Volume XXVIII, No. 3 (No. 728)
Friday, July 17, 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.
Gestwick’s Garden State Gazette
Dear Readers:
It feels weird being at the top of this thing, but I do so only to help our esteemed colleague Dan enjoy his time away. I will back down at the bottom, where some may say I belong, soon enough.
Two weeks from Saturday, I’ll be a married man! The logistics are coming together—vendors were reserved a while ago, and the fine details are being checked off our list daily. The next “to-do” is to build our seating chart. We are using an oval-shaped mirror with a golden arch around it as the base. Each table, with the names of each person sitting there, is printed on cardstock. To stick them to the mirror, we are using wax stamped into a letter “G,” for Gestwick. That should be an interesting project.
Speaking of the wedding, and my interim role as Newsletter Editor, don’t fret if this publication is not transmitted to you two Thursday evenings from now. Rest assured that it will be transmitted to you, safe and sound, the following morning. Reason being that I will be at my rehearsal dinner two Thursdays from now. We hope you can understand!
I have two Garden State cases for you this week. First, we visit the employer’s liability exclusion, with an added twist in the form of a separation of insureds provision. Second, we draw a dichotomy between intentional versus negligent failure to inform a UIM carrier of the insured’s settlement with the tortfeasor.
That’s all from me. Hopefully I send this newsletter to you properly!
Kohane’s Coverage Corner
Dear Friends:
For one of the few times in our 28 years of publication, I have ceded the editor’s chair for this issue—and the next—to Evan Gestwick. I am confident that Evan will do a fabulous job.
I am writing from Europe, where I am enjoying a river cruise along the Douro River between Portugal and Spain. We began in Porto, and when the cruise concludes, we will spend a few days in Madrid, followed by a week in Lisbon for the FDCC Annual Meeting.
On Tuesday, July 14, I celebrated my 49th anniversary with the firm. I joined during the summer following my first year of law school, when H&F—we have since lost the ampersand—was just 45 days old. I was a 24-year-old law student hired to help draft a trial brief, and, somehow, I never left.
Forty-nine years is a long time to do anything, but it passes quickly when you are surrounded by extraordinary lawyers, talented and devoted staff, loyal clients, and colleagues who become lifelong friends. I have been extraordinarily fortunate to spend my career in a firm with a remarkable culture, a commitment to excellence, and an environment that has always felt like home.
It has been quite a journey—and I remain deeply grateful for every mile of it.
Thousand’s Flee
There is a troubling case out of the First Department – at least from my perspective. In Century Indemnity Company v. The Archdiocese of New York, the court denied alleged victims of abuse from intervening in a declaratory judgment action between the insured Diocese and its carriers. The law is clear that claimants cannot commence declaratory judgment actions without a judgment against a purported insured. However, I have always believed – and still do – that if an insured or insurer commences a DJ action, it is appropriate (perhaps critically so) to add the injured parties to the lawsuit (so that they are bound by the outcome). In this case, the claimants were not added by the parties to the DJ and instead, the claimants moved to intervene. The lower court denied it and the First Department affirmed. The First Department held that because proposed victims had not yet secured judgments against insurers as required by Insurance Law § 3420(b)(1), and thus, they lack a basis to intervene. I really think that’s a mistake because it could lead to inconsistent outcomes.
The AVOID Act.
Over the past several months, we have written extensively about the AVOID Act, the legislation that now requires third-party actions to be commenced—meaning filed—within 90 days after a defendant serves its answer. The law applies to actions commenced on or after April 18, 2026.
There is another critically important aspect of the Act that should not be overlooked:
AVOID Act: 90 days to file a third-party action after service of the answer—and only 20 days thereafter to serve it. No extensions.
Before the AVOID Act, CPLR 306-b generally permitted a party 120 days after filing to serve a complaint or third-party complaint. It also allowed a court to extend the time for service upon a showing of good cause or in the interest of justice.
The AVOID Act amended CPLR 306-b, however, to remove third-party actions from that provision. As a result, the customary 120-day service period—and the ability to seek an extension of that period under CPLR 306-b—no longer applies to third-party actions.
So, how long does a defendant now have to serve a third-party summons and complaint after filing it?
The answer is found in CPLR 1007.
Before the AVOID Act, CPLR 1007 also provided 120 days after filing to serve a third-party action. Chapter 704 of the Laws of 2025—the AVOID Act—struck the words “one hundred” from the statute. The result is that a defendant now has only 20 days after filing to serve the third-party summons and complaint.
Moreover, CPLR 1007 does not expressly authorize an application to extend that 20-day service deadline.
What happens when a defendant timely files a third-party action but fails to complete service within 20 days? Is the third-party action a nullity? Is there some other procedural mechanism for relief, despite the absence of an express extension provision?
Stay tuned.
Best wishes.
Dan
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.
Portugal, Tumult a Century Ago – 100 Years Ago:
The Australasian
Melbourne, Victoria, Australia
17 July 1926
POLITICS IN PORTUGAL
The Dacosta Ministry has been overthrown, and General Dacosta is a prisoner in Belem Palace. A new Cabinet has been formed with General Carmona as Prime Minister, Major Joao Bello Minister for the colonies, and General Rodriguez Minister for Foreign Affairs.
Peiper on Property (and Potpourri):
We write from a very smoky, hazy Western New York this afternoon. The multiple fires across Minnesota and Central Canada have decreased air quality so much that folks are staying in and enjoying the air conditioning. It has made for an unexpected, yet welcomed, day off for my lifeguarding daughter who is home from college for the Summer. My son, not to be deterred, challenged his fate to hit balls at the driving range today. Somethings, clearly, are worth the risk.
We wish all with breathing challenges a safe and healthy couple of days, as well as all of those folks trying to bring the fires under control. It is becoming a yearly occurrence, and it is one trend we could all do without.
Other than that, we are happy to be back at the control center this week. Last week, I attended the IADC’s annual meetings in Prague, Czechia. Prague is spectacular, and the conference was, as usual, top notch. Jet lag aside, we’ve settled back into a hectic but challenging schedule and are part of the contingent here holding things in place until our Editor’s return from his own conference on the old continent.
On the column front this week, we review an interesting decision involving Inland Cargo coverage which explores the perils of adding language to an accompanying Certificate of Insurance.
That’s it for this week. Na shledanou!
Steve
Steven E. Peiper
[email protected]
Now There is a Good Idea – 100 Years Ago:
The Buffalo News
Buffalo, New York
17 July 1926
ELECTRICTY USE ON
FARMS CONSIDERED
Application to Stationary Operations
May Profitably Be
Expanded, Is Claim.
NEW YORK, July 16.-The problem of handling field and other mobile operations on the farm with electric power service has not yet been solved, but is being carefully studied, and the application of electric power to stationary operations which will reduce farm labor may profitably be expended by the public utilities companies many fold beyond existing developments, according to L. R. Nash of Stone & Webster.
"Farming is the oldest industry in the world and is still the most important as measured by the most improper and power requirements," he states. "The major proportion of power requirements is supplied by the public utilities, but there is still considerable field to cover. The total power requirements on farms in the United States aggregate about 15,000,000 horsepower, of which 44 per cent is supplied by horses and only four per cent by electric power. The total annual overall cost of farm power is estimated at about $3,000,000, or greater than power bill of other class of industry.
Lee’s Connecticut Chronicles:
Dear Nutmeggers:
Thanks to the scores of you who joined us for today’s Connecticut Coverage webinar. I always find it difficult to present to the little white dot that is my video camera, so I hope it wasn’t too awkward. If you learned a little something about Connecticut’s coverage and bad faith environment, then we did our job. If you weren’t able to make it, we’re happy to provide a copy of the slide deck, or there's always the chance of a command performance.
For now, it’s back to the coverage grind. Until next time, keep keeping safe (and stay away from the wildfires).
Lee
Lee S. Siegel
[email protected]
The Taste of Money – 100 Years Ago:
The Buffalo News
Buffalo, New York
17 July 1926
CHECK CHEWER UST
FACE NEXT GRAND JURY
DANSVILLE, July 17. – C.E. Harris, who has been working for a short time in Dansville, must face charges of grand larceny and forgery before the next grand jury in Geneseo. He is alleged to have altered the figures in his pass book with the Steuben Trust company of Hornell so that his balance of $5.05 was made to appear as $500.05, and on the strength of his alleged finances bought a car from Walter Hughes, giving a check for $275 in payment. He asked to examine the check when arrested, and later chewed it up with a wad of gum in the local jail, to which he was taken on a warrant.
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers’ Subscribers:
My flight home from NYC yesterday included, among other passengers, a Buffalo politician. While I said hello, I chose to give him his space as he was travelling alone, in plain clothes. Personal space is important. I may have been the only person in the airport that recognized him and could probably have counted on one hand how many people may have known who he was at midnight on our flight home.
This edition, I tackled a SDNY decision involving when an insurer can file a declaratory judgment action (and when it cannot). A nuanced decision but one that involves an important distinction worth a read (because the juice is worth the squeeze). That’s assonance and I couldn’t help myself—get over it.
Until next time,
Ryan
Ryan P. Maxwell
[email protected]
The Great Canadian Invasion – 100 Years Ago:
The Buffalo News
Buffalo, New York
17 July 1926
99,796 CANADIANS
EMIGRATE TO U.S.
Nearly 6,000,000 Questioned
By Immigration Officials –
Total Shows Little Change
MONTREAL, July 17. – Figures of immigration from Canada to the United States during the fiscal year ended June 30, 1926, were announced yesterday by H.R. Landis, United States commissioner of immigration at Montreal. Exclusive of the Seattle district, they show that 99,796 entered the republic, about the same as last year.
Prior to July 1, 1924, European aliens with five years residence in Canada were exempt from the quota law. For the last two years residents of Canada must be born in the dominion to obtain quota exemption while actual immigration across the line was around 100,000 nearly 6,000,000 were questioned by United States government officers at the international border posts.
More than 2,500,000 is the estimate given for citizens of the United States returning home, and 2,523,106 covering aliens of the non-statistical class. The non-statistical class. The non-statistical class includes those entering for temporary visit and those who asserted they had been legally admitted before and were returning from a temporary sojourn in Canada.
Storm’s SIU:
[Busy signal] See you in two weeks!
Scott
Scott D. Storm
[email protected]
A Jury of His Peers? Nah. But Still Acquitted – 100 Years Ago:
The Buffalo News
Buffalo, New York
17 July 1926
FREAK INJURY FREES
MAN OF RUM CHARGE
Attorneys and Dry Agents Serve
As Jurors to Rectify an
Injustice to Accused.
JAMESTOWN, July 17. – A jury which included three prohibition agents Friday in Federal court acquitted a man of violating the prohibition law. It happened this way.
An attorney representing Fred Patterson, Wellsville hotel proprietor, protested his client has been in court four days his case had not been taken up by the United States attorneys.
Declaring it the duty of the federal prosecutor to be ready for trial, Judge Howe ordered the case to be put on. There were no jurors available, but Samuel Fleischmann, a Buffalo attorney, offered his services, saying he always wanted to sit on a jury. Judge Howe ordered him to take seat No. 1. Within a few minutes F. Raemond Chant and Francis Monihan, two local attorneys, were in jurors’ seats and, to the surprise of everyone in the courtroom, Judge Howe next called on Hoyt Chamberlain, special prohibition agent working from Washington, D.C., headquarters and two other federal agents, who were in the courtroom, to take seats in the jury box.
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
It was a perfect summer night for our outing to see Noah Kahan at Fenway last weekend. At times, it was almost hard to hear him over the roar of the crowd, but everyone there was so nice. We met a girl from Connecticut in line, and everyone wanted to get her take on Mr. Kahan’s “Connecticut erasure” joke (and subsequent apology) that it is not really part of New England. It was a very silly debate.
This edition’s case comes from Wisconsin (go Badgers). The Wisconsin Supreme Court accepted the insurer’s petition to review questions relating to the proper interpretation of (1) a construction defect exclusion and its ensuring loss exception and (2) a fungi exclusion and the policy’s fungi additional coverage.
Stay cool and see you in a fortnight,
Kate
Katherine A. Fleming
[email protected]
The Buffalo News
Buffalo, New York
17 July 1926
DOCTOR SURRENDERS
TO POLICE IN BOSTON
Dr. Walsh and His Wife, Wanted
In Death of Girl,
Arrested.
BOSTON, July 17 (AP) – Dr. Thomas E. Walsh, wanted on charges of abortion, in connection with the death of Edith Greene, surrendered with his wife to the district attorney last night and were booked at police headquarters. Bail for Dr. Walsh was set at $15,000 and for Mrs. Walsh, charged as an accessory, at $2000. They said they had not surrendered earlier because Mrs. Walsh feared to be locked up with her mother dying
Miss Greene’s body was found in three packages in the Mattapan section last Tuesday, and her sweetheart, James V. Ford, confessed to hiring Dr. Walsh to perform an illegal operation upon her.
Dr. Walsh was named in a murder warrant, but today indictment by the grand jury superseded the warrant charges.
Police also were searching for a doctor thought to have cut up the girl’s body after she died from the operation, and to have left the parts where they were found near New Calvary cemetery. He was seen in Dr. Walsh’s company last Saturday, the day of the illegal operation, and the day before.
Editor’s Note: A grizzly murder -- Dr. Walsh would never explain to them what he did. Nevertheless Dr. Walsh was only found guilty of illegal surgery, not the death of Edith Greene, and was given seven years.
Gestwick’s Garden State Gazette:
Dear Readers:
For the first time, my note is at the top of the publication. I am helping Dan by sending this publication (and the next one) to you in his stead, so that he can enjoy his time away. I will return to this area of the cover notes once Dan returns.
Evan
Evan D. Gestwick
[email protected]
Get Outta Town – 100 Years Ago:
The Buffalo News
Buffalo, New York
17 July 1926
ANNOYED WOMEN, CHARGE.
LE ROY, July 17. – Stanislaw Malek, 35 years old, a painter residing at 5 Lake street, was arrested on complaint of Lonson Rodgers of Pavilion, who charged Malek with annoying young women on the streets. He was taken before Police Justice MacPherson, who gave him a choice of 30 days in the country jail or to leave town within 12 hours. Malek promised to depart at once.
O’Shea Rides the Circuits:
Readers,
This time of year, I am usually left home alone for a week or so and delve into TV Shows from childhood. Last year it was the New Adventures of Lois & Clarke. This year it is Star Trek: The Next Generation and now I am slowly referring to my dogs as Mr. Worf and Commander Data. Thankfully, my wife will be home soon to stop the madness.
This week I have a Seventh Circuit case discussing illusory coverage due to an exclusion barring completed operations coverage prior to a certain date. However, the insured paid an allegedly significant premium for completed operations coverage.
Ryan
Ryan P. O’Shea
[email protected]
Brilliant – 100 Years Ago:
The Times-Union
Rochester, New York
17 July 1926
Lights Match To See
Gasoline, Fruit Dealer
Lands In St. Jerome’s
Batavia, July 17 – Using a match to determine how much gasoline was in his tank landed Anthony Marchese, 40, fruit dealer, in St. Jerome’s Hospital with his hands and face severely burned. Damage to his truck amounted to $30.
Marchese drove up in front of the service pump at the Batavia Garage to buy gas. Uncertain as to how much his tank contained, he struck a match. Blaze necessitated calling of fire apparatus.
LaBarbera’s Lower Court Library:
Dear Readers:
I am absolutely thrilled to report that for the first time in three years I have bountiful growth in the garden. Each year, mid-July brings a scorching heatwave, which left me with wilted vegetables and shriveled flowers. Thanks to some handy new garden features, including a phone-operated irrigation system, everything is thriving. On another note, if anyone has good spaghetti squash recipes (or wants spaghetti squash), please do let me know.
Found a good case in Kings County for this week, discussing the standard in a claim against an insurance broker for failing to procure insurance.
Until next time…
Isabelle
Isabelle H. LaBarbera
[email protected]
Electricity is Becoming Popular! – 100 Years Ago:
The Chat
Brooklyn, New York
17 July 1926
SEVEN-TNETHS OF U.S.
POPULATION NOW REACHED
BY ELECTRIC LINES
Eighty-three million people, or approximately 71 per cent of the population of the United States, were living in communities having electrical central station service at the beginning of this year, and of this number about ten million lived in rural districts, according to the New York state Committee on Public Utility Information.
Of the country’s urban population, it is estimated that 92.5 per cent now live in cities and towns having electric service.
The survey has been based upon figures from the U.S. Official Postal Guide and the McGraw Central Station Directory for 1926.
Every city and town in the country is having more than 5,000 people is now reached by central station lines.
Lexi’s Legislative Lowdown:
Dear Readers,
My mom and I are off to a concert this weekend. I am hoping the weather is nice and everyone is able to enjoy some time outside.
This week we discuss an extension of certain provisions of insurance law as signed by the Governor on June 26, 2026.
Thanks for reading,
Lexi
Lexi R. Horton
[email protected]
Dear Miss Fairfax – 100 Years Ago:
Rochester Journal and the Post Express
Rochester, New York
17 July 1926
Continue Companionship
DEAR MISS FAIRFAX:
I am going about with a young man about two years my senior. I am twenty. Both he and I have boasted to our friends of the beautiful, platonic friendship that existed between us, so full of good fellowship and comradeship. Now, much to my sorrow, this friendship has developed, on his side only, into deep love, which makes it so hard for me to continue being a good pal.
I’m afraid to encourage him because my feeling for him is just deep affection not the love I would give to the man I marry.
Although it would be painful to give him up, I would do so except that I feel sure it would take a long time for his wound to heal.
Please tell me what to do. After wracking my brain for months, I find my power of thought is utterly exhausted. TROUBLED.
Are you quite sure, my dear, that your deep affection for the man who loves you does not amount to love?
Friendship, you know, plays a great and happy part in successful marriage. Think twice before you reuse the tried and true love he offers you.
Romantic thrills, overwhelming infatuation, of which we sometimes dream in early youth, if they come into our lives at all, prove fleeting and are by no means a sure indication of love that is deep and kind and a safe basis for marriage.
If your friend is willing to go on with things as they are, why do you not continue the companionship and meantime ask yourself seriously whether he is not, after all, just the trustworthy friend and pal who would make the best sweetheart and husband for you.
Victoria’s Vision on Bad Faith
Dear Readers,
This weekend I have yet another wedding reception, but the weekend after is the (apparently annual) Hoy Family Spelling Bee. Last year I lost in a knockout round against the ultimate winner when I misspelled ubiquitous (spelled with a d instead of t; rookie mistake). Hoping for a W this year, though I don't plan on cracking open a dictionary in advance.
This week's case stems from a motion to dismiss made by our office, where the SDNY dismissed the Plaintiff's bad faith, fraudulent breach of duty, and prima facie tort allegations against the Defendant Insurer.
Have a good weekend,
Victoria
Victoria S. Heist
[email protected]
Segregation Litigated – 100 Years Ago:
The New York Age
New York, New York
17 July 1926
SEGREGATION LAW
IN NORFOLK BEFORE
COURT FOR HEARING
Negro Given Right To Own
Property But Barred
From Occupancy
Norfolk, Va. - The attempt of Norfolk’s whites to prevent Negroes from occupying homes in certain sections, although conceding them the right to own such holdings, is being fought in the courts by the Norfolk branch A. A. C. P., through its president, Attorney David H. Edwards.
Mr. Edwards is counsel for Samuel Costen, a colored man, who recently moved into house at corner of Maple and Majestic avenues. Whites in the neighborhood swore out a warrant in protest and the case was argued before Judge Pindle, John B. Gentry and J. Lewis Broudy appearing for the whites.
The Norfolk segregation ordinance is said to be patterned after the New Orlean's law, which permits a Negro to buy property but bars him from occupying it or renting to Negro tenants.
The New Orleans' the ordinance is now being considered by U. S. Supreme Court in a case backed by the New Orleans branch N.A.A.C.P.
Attorney Edwards argued that denial of the right of occupancy was an effective restriction of property rights and that giving citizens the power to waive effect of the ordinance by their signatures was an improper, grant of legislative powers.
Judge Spindle ordered the attorneys to file briefs and set July 15 as date of next hearing.
Shim’s Serious Injury Segment
Hi Readers,
Hope everyone has been well since our last column.
With the MLB All Star Week concluding and play resuming on July 17, 2026, I thought it would be a good time to consider which of the 30 clubs has been the biggest overachiever. With many teams like the Detroit Tigers, Boston Red Sox, Toronto Blue Jays and New York Mets falling short of lofty expectations in 2026, let’s consider the biggest overachiever of 2026 so far.
Sitting at the top of the AL Central with a 50-45 record at the time of this writing, our biggest overachiever of 2026 is none other than the Chicago White Sox (honorable mention to the Miami Marlins, who ended 2025 playing above .500 baseball since July). Led by a young and exciting position player core of Munetaka Murakami, Miguel Vargas, Sam Antonacci and Colson Montgomery, the White Sox have bounced back from a 100-loss season in 2025 to a playoff contender at the start of the second half of the 2026 season. They also boast one of the league’s top farm systems – a sign for a hungry White Sox fanbase that has not seen a championship since 2005. We certainly hope that this is just the start of a bright future for an organization that has struggled to sustain success since the 2010s.
Today I have shared a Westchester County Supreme Court case wherein the defendants’ summary judgment motion on the issue of “serious injury” was denied.
See you in the next issue!
Stephen
Stephen M. Shimshi
[email protected]
What's Old is New Again – 100 Years Ago:
The Danville News
Danville, Pennsylvania
17 July 1926
LIBERTY MENACED,
BARRISTERS TOLD
Lawyers Hear Speaker Declare
That Violation Of laws Is
Danger To Nation.
Denver. Col.. July 16. - In a ringing defense of individual liberty and local self government. President Chester I. Long, Thursday, warned that both were imperiled, in his address here before 2,000 leading attorneys at the opening session of the 49th annual convention of the American Bar Association.
“There are two issues forming in this country on constitutional questions upon which lawyers should be informed.” Said Long. "The first is preservation of individual liberty: the second, preservation of local self government. The Supreme Court has defined liberty.
"The states of Nebraska, Iowa, and Ohio passed laws that restricted the teaching of modern languages in schools below the 8th grade. It was decided by the court that the liberty of the teacher could not thus be impaired.
"In Tennessee a law was passed that biology must be taught in a certain way - that there must not be a conflict with the Bible story of creation. A teacher violated the law and was convicted.
"As lawyers we are not interested in the contest between modernists and fundamentalists. We are however interested in whether a state can control our opinions by legislative enactment as it does our actions.”
New England Almanack
The dog days of summer are upon us. The World Cup is coming to an end; the tall ships are back in Boston; and all the world is enjoying time outside. As a result, the New England courts have been fairly quiet on coverage questions recently. We hope that you and yours are enjoying some needed down-time, both to recharge and to take full advantage of these bright, long days.
In this edition of the Almanack, we reach back a few weeks to bring you a decision from the Supreme Court of Rhode Island. A state employee drove her personal vehicle in the scope of her employment because no vehicle was available from the state pool for her use. She was involved in an accident with an underinsured driver, and she sought UM/UIM benefits from the insurer of the state’s fleet. The carrier disclaimed; the employee sued; and carrier removed the matter to Rhode Island’s federal district court. On appeal, the First Circuit certified two questions to Rhode Island’s high court, with implications for all of the state’s 17,000 employees.
And, if you choose to visit New England this summer and decide to tuck into some of our regional culinary offerings, may I recommend a Maine-style lobster roll? Our brethren in Connecticut have a buttery confection that’s great in cold weather, but the Maine roll just hits the spot in peak summer.
Alex
Alexander G. Henlin
[email protected]
Iryna
Iryna N. Dore
[email protected]
Barbara
Barbara A. O’Donnell
[email protected]
A Bridge Too Far – 100 Years Ago:
Buffalo Courier Express
Buffalo, New York
17 July 1926
Wife, Beaten for
Misplay at Bridge,
Obtains Divorce.
Chicago, Ill., July 16 – Bridge fans doubtless will say George Moore did right when he administered a sound beating to his wife, Hazel, when she failed to take him out of a double on first round bid in a game, but the courts look at these matters from a different viewpoint.
Judge Walter P. Steffen heard the evidence today and granted Mrs. Moore a divorce. Moore is a motor car salesman. The court awarded Mrs. Moore the custody of their son, nineteen months old. A $10,000 property settlement was effected out of court.
North of the Border:
Last summer, Alberta and Saskatchewan were under a haze of wildfire smoke drifting north from Montana. This year, it is the northern Great Lakes states experiencing similar conditions, as smoke from Ontario wildfires blankets regions far removed from the source.
These are no longer isolated or regional events. They are cross-border, persistent, and increasingly severe manifestations of a changing climate: heat waves that dry out the landscape followed by wildfire triggered by lightning.
It is tempting to look to forest management practices as a primary solution. While those measures have a limited role, they do not address the underlying driver of these increasingly intense and widespread events. The broader issue is the acceleration of climate change, fueled by continued reliance on carbon-intensive energy sources. Mitigation efforts aimed at reducing emissions and transitioning to alternative energy sources are not simply environmental policy choices—they are essential.
My column this week is divorced from that weighty topic – it deals with a property insurance claim that arises from a real-live treasure hunt.
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]
- Victims in Sex Abuse Case Not Permitted to Intervene in Declaratory Judgment Action Commenced by Insurers. Impracticable Decision Will Likely Lead to Duplicative Litigation. Thousands Flee
- Assault After Auto Accident Does Not Trigger Uninsured Motorists Coverage
- Where Plaintiff was Injured When Working for the Named Insured, Additional Insured. Court Blurs “Caused By” and “Arising Out of” Language.
- Interest Payments on No Fault Arbitration Awards
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
- Certificate of Insurance Language Specifically Linked to Insurance Contract and Creates a Question of Fact on Scope of Open Marine Cargo Policy
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- Advertising Injury Exclusions Do Not Render Policy Illusory; Adult Models’ Claims Barred From Coverage
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- No Declaratory Judgment Action Available Where Damages Have Already Occurred and Claimed Losses Have Already Accrued
STORM’S SIU
Scott D. Storm
[email protected]
- [Busy signal] See you in two weeks!
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- Coverage for Ensuring Water Loss Due to Construction Defect; Fungi Additional Coverage Interrupted as Exception to the Exclusion
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
- Appellate Division Holds That Separation of Insureds Provision Precludes Application of Employer’s Liability Exclusion
- Insured Who Negligently, Rather Than Intentionally, Fails to Notify UIM Carrier of Settlement With the Tortfeasor, Is Entitled to a Hearing on Prejudice to the UIM Insurer
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- Exclusion Negating Prior Completed Operations Did Not Create Illusory Coverage Since Policy Still Provided Coverage for Completed Operations After the Exclusion’s Date
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Court Finds Insured Cannot Sustain Burden in Relation to Failure to Procure Insurance Claim Against Insurance Broker
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- Bill Signed by the Governor to Extend Provisions of the Property/Casualty Insurance Availability Act and the Authority of the New York Property Insurance Underwriting Association
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- Court Dismisses Bad Faith, Fraudulent Breach of Duty, and Prima Facie Tort COAs against Insurer
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
- The Westchester County Supreme Court Denies the Defendants’ Summary Judgment Motion Made on the Ground That the Plaintiff Did Not Sustain a Serious Injury Within the Meaning of CPLR 5102(d)
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
[email protected]
Alex G. Henlin
[email protected]
Iryna N. Dore
[email protected]
- State Employee Operating Personal Car Within Scope of Her Employment Does Not Qualify as a “Named Insured” Under State Government’s Automobile Insurance Policy, With Result that She Cannot Claim UM/UIM Benefits
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- Applying Giacomini to Delay in Coverage Litigation
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]
07/09/26 Century Indemnity Company v. The Archdiocese of New York
Appellate Division, First Department
Victims in Sex Abuse Case Not Permitted to Intervene in Declaratory Judgment Action Commenced by Insurers. Impracticable Decision Will Likely Lead to Duplicative Litigation. Thousands Flee
Proposed intervenors are alleged victims of sexual abuse (“victims”) by defendant carriers (“insurers”), each having already filed lawsuits to vindicate their claims as well as note of issue, but as of yet have not obtained a judgment. At the time of the alleged abuse, The Archdiocese held insurance policies with the insurers. Victims sought to intervene in this declaratory judgment action to protect their interests as they may be bound by the court's determination of coverage.
The First Department held that the because proposed victims had not yet secured judgments against insurers as required by Insurance Law § 3420(b)(1), and thus, they lack a basis to intervene.
Although CPLR 1012(a)(2) states that one may intervene as of right "when the representation of the person's interest by the parties is or may be inadequate and the person is or may be bound by the judgment," Insurance Law § 3420(b)(1) provides that an action may be maintained by "any person who . . . has obtained a judgment against the insured" "to recover the amount of a judgment against the insured."
Thus, the more specific provision of Insurance Law § 3420(b)(1) takes precedence over the broader joinder provision of CPLR 1012(a)(2).
Supreme Court also providently exercised its discretion in denying intervention under CPLR 1013, which provides that "any person may be permitted to intervene in any action . . . when the person's claim or defense and the main action have a common question of law or fact" (CPLR 1013). First the court held that victims do not have a real and substantial interest in the outcome of the proceeding as they have yet to obtain a judgment against the Archdiocese, although there are some common questions of fact given that proposed victims underlying actions serve as part of the basis of this coverage dispute.
The court concluded that this case concerns "whether [plaintiffs] can disclaim coverage," i.e., the scope of the policies, while the proposed intervenors' cases are based on allegations of defendants' "negligent hiring, retention, and supervision of individuals who sexually abused the proposed intervenors." Additionally, intervention could cause some delay because it would lead to duplicative discovery and motion practice.
Editor’s Note: Case law surely supports the conclusion that that the victims could not start a DJ action without a judgment against the insureds (Lang v. Hanover). But once the carrier started the DJ action, it would have been appropriate (indeed one can argue necessary) that the underlying plaintiffs (victims) be included so that they are bound by the decision. If that’s true, and we believe it is, they should also be allowed to intervene. Otherwise, there could be a finding, for example, of no coverage, and the victims would not be bound by it.
I am not blind to the cases that suggest that injured parties who have not yet obtained a judgment against an insured should not be added as defendants in DJ actions since they have no judgment against the insured they are strangers to the policy. However, those cases make so sense to me and to most of my colleagues who regularly include them in these actions so that they cannot relitigate the coverage issues later. This is an impractical decision, IMHO.
07/08/26 Matter of Hereford Ins. Co. v Ramirez
Appellate Division, Second Department
Assault After Auto Accident Does Not Trigger Uninsured Motorists Coverage
On June 6, 2021, Victor Ramirez was the owner and operator of a taxicab insured by the petitioner, Hereford Insurance Company). A vehicle operated by l Pool collided with Ramirez's taxicab. After the collision, Ramirez and Pool pulled over, Pool exited his vehicle, walked over to Ramirez's taxicab, and allegedly struck Ramirez in the face with an ashtray while Ramirez was sitting inside his taxicab. Pool's vehicle was uninsured.
Ramirez sought to recover under the uninsured motorist endorsement contained in his car insurance policy with Hereford. Hereford denied coverage, concluding, inter alia, that Ramirez's injuries did not arise out of the use or operation of a motor vehicle, the motor vehicle was not the proximate cause of Ramirez's injuries, and Ramirez's injuries were solely the result of an assault by the adverse driver.
Ramirez sought to arbitrate the matter, and Hereford thereafter commenced this proceeding pursuant to CPLR article 75, among other things, to permanently stay arbitration. Ramirez opposed the petition, contending, inter alia, that incident was an "accident" within the meaning of the uninsured motorist endorsement. The Supreme Court granted that branch of the petition which was to permanently stay arbitration. Ramirez appeals.
A court may stay arbitration where the particular claim sought to be arbitrated is outside the scope of the agreement to arbitrate For purposes of automobile insurance policies, the term 'accident' means an event typically involving violence or the application of external force In order to determine whether a particular event was accidental, it is customary to look at the casualty from the point of view of the insured, to see whether or not . . . it was unexpected, unusual and unforeseen.
However, uninsured motorist endorsements, such as the one at issue in this case, provide coverage only when the injuries are the result of an accident "arising out of such uninsured motor vehicle's ownership, maintenance or use" Use of an automobile encompasses more than simply driving it, and includes all necessary incidental activities such as entering and leaving its confines"
To satisfy the requirement that it arose out of the 'ownership, maintenance or use of' a motor vehicle, the accident must have arisen out of the inherent nature of the automobile and, as such, inter alia, the automobile must not merely contribute to the condition which produces the injury, but must, itself, produce the injury. Although the vehicle itself need not be the proximate cause of the injury, "'negligence in the use of the vehicle must be shown, and that negligence must be a cause of the injury'
Here, from Ramirez's point of view, the occurrence was unexpected, unusual, and unforeseen (see State Farm Mut. Auto. Ins. Co. v Langan, 16 NY3d at 355). However, as a matter of law, Ramirez's injuries did not result from the inherent nature of Pool's vehicle,” nor did the vehicle itself produce the injuries. The injuries were caused by Pool's alleged assault, and the uninsured vehicle merely contributed to the condition which produced the injuries.. Hereford established that a proximate causal relationship between the uninsured vehicle and the incident was lacking,
07/08/26 Berkley Insurance Company, v. Farm Family Insurance Co.
Appellate Division, Second Department
Where Plaintiff Was Injured When Working for the Named Insured, Additional Insured. Court Blurs “Caused By” and “Arising Out of” Language
Berkley Insurance commenced this action against Farm Family Insurance Company (“FFIC”). Berkley sought a judgment declaring that KSK Construction Group, LLC is an additional insured under a FFIC insurance policy issued to ATA Construction, Inc, and that the defendant is obligated to defend KSK in an underlying action entitled Pillco v 160 Dikeman Street, LLC (the “underlying action”). The underlying action was commenced by Pillco against, among others, KSK to recover damages for personal injuries he alleged he sustained while working for ATA.
Berkley moved for summary judgment on the first cause of action for declaratory relief and the lower court granted the motion and declared that the FFIC is obligated to defend KSK in the underlying action and FFIC appealed.
The defendant appeals.
An insurer's duty to defend its insured arises whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of recovery under the policy. If the allegations of the complaint are even potentially within the language of the insurance policy, there is a duty to defend. In determining whether there is a reasonable possibility of recovery under the policy, parties are bound by the four corners of the complaint rule, under which courts of this State have refused to permit insurers to look beyond the complaint's allegations to avoid their obligation to defend and have held that the duty to defend exists if the complaint contains any facts or allegations which bring the claim even potentially within the protection purchased.
"However, a court may look to judicial admissions in the insured's responsive pleadings in the underlying tort action or other formal submissions in the current or underlying litigation to confirm or clarify the nature of the underlying claims.
Here, the insurance policy issued to ATA by the FFIC was limited in scope to "liability caused, in whole or in part, by 1) [ATA's] acts or omissions; or 2) [t]he acts or omissions of those acting on [ATA's] behalf in the performance of [ATA's] ongoing operations for" KSK.
Although the complaint in the underlying action lacked specific allegations against ATA, Pillco testified at his deposition in the underlying action that he was injured while performing demolition work on a ladder owned by ATA. Therefore, the Berkley’s submissions established its prima facie entitlement to judgment as a matter of law on the first cause of action for declaratory relief.
Editor’s Note: I disagree with this decision. The fact that someone WORKS for the named insured doesn’t mean that the accident was caused by the named insured’s acts or omissions. We are seeing more and more of that lately.
07/08/26 Matter of 563 Grand Medical, P.C., v. Country-Wide Ins. Co.
Appellate Division, Second Department
Interest Payments on No Fault Arbitration Awards
563 Grand Medical, P.C. commenced a no-fault arbitration proceeding to recover no-fault insurance benefits from Country-Wide Ins. Co. for medical services provided to Grand Medical's assignee following a motor vehicle accident on August 3, 1999. On September 10, 2003, an arbitrator dismissed the proceeding, without prejudice.
Grand Medical commenced an action in the Civil Court of the City of New York, Kings County, to recover no-fault insurance benefits for the August 3, 1999, accident (hereinafter the Civil Court action). In 2015, Country-Wide's motion for summary judgment dismissing the complaint in the Civil Court action was granted on the basis that Grand Medical had elected arbitration as the forum for resolution of its claims. That order was affirmed in November 2018.
Ultimately, an arbitrator granted Grand Medical's claim for no-fault insurance benefits in the amount of $4,999. The arbitrator also determined that Grand Medical was entitled to compound interest at the statutory rate of 2% per month (see 11 NYCRR 65-3.9[a]) from September 10, 2003. The arbitrator's determination was affirmed by a master arbitrator in a master arbitration award dated May 10, 2023.
Grand Medical commenced this CPLR article 75 proceeding, inter alia, to confirm the master arbitration award dated May 10, 2023, and Country-Wide cross-petitioned to stay this proceeding pending the resolution of its appeal in a related proceeding, or to vacate the master arbitration award, or, alternatively, to modify so much of the master arbitration award as determined that Grand Medical was entitled to recover statutory compound interest from September 10, 2003, so as to limit the accrual of compound interest to simple interest accruing from November 6, 2018.
Here, contrary to Country-Wide's contention, the master arbitration award affirming the arbitrator's determination that Grand Medical was entitled to payment on its claims for no-fault insurance benefits had evidentiary support and was not arbitrary and capricious Furthermore, the master arbitrator's affirmance of the determination of the arbitrator to apply the former no-fault regulation providing for compound interest on Grand Medical's claims (see former 11 NYCRR 65.15[h]) was not arbitrary and capricious or irrational. The former regulation was in effect at the time of the underlying accident and Grand Medical's submission of its claims to Country.
However, under 11 NYCRR 65-3.9(d) interest will not accumulate if "the applicant unreasonably delays the arbitration or court proceeding" (id.). Under the circumstances of this case, the determination that Grand Medical did not unreasonably delay the arbitration proceeding during the period of September 10, 2003, through November 6, 2018, lacked evidentiary support and a rational basis, and this period should have been excluded from the calculation of interest on Grand Medical's claims.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
07/15/26 Machine Tool Repair & Sales, Inc. v. Tokio. Mar. Am. Ins. Co.
Appellate Division, Second Department
Certificate of Insurance Language Specifically Linked to Insurance Contract and Creates a Question of Fact on Scope of Open Marine Cargo Policy
Plaintiff Machine arranged to purchase a large commercial grinder from Pride Machinery Sales, Inc. As part of that transaction, Pride agreed to purchase an Open Marine Cargo policy which was to provide coverage from "warehouse to warehouse" for the subject grinder. Essentially, should any misfortune befall the grinder from the time it left the warehouse where it was stored until it arrived at Machine's premises, coverage was secured under the policy issued by Tokio Marine. Machine was also provided with a Certificate of Insurance which included a clause denoting "machine sold from Caterpillar warehouse floor to [Machine's] warehouse floor...warehouse floor to floor."
The grinder was loaded and transported to Machine's warehouse without incident. Unfortunately, during the unloading process the pallet upon which the grinder was secured fell off of the forks of the lift assisting in the transfer from the truck to the warehouse floor. Upon receipt of the claim for coverage, Tokio denied by stating that the policy only provided coverage while the grinder was in transit from warehouse to warehouse. Here, the item was delivered without incident to the Machine warehouse and was irreparably damaged when it fell during removal/installation. That, to Tokio Marine, meant that the risk shifted from the Cargo Policy a written.
Machine countered by arguing that the Certificate of Insurance created additional terms which, in effect, overrode the language of the policy. Recall, the Certificate of Insurance specifically provided coverage from warehouse floor to warehouse floor.
The Court began its analysis by noting that Certificates of Insurance are usually issued for information purposes, and only provide evidence of coverage. They do not, usually, amend or otherwise impact the scope of coverage outlined in the insurance contract. Here, however, Certificate of Insurance provided that "the right of the Bonafide holder of this Certificate for values shall not be prejudiced by any terms of the Open Policy which are in conflict with the terms of this Certificate. Further, the Tokio policy did not include essential terms including the named insured, the goods insured, and/or the origin/destination of the grinder. Because the Certificate of Insurance was "inextricably intertwined" with the policy, the Court ruled that both the Certificate of Insurance and the policy needed to be read in conjunction.
Because the meaning of "floor to floor" was unclear from the Certificate of Insurance, the Court denied Tokio's motion for summary judgment on a question of fact.
As a secondary issue, the Court did rule that Tokio was entitled to a dismissal of Pride's claims for Tokio's alleged bad faith denial and failure to promptly pay Machine's claim. Pride was not a party to the insurance contract, so it had no standing to assert damages for the breach of a contract to which it was not a party.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
07/10/26 Nobrigia v. Clear Blue Specialty Ins. Co.
United States District Court, District of Connecticut
Advertising Injury Exclusions Do Not Render Policy Illusory; Adult Models’ Claims Barred From Coverage
Six well-known adult entertainment models sued the insured, Mr. Happy’s Café in Waterbury, claiming that it misappropriated their likeness in the café’s advertising. The entertainers settled with the insured, accepting an assignment of its rights against its CGL carrier, Clear Blue Specialty. The plaintiffs brought this suit against Clear Blue alleging a failure to defend and indemnify Mr. Happy, and for common law and statutory bad faith.
The court held that the underlying claims were excluded from coverage. The Clear Blue policy contained the standard AI/PI definition; however, an exclusion precluded coverage for libel, slander, violation of privacy, or infringement “if such activities arise out of or are part of exhibitions and related marketing.” (The ERM Exclusion).
The Court found that the ERM exclusion was directly on point, and rejected argument that the exclusion rendered coverage illusory. “Here, the plain language of the ERM Exclusion applies only to a subset of the types of personal and advertising injuries that are otherwise covered by the Policy, and therefore is not illusory.” The court added that the exclusion does not preclude coverage for all injuries within the excluded categories.
Judge Nagala refused to apply a Rhode Island district court opinion finding the exact ERM language illusory.
Despite Plaintiffs’ urging, the Court declines to adopt the reasoning in Princeton Excess & Surplus Lines Ins. Co. v. R.I. Cranston Ent. Inc., 725 F. Supp. 3d 184 (D.R.I. 2024), in which the District of Rhode Island concluded the identical ERM Exclusion rendered the advertising injury coverage illusory. To reach this conclusion, the District of Rhode Island interpreted the personal and advertising injury coverage as providing two separate categories of coverage—first, personal injury, and second, advertising injury. Id. at 194–95. Because it found that the ERM Exclusion “contradicts [the insurer’s] purported coverage for ‘advertising,” it held that the personal injury and advertising coverage of the policy was illusory, despite that coverage for various personal injuries remained intact. Id. at 195–96.
The Rhode Island court failed to follow a contrary 5th Circuit opinion, and nevertheless, Connecticut law does not permit the distinction drawn. “The Connecticut Supreme Court has expressly rejected Campbell’s reasoning, finding that the decision “runs counter to that court’s repeated holding, consistent with our own precedent and the case law of virtually every other state, that a policy provision offering coverage for a particular peril will not be deemed illusory unless it would not result in coverage under any reasonably expected set of circumstances.” Karas, 355 Conn. at 107–08.”
Ultimately, the court denied the entertainers’ motion and granted the insurer’s cross motion, finding that the policy excluded coverage for the underlying claims.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
07/10/26 Endurance Am. Ins. Co. v. Agrico Sales, Inc
Southern District of New York
No Declaratory Judgment Action Available Where Damages Have Already Occurred and Claimed Losses Have Already Accrued
Endurance American (and co-insurers) issued a marine cargo policy to Agrico Sales covering (among other equipment) a shiploading system known as Shiploader 691, with coverage incepting March 15, 2019. Oxbo Engineering rigged and secured Shiploader 691 on a barge for shipment from Vancouver, Washington to Vancouver, British Columbia on April 1, 2019. While at sea on April 9, 2019, the Shiploader fell and was damaged, and the barge diverted to Oregon to assess the damage.
Agrico submitted a claim and the insurers acknowledged coverage for the Shiploader’s damage, paying Agrico $6,314,500 in policy proceeds. Thereafter, Agrico and the insurers jointly sued Oxbo in the Western District of Washington in April 2022 for negligent loading/lashing/securing, which was ultimately settled for $6,813,341, which was held in escrow as a settlement fund. After the settlement, Agrico sought to recover an additional $2,600,000 under the policy (separate from repair costs), asserting further losses. According to the insurers, those claimed losses relate to standby tug costs at Vancouver, British Columbia and economic losses associated with the damage/repair of the Shiploader, resulting in a denial of coverage on the ground that the policy does not cover those categories.
On April 8, 2025, Agrico sued these insurers in the Western District of Washington for the $2.6 million (plus fees, interest, costs, and bad-faith damages). On May 9, 2025, the insurers filed this separate action in the Southern District of New York seeking declaratory relief that the additional $2.6 million is not covered and addressing rights to the settlement fund.
The court emphasized that the Declaratory Judgment Act (DJA) is discretionary and applied the Second Circuit’s six-factor framework from Admiral Insurance Co. v. Niagara Transformer, which assesses usefulness, finality/relief from uncertainty, procedural fencing, federal/state friction, better remedy, and judicial economy). It also underscored that a core DJA purpose is prospective—clarifying rights before damages fully accrue—and that courts generally decline DJA actions seeking only declarations of non-liability for past, fully accrued losses.
First through fourth causes of action (coverage/time-bar/Sue & Labor/profits-markups): The court held that the first through fourth causes of action asserted by the insurers, seeking declarations as to coverage, time-bar, Sue & Labor, and profits-markups, were backward-looking because they asked the court to declare non-liability for losses stemming from a 2019 accident that had already fully accrued. Drawing on prior cases handled in the SDNY (one of which was affirmed by the Second Circuit), (affirmed by the Second Circuit), the SDNY found this was not a proper prospective use of the DJA. Applying the Admiral Insurance factors, the court concluded that usefulness and finality weighed against exercising jurisdiction because the earlier-filed Washington Action could fully adjudicate the same issues; procedural fencing weighed against exercising jurisdiction because the insurers’ suit sought to “wrest the choice of forum” from the natural plaintiff; federal/state law friction was neutral as both cases were filed in federal court); and better remedy was “irrelevant” in this context because the insurers could obtain the same remedy as defendants in the Washington Action. Judicial economy considerations also reinforced declining jurisdiction given the overlapping, first-filed Washington Action.
Fifth through eighth causes of action (rights to and distribution of the settlement fund; made-whole; interim disbursement; attorneys’ fees): Although the court acknowledged an actual case or controversy relative to rights to and distribution of the settlement fund, along with other issues including attorney’s fees, it concluded these claims also hinged on losses arising from the same 2019 damage and repairs and therefore were not meaningfully prospective. Because the Washington Action already addressed these matters and could resolve the parties’ rights to the escrowed funds, the court again declined to entertain declaratory relief.
STORM’S SIU
Scott D. Storm
[email protected]
[Busy signal] See you in two weeks!
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
07/07/26 Cincinnati Ins. Co. v. Ropicky
Wisconsin Supreme Court
Coverage for Ensuring Water Loss Due to Construction Defect; Fungi Additional Coverage Interrupted as Exception to the Exclusion
The defendant’s property was damaged during a storm when rainwater entered the home. He made a claim under his homeowner’s insurance policy issued by the plaintiff insurer. The insurer determined that the rainwater entered the home through a one-inch gap that constituted a construction defect from the time the house was originally built and that rainwater had been entering the home for years. The persistent rainwater over the years allowed fungi to grow, and the insurer determined that the damage to the home was attributable to both rainwater and fungi. The policy contained exclusions that barred or limited coverage for damages resulting from construction defects and fungi. Relying on these provisions, the insurer paid the defendant a sum of money far less than the damages incurred. The insurer denied coverage for the cost to repair the one-inch gap but stated that the ensuing cause of loss provision partially reinstated coverage for some damages caused by the defective workmanship and materials. The insurer also agreed to pay under the additional coverage for fungal damage the insured had purchased.
The insurer filed a declaratory judgment action for a declaration that the construction defect exclusion and the fungi exclusion barred coverage for the damages besides the amount of fungi additional coverage already paid. The circuit court agreed with the insurer and granted summary judgment. On appeal, the court of appeals reversed because genuine issues of fact remained. The appellate court held that the rainwater was an ensuring loss and covered as an exception to the construction defect exclusion, and the appellate court also concluded that the fungi additional coverage did not render it an exception to the fungi exclusion.
The Wisconsin Supreme Court accepted the insurer’s petition to review the questions relating to (1) the proper interpretation of the construction defect exclusion and the ensuring loss exception and (2) the fungi exclusion and fungi additional coverage. The Wisconsin Supreme Court held that “physical losses” caused by the rainwater constitute an ensuing loss and fell within the exception to the construction defect exclusion. The court rejected a proximate cause like interpretation and adopted a reading more consistent with normal language that to ensue means to follow as a “chance, likely, or necessary consequence.” In this case, the rainwater was an additional cause, and while the cost of repairing the construction defect itself would not be covered, the ensuing loss caused by the rainwater that came as a consequence of the construction defect would be covered. The court further held that the fungi additional coverage was an exception to the fungi exclusion, reasoning that the exclusion would operate to exclude coverage but for the exception that specifically restores coverage. Since material factual disputes existed for both the construction defect exclusion and the fungi exclusion, the court affirmed the appellate court’s reversal of summary judgment.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
07/15/26 SL 10 Park Place, LLC et al. v. Utica Nat’l Ins. Grp. et al.
Superior Court of New Jersey, Appellate Division
Appellate Division Holds That Separation of Insureds Provision Precludes Application of Employer’s Liability Exclusion
SL 10 Park Place and SL Management Group (collectively, “SL”) leased a space in their premises to Fogarty Brothers for their piano moving business. One day, Fogarty—one of the brothers—fell down an elevator shaft at that premises. Fogarty sued the elevator company and SL, who implemented the Fogarty Brothers pursuant to the lease agreement between them.
That lease agreement required Fogarty Brothers to, among other things, procure insurance coverage naming SL as additional insureds with respect to claims arising out of the Fogarty Brothers’ acts or omissions. Pursuant to the lease agreement, the Fogarty Brothers procured a commercial general liability policy with Utica National. At the time of the incident, SL was insured by Travelers.
Travelers tendered SL’s defense and indemnity to Utica National, and separately, to Great American, the insurer for the elevator company. Great American accepted the tendered defense under a reservation of rights on indemnity, and began defending SL in the underlying tort action. However, Utica National denied the tender on the basis that SL did not qualify as an additional insured, and that its employer’s liability exclusion operated to bar coverage. This declaratory judgment action followed.
The additional insured endorsement in the Utica National policy provided additional insured status to any person or organization with whom the Fogarty Brothers entered into a written contract or agreement requiring the Fogarty Brothers to provide such insurance. However, the coverage provided by the additional insured endorsement was limited only to the extent that the additional insured was held liable for the acts or omissions committed by the Fogarty Brothers or by its subcontractors during the performance of the Fogarty Brothers’ ongoing operations for the additional insured.
Separately, the Utica National policy contained an employer’s liability exclusion, which barred coverage for bodily injury to an employee of the insured arising out of and in the course of employment by the insured, or performing duties related to the conduct of the insured’s business.
The Appellate Division began its analysis by finding that SL was an additional insured under the Utica National policy. In reaching that conclusion, the Appellate Division noted that the lease agreement between SL and the Fogarty Brothers required the Fogarty Brothers to procure commercial general liability insurance protecting both itself as well as SL as additional insureds. As above, the resulting additional insured endorsement provided coverage to SL with respect to its liability for acts or omissions committed by the Fogarty Brothers.
Utica National argued that coverage under its additional insured endorsement was not triggered because Fogarty did not allege that his injuries were caused by the Fogarty Brothers. However, SL made that assertion as a cross-claim against the Fogarty Brothers, which the Appellate Division found was sufficient.
Second, the Appellate Division held that Utica National’s employer’s liability exclusion did not apply to bar coverage for this loss. In reaching that conclusion, the Court noted that the Utica National policy contained a separation of insureds provision, which provided that the coverage provided by the policy applied separately as to each person or organization qualifying as an insured under the policy. While employer’s liability exclusions that apply to bodily injury to “the” insured apply only to bodily injury sustained by employees of the named insured, the Appellate Division found that the employer’s liability exclusion did not apply to SL, whose right to coverage was to be treated separately and independently from that of the Fogarty Brothers.
07/16/26 Signer v. Nationwide Insurance Company et al.
Superior Court of New Jersey, Appellate Division
Insured Who Negligently, Rather Than Intentionally, Fails to Notify UIM Carrier of Settlement With the Tortfeasor, Is Entitled to a Hearing on Prejudice to the UIM Insurer
Harleysville, a subsidiary of Nationwide, issued a commercial auto policy to the plaintiff’s employer. That policy took effect August 1, 2022, and initially provided UIM coverage subject to a $100,000 limit. Later, but before the subject accident, the policy was amended to provide a $1,000,000 UIM limit, and added several new rated drivers.
After the policy was so amended, Signer, an employee of the policyholder, was involved in a motor vehicle accident while driving a vehicle owned by the insured. The other driver had an insurance policy that provided $100,000 in bodily injury limits.
On September 18, 2023, Signer agreed to settle his tort claim with the other driver in exchange for the tortfeasor’s full $100,000 bodily injury limits. In that process, Signer signed a release, applicable to all claims, effectively waiving Harleysville’s right of subrogation against the tortfeasor.
It was not until November 28, 2023—after the settlement with the tortfeasor was fully consummated—that Signer first informed Harleysville of the settlement and his intent to proceed with a UIM claim. Harleysville rejected Signer’s attempt to proceed with a UIM claim on the basis that Signer waived his right to do so by reason of his failure to inform Harleysville of his settlement with the tortfeasor.
Under New Jersey law, an insured must notify its UIM insurer of a settlement with a tortfeasor (or the tortfeasor’s insurer). However, generally, UIM carriers are required to establish actual prejudice to their subrogation rights in order to deny a claim for UIM benefits on the basis that no notice was provided.
There is a line of New Jersey case law standing for the proposition that no prejudice analysis is required where the insured intentionally, as opposed to negligently, fails to notify the UIM carrier of a settlement with the tortfeasor. However, the Appellate Division found no evidence in the appellate record that Signer intentionally failed to notify Harleysville of his settlement with the tortfeasor prior to proceeding with his UIM claim.
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
07/09/26 Nautilus Ins. Co. v. Bee Quality Inc.
United States Court of Appeals. Seventh Circuit
Exclusion Negating Prior Completed Operations Did Not Create Illusory Coverage Since Policy Still Provided Coverage for Completed Operations After the Exclusion’s Date
Bee Quality procured a commercial general liability policy from Nautilus that provided coverage for bodily injury or property damage arising out of completed operations. However, the policy contained a Prior Work Exclusion that applied to all work completed before February 8, 2022.
An August 2, 2020, windstorm damaged a building in Chicago, Quality Bee later performed the repair work on the building. On April 12, 2022, after Quality Bee completed their work, the building’s façade collapsed and killed two people. The subsequent liability complaint alleged Queen Bee negligently performed the repair which led to the deaths. Queen Bee admitted in discovery that the work completed in December 2020.
The policy’s Prior Work Exclusion was deemed applicable to the loss. In doing holding so, the court rejected Queen B’s illusory coverage argument. Queen B asserted that Nautilus’s charging of a completed-operations coverage premium, created unrestricted coverage for all of Queen Bee’s prior operations. As such, the Prior Work Exclusion would render the completed operations coverage paid illusory, if it were applied.
However, illusory coverage applies only where the exclusion swallows all coverage entirely. As the court noted, an insurer’s interpretation of an exclusion will not be adopted if it would altogether eliminate the coverage on which the insured relies. Since the Prior Work Exclusion provided ample room for completed operations coverage after February 8, 2022.
Indeed, the February 8, 2022, date on which the policy formed. Queen Bee contended the premium charged for the coverage was well in excess of the general market rate, and thus, intended unlimited completed operations coverage. Even assuming this claim to be true, the court elected not to disturb the arms-length transaction. Thus, the exclusion applied and the policy did not provide illusory coverage.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
06/01/26 Piscal v. Public Admr. Of Kings County
New York State Supreme Court, Kings County
Court Finds Insured Cannot Sustain Burden in Relation to Failure to Procure Insurance Claim Against Insurance Broker
An underlying claimant was allegedly injured during the course of construction, when he was installing sheetrock and fell off a ladder. The commercial general liability policy covering the property contained an exclusion for bodily injury to any contactor performing work on the insured’s property. After receipt of the claim, the insurance carrier denied coverage for the claim.
The insured commenced a third-party action against his broker, for failing to procure insurance that was adequate to his needs. The broker moved to dismiss the third-party complaint, for multiple reasons. The court agreed with the broker in its entirety, finding that the documentary evidence supports a finding in favor of the broker.
An insurance broker, pursuant to New York law, is only required to procure insurance coverage specifically requested by the customer, or to timely inform the customer that the requested coverage is unavailable. Once coverage is procured, no continuing duty is owed. Once the insured has been provided a copy of their insurance policy, it becomes their duty to read the policy. Admitting to receipt and review of the subject insurance policy bars a subsequent claim for failure to procure insurance.
If a policyholder cannot establish that it made a specific request for the coverage in question, or had a special relationship with their broker, the claims must be dismissed as a matter of law.
The court particularly found the deposition testimony fatal to the insured’s claim. In discovery, the insured and his wife testified that they received and reviewed their insurance policies each year, and had no complaints upon receiving them. The insureds further testified that they admittedly did not discuss the exclusions in his insurance policy with his broker. In sum, the court found that the evidence exclusively established that the insured never requested insurance which would cover the incident in question. Further, there was no evidence produced to establish that the insured ever specifically requested insurance coverage relating to construction related activities – indeed, the application for insurance indicated otherwise.
The court found that the policyholder here could not establish a special relationship, solely because the parties worked together for ten years. Instead, the evidence supported a finding that the policyholder did not compensate their broker for insurance advice, outside of the payment of premiums, nor did the policyholder delegate their decision-making responsibilities to their broker. As such, the court found that no special relationship existed, based on the testimony of the insureds themselves.
Further, the court found that the policyholders’ testimony conclusively established that they had the opportunity to read and review the policy at issue, serving as a complete bar to any claim that the policyholder may assert for failure to procure insurance.
In addition, the court dismissed the claims for breach of contract, negligent breach of fiduciary duty, contribution, and indemnification. In all cases, the court found that, as a matter of law, the policyholder was not entitled to relief. In the first instance, a contract could not be located. In the remainder of causes of action, the court found that the insureds could not establish any breach of a special duty by the broker.
Accordingly, the court dismissed the complaint in its entirety.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
07/17/26 New York Senate Bill S10582
New York State Senate
Bill Signed by the Governor to Extend Provisions of the Property/Casualty Insurance Availability Act and the Authority of the New York Property Insurance Underwriting Association
On June 26, 2026, the Governor signed into law Bill S10582. The Bill amends insurance law by extending provisions of the property/casualty insurance availability act and the New York property insurance underwriting association. The Bill extends Insurance Law §§ 2307 (c), 2308, 2310(a), 2316, 2320, 2323, 2326, 2335, 2336(b), 2305(f), 2344(h), to extend the applicability of the flexible rate limitations in problem markets for certain commercial property/casualty insurance rates, 3425(m), to extend the “two percent rule” and “two-for-one credit” set forth in 3425(f), and 5412(g), allowing NYPIUA to write certain coverage upon determination by the Superintendent that coverage is unavailable in a particular market, until June 30, 2029.
The Bill’s justification provides that it extends the file-and-use and flexible rating provisions in Article 23 for three years. Further, the bill extends provisions of Insurance Law 3425(f) extending the “two-percent rule” for personal motor vehicle insurance, which permits an insurer to non-renew or conditionally renew up to two percent of the total auto policies in force in each of the insurer’s rating territories. Further, it extends the “two-for-one credit” which provides that an insurer may non-renew or conditionally renew one additional motor vehicle policy in each territory beyond the two percent limitation, for every two newly issued automobile insurance policies voluntarily written by that insurer in such territory.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
07/02/26 Stephen Mears v. Protective Insurance Company
United States District Court, Eastern District of New York
Court Dismisses Bad Faith, Fraudulent Breach of Duty, and Prima Facie Tort COAs against Insurer
Stephen Mears, a self-employed delivery driver, was injured in a work-related accident on June 7, 2022. He alleged that he complied with all requirements under his workers' compensation insurance policy issued by Protective Insurance Company and that the Workers' Compensation Board repeatedly approved his treatment and benefits. Despite those approvals, Mears claimed Protective repeatedly denied authorization for necessary medical treatment and related benefits, causing him substantial economic losses.
On June 9, 2025, Mears commenced a lawsuit against Protective Insurance Company alleging (1) breach of contract; (2) bad faith denial of coverage; (3) fraudulent breach of duty; and (4) prima facie tort.
Protective made a motion to dismiss the complaint in its entirety for failure to state a cause of action. The Court ultimately dismissed three of the four, declining to dismiss the breach of contract cause of action.
The Court dismissed the bad faith cause of action because Plaintiff failed to allege conduct that is not actionable as an independent tort and instead based its breach of contract cause of action entirely on Protective's alleged denial of coverage under the Policy.
The Court dismissed the fraudulent breach of duty cause of action because there is no allegation in the complaint that Defendant was called upon to defend Plaintiff in a lawsuit and there are no allegations that reflect a fiduciary or special relationship between the parties that would give rise to a fiduciary duty owed to the Plaintiff.
Finally, the Court dismissed the cause of action for prima facie tort finding Plaintiff failed to allege a legal duty on the part of Protective that is extraneous to the contract between the parties. Thus, the Court dismissed the cause of action for prima facie tort as duplicative as the breach of contract cause of action.
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
06/29/26 Slater v. Notre Dame Mgt. Group Inc.
Supreme Court, Westchester County
The Westchester County Supreme Court Denies the Defendants’ Summary Judgment Motion Made on the Ground That the Plaintiff Did Not Sustain a Serious Injury Within the Meaning of CPLR 5102(d)
Plaintiff Luna Slater ("plaintiff") commenced the action on April 11, 2025, seeking recovery for injuries to her lumbar spine and left knee that she allegedly sustained on July 17, 2024, as she began to enter a motor vehicle owned by Notre Dame Management Group Inc. and operated by Mark A. Allen. The amended complaint alleges that plaintiff caused to sustained personal injuries which resulted in dismemberment, significant disfigurement, a fracture, permanent loss of the use of a bodily organ or member, significant limitation of the use of a bodily function or system, and/or a medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury or impairment.
Defendants filed a summary judgment motion arguing that the plaintiff's injuries failed to meet the "serious injury" threshold. Defendants cited to plaintiff's bill of particulars (which only alleged soft tissue injuries) and the reports of defendants' independent medical examination ("IME") doctors, who found no evidence of serious injury. In opposition, plaintiff argued that there was an issue of fact as to whether plaintiff sustained a serious injury, as evidenced by plaintiff's sworn affidavit, deposition transcript and verified bill of particulars, the affirmations of her treating and examining physicians, and the objective medical evidence upon which the physician's rely. Therefore, defendants were not entitled to summary judgment dismissing the complaint, the plaintiff argued.
The Court initially noted that defendants' expert radiologist report, prepared by Sheldon P. Feit, M.D., DABR, was not in admissible form because it was only made “pursuant to CPLR 2106 under the penalties of perjury” and did not include the specific language required by CPLR 2106 (see Beier v Giglio, 230 AD3d 733, 734 [2d Dept 2024]; see also Loadholt v New York City Tr. Auth., 12 AD3d 352, 783 N.Y.S.2d 660 [2d Dept 2004]).
However, the Court determined that the report of the defendants’ orthopedic expert, Hugh Selznick, M.D., F.A.C.S., was sufficient to establish that plaintiff did not suffer a “serious injury” within the meaning of CPLR 5102. Dr. Selznick found that plaintiff had a normal gait, toe/heel walk, and lordotic curve, with no spasm or tenderness noted over the paraspinal musculature on palpation, normal range of motion of the lumber spine, normal patellar and Achilles deep tendon reflexes, no sensory deficit, and normal muscle strength of the lower extremities with no atrophy, radiation of pain, numbness or tingling. With respect to plaintiff's left knee, Dr. Selznick found plaintiff's range of motion to be normal without crepitus, no redness, swelling or increased temperature, no tenderness above the joint line or bony structures, medial or lateral joint lines, no joint effusion, no obvious atrophy, and no instability to varus or valgus stress. Based on the foregoing, Dr. Selznick concluded that the plaintiff's lumbar spine and left knee injuries were resolved, and plaintiff had fully healed from the left knee surgery. Dr. Selznick opined that there was no objective evidence of permanency or disability. He concluded that plaintiff was able to work and perform her activities daily living without restrictions.
In opposition, plaintiff submitted a sworn affidavit and sworn affirmations of her treating and examining physicians. The Court determined that the foregoing were sufficient to raise an issue of fact as to whether plaintiff suffered a permanent consequential limitation of use of a body organ or member and/or a significant limitation of use of a body function or system. Accordingly, the defendant’s motion was denied.
Plaintiff’s expert, Dr. Nicolas El-Khoury reviewed plaintiff's MRI films and performed range of motion testing shortly after the accident on August 3, 2024, and again on April 25, 2026, which detected lumbar disc bulging, a left knee meniscus tear, and a reduced ranges of motion in the plaintiff’s lumbar spine and left knee. In his report, Dr. El-Khoury opined that based upon plaintiff's description of the accident, and his examination of plaintiff, there was a direct causal relationship between the subject accident and plaintiff's injuries and disabilities.
According to Dr. G. Alex Simpson’s affirmation, plaintiff sustained tears to the medial meniscus of her left knee which Dr. Simpson observed during plaintiff's April 17, 2025, arthroscopic surgery. Dr. Simpson affirmed that there was no evidence of any significant degenerative or pre-existing conditions to plaintiff's injuries. Based upon his examination of plaintiff and what he observed during the surgical procedure, Dr. Simpson concluded that plaintiff's left knee injuries were consistent with and causally related to subject accident. Finally, according to the affirmation of plaintiff's pain management physician, Dr. Boleslav Kosharskyy, plaintiff received epidural steroid injections to her lumbar spine on June 5, 2025, and has been recommended to undergo a lumbar spine percutaneous discectomy.
Considering the defendants’ last argument that an unexplained 10-month gap in plaintiff's treatment alone warranted the granting of defendants' motion, the Court determined that the record did not support such a finding. Dr. Kosharskyy's affirmation and the plaintiff’s supporting records upon which he relied demonstrated that plaintiff had follow up visits for pain management through August 28, 2025, and was directed to continue physical therapy for six-to-eight weeks. Plaintiff also testified at her deposition that she attended physical therapy “two-to-three times per week for more than one year”. As such, the record did not conclusively establish a 10-month gap in treatment.
Based on the above, the Court determined that the defendants were not entitled to summary judgment dismissing the complaint on the ground that plaintiff did not sustain a “serious injury” within the meaning of CPLR 5102(d).
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
[email protected]
Alexander G. Henlin
[email protected]
Iryna N. Dore
[email protected]
05/26/26 Roberge v. Travelers Prop. Cas. Co. of Am.
Supreme Court of Rhode Island
State Employee Operating Personal Car Within Scope of Her Employment Does Not Qualify as a “Named Insured” Under State Government’s Automobile Insurance Policy, With Result that She Cannot Claim UM/UIM Benefits
The State of Rhode Island directly employs approximately 17,000 people. One of them was an individual named Cynthia Roberge. Her job regularly required her to go to various worksites across the state. On October 18, 2018, not one of the state’s 2,134 vehicles was available for use, so Roberge drove her own automobile. While doing so, and while acting within the scope of her employment, she was involved in a serious collision with an underinsured motorist. She sustained injuries that prevented her from returning to work.
The state’s vehicles were insured under an automobile insurance policy issued by Travelers. Roberge sought UM/UIM coverage under that policy three times. Each time, Travelers disclaimed, explain that underinsured motorist coverage was only afforded to “covered autos” – and, at the time of her injury, Roberge was operating her own vehicle. In April 2021, Roberge brought suit in Rhode Island’s superior (trial) court, seeking declaratory relief, damages for breach of contract, punitive damages, and further damages for bad faith.
Travelers removed Roberge’s lawsuit to the federal district court and sought summary judgment on all counts. The federal court granted it: it held that Roberge did not qualify as a “named insured” under the policy that Travelers issued to the state (her employer), and that she was not operating a “covered vehicle” at the time of the accident. Roberge appealed, and the United States Court of Appeals certified two questions to the Rhode Island Supreme Court.
The first question was whether Rhode Island law required that Roberge (an employee) be considered a named insured under her employer’s auto insurance policy when driving her own personal vehicle while in the scope of her employment, despite policy language to the contrary. Roberge’s argument for an affirmative answer to that question rested on the Rhode Island Supreme Court’s dicta in Martinelli v. Travelers Insurance Company, 687 A.2d 443 (R.I. 1996), In that case, a David Martinelli was riding as a passenger in someone else’s vehicle when it was involved in an accident. Martinelli sought UIM coverage under a commercial garage policy issued to his company, and the Rhode Island Supreme Court held that he was not entitled to coverage. It nevertheless held that “we do not foreclose the possibility that in difference circumstances this Court could conclude that an individual shareholder or employee might be eligible for uninsured-motorist coverage under a policy that listed the corporation as the named insured.”
The court answered the question in the negative, holding that what has come to be known as the “Martinelli exception” might apply only in the context of a small, closely-held company. Roberge, the court noted, worked for a government entity that employed 17,000 people; accepting her argument would, according to the court, require that every state employee injured while acting within the scope of their employment may be considered a “named insured” for purposes of the state’s UM/UIM coverage – and the language of the Travelers policy plainly precluded that. The court noted that, in Martinelli and its progeny, the court had only considered cases where the plaintiff was acting outside the scope of employment, so the “exception” was a hypothetical.
The second question was whether the Travelers policy violated the state uninsured motorist statute, G.L. 1956 § 27-7-2.1, or Rhode Island public policy. That statute generally holds that a policy that that provides liability coverage must also provide uninsured motorist coverage. The court answered that the Travelers policy did not violate either the statute or any public policy because the statute applies to primary policies. As to Roberge, the court held that her personal auto policy was primary; and that coverage fully complied with the UIM statute. At best, the Travelers policy was only excess as to its liability coverage for Roberge.
Justice Robinson, in a lukewarm dissent, wrote that he would have answered the first question in the affirmative, notwithstanding policy language to the contrary.
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.
05/29/26 HUB Int’l Canada West ULC v. Forgotten Treasures Int’l Inc.
British Columbia Court of Appeal
Applying Giacomini to Delay in Coverage Litigation
In British Columbia, Giacomini Consulting Canada Inc. v. The Owners, Strata Plan EPS 3173, 2023 BCCA 473, is the leading authority on dismissal for want of prosecution. This decision shows how Giacomini’s three‑part framework plays out in a real‑world insurance coverage dispute and underscores a practical point for defence counsel and claims professionals: Delay alone—even inordinate and partly inexcusable delay—will not suffice if the defence has itself been largely passive.
Background
According to his LinkedIn profile, Ron Shore of Vancouver, B.C., following a career in the Royal Canadian Navy, currently makes a living in the software industry. But his passion is treasure hunts, radio contests and the like.
When his sister‑in‑law died of breast cancer, Mr. Shore decided to create and direct a treasure hunt fundraiser for cancer research that would be like no other fundraiser. The grand prize was a sculpture of a golden eagle, which in 2016 was worth about $7 million.
According to Wikipedia, the eagle is made out of 18 pounds of solid gold; the head is made of 18 carat white gold and encrusted with 763 diamonds; and the eyes are made of two 1.1 carat matching pear‑shaped diamonds. The Eagle stands watch over the Atocha Star emerald, a 12.72 carat emerald valued at $3.18 million in 2013. The tail feathers are 14 kt white gold; the body, rock and base are 14 kt yellow gold, and the very bottom pedestal is 10 kt yellow gold.
Mr. Shore incorporated a company, Forgotten Treasures International Inc. (FTI) and a website. In 2010, Mr. Shore, through this company, published a 12‑chapter book, The World’s Greatest Treasure Hunt: Quest for the Golden Eagle. According to a July 7, 2016, article in the National Post, each chapter is filled with clues and ends with 20 trivia questions. Initial purchase price for the book was about $100. Players are invited to submit their answers online. The first person to complete a chapter is flown to a city where, with a video camera in tow, they follow directions to claim the prize, a silver eagle, worth about $50,000. Once all chapters are completed, competitors vie for the ultimate prize, the lavish golden eagle or $1 million cash. With these pieces in place, Mr. Shore began promoting the treasure hunt. Initially, Mr. Shore declared 20 per cent of gross sales of the book would go to breast cancer research. That changed to 100 per cent of the net proceeds because, he says, people were calling him “cheap.”
The Insurance
The golden eagle was insured. The property policy was brokered through HUB International Canada West (HUB) and underwritten by Lloyd’s. According to an article in Insurance Business Magazine, the policy limit on the golden eagle was $400,000 and the limit on each of the silver eagles was $53,750 each. The insurance policy included a two‑person accompaniment term. Coverage was excluded for losses suffered when the insured property is “in transit”, unless the property is “in the close personal custody” of the insured party (Mr. Shore), together with an officer, independent contractor, designated employee or representative of the insured party. For underwriters and claims handlers, this is a familiar structure: high‑value, mobile property is subject to tight custody conditions intended to control transit risk.
The Robbery
On May 29, 2016, Mr. Shore attended an event in a church in Delta, B.C. to publicize the treasure hunt. He had the golden eagle with him in a backpack. A silver eagle was in the trunk of his car. He was accompanied by a female friend, who is a psychologist. After the event he walked his friend to her car, turned and walked to his own.
Various CBC and CTV news reports as well as the National Post article detail what happened next. As Mr. Shore opened the trunk of his car, he was hit from behind by an assailant who ripped open the backpack, stole the golden eagle and snatched the silver one from the trunk. The assailant fled in an SUV. Mr. Shore caught up to the SUV, grabbed some part of the vehicle and was dragged 200m before he let go. The event was reported to the Delta police who verified that Mr. Shore’s injuries were consistent with his narration of the robbery.
The Claim and its Denial
With media questioning whether the robbery was a publicity stunt or insurance fraud, on August 12, 2016, Mr. Shore placed a claim for the loss of both eagles. Lloyd’s insurance adjuster interviewed the friend who accompanied Mr. Shore on the evening of the robbery. Thereafter, on October 12, 2016, the claim was denied as this friend did not meet the definition of the person who was to accompany Mr. Shore and further questioned whether she was with him at the time of the robbery.
The Litigation
FTI filed and served an action against HUB and Lloyd’s. The litigation then languished for six‑and‑a‑half years, including an imprudent default‑judgment detour, long dormancy, and limited steps (a list of documents in June 2021 and an amended pleading in January 2023).
Email traffic in April 2023 and August 2024 discussed a proposed summary trial; Lloyd’s questioned delay and suitability but counsel lacked availability until November 2023. By late summer 2024 the defendants advised that they were intent on filing dismissal applications for want of prosecution, which were heard January 27, 2025.
The Chambers Decision
The chambers judge found the overall delay inordinate. About five years of delay was held to be inexcusable, but nonetheless and “somewhat reluctantly,” the judge held it was in the interests of justice to let the claim proceed, calling it a “close call”.
Why the Chambers Judge Let the Action Continue Despite Inexcusable Delay
The binding British Columbia case on delay is Giacomini Consulting Canada Inc. v. The Owners, Strata Plan EPS 3173, 2023 BCCA 473. Applying Giacomini’s three‑part framework, the judge accepted there had been inordinate and inexcusable delay, but then weighed interests‑of‑justice factors qualitatively.
Prejudice to the ability of the defence to prove its case was presumed, but, given little weight. There were some contemporaneous documents to the verbal dealings; the defendants did not pursue timely discovery of Mr. Shore or compel the non‑party witness. Length and stage of delay, and some impact on professional interests, favoured dismissal but not heavily. Critically, the context weighed against dismissal: there was no evidence the defendants put pressure on FTI to proceed until summer 2024, and they took no independent steps such as seeking a trial date, scheduling discoveries, compelling the witness, or delivering HUB’s list of documents. Reasons advanced for delay did not assist FTI, and public‑importance and merits considerations were neutral. Balancing all factors, the judge prioritized the plaintiff’s presumptive entitlement to adjudication on the merits and declined dismissal.
HUB and Lloyd’s appealed.
The Court of Appeal
The Court of Appeal denied the appeal and affirmed the chambers judge’s decision, stating that deference is required for discretionary rulings such as this one. Intervention at the appeal level requires misdirection or a result so clearly wrong as to amount to an injustice.
Lloyd’s and HUB argued that if the chambers judge’s decision is “upheld”, the Court will effectively be “hollowing out” the reform Giacomini sought to make in response to concerns about delay in civil proceedings. The Court of Appeal disagreed. That Court declared that this is a case where the appellants must demonstrate that the chambers judge made a reviewable error in reaching a discretionary decision declining to dismiss the action for want of prosecution.
In that regard, Lloyd’s and HUB argued that the chambers judge committed a palpable and overriding error—they argued that emails were exchanged which evidenced defence concern regarding delay. The text of the emails is not cited by that Court, but the Court disagreed with that characterization. The Court stated:
“The emails do not show that Lloyd’s put any pressure on FTI to move the matter forward. The entire thrust of the exchange was that FTI sought to schedule a summary trial application, and counsel for Lloyd’s resisted those efforts. Indeed, in one of the emails, counsel for Lloyd’s expressed concern that after several periods of unexplained inactivity, FTI was ‘stepping on the gas’ by bringing a summary trial application before discoveries had taken place. This could hardly be taken as evidence of the defendants pressing the plaintiff to advance the action.”
On this basis, the Court unanimously held the chambers judge reasonably distinguished passive expressions of concern about delay from actual pressure to proceed; the April 2023 exchange resisted summary trial and set no deadlines, so there was no palpable error, and in any event the point was not overriding. On weighting, the Court rejected the notion the judge let one factor “trump” the rest, endorsing her nuanced, qualitative balancing rather than an arithmetic tally. On public importance, the absence of broader importance need not favour dismissal; where no such issue arises, the factor can be neutral. Concluding there was no reviewable error, the Court dismissed the appeal.
Comment
The Court of Appeal was clear that delay alone—even inordinate and partly inexcusable—will not guarantee dismissal for want of prosecution. To set the table for such an application, the defence must place pressure on the plaintiff by setting clear deadlines; seeking a case management order; taking active steps to set discoveries; delivering documents; and warning of the remedies for inaction. Passive grumbling in correspondence is not enough.
These applications are largely discretionary and must be won at the chambers level. Courts of Appeal will extend deference to the chambers judge on these matters. In practical terms, if the defence has allowed a file to languish without making use of the procedural tools available to move it forward, even a long and problematic delay may not result in dismissal.
© Hurwitz Fine P.C. 2026
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