgment and breach of contract action against Liberty Mutual in Massachusetts federal district court to resolve a dispute over its asserted entitlement to coverage under CGL Policies issued to its initial and successor parent companies, both of which were based in Pennsylvania, between 1976 and 1987.
To resolve the threshold question of whether Illinois or Pennsylvania law governed the application of the pollution exclusion in the CGL policies to the claims asserted against Arnold in the Illinois lawsuits, the court granted the parties leave to file cross motions for summary judgment at an early stage of proceedings in the D. MA action. As the court noted, the existence of an "actual conflict . . . between the substantive laws of the [two] interested jurisdictions” was undisputed because pollution exclusions “are construed more narrowly in certain respects . . . in a way that is more favorable to the insured - under Illinois law than they are under Pennsylvania law.”
Massachusetts law governed the choice of law analysis because federal courts in diversity actions apply the substantive law of the forum state, including its conflict of laws rules. Massachusetts law “follows a ‘functional approach’ to choice-of-law issues, guided by the Restatement (Second) of Conflict of Laws (1971).” When dealing with insurance contracts, Massachusetts courts start by examining the provisions laid out in §193 of the Restatement. If the outcome remains uncertain under §193, the “next step is to employ the principles set forth in §188 to ascertain which State has a more significant relationship to the issues, using in that analysis the factors set forth in §6” of the Restatement.
When examining policies that insure risks in multiple jurisdictions, Massachusetts courts favor the application of one state's law to promote consistent and predictable outcomes. In this regard, while an underlying tort claim is generally resolved under the laws of the State where the injury occurred, “the obligation of an insurer to defend and indemnify against that claim is more appropriately determined by reference to the insurance contract itself and the circumstances of its issuance.”
Applying these principles, the court (Burroughs, J.) entered summary judgment for Liberty Mutual regarding Pennsylvania law’s application to the parties’ dispute over the pollution exclusion’s application to the underlying Illinois lawsuits. In so holding, the court concluded that the factors set forth in §§188 and 6 of the Restatement supported the determination that Pennsylvania had a stronger interest than Illinois in having its “substantive law applied to the policies at issue” because Liberty Mutual “sold the policies at issue to Pennsylvania-based companies out of its Pennsylvania offices.” The contracts were also performed, at least in part, in Pennsylvania because the named insured parent entities paid the premiums for the policies from their headquarters in that state.
As grounds for denying Arnold’s cross motion for summary judgment, the court rejected its argument that “Pennsylvania lacks ‘a present interest in Arnold's insurance claims’ [because] its “Pennsylvania-based former parent companies ‘no longer exist.’” As the court explained, the choice of law evaluation examines "the expectation of the parties at the time the policy was issued,” and Arnold did not offer any support for its argument that the Court “may disregard the justified expectations of parties at the time of contracting simply because some of those parties no longer exist.”
05/19/26 GEICO Gen. Ins. Co. v. Diop
Rhode Island Supreme Court
Auto Policy’s Per Person Bodily Injury Limit Applies to Derivative Loss of Consortium Claims by Any Individuals Who Were Not Directly Involved in Accident
The Rhode Island Supreme Court affirmed the entry of summary judgment for GEICO in a DJ action filed to establish the applicable liability limit in a wrongful death lawsuit filed against its policyholder and her minor son (the at-fault driver) by the spouse and administratrix of decedent’s Estate.
Applying a de novo standard of review on appeal, the Rhode Island Supreme Court concluded that the policy language unambiguously permitted GEICO to apply the $50,000 per person limit, rather than the $100,000 per accident limit, to the underlying action filed on behalf of the surviving spouse and the decedent’s children because their claims were derivative in nature because they were not in the car when the accident occurred and the decedent was the only individual injured in the accident.
In an effort to avoid the application of the holding in Allstate Insurance Company v. Pogorilich, 605 A.2d 1318 (R.I. 1992), that derivative claims are subject to an auto policy’s per person limit, the claimants argued that their wrongful death claims against the at-fault driver and the vehicle’s owner differed from the common law injury claims addressed in that earlier decision. In the coverage action, the claimants filed a counterclaim against GEICO for declaratory relief regarding their asserted entitlement to recover the $250,000 statutory minimum for wrongful death claims under R.I. G.L. 1956 §10-7-1 et seq.
As grounds for rejecting the claimants’ contention that their wrongful death claims should not be treated as derivative claims subject to the Policy’s per person limit, the Rhode Island Supreme Court pointed to the absence of any support in Pogorilich or other Rhode Island decisions for distinguishing between wrongful death and personal injury actions, at least as it relates to the application of unambiguous policy language to the derivative treatment of loss-of-consortium claims.
As further support for its conclusion that loss of consortium claims are governed by an auto policy’s per person limit when brought by individuals who were not directly involved in the accident, irrespective of whether they are styled as statutory wrongful death or common law claims, the Rhode Island Supreme Court noted that Pogorilich has been endorsed by a number of other state high courts, including the Massachusetts Supreme Judicial Court’s decision in Santos v. Lumbermens Mutual Casualty Co., 408 Mass. 70, 556 N.E.2d 983 (Mass. 1990).
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.
05/11/26 Green Rise Foods Inc. v. N.V. Hagelunie
Ontario Court of Appeal
Ontario Court of Appeal Sends Greenhouse Crop Loss Coverage Fight Back for Trial on Causation
Who knew that the tomato on your summer barbecue platter owes its life to carbon dioxide, water, and sunlight? In commercial greenhouses, growers often add carbon dioxide to help plants grow, especially during the seedling stage. But too much carbon dioxide can harm the crop. That is why greenhouse systems must monitor carbon dioxide levels carefully. They also must monitor carbon monoxide, which can be highly toxic to plants.
Kingsville, Ontario, is part of the Greenhouse Capital of Canada, along with nearby Leamington. The region is home to one of the largest concentrations of greenhouses in North America. Green Rise Foods Inc. operated one of those greenhouse facilities near Kingsville. In early March 2021, an entire crop of beefsteak tomatoes began to deform and die. Green Rise lost 23 acres of tomatoes, just under 60 NHL hockey rinks’ worth of crop.
The investigation showed that a heat diffuser in one of four natural-gas-fired boilers had failed, causing excessive carbon monoxide to be produced. The carbon monoxide sensor also failed, which meant the problem was not detected in time. The crop was lost.
Green Rise’s Property Insurance Claim
Green Rise held a horticultural greenhouse insurance policy issued by N.V. Hagelunie, a specialist insurer in the global greenhouse sector. Green Rise reported the loss and supported its claim with a report describing the boiler and monitor failures, along with photos of the damaged crop.
Five days later, Hagelunie denied coverage. It said the loss fell within the machinery breakdown exclusion or the exhaust gas exclusion, and, therefore, was not covered. Green Rise responded that the loss was caused by carbon monoxide acting as a pollutant, and that the policy covered loss caused by pollution when it arose from a covered cause of loss or from soot or smoke from a covered event.
The Motion Court
Green Rise brought an application for summary judgment seeking a declaration that Hagelunie had to indemnify it for the loss. Hagelunie opposed the application and argued that the loss was excluded by the exhaust gas wording.
The motion judge agreed with Hagelunie. The judge held that the direct cause of the loss was excessive carbon monoxide produced by the malfunctioning boiler and left undetected because the monitor also malfunctioned. In the judge’s view, the exhaust gas exclusion was clear and complete. The motion judge also concluded that carbon monoxide fell within the ordinary meaning of “exhaust gas.” On that basis, the motion judge found that there was no genuine issue requiring a trial and dismissed Green Rise’s action.
The Court of Appeal
The Court of Appeal took a different view. It held that the motion judge focused too narrowly on the immediate cause of the damage and failed to analyze the full chain of events. In insurance cases, the court must identify the effective cause or causes of the loss using common-sense principles. The closest event in time is not always the legal cause that matters.
The effective cause of loss is also called “the proximate” cause of the loss. However, the Court of Appeal cautioned “it is important to remember that “proximate”, in this context, does not mean “closest in time” to the loss; rather, “proximate” refers to the “effective cause of the loss.”
Here, the court said there were several potentially causal events: the boiler malfunction, the monitor malfunction, and the resulting carbon monoxide poisoning of the crop. The trial judge needed to determine which of those events, alone or together, were the effective cause or causes of the loss. That analysis was necessary before deciding whether coverage existed and whether any exclusion applied.
The Court of Appeal also found that the motion judge did not properly decide who bore the onus of proving the machinery breakdown exception in the policy’s initial grant of coverage. The court further held that the factual record was incomplete. The evidence did not clearly explain what caused the boiler diffuser to become displaced or why the monitor failed. Those unresolved facts mattered to the coverage analysis.
The court also said the term “exhaust gas” had not been properly interpreted in the context of the whole policy. The relationship between the exhaust gas exclusion and the pollution exclusion, including the exceptions to the pollution exclusion, had to be examined together. If the causes were concurrent, the court would need to decide whether the loss was excluded at all, or whether coverage remained because of a non-excluded cause. In the end, the court held that these issues required a trial. The motion judge’s order was vacated and the parties were ordered to proceed.
Comment
This case is another reminder that causation matters in property insurance disputes. When several events may have contributed to a loss, courts do not simply stop at the last event in the chain. They must decide the effective cause or causes of the loss, then apply the policy in sequence: the initial grant of coverage, any exceptions within that grant, the exclusions, and any exceptions to the exclusions.
That approach can make all the difference in a claim involving overlapping causes, especially when machinery failure, monitoring failure, and an excluded substance all play a role. There are several Canadian cases dealing with serial and concurrent causes of loss under property policies. A leading example is Clark’s Chick Hatchery Ltd. v. Commonwealth Insurance Co. (1982), 38 N.B.R. (2d) 189 (C.A.). In that case, baby chicks died in transit after a weather-related delay prevented a ferry crossing. The court had to decide whether the loss was caused by windstorm, high seas, or delay. The answer determined coverage.
The broader lesson can be simply stated: In multi-event property losses, courts must identify the effective cause or causes of the loss using common-sense causation analysis. That finding then drives the coverage result. The difficulty lies in proving the chain of causation.
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