Coverage Pointers - Volume XXVIII No. 6

Volume XXVIII, No. 6 (No. 731)
Friday, August 28, 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.

The courts continue to be in their summer slumber.  In the last eight days, for example, only one coverage decision was rendered by any of the five New York State appellate courts we monitor. But we won’t let that stop us from sending another timely issue of Coverage Pointers, our 731^st  since July 1999.

Lake Erie and Lake Ontario

.

 

The photo above is of Lake Erie, taken from my cottage on the Canadian north shore of this Great Lake. Just 25 miles to the north lies another Great Lake—Lake Ontario.

Let me say that again: Lake Ontario. It has been Lake Ontario for the past 385 years, and Lake Ontario it shall remain.

For all the years we have published this newsletter, I have steadfastly avoided politics. I have tried to keep political disagreements outside these pages. But I confess that I am having an extraordinarily difficult time remaining silent about the President’s continuing dispute with Canada.

For nearly six months of each year, I live in a second home in Canada, and I am writing these words from the Canadian side of our long and peaceful border.

I have the deepest affection and respect for our Canadian brothers and sisters. Canada is a nation that has fought beside us, stood with us in difficult times, provided help and assistance when we needed it, and, through generations of friendship, has never let us down.

Some friendships deserve better.

 

We Appreciate the Recognition:

Hurwitz Fine is pleased to announce that 28 of the firm’s attorneys across five offices have been selected by their peers for inclusion in the 2027 edition of The Best Lawyers in America®. Among this list, five Hurwitz Fine attorneys were named to the Best Lawyers: Ones to Watch® in America list.

In addition, Firm President/Managing Partner Jody E. Briandi was also named as Best Lawyers “Lawyer of the Year” in Buffalo for Litigation – Municipal. “Lawyer of the Year” honors are awarded annually to only one lawyer per practice area in each region with extremely high overall feedback from their peers, making it an exceptional distinction.

The attorneys named to the 2027 edition of The Best Lawyers in America® and the practice areas in which they were honored are as follows:

Buffalo, NY:

• David R. Adams (2024)
  • Personal Injury Litigation – Defendants
• Jody E. Briandi (2021)
  • Litigation – Insurance
  • Litigation – Municipal
  • Personal Injury Litigation – Defendants
  • Product Liability Litigation – Defendants
• Evan Y. Bussiere (2024)
  • Real Estate Law
• Patrick B. Curran (2011)
  • Personal Injury Litigation – Defendants
• Lawrence C. Franco (2009)
  • Corporate Law
  • Tax Law
  • Trusts and Estates
• Dan D. Kohane (2009)
  • Commercial Litigation
  • Insurance Law
  • Litigation – Insurance
  • Mediation
• Anastasia M. McCarthy (2026)
  • Litigation – Insurance
  • Litigation – Labor and Employment
  • Personal Injury Litigation – Defendants
• Elizabeth M. Midgley (2024)
  • Personal Injury Litigation – Defendants
• Mark S. Nemeth (2024)
  • Personal Injury Litigation – Defendants
  • Product Liability Litigation – Defendants
• Steven E. Peiper (2021)
  • Insurance Law
  • Litigation – Insurance
• Michael F. Perley (2010)
  • Litigation – Municipal
  • Mediation
  • Municipal Law
  • Personal Injury Litigation – Defendants
• V. Christopher Potenza (2024)
  • Personal Injury Litigation – Defendants
• Lawrence M. Ross (2010)
  • Corporate Law
  • Health Care Law
  • Tax Law
• Andrea Schillaci (2015)
  • Commercial Litigation
  • Litigation – Health Care
  • Product Liability Litigation – Defendants
• Stephen M. Sorrels (2024)
  • Litigation – Health Care
  • Medical Malpractice Law – Defendants
  • Product Liability Litigation – Defendants
• Scott D. Storm (2024)
  • Insurance Law
  • Litigation – Insurance
• Amber E. Storr (2022)
  • Commercial Litigation
• Agnieszka A. Wilewicz (2023)
  • Insurance Law
  • Litigation – Insurance
• Kevin J. Zanner (2021)
  • Corporate Law
  • Real Estate Law

 

Long Island, NY:

• Lee S. Siegel (2025)
  • Insurance Law

 

Woburn, MA:

• Barbara A. O'Donnell (2024) 
  • Insurance Law
  • Litigation – Insurance

 

Concord, NH:

• Iryna N. Dore (2027)
  • Insurance Law
• Alexander G. Henlin (2025)
  • Litigation – Insurance

 

Five Hurwitz Fine attorneys were also named to the “Ones to Watch” list:

 

Buffalo, NY:

Alexis M. Florczak (2025)

• Corporate Law
• Real Estate Law

• Evan D. Gestwick (2027)
  • Insurance Law
• Isabelle H. LaBarbera (2027)
  • Insurance Law
• Ryan P. Maxwell (2023)
  • Insurance Law

 

Rochester, NY:

• Elizabeth K. Ognenovski (2027)
  • Personal Injury Litigation – Defendants

 

(Year) First year the lawyer was listed in the published practice area.

 

Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. The 33^rd edition recognizes 81,620 lawyers across 151 practice areas and 203 metropolitan and geographic areas, spanning 17,004 participating firms. Only about 5% of practicing attorneys in the market earn this distinction.

This year's awardees were determined through 3.8 million evaluations submitted during the current cycle, adding to a cumulative total of more than 30 million historical evaluations, with more than 32,000 lawyers voting. 

 

Need a Mediator Give a Call:

A growing percentage of my practice has been as 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.

 

I am delighted to report that I was just designated as a Special Master as part of the Second Department ADR program, helping to resolve appeals at that backlogged court.

 

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.

 

 

Burial of a Star – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
28 Aug 1926

TO HALT BURIAL
OF STAR UNTIL
BROTHER COMES

Funeral of Valentino Monday,
But body will be held.
Curious abandon vigil

New York, Aug. 27 (AP) – The burial of Rudolph Valentino has been postponed until Wednesday to await the arrival of Alberto Guglielmo, the actor’s brother, who is on his way here from Italy.

The funeral will be held on Monday, as previously announced by S. George Ullman, Valentino’s manager, and the body will be taken back to the Campbell funeral parlors.

Given More Time

Mr. Ullman obtained from Health Commissioner Harris late this afternoon a second 24-hour extension of time of the burial, on the ground that the body is not to be shown again to the public. Dr. Harris said he could grant the extension because death was not caused by a contagious disease.

If Valentino’s brother does not arrive on scheduled time the body will be taken to a vault in Woodlawn Cemetery and then disposed of according to his wishes.

 

Peiper on Property (and Potpourri):

Nothing from me this week—see you in two.

Steve
Steven E. Peiper
[email protected]

 

Now, it Would Take About 38 Hours – 100 Years Ago:

Buffalo Courier Express
Buffalo, New York
28 Aug 1926
From California
To N.Y., 83 Hours

New York, Aug. 27 – A new transcontinental automobile record of 83 hours and 12 minutes was established when L.B. Miller reached here today from San Francisco in a roadster.

Miller began his record breaking trip at 9 p.m. (Pacific Coast time) last Monday evening. Ad Jedkins and Roy Tuck held the previous record of 86 hours and 20 minutes.

 

Lee’s Connecticut Chronicles:

It's been a crazy-busy end to the summer, both for fun and work. We've been to visit friends, see concerts in multiple cities (we're at risk of becoming groupies), and take in all that New England offers for summer recreation.

On the work side, we've seen some awful events (murder, suicide, death, sex trafficking, slave labor) lead to interesting and unique insurance coverage issues. Whoever said insurance was boring has never spent a day in our shoes!

Now it's time to ship our youngest back to school for his final college semester. It’s been a journey, a long and expensive journey.

Until next time, keep keeping safe.

Lee
Lee S. Siegel
[email protected]

 

Buffalo to be Leading Airport, or Not – 100 Years Ago:

The Buffalo News
Buffalo, New York
28 Aug 1926

AIR SUPREMACY IN TWO
MONTHS SEEN FOR BUFFALO

City Has All the Natural Advantages,
Says Badger.

“According to present developments Buffalo will be peer among airports in this country within two months,” H. Ralph Badger, Friday, told members of the Shrine Luncheon club. Mr. Badger said the slogan: “A million for Buffalo by 1930” could be realized by the development of this city as the country’s leading airport. He asserted that within a radius of 500 miles the Queen City has three-fourths of the population of the United States and of Canada, an advantage possessed by none of the other large cities now bidding for supremacy as airports.

 

Ryan’s Federal Reporter:

Hello Loyal Coverage Pointers’ subscribers:

This week, with camps concluded, my wife took our sons to Hershey, Pennsylvania, for some fun at Hershey Park. My daughter and I held down the fort at home. All accounts appear mostly positive from both locations. Some accounts weigh more than others, oddly enough coming from those that weigh much less than me.

This edition, I have summarized an interesting Report and Recommendation involving additional insured coverage for breach of contract claims involving construction defect litigation.

Until next time…

Ryan
Ryan P. Maxwell
[email protected]

 

Canada to the Rescue (Through Dominion) – 100 Years Ago:

The Vancouver Sun
Vancouver, British Columbia, Canada
28 Aug 1926

In Hundred Years
Canada Will Feed
All of America

Get Ready for
Famine in U.S. Before
Year 2200

By Laurence Donovon

One hundred years from now?

What?

Two hundred years?

Why should a supervisor of playgrounds conceive of the relation of children playing, and living and learning, to the productivity of the land?

Stuart Miller, head of the supervised playgrounds of Vancouver, in pageantry depicted with the living colors of children the resources of Canadian provinces. A peculiar thing to do, one might say offhand. What connection can there be between the play and the teaching of children to the production of this nation that is Canada?

Well, one hundred years from now, what?

One hundred years from now Canada will be feeding the United States. Two hundred years from now, were the United States denied the food resources of the Great Dominion to the northward, famine would be stalking across the land. Before 2200 there will be 300,000,000 people south of the border, with a density of population equal to that of China today and with the great breadbasket and meat market of North America in now unpopulated areas of this Dominion.

 

Storm’s SIU:

Hi Team:

Three interesting no-fault cases for you in this edition:

• Disputes over a No-Fault provider’s alleged noncompliance with No‑Fault verification procedures fall within mandatory arbitration under Insurance Law § 5106(b) and the parties’ policy arbitration clause and are governed by the Federal Arbitration Act.  Medical provider did not waive any right to arbitrate by filing state court collection actions on related bills.

 

• An insurer seeking to use civil RICO to attack allegedly fraudulent third-party personal-injury litigation faces significant proximate cause and damages-hurdle obstacles where the alleged racketeering is directed at claimants and insureds, and the insurer’s losses arise indirectly through its coverage obligations. Absent direct fraudulent conduct targeted at the insurer (e.g., direct billing schemes), RICO’s directness and clear-and-definite injury requirements are unlikely to be satisfied, and courts may decline to entertain pendent state-law claims once the federal claims fall.

 

• In No-Faut RICO action this Court quashed a third‑party subpoena an insurer served on Google seeking six years of “non‑content” email metadata of a medical provider.  Even where metadata might theoretically generate investigative “leads,” Fed. R. Civ. P. 26’s proportionality limits bar broad, speculative discovery that will predominantly sweep in irrelevant personal data.

I’ll meet you back here again in a fortnight.

Scott
Scott D. Storm
[email protected]

 

One Love at a Time – 100 Years Ago:

Rochester Journal and the Post Express
Rochester, New York
28 Aug 1926

DEAR MISS FAIRFAX:

I'm here again. This time it is something different that I’m in doubt about.

Can a woman love two men at the same time. Sometimes I'm sure it is yes, and then other times I say “no.” I’m trying my hardest to forget the old flame. I'm married, but my heart isn't with my husband. When the other man came into my life I lived only for the times when I could see him, and I don't believe in such affairs; so, I gave him up.

But, oh, how my heart aches when I see him. My life isn't worth living when I don’t see him.

Still, I don't think I could be parted from my husband I love him — yes, and no.

Please tell me — can a woman love two men at the same time?

COUNTESS.

THAT’S a big question, one on which even psychoanalysts do not agree. Personally, I would tell you "No," because you see I’m one of those romantic idealists who believe that a husband is the most wonderful thing in the world, else he isn't worth having.

The world is full of nice men, and there are many qualified to make fine husbands; many who would make you equally happy, so long as they were interested in doing so. But the one you look up to and want in spite of his faults, is the one you're in love with. And I don't believe you could feel that way about two of them at the same time.

 

Fleming’s Finest:

On vacation. See you next edition.

Kate
Katherine A. Fleming
[email protected]

 

To Pet or Not to Pet; That is the Question – 100 Years Ago:

Wilkes-Barre Times Leader, the Evening News
Wilkes-Barre, Pennsylvania
28 Aug 1926

Dear Miss Fairfax:

"I am a young man twenty years of age.

"About two years ago, I was taken ill and went to the country for a year.

"While there, I met a girl who was two months my junior. She was a relative of the family with whom I was stopping. We used to go out for walks at night and stop in some lonely spot and "pet." This continued for about two months, when I returned to the city I kept in constant communication with her, and often went to her house to visit her.

"She attracted me very much. Often I used to go to the family with whom I stopped and stayed for the weekend, call on her and take her to the theatre. On the way home we stopped the car and did some 'petting.'

"However, I have come to view petting in its true light and have discontinued the practice.

"Since then, I have called on her. The first two or three times she seemed glad to see me, and on the way home from a show would suggest stopping and ‘petting’ -not, of course, in so many words. But she suggested it, nevertheless.

“I politely refused to take the hint. Since then, she has not seemed anxious to see me and corresponds only occasionally. Now my problem is how to keep her friendship which I value very, very much, without petting.

"Of course, you would not expect me to tell her not to pet. I really value and respect her friendship and hope that it may continue. Your advice will be greatly appreciated. "MR. X."

Did you explain to your friend the reason you stopped petting? It seems to me that it was due her. Otherwise, she may wonder just why you suddenly ceased our demonstrations of affection. When she understands clearly I am sure she will not sacrifice your friendship because you have the courage to be true to your principles.

The next time you spend a weekend in the country and invite her out, explain on your way home just why you changed your mind about promiscuous petting.

I'm assuming that you are in love with her. If you love her and are in a position to marry, why don't you propose marriage? Then, when you are engaged to her, you can kiss and caress her with a free conscience.

 

Gestwick’s Garden State Gazette:

Dear Readers:

Now that my recent marriage is “old news—” that was last edition, after all—I am proud to announce that my wife and I have purchased our first house!! Details to follow.

Nothing of interest out of the Garden State this week. Until next time.

Evan
Evan D. Gestwick
[email protected]

 

Judicially Approved Petting Rules – 100 Years Ago:

The Buffalo Times
Buffalo, New York
28 Aug 1926

PETTING APPROVED
BY OHIO JUSTICE

But He Declares It
Should Be Done
Properly.

YOUNGSTOWN, Aug. 28.  – Petting wasn’t patented in the twentieth century, but the past 25 years has witnessed a great advance in the popularity of the pastime among young and old, according to Judge George H. Gessner, a strong advocate of “proper spooning.”

“I’m not against petting when it’s done properly,” declared Judge Gessner, Domestic Relations Court.

“Petting is merely a trend of nature and all of us have felt its appeal at least once during our lifetime.”

The judge set down a set of “don’t” to govern petting. They are

“Don’t pet while driving an auto. Keep both hands on the steering wheel. When you start petting, stop driving. The two don’t mix.

“Don’t park your machine without lights.

“Don’t pet on roads or lanes. Use the main thoroughfares. You’ll attract considerably less attention and probably will keep out of the hands of the police.

“Don’t pet the other fellow’s girl. Pet the daughters and leave the wives alone.

“Don’t pet unless your petter friends are 18 or over.”

Gessner urged police to use more discretion in arresting petters, saying there was “no harm in a little innocent spooning.

 

O’Shea Rides the Circuits:

Readers:

Staining a shadowbox fence is my bane at the moment. After 10 gallons of stain my wife and I still have the “Great Wall” left to complete which is the longest side of the fence. Hopefully, five gallons will suffice. But as Stuart Smalley affirmed in times of struggle, “I’m good enough, I’m smart enough, and doggone it people like me.” Thanks, Stuart, I’ll affirm that mantra as I attempt to finish staining the fence this weekend.

This edition I have an entertaining read from the Eleventh Circuit regarding a first-party property damage claim. The insureds, a father and daughter, bought a home together in Alabama. Both insureds told the prospective insurer that the other co-insured would burn the house down. A month after issuing the policy, the house burned down. Was it arson? Yes. Was the innocent insured covered? Read to find out.

See you in two,

Ryan
Ryan P. O’Shea
[email protected]

 

New Insurance Program – 100 Years Ago:

Elmira Star-Gazette
Elmira, New York
28 Aug 1926

New Insurance
Plan is Devised
By Government

The United States government has instituted a new plan of government insurance, called the five-year convertible term policy. This act has to do with World War veterans.

The policy provides for a level premium term rate for a period of five years, and thereafter the premium rate is the same as with ordinary life insurance, depending upon the age of the applicant. Premiums are computed for payment on a monthly basis but need not be paid at such intervals. These policies may be converted while the policy is in force in multiples of $500 or $1,000 to ordinary life, 20-payment life, 30-payment life, 20-year endowment, 30-year endowment, or to endowment at the age of 62 years.

 

LaBarbera’s Lower Court Library:

Dear Readers:

My wildflowers are officially taller than I am — 5’8”, for those wondering. Disappointing news on the spaghetti squash front though, as it appears pesky squash vine borers found a home in their stems. No longer in need of spaghetti squash recipes …

It has been another quiet few weeks at the trial level, but I found one decision that reinforces well-established principles regarding suit-limitation provisions, with a few procedural points to keep things interesting. This week, I report on a New York County decision dismissing an action for lack of personal jurisdiction and for violation of the subject policy’s suit-limitation provision.

Until next time …

Isabelle
Isabelle H. LaBarbera
[email protected]

 

Good to Know – 100 Years Ago:

The Buffalo Courier Express
Buffalo, New York
28 Aug 1926

Even a Camel
Would Not be.
Found on Mars

Pasadena, Cal., Aug. 27 (AP) – Even a camel would shun Mars if what Dr. Walter S. Adams, director of the Mount Wilson observatory here, says about the planet is true, for ultra arid conditions prevail throughout the planet, he declares.

Couples with the extreme aridity is the scientifically established fact that there is a drastic daily change in temperature on Mars, from something like 75 degrees at noon to 40 degrees below zero at midnight.

 

Lexi’s Legislative Lowdown:

Dear Readers,

We are heading to my hometown this weekend for a friend’s wedding. I haven’t been back in a while, and my mom has been preparing all week for our stay. Looking forward to spending some time at home. Unlike my visits home from college, this time I will be accompanied by my husband and two dogs, a full house for sure.

This week we discuss a Massachusetts act that regulates property and casualty insurance policy provisions relating to public insurance adjusters. The Act prevents insurers from making recovery under a policy conditional on the insured agreeing not to use a public adjuster.

Thanks for reading,

Lexi
Lexi R. Horton
[email protected]

 

Lake Ontario is So Named – 385 Years Ago:

The name “Ontario” was being used for Lake Ontario by at least 1641.

Samuel de Champlain had earlier called it Lac St. Louis on his 1632 map. But a Jesuit account by Father Jérôme Lalemant in 1641 referred to the lake as “Ontario, or Lake St. Louis.” Another Jesuit account in 1647–48 described it as “a lake named Ontario which we call Saint Louys.”

The name is Indigenous, generally traced to an Iroquoian/Haudenosaunee word referring to a beautiful, great, or sparkling body of water. The Government of Canada says the earliest recorded use of “Ontario” dates to 1641.

Late 17th century, however, Ontario had won out.

So, if you're looking for an anniversary: Lake Ontario has been recorded under essentially its present name for about 385 years, since 1641.

By the way, The Province of Ontario received its present name in 1867, when the British North America Act created the Dominion of Canada effective July 1, 1867.

Before Confederation, the area was known as Canada West from 1841 to 1867 and, before that, largely as Upper Canada from 1791 to 1841.

So, the name “Ontario” for the province dates to July 1, 1867, although the name had been used for Lake Ontario for more than two centuries by then.

 

Victoria’s Vision on Bad Faith

Dear Readers,

The curtain has officially closed on my bridesmaid era after celebrating my last bride this weekend. My Bridesmaid Wrapped includes five weddings in two years; six bridal showers (planned one); three dresses purchased (rewore two; this included my prom dress from 2016 after a failed attempt at DIY dyeing one of my other bridesmaid dresses to save a buck. One dress is now gray); five dress colors (gold, mauve, blue, lavender [now gray, see saving a buck], and black); three shoe colors (pink, tan, black); bachelorette trips to Austin and Syracuse, and out-of- town wedding locations in Chautauqua, Watertown, and Brockport. Honorable mentions to my brother-in-law's wedding in Dallas and Baby Ben's first birthday party (animal themed).

It's always a privilege to be asked to stand in a wedding, though I'm looking forward to what my summer will bring. Next year, I have one wedding in Las Vegas in May (just a guest this time) and planning a trip to Switzerland in July.

In other news, this week I have a bad faith case out of Connecticut federal court, where the court declined the insurer's motion to dismiss the plaintiff's cause of action for breach of the covenant of good faith and fair dealing.

Have a good weekend,

Victoria
Victoria S. Heist
[email protected]

 

Beheading? – 100 Years Ago:

The Brooklyn Daily Times
Brooklyn, New York
26 Aug 1926

GERMANY MAY ADOPT
THE ELECTRIC CHAIR

Sing Sing Visitor Will
Recommend Change From Ax.

Ossinning, Aug. 26. – Beheading may give way to the electric chair in Germany if the officials of that country accept the suggestion of Dr. Carl Struve, Attorney General of Germany, who visited Sing Sing Prison yesterday with the other German criminologists in search of ideas for handling German criminals.

The visitors spent much time in the death chamber, carefully scrutinizing the electric chair. Before he left Dr. Struve said he would recommend the substitution of the electric chair for the axe, the present method of dispatching criminals in Germany.

 

Shim’s Serious Injury Segment

Hi Readers,

Hope everyone has been well since our last column.

Unfortunately, we have a bit of bad news this issue as country music icon and philanthropist, Dolly Parton, has passed away. Although I am not a fan of country music in the least, all of us can appreciate a legacy featuring 11 Grammy awards, an Emmy, and, most importantly, millions of books sent to children around the world through her Imagination Library. While the world will dearly miss Dolly Parton, her legacy will survive for many years to come.

Today I have shared an appeal decided by the Supreme Court of New York, Appellate Division, Second Department, which upheld a Supreme Court, County of Queens, decision denying defendants’ motion for summary judgment on the issue of serious injury in accordance with Insurance Law 5102(d).

See you in the next issue!

Stephen
Stephen M. Shimshi
[email protected]

 

Women Losing the Franchise in Italy? – 100 Years Ago:

The Buffalo News
Buffalo, New York
26 Aug 1926

ITALIAN WOMEN MAY
LOSE NEW FRANCHISE

ROME, Aug. 26 (AP) – The Italian women way lose the right to vote before ever they have had a chance to cast a ballot.

They won the right to vote at municipal elections at the last legislative session of parliament after many years of struggle. But now a Fascist decree probably will abolish all municipal elections.

A more important aspect of the cabinet’s coming decree is that it is a confirmation of the government’s purpose gradually to legalize the temporary suspension of all elections recently ordered by Mussolini to enable the Fascist party to crush the turbulence of certain local elements who were refusing to accept the dictates of a central authority.

 

New England Almanack

Dear Readers,

As we cling to the waning days of summer, the New England team brings you two First Circuit decisions: the first of which affirmed an insurer’s right to rely upon a “related claims” provision to deny coverage for a pregnancy discrimination lawsuit filed during the policy period that shared a common factual nexus with an EEOC charge initiated prior to the policy inception and the second of which affirmed the dismissal of a lawsuit against an insurance broker for the alleged failure to eliminate a coverage gap and/or procure adequate limits for claims arising out of a boat collision during a race in Greece.

Barbara
Barbara A. O’Donnell
[email protected]

Alex
Alexander G. Henlin
[email protected]

Iryna
Iryna N. Dore
[email protected]

 

“Bracelets?” – 100 Years Ago:

The Plain Dealer
Cleveland, Ohio
28 Aug 1926

THUGS HANDCUFF GIRLS

“We Lost the Keys,” They Sneer, and Flee With $10.
(By Plain Dealer Wire)

CHICAGO, Aug. 27.—Fourt swashbuckling bandits swaggered into the office of the Harmony Cafeteria Corporation today.

Six office workers including four young women, were handcuffed together and made to stand in a corner.  The office manager was ordered to open the vault.  It was empty.  The robbers looted the manager’s pockets of $10 and fled.

“We lost the keys,” sneered one of the gunmen when a girl asked to be freed of the handcuffs.  Police filed the “bracelets” off.

 

North of the Border:

It has become harder, this year, and particularly since this past Friday night, to look past what is unfolding between Canada and the United States and focus on the many things I still deeply value in my American friends, colleagues, and clients.

A trade war, as someone recently put it, is a war fought without bullets — but the intent behind it is no less deliberate: Enough pressure applied that one side bends to meet the other's terms. This summer, I found myself unable to reach for a glass of Florida orange juice or a California Cabernet. I pour apple juice instead, or a B.C. red, and find I enjoy the substitution rather than mourning it. Multiply that by a country's worth of households and businesses quietly redirecting their spending, sourcing, and supply chains away from the United States, and you get something more durable than any tariff schedule: A structural shift as to where Canadians choose to buy, sell, vacation and invest. That diversification will change the relationship between our two countries. It is hard to envision that it will ever return to what it was.

My column this week discusses an aspect of Builders’ Risk Insurance – subrogation rights don’t always arise when the policy terminates.

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]

• Deceased’s Girlfriend Did Not Have Permission to Operate His Car When She Was Not the Legal Custodian

 

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]

• Nothing from me this week—see you in two.

 

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]

• Bad Faith Claim Survives Where it Alleges More Than a Coverage Dispute
• Court Establishes Cause of Action for Mental Health Care Negligence for Non-Patients

 

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]

• Underlying Breach of Contract Claims Deemed Sufficient to Trigger Coverage Where Allegations Were Broad Enough to Encompass Property Damage to Others

 

STORM’S SIU
Scott D. Storm
[email protected]

• Disputes Over a No-Fault Provider’s Alleged Noncompliance With No‑Fault Verification Procedures Fall Within Mandatory Arbitration Under Insurance Law § 5106(B) and the Parties’ Policy Arbitration Clause and Are Governed by the Federal Arbitration Act.  Medical Provider Did Not Waive Any Right to Arbitrate by Filing State Court Collection Actions on Related Bills
• An Insurer Seeking to Use Civil RICO to Attack Allegedly Fraudulent Third-Party Personal-Injury Litigation Faces Significant Proximate Cause and Damages-Hurdle Obstacles Where the Alleged Racketeering is Directed at Claimants and Insureds, and the Insurer’s Losses Arise Indirectly Through Its Coverage Obligations. Absent Direct Fraudulent Conduct Targeted at the Insurer (E.G., Direct Billing Schemes), RICO’s Directness and Clear-And-Definite Injury Requirements Are Unlikely to Be Satisfied, and Courts May Decline to Entertain Pendent State-Law Claims Once the Federal Claims Fall
• In No-Faut RICO Action This Court Quashed a Third‑Party Subpoena an Insurer Served on Google Seeking Six Years of “Non‑Content” Email Metadata of a Medical Provider. Even Where Metadata Might Theoretically Generate Investigative “Leads,” Fed. R. Civ. P. 26’s Proportionality Limits Bar Broad, Speculative Discovery That Will Predominantly Sweep in Irrelevant Personal Data

 

FLEMING’S FINEST
Katherine A. Fleming
[email protected]

• On vacation. See you next edition.

 

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]

• Garden State was quiet this week. See you in two more.

 

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]

• Alabama Courts Do Not Create Public Policy and Legislature Did Not Prohibit Innocent-Insured Exclusion, Thus, No Coverage Applied to Arson Claim

 

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]

• Court Dismisses Action for Failure to Timely Serve and Violation of the Suit-Limitation Provision

 

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]

• Act Further Regulating Insurance Claims and Public Insurance Adjusters

 

VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]

• District Court Denies Insurer’s Motion to Dismiss COA for Breach of Good Faith and Fair Dealing

 

SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]

• The Appellate Division, Second Department, Upholds the Supreme Court, Queens County, Decision Denying the Defendants’ Motion for Summary Judgment on the Issue of Serious Injury in Accordance with Insurance Law 5102(d).

 

NEW ENGLAND ALMANACK
Barbara A. O’Donnell
Alex G. Henlin​
Iryna N. Dore​

• Judgment for Insurer Affirmed Based Upon “Related Claim” Policy Provision That Was Not Included in Subsequently Purchased EPL Endorsement
• Dismissal of Breach of Contract, Negligence and Breach of Fiduciary Duty Claims Against Insurance Broker for Alleged Failure to Eliminate Coverage Gap and/or Procure Adequate Limits for Claims Concerning a Boat Collision Affirmed

 

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]

• Builders’ Risk, Subrogation, and a Premature Cancellation: Lessons From Chippewas v. Sexton’s Mechanical

 

My best to you all. Hopefully, better times ahead.

Dan

 

Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut, New Jersey, and across New England.

In addition, Dan D. Kohane is a Foreign Legal Consultant, Permit No. 0119144, issued by the Law Society of Upper Canada, and authorized to provide legal advice in the Province of Ontario on matters of New York State and federal law.

 

NEWSLETTER EDITOR
Dan D. Kohane
[email protected]

ASSOCIATE EDITOR
Evan D. Gestwick
[email protected]

 

INSURANCE COVERAGE/EXTRA CONTRACTUAL LIABILITY TEAM
Dan D. Kohane, Chair
[email protected]

Steven E. Peiper, Co-Chair
[email protected]

Michael F. Perley

Agnieszka A. Wilewicz

Lee S. Siegel

Barbara A. O’Donnell

Brian F. Mark

Scott D. Storm

Alexander G. Henlin

Iryna N. Dore

Ryan P. Maxwell

Katherine A. Fleming

Evan D. Gestwick

Ryan P. O’Shea

Isabelle H. LaBarbera

Lexi R. Horton

Victoria S. Heist

 

FIRE, FIRST PARTY AND SUBROGATION TEAM
Steven E. Peiper, Team Leader
[email protected]

Michael F. Perley

Scott D. Storm

 

NO-FAULT/UM/SUM TEAM
Jessica L. Deren

Ryan P. O’Shea
[email protected]

 

APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]

 

Topical Index

Kohane’s Coverage Corner

Peiper on Property and Potpourri

Lee’s Connecticut Chronicles

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]

08/19/26         Allstate Insurance Company v. Cabrera
Appellate Division, Second Department
Deceased’s Girlfriend Did Not Have Permission to Operate His Car When She Was Not the Legal Custodian

On October 9, 2020, the defendant GV Nunezsivirian (“GV”)  allegedly was operating a vehicle owned by her deceased boyfriend Rodriguez when it was involved in an accident with a vehicle owned by the defendant Perez and operated by the defendant Floresperez, in which the Acosta was a passenger. At the time of the accident, the Rodriguez vehicle was insured under a policy issued by the Allstate covering the period of January 11, 2020, to January 11, 2021. Rodriguez had died on April 15, 2020. In August 2021, Acosta commenced an action against GV,  Perez, and Floresperez to recover damages for personal injuries Acosta allegedly sustained in the accident.

Allstate initially agreed to provide a defense to GV in the underlying action but subsequently commenced this action against GV, Perez, and Floresperez, among others, for a judgment declaring that it is not obligated to defend or indemnify GV in the underlying action. Allstate claimed alleged that there was no coverage under the policy issued to Rodriguez for the defense and indemnification of GV, since she was not acting as the legal representative for the Rodriguez’s estate at the time of the accident and did not have proper temporary custody of the vehicle at that time. Perez and Floresperez interposed an answer.  Allstate moved for leave to enter a default judgment against GV and for summary judgment on the complaint insofar as asserted against Perez and Floresperez.

A default judgment in a declaratory judgment action will not be granted on the default and pleadings alone for it is necessary that plaintiff establish a right to a declaration.

Allstate established proof of service against GV.

Moreover, Allstate established its right to a declaration that it has no obligation to defend or indemnify Nunezsivirian in the underlying action.

Pursuant to the terms of the policy issued to the Rodriguez, in the case of the death of the named insured, the "rights and duties [under the policy] will be transferred to [the named insured's] legal representative." However, "[u]ntil [the named insured's] legal representative is appointed, anyone having proper temporary custody of [the named insured's] property will have [the named insured's] rights and duties but only with respect to that property."

The evidence submitted by the plaintiff in support of its motion established that the Rodriguez’s daughter was appointed the legal representative of the decedent's estate in January 2021 and that GV  did not have permission to operate the decedent's vehicle at the time of the accident. As such, the Allstate established, prima facie, that GV was not the legal representative of the estate and that she did not have proper temporary custody of the vehicle at the time of the accident.  Allstate has no responsibility to defend or indemnify.

 

PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]

Nothing from me this week—see you in two.

 

LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]

08/14/26        Jimenez v. State Farm Fire & Cas. Co.
United States District Court, District of Connecticut
Bad Faith Claim Survives Where it Alleges More Than a Coverage Dispute

Jimenez sued his insurer, State Farm, for breach of contract and bad faith, alleging that it failed to pay the fair rental value of his fire-damaged property.

In November 2023, the insured’s two-family New London home was damaged by fire. The insured claimed that he had rented the property to a tenant under an oral lease agreement. To support his claim for lost rental income, the insured provided State Farm with bank deposit records, a news article documenting that three tenants were displaced by the fire, and a letter from a tenant attesting that she paid the insured $2,200 on the first of every month for the last 14 months. State Farm denied the lost rental income claim.

In his complaint, the insured claimed that State Farm denied the claim in bad faith, in part, by making improper and unreasonable document demands, including insisting on documents that did not exist or that were destroyed in the fire. The insured called the requests “impossible to comply with in an intentional effort to avoid its contractual obligations to Plaintiff and avoid issuing further payment.”

State Farm moved to dismiss the bad faith allegations. The court sided with the insured, holding that the allegations went beyond a simple coverage disagreement.

To constitute a breach of the implied covenant of good faith and fair dealing, the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith, the court wrote, citing, Dorfman v. Smith, 342 Conn. 582, 597, 271 A.3d 53 (2022). In the context of the case, bad faith "implies . . . actual or constructive fraud, or a design to mislead or deceive another, or a neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake as to one's rights or duties, but by some interested or sinister motive." Id. at 605-06 (internal quotation marks omitted). "Bad faith means more than mere negligence; it involves a dishonest purpose." Id. at 606 (internal quotation marks omitted). An insurer's failure to adequately investigate a claim, "when accompanied by other evidence[] reflecting an improper motive," may support an inference of bad faith. Karas v. Liberty Ins. Corp., 33 F. Supp. 3d 110, 116 (D. Conn. 2014), the court noted.

Based on these standards, the insured’s allegations were sufficient to survive dismissal. “Taken together, these allegations plausibly allege more than a mere coverage dispute or negligent investigation,” the court held. The court, however, dismissed the insured’s declaratory judgment cause of action, finding that it was duplicative of the breach of contract claim.

05/04/26         Ashworth v. Town of Branford
Supreme Court of Connecticut
Court Establishes Cause of Action for Mental Health Care Negligence for Non-Patients

The Supreme Court reinstated a non-patient's negligence claim against a mental health care provider, recognizing this cause of action for the first time. The Court found that the administratrix of the estate of an identifiable nonpatient victim, who was murdered by a psychiatric patient following the patient's involuntary hospitalization and subsequent discharge, may sue the mental health care provider1 that treated and discharged the patient.

In a tragic murder-suicide case, Dr. Mollow killed his former girlfriend, Caroline Ashworth, and then himself. Dr. Mollow had checked himself into a local hospital, claiming that he was suffering from suicidal and homicidal ideations, and that he had ready access to firearms.

Mollow went to the emergency department at MidState Medical Center (MidState). There, he reported to medical staff that he was "emotionally distraught" because the decedent had ended their three year relationship. He told medical staff that he had specific homicidal ideations toward the decedent and feared that he would hurt her if she returned to Connecticut. He also reported that he was " 'obsessed' " with the decedent, had been suffering from sleep disturbances, had been using alcohol and Xanax obtained " 'off the street,' " and "did not feel able to remain safe outside [of] a hospital environment . . . ." He informed the  staff that he possessed a pistol permit and owned firearms located at his residence. 

The hospital placed Dr. Mollow on an involuntary 15-day hold and quickly transferred him to the psychiatric hospital at St. Vincent's Medical Center. There, Dr. Mollow repeated the same concerns that he “he had thoughts of harming or killing the decedent, (2) was depressed and having trouble sleeping, and was using alcohol and nonprescription Xanax, and (3) was requesting medication "to stop his 'intrusive thoughts' " about harming the decedent and to help him sleep.”

St. Vincent’s released Dr. Mollow on his own recognizance approximately two days later. The following evening, Dr. Mollow tracked down Ashworth, shot her several times, and then killed himself.

Lawsuits followed, including a claim by Ashworth’s estate against St. Vincent’s. The trial court granted the hospital’s motion to strike and entered judgment for the hospital, finding that a non-patient could not hold it liable for medical malpractice.

The Supreme Court reversed, holding that Ashworth’s claims sounded in simple negligence and not medical malpractice, as such claims would be barred by a non-patient. The Court held that the hospital knew Dr. Mollow posed a substantial risk of imminent harm to Ashworth but failed to warn her or control him; because these allegations sound in ordinary negligence rather than medical malpractice, they present a cognizable claim under the Court’s newly recognized limited duty to identifiable victims.

The Court created a rule providing that when a healthcare provider has actual knowledge of a substantial risk to a known person, a duty arises to act with ordinary care to protect that person from a foreseeable harm. Here, the complaint alleged that the mental health care provider knew that the patient posed a substantial risk of imminent physical harm to an identifiable person but failed to exercise reasonable care to protect the victim. Therefore, the claim does not challenge the adequacy of the provider's professional judgment in the medical evaluation, diagnosis, or treatment of the patient. 

Although this is not an insurance coverage decision per se, the holding implicates general negligence coverage beyond where underwriters and professional liability adjusters may have expected it to reach in the past. While these occurrences are hopefully rare, the exposure for carriers and insureds alike is expanded to an area that may be underinsured and the risk underappreciated.

 

RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]

08/25/26         Phx. Ins. Co. v. Scottsdale Ins. Co.
Eastern District of New York

Underlying Breach of Contract Claims Deemed Sufficient to Trigger Coverage Where Allegations Were Broad Enough to Encompass Property Damage to Others

Aurora entered a construction agreement with GGP Staten Island Mall, LLC (GGP) to serve as general contractor on a mall project. As part of that work, Aurora subcontracted with ADCO Electrical Corp. (ADCO) to furnish and install a complete power distribution system.

As part of the subcontract, ADCO had to maintain commercial general liability insurance naming Aurora as an additional insured, with Aurora’s additional insured coverage to apply on a primary, non‑contributory basis ahead of any other insurance or self‑insurance. Scottsdale issued ADCO a CGL policy.

In July 2018, a busway duct on the mall’s roof exploded, damaging nearby ducts and other GGP property and leaving the mall without power. GGP sued Aurora for breach of contract and asserted claims against other project participants (the “Underlying Action”), alleging Aurora breached warranties and contractual responsibilities and seeking damages including repair costs and lost profits.

Aurora filed a third‑party complaint against ADCO, alleging ADCO caused the damage through a defective duct. ADCO counterclaimed against Aurora for breach of contract and filed a separate third‑party complaint against several companies it alleges sold it defective equipment.

Scottsdale denied coverage to Aurora, contending that the underlying complaint alleged merely pure breach of contract claims. Scottsdale further denied coverage based on a professional services exclusion. Thereafter, Travelers filed this declaratory‑judgment action seeking a ruling that Scottsdale must defend and indemnify Aurora in the Underlying Action under the Aurora–ADCO subcontract and Scottsdale’s policy, reimbursement of defense costs paid for Aurora, and a declaration that the Travelers policy is excess to Scottsdale’s. Scottsdale answered, denying any duty to defend and asserting affirmative defenses. The parties filed cross‑motions for summary judgment and, a Report and Recommendation from the assigned magistrate of the Eastern District of New York found that Scottsdale owed a defense to Aurora.

First, the Magistrate noted that the Scottsdale policy covers suits for damages the insured/additional insured must pay because of an “occurrence” causing “bodily injury” or “property damage,” and CGL policies generally do not cover pure breach‑of‑contract claims. However, Coverage can still arise for breach of contract claims where defective work results in consequential damage to property other than the insured’s own work product and the insurer must defend claims seeking compensation for that other property damage.

Here, although the Underlying Action pleads breach of contract, it alleges damage to GGP property beyond Aurora’s work, which brings the claim at least potentially within coverage. And while Scottsdale argued that the entire project is Aurora’s “work product,” the Underlying Complaint alleged damage to other GGP property.

Given the broad duty to defend, the allegation of damage to other property is sufficient to trigger Scottsdale’s defense obligation, even if the underlying court later finds that only Aurora’s work was damaged.

The Magistrate was equally unconvinced by Scottsdale’s reliance upon its professional services exclusion. Scottsdale’s professional services exclusion addressed engineering, architectural, surveying services and supervision, hiring, training, and monitoring, including preparing or approving drawings and specs, shop drawings, change orders, and supervisory, inspection and engineering activities. The exclusion did not reach every act performed by a professional, and the question is whether the conduct required specialized skill and training, as opposed to ordinary supervision or observation. Applying that standard, Scottsdale did not show the exclusion negates all possibility of coverage, where the Underlying Action alleged Aurora breached warranties about defect‑free materials and code‑compliant work and assumed responsibility for subcontractors, while the subcontractor allegations range from negligent design and failure to supervise and inspect to failures to warn and take remedial action—some of which may not be “professional services.” Because any possibility of covered claims triggers a defense, the professional services exclusion does not bar Scottsdale’s duty to defend.

Because Scottsdale's policy was admittedly primary, Travelers was also entitled to reimbursement of costs associated with defending Aurora in the Underlying Action.

 

Maxwell’s Minute: If you would like a copy of this Report and Recommendation, shoot me an email and I would be glad to send it along.

 

STORM’S SIU
Scott D. Storm
[email protected]

01/29/26        State Farm Mutual Automobile Insurance Co. v. Emuna Inc.
United States District Court for the Eastern District of New York
Disputes Over a No-Fault Provider’s Alleged Noncompliance With No‑Fault Verification Procedures Fall Within Mandatory Arbitration Under Insurance Law § 5106(B) and the Parties’ Policy Arbitration Clause and Are Governed by the Federal Arbitration Act.  Medical Provider Did Not Waive Any Right to Arbitrate by Filing State Court Collection Actions on Related Bills

State Farm filed a declaratory judgment action seeking a determination that Emuna’s unpaid No‑Fault claims were non-compensable due to alleged failures to comply with State Farm’s verification requests, including document requests and examinations under oath (EUOs). Emuna moved to compel arbitration under N.Y. Insurance Law § 5106(b) and the Federal Arbitration Act (FAA) and to dismiss; State Farm opposed, arguing Emuna waived arbitration by filing several state civil court collection suits on related invoices.

Before this federal action, Emuna filed several state civil court suits to collect on specific unpaid No‑Fault invoices; the record did not show that verification issues were raised or adjudicated in those suits.

1. Whether disputes over a provider’s alleged noncompliance with No‑Fault verification procedures fall within mandatory arbitration under § 5106(b) and the parties’ policy arbitration clause and are governed by the FAA.
2. Whether Emuna waived any right to arbitrate by filing state court collection actions on related bills.

The Court found that New York Insurance Law § 5106(b) requires insurers to provide claimants the option to arbitrate any dispute involving liability to pay first‑party benefits; New York’s No‑Fault regulations require a mandatory personal injury protection endorsement reflecting that arbitration option (e.g., 11 N.Y.C.R.R. § 65‑1.1).

The FAA applies to arbitration agreements in contracts involving interstate commerce and mandates that courts compel arbitration when a valid agreement exists and the dispute falls within its scope.

Waiver of the right to arbitrate is assessed under Morgan v. Sundance and Second Circuit authority (e.g., Doyle v. UBS Financial Services), focusing on litigation conduct inconsistent with the right to arbitrate, including delay, the extent and substance of prior litigation, and whether the same legal and factual issues were previously litigated.

The policies at issue included an arbitration clause giving either the insured or the insurer the right to arbitrate disagreements over whether charges are medical expenses, and New York law supplies such a clause if absent (Insurance Law § 5103(h)). Emuna, as assignee of claimants’ benefits, could invoke arbitration under that clause. The court found a valid arbitration agreement between the parties.

Disputes over compliance with verification obligations (document requests and EUOs) “fall squarely within” § 5106(b)’s arbitration framework because they concern liability for first‑party benefits. The court cited New York and Eastern District precedent reading § 5106(b) broadly to encompass such verification issue.

Automobile insurance policies and the underlying transactions affect interstate commerce; therefore, the FAA applies and requires the court to compel arbitration when the agreement and scope conditions are met.

The court rejected State Farm’s waiver theory. First, Emuna moved promptly—within about a month of the complaint—to compel arbitration in federal court, indicating an intent to arbitrate. Second, the state civil suits were characterized as routine, early‑stage collection actions focused on payment of individual invoices, not on verification or eligibility issues central to State Farm’s declaratory judgment claims. Even some factual overlap did not equate to identity of issues. The court analogized to decisions finding no waiver where prior actions were simple collection proceedings or involved different legal frameworks and issues and concluded Emuna’s conduct was not inconsistent with the right to arbitrate.

The court granted Emuna’s motion to compel arbitration and dismissed the action with prejudice because neither party requested a stay. The court emphasized that the legislature has committed disputes like these to arbitration under § 5106(b), and that Emuna’s prior collection suits did not alter that conclusion.

Key takeaways:

• Under New York’s No‑Fault scheme, disputes about verification compliance (including EUOs and documents) are arbitrable as matters relating to liability for first‑party benefits under § 5106(b), and providers as assignees may invoke that arbitration right.
• The FAA applies to No‑Fault policy arbitration clauses, requiring courts to compel arbitration where appropriate.
• Filing limited, early‑stage state collection suits on specific invoices does not, without more, waive a provider’s right to arbitrate broader verification disputes; waiver requires litigation conduct inconsistent with arbitration on the same legal and factual issues, which was not shown here.

 

08/14/26        Union Mutual Fire Insurance Co. v. Subin Associates, LLP
U.S. District Court for the Eastern District of New York
An Insurer Seeking to Use Civil RICO to Attack Allegedly Fraudulent Third-Party Personal-Injury Litigation Faces Significant Proximate Cause and Damages-Hurdle Obstacles Where the Alleged Racketeering is Directed at Claimants and Insureds, and the Insurer’s Losses Arise Indirectly Through Its Coverage Obligations. Absent Direct Fraudulent Conduct Targeted at the Insurer (E.G., Direct Billing Schemes), RICO’s Directness and Clear-And-Definite Injury Requirements Are Unlikely to Be Satisfied, and Courts May Decline to Entertain Pendent State-Law Claims Once the Federal Claims Fall

The case addresses multiple motions to dismiss and a motion for leave to amend or supplement the complaint.  It involves over sixty defendants grouped as: (1) Legal Service Defendants (including the “Subin Defendants”), (2) Runner/Support Defendants, (3) Funding Defendants, and (4) Medical Provider Defendants. One defendant group (Gallina) answered; the remaining defendants filed motions to dismiss.

Causes of action in the First Amended Complaint (FAC) include: civil RICO under 18 U.S.C. §§ 1962(a), (c), and (d); New York common-law fraud; aiding and abetting fraud; unjust enrichment; N.Y. Gen. Bus. Law § 349; and N.Y. Jud. Law § 487. Union Mutual sought damages, injunctive relief, fees, and costs.

Union Mutual alleged a long-running fraud scheme summarized as “stage a fall (or just make it up), overtreat, and sue,” with a “marked escalation since 2020.” The FAC alleged five principal methods: misrepresenting degenerative conditions as acute trauma; recruiting vulnerable “Claimants”; providing or alleging medically unnecessary/excessive services; funding the scheme; and using those diagnoses and services to prolong litigation and inflate settlement value.

The complaint organized defendants into the four categories above and identified “the Subin Firm” as the enterprise’s “center” or “machinery.” The FAC also pleaded eight exemplar personal-injury suits (Claimants A–H) as illustrations of how the alleged scheme harmed Union Mutual through defense and settlement expenditures and payments diverted via medical liens.

Issues presented:

• Subject-matter jurisdiction and Article III standing (Rule 12(b)(1)).
• Whether the FAC stated claims under RICO §§ 1962(a), (c), and (d), including RICO’s proximate-cause and “clear and definite injury” requirements (Rule 12(b)(6)).
• Whether to retain supplemental jurisdiction over state-law claims if RICO claims were dismissed.
• Whether to grant leave to amend or supplement.

Holdings:

• Article III standing: Motion to dismiss under Rule 12(b)(1) denied; the court held Union Mutual adequately alleged constitutional standing.
• Federal RICO claims: All dismissed under Rule 12(b)(6) for failure to plausibly plead RICO statutory standing (proximate cause and clear-and-definite injury).
• State-law claims: The court declined supplemental jurisdiction after dismissing all federal claims; state-law claims dismissed without prejudice.
• Leave to amend/supplement: Denied as futile; plaintiff did not identify additional facts or legal theories to cure the defects.

Key reasoning:

Article III standing:

The court found constitutional standing satisfied (injury-in-fact, causation, redressability) at the pleadings stage and denied the 12(b)(1) motion. The main deficiencies, however, went to RICO statutory standing and proximate cause under Rule 12(b)(6), not Article III.

RICO statutory standing: proximate cause:

RICO proximate cause requires a “direct relation” between the alleged racketeering and the plaintiff’s injury. The court applied case law emphasizing that remoteness, contingency, and indirectness defeat RICO proximate cause. Union Mutual’s theory—anchored to its duty to defend insured property owners in the underlying slip-and-fall suits—was at least “two steps” removed from the alleged racketeering. The immediate victims were the claimants (allegedly overtreated or misdiagnosed) and the insured property owners (targets of allegedly inflated suits); Union Mutual’s losses were derivative of its insurance obligations. The court rejected Union Mutual’s attempt to ground directness in its duty to defend, noting no authority that an insurer’s duty to defend itself establishes RICO direct causation.

The court distinguished insurer RICO cases under New York’s no-fault regime (e.g., GEICO and Allstate matters) where medical providers allegedly submitted fraudulent bills directly to the insurer. There, insurers were the immediate payors of the fraudulent charges; here, the alleged fraud targeted personal-injury litigation against property owners, and Union Mutual’s costs arose via its insurance obligations, not via direct fraudulent billing to the insurer.

The court also relied on Roosevelt Road Re v. Subin (2d Cir. 2026) to underscore remoteness: even if Union Mutual was closer to the alleged racketeering than reinsurers, it still was “at least two steps beyond” the racketeering activity, reinforcing the lack of directness.

The insurer’s “duty to defend” argument did not substitute for direct causation under RICO; foreseeability or defendants’ intent could not bridge the directness gap under controlling Supreme Court and Second Circuit precedent.

RICO statutory standing: clear-and-definite injury:

RICO requires that actual loss be “clear and definite.” Union Mutual’s damages were pegged to eight exemplars (Claimants A–H), but at least three exemplar suits (A–C) were still pending, and the complaint did not clearly allege the status of a fourth (D). Because the same underlying accidents and insurance claims were being litigated, potential offsets or outcome changes could alter Union Mutual’s net loss, making the claimed damages not “clear and definite” at the pleading stage.

The court tied its ripeness/clear-and-definite injury analysis to the still-pending exemplar suits, emphasizing the risk that outcomes there could reduce or alter the insurer’s claimed losses.

Disposition of RICO counts:

Given the failure to plead proximate cause and clear/definite loss, the court dismissed all RICO claims: §§ 1962(a), (c), and (d).

State-law claims (common-law fraud, aiding/abetting fraud, unjust enrichment, GBL § 349, Judiciary Law § 487):

After dismissing all claims within original federal jurisdiction, the court declined supplemental jurisdiction and dismissed the state claims without prejudice under 28 U.S.C. § 1367(c)(3).

Procedurally, one defendant group answered, but the court’s rulings addressed the moving defendants’ 12(b)(1) and 12(b)(6) motions and the plaintiff’s amendment/supplement motion. Ultimately, all federal claims were dismissed; state claims were dismissed without prejudice as a discretionary matter.

Leave to amend / supplemental pleading:

Denied for futility. The plaintiff had already amended it once and failed to identify specific additional facts or legal theories that would cure the core defects, which centered on RICO proximate cause and ripeness/clarity of damages. The court also found the proposed supplemental materials (post-FAC filings in other matters) did not fix the statutory standing problems.

 

08/13/26        Allstate Ins. Co. v. Birnhak
United States District Court for the Eastern District of New York
In No-Faut RICO Action This Court Quashed a Third‑Party Subpoena an Insurer Served on Google Seeking Six Years of “Non‑Content” Email Metadata of a Medical Provider. Even Where Metadata Might Theoretically Generate Investigative “Leads,” Fed. R. Civ. P. 26’s Proportionality Limits Bar Broad, Speculative Discovery That Will Predominantly Sweep in Irrelevant Personal Data

Subpoena Communications metadata—without message content—can create a sufficient privacy interest to give a party standing to move to quash a subpoena to a third‑party provider.

Allstate sued several healthcare practitioners and clinics, including Jason Birnhak, D.C., Johanna Castellano, P.T., Paul Manadan, M.D., Hye Hyun Chung, L.Ac., Richard Koffler, M.D., and their associated entities (defendants). The suit alleges a civil RICO scheme involving medically unnecessary and excessive services to defraud insurers.

The “Manadan Defendants” (Dr. Paul Manadan and New Millennium Pain and Spine Medicine, PLLC) moved to quash a third‑party subpoena Allstate served on Google seeking six years of “non‑content” email metadata (to/from, date, time) for defendant Jason Birnhak.

The Manadan Defendants moved to quash a materially similar subpoena seeking Dr. Manadan’s Gmail metadata; Allstate opposed. The exhibit attached referenced Birnhak’s account, but the court treated the record as establishing a substantively identical subpoena directed at Manadan’s Gmail metadata, because Allstate did not contend otherwise.

Issues presented:

1. Whether the Manadan Defendants had standing to move to quash a subpoena issued to a non‑party (Google) for six years of their email metadata; and
2. Whether, on the merits, the subpoena should be quashed under Rule 45 and Rule 26 (relevance and proportionality).

Holding:

The court held that the Manadan Defendants had standing to challenge the subpoena because the email metadata implicated a sufficient personal privacy interest.

On the merits, the court quashed the subpoena as wildly disproportionate to the needs of the case and thus outside the permissible scope of discovery under Rule 26(b)(1); the motion to quash was granted.

Reasoning:

Standing to challenge a third‑party subpoena:

Generally, parties ordinarily lack standing to quash non‑party subpoenas; exceptions exist where the movant asserts a “personal right,” real interest, or privilege in the materials sought, including privacy interests.

The court analogized to cases recognizing standing to quash when personal financial records or identifying information are subpoenaed, and to decisions finding a privacy interest in communications metadata (e.g., Instagram metadata; phone call/text logs), even when content is not sought. The court emphasized that metadata could reveal sensitive information about who a person communicates with (e.g., doctors, psychologists, advisors) and when, thereby creating an “intimate portrait” of private life.

Applying those principles, the court concluded email metadata (to/from, date, time) for six years implicates a sufficient privacy interest to confer standing on the Manadan Defendants to move to quash Google’s subpoena.

Relevance and proportionality:

Rule 45 subpoenas are subject to Rule 26(b)(1)’s relevance and proportionality limits; courts may act sua sponte to limit discovery under Rule 26(b)(2)(C) if it is cumulative or outside permissible scope.

The request for six years of email metadata was “wildly disproportionate” to the needs of the case. The complaint alleged a scheme among five individuals; Dr. Manadan was not pled as the mastermind. Even if he were, combing through years of personal email logs would generate “scores of data not relevant to any aspect of Allstate’s suit,” failing proportionality. The court quoted authority criticizing similar requests despite a theoretical “potential to shed light” on claims because they would yield vastly more non‑responsive data than useful material.

 

Allstate argued that the metadata would help identify correspondents and thus lead to relevant communications that could be sought directly. The court rejected this as the sort of speculative “fishing expedition” proportionality is meant to curb; similar logic had been rejected in prior cases addressing broad, non‑content telecom/metadata subpoenas. The court characterized Allstate’s rationale as vague speculation insufficient to justify the privacy intrusion and burden.

The court granted the Manadan Defendants’ motion to quash. Courts may limit or quash such subpoenas sua sponte under Rule 26(b)(2)(C) when discovery is disproportionate or outside the permissible scope.

 

FLEMING’S FINEST
Katherine A. Fleming
[email protected]

On vacation. See you next edition.

 

GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]

Nothing from the Garden State this edition. See you in two.

 

O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]

08/11/26         Renfroe v. USAA Gen. Indem. Co.
United States Court of Appeals, Eleventh Circuit
Alabama Courts Do Not Create Public Policy and Legislature Did Not Prohibit Innocent-Insured Exclusion, Thus, No Coverage Applied to Arson Claim

A father and daughter owned a house in Alabama. However, each warned USAA that the other would burn the house down. Nonetheless, USAA agreed to write the risk. Unsurprisingly, a month later the house burned to the ground.

The father sought a payout, but the USAA policy barred coverage for innocent parties for losses caused by the intentional conduct of non-innocent co-insured. The father, Renfroe, sued USAA for breach of contract and bad faith. The lower court voided the exclusion as a matter of public policy and denied the bad faith claim due to the clear evidence of arson.

The exclusion at issue provided:

1. h. Intentional Loss, meaning loss arising out of any act any "insured" commits or conspires to commit with the intent to cause a loss. Even "insureds" who did not commit or conspire to commit the act causing the loss are not entitled to coverage.

However, if you commit an act with the intent to cause a loss, we will provide coverage to an innocent "insured" victim of domestic abuse, as defined in the "Domestic Abuse Insurance Protection Act", to the extent of that person's interest in the property when the damage is proximately related to and in furtherance of domestic abuse.

The Eleventh Circuit reversed as Alabama courts due not void policy provisions due to public policy considerations. Rather, provisions are voided if clearly illegal, contravene a statute or some other well-established rule of law. The Court reasoned the Alabama Supreme Court explained that it defers to the legislature as the exclusive domain to establish the State’s public policy. The Court also noted the Alabama Code does not prohibit such “innocent-insured exclusions.” Since there is no statute or public policy that precludes the inclusion and application of the innocent-insured exclusion, the Eleventh Circuit reversed the District Court's decision.

 

LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]

08/17/26         Melodya & Co., Inc. v. Certain Underwriters at Lloyds London
New York State Supreme Court, New York County
Court Dismisses Action for Failure to Timely Serve and Violation of the Suit-Limitation Provision

Melodya & Co. (the “Insured”) purchased an insurance policy from Certain Underwriters at Lloyd’s London (the “Underwriters”), covering a restaurant located in Queens, New York. The policy contained a suit-limitation provision requiring that any legal action be commenced within two years after the date of direct physical loss or damage. The policy also required the Insured to allow Underwriters to inspect the property proving the loss or damage.

On January 6, 2018, frozen pipes burst at the restaurant, causing water damage to the equipment. By the time Underwriters’ agent arrived to inspect the property, the damaged equipment could not be located. Accordingly, Underwriters disclaimed coverage on the ground that the Insured violated the condition precedent to coverage, by failing to allow inspection of the alleged damaged property, to prove loss or damage.

The Insured subsequently filed a lawsuit against Underwriters on January 21, 2021. After suit was commenced, Underwriters moved to dismiss, arguing that the Court lacked personal jurisdiction over it. Underwriters also sought dismissal on the ground that the claim was time-barred under the suit-limitation provision in the subject policy.

In opposition, the Insured cross-moved for an extension of time to serve Underwriters. The Insured further argued that the COVID-19 executive orders tolled the statute of limitations to commence actions, and thus the action was timely. The Insured sought a post hoc extension to serve its claims in the interest of justice under CPLR 306-b, in the event the Court disagreed with the argument that the lawsuit was filed timely, based on the COVID-19 executive orders.

The Court denied the Insured’s cross-motion, finding that the Insured failed to show reasonable diligence in attempting service on Underwriters. As a result of the lack of diligence, the Court granted Underwriters motion to dismiss, based on lack of personal jurisdiction. In finding that the Insured did not use appropriate diligence, the Court pointed to the fact that the Insured did not serve Underwriters and waited until Underwriters moved to dismiss until filing a motion for an extension of time to serve.

Further, the Court enforced the two year suit-limitation provision in the policy. The Court found that because the Insured did not bring the lawsuit until two years after the date of physical loss, Underwriters has conclusively established a defense to the Insured’s claims, on the ground that they are time-barred.

As such, the Court dismissed the Complaint in its entirety.

 

LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]

08/28/26       An Act Further Regulating Insurance Claims
New York State Legislature
Act Further Regulating Insurance Claims and Public Insurance Adjusters

Section 1 of Chapter 187 amends Chapter 175 of the Massachusetts General Laws by inserting new Section 2C after Section 2B. The new section applies broadly to companies as defined in Chapter 175, Section 1, as well as non-admitted and surplus lines insurers. It prohibits those insurers from including any policy language, form, or endorsement in a property and casualty policy that would bar an insured from hiring, retaining, engaging, utilizing, consulting, or contracting with a public insurance adjuster as a condition of recovery under the policy.

Section 1 further provides that any policy language, form, or endorsement violating the new section is unenforceable and must be excised from the policy. Importantly, the Act preserves the remainder of the policy by providing that all other policy language, forms, and endorsements remain unaffected.

Section 2 amends Chapter 176D, Section 3, clause (9), which lists conduct considered unfair claim settlement practices, by adding new subclause (o). The new subclause identifies as an unfair claim settlement practice any provision in a property or casualty insurance policy that prohibits an insured from hiring a public adjuster for services provided under Chapter 176D.

 

VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]

08/14/26         Jiminez v. State Farm Fire & Casualty Company
United States District Court, District of Connecticut
District Court Denies Insurer’s Motion to Dismiss COA for Breach of Good Faith and Fair Dealing

In this case, the plaintiff Mr. Jimenez sued State Farm alleging that State Farm wrongfully denied coverage under his homeowners policy, alleging breach of contract, breach of the implied covenant of good faith and fair dealing and declaratory judgment. State Farm moved to dismiss the breach of the implied covenant of good faith and fair dealing and the claim for declaratory judgment.

 Mr. Jiminez owned a property in New London, Connecticut that was insured by State Farm. A fire damaged the property in 2023, and Mr. Jiminez submitted a claim to State Farm, including a claim for fair rental value coverage because Mr. Jiminez alleges that he rented part of the property under an oral lease agreement. Mr. Jiminez provided State Farm with bank deposit receipts showing the cash rental payments, a statement from the tenant, and a news article stating three tenants were impacted by the fire.

State Farm denied the fair rental value coverage, citing to the "Your Duties After Loss" provision, which requires that the insured provide State Farm with requested records and documents reasonably required. Mr. Jiminez alleges he complied by providing all materials in his possession, but he could not provide the documentation that was destroyed by fire.

In Connecticut, to constitute a breach of the implied coverage of good faith and fair dealing, "the acts by which a defendant allegedly impedes the plaintiff's right to receive benefits that he or she reasonably expected to receive under the contract must have been taken in bad faith." Bad faith implies actual or constructive fraud, a designed to mislead or deceive another, or neglect or refusal to fulfill some duty or some contractual obligation, not prompted by an honest mistake. A failure to adequately investigate the claim when accompanied by other evidence showing improper notice creates an inference of bad faith.

In its motion to dismiss, State Farm argues that Mr. Jiminez failed to allege facts supporting the dishonest purpose necessary for a bad faith claim but rather provides conclusory allegations of bad faith. Mr. Jiminez argues that his allegations demonstrate that State Farm abused its conditions of coverage and created requirements beyond what is set forth in the policy.

The Court found that the breach of the implied covenant of good faith and fair dealing does not rest solely on the conclusory allegation that State Farm allegation, but rather specifically demonstrate the materials submitted to State Farm for the rental value claim and allege that State Farm intentionally misrepresented and misconstrued the terms and use of the conditions of coverage.

The Court found that the allegations "plausibly allege more than a mere coverage dispute or negligent investigation" and because this case is at the pleading stage, Plaintiff "need only allege sufficient factual content to permit a reasonable inference that State Farm acted with the dishonest purpose required under Connecticut law, and he has done so here."

Thus, the Court denied State Farm's motion to dismiss the cause of action for good faith and fair dealing but granted its motion to dismiss the declaratory judgment cause of action as duplicative to the other causes of action.

 

SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]

07/29/26         Hiller v. Jetex Servs., Inc.
Supreme Court of New York, Appellate Division, Second Department

The Appellate Division, Second Department, Upholds the Supreme Court, Queens County, Decision Denying the Defendants’ Motion for Summary Judgment on the Issue of Serious Injury in Accordance with Insurance Law 5102(d)

Plaintiff, Dovid Hiller ("plaintiff" or "Hiller") commenced an action in Supreme Court, Queens County, to recover for personal injuries sustained in connection with a motor vehicle accident. On July 24, 2024, the Supreme Court issued an Order denying the defendants’ motion for summary judgment dismissing the complaint on the basis that plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) because of the subject accident. Defendants appeal.

Defendants established, prima facie, that the alleged injuries to the cervical and lumbar regions of the plaintiffs spine were not caused by the accident (see Amirova v JND Trans, Inc., 206 AD3d 601, 602, 167 N.Y.S.3d 410; Gash v Miller, 177 AD3d 950, 111 N.Y.S.3d 200; Gouvea v Lesende, 127 AD3d 811, 6 N.Y.S.3d 607). In opposition, the plaintiffs raised a triable issue of fact as to whether Hiller's injuries were caused by the accident (see Perl v Meher, 18 NY3d 208, 960 N.E.2d 424, 936 N.Y.S.2d 655; Polight v Martin, 237 AD3d 990, 992, 232 N.Y.S.3d 543; Owens v ELRAC, LLC, 213 AD3d 684, 685, 184 N.Y.S.3d 62).

As the burden shifted back to the defendants, they failed to submit competent medical evidence establishing, prima facie, that the plaintiff did not sustain a serious injury to the cervical and lumbar regions of his spine under either (1) the permanent consequential limitation of use or (2) significant limitation of use categories of Insurance Law § 5102(d). Defendants' expert determined that there were significant limitations in the ranges of motion of the cervical and lumbar regions of the plaintiff’s spine but failed to adequately prove, with competent medical evidence, his belief that the limitations were self-imposed (see Matveieva v Metropolitan Transp. Auth., 212 AD3d 726, 726, 183 N.Y.S.3d 120; Mondesir v Ahmed, 175 AD3d 1291, 105 N.Y.S.3d 910; Singleton v F & R Royal, Inc., 166 AD3d 837, 838, 88 N.Y.S.3d 81).

Therefore, the Appellate Division, Second Department, held that the Supreme Court, Queens County, properly denied the defendants' motion for summary judgment to dismiss the on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d) because of the subject accident.

 

NEW ENGLAND ALMANACK
Barbara A. O’Donnell
[email protected]

Alexander G. Henlin
[email protected]

Iryna N. Dore
[email protected]

 

08/11/26        Urena v. Travelers Cas. & Sur. Co. of America
First Circuit Court of Appeals
Judgment for Insurer Affirmed Based Upon “Related Claim” Policy Provision That Was Not Included in Subsequently Purchased EPL Endorsement

When read as a whole, a Private Company Directors and Officers Liability Policy and subsequently purchased Employment Practices Liability Endorsement eliminated coverage for a pregnancy discrimination and retaliation lawsuit that was filed during the policy period because of its “related claim” status with a EEOC and N.H. administrative proceeding filed prior to the Policy inception. 

In its effort to collect on a $303,592.02 default judgment entered against the insured employer, the claimant’s estate attempted to circumvent the application of the “Related Claims” provision in the Private Company Policy by arguing that the provision was superseded by the insured’s purchase of an EPL Endorsement that omitted a comparable provision. Rejecting this argument, the First Circuit agreed with the trial court that provisions contained in a rider or endorsement only prevail over the provisions in the main policy when there is a conflict between the provisions. The Estate could not demonstrate the required conflict because the EPL endorsement did not include any language that supported a determination that the reference to “All Claims” in the Related Claims provision did not encompass employment-related claims. Rather than conflict, when the provisions in the primary policy and the EPL endorsement were read as a whole, they “easily work together” because the Related Claims provision makes “clear that, so long as [two or more] claims are ‘Related,’ the ‘first made’ date for those ‘Employment Claims’ is the date that the earliest of those ‘Related Claims’ was made.”

The First Circuit’s conclusion was not altered by the EPL endorsement’s inclusion of a “Prior and Pending Proceeding” that eliminated coverage for any employment claim based upon circumstances at issue in a proceeding initiated before December 4, 2015. As the First Circuit explained, “the Prior and Pending Proceeding provisions operate differently from the [Private Company Policy’s] Related Claims provision” and they “can comfortably work together.”

 

08/21/26        Galakatos v. Marsh & McClennan Co.
First Circuit Court of Appeals
Dismissal of Breach of Contract, Negligence and Breach of Fiduciary Duty Claims Against Insurance Broker for Alleged Failure to Eliminate Coverage Gap and/or Procure Adequate Limits for Claims Concerning a Boat Collision Affirmed

Relying on well-settled Massachusetts law that insulates insurance agents and/or brokers from liability for coverage gaps and/or inadequate limits unless the insured can demonstrate a longstanding relationship of trust and reliance and/or a contractual agreement to advise the insured regarding needed coverages, the First Circuit affirmed the dismissal of the claims in a “bare-boned” complaint brought against several Marsh entities by the owner of a boat that faced multiple personal injury and property damage claims following a collision with another boat during a race in Greece. As grounds for affirming the dismissal, the First Circuit agreed that Marsh’s requests for specific information to “thoroughly and appropriately advise [the insured] and eliminate potential gaps in coverage" did not establish the existence of a contract to secure adequate levels of coverage for his boat or the existence of a fiduciary relationship.

 

NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]

The content of this column also appears in the “Liability & Insurance,” a monthly newsletter focusing on Canadian coverage and published by Heather Sanderson. Contact her for a subscription.

06/02/26       ​ Chippewas of Mnjikaning Rama First Nation et al v. Sexton’s Mechanical Limited
Ontario Superior Court (trial level)
Builders’ Risk, Subrogation, and a Premature Cancellation: Lessons From Chippewas v. Sexton’s Mechanical

The Case at a Glance

In this decision, the Ontario Superior Court granted summary judgment dismissing a subrogated claim arising from damage to a cooling unit during commissioning at a new office building in Rama, Ontario. The motion judge held there was no genuine issue requiring a trial because the owner breached a covenant to maintain builders’ risk insurance to the point of approved occupancy yet cancelled the policy early.

 

Key Facts and Procedural Posture

The Chippewas of Rama First Nation is an Anishinaabe First Nation in Ontario with a fascinating history of change and adaptation and resilience. Today, the Nation of about 1,800 has a diverse economic base centred in the town of Rama, about 90 minutes (in good traffic) from Toronto.

In 2019, the Nation was building a three storey office building in Rama that today houses a health clinic and other offices supporting the Nation.

W.S. Morgan was the general contractor for that building; Sexton’s Mechanical was the HVAC subcontractor.  Construction began in October 2019 . Contract documents required a Builders’ Risk Policy (BRP), with subcontractors added as insureds; the owner obtained coverage via a broad form endorsement to the Nation’s property policy effective April 1, 2021, to April 1, 2022.

The Nation cancelled the BRP on January 31, 2022, without written notice to Sexton or W.S. Morgan. On February 23 or 24, 2022, while a Sexton employee was commissioning and testing the cooling unit, water mistakenly filled the unit, froze, which critically damaged the unit. The damage was discovered February 28, 2022.

 

The Insurers Subrogate Against Sexton

As the BRP had been cancelled, the Nation’s property insurers paid for the damage to the cooling unit and then filed an action against Sexton asserting a right of subrogation for the cost of replacing the cooling unit - $356,981.00.

Sexton argued that there was a convent to insure under the contract. As a result of that covenant, Sexton had immunity from the subrogated claim. Sexton applied for summary judgment. That application was heard in the Ontario Superior Court.

The Insurer’s Arguments

The Nation opposing Sexton’s application, arguing that a genuine issue required trial on whether they were entitled to cancel the BRP because the premises were being used or occupied at the time, contending the BRP and governing documents required contextual interpretation.

The Opposing Arguments

Sexton argued the owner covenanted to maintain BRP coverage through April 1, 2022, or until 10 days after commencement of lawful occupancy; cancellation on January 31, 2022, was unilateral, premature, and without notice; the loss occurred during commissioning February 24–28, 2022; no occupancy inspection had occurred before cancellation; and partial occupancy approval only came March 11, 2022, so the covenant to insure remained in force and barred the action.

 

The Court: No Right to Subrogation

The Court found the owner breached its covenant to insure because BRP coverage was to continue until 10 days after lawful use or occupancy commenced, and occupancy was impermissible without an occupancy permit that had not yet issued. As a result, neither the Nation nor their insurers could maintain the action; the claim was dismissed.

 

The Court’s Analysis and Reasoning

Summary judgment was an appropriate remedy; the court held it could fairly and proportionately decide the dispositive issue on the record before the court; a trial with witnesses was not necessary.

The BRP Coverage was clear that it ceased 10 days after commencement of use or occupancy, with explicit permissions for certain occupancy while maintaining BRP.

Applicable by-laws prohibited occupancy without an occupancy permit, which could only be issued after inspection by the Building Department.

The Nation’s deponent admitted that they knew on January 7, 2022, the building remained under construction pending occupancy confirmation; no interim or final occupancy was granted before cancellation; the Building Department had not inspected for occupancy; a February 11, 2022, report said the premises were not suitable; the architect said occupancy required departmental approval; and first acceptance for occupancy came March 11, 2022.

Given these uncontradicted facts, the owner was not contractually entitled to cancel the BRP before March 11, 2022; cancelling on January 31, 2022, breached the covenant to insure, extinguishing the right of action for the owner and its subrogating insurers  . The court dismissed the claim and awarded agreed costs: $30,000 to Sexton and $10,000 to W.S. Morgan.

 

Practical Takeaways for Insurers and Counsel

Cancellation must be tied to lawful occupancy, not de facto use. Where local by-laws require an occupancy permit, “use or occupancy” triggers in BRP clauses should be read with that legal threshold in mind.

Before the occupancy permit issued, the covenant to insure remains through commissioning and partial occupancy. The policy and contract here contemplated occupancy for office or commissioning purposes without ending BRP coverage.

Cancellation before an occupancy permit (or other clear cessation trigger), risks breaching a covenant to insure and forfeiting subrogation rights.

This decision underscores that premature cancellation of a builders’ risk—before lawful occupancy is established does not nullify the covenant to insure. Insurers and project owners should anchor cancellation and subrogation strategies to documented occupancy approvals, adhere to notice practices, and maintain coverage through commissioning to protect both indemnity and recovery prospects.

 

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