Volume XXVIII, No. 7 (No. 732)
Friday, September 11, 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:
We start out by expressing our heartfelt sympathy to my law partner Amber Storr and my friend and columnist Heather Sanderson, both of whom lost their fathers in law over the past few days, Our collective heart goes out to their families as well. In Hebrew, we say זיכרונם לברכה, “may their memory be a blessing”.
Shana Tovah - Happy New Year
We Pause to Remember September 11, 2021
It is the 25th anniversary of the tragedy which is known as 9/11. The horror and tragedy of that day’s events are repeated over and again in every form of media, print, broadcast, social, and more.
I taught my Insurance Law class at the University at Buffalo Law School, the following day, on September 12, 2001, and spoke about how the solvency of the insurance industry would help rebuild the lives and businesses of those left behind. I thought I would use this space to speak to the numbers:
On this anniversary, we should pause to express our nation’s deepest gratitude to the insurance industry for the extraordinary role it played in the aftermath of that tragic day. In the face of an unprecedented catastrophe, it responded with professionalism, compassion, and resilience. It honored its promises, processed an enormous volume of complex claims, and provided critical financial support to individuals, families, businesses, and communities when it was needed most. Its efforts helped countless people and organizations begin the nearly impossible journey of recovery and help rebuild our nation’s most vital city.
It demonstrated the true value of insurance, a promise to be there in times of unimaginable losses.
The best-supported figure for what the insurance industry actually paid for losses arising from the September 11, 2001, attacks are approximately $32.5 billion in 2001 dollars.
That figure is particularly well supported by government and insurance-industry sources:
- U.S. Department of the Treasury reported approximately $32 billion of insured losses, describing 9/11 as, at the time, the largest single insured-loss event in U.S. history.
- A Congressional hearing record states more specifically that claims ultimately paid by insurers totaled about $32.5 billion, equivalent to $42.1 billion in 2012 dollars.
- The Insurance Information Institute (Triple-I) likewise reports $32.5 billion in 2001 dollars and describes this as the cumulative claims payout.
- The NAIC now expresses the same loss in inflation-adjusted terms as approximately $59 billion in 2024 dollars. It also reports that reinsurers bore roughly two-thirds of the losses insured.
Where the $32.5 billion went.
Triple-I's accepted breakdown in 2001 dollars is particularly useful:
|
Coverage |
Approx. Insured Loss |
|---|---|
|
Business interruption |
$11.0 billion |
|
Other property |
$6.0 billion |
|
Other liability |
$4.0 billion |
|
WTC property |
$3.6 billion |
|
Aviation liability |
$3.5 billion |
|
Workers' compensation |
$1.8 billion |
|
Life insurance |
$1.0 billion |
|
Event cancellation |
$1.0 billion |
|
Aviation hull |
$0.5 billion |
|
Total |
≈ $32.5 billion |
Thus, an important point, especially in teaching insurance law, is that 9/11 was not principally a building-loss insurance event. Only about $3.6 billion of the $32.5 billion was attributed directly to the World Trade Center property itself. Business interruption alone accounted for approximately one-third of the industry's total loss. Liability, aviation, workers' compensation, life insurance, and other coverages made it a uniquely multi-line insurance catastrophe.
Considering inflation that is $47.5 billion in 2026 dollars.
One other striking fact worth emphasizing: approximately two-thirds of that loss ultimately fell on reinsurers, rather than remaining with the primary insurers.
Special Thanks go Matthew Taub from Lewis Brisbois for a contribution to this week’s issue. He knows why.
LinkedIn:
For those who need to keep up to date on insurance coverage between issues of Coverage Pointers, we’re happy to help. Just follow me on LinkedIn and we’ll keep you up to date. I’m easy to find – my linked in name is (ready for this unusual and unexpected name): Kohane and you can find me here: https://www.linkedin.com/in/kohane/
Need a Mediator or Arbitrator, Give a Call:
A growing percentage of my practice has been a mediator (and sometimes as an arbitrator) in insurance coverage, commercial, personal injury, and other disputes. With a robust national client base, I am regularly called on by friends and colleagues from around the country, folks who know me and trust me, to help resolve disputes. Often, particularly in mediated matters, I know the insurers and lawyers on both (or several) sides of the dispute. Since they all trust me as a fair dealer, they feel comfortable having me try to help close the file (and avoid precedent). Just pick up the phone, 716.849.8942 or send an email to [email protected] and I’ll try to help.
Newsletters:
We have other firm newsletters to which you can subscribe by simply letting the editor (or me) know, including a new publication, which was created to advise on business and employment law questions:
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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.
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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.
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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.
History Repeats Itself: Sinclair Lewis Novel Serialized with Presidential Candidate Each American Citizen $5,000 a Year -- 90 Years Ago Today:
The Akron Beacon Journal
Akron, Ohio
11 Sep 1936
Readers of the Beacon Journal, beginning today, are offered one of the fictional treats of the season—or of any season. Sinclair Lewis’ “It Can’t Happen Here,” the first installment of which will be found on another page of this issue, is far more than “just another novel.” It is the work of a rapier-sharp mind that has looked about the American scene and discovered many factors and trends alarming in implication.
“It Can’t Happen Here’ is the story of the coming of Fascism to the United States, its insidious development from the old familiar political forms, until it is strong enough to overthrow everything that is of excellence in the American tradition.
Against these forces of medievalism and barbarism and going down to defeat before them, stands the lonely, but ultimately noble figure of Doremus Jessup, Lewis’ prototype of the American liberal: progressive, tolerant, humanitarian, and certain – until the whirlwind of Fascism proves him to be wrong – that “It can’t happen here.” Jessup himself is the personification of his own though after he has suffered from the bestial future of the Fascist legions --
Editor’s Note: 90 years ago, newspaper around the country began serializing the 1935 Novel: It Can't Happen Here, the Character in Sinclair Lewis's book, the charismatic demagogue, Berzelius "Buzz" Windrip, runs for President of the United States. The Promise, he would return the country to prosperity and greatness portraying himself as the champion of the “forgotten man” and “traditional” American values.
Windrip wins the presidency by promoting extreme nationalism and promising every American family a reward of $5,000 a year. He promised The Reality: Once elected, Windrip seizes absolute totalitarian control, sidelines Congress, and sets up a brutal paramilitary regime.
Peiper on Property (and Potpourri):
Summer has passed, football season is back, and everyone who is in school has returned. We just had our last “first day” with my son starting his senior year on Wednesday. He even stopped (and smiled) for a photo, something we haven’t seen in quite a few years.
The return of school also brings with it the return of the much celebrated Coverage Pointers University. We’re back at it with a full set of classes starting on Thursday, October 15th, when your humble author will offer everything you ever wanted to know about Construction Defect Coverage Issues and the Confounding Work Product Exclusions. For those of you in the space, and even those of you who are not, not all exclusions are written the same. Each work product exclusion has a specific meaning and attaches to a specific type of loss. The discussion will review the history, verbiage, and scope of the work product exclusions. We will also discuss what constitutes an “occurrence” under a CGL policy, and review some of the more recent changes in that area of CD coverage litigation. We do hope you will consider joining us.
Other than that, we’re all out of things to discuss. The Courts haven’t yet awoken from their summer slumber. Perhaps we will have something more to discuss next time. Until then, enjoy the last vestiges of summer and lace up your fall boots.
Steve
Steven E. Peiper
[email protected]
How Did They Find It? – 100 Years Ago:
The Buffalo Times
Buffalo, New York
11 Sep 1926
Women Dressed as Nuns Found to Be Smuggling Lace
ST. ALBANS, Vt., Sept. 11.—Three women, dressed as nuns, were taken from a Canadian Pacific Train in Richford this morning when a customs inspector found that they had yards of valuable French lace concealed beneath their clothing.
The women were said to have boarded the train in Montreal. The first message received here did not disclose their names or destination. The inspectors said, however, that it appeared that they had the lace wound about their bodies.
Lee’s Connecticut Chronicles:
Nothing from me this edition—keep keeping safe.
Lee
Lee S. Siegel
[email protected]
Interesting to Watch, I’d Imagine – 100 Years Ago:
The Buffalo News
Buffalo, New York
11 Sep 1926
GARGOYLES HOLD CLAMBAKE.
OLEAN, Sept. 11.—The second annual clambake of the Gargoyle club of the Vacuum Oil company was held at the club house in the tank farm, Saturday. Three hundred members were present. Dinner was served at 2 o’clock. A program of games and contests followed.
Ryan’s Federal Reporter:
Hello Loyal Coverage Pointers Subscribers:
Another NFL season is upon us. The opening night game is in the books and while our Massachusetts colleagues may have hoped for a different result, I watched from start to finish with glee. Now if only star players could remain on the field without injury for more than the first drive or the first half in the remainder of this week’s contests, the NFL (and my fantasy teams) might make it to week 2.
It is not every day that you see a court decline to follow a magistrate’s report and recommendation, but in this edition, I have summarized a case where the Eastern District of New York found a basis for diversity jurisdiction over Certain Underwriters at Lloyd’s. Depending upon the precise insurance issue before a district court, whether liability is joint or several or both can mean the difference between a sufficient amount in controversy or not. Subject-matter jurisdiction lay in the balance.
Until next time,
Ryan
Ryan P. Maxwell
[email protected]
Missed Him by “That Much” – 100 Years Ago:
Times Herald
Olean, New York
11 Sep 1926
Another Attempt To Kill Premier Of Italy Fails
Bomb Thrown By Italian Youth Hits Top Of Mussolini’s Automobile and Rolls Off and Explodes.
Rome, Sept. 11—(INS)—Premier Mussolini escaped an attempted assassination today.
Ermeto Giovanni, an eighteen-year-old Italian youth, hurled a bomb at the premier as he drove in his automobile to his offices in the Chigi Palace at 10 o’clock this morning.
The bomb struck the top of Mussolini’s care and rolled off to the ground and exploded in the street, Mussolini being uninjured but for passersby suffered severe injuries from the pieces of flying bomb.
Storm’s SIU:
Hi Team:
I hope you had an awesome and memorable summer! I’m getting in some end of the season hiking, biking, and kayaking before the snow flies. It’s an exciting time as MLB playoffs are imminently approaching!
In this edition I have the privilege of discussing a 1st-party property fire case I am handling for a client in federal court involving subject matter jurisdiction pursuant to 28 USCS § 1335(a) (Interpleader), together with 28 USCS § 1367(a) (Supplemental jurisdiction) and 28 USCS § 2201(a) (Creation of Remedy [declaratory judgment]). My digest for this edition will provide a lesson on federal interpleader. It’s an interesting read.
As this pertains to a ruling on a procedural matter, stay tuned for the Court’s decision on the substantive issues.
I’ll meet you back here again in two weeks,
Scott
Scott D. Storm
[email protected]
Future Trade With Canada Not a Problem for US – 100 Years Ago:
Free Press Evening Bulletin
Winnipeg, Manitoba, Canada
11 Sep 1926
AMERICAN CAPITAL IS NOT MENACE TO FUTURE OF CANADA
Total is Not Great Portion of Wealth of Country, Declared Professor Mavor
No fear need be felt either at the growth of Ame3rican investment in Canada or in the apparent passage of Canadians into the United States, according to an article by the late Professor Mavor, of the University of Toronto. The article in question was found among his papers and lately published in Barron’s.
Professor Mavor’s conclusions are:
1. The movement of capital from the United States to Canada (estimated at $2,538,000,000) makes up so small a part of the aggregate wealth of the Dominion (estimated at $22,500,000,000) that no alarm need be felt in Canada, even if the flow of capital were to be considerably augmented.
2. The movement of capital depends upon the return on investment in Canada being greater than the return on a similar investment in the United States, and the flow will continue only so long as that remains true.
3. With two countries so close to each other as are Canada and the United States, with language similar and industrial conditions also alike, each ebb and flow in the prosperity of the two countries will bring an immediate reflex movement of labor to or from Canada.
4. It is harmful to exaggerate unduly passing phases which may or may not become permanent tendencies.
Fleming’s Finest:
Hi Coverage Pointers Subscribers:
I recently returned from a trip down under. After our big flight to Sydney, we hit the ground running fueled by flat whites. We went bushwalking and saw kangaroos, wombats, echidnas, lyrebirds, and other animals on our days out. Even though it was winter in Australia, we had a couple of beach days and enjoyed walking through parks lined with lush trees.
This edition’s case comes from the Arizona Supreme Court and defines what constitutes a fortuitous loss under Arizona law.
See you in a fortnight,
Kate
Katherine A. Fleming
[email protected]
A Kiss Is But a Kiss – 100 Years Ago:
Rochester Journal and the Post Express
Rochester, New York
11 Sep 1926
ADVICE TO THE LOVELORN
By Beatrice Fairfax
There are some girls—usually very young girls—who place such exaggerated emphasis on sentiment that it ceases to be natural and noble and becomes the silly slush called “sentimentality.”
Anne, who writes the following letter, is going through a phase of such pronounced sentimentality that her heart is positively brittle, figuratively speaking, ready to break at any moment.
“Dear Miss Fairfax,” she writes.
“Help me or I will go mad!
“A year ago, I met him and learned to like him. Then five months ago we were invited to dinner at his sister’s home. His brother in law is my dad’s best friend. I have known him since I was a baby. At the dinner I met him again.
“All through dinner he stared at me until I thought he could read my soul. We danced together and finally went for a ride in his car. Upon returning we met his brother in law in the hall, and I kissed him as I would have kissed my dad. He in turn pecked me on the cheek.
“I said as much and before I knew what was going to happen, he gathered me in his arms and kissed me full on the lips.
“I was stunned and the color left my face. Something stirred within my heart. I was elated. God had given me a glimpse of love’s Paradise. But only a glimpse was my share of love.
“Since then, I have loved him hopelessly, madly. It is torture to care so, in vain.
“To forget is hard. I have tried, but failure has met my every attempt. Other men do not interest me, and at eighteen I feel old and left over. I dream of accidents where he is injured and for days I do not eat or sleep. My mind is in a daze until I find that he is well and healthy.
“Is there no way that I can win him? O, help me to help myself. If only I knew what to do!
“ANNE.”
Gestwick’s Garden State Gazette:
Dear Readers:
Now that the wedding has occurred and the house has been purchased, I have no other noteworthy life events to report. That said, football season has commenced with a delicious defeat of the New England Patriots (with apologies to our esteemed colleague Mr. Henlin, who I suspect is experiencing a bout of dis-“Maye” after last night’s contest). Congratulations to my wife, who has both Jaxon Smith-Njigba and Seattle’s defense on her fantasy team.
The case I have for you this week is a bit off the beaten path—it’s about class certification as part of an attempt at a class action lawsuit. It has been happening around the country over the last half-decade or so, where someone gets the creative idea to challenge an insurance company’s ACV valuation methods by way of a class action suit. Such attempts have routinely been struck down by our nation’s Circuit Courts. Read on to see whether the New Jersey District Court followed suit.
That’s all from me. Have a great two weeks.
Evan
Evan D. Gestwick
[email protected]
Racism in London – 100 Years Ago:
The Herald Statesman
Yonkers, New York
11 Sep 1926
LONDON OBJECTS TO U.S. NEGRO DOCTORS
London, Sept. 9.—Opposition to the American Medical Congress project looking toward the sending of seventy-five leading Negro doctors to study medical methods in British hospitals developed here today and leading medical school and London hospitals soon will be called on to decide whether permission is to be granted.
“The matter is by no means a foregone conclusion,” Professor William Wright, dean of the London Hospital Medical School, declared today. Pointing out that many officials were at present on vacation, Professor Wright said, “it will need careful considerations. At the moment it seems to me there will be difficulty unless all schools agree. We do not want to have a large number of Nego doctors dumped on any particular hospital. Apparently the best way to decide the matter would be through a joint conference at which unanimity would be desirable. It is purely a question of color.”
The American Medical Congress letter asked that the Negro doctor delegation be granted facilities next June to watch operations and study methods in British hospitals.
O’Shea Rides the Circuits:
Readers,
The fence is done. I broke down and bought a paint sprayer after certain statements were made over the course of a prior weekend (not by my wife, but an aspiring litigator at a local firm). I concede that a paint sprayer is faster and does not overspray as much as one would think. The next projects include redoing the basement bulkhead doors and potentially roofing a shed prior to winter. We shall see what jobs the upcoming Fall weather permits.
This week I will discuss a case from the Fifth Circuit regarding policy interpretation. Particularly, whether an unindented separate paragraph modifies an entire policy definition.
Until Next Time,
Ryan
Ryan P. O’Shea
[email protected]
Stalin Takes Charge – 100 Years Ago:
Times Union
Brooklyn, New York
11 Sep 1926
SOVIET RUSSIA’S “MAN OF STEEL” IN CONTROL AT MOSCOW
Stalin, Secretary of Communist party, Now Dominating Figure in Government.
(By United Press)
LONDON, Sept. 11.—Behind the kaleidoscope of Soviet politics, which recently has sent some well-known recently figures tumbling, stands a new power in the person of Stalin, the name he took which means the “Man of Steel.”
He is the Russian counterpart of an American political boss, the head of the machine, the power behind the principal actors of the Soviet drama to-day, according to report reaching England.
He sent Trotzky into exile and called him back again. He directed Djerjinsky, the head of the ferocious Cheka, the secret police, who recently died under mysterious circumstances. He sent Zinovieff down from power and was behind the dismissal of Kameneff from his place as chief of the Commissariat of Trade.
His name Josef Djugashvili, but he calls himself Stalin.
LaBarbera’s Lower Court Library:
Dear Readers:
Just like that, another summer season is behind us. Hoping everyone had a safe, and memorable, last few months as we roll into fall. While I am slightly saddened to be leaving the months of warmth, I am excited to start up fall festivities any day now.
This week I am reporting on an unpublished decision, which can be made available upon request. In this case, the Court focused on procedural deficiencies in the motion papers, and denied claims made for lack of standing or a defense based on documentary evidence, based on the fact that the defendant only moving to dismiss under CPLR 3211(a)(7), which governs dismissals for failure to state a cause of action. A good read and reminder on some procedural points.
Until next time…
Isabelle
Isabelle H. LaBarbera
[email protected]
Insuring the Disappointed Debs – 100 Years Ago:
Redlands Daily Facts
Redlands, California
11 Sep 1926
DEBUTANTES INSURED AGAINST DISAPPOINTMENT
LONDON.—Owing to the overwhelming applications for presentation at this year’s Royal Courts at Buckingham Place and the number of “debs” who had to be disappointed, London insurance companies are issuing policies against the disappointment of “debs” not being presented at Court and enjoying their first season in leading social circles.
Lexi’s Legislative Lowdown:
Dear Readers,
Home renovations are underway. Luckily for me, my husband has left me with more of a general contractor role, which means I get to pick out the paint, flooring, light fixtures, and décor. I am not sure if that is because he has kindly left me out of the hard work or if he does not want to hear me complain. But either way I am happy with the arrangement.
Naturally, as an electrician, my husband has insisted on recessed lighting in every room. I am not a fan of bright lights and rarely turn on the overhead lights, but we compromised on “warm” recessed lighting, which I have come to like.
This week we discuss DFS’s proposed amendment to the flexible-rating regulation for nonbusiness motor vehicle insurance. The proposal implements an important piece of New York’s 2026 motor vehicle insurance reforms by requiring prior approval for rate increases while preserving limited flexibility for qualifying decreases.
Thanks for reading,
Lexi
Lexi R. Horton
[email protected]
Compulsory Insurance? – 100 Years Ago:
The Morning Union
Springfield, Massachusetts
11 Sep 1926
Compulsory Insurance Desirable.
From the Portland Express.
Maine has copied so many good laws from Massachusetts it might as well go a bit further and adopt compulsory insurance for automobiles, which has just become effective in the Bay state. At any rate, results from the policy among our neighbors are worthy of our careful observation. Some serious defects not now suspected may develop there, but on the whole the move appears a wise one to a great many.
Victoria’s Vision on Bad Faith
Dear Readers,
This week is starting to feel like fall in Western New York. The nights are getting colder and the days are getting shorter, and soon enough it will be 30 degrees and dark by 4 PM. On the bright side, I've already secured my ski pass for this season, so at least there's one thing to look forward to as the dreaded winter approaches.
This week, I have a case from the EDNY discussing amending a complaint to assert bad faith against an insurer.
Have a good weekend,
Victoria
Victoria S. Heist
[email protected]
Rain Insurance Pays Claim – 100 Years Ago:
Rochester Journal and the Post Express
Rochester, New York
11 Sep 1926
NAPLES FAIR GETS RAIN INSURANCE
NAPLES, Sept. 11.—Rain insurance was paid in record time after a steady downpour spoiled the closing day of the Naples fair. More than one-tenth of an inch of rain fell between 1 and 1 o’clock.
By 4 o’clock the same afternoon, the insurance adjustor endorsed the claim and placed a check for $500 in the hand of Secretary Edgar J. Haynes. The insurance policy was written by George L. Tobey, local agent for the Hartford Insurance Company.
Shim’s Serious Injury Segment
Hi Readers,
This Friday marks the 25th anniversary of the terrorist attacks of September 11, 2001. From the burning of the White House by British soldiers on August 24, 1814, during the War of 1812, to the Japanese attack on Pearl Harbor on December 7, 1941, I truly believe that September 11, 2001, was the darkest day in the history of the United States. It was the only time in the history of our great nation that thousands of our citizens were killed on mainland United States at the hands of an international terrorist organization. As a mere child, I saw photographs and videos of the Twin Towers engulfed in flames and smoke. I witnessed graphic video footage of individuals plunging to their deaths from stories above the ground.
As we reach yet another solemn anniversary of these attacks and such a tremendous loss of life, we must remember them and how our world was forever changed.
This issue, I have shared a case published in the New York Law Journal and decided by the Court of Claims of New York, wherein a directed verdict was granted in favor of Defendant on grounds that the claimant failed to establish, by a preponderance of the evidence, that he suffered a "serious injury" within the meaning of Insurance Law 5102(d).
See you in the next issue!
Stephen
Stephen M. Shimshi
[email protected]
Good Planning – 100 Years Ago:
Rochester Journal and the Post Express
Rochester, New York
11 Sep 1926
Accident Victim Took Out Insurance Three Days Before Death
CANEADEA, Sept. 11.—The mother of Harry Hillman, Caneadea youth who was killed when a car struck him while he was fixing the taillight of his machine, will receive $4,000 as compensation for the death of her son.
Three days before the accident Hillman took out a double indemnity life insurance policy in favor of his mother for $2,000.
New England Almanack
Greetings!
We hope you all had a good Labor Day weekend. The unofficial end of summer is always bittersweet. In our little corner of the world, though, I submit that this is the best of seasons. The air starts to take on a newfound crispness that sneaks out at sunset; the pulse quickens as schools come back into session and weekend tailgates start to pop up; and, of course, foliage season will be upon us soon enough. We’ve survived the heat and humidity of summer. We now get to enjoy some of the glories of where we call home.
Apropos, the courts have begun to rise from their summer slumber. This issue features a discussion about an unusual set of facts on a commercial auto policy. We’re certain to see more very soon.
See you in a few weeks.
Alex
Alexander G. Henlin
[email protected]
Barbara A. O’Donnell
[email protected]
Iryna N. Dore
[email protected]
The Cost of Insurance Fraud – 100 Years Ago:
The Tablet
Brooklyn, New York
11 Sep 1926
The Public Pays the Cost of Arson.
There is a pretty general feeling that if a man chooses to set fire to his property it concerns primarily or wholly the insurance companies. An attitude of public indifference helps to make difficult the collection of evidence in arson cases and effective prosecution of guilty persons. Those who might aid in conviction of these offenders often are reluctant to tell what they know.
The public would be served by a reduction in the number of fires of incendiary origin that severe punishment of guilty persons would be certain to bring. For it is the public that pays the bill when insured property is destroyed by fire, no matter what the cause. The rate of fire losses determines the insurance rate, and property owners, together with people who rent property, are all penalized when unnecessary fire losses increase the cost of protection by insurance. Th payment is not made direct, but there are few persons in New York who do not contribute to the cost when some conscienceless individual burns up property in order to collect insurance on it.
This is a matter seldom given consideration by the public.
North of the Border:
As I write this, I am flying from Calgary to Montreal, via Ottawa, for my father-in-law’s funeral. For 42 years, he has been a solid presence in my life.
Someday, when my grandchildren ask what their great-grandfather was like, what will I tell them?
I will tell them that he had a Grade 7 education and went to work when he was 13. But he grew up in a village of Eastern European immigrants, spoke five languages fluently, and had lifelong friends from every kind of background. I will tell them that he remembered people, places, and names—and that he had a gift for making everyone he met feel seen and appreciated.
I will tell them that he raised, bought, and sold livestock; ran a gas station; hauled feed for farmers; operated a quarry with his brothers during the construction of the St. Lawrence Seaway and for decades afterward; and later built a business selling fishing lures and all the things fishermen do not need but are sure they do.
He approached all of it with perseverance, a monstrous work ethic, and a smile. He was a master at telling a story from his life that taught a lesson or pointed you in the right direction—without ever telling you what to do.
I will tell them that had you met him, you would have climbed into his lap and said, Zaide, tell me another story. As you grew older, you would have concluded, as I did, that he was one of the smartest people you would ever meet. He was one of a kind. Irreplaceable. That’s what he was like.
My column this week deals with fleet insurance, but it contains lessons for coverage beyond the confines of that policy.
Heather
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
AAA v. Hot Dogs – 100 Years Ago:
The Buffalo Times
Buffalo, New York
11 Sep 1926
WAR ON HOT DOG
A. A. A. Would Restrict Highway Vendors.
By Associated Press.
WASHINGTON, Sept. 11.—The haunts of the seductive hot dog have desecrated the highways of the nation to such an extent that the American Automobile Association has launched a countryside campaign to restrict the operations of vendors along the roadsides.
In an effort to restore the beauty along the highways, officials in every state were requested by the association today to “formulate plans whereby the thousands of unwashed, unpainted and unsanitary hot dog stands and lunch counters could be brought under decent regulations.”
Headlines from this week’s issue:
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
- Only the Intended Beneficiaries of Life Insurance Policy Can Bring Action to Enforce the Policy Terms or Sue to Enforce an Agreement to Provide Life Insurance
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
- Nothing to Report this Issue.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
- Nothing from me this edition—keep keeping safe.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
- Amount-in-Controversy Deemed Sufficient as Against Several Lloyd’s Underwriters on the Basis of Potential Joint and Several Liability
STORM’S SIU
Scott D. Storm
[email protected]
- A Lesson on Federal Interpleader in 1st-Party Property Losses
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
- Loss is Non-Fortuitous Only When the Insured Knew, at the Time Coverage Attached, That the Loss-Causing Event Had Already Occurred, Was Already in Progress, or Was Certain to Occur
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
- Court Strikes Class Claims, Finding That Insured Can Never Certify a Putative Class of Insureds Affected by Insurer’s Method of Valuation
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
- Unindented Qualifier at End of Definition Modified Entire Policy Definition and Barred Additional Extra Expenses Costs Incurred
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
- Court Declines to Grant Motion in Full, Based on Failure to Properly Move under CPLR(a)(1) and CPLR(a)(3)
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
- DFS Proposes to Amend the Flexible-Rating Regulation for Nonbusiness Motor Vehicle Insurance to Conform with New York’s 2026 Motor Vehicle Insurance Reforms
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
- Magistrate Recommends Granting Plaintiff’s Motion to Amend Complaint to Allege Bad Faith
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
- The Court of Claims of New York Grants a Direct Verdict in Favor of Defendant on Grounds That the Claimant Failed to Establish, by a Preponderance of the Evidence, That He Suffered a "Serious Injury" Within the Meaning of Insurance Law 5102(d)
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
Alex G. Henlin
Iryna N. Dore
- Vehicle That Was “Sold” by Named Insured Is Still a “Covered Auto” for Purposes of Massachusetts Compulsory Auto Insurance, Obligating That Carrier to Provide Primary Coverage
NORTH of the BORDER
Heather A. Sanderson, K.C.
Sanderson Law
Calgary, Alberta, Canada
[email protected]
- Fleet Coverage Cannot Be Backdated: Ontario Court of Appeal Gives Effect to Fleet Endorsement’s Specific Pre-Policy Scheduling Limitation
Peace be with you.
Dan
Hurwitz Fine P.C. is a full-service law firm providing legal services throughout the State of New York and providing insurance coverage advice and counsel in Connecticut, New Jersey, and across New England.
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, SIU, 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
APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Topical Index
Kohane’s Coverage Corner
Peiper on Property and Potpourri
Gestwick’s Garden State Gazette
LaBarbera’s Lower Court Library
Lexi’s Legislative Lowdown
Victoria’s Vision on Bad Faith
KOHANE’S COVERAGE CORNER
Dan D. Kohane
[email protected]
09/02/26 Graudins v. Hunt
Appellate Division, Second Department
Only the Intended Beneficiaries of Life Insurance Policy Can Bring Action to Enforce the Policy Terms or Sue to Enforce an Agreement to Provide Life Insurance
So desperate to find a case upon which to report I found a life insurance case in a matrimonial matter. The court will be back in session with new decision soon.
Christine Hunt (hereinafter the decedent) and the defendant were divorced by a judgment of divorce entered June 5, 2018. A stipulation of settlement provided, that the decedent would maintain a life insurance policy with a face value of not less than $300,000, naming the defendant as the trustee for the benefit of their children and the children as the beneficiaries, until the children were emancipated.
In 2021, the decedent died. The plaintiff, the executor of the decedent's estate, moved, among other things, to enforce the judgment of divorce relating to the equitable distribution of the defendant's retirement benefits and for an award of attorneys' fees. The defendant cross-moved to enforce the stipulation, seeking to direct the decedent's estate to pay him $300,000 due to the decedent's failure to procure and/or maintain a life insurance policy.
Here, even if, as the defendant contends, the decedent breached the stipulation's life insurance provision by failing to obtain a life insurance policy for the required amount, the provision does not give the defendant standing to maintain a claim against the decedent's estate, since the defendant was not the intended beneficiary of the policy. Pursuant to the provision in the stipulation, the children were the intended beneficiaries of the policy. The defendant is not seeking to enforce the stipulation on behalf of or for the benefit of his children but rather seeks to recover money from the decedent's estate in his own name. Given that the children themselves were the intended beneficiaries of the policy, they are the interested persons with standing to enforce the provision of the stipulation.
PEIPER on PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
Nothing to report this issue.
LEE’S CONNECTICUT CHRONICLES
Lee S. Siegel
[email protected]
Nothing from me this edition—keep keeping safe.
RYAN’S FEDERAL REPORTER
Ryan P. Maxwell
[email protected]
09/08/26 Caruso Glynn, LLC v. Liberty Corp. Cap. Ltd.
Eastern District of New York
Amount-in-Controversy Deemed Sufficient as Against Several Lloyd’s Underwriters on the Basis of Potential Joint and Several Liability
Caruso Glynn LLC (a law firm) filed suit against Riviana Foods, Inc., Aon, and ten Lloyd’s of London underwriters (including Liberty Corporate Capital Ltd.) to recover attorney’s fees in quantum meruit for work the firm performed for these defendants in a subrogation matter. The representation arose from a fire at the Monee Warehouse that allegedly caused Riviana $2,261,459.85 in losses.
On March 20, 2018, defendants, acting through Barbuss Global—a third‑party recovery agent approved by Aon and the Lloyd’s underwriters—retained Caruso Glynn to pursue subrogation arising from the warehouse fire. Caruso Glynn alleged it was authorized to proceed on a contingency basis.
On July 26, 2018, Caruso Glynn filed the subrogation action on behalf of the defendants (captioned with Riviana as plaintiff), initially in the Southern District of New York, later transferred to the Northern District of Illinois. Caruso Glynn appeared as attorney of record for “Riviana Foods, Inc. and Interested Subrogated Underwriters.” However, in July 2025, before the subrogation case concluded, defendants discharged Caruso Glynn and retained new counsel. Caruso Glynn then pursued this litigation, seeking $741,150 in quantum meruit for more than seven years of legal work performed for defendants on the subrogation matter, asserting that all defendants are responsible for the reasonable value of those services. Defendants moved to dismiss the case for lack of subject-matter jurisdiction and convinced the magistrate of same. However, the district judge disagreed.
Defendants argued the $741,150 quantum meruit demand could not be aggregated because each Lloyd’s underwriter (and the other defendants) would owe only a pro‑rata, several share, so no single defendant’s amount would exceed $75,000. The court identified the key question as the nature of defendants’ liability to the firm—joint and several versus several only—because that determines whether the total alleged fee can be used to satisfy the amount‑in‑controversy requirement. There is a rebuttable presumption that the face of the complaint represents a good‑faith amount in controversy and the court emphasized that, absent extrinsic evidence contradicting jurisdictional allegations, courts take well‑pleaded facts as true when only legal sufficiency is challenged. Defendants must show to a legal certainty that the amount in controversy is insufficient—something they did not do here.
In finding that the Defendants were facing joint and several liability, the court relied on the strong presumption that multiple promisors who agree to pay a stated sum to the same promisee are jointly liable unless they unambiguously express a contrary intent. The court found the complaint and exhibits plausibly establish that defendants—acting through Barbuss Global as their authorized agent—jointly promised to compensate the firm via a contingency arrangement for litigation undertaken “on behalf of all named defendants,” and that defendants discharged the firm “on behalf of” all. Defendants offered no extrinsic evidence that the engagement imposed only several obligations or that they unambiguously intended several liability. On this record, the court concluded that defendants would be jointly and severally liable in quantum meruit for the reasonable value of the services, making the full $741,150 relevant to the jurisdictional threshold.
Defendants (and the magistrate) relied on decisions holding that individual Lloyd’s underwriters are severally liable to an insured under a policy, preventing aggregation of claims by the insured to meet the jurisdictional minimum. However, those authorities concern underwriters’ liability to insureds under insurance contracts, not their liability to an attorney under a separate engagement. The Lloyd’s policy structure therefore does not control the fee relationship here. Because the fee engagement was a distinct agreement with the attorney, and because New York law presumes joint liability among multiple promisors absent clear words of severance, the court held aggregation proper in this context.
Maxwell’s Minute: Other issues including Rule 19 joinder were discussed by the court and found unpersuasive. A copy of this decision is available upon request.
STORM’S SIU
Scott D. Storm
[email protected]
09/03/26 Adirondack Insurance Exchange v. HSBC Bank, USA, N.A., et al
United States District Court, N.D. New York.
A Lesson on Federal Interpleader in 1st-Party Property Losses
On behalf of our client Adirondack Insurance Exchange we commenced this statutory interpleader action against Defendants HSBC Bank, USA, N.A.; Steven A. Bresler; and Gerry-Lynn Stohr; seeking a declaratory judgment regarding claims under a homeowners policy following a fire at the property owned by Bresler and Stohr and arguably encumbered by a mortgage held by HSBC.
Adirondack asserts subject matter jurisdiction pursuant to 28 USCS § 1335(a) (Interpleader), together with 28 USCS § 1367(a) (Supplemental jurisdiction) and 28 USCS § 2201(a) (Creation of Remedy [declaratory judgment]).
The federal interpleader statute confers original jurisdiction on federal district courts if: (1) "[t]wo or more adverse claimants, of diverse citizenship . . ., are claiming or may claim" entitlement to "money or property of the value of $500 or more," and (2) the plaintiff "has deposited such money or property . . . into the registry of the court, there to abide the judgment of the court, or has given bond payable to the clerk of the court in such amount and with such surety as the court or judge may deem proper." 28 U.S.C. § 1335(a). To adequately allege these jurisdictional requirements are satisfied, a plaintiff must allege that: "(1) it is in possession of a single fund of value greater than $500; (2) the action involves two or more adverse claimants of diverse citizenship; (3) it has deposited or is depositing the fund with the court; and (4) it has a real and reasonable fear of double liability or vexatious, conflicting claims" (citation omitted).
Adirondack alleges that it possesses a fund of more than $500. Further, it is alleged that the adverse claimants are of diverse citizenship: HSBC Bank is a citizen of Virginia, Mr. Bresler is a citizen of New York, and Ms. Stohr is a citizen of Florida. Adirondack also alleges that it has a real and reasonable fear of conflicting claims to the fund.
Here, Bresler and Stohr were divorced at the time of the fire. The Adirondack policy was solely in the name of Bresler and included HSBC as mortgagee. Bresler resided in the subject premises. Stohr had previously relocated to Florida. However, Stohr remained on the deed and, pursuant to the divorce agreement, continued to have an interest in the property should it be sold. At the time the house burned the amount owed on the mortgage exceeded the value of the premises.
HSBC had commenced a series of foreclosure actions and its interest in the property is being disputed by Bresler alleging that HSBC failed to timely protect its interests. Whether the mortgagee continues to have an interest in the property is being separately litigated between Bresler, Stohr and HSBC.
Adirondack is ready to issue an actual cash value payment for the damage to the dwelling. However, both Bressler and HSBC are claiming 100% of the policy proceeds. Stohr reportedly had her own policy on the premises which lapsed prior to the fire. Her interest is not insured under the Adirondack policy as she is not a named insured, nor does she constitute an "insured" as defined in the policy. Adirondack included her in the litigation as the interpleader statute contemplates people who "may claim" the amount in dispute.
Adirondack's position is that it only owes 50% of the ACV damage to either Bresler or HSBC, but not both. Under the conditions of the policy Adirondack only owes Bresler for his interest in the property, which is 50%.
SECTION I – CONDITIONS
- Insurable Interest And Limit Of Liability
Even if more than one person has an insurable interest in the property covered, we will not be liable in any one loss:
1. To an “insured” for more than the amount of such “insured’s” interest at the time of loss; or...
Pursuant to the terms of the policy and New York case law, the mortgagee may never have an insurable interest in the property greater than the named insured. As such, if Adirondack is required to pay HSBC, its interest is also limited to 50%. In addition, case law supports the mortgagee having priority of recovery over the mortgagor/insured.
Fed. R. Civ. P. 67(a) prohibits a party from depositing money with the court without a court order. As such, Adirondack herein sought leave of court to deposit funds with the Court Registry pursuant to Fed. R. Civ. P. 67 and Local Rule of Practice 67.1(a). This order of the court followed granting Adirondack's request and directing it to pay the undisputed funds into the Court Registry by a certain date.
Having the funds deposited with the Court is a condition of the Court maintaining jurisdiction over the action. Adirondack represents that it is undisputed that it owes one or more Defendants the payment of $273,998.71 and is prepared to deposit this amount with the Court.
Accordingly, Adirondack was ordered to either deposit the amount of $273,998.71 with the Court or show cause why the case should not be dismissed for failure to deposit the disputed fund with the Court.
Stay tuned for the Court’s decision with respect to which party receives the payment and whether it is 50% or 100% of the ACV damages.
FLEMING’S FINEST
Katherine A. Fleming
[email protected]
09/01/26 Indus. Park Ctr., LLC v. Great N. Ins. Co.
Arizona Supreme Court
Loss is Non-Fortuitous Only When the Insured Knew, at the Time Coverage Attached, That the Loss-Causing Event Had Already Occurred, Was Already in Progress, or Was Certain to Occur
Industrial Park Center LLC, dba Mainspring Capital Group (“Mainspring”) owned a commercial property insured under an all-risk property insurance policy issued by Great Northern Insurance Company (“GNIC”). Mainspring had leased a portion of the property to Star Fisheries, Inc. for over thirty years. During that time, the combination of water and salt Star Fisheries used in its operations and to clean the building caused damage to the stairs, interior slab, and concrete walls, compromising the building’s structural integrity. Mainspring retained an engineering firm to review the potential issues and recommend repairs, and the report largely found the damage was the result of the daily cleaning of the property with water. Mainspring and Star Fisheries amended their lease, making Star Fisheries responsible for the costs of remediating the damage. Mainspring also made changes suggested to the building, but it did not install a waterproof floor coating, a vapor barrier, or additional drainage systems. Mainspring did not file a claim at the time.
Additional damage was later discovered from the tenancy. Mainspring field a notice of loss with GNIC. GNIC retained an engineering firm to investigate, and the engineering firm claimed the deterioration was largely around the space Star Fisheries leased and that the damage was consistent with exposure to a corrosive environment for years or even decades. GNIC denied coverage based on the inherent-vice, faulty-workmanship, settling, and wear-and-tear exclusions.
Mainspring sued GNIC, and GNIC later successfully moved for summary judgment. The federal district court found that the loss was reasonably foreseeable and almost certain to occur, so the loss was not fortuitous. Mainspring appealed to the Ninth Circuit, which then certified a question to the Arizona Supreme Court. The Court addressed only the underlying question of what constitutes a “fortuitous loss.”
Although Arizona courts have recognized that a loss must be fortuitous to be insurable, no Arizona court has defined what constitutes a “fortuitous loss,” and the term is not defined in the Arizona Revised Statutes. The Arizona Supreme Court turned to the Restatement (First) of Contracts and noted that the parties’ subjective knowledge was central the concept of fortuity as opposed to an objective determination of reasonable foreseeability based on hindsight. The Court adopted the definition in the Restatement, reasoning that while insurers can take steps to minimize liability, insureds who purchase all-risk policies are entitled to the benefit of their bargain, which encompasses risks that they did not know were certain to occur. The Court further reasoned that an objective standard would defeat the purpose of insurance and eviscerate freedom of contract when at the time only a risk was involved as far as the parties were aware. Accordingly, the Court held that a loss is non-fortuitous only when the insured knew, at the time coverage attached, that the loss-causing event had already occurred, was already in progress, or was certain to occur because no material contingency remained between the facts known to the insured and the loss-causing event.
GESTWICK’S GARDEN STATE GAZETTE
Evan D. Gestwick
[email protected]
08/28/26 Jessica Dinicola-Ortiz v. GEICO Indemnity Company
United States District Court, District of New Jersey
Court Strikes Class Claims, Finding That Insured Can Never Certify a Putative Class of Insureds Affected by Insurer’s Method of Valuation
Dinacola-Ortiz took out a GEICO automobile insurance policy to insure her 2015 Jeep Cherokee Latitude. After getting into an accident, Dinicola-Ortiz made a property damage claim with GEICO. During investigation, GEICO declared the Jeep a total loss, on the basis that the cost to repair the damage would have exceeded the vehicle’s actual cash value (ACV), measured by subtracting the vehicle’s depreciation from its replacement loss.
To find the ACV of the vehicle in the first instance, GEICO used a third-party vendor, who created a report using comparable vehicles recently sold or listed for sale within the insured’s geographic area to find the average retail price of Dinicola-Ortiz’s vehicle. From there, the vendor made adjustments to that base value, given Dinicola-Ortiz’s vehicle’s mileage, options, and other factors.
Dinicola-Ortiz alleged in this action that this valuation method resulted in her receiving less than the ACV of her vehicle to which she was entitled pursuant to the terms of the policy. Dinicola-Ortiz asserted breach of contract claims against GEICO on behalf of herself, as well as a class of all other persons affected by GEICO’s valuation methods.
GEICO then moved to strike Dinicola-Ortiz’s class claims, on the bases that: (1) Dinicola-Ortiz could never certify the purported class, and (2) if she could, individualized questions of fact would predominate over questions common to the class, preventing class certification.
On the first issue, the District Court noted that the litmus test applicable to standing to sue is whether the putative plaintiff has suffered an actual injury, as opposed to a hypothetical or theoretical injury. Here, the Court ruled that only those who have actually received less than the ACV of their vehicle—when that valuation method was required by their policies—would have standing to be a member of the class. Dinicola-Ortiz’s class claims were brought on behalf of a class of anyone affected (apparently in any way) by GEICO’s valuation method. The District Court held that this class was too broad, as it could result in people who have not sustained actual harm as a result of GEICO’s valuation methods becoming a part of the class.
GEICO also argued that certifying the class pushed by Dinicola-Ortiz would result in the predominance of individualized facts over facts common to the class. The District Court agreed, noting that it would have to examine the ACV of each and every class member’s vehicle, and compare it against what GEICO actually paid each member, which is a case-by-case exercise.
The District Court granted GEICO’s motion to strike Dinicola-Ortiz’s class claims, noting that she could likely never properly certify a class on an ACV valuation issue.
Editor’s Note: The Court noted that four different Circuit Courts have all held the same way over the last four years on ACV questions. Those Circuits are the Third Circuit (Delaware, New Jersey, Pennsylvania, and U.S. Virgin Islands), the Fourth Circuit (Maryland, Virginia, West Virginia, North Carolina, and South Carolina), the Sixth Circuit (Kentucky, Michigan, Ohio, and Tennessee), and the Ninth Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam, Northern Mariana Islands). The lesson is simple: none of those places will certify a class where the issue is allegedly improper ACV valuations.
O’SHEA RIDES the CIRCUITS
Ryan P. O’Shea
[email protected]
09/08/26 Coastal Dust Control, Inc. v. State Farm Fire & Cas. Co.
United States Court of Appeals, Fifth Circuit
Unindented Qualifier at End of Definition Modified Entire Policy Definition and Barred Additional Extra Expenses Costs Incurred
Coastal Dust operated an industrial laundry facility serving hospitality companies in Mississippi destroyed by a March 13, 2023, fire. Costal Dust trucked laundry items to Alabama and subcontracted the laundering to others in an effort to sustain its business. State Farm insured Coastal Dust under a policy that provided both property damage and loss of income protection. At issue was the policy’s “Extra Expense Endorsement.”
The Endorsement defined an “extra expense” as:
a. To avoid or minimize the "suspension" of business and to continue "operations":
(1) At the described premises; or
(2) At replacement premises or at temporary locations, including relocation expenses, and costs to equip and operate the replacement or temporary locations;
b. To minimize the "suspension" of business if you cannot continue "operations"; or
c. To:
(1) Repair or replace any property; or
(2) Research, replace or restore the lost information on damaged "valuable papers and records"
to the extent it reduces the amount of loss that otherwise would have been payable under this coverage or "Loss Of Income" coverage.
Costal Dust asserted all expenses incurred after the fire fell under subpart a. of the Extra Expense Endorsement. Essentially, Coastal Dust sought coverage for the expenses incurred in shipping the laundry items to Alabama and the use of subcontractors. State Farm countered that the term “to the extent” was a qualifier that modified the all subparts in the endorsement to limit coverage. State Farm stated “extra expenses” were recoverable to the extent it reduces the amount of loss that otherwise would have been payable as loss of income coverage, which is a full business shutdown calculation.
Coastal Dust and State Farm agreed to retain a forensic accountant who determined Coastal Dust avoided a $906,941 income loss had it ceased operations. State Farm then paid that amount. However, Coastal Dust still brought suit to recover what it deemed as “extra expenses.”
State Farm noted that while Coastal Dust did not sustain a loss of income, it did incur extra expenses to continue operation. State Farm posited the endorsement caps the recoverable expenses at the amount Coastal Duct would have lost in a full shutdown. State Farm based its argument that the unindented “to the extent” qualifier separated the clause from subpart c., which therefore indicates the qualifier applied to all subparts in the endorsement to limit coverage.
Coastal Duct counterargued that the use of semi-colons and the word “or” creates disjunctive definitions. It buttressed this position by identifying the lack of a period, comma, semi-colon, or any other disconnector between “to the extent” and subpart c. Thus, the broader coverage under subpart a. applied and permitted Coastal Duct to receive coverage for all other post-fire expenses incurred to sustain its business.
The Court of Appeals found for State Farm. The court reasoned the “to the extent” qualifier plainly applied to all sections in the “extra expense” definition. It noted the qualifier demoted to unindented status is structurally separated from subpart c. It also held the qualifier read to the “to the extent it reduces” attaches to the singular word “expense” in the first unindented line of the entire definition.
The court rejected Coastal Duct’s arguments noting the policy’s format sets the lettered subparts apart from the unindented phrase. As such, the “to the extent” qualifier was separated from subpart c. despite the lack of a disconnector. The Court also held Coastal Duct’s interpretation would lead to a nonsensical reading of the policy as it sought to avoid the unambiguous interpretation of the endorsement.
LABARBERA’S LOWER COURT LIBRARY
Isabelle H. LaBarbera
[email protected]
07/21/26 Pro-Wash Xteriors, Inc. v. Atl. Cas. Ins. Co.
Supreme Court of New York, Orange County
Court Declines to Grant Motion in Full, Based on Failure to Properly Move under CPLR(a)(1) and CPLR(a)(3)
Pro-Wash Xteriors d/b/a Xterior Solutions (“Xterior”) brought a declaratory judgment action against Atlantic Casualty Insurance Company (“Atlantic”), seeking a declaration that Atlantic must defend and indemnify Xterior under an insurance policy issued to MJT Carpentry Corp. (“MJT”).
The claims by Xterior originated after a tort action was commenced against them in Orange County Supreme Court, seeking recovery for personal injuries sustained as a result of a construction incident. The underlying claimant alleged that he sustained injuries in the course of his employment with MJT on April 23, 2024, leading to personal injuries. At the time of the loss, MJT was performing work at the loss location pursuant to a subcontract agreement with Xterior, dated May 17, 2021.
Xterior brought a third-party action against MJT in the underlying action, seeking common law and contractual damages. MJT defaulted in the underlying action.
In addition to the action against MJT, Xterior originally brought claims against Atlantic in the underlying action. After the claims were severed, Xterior brought the claims in a separate action. After being served, Atlantic filed a pre-answer motion to dismiss pursuant to CPLR 3211 (a)(7), arguing dismissal is warranted because (1) Xterior does not have standing to seek coverage on Atlantic’s insured, MJT; (2) the policy excludes coverage for the claims asserted in the underlying action; (3) indemnification obligations are premature; and (4) the bad faith claim against Atlantic is redundant, and identical to its claims of breach of obligations under the policy. In support, Atlantic attached the pleadings from the underlying action, an affirmation from claims counsel, and a copy of the subject insurance policy issued to MJT. Xterior opposed, in full.
The Court emphasized the procedural problems with Atlantic’s motion, identifying that it only analyzes the motion, solely under the settled framework of a motion to dismiss for failure to state a cause of action, under CPLR 3211(a)(7). It began the analysis by discussing the purpose of CPLR 3211(a)(7), which identifies that a party may move for judgment dismissing one or more causes of action, on the ground that the pleading fails to state a cause of action. When moving under this portion of the statute, the standard is whether the pleading states a cause of action, not whether the proponent of the pleading has a cause of action. Under CPLR 3211(a)(7), the Court is to accept the facts alleged in the Complaint as true, to determine whether they fit into any cognizable legal theory.
The Court found that Atlantic’s arguments regarding standing would be proper for a motion to dismiss under CPLR 3211(a)(3), which provides a basis to dismiss on the ground that the party asserting the claim has no legal capacity to sue. However, the Court found this argument to be irrelevant under CPLR 3211(a)(7), to determine whether the Plaintiff had stated a cause of action.
Further, in looking at the language in the Atlantic policy, the Court identified that the exclusionary language would only be relevant in considering a pre-answer motion to dismiss pursuant to CPLR 3211(a)(1), allowing dismissal on the ground there is a defense founded upon documentary evidence. However, again, the Court pointed out that Atlantic had not moved to dismiss pursuant to CPLR 3211(a)(1).
Since Atlantic only moved for dismissal pursuant to CPLR 3211(a)(7), the Court found that Xterior had sufficiently stated a cause of action, and therefore, dismissal was not warranted under the circumstances. The Court found that the Complaint in the action sufficiently pleads facts in support of Xterior’s claims.
However, the Court did separately consider the portion of Atlantic’s motion regarding a duty to indemnify being premature, because liability had not been determined in the underlying action. In relation to the claims seeking indemnification, the Court did find that the claims were premature, because there had been no adjudication in the underlying action regarding liability to the underlying plaintiff. As such, the Court dismissed the cause of action seeking indemnification, without prejudice, based on it being premature.
The Court denied the remaining portion of the motion, finding that Atlantic must file an Answer within twenty days of service of the Order with Notice of Entry.
LEXI’S LEGISLATIVE LOWDOWN
Lexi R. Horton
[email protected]
09/11/26 Second Amendment to 11 NYCRR Part 163
New York State Department of Financial Services
DFS Proposes to Amend the Flexible-Rating Regulation for Nonbusiness Motor Vehicle Insurance to Conform with New York’s 2026 Motor Vehicle Insurance Reforms
The New York State Department of Financial Services has published a proposed Second Amendment to 11 NYCRR Part 163, Insurance Regulation 153. Part 163 governs flexible rating for nonbusiness motor vehicle insurance. The proposed amendment follows the motor vehicle insurance reforms enacted in Chapters 55 and 58 of the Laws of 2026 and complements DFS Circular Letter No. 3 (2026), which directed insurers to account for the reforms’ anticipated savings in pending and future motor vehicle rate filings.
Effective November 27, 2026, insurers will no longer be permitted to implement an overall average rate increase of up to five percent without the Superintendent’s prior approval. Overall average rate decreases of up to five percent may continue to be implemented under the flexible-rating mechanism. The proposal updates Part 163 to remove or revise provisions that previously permitted qualifying rate increases without prior approval and to conform the regulation to the amended statutory framework.
Further, if an insurer reduces premium rates due to the reforms of the State fiscal year 2026-2027 budget, the insurer shall provide notice to the named insured of this rate reduction at policy renewal and indicate that the reduction was due to the reforms of the State fiscal year 2026-2027 budget.
VICTORIA’S VISION ON BAD FAITH
Victoria S. Heist
[email protected]
09/01/26 Powell v. Liberty Insurance Group
United States District Court, Eastern District of New York
Magistrate Recommends Granting Plaintiff’s Motion to Amend Complaint to Allege Bad Faith
In this case, Plaintiff Powell owns a property in the Bronx that was insured by Liberty Insurance Group and damages in a dire loss in 2023. Powell provided Liberty with notice of the loss, and Liberty paid around $200,000 in damages to Powell. Powell believed the $200,000 was insufficient to cover the repairs and demanded an appraisal. After demanding the appraisal, Powell argues that Liberty delayed in appointing an appraiser, delayed the appraisal process, and then delayed getting an umpire to continue the appraisal process after their respective appraisers could not come to an agreement for value. Plaintiff then commenced this lawsuit seeking damages for the loss.
This decision turns on Plaintiff's second motion to amend his complaint and Liberty's motion for summary judgment. In the motion to amend, Plaintiff alleges that Liberty acted in bad faith by violating the covenant of good faith and fair dealing by unduly delaying the investigation and appraisal process and attempting to underpay the Plaintiff. Plaintiff seeks $80,000 in consequential damages for temporary housing he paid for while the repairs were underway.
Liberty opposed the motion and cross-moved for summary judgment. Liberty argued the amended complaint contains conclusory allegations without any support as to how the investigation and appraisal were delayed. Further, damages in an insurance claim alone are not evidence of bad faith of the insurer. Defendant argues the evidence submitted with its motion provides there was no bad faith and Powell's attempt to use bad faith as a basis for a claim for consequential damages must fail.
Under New York law, consequential damages from breach of the covenant of good faith and fair dealing may be asserted in the insurance context where the damages were within the contemplation of the parties as a probable result of breach at the time or prior to contracting.
The Magistrate Judge ultimately recommended granting Plaintiff leave to amend his complaint, finding that the allegations contained in the amended complaint infer more than the mere possibility of misconduct, and specifies why Powell believes he was underpaid, how Liberty caused a delay, why they caused the delay (to accept lower payment), and specified the delay was 14 months after the initial claim was made.
The Magistrate Judge recommended denying Liberty's motion for summary judgment, finding issues of material fact, noting that Plaintiff argues it requires depositions of Defendant representatives and the appraisers and Plaintiff is entitled to those depositions prior to the Court deciding a motion for summary judgment.
SHIM’S SERIOUS INJURY SEGMENT
Stephen M. Shimshi
[email protected]
08/17/26 Nivar v. New York
Court of Claims of New York
The Court of Claims of New York, Grants a Direct Verdict in Favor of Defendant on Grounds That the Claimant Failed to Establish, by a Preponderance of the Evidence, That He Suffered a "Serious Injury" Within the Meaning of Insurance Law 5102(d)
On December 30, 2022, a New York State vehicle struck Aniel Sanchez Nivar’s ("Nivar") parked car. He subsequently sought recovery against the State of New York ("State") for personal injuries allegedly caused by the subject accident. At trial, on damages only, Nivar alleged injuries to his cervical spine, lumbar spine, and left shoulder. He relied upon his testimony and treating physician Dr. Boleslav Kosharskyy, who causally related Nivar’s disc herniations, range of motion limitations, and pain to the subject accident. The State’s expert orthopedic surgeon, Dr. Andrew Bazos, opined that Nivar’s MRIs reflected age-related degenerative conditions, not traumatic injury. He further opined that Nivar suffered temporary sprain and strain injuries. At trial, the State moved for a directed verdict.
Dr. Bazos testified that Nivar's MRI three weeks following the accident was “completely uniform” and no evidence of “trauma to any of the structures” or “disc injury” were present. Dr. Bazos determined that the alleged bulging discs on Nivar's neck MRI did not compress the spinal cord and would routinely appear on most patients exceeding age 20. He opined that Nivar's MRI revealed no signs of traumatic herniations. During Nivar’s IME, Dr. Bazos found that Nivar exhibited no abnormalities in spinal range of motion or muscle function served by the spine nerves. February 2023 EMG (Electromyography) and NCV (Nerve Conduction Velocity) tests done in February 2023, revealed no evidence of cervical radiculopathy, or nerve compression in the neck, according to Dr. Bazos. He opined that no medical necessity for Nivar’s percutaneous discectomy was present.
Dr. Kosharskyy opined that the MRI films revealed age-appropriate degenerative changes. He also explained that gaps in treatment occur when treatment is ineffective and the patient becomes tired and loses hope. Dr. Kosharskyy further opined that Nivar ceased treatment because there was “nothing else to offer” him following failed injections, therapy, and surgery. The Court then questioned Dr. Kosharskyy. He explained that Nivar’s emergency room records revealed no spinal pain but revealed pain to the muscles on both sides of the spine. Dr. Kosharskyy again opined that Nivar's degeneration was adequate for his age.
Based on the foregoing, the Court held that Nivar failed to establish by a fair preponderance of the evidence that he sustained serious and significant injuries causally related to the accident (see Toure v. Avis Rent-A-Car Sys., 98 NY2d at 345; Gaddy v. Eyler, 79 NY2d 955, 956-957 [1992]). The Court found neither Nivar nor Dr. Kosharskyy, but neither was as credible. The initial concern with their credibility arose from the issue.
Additionally, Nivar failed to proffer any reasonable explanation for the approximate one-year gap in medical treatment for his spinal injuries (see Pommells v. Perez, 4 NY3d at 574; Hwang v. Ilgar, 178 AD3d 784, 785 [2d Dept 2019]). The Court concluded that Nivar undisputedly suffered some injuries as a result of the accident. However, such injuries were temporary and resolved in September 2023. As such, the Court deemed Dr. Kosharskyy’s assertions that Nivar’s shoulder, cervical and lumbar spine injuries were causally related to the subject accident were “speculative" in nature (Perez-Torres v. Cocoa Point Car Serv., 225 AD3d 554 [1st Dept 2024], citing Alverio v. Martinez, 160 AD3d 454, 455 [1st Dept 2018]).
NEW ENGLAND ALMANACK
Barbara A. O’Donnell
[email protected]
Alexander G. Henlin
[email protected]
Iryna N. Dore
[email protected]
08/25/26 ACE American Insurance Co. v. D&G Towing & Auto Repair
U.S. District Court – D. Massachusetts
Vehicle That Was “Sold” by Named Insured Is Still a “Covered Auto” for Purposes of Massachusetts Compulsory Auto Insurance, Obligating That Carrier to Provide Primary Coverage
Libert was involved in an accident with a pedestrian on July 10, 2022. At the time, he was driving a 2012 Ford van within the scope of his employment for D&G Towing.
The van was owned by a non-party called Export Enterprises. In 2018, Export provided the van to D&G in exchange for services. Export never signed over title to D&G: rather, it provided D&G with a repair plate, which it renewed annually. Export consistently provided the renewal stickers to D&G. Export informed D&G that a certificate of title would be forthcoming in 2022. At the time of the accident, Libert was driving the van to have D&G’s logos and advertising put on the exterior.
At the time of the accident, D&G was insured under a business auto policy issued by Commerce Insurance Company, which provided primary coverage for every vehicle that D&G owned. That coverage was “excess over any other collectible insurance” for vehicles that D&G did not own.
ACE insured Export. In May 2024, it sought a declaration that it did not owe coverage to either Libert or D&G. The injured pedestrian subsequently sued; Libert and D&G tendered to ACE and asserted counterclaims; and the parties cross-moved for summary judgment.
The federal district court, applying Massachusetts law, held that the van was not a “covered auto” for purposes of the policy’s optional coverage parts. Export was still the owner of the vehicle because it had never signed over title to D&G, nor had it advised the state registry of motor vehicles of the transfer of ownership. (The court’s decision features a lengthy discussion about the interplay between provisions of the UCC and Chapter 90D of the Massachusetts General Laws with regard to title transfers, and those with an interest in the issue should read the decision linked in the title.)
The court went on, however, to find that Libert had permission to operate the van within the scope of his employment for D&G and did not need to secure express permission from Export to use it. The court’s holding that the optional coverage parts did not apply rested on the ACE policy’s auto business exclusion (which precluded coverage for use of the van while “working in a business of selling, servicing, repairing, parking or storing” autos unless it was for Export).
Under Massachusetts law, both personal and commercial auto policies must include the “Massachusetts Mandatory Endorsement” that incorporates a compulsory “Bodily Injury to Others” coverage form. For accidents in Massachusetts, the form requires the provision of certain minimum limits, typically $20,000 per person and $40,000 per accident. The mandatory endorsement defined the “insured” to be Export or “anyone else using a covered ‘auto’ with Export’s consent” – and it did not have any kind of an auto business exclusion. Where Libert was deemed to have permission to use the van, the compulsory coverage part applied to the loss on a primary basis. The court concluded that D&G’s own insurance from Commerce applied on an excess basis.
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.
07/30/26 West York Sales & Leasing Inc. v. Dominion of Canada General Insurance Company
Ontario Court of Appeal
Fleet Coverage Cannot Be Backdated: Ontario Court of Appeal Gives Effect to Fleet Endorsement’s Specific Pre-Policy Scheduling Limitation
The Ontario Court of Appeal’s decision in West York Sales and Leasing Inc. v. Dominion of Canada General Insurance Company (Travelers Canada), 2026 ONCA 553, is an important reminder that an insurance policy must be read as an integrated instrument. Broad language in a coverage grant does not displace a specific provision that qualifies that grant. For fleet insurers, rental companies, leasing companies, brokers, and claims professionals, the case also draws a critical line between accepting a premium calculated from a monthly fleet report and retroactively assuming a risk that was never covered when the loss occurred.
The result was a reversal of a coverage declaration in favour of the vehicle owner. The Court held that a 2017 Honda Civic was not insured on the accident date—even though it appeared on a later monthly report and the insurer retained the resulting premium—because it had been leased before the policy began, omitted from the inception schedule, and was not the subject of a request for coverage until after the loss.
The Accident and the Delayed Coverage Demand
West York Sales and Leasing Inc. owned a Honda Civic. It leased the vehicle to 8182485 Canada Inc., operating as Platinum Car and Truck Rental, from February 2017 until January 2021. Platinum’s lease required it to add West York as an additional insured under Platinum’s fleet policy with Dominion, doing business as Travelers Canada.
The policy period ran from September 15, 2019, to September 15, 2020. A vehicle could be added to the policy in one of three ways:
- Vehicles already owned or leased at inception and listed on the inception schedule.
- Vehicles acquired or added after inception, which can be addressed through monthly fleet reporting.
- Vehicles already owned or leased before inception but omitted from the inception schedule, for which coverage does not begin until a request is made.
The Honda had already been leased to Platinum when that policy took effect, but Platinum did not put it on the schedule of automobiles filed at inception. West York said the car had suffered engine failure and was out of service. Whatever the reason for its absence, the omission from the inception schedule was undisputed.
On August 25, 2020, the Honda was involved in an accident. Platinum did not notify either Dominion or West York. A month later, on September 29, 2020, Platinum included the Honda in its August fleet report—fourteen days after the September 15 reporting deadline. The report described the Honda as having entered the fleet on August 15, 2020. Dominion did not reject the report as late and retained the $7,540 monthly premium calculated for the 26 reported vehicles (which included the Honda) at $290 per vehicle.
The accident did not generate a demand to Dominion at that time. Platinum first told West York about the accident – almost three years after it occurred - in July 2023, and only after a legal claim was brought against them. West York then requested a defence and indemnity from Dominion in its capacity as an additional insured. Dominion denied coverage on October 17, 2023, on the ground that the Honda had been added to the policy only after the August 25, 2020, loss.
The Fleet Policy and the Competing Readings
In practical terms, (and at the risk of repetition) the standard form OPCF 21A issued by Dominion creates three categories of coverage: Vehicles properly listed at inception; vehicles acquired after inception and reported through the ordinary monthly process; and vehicles already owned or leased at inception but omitted from the opening schedule. The appeal concerned the third category. The Court of Appeal held that the ordinary reporting mechanism cannot be used to retroactively erase the separate request-for-coverage requirement for vehicles that fall into that category. The interesting part is how the Ontario Court of Appeal arrived at that conclusion.
The policy incorporated the standard Ontario Automobile Policy (OAP 1) and the Ontario Policy Change Form 21A, known as the Monthly Reporting Basis Fleet endorsement. The endorsement creates a practical reporting mechanism for fleets whose composition changes regularly.
Paragraph (a) stated that the policy would insure all Ontario automobiles owned and licensed in the insured’s name, as well as vehicles leased from specified lessors for more than 30 days where the insured lessee was required to insure them. On its face, that broad language captured the Honda: West York owned it, and Platinum had leased it for well over 30 days.
But paragraph (c) stated that the inception schedule included all paragraph (a) automobiles held as of the policy’s effective date. It then imposed a conspicuous qualification, in capital letters: No coverage was provided for an automobile owned or leased before the policy’s effective date but omitted from the schedule until a request for coverage had been filed with the insurer. Paragraph (f), in turn, required a report by the 15th of each month so the insurer could compute the earned premium for the preceding month.
West York relied on paragraph (a). Its position was that all qualifying vehicles in the rental fleet were automatically covered, including the Honda; it argued that paragraph (c)’s limiting words did not apply because the vehicle fit paragraph (a). It also contended that its subsequent inclusion in the August report, Dominion’s acceptance of the report and premium, and the absence of a contemporaneous coverage denial supported coverage. Alternatively, West York obtained relief from forfeiture for the late report and accident notice.
Dominion answered that paragraph (c) drew a deliberate distinction. Vehicles scheduled at inception and vehicles newly acquired after inception could fall within the ordinary fleet-reporting arrangement. An automobile already owned or leased when the policy began, but omitted from the inception schedule, was in a different category: It remained outside coverage unless and until the insurer received a request for coverage. The monthly report was a premium-calculation device, Dominion argued, not a mechanism for converting an uninsured historical risk into an insured one after a loss.
The Application Judge: General Fleet Coverage Prevails
The application judge accepted West York’s approach. In West York Sales and Leasing Inc. v. Dominion of Canada General Insurance Co., 2025 ONSC 3845, the court held that, because the Honda satisfied paragraph (a), it was automatically part of the scheduled automobiles at the policy’s inception. On that reading, the capital-letter limitation in paragraph (c) was “not relevant,” and no additional request for coverage was necessary.
The application judge also treated the monthly report as a mechanism for identifying fleet vehicles and calculating the premium. The Honda’s inclusion in the August report, the payment and retention of premium, and the insurer’s history of accepting late reports supported the conclusion that the vehicle was covered for August. The judge further held that West York had not known of the accident and, if necessary, was entitled to relief from forfeiture for imperfect compliance with the notice requirements. Dominion was ordered to defend and indemnify West York.
The Appeal: Does the Specific Qualification Have Work to Do?
Dominion appealed, primarily challenging the interpretation of OPCF 21A. It submitted that the application judge had effectively read the all-capitals portion of paragraph (c) out of the endorsement. A pre-policy vehicle omitted from the opening schedule required a request for coverage; without one before August 25, there could be no coverage for the accident.
West York maintained that the broad wording in paragraph (a) controlled. It submitted that its monthly fleet report was sufficient, in any event, to request coverage; that the insurer had retained a premium based on a report containing the Honda; and that the 14-day reporting delay caused no meaningful prejudice. It also defended the relief-from-forfeiture ruling.
The Court of Appeal: Read the Endorsement as a Whole
The Court of Appeal allowed Dominion’s appeal. It began with the uncontroversial rule that clear policy language must be given effect in the context of the policy as a whole. The court reviewed the matter on a correctness standard because the policy was a standard-form contract.
Paragraph (a) did bring the Honda within the general class of vehicles to which fleet coverage could apply. But it did so subject to the other terms of the policy. Paragraph (c) specifically addressed the subset of paragraph (a) vehicles that were already owned or leased when the policy began but had not been put on the inception schedule. Its capitalized language limited the broad grant: No coverage existed for those vehicles “until” a request for coverage had been filed.
The Court held that “until” plainly fixed a temporal boundary. It meant there was no coverage before a request. West York’s construction would deprive the specific limitation of meaningful operation; that is not a permissible way to read an insurance contract. The general coverage language and the particular qualification had to be reconciled, not placed in competition. As the Court put it, paragraph (c) reflected the insurer’s right to assess the risk of a vehicle that was already in the insured’s fleet but had not been disclosed when the policy was placed.
The Court was prepared to assume, favourably to West York, that the September 29 monthly report might qualify as a “request for coverage,” since the endorsement did not define that term. Still, that assumption did not resolve the claim. The first communication about the Honda was made on September 29—more than a month after the August 25 accident.
Paragraph (f) did authorize retrospective reporting for the limited purpose of computing premiums earned for the preceding month. It did not provide retrospective coverage for an automobile that paragraph (c) kept outside the policy until an affirmative request. The monthly report therefore could calculate a premium, but it could not reach back to insure an earlier accident. The Court held that there was no duty to defend.
By agreement, the Court awarded Dominion partial-indemnity costs of $15,000 for the appeal and $20,000 for the proceeding below, for total all-inclusive costs of $35,000.
Why Retaining the Premium Did Not Create Coverage
This aspect of the case warrants special attention. Dominion did accept the premium generated by the August report. It did not reject the report when it was filed 14 days late, return the $7,540 paid for the fleet, or issue an immediate coverage denial. Those facts understandably helped West York before the application judge.
These facts did not change the result on appeal because the premium and the coverage question performed different functions under OPCF 21A. The endorsement permits a monthly report to determine the premium owed for automobiles already within coverage during the reported month. For this Honda, however, the threshold coverage condition in paragraph (c)—a request for coverage for an omitted pre-policy vehicle—had not been met before the accident.
Put another way, Dominion did not accept a premium for “weeks” or “months” of known Honda coverage before denying the claim. The Honda first appeared on the August report filed September 29, 2020, after the loss. Dominion learned of the accident only in July 2023, nearly three years later, and denied the claim in October 2023. Its retention of the fleet premium did not waive the timing condition or supply retroactive coverage that the endorsement did not promise.
The result should not be read as resolving every possible waiver, estoppel, or premium-refund issue. Those doctrines depend on the policy wording and the parties’ communications, knowledge, reliance, and conduct. In this case, however, the Court treated the issue as one of initial coverage attachment under OPCF 21A(c), and the retained fleet premium could not make coverage effective before the request. The Court was deciding the scope and start date of coverage under the wording. A monthly premium calculation was not an agreement to insure a pre-existing, unscheduled vehicle for a loss occurring before the request.
An Issue Reserved for Another Day
The Court deliberately did not define what constitutes a “request for coverage” under OPCF 21A(c). It assumed, without deciding, that the September 29 report might satisfy that requirement. Accordingly, the case establishes that an omitted pre-policy vehicle cannot be covered retroactively before any request, but it does not settle whether a monthly report, standing alone, will suffice where it is submitted before a loss. Insurers, brokers, lessors, and fleet operators should therefore avoid relying on implication: a dated, vehicle-specific request that identifies the vehicle’s pre-policy status and seeks coverage prospectively is the safer practice.
Relief from Forfeiture Was Not Available to Create Coverage
The Court of Appeal was clear that there was no need to determine if West York was entitled to relief from forfeiture as coverage had not attached.
Nonetheless, the Court explained the limit of relief from forfeiture. If coverage had attached and the only problem had been the two-week delay in filing the report, the Court said it would have granted relief: West York was not aware of the accident, the delay caused no demonstrated bad faith or prejudice, and the potential loss of coverage was substantial.
But that analysis was hypothetical. Relief from forfeiture may excuse imperfect compliance with a policy requirement after coverage has been triggered. It cannot create coverage where the contractual precondition for coverage was not met. Because the Honda was outside coverage on August 25, the Court did not need to decide the forfeiture issue to dispose of the appeal.
Practice Pointers
For fleet insurers and claim handlers:
• Separate vehicle eligibility from premium administration. Determine first whether the vehicle was scheduled at inception, newly acquired after inception, or a pre-policy vehicle omitted from the schedule. Do not assume that a report and premium calculation answer the coverage-inception question.
• Document the coverage request. The endorsement did not define “request for coverage.” Insurers and brokers can reduce uncertainty by requiring a clear, dated request that identifies the vehicle, confirms whether it was held at policy inception, and records the effective date of acceptance.
• Reconcile reporting procedures with endorsement language. A recurring practice of accepting late reports may affect a late-reporting defence, but it does not necessarily override a separate condition that determines whether a vehicle ever entered coverage.
• Investigate the status of a reported vehicle. Where a report lists a vehicle as newly received, but the vehicle may have been owned or leased before the policy began, the distinction can be coverage-determinative. The underlying facts should be confirmed before a coverage position is finalized.
• Give prompt, precise coverage communications once the loss is known. Although Dominion’s lack of an immediate denial after receiving the report did not alter the result, clear communications can avoid later waiver, estoppel, or reasonable-expectations arguments.
For lessors, fleet operators, and brokers:
• Do not treat an additional-insured certificate as a substitute for schedule verification. West York’s position illustrates a structural risk for lessors: the party that controls the fleet policy and submits the reports may create a coverage gap, while the additional insured bears the consequences. At placement and renewal, lessors should obtain and verify the inception schedule for vehicles leased to the operator.
• Audit the inception schedule. The case is a warning that an existing vehicle omitted at renewal or placement may not be treated like a later acquisition. A monthly fleet list is no substitute for verifying that all pre-existing vehicles are properly scheduled.
• Treat a return-to-service vehicle with care. If a vehicle leaves reporting because it is out of service and later returns, confirm whether the policy treats it as a vehicle already scheduled, a newly acquired vehicle, or an omitted pre-policy vehicle requiring an affirmative request.
• Report accidents immediately. The accident was not disclosed for nearly three years. The Court’s coverage holding made the late notice issue unnecessary, but such delay can independently compromise investigation and defence rights.
The Larger Lesson
West York Sales is a useful example of the familiar but vital principle that insurance contracts are not interpreted clause by clause in isolation. A general insuring agreement may establish the broad universe of risks, persons, or property potentially covered. A more specific endorsement provision can then define the conditions, timing, or limits of coverage for a particular subset within that universe.
In the fleet context, the distinction between reporting a vehicle for premium purposes and obtaining coverage for an omitted pre-policy vehicle can be decisive. The case also leaves an important question unanswered: What constitutes a sufficient “request for coverage” under OPCF 21A(c)? Until that question is resolved, the prudent course is not to rely on a monthly report alone. Fleet operators, brokers, and additional insureds should make a clear, dated, vehicle-specific request and confirm the insurer’s acceptance before the vehicle is put at risk.
© Hurwitz Fine P.C. 2026
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