Source: https://www.hurwitzfine.com/news/coverage-pointers-volume-xi-no-2
Timestamp: 2020-08-08 09:45:51
Document Index: 310514828

Matched Legal Cases: ['§241', '§ 29', '§ 240', '§ 200', '§ 240', '§ 200', '§ 240', '§ 200', '§ 241', '§ 200', '§ 241', '§3420', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 29', '§ 29', '§ 3420', '§ 375', '§ 3420', '§ 241', '§ 200', '§ 240', '§ 240', '§ 240', '§ 240', '§ 241', '§ 240', '§ 241', '§ 200', '§ 240', '§ 240', '§ 240', '§ 241', '§ 240', '§ 240', '§ 240']

We welcome back Jennifer Ehman from her honeymoon in Hawaii. She looks tan and rested. Some people will do ANYTHING to escape from the office for a few weeks.
You can set your clock to the summer recess.
A refrain from our July 23, 2009 edition, equally applicable here:
This week’s issue reflects the summer slowdown in the appellate courts in New York. The Court of Appeals is on break until Labor Day, although we occasionally see a mid-summer decision or two. The four appellate departments are traditionally quiet, with only a smattering of decisions, particularly in the two upstate Departments.
From the “Oh, Come Now” Department
As Mike Perley will attest, all good jokes begin with “A man walks into a bar with a parakeet on his shoulder …”
The Third Department, in the Liberty Mutual case decided yesterday, was doing stand-up when it reached its decision in that case. It starts:
“A women walks in to a piece of sheet metal protruding from a parked pickup truck sitting in a parking lot (perhaps with a parakeet on her shoulder) and squeezes $25,000 out of the truck’s liability limits and then files a claim for underinsured motorists benefits alleging that she was in a car accident…”
I know. I can hear your questions:
“You mean the car was standing still, by its lonesome, without a driver, and the woman walks into a piece of sheet metal that’s hanging off the back of the truck bed?
She thinks the claim qualifies her SUM benefits?”
How can that accident possibly be considered to arise out of the use and operation of a motor vehicle?
Sheesh. You’ll have to read it yourself.
The summer season has begun and the number of reported decisions has dropped off a bit. One issue that we have spotted is yet again the sufficiency of IME or peer review reports. The decisions reported this edition address problems found with the reports which state phrases too close to MMI or the report has a summary conclusion. The assigned arbitrators to the cases seem to indicate in their decisions that some additional explanation or some additional rationale is needed for the opinion as to why continued care is not medically necessary. It is not sufficient to summarily state that since the patient has received over 80 chiropractic visits; has no change in objective testing; has positive subjective complaints no further care is warranted. The assigned arbitrators seem to be seeking some explanation for the conclusion. Further, they seem to be seeking some medical standard of care to rely upon for the conclusion.
While this issue appears for IME and peer reviews it is not isolated. The one reported decision indicates that the applicant did not submit medical records or evidence that was contemporaneous with the IME report to rebut the insurer's case of lack of medical necessity. Accordingly, both parties need to be mindful that the assigned arbitrator, at least in Upstate NY, is looking for a well reasoned opinion on lack of medical necessity and contemporaneous and thorough rebuttal.
If you have any questions regarding the issue please do not hesitate to contact me at [email protected]
Do you need someone to stop out to your office to provide some training opportunities for your claims professionals? Here’s a list of some of the topics on which we can present and we can manuscript any kind of coverage or tort program that might be important for your book of business. The first three topics, the ones highlighted below, have been the most popular ones recently. We have a traveling troupe so contact us and we can schedule a visit at a mutually convenient time.
Good Faith, Consequential Damages and Extra-Contractual Liability – the New York Experience
ADR and How to Get to "Yes".
Construction Cases - The Interplay Between Indemnity
From Steve Peiper, the Pied Piper of Potpourri
Another two weeks of a beautiful summer in the books, and another five decisions of note on the law books. Unlike last time, we are light on first party cases this week. However, there is a rather interesting decision from the Second Department addressing a broker's potential liability in a material misrepresentation matter. We trust that you'll enjoy.
After that, however, we would encourage you to take a look at the three potpourri offerings this week. As you know, we try to cover decisions that have some use in everyday practice. This, at times, includes the review of appellate Labor Law decisions. This week we offer decisions addressing when liability attaches to a construction manager, whether liability can attach to a party that is not in the chain of contracts leading to the injured employee, and what falls within the definition of a "worksite" under Labor Law 241(6). All three, incidentally, are standards that I often look up in my own practice, so store them away for reference at a later time. You know they'll be in front of you again shortly. No need to thank me when they pop up. As always, best wishes as we bring July to a close. Cheers!
DRI’s Annual Insurance Coverage and Practice Symposium
Thursday, November 18, 2010 - Friday, November 19, 2010
I can hear Billie Holiday, Frank Sinatra and Ella Fitzgerald singing in the background:
Autumn in New York; why does it seem so inviting.
Autumn in New York; it spells the thrill of first-nighting.
Come spend a couple of days in NYC in the fall for the most significant insurance coverage program of the year. I have the honor of chairing this year’s ICPS and can guarantee that you will be treated to a distinguished faculty of regulators, practitioners and insurance industry leaders providing insight into national trends, dissecting important recent decisions and offering creative practice tips to assure that you remain on the cutting-edge for first- and third-party coverage. The faculty consists of national coverage specialists who work in the trenches and who know how to share the most important developments in claims and insurance coverage. Make plans now to join us in New York City!
Click here for a brochure and visit the DRI web site for more information and registration.
REFUSES TO CONVICT FOR SUNDAY BALL
Jury at Southport Acquits Four
Members of Elmira Team Who
ELMIRA. July 21.—The four ball players, members of the Elmira State League club, who were arrested on Sunday last charged with violating the law in playing
ball or Sunday, were to-day acquitted of the charge by a jury in Justice Allen's
court in the town of Southport. The players, William Mack, John Clougher, James Nagle and Stephen O'Neill, were immediately released.
Sheriff T. Stanley Day, who made the arrests, following Governor Hughes' decision in the matter of the charges preferred against the county officer, was the only witness for the prosecution.
The jury was out only live minutes.
Editor’s Notes: It wasn’t until 1919, that the New York State Legislature legalized Sunday baseball (where admission fees were being charged) and Sunday movies. The 1919 Legislature was the same one that ratified the Prohibition Amendment to the Constitution. Go figure: Baseball without beer.
Women Who Walks Sheet Metal Protruding From Driverless Truck In Parking in Lot Entitled to Underinsured Benefits. Thousands Flee.
Despite “Separation of Insureds Clause,” Exclusion that Removes Coverage for Injuries to Employees of Any Insured is Given Clear Meaning According to Its Terms. Additional Insured Loses Coverage for Injury Claim by Named Insured’s Employee
Summary Judgment Vacated in SUM Case
Exacerbation or Aggravation Language in Report Does Not Necessarily Support Serious Injury
Defendants’ Reliance on Plaintiff’s Medical Records Documenting Injury to Knee Dooms Their Motion
Failure to Relate IME Findings to 90/180-Day Claim in BOP Defeats Defendant’s Motion for Summary Judgment
Concurrent Care Burden Not Met But Expert Chiropractor’s Apportionment Adopted
Applicant Failed to Rebut IME With Contemporaneous Report and With Proper Medical Doctor
IME Report’s Conclusion of MMI Insufficient Basis for Denial
IME Report’s Failure to Explain Why Care After Over 160 Treatments Should Not Continue Insufficient to Uphold Denial
Insurer’s SJ Motion Properly Granted As Plaintiff Failed To Rebut Peer Review
Dispute Over a Title Insurance Policy Issued in Massachusetts, for Massachusetts Realty, Dismissed on Forum Non-Conveniens
Broker’s Negligence is Irrelevant, Where Its Actions Were Not the Proximate Cause of Plaintiff’s Loss of Coverage
No Supervisory Authority Means Not Labor Law Liability For Subcontractor
Responsibility, Not Title, Determine Whether a “Construction Manager” is Saddled Labor Law Liability
Under Labor Law §241(6), a Parking Lot does not Qualify as a Passageway or Walkway To and From a Work Area
Applying Texas Law –The Pollution Exclusion
Applying Mississippi Law – Interpretation of the Windstorm Deductible Endorsement
Sub-limit “Warranty” Endorsement Given Plain Meaning
Late Notice Not Excused where Insured Allegedly Never Received Suit Papers Because the Address Listed with the Secretary of State had not been Updated
No SUM Coverage for Injured Party Struck While Walking Back to a Friend’s Vehicle after Eating Lunch
No Coverage for Losses Sustained After Power Outage
Court Rejects Insurer’s Denial of Coverage Based on the Insured’s Failure to Cooperate with the Claim Investigation
Policy Cancellation Fails to Conform to Virginia Statutory Requirements
Remember, we're here 24/7, at your service. The mobile number is provided so that you can use it.
7/22/10 Arbitration between Liberty Mutual Fire Ins. Co and Malatino
This may be the silliest decision of the year, to date.
Picture this. Woman is returning to work after taking a break in the employer's parking lot. She walks into a piece of sheet metal extending approximately five feet beyond the tailgate of a coworker's parked pickup truck and was injured. The sheet metal was to be delivered to a junk yard at the end of the day.
She makes claim against her co-worker, the owner of the pickup truck and that carrier pays its $25,000 in limits. She then files a claim for underinsured motorists (SUM) benefits.
The SUM carrier takes the (fairly logical) position that the accident did not arise out of the use or operation of the pickup truck that was standing still and without a driver. It arose from her walking into the metal.
“No, no.” holds the Third Department after one too many pina coladas. The court finds that the truck was in use even though not being used. There was a causal connection between the use of the truck to transport sheet metal and the injuries so SUM benefits are available. The use of the pickup truck to transport the sheet metal was unrelated to the coworker's employment and, therefore, the exclusive remedy provision of Workers' Compensation Law § 29 (6) is inapplicable
A lone dissenting justice provided the more logical argument that the parked truck was not in use and the accident was caused by (duh) walking into the sheet metal (which could have easily been on something other than a truck.
7/13/10 Howard & Norman Baker, Ltd., v. American Safety Cas. Ins. Co.
American Safety issued a CGL policy to Point Recycling (“Point”). Point was a tenant in a building owned by Howard & Norman Baker, Ltd. (“HNB”). The lease required Point to add HNB as an additional insured under the Policy and it did.
Ruiz, an employee of Point sued HNB to recover for injuries sustained in the building. Point tendered to American Safety and the carrier denied, based on an exclusion for "bodily injury to . . . [a]n employee of any insured arising from and in the course of . . . [e]mployment by any insured."
Here, the plain meaning of the exclusion invoked by American was that the Policy did not provide coverage for damages arising out of bodily injury sustained by an employee of any insured in the course of his or her employment. While there was a “separation of insured’s clause,” the exclusion's reference to "any insured" makes it unmistakably clear that the exclusion is not limited to injuries sustained by HNB's employees.
7/9/10 Kent v. Allstate Insurance Co. and New York Central Mutual
The court below granted summary judgment to a underinsured motorist claimant. The insurer appealed, arguing that the vehicle involved – a moped -- was not a motor vehicle under the policy, that notice was late in any event and thirdly, that the tort-feasor’s coverage had not been exhausted. Without any discussion, the Fourth Department vacated the summary judgment grant, but did not explain on which ground it based its decision, simply holding that the claimant had not met its burden of proof.
Editor’s Note: My thanks to Carolyn Henry, from Brown Kelly, the appellant’s counsel, for sharing her brief.
7/15/10 Tandoi v. Clarke
Plaintiff brought a motion for summary judgment on the issues of liability and serious injury. The trial court granted the liability portion but denied the serious injury part. On appeal, the court agreed. Although plaintiff met her prima facie burden through the submission of her deposition testimony and reports from her physiatrist and neurosurgeon, who both found disc herniation at C6-7 which they opined was permanent and causally related to the accident, in opposition defendant submitted the affirmed opinion of an orthopedist who opined that plaintiff suffered from disc degeneration which pre-existed the accident. While he also noted that the accident might have exacerbated or aggravated the degenerative condition, this was not sufficient to warrant summary judgment for plaintiff as he specifically stated that any aggravation was mild and temporary. Because plaintiff’s experts did not diagnose her with an exacerbation of a pre-existing condition, the only proof was from defendant’s expert who specifically noted that any limitation was not “significant”. Defendant raised a triable issue of fact sufficient to defeat plaintiff’s motion.
7/13/10 Abdalla v. Mazl Taxi, Inc.
Defendants relied on plaintiff’s own medical reports, including those of his treating physician, which documented significant limitations in plaintiff’s right knee, and an operative report from plaintiff’s orthopedic surgeon, which noted a tear of the medial meniscus in the right knee. These reports did not support defendants’ position that plaintiff did not suffer a serious injury and resulted in the reversal of the trial court and denial of defendants’ motion.
7/13/10 Strilcic v. Paroly
Defendant’s examining orthopedic surgeon examined plaintiff a year and three months after the accident and noted that plaintiff had not returned to her two part-time jobs following the accident. Although plaintiff was also examined by defendant’s examining neurologist, neither doctor related any of their findings to the 90/180-day claim set forth in plaintiff’s bill of particulars. Therefore, on appeal, the trial court’s grant of summary judgment was reversed as defendant failed to meet his prima facie burden.
7/19/10 Jamie Randall v. Respondent
The two issues in this arbitration involved whether the massage therapy was for injuries causally related to one of three motor vehicle accidents and whether the massage therapy was properly denied as concurrent care to chiropractic treatment.
The eligible injured person (“EIP”) was involved in motor vehicle accidents on March 29, 2003, June 16, 2003, and May 9, 2004. In 1996, the EIP underwent back surgery which placed him out of work for six years. The March 29, 2003, accident occurred when a tractor trailer backing into the EIP’s vehicle. His alleged injuries from that accident were to the neck, shoulder, and back. The EIP underwent extensive medical treatment for injuries and as of April 2003, still had limited range of motion in the neck with only lumbar spasm. The EIP was also regularly receiving chiropractic treatment.
Then after the May 9, 2004, accident the EIP chiropractic treatment initially slightly increased to three times per week. Further, the May 2004, treatment records refer to the May 9, 2004, accident the findings did not differ from the findings prior to the May 9, 2004 accident.
The EIP was examined by Elias Nicolas, DC who opined that 20% of the EIP’s injuries were related to the May 9, 2004, accident and 80% related to the March 2003 accident.
The EIP was also examined by Dr. Patrick Hughes for injuries related to the May 9, 2004, accident. Dr. Hughes opined that the EIP sustained a temporary aggravation of the pre-existing neck and low back injury but was back to pre-May 9, 2004, accident status.
The assigned arbitrator determined that Mr. Nicolas’ opinion was persuasive on the 80/20 apportionment between the accidents. The massage therapist was providing the same treatment just before the 2004 accident and only slightly increased the frequency after that accident. Therefore, reimbursement based upon Mr. Nicolas’ opinion was appropriate.
Turning to the argument of concurrent care of massage therapy and chiropractic care, the assigned arbitrator determined that the insurer failed to meet its burden of proof. The burden of proof applied to this case was that both treatments were the exact same treatment to the EIP. The assigned arbitrator suggested that perhaps an affidavit from a person qualified to asses whether the treatment was concurrent would be warranted and most persuasive.
7/19/10 Albany Multi Medicine Group v. Respondent
The issue in this arbitration was whether the insurer properly denied physical therapy based upon the independent orthopedic medical exam (“IME”) report of Dr. Louis Benton. The assigned arbitrator determined that denial was proper.
Dr. Benton conducted the IME on January 20, 2009, as a result of an October 1, 1998, motor vehicle accident. Dr. Benton’s evaluation revealed subjective complaints of pain in the cervical spine radiating into the right shoulder as well as occasional low back pain. The objective tests were normal with no positive clinical findings. Dr. Benton concluded that further physical therapy was not medically necessary.
The Applicant submitted in opposition to the IME report a July 2008, report from the treating therapist which was determined not to be contemporaneous with the treatment in issue and insufficient under Workers’ Compensation Ground Rule 5 to rebut the findings of a medical doctor.
7/15/10 Affordable Chiropractic v. Respondent
The insurer denied chiropractic treatment to the eligible injured person (“EIP”) as a result of an August 10, 2002, accident based upon the independent chiropractic exam of David B. Pearson, DC. Mr. Pearson’s opinion was that the EIP reached an end point with massage therapy and chiropractic care. There was no further reported discussion whether Mr. Pearson concluded that care was no longer necessary.
The assigned arbitrator determined that the use of the phrase end point was the same as concluding maximum medical improvement. As many know, this is not a valid basis for denial under Hobby v. CNA Ins. Co.
7/13/10 Matthew M. Misiak, DC v. Respondent
Initially, the assigned arbitrator rejected the Applicant’s argument that the independent medical examination in support of the denial must be in affidavit form. The assigned arbitrator determined there was no supporting law for such an argument.
Next, the assigned arbitrator rejected the insurer’s argument that the Applicant did not provide an executed assignment of benefits. The assigned arbitrator determined that this issue was not raised in the denial and was therefore waived.
Then, the assigned arbitrator reviewed whether the independent chiropractic examination report of William Krieger, DC was sufficient. The assigned arbitrator determined the report was not sufficient as it failed to explain why further chiropractic treatment, in excess of the over 160 treatments already rendered, was not needed even though he found existing injuries as a result of the accident. The assigned arbitrator indicated that while there was a plethora of treatment Mr. Krieger did not suggest how many treatments were sufficient before further care is not necessary particularly when the eligible injured person has continuing pain and discomfort.
7/16/10 Hillcrest Radiology Assoc. a/a/o Leroy Stewart v. State Farm Mut. Auto. Ins. Co.
The insurer’s summary judgment motion was properly granted as the plaintiff failed to submit any evidence to rebut the conclusions set forth in the peer review report demonstrating lack of medical necessity.
7/22/10 Gozzo v. First American Title Ins. Co.
The facts of this case are fairly straight-forward. Plaintiff obtained a title insurance policy for a parcel of land they purchased in Massachusetts while they were residents of that state. Years later, plaintiff’s first sale of the parcel fell through when it was determined that title to the property was unmarketable. Plaintiff eventually sold the premises, but at a reduced amount due to the title issues.
That resulted in the current claim against First American. Now residents of New York, plaintiffs commenced a claim under their title insurance policy in Albany County. First American moved to dismiss on forum non-conveniens.
The trial court dismissed the claim on the basis that the case was most aligned with Massachusetts. In affirming, the Third Department stated that Massachusetts law applied, all contacts were in Massachusetts (save plaintiffs), and the plaintiff’s current residency was not enough to justify placing this matter in a New York court. Accordingly, the trial court’s dismissal was appropriate.
7/09/10 Milgrim v. Royal & Sunalliance Ins. Co.
In this interesting decision, the plaintiff, administrator of the Estate of Swartz, is challenging Royal’s denial of homeowners’ coverage after a fire destroyed the insured premises. The story provides that that home was purchased for Rabbi Swartz through a religious corporation formed for that purpose. Because the religious corporation was the “owner” of the premises, the insurance was written under “corporate rates” which were substantially higher than rates available to individual home owners.
At some point, Fairmont Insurance Brokers (“Fairmont”) advised Rabbi Swartz’s son, Myron Swartz, to name himself as the owner of the residence, and simply list the religious corporation as a mortgage holder. This was the case even though both knew that there was no mortgage on the property. In any event, Swartz complied with this suggestion, and several policy terms were bound under this arrangement.
In 2003, Rabbi Swartz moved from the home into a nursing facility. Mr. Swartz also no longer lived at the residence. Eventually, the premises were placed on the market for sale. However, in 2004, prior to selling the residence, it was severely damaged by fire.
Royal disclaimed on the basis that Swartz and Fairmont’s statements as to the ownership of the premises were a material misrepresentation. Further, Royal denied on the basis that Swartz was not a resident of the premises, and that Swartz had no insurable interest in the premises. In response, Swartz cross-claimed against Fairmont alleging that Fairmont’s suggestion to lower the insurance rate by naming Swartz as owner had cost him coverage.
In review, the Second Department noted that Swartz was not entitled to coverage under the terms of the policy at issue because the “insured premises” was not the “residence premises” of Mr. Swartz. As such, because Swartz was not entitled to coverage regardless of the alleged negligence of Fairmont, Fairmont’s negligence was irrelevant. Where Fairmont’s negligence was not the proximate cause of the loss of coverage, no claim could be asserted against it.
7/13/10 Temperino v DRA, Inc.
Plaintiff sustained injury when he fell from a ladder during the course of his employment at a renovation project at Rockefeller University. Defendant DRA, Inc. was named as a defendant due its status as a contractor at the jobsite.
DRA, Inc. moved for summary judgment in this matter therein alleging that it was not liable under Labor Law § 240(1) where, as here, it was not responsible for the work being performed by plaintiff. Further, DRA, Inc. moved for summary judgment dismissing the Labor Law § 200/Common Law Negligence claims where it again had no direct control of plaintiffs work and where there had been no complaints about the manner in which DRA, Inc. had completed its work at the project site.
The Second Department agreed, and dismissed plaintiff’s claims against DRA. Initially, it is noted that plaintiff’s claims of Labor Law § 240(1) were dismissed where it was established that DRA was not party to the contracts entered into by plaintiff’s employer. Further, it was established that DRA did not have any control over the work being performed by plaintiff’s employer, nor did DRA have any authority to insist upon proper safety procedures. Where DRA was established to have had no authority to direct, supervise, or control plaintiff’s work, it follows that the Labor Law § 200/Common Law Negligence claims were dismissed as well.
7/13/10 Barrios v City of New York, et al
“Construction Manager” Skanska moved for summary judgment dismissing plaintiff’s Labor Law action. Essentially, it appears that Skanska argued that, as a construction manager, it was not liable under the plain wording of Labor Law §§ 240(1) and 241(6), respectively. Not being fooled by titles, the Second Department noted that liability under the Labor Law attaches when the party has “authority to supervise or control the plaintiff’s work.” At that point, despite where they fall in the chain of contracts, or what their title is, the company becomes a “statutory agent” of the owner/general contract, and thus liable.
Here, the record established that Skanska, in fact, had direct supervisory control over on-site operations. Accordingly, it was an “agent” of the owner/general contractor under the Labor Law, and liability attached.
7/09/10 Sheldon v Henderson & Johnson, Inc.
In this matter, plaintiff allegedly sustained injury when he slipped and fell on ice that had formed on a parking lot maintained by the tenant POMCO. As a result, plaintiff commenced an action for personal injuries under Labor Law § 200/Common Law Negligence and Labor Law § 241(6). Defendant Henderson & Johnson was a contractor hired to perform work on the exterior of POMCO’s building.
Plaintiff’s claims under Labor Law § 200 against Henderson & Johnson were denied where it was established H&J had no duty to remove ice from the parking lot. Further, plaintiff’s claims under Labor Law § 241(6) were dismissed because the Second Department held that the incident did not occur on a jobsite. It is noted that “jobsite” encompasses walkways and passageways leading to and from a worksite. However, the parking lot where plaintiff fell did not qualify as walkway or passageway.
7/16/10 Standard Waste Systems, Ltd. v. Mid-Continent Cas. Co.
In the underlying suit, plaintiffs asserted claims for negligence against Standard Waste Systems [“Standard”], J.B. Hunt and The Scott’s Company based on personal injuries the plaintiffs suffered as a result of exposure to a hazardous chemical. The plaintiffs, employees of Georgia Pacific, were injured after handling the contents of a trailer delivered to Georgia-Pacific by J.B. Hunt and loaded with scrap paper by Standard.
Standard had a commercial general liability policy with Oklahoma Surety, and Standard contends that this policy obligated the Insurers to defend it in the underlying action. The insurer denied coverage based on the Pollution Exclusion.
The district court found that all liability theories against Standard in the underlying lawsuit fall within the exclusion in the policy. While noting that the underlying plaintiffs were somewhat oblique regarding the source of the contamination, the court concluded that the underlying plaintiffs allege that Standard was negligent only if Standard was the source of the chemical.
Standard argued on appeal that the district court’s decision should be reversed because the insurers failed to plead the policy exclusion as an affirmative defense. The court pointed out that under Texas law a policy exclusion is an affirmative defense and that FRCP 8(c) requires that a party affirmatively state any avoidance or affirmative defense. However, because the failure to plead the policy exclusion did not result in unfair surprise or prejudice the insurers’ failure to do so would not be fatal to their defense.
As to whether or not Standard was entitled to a defense under the policy the court noted that Texas uses the “eight corners” rule to determine whether an insurer has a duty to defend. This rule requires the finder of fact to compare only the allegations in the underlying suite – the suit against the insured – with the provisions of the insurance policy to determine if the allegations fit within the policy coverage.
The pollution exclusion in Standard’s policy bars coverage for claims of bodily injury from pollutants if Standard was the source of the pollutant. The insurer only had a duty to defend Standard in the underlying litigation if the underlying complaints allege that Standard is liable independent of Standard being the source of the hazardous chemical. Inasmuch as the complaints alleged liability only if Standard was the source of the hazardous chemical the court held that the insurers had no duty to defend.
7/15/10 Penthouse Owners Assoc., Inc. v. Certain Underwriters at Lloyds
Penthouse Owners Association [“POA”] owns a complex of condominiums in Pass Christian, Mississippi, that are insured under a Lloyd’s all-risk policy. The policy excluded water damage, including “flood, surface water, waves, tides, tidal waves, overflow of any body of water, or their spray, all whether driven by wind or not.” It also contains an anti-concurrent causation clause (“ACC”), which states that such water loss or damage is excluded regardless of any other cause of loss or event that contributes concurrently or in any sequence to the loss. In addition, the policy includes an endorsement that defines a “Windstorm or Hail Deductible”.
The Windstorm or Hail Deductible applies to loss or damage to Covered Property caused directly or indirectly by windstorm or hail, regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage. The Windstorm or Hail Deductible applies whenever there is an occurrence of windstorm or hail.
Hurricane Katrina completely destroyed the POA property, leaving only a slab. POA recovered its policy limit from its flood insurer, and made a claim under the Lloyd’s policy. Lloyd’s denied the claim, citing the Policy’s Flood Exclusion and ACC clause and the Lloyd’s engineers’ determination that the buildings had been destroyed by flood.
POA filed its declaratory judgment action based on breach of contract and negligent and bad faith breach of contract. The complaint alleged that the winds of Hurricane Katrina destroyed the condos several hours before the storm surge, and that therefore the loss was caused entirely by wind, not flood. Lloyd’s moved for Summary judgment. The district court denied the motion based on its conclusion that the Windstorm Deductible operated to provide coverage for hurricane damage regardless of whether the damage was caused by wind or flood.
The legal question which was certified to the Fifth Circuit was whether, as a matter of contract interpretation, the Windstorm Deductible negates the policy’s exclusion of coverage for water loss.
The district court held that conflict is created by the language in the Windstorm Deductible that explains when the deductible applies. The deductible “applies to loss or damage. . . caused directly or indirectly by windstorm or hail, regardless of any other cause or event that contributes concurrently or in any sequent to the loss or damage”. The phrase exactly tracks the language of the ACC clause in the “Exclusions” portion of the policy, which extends the water exclusion to damage caused directly or indirectly by water, “regardless of any other cause or event that contributes concurrently or in any sequence to the loss.” The district court concluded that, “[i]n effect, the deductible endorsement operates as a reverse anti-concurrent cause clause.” The district court held that the deductible does not serve to limit coverage, but expands coverage to include any damage caused “concurrently or in any sequence to” windstorm or hail damage, even if the damage would not have been covered under policy provisions that exclude flood damage.
The Fifth Circuit disagreed stating that “the purpose of the broad language, which the district court read as a “reverse anti-concurrent” clause, is actually to ensure than an insured cannot escape the applicability of the higher deductible for windstorm and hail damage simply because other weather events (with lower deductibles) contributed to the loss. That is, the clause operates only when deciding whether to apply the deductible to a loss, after determining the coverage for the loss exists pursuant to the coverage-defining portions of the policy. The deductible endorsement does not create or extend coverage.
7/19/10 The Burlington Insurance Company v. Industrial Steel Fabricators
Eleventh Circuit Court of Appeals (applying Florida law)
Sublimit “Warranty” Endorsement Given Plain Meaning
Nasr was killed in a construction accident when a 1,200 pound steel beam fell on his head. His estate sued Industrial Steel Fabricators, Inc. ("ISF") and its subcontractor A&K Erectors, Inc. ("A&K") for negligence. Pursuant to ISF's general liability insurance policy, the Burlington Insurance Company ("Burlington") was indemnifying and defending ISF in that lawsuit to the extent of ISF's coverage.
How much coverage? Is there $1 million or was it reduced to $25,000 because
ISF failed to require A&K to obtain, maintain, and submit certified proof of its
own insurance policy with coverage and limits of liability at least equal to those in
ISF's policy with Burlington.
A "warranty endorsement" in the policy was in issue:
ties' dispute. That endorsement reduces ISF's coverage from $1 million to $25,000 per occurrence if ISF breaches two warranties regarding contractors:
WARRANTY - INSURANCE FOR LEGAL LIABILITY
In consideration of our agreeing to … issue this policy, you agree, covenant and warrant that you require without exception that those who undertake a job for or in your behalf obtain and maintain insurance, during the duration of the job, for legal liability arising out of their operations with coverage and limits of liability equal to or greater than those provided by this policy.
You further warrant that you obtain [certified proof or the equivalent] of such insurance prior to commencement of any work performed for or in your behalf.
For any "occurrence" arising out of your failure to comply with the warranties in Paragraph 1 and 2 above the limits of insurance [are reduced as set forth in the schedule]…
A&K, as ISF's subcontractor, did not have the requisite insurance policy and that ISF never obtained certified proof of insurance from A&K.
The Estate argued that the “occurrence” did arise out of the “failure to comply with the warranties” (that the death did not arise out of the failure to get the proper insurance) to the sublimit reduction did not apply. The Court found that interpretation “unreasonable” as no “rational interpretation” would require a causal connection between the occurrence and the breach of warranties.
In the alternative, the Estate argued that there should not be any
reduction in coverage because ISF did not breach the warranties in
paragraphs one and two. The estate urged that the warranties should not be construed as creating prospective obligations but rather as only representations of present facts given that they are written in the present, not future, tense. Under this interpretation, a breach of the warranties could only occur if ISF, at the time the policy was "applied for and issued," did not have a standard operating procedure requiring its contractors to obtain and submit proof of the requisite insurance coverage. Because ISF had such a procedure at that time, the estate says that ISF's inadvertent failure to follow that procedure with respect to A&K following the underwriting of lSF's insurance contract is irrelevant and could not have resulted in a breach of the warranties.
The Court rejected that argument as well. The purpose of the endorsement was not to establish protocols but to assure that coverage would be secured.
Editor’s Note: Kudos to attorney Don Grzybowski from Burlington on his prep work on this one as well as thanks to Mike McMyne from Burlington for bringing this to our attention. We’re beginning to see more and more sublimit cases reaching the appellate courts.
7/19/10 Spentrev Realty Corp. v. United Natl. Specialty Ins. Co.
On March 2, 2007, Angel Martinez allegedly sustained injury when he slipped and fell on an accumulation of snow and ice in front of 188 Parkside Avenue, a building owned by plaintiff. Martinez immediately retained counsel. Approximately ten days after the incident, Martinez’s counsel wrote a letter to plaintiff at the building’s address advising it of the incident and requesting that it forward the letter to its insurance carrier.
Thereafter, on March 29, 2007, Martinez commenced the underlying personal injury action. Martinez’s affidavits of service indicated that plaintiff was personally served along with the Secretary of State. Upon receipt of process, the Secretary of State forwarded the papers to plaintiff’s registered agent. The papers were returned with the notation “Attempted Unknown/Not Known.”
Defendant was never officially placed on notice of the incident until November 20, 2007. It promptly disclaimed coverage thereafter based on late notice.
Plaintiff brought this declaratory judgment and then moved for summary judgment while defendant cross-moved. In its decision, the court first addressed the notice provided by plaintiff, the insured party. It held that defendant met its prima facie burden by establishing an over six month delay in providing notice of the incident. Specifically, the court noted, citing the Court of Appeals decision in Briggs Ave. LLC v. Ins. Corp. of Hanover, that “a liability insurer is entitled to disclaim coverage when the insured, because of its own error in failing to update the address it had listed with the Secretary of State, did not comply with a policy condition requiring timely notice of lawsuit.”
The court then addressed notice provided by the injured party. It reasoned that although an injured party has an independent right to provide notice of an incident, herein, no such notice was provided. Moreover, beyond the one letter sent by Martinez’s counsel requesting that plaintiff notify its insurer of the incident, there was no evidence that Martinez made any attempt to independently ascertain the identity of the insurer. Accordingly, the court denied plaintiff’s motion for summary judgment and granted defendant’s cross-motion.
7/13/10 Matter of Commerce & Indus. Ins. v. Reiss
This decision arises out of a demand for supplemental uninsured motorist benefits. The respondent and non-party Anthony Manheim were crossing the street when respondent was struck by a vehicle owned and operated by Michael Rea, who was insured under a policy issued by Geico.
Thereafter, Geico tendered its $25,000 policy limits to respondent. Respondent then presented a SUM claim under the policy of insurance that petitioner issued to non-party Manheim. The issue that arose was whether respondent was an “insured” under the Manheim policy, as a person “occupying” Manheim’s vehicle. Both parties agreed that at the time of the accident respondent was walking across the street to reach Manheim’s vehicle. Further, Manheim stopped the vehicle across the street from a restaurant where he and respondent ate a bowl of soup.
Respondent argued that the courts have afforded a liberal interpretation of the term “occupying” a vehicle in a SUM endorsement. Specifically, respondent relied upon Matter of Cepede’s Estate v. US Fidelity & Guaranty Co., which stated “where a departure from a vehicle is occasioned by or is incident to some temporary interruption in the journey and the occupant remains in the immediate vicinity of the vehicle and, upon completion of the object occasioned by the brief interruption, he intends to resume his place in the vehicle, he does not cease being a passenger.” The court rejected respondent’s argument noting that she did not remain in the immediate vicinity of the vehicle and the interruption in occupation was not brief.
7/7/10 Fruit & Vegetable Supreme, Inc. v. The Hartford Steam Boiler Inspection & Ins. Co.
This case arose out of a 30 hour power outage, which affected the Midwest, Northern United States and parts of Canada. On the same day, sometime prior to the outage, plaintiff’s equipment was being repaired by an electrician due to some seemingly unrelated breakdown. The repair work was halted when the power outage affected plaintiff’s premises.
As a result of the outage, plaintiff allegedly sustained losses in the form of property damage, spoilage and associated loss of business income. Plaintiff subsequently filed a claim under its “equipment breakdown” policy issued by defendant. The policy set forth two prerequisites to coverage. First, there must have been an “accident” to “covered equipment.” Second, any damage must have been the “direct result of” and solely attributable to” an “accident” to “covered equipment.” Additionally, in the definitions section of the policy, the term “accident” was limited by excluding the following: “(5) Misalignment, miscalibration, tripping off line…”
After an investigation, defendant concluded that coverage existed for the property damage sustained prior to the outage, but denied coverage for the remainder of the claim as it was caused by a lack of power from plaintiff’s utility provider and not from an equipment breakdown or an interruption of supply as required by the policy.
The court held that defendant met its burden of proof that an exclusion applied only as to those damages sustained after the outage by citing to the policy language and the government’s report which revealed that the outage was caused by an Ohio condition.
6/24/10 Pepper v. Geico Indem. Ins. Co.
This action arises out of an April 2008 incident in which plaintiff was riding a bicycle when a car operated by Yolanda Johnson swerved towards him causing him to fall and sustain injury. Plaintiff’s counsel notified defendant of the incident both verbally and in writing. In response, defendant opened a claim file.
Thereafter, the adjuster assigned to the file attempted to contact Johnson to secure details about the incident. The adjuster called both Johnson’s home number and cell number numerous times and sent a contact letter. The adjuster also requested that a field investigator attempt to contact Johnson. Approximately nine days after the first attempt at contact was made, Johnson returned the adjuster’s call. However, Johnson requested that the adjuster call her on her cell phone. When the adjuster went to return the call, Johnson informed him that she could not speak at that time because she was “in the field” during work hours. Thereafter, the adjuster placed additional phone calls and left numerous messages for Johnson. Further, the adjuster received a call from a friend of Johnson’s indicating that she would attempt to set up a three-way conference with Johnson. Again, this arrangement was not successful and additional messages were then left for the friend.
On May 20, 2008, defendant sent a reservation of rights letter to Johnson’s home based on her failure to cooperate in the investigation. When no response was received, defendant disclaimed coverage on July 11, 2008. Thereafter, a default judgment was entered against Johnson in the underlying action and, pursuant to Insurance Law §3420, plaintiff commenced this action.
The court, applying the Trasher test, determined that plaintiff had demonstrated a prima facie entitlement to judgment as a matter of law. The court reasoned that while defendant made efforts to contact Johnson, the evidence did not establish, or generate a triable issue of fact with respect to the third prong of the Trasher test, namely, that Johnson’s attitude was “one of willful and avowed obstruction.” The court attributed Johnson’s conduct as evincing an attitude of “inaction,” which, in the court’s opinion, was insufficient to establish non-cooperation. Moreover, the court held that there was no justification for the month and a half delay between the last contact with Johnson and the denial letter.
6/18/10 Matter of Government Empls. Ins. Co. v. Polo-Apolinar
This matter arises out of motor vehicle accident, in which respondent was struck by a vehicle operated by Cecil Singleton and registered in Virginia. Respondent contacted Cecil Singleton’s insurer, Hartford Casualty Insurance Company, to notify it of the accident. Hartford declined coverage stating that the claim arose after the policy it issued had been cancelled. Respondent then filed a demand for arbitration to obtain uninsured motorist benefits under his insurance policy, issued by petitioner.
In applying Virginia Law, the court noted that the cancellation was required to be printed in 8 point type. In addition, Virginia Law required fifteen day advance written notice of cancellation be sent by registered or certified mail. As Hartford failed to use 8 point type and the purported record of mailing was not supported by the affidavit of a person with knowledge to show that the notice was in fact sent on or about the date of notice, the court held that the cancellation was invalid.
Risk is part of the construction industry, and many other trades and lines of work. Attempts to shift or minimize risks are endemic. The two primary risk transfer devices are contractual indemnification and additional insured insurance coverage.
The purpose of contractual indemnification is to transfer risk and costs from the indemnitee to the indemnitor. Contractual indemnification typically provides these benefits to the indemnitee:
A claim against the indemnitor for damages covered by the indemnification provision
Limitation on the indemnitee’s exposure for defense costs and damages for claims covered by the indemnification provision; and
The indemnitee may be provided limited coverage under the indemnitor’s general liability policy.
There are three basic types of indemnity clauses: limited; intermediate; and broad. A limited indemnification provision covers only damages caused “solely” by the indemnitor’s acts or conduct of omission or commission. Intermediate indemnity clauses are identified by the attempt to cover all damages, not just damages caused by the indemnitor, even if the damages are caused in part by the indemnitee. This is covered, for example, by language providing for indemnification for all claims, damages, losses, etc. “arising out of or resulting from performance of” the indemnitor’s work. The indemnity provisions in the standard AIA Document A401 and Consensus Docs 750 are such limited indemnity agreements. A broad contractual indemnification clause is one in which the indemnitee attempts to obtain indemnification for all damages, including a loss that may be caused by the indemnitee’s own negligence.
Generally, indemnity provisions that seek to obtain indemnification for the indemnitee’s partial or sole negligence are heavily scrutinized and strictly construed against the indemnitee. Broad form indemnity clauses include phrases such as being indemnified for all claims, losses and damages “arising from the Work”, or “resulting from performance of the Work” with little or no exclusions.
While indemnification provisions may be included in most construction contracts, enforcing those provisions is often difficult. Enforcement may be limited by unclear or confusing indemnity provisions, state law interpretations of various indemnity provisions, and state statutes. For example, all but approximately ten states specifically prohibit indemnification in construction contracts for the indemnitee’s sole negligence.
For several reasons, including this difficulty of enforcing indemnification clauses, upstream parties may contractually require the downstream party to add the upstream party as an additional insured. Requests for additional insured status and waiver of subrogation clauses are the two most common insurance requirements sought from downstream parties.
Additional insured coverage typically provides several advantages over indemnification. First, the upstream party becomes a defined insured under an insurance policy and is not dependent on contractual indemnification language. Since the value of contractual indemnification is, of course, defined by the financial strength of the indemnitor, additional insurance coverage is preferred since the insurer will have a direct financial obligation to the indemnitee. A further advantage of additional insured coverage is that it avoids statutory limitations on risk transfer contained in the various state anti-indemnity statutes.
To obtain appropriate additional insured coverage, the upstream party must include the proper contractual requirement, and then insure that the downstream party in fact obtains and documents a policy with the specified coverage. The primary contractual additional insured requirements should be as follows:
The indemnitee shall be an additional insured under the indemnitor’s policy for ongoing and completed operations;
Additional insured coverage should apply on a primary and non-contributory basis; and
The additional insured coverage should be maintained for a period after substantial completion equal to the statute of limitations.
Additional insured coverage is extended by endorsements to the general liability policy. Proper endorsements for additional insured coverage include CG 20 10 07 04 or CG 20 33 07 04 for ongoing operations, and CG 20 37 07 04 for completed operations. The broadest additional insured coverage is afforded by CG 20 10 11 85 which provides coverage for the upstream party for all damages arising from the indemnitor’s ongoing or completed operations even if the damages were caused by the indemnitee’s sole negligence. Not surprisingly, this endorsement is no longer generally available.
Many carriers have “custom” endorsements for additional insured coverage, and an upstream party must be diligent and review all additional insured endorsements to make sure that the coverage provided is consistent with contractual requirements. The upstream party must also monitor policy renewal dates and require the downstream party to annually provide acceptable evidence that the required coverage are in place. While Certificates of Insurance are typically provided as proof of coverage, Certificates of Insurance are NOT proof of insurance coverage in court. In an effort to avoid other legal obstacles and hurdles, an upstream party should require that the additional insurance coverage is primary and provided via a primary general liability and not opposed to an excess or umbrella policy. The additional insured party must also be diligent and require proof (i.e. actual policies, broker certifications, etc.) of AI coverage for ongoing and completed ops.
Therefore, in the construction world, there is an ongoing dialogue and contest between owners, general contractors and other “upstream” parties attempting to push down contractual indemnification and additional insured coverage, while “downstream” parties such as subcontractors and sub-subcontractors attempt to limit such efforts.
7/10/10 Oklahoma Reinstates Intentional Tort Exception to Workers Compensation Exclusivity
It appears that the PARRET v. UNICCO SERVICE COMPANY, 2005 OK 54, 127 P.3d 572, holding will be reversed by a statutory change that takes effect on August 1, 2010:
Attorney John R. Woodard, III, of the Tulsa, OK firm of Feldman, Franden, Woodard & Farris brought this to our attention and explains the Parret ruling:
In that case, Glen Parret, an employee of UNICCO Service Company, was working in an Oklahoma tire plant when he was asked by his supervisors to work on some emergency lights. Other employees subsequently warned him that the lights were still energized, or “hot,” and recommended that he refuse to do the work because it was dangerous. Nonetheless, Parret continued working on the lights according to his employer’s instructions, was electrocuted, and died as a result of his injuries. His wife was paid worker’s compensation benefits, but proceeded to bring a common law tort claim against UNICCO for intentionally injuring her husband. In evaluating the case, the court in Parret expressed its worry that it would take a case on par with assault or battery to gain a recovery outside of Workers’ Compensation under the specific intent standard. 2005 OK 54, 127 P.3d 572, 575. Deciding that this result was out of line with the policy goals underlying the Worker’s Compensation Act, the Court held that Oklahoma should join with roughly a dozen other states in adopting a “substantial certainty” standard for the intentional tort exception.
The court gave two criteria for meeting the standard: “the employer must have (1) desired to bring about the worker’s injury or (2) acted with the knowledge that such injury was substantially certain to result from the employer’s conduct.” [emphasis added] Id. at 579. The Court maintained that there is still a subjective component at work here – it is not enough that the injury was substantially certain to occur from an objective standpoint.
This legislative enactment overrules Parret. In part, the statute was amended to read:
SECTION 3. AMENDATORY 85 O.S. 2001, Section 12, as amended by Section 14, Chapter 1, 1st Extraordinary Session, O.S.L. 2005 (85 O.S. Supp. 2009, Section 12), is amended to read as follows:
Section 12. The liability prescribed in Section 11 of this title shall be exclusive and in place of all other liability of the employer and any of his employees, any architect, professional engineer, or land surveyor retained to perform professional services on a construction project, at common law or otherwise, for such injury, loss of services, or death, to the employee, or the spouse, personal representative, parents, or dependents of the employee, or any other person, except in the case of an intentional tort, or where the employer has failed to secure the payment of compensation for the injured employee as provided for in Section 61 of this title. An intentional tort shall exist only when the employee is injured as a result of willful, deliberate, specific intent of the employer to cause such injury. Allegations or proof that the employer had knowledge that such injury was substantially certain to result from its conduct shall not constitute an intentional tort.
Abdalla v. Mazl Taxi, Inc.
Phillips, Krantz & Associates, LLP, New York, N.Y. (Heath T.
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Queens County (Mayersohn, J.), entered December 15, 2009, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
Contrary to the Supreme Court's determination, the defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendants, in support of their motion, relied on some of the plaintiff's own medical reports. One such report was that of the plaintiff's treating physician, Dr. Joyce Goldenberg, which revealed the existence of a significant limitation in the plaintiff's right knee flexion (see Guerrero v Bernstein, 57 AD3d 845; Mendola v Demetres, 212 AD2d 515). The other was an operative report of the plaintiff's treating orthopedic surgeon, Dr. Richard Seldes, which revealed, inter alia, the existence of a tear in the posterior horn of the medial meniscus in the right knee. Since the defendants did not meet their prima facie burden, it is unnecessary to determine whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact (see Guerrero v Bernstein, 57 AD3d at 845; Mendola v Demetres, 212 AD2d at 515).
Strilcic v. Paroly
Edelman, Krasin & Jaye, PLLC, Carle Place, N.Y. (Jarad Lewis
Siegel of counsel), for appellant.
Smith Mazure Director Wilkuns Young & Yagerman, P.C.,
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Diamond, J.), entered August 14, 2009, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
Contrary to the Supreme Court's determination, the defendant failed to meet his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendant's motion papers failed to adequately address the plaintiff's claim, clearly set forth in her bill of particulars, that she sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her usual and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (hereinafter the 90/180-day category) (see Encarnacion v Smith, 70 AD3d 628; Alvarez v Dematas, 65 AD3d 598; Smith v Quicci, 62 AD3d 858; Alexandre v Dweck, 44 AD3d 597; Sayers v Hot, 23 AD3d 453, 454). The subject accident occurred on August 8, 2007. In her second supplemental bill of particulars, the plaintiff alleged that, since the subject accident occurred, she has been unable to return to work. The medical report of Dr. Leon Sultan, the defendant's examining orthopedic surgeon, who examined the plaintiff one year and three months after the subject accident, noted that the plaintiff did not return to her two part-time jobs after the subject accident. In addition, the plaintiff was examined by Dr. Freddie M. Marton, the defendant's examining neurologist, on October 23, 2008. Both Dr. Sultan and Dr. Marton failed to relate their findings to the 90/180-day category of serious injury for the period of time immediately following the subject accident.
Since the defendant failed to meet his prima facie burden, it is unnecessary to consider whether the papers submitted by the plaintiff in opposition were sufficient to raise a triable issue of fact (see Encarnacion v Smith, 70 AD3d at 628; Coscia v 938 Trading Corp., 283 AD2d 538, 538).
Tandoi v. Clarke
Parisi & Bellavia, Rochester (Timothy C. Bellavia of
Egger & Leegant, Rochester (Jan P. Egger of
Appeal (transferred to this Court by order of the Appellate Division, Fourth Department) from an order of the Supreme Court (Galloway, J.), entered November 17, 2009 in Monroe County, which, among other things, denied plaintiff's motion for summary judgment on the issue of serious injury.
Plaintiff commenced this action for injuries she allegedly sustained in September 2006 when her motor vehicle was struck from behind by a car driven by defendant. Following joinder of issue and discovery, plaintiff moved for summary judgment on the issues of liability and whether she suffered a serious injury within the meaning of Insurance Law § 5102 (d). Although the liability portion of the motion was granted, Supreme Court denied the motion as to serious injury, prompting plaintiff's appeal.
Plaintiff contends that Supreme Court erred in denying her motion for summary judgment on the issue of whether she suffered a serious injury under the "significant limitation of use" category within the meaning of Insurance Law § 5102 (d). We do not agree. "As the proponent of the summary judgment motion, plaintiff bore the burden of establishing, as a matter of law, that she suffered a serious injury pursuant to [that statute] and that the injury was causally related to the accident" (Autiello v Cummins, 66 AD3d 1072, 1073 [2009] [citations omitted]; see McHugh v Marfoglia, 65 AD3d 828, 828-829 [2009]; LaForte v Tiedemann, 41 AD3d 1191, 1192 [2007]; Ellithorpe v Marion, 34 AD3d 1195, 1196 [2006]). "[I]n order to establish . . . a significant limitation of use, the medical evidence submitted by plaintiff must contain objective, quantitative evidence with respect to diminished range of motion or a qualitative assessment comparing plaintiff's present limitations to the normal function, purpose and use of the affected body organ, member, function or system" (Dean v Brown, 67 AD3d 1097, 1098 [2009] [emphasis added] [internal quotation marks and citation omitted]; see Toure v Avis Rent A Car Sys., 98 NY2d 345, 353 [2002]; Hildenbrand v Chin, 52 AD3d 1164, 1165 [2008]; Pianka v Pereira, 24 AD3d 1084, 1085 [2005]).
Here, contrary to Supreme Court's finding, we conclude that plaintiff succeeded in setting forth a prima facie showing that she sustained a serious injury pursuant to the above standard. Notably, plaintiff submitted excerpts from her deposition testimony indicating that, prior to the subject accident, she had no problems with her neck that required medical treatment. Further, plaintiff established the qualitative nature of her limitations by submitting affidavits from her physiatrist, Clifford Ameduri, and her neurosurgeon, Seth Zeidman, who, based upon objective medical evidence, including their physical examinations and treatment of plaintiff and review of two MRI scans and reports, dated February 14, 2007 and November 6, 2007, respectively, opined to a reasonable degree of medical certainty that plaintiff suffered a disc herniation at C6-7, which was the permanent and direct result of the motor vehicle accident (see Toure v Avis Rent A Car Sys., 98 NY2d at 353; Durham v New York E. Travel, 2 AD3d 1113, 1114 [2003]).[FN1]
Although proof of a herniated disc alone is not sufficient to demonstrate a serious injury (see Pommells v Perez, 4 NY3d 566, 574 [2005]; Ellithorpe v Marion, 34 AD3d at 1196-1197), here, Zeidman also stated that, during his physical examinations of plaintiff, she exhibited "weakness in her left upper extremity biceps and triceps and numbness in the C6 and C7 distributions of the cervical spine." Significantly, Zeidman's conclusions were echoed by Ameduri, who further detailed plaintiff's significant limitations of "cervical range of motion with respect to extension, flexion and rotation." Zeidman opined that the herniation causes plaintiff "to suffer from persistent pain in her neck and left arm, numbness and tingling in the fingers of her left hand, toes of her left foot and left arm and neck weakness" and recommended surgical intervention. Zeidman further sufficiently described the qualitative nature of plaintiff's limitations by opining that her pain limited her ability to do normal, daily activities such as "housework, yardwork, lifting, using a computer, watching TV, placing items on overhead shelves and working as an intensive care unit nurse" (see Toure v Avis Rent A Car Sys., 98 NY2d at 353; Autiello v Cummins, 66 AD3d at 1073-1074; McHugh v Marfoglia, 65 AD3d at 829; Laforte v Tiedemann, 41 AD3d at 1192), and attributed these limitations to the "natural and expected medical consequence of the injuries she suffered as a result of the motor vehicle accident" (see Toure v Avis Rent A Car Sys., 98 NY2d at 353).
Given plaintiff's initial showing, the burden shifted to defendant to raise "a triable issue of fact . . . through the submission of competent medical evidence" (Autiello v Cummins, 66 AD3d at 1074). In that regard, defendant submitted an affirmed medical opinion summary, and an addendum thereto, of orthopedist Robert Molinari,[FN2] who stated therein that he reviewed plaintiff's medical records, imaging studies and radiographs, and opined that plaintiff suffered from disc degeneration at C4-5, C5-6, C6-7, which preexisted the motor vehicle accident. Notably, Molinari indicated that plaintiff's radiographs revealed "no evidence of significant injury or fracture[,] subluxation or instability" to her cervical spine resulting from the accident. While it is true that Molinari also acknowledged that the subject accident "may have exacerbated her degenerative changes and symptomotology," we cannot agree with plaintiff that this language was sufficient to justify summary judgment in her favor (see e.g. Laforte v Tiedemann, 41 AD3d at 1192) given Molinari's further specific statements that any aggravation of a preexisting condition would be mild and temporary (see Mc Gough v Truco Engine, 309 AD2d 1298, 1299 [2003]). In other words, since none of plaintiff's experts diagnosed her with the aggravation of a preexisting condition, the proof in that regard was exclusively from defendant's expert, who specifically qualified his opinion by indicating that any limitation plaintiff sustained was not "significant" as required by the applicable category of Insurance Law § 5102 (d). Accordingly, we find that defendant raised a triable issue of fact sufficient to defeat plaintiff's motion for summary judgment on the issue of serious injury.
Footnote 1: Plaintiff further maintains that her burden was met on the motion because she established the quantitative nature of her limitations (see Toure v Avis Rent A Car Sys., 98 NY2d at 350) through Ameduri's assigning of specific percentages detailing plaintiff's reduced range of motion, accompanied by a comparison of those findings to normal ranges of motion, which were corroborated by the independent objective medical evidence of the MRI scans (see Durham v New York E. Travel, 2 AD3d at 1115). However, we note that Amedori did not indicate for purposes of this motion what specific objective tests were employed to produce such percentages (see Rivera v Benaroti, 29 AD3d 340, 342 [2006]; see also Toure v Avis Rent A Car Sys., 98 NY2d at 350).
Footnote 2: We note that while plaintiff correctly points out that Molinari's addendum was not in admissible form (see Daus v Cassavaugh, 17 AD3d 837, 838 [2005]), since she raised this argument for the first time on appeal it is unpreserved for appellate review (see Shinn v Catanzaro, 1 AD3d 195, 198 [2003]).
Howard & Norman Baker, Ltd., v. American Safety Casualty Ins. Co.
Tese & Milner, New York, N.Y. (Michael M. Milner of counsel),
Gartner & Bloom, P.C., New York, N.Y. (Susan P. Mahon of
In an action, inter alia, for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an underlying action entitled Ruiz v Howard and Norman Baker II, LLC, commenced in the Supreme Court, Queens County, under Index No. 14240/07, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Queens County (McDonald, J.), entered May 14, 2009, as denied its cross motion for summary judgment declaring that the defendant is obligated to defend and indemnify it in the underlying action, and the defendant cross-appeals, as limited by its brief, from so much of the same order as, in effect, denied its application to search the record and award it summary judgment declaring that it was not so obligated.
ORDERED that the notice of cross appeal is deemed to be an application for leave to cross-appeal, and leave to cross-appeal is granted (see CPLR 5701[c]); and it is further,
ORDERED that the order is reversed insofar as cross-appealed from, on the law, the defendant's application to search the record and for an award of summary judgment in its favor declaring that it is not obligated to defend and indemnify the plaintiff in the underlying action is granted, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment declaring that the defendant is not so obligated; and it is further,
The defendant American Safety Casualty Insurance Company (hereinafter American) issued a general liability insurance policy (hereinafter the Policy) to Point Recycling, Ltd. (hereinafter Point), which was a tenant in a building owned by the plaintiff, Howard & Norman Baker, Ltd. (hereinafter HNB). As required by the lease between HNB and Point, HNB was named as an additional insured under the Policy. Roberto Ruiz, an employee of Point, commenced an action to recover damages for personal injuries he allegedly sustained in the subject building (hereinafter the underlying action), and the defense of HNB in that action was tendered to American. American denied coverage, inter alia, on the ground that the Policy contained an exclusion for "bodily injury to . . . [a]n employee of any insured arising from and in the course of . . . [e]mployment by any insured."
HNB then commenced this action, inter alia, for a judgment declaring that American is obligated to defend and indemnify it in the underlying action. After American moved, among other things, to vacate the note of issue, HNB cross-moved for summary judgment declaring that American is obligated to defend and indemnify it in the underlying action. In its opposition papers, American requested that the Supreme Court search the record and award it summary judgment declaring that it is not so obligated. The Supreme Court denied HNB's cross motion for summary judgment and, in effect, denied American's application to search the record and award summary judgment in its favor.
An insurer's duty to defend is not triggered when the only possible interpretation of the allegations against the insured is that the factual predicate for the claim falls wholly within a policy exclusion (see Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137; Global Constr. Co., LLC v Essex Ins. Co., 52 AD3d 655, 656; Bruckner Realty, LLC v County Oil Co., Inc., 40 AD3d 898, 900). "An exclusion from coverage must be specific and clear in order to be enforced' (Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311), and an ambiguity in an exclusionary clause must be construed most strongly against the insurer" (Guachichulca v Laszlo N. Tauber & Assoc., LLC, 37 AD3d 760, 761; see Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390, 398; Ruge v Utica First Ins. Co., 32 AD3d 424, 426). However, the plain meaning of a policy's language may not be disregarded to find an ambiguity where none exists (see Bassuk Bros. v Utica First Ins. Co., 1 AD3d 470, 471; Garson Mgt. Co. v Travelers Indem. Co. of Ill., 300 AD2d 538, 539).
Since this is an action for a declaratory judgment, we remit the matter to the Supreme Court, Queens County, for the entry of a judgment declaring that American is not obligated to defend and indemnify HNB in the underlying action (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901; Ponok Realty Corp. v United Natl. Specialty Ins. Co., 69 AD3d 596).
Kent v. Allstate Insurance Company and New York Central Mutual
Appeal from an order of the Supreme Court, Niagara County (Richard C. Kloch, Sr., A.J.), entered April 3, 2009. The order, insofar as appealed from, granted that part of plaintiff's motion for summary judgment on the complaint against defendant New York Central Mutual Fire Insurance Company and directed that defendant to pay a certain sum to plaintiff under an automobile insurance policy.
BROWN & KELLY, LLP, BUFFALO (CAROLYN M. HENRY OF COUNSEL), FOR DEFENDANT-APPELLANT.
LAW OFFICE OF CRAIG Z. SMALL, BUFFALO (CRAIG Z. SMALL OF COUNSEL), FOR PLAINTIFF-RESPONDENT.
It is hereby ORDERED that the order insofar as appealed from is unanimously reversed on the law without costs, the motion is denied in part and the fourth ordering paragraph is vacated.
Memorandum: Plaintiff commenced this action seeking, inter alia, supplementary uninsured/underinsured motorist (SUM) coverage under an automobile insurance policy issued by New York Central Mutual Fire Insurance Company (defendant) to plaintiff's father. Plaintiff was a passenger on a moped that was operated by Stephen Spaziale, and he sustained injuries when the moped was rear-ended by a vehicle driven by Donald Boss. Sixteen months after the accident, plaintiff notified defendant of the potential SUM claim, and defendant disclaimed coverage based, inter alia, on the alleged lack of timely notice of the potential SUM claim. Plaintiff subsequently obtained a judgment in excess of $800,000 against the Spaziales and settled his claims against Boss for $10,000. Plaintiff then commenced this action against defendant and Allstate Insurance Company, which insured the Spaziales, seeking SUM coverage under both policies. Supreme Court granted plaintiff's motion for summary judgment on the complaint and, inter alia, ordered defendant to pay plaintiff SUM coverage in the amount of $25,000. We reverse the order insofar as appealed from because plaintiff did not meet his burden of establishing his entitlement to judgment as a matter of law from defendant (see generally Zuckerman v City of New York, 49 NY2d 557, 562).
Arbitration between Liberty Mutual Fire Ins. Co and Malatino
Law Office of Taylor & Associates, Albany (Sean A.
Tomko of counsel), for respondent.
Appeal from an order of the Supreme Court (Aulisi, J.), entered October 20, 2009 in Fulton County, which granted petitioner's application pursuant to CPLR 7503 to stay arbitration between the parties.
While respondent Marcia Malatino (hereinafter respondent) was returning to work after taking a break in the employer's parking lot, she walked into a piece of sheet metal extending approximately five feet beyond the tailgate of a coworker's parked pickup truck,[FN1] sustaining facial lacerations and a broken nose. According to the record, the coworker had torn the sheet metal off a building on his property and planned to deliver it to a junkyard after work.
Thereafter, respondent settled with the coworker's automobile liability insurer for $25,000 — the policy limit — and received a lump sum workers' compensation award. Seeking additional compensation, respondent subsequently demanded arbitration as a named insured under the supplemental underinsured motorists provisions of an insurance policy issued by petitioner. Petitioner sought to stay arbitration on the grounds that respondent's injuries did not, as required by the policy, arise out of the "ownership, maintenance or use" of the coworker's motor vehicle and, alternatively, because respondent was injured as a result of the alleged negligence of a coworker, workers' compensation was her exclusive remedy (see Workers' Compensation Law § 29 [6]). Supreme Court, finding, among other things, that there was no use or operation of the vehicle, granted petitioner's application, and this appeal ensued.
Initially, we note that the issue herein involves the right to arbitration under the specific terms of the parties' supplemental underinsured motorists policy and not the application of any statutory no-fault provisions [FN2]. A court may grant an application to stay arbitration "where 'the particular claim sought to be arbitrated is outside [the] scope of the agreement to arbitrate'" (Matter of Farm Family Cas. Ins. Co. [Trapani], 301 AD2d 740, 741 [2003], quoting Matter of County of Rockland [Primiano Constr. Co.], 51 NY2d 1, 7 [1980]). Generally, "policies of insurance are to be construed liberally in favor of the insured and strictly against the insurer" (Penna v Federal Ins. Co., 28 AD3d 731, 731 [2006]; see Government Empls. Ins. Co. v Kligler, 42 NY2d 863, 864 [1977]; see generally Turkow v Erie Ins. Co., 20 AD3d 649, 650 [2005]). Where ambiguity exists as to coverage, doubt should be resolved in favor of the insured (see Handelsman v Sea Ins. Co., 85 NY2d 96, 101 [1994]; Penna v Federal Ins. Co., 28 AD3d at 731). Supplemental underinsured motorists coverage policies, such as the one at issue herein, apply only when an insured's injuries are "caused by an accident arising out of such [underinsured] motor vehicle's ownership, maintenance or use" (11 NYCRR 60-2.3 [f] [II]; see Matter of Farm Family Cas. Ins. Co. [Trapani], 301 AD2d at 741). "Use" of a vehicle encompasses more than just driving, and extends to other incidental activities (see Rowell v Utica Mut. Ins. Co., 77 NY2d 636, 639 [1991]). Furthermore, the use of the underinsured vehicle must be a proximate cause of the injuries for which coverage is sought (see Matter of Farm Family Cas. Ins. Co. [Trapani], 301 AD2d at 741).
Clearly, the pickup truck was not being operated at the time of the accident — having been parked in the employer's lot when the coworker arrived at work. The focus herein, however, is whether the vehicle was in use so as to fall within the scope of the terms of the supplemental underinsured motorists policy. Here, at the time of respondent's injury, the pickup truck was being used by the coworker to transport the sheet metal to the junkyard after work. Construing the language of the supplemental underinsured motorists policy liberally "in favor of the insured and strictly against the insurer" (Penna v Federal Ins. Co., 28 AD3d at 731), and given the causal connection between the use of the pickup truck to transport the sheet metal and respondent's injuries, we find that respondent's request for arbitration falls within the scope of the parties' agreement. Accordingly, under the particular circumstances herein, the application for a stay of arbitration should have been denied.
Furthermore, the record is clear that the use of the pickup truck to transport the sheet metal was unrelated to the coworker's employment and, therefore, the exclusive remedy provision of Workers' Compensation Law § 29 (6) is inapplicable and cannot form the basis for granting the stay of arbitration.
Spain, Stein and Egan Jr., JJ., concur.
Because respondent Marcia Malatino (hereinafter respondent) did not sustain injuries arising out of the ownership, maintenance or use of a motor vehicle, petitioner was entitled to a stay of arbitration [FN3] . Respondent's coworker parked his pickup truck in the employer's parking lot in the morning and apparently intended to leave the vehicle there for his entire eight-hour shift. If respondent had walked into the parked truck itself, her injuries would not have arisen out of the use of the vehicle (see Wooster v Soriano, 167 AD2d 233, 234 [1990]; McConnell v Fireman's Fund American Ins. Co., 49 AD2d 676, 677 [1975]). The same result should follow when she walked into materials protruding from the bed of the truck.
While "use" of a motor vehicle encompasses more than just driving and extends to other incidental activities (see Rowell v Utica Mut. Ins. Co., 77 NY2d 636, 639 [1991]), there are limits to that term and the corresponding insurance coverage [FN4] . The majority holds that the truck here was being used to contain sheet metal until the coworker could transport it, rendering the vehicle in "use." This broad finding places no parameters on the use of a vehicle. It is unclear if the majority considered that the truck was in use while containing the sheet metal only because the coworker intended to transport the sheet metal to the junkyard that same day, or if the truck would be considered in use as a vehicle if the sheet metal was placed there a year earlier and the coworker regularly parked his truck with metal protruding from his tailgate. Conversely, if the truck was never moved from the parking lot but was regularly utilized to store different materials in the same location, would the parked truck constantly be in use as a vehicle? Rather than expanding the application of the statute and regulation requiring coverage for injuries arising out of a "motor vehicle's ownership, maintenance or use" (11 NYCRR 60-2.3 [f] [II]; see Insurance Law § 3420 [f] [1]), we should adhere to the current rule that looks to whether the "circumstances constituted an 'on-going activity relating to the vehicle' which would necessitate a conclusion that the vehicle was in use" (Trentini v Metropolitan Prop. & Cas. Ins. Co., 2 AD3d 957, 958 [2003], lv dismissed 2 NY3d 823 [2004], quoting Matter of Celona v Royal Globe Ins. Co., 85 AD2d 635, 636 [1981]; see Zaccari v Progressive Northwestern Ins. Co., 35 AD3d 597, 599-600 [2006]); Wooster v Soriano, 167 AD2d at 234).
In Sullivan v Barry Scott Agency, Inc. (23 AD3d 889 [2005]), this Court held that a plaintiff's back injury caused by lifting a heavy box was not related to the use of a motor vehicle, even though he was standing in a delivery van when unloading the box. We found the proximity to the vehicle "wholly incidental," "[a]s plaintiff's injuries would have occurred even if he had been standing on the ground and lifting the box" (id. at 890; see Sochinski v Bankers & Shippers Ins. Co., 221 AD2d 889, 889 [1995]; United Servs. Auto. Assn. v Aetna Cas. & Sur. Co., 75 AD2d 1022, 1022 [1980]; cf. Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 215 [1996]). Similarly, respondent here would have received the same injuries had the sheet metal she walked into been protruding from any object other than a vehicle. Under the circumstances, there was no ongoing activity related to the parked truck — in its capacity as a motor vehicle, rather than as a storage bin for sheet metal — so as to necessitate a conclusion that the vehicle was in use when respondent was injured (see Sullivan v Barry Scott Agency, Inc., 23 AD3d at 890; Matter of New York Cent. Mut. Fire Ins. Co. [Hayden — Allstate Ins. Co.], 209 AD2d 927, 928 [1994] [staying arbitration where "accident did not arise out of the inherent nature of the automobile as such"]; Reisinger v Allstate Ins. Co., 58 AD2d 1028, 1028 [1977], affd 44 NY2d 881 [1978]; McConnell v Fireman's Fund American Ins. Co., 49 AD2d at 677). Accordingly, petitioner was entitled to a stay of arbitration because its insurance policy does not provide coverage for respondent's injuries.
Footnote 1:No red flag was placed on the sheet metal in accordance with Vehicle and Traffic Law § 375 (27) despite the fact that it protruded more than four feet beyond the tailgate of the pickup.
Footnote 2:Thus, we do not find the dissent's reference to cases interpreting no-fault provisions in insurance policies to be applicable.
Footnote 3: The parties do not contend that respondent's accident arose from ownership or maintenance of a motor vehicle, so we likewise focus on whether her injuries arose from the vehicle's use.
Footnote 4: The majority asserts that case law requires us to strictly construe the insurance policy against the insurer (see Penna v Federal Ins. Co., 28 AD3d 731, 731 [2006]). While that is the general rule — based upon a canon of contract interpretation that courts construe terms against the drafter (see Guardian Life Ins. Co. of Am. v Schaefer, 70 NY2d 888, 890 [1987]) — it is unfair to apply that rule where, as here, the provision at issue was not written by the insurer, but was drafted by the Insurance Department, and its inclusion was mandated by law (see Insurance Law § 3420 [f] [1]; 11 NYCRR 60-2.3 [f]; see generally Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 214 [1996]). I therefore find cases interpreting mandatory no-fault provisions more pertinent.
GOZZO v FIRST AMERICAN TITLE INSURANCE COMPANY
Gerald H. Katzman, Troy, for appellants.
Roemer, Wallens & Mineaux, L.L.P., Albany (Earl T.
Redding of counsel), for respondent.
Appeal from that part of an order of the Supreme Court (Connolly, J.), entered February 9, 2009 in Albany County, which granted defendant's motion to dismiss the complaint on the ground of forum non conveniens.
In 1998, plaintiffs purchased property in Stockbridge, Massachusetts, for which they purchased a policy of title insurance from defendant, a California corporation doing business in Massachusetts. When plaintiffs contracted to sell the property in 2006, the prospective buyers claimed that title to the property was unmarketable and refused to proceed with the sale. Plaintiffs ultimately sold the property at a lower price to another buyer. Thereafter, plaintiffs, now residents of New York, commenced this action against defendant in Supreme Court, Albany County, seeking indemnification and damages for their losses, alleging that defendant was negligent with respect to the title search and in its advice to them regarding title issues, and also asserting a claim for unfair settlement practices.
Prior to serving its answer, defendant moved to dismiss the complaint for lack of personal jurisdiction pursuant to CPLR 3211 (a) (8) or, in the alternative, on the basis of forum non conveniens pursuant to CPLR 327 (a). Plaintiffs opposed the motion and, among other things, cross-moved for summary judgment in their favor. Supreme Court denied that part of defendant's motion based on personal jurisdiction, granted that part based on forum non conveniens, and denied plaintiffs' cross motion as academic. Plaintiffs appeal solely from that part of the order as granted defendant's motion to dismiss on the basis of forum non conveniens.
A court may dismiss an action based on the doctrine of forum non conveniens if it "determines that 'in the interest of substantial justice the action should be heard in another forum'" (National Bank & Trust Co. of N. Am. v Banco De Vizcaya, 72 NY2d 1005, 1007 [1988], cert denied 489 US 1067 [1989], quoting CPLR 327). The application of this flexible doctrine is discretionary and requires the balancing of relevant factors such as the availability of an alternative forum, the potential hardship to the defendant, the parties' residency, the jurisdiction in which the cause of action arose and the burden on New York courts in entertaining the action (see Islamic Republic of Iran v Pahlavi, 62 NY2d 474, 478-479 [1984], cert denied 469 US 1108 [1985]; Allen v Marais, S.A., 307 AD2d 613, 614 [2003]; 3H Enters. v Bennett, 276 AD2d 965, 966 [2000], lv denied 96 NY2d 710 [2001]; Markov v Markov, 274 AD2d 870, 871 [2000]). A plaintiff's choice of forum may be denied only if the relevant factors weigh heavily in the defendant's favor; no one single factor is determinative (see Banco Ambrosiano v Artco Bank & Trust, 62 NY2d 65, 68 [1984]; Hudson Ins. Co. v Oppenheim, 35 AD3d 168, 168-169 [2006]; Markov v Markov, 274 AD2d at 871).
Here, counsel for plaintiffs conceded at oral argument on this appeal that the sole connection between this state and the litigation is that plaintiffs currently reside in New York. However, a party's New York residency does not preclude dismissal, particularly where, as here, there is no substantial nexus between this state and the cause of action (see CPLR 327 [a]; Silver v Great Am. Ins. Co., 29 NY2d 356, 361 [1972]; 3H Enters. v Bennett, 276 AD2d at 966-967; compare Blais v Deyo, 92 AD2d 998, 999 [1983], affd 60 NY2d 679 [1983] and Blais v Deyo, 97 AD2d 613, 613 [1983], with Nevader v Deyo, 111 AD2d 548, 549-551 [1985]). Moreover, Supreme Court balanced the relevant factors and concluded that Massachusetts was the proper forum in which to resolve this dispute, which involves a title policy that was issued in Massachusetts for real property located there, where the potential witnesses — with the exception of plaintiffs — are located in Massachusetts, and where Massachusetts was the "center of gravity" of the underlying transaction, making Massachusetts' law applicable to the dispute. We are not persuaded in these particular circumstances by plaintiffs' argument that we should consider the likelihood that a trial will be avoided if the matter proceeds in New York, thereby diminishing any potential burden on defendants. Accordingly, we cannot conclude that Supreme Court abused its discretion in dismissing the complaint on the basis of forum non conveniens.
Finally, plaintiffs specifically limited their notice of appeal and did not appeal from that part of Supreme Court's order that denied their cross motion for summary judgment. Consequently, they may not now argue that the cross motion should have been granted. Nor will we speculate as to whether, in the future, plaintiffs might be entitled to summary judgment on their claim that defendant breached its obligations under the title insurance policy.
Milgrim v Royal & Sunalliance Insurance Company
Babchik & Young, LLP, White Plains, N.Y. (Jordan Sklar of
In a consolidated action to recover insurance proceeds under a homeowner's insurance policy, the plaintiffs appeal from an order of the Supreme Court, Nassau County (LaMarca, J.), entered September 10, 2009, which granted the motion of the defendant Fairmont Insurance Brokers, Ltd., for summary judgment dismissing the complaint insofar as asserted against it and denied their cross motion for summary judgment on the issue of liability against that defendant.
ORDERED that on the Court's own motion, Eric P. Milgrim, as administrator of the Estate of Myron J. Schwartz, is substituted for the plaintiff Myron J. Schwartz, individually and on behalf of Kadimah Chapter Kiryat Unguar, nunc pro tunc as of February 18, 2010, and the caption is amended accordingly; and it is further,
Kadimah Chapter Kiryat Unguar (hereinafter Kadimah) is a religious organization that was formed to purchase a home for Rabbi Bernard Schwartz (hereinafter Rabbi Schwartz) and his family, which included his son, the plaintiffs' decedent, Myron J. Schwartz (hereinafter Schwartz). In November 1992, Kadimah purchased the subject premises, located in Kings Point, for Rabbi Schwartz and his family.
While Kadimah was still in contract to purchase the subject premises, Schwartz approached the defendant Fairmont Insurance Brokers, Ltd. (hereinafter Fairmont), about obtaining homeowner's insurance for the subject premises. However, since Kadimah would own the premises, Schwartz was required to purchase property insurance at corporate rates, which was considerably more expensive than individual homeowner's insurance. Schwartz alleged that after the insurance rates began to increase, Fairmont suggested that he obtain individual homeowner's insurance by listing himself as the owner of the premises and Kadimah as the mortgagee, even though there was no mortgage on the premises. Schwartz contended that he followed Fairmont's suggestion, and for years thereafter, he insured the premises through an individual homeowner's policy purchased through Fairmont. Beginning in 1999, the insurance policy was issued by the defendant Royal & Sunalliance Insurance Company (hereinafter Royal). It is undisputed that in completing the 1999 insurance application for Schwartz, Fairmont indicated that Schwartz was the owner of the subject premises and that Kadimah was the mortgagee. Fairmont contends that in making such application, it spoke with Royal's agent to explain that, despite the information on the insurance application, Kadimah actually owned the premises.
Schwartz admitted that in November 2002, his father, Rabbi Schwartz, moved out of the premises and into a nursing home. In February 2003 Schwartz entered into a contract to sell the premises and, in anticipation of the closing, he moved out of the premises. Nearly one year later, in January 2004, before the closing had occurred, the premises were damaged in a fire. Schwartz made a claim upon Royal, which thereafter denied the claim on three grounds: (1) Schwartz's insurance application to it contained fraudulent misrepresentations and material misrepresentations regarding the premises, his interest in the premises, and his ownership of the premises, (2) Schwartz no longer resided in the subject premises on the date of the fire, and (3) Schwartz had no insurable interest in the premises on the date of the fire.
Schwartz and Kadimah (hereinafter together the plaintiffs) commenced separate actions against Fairmont and Royal, which were later consolidated. The plaintiffs later settled with Royal in July 2008 and discontinued the action against it.
In February 2009 Fairmont moved for summary judgment dismissing the complaint insofar as asserted against it, and the plaintiffs cross-moved for summary judgment on the issue of liability against Fairmont. The Supreme Court granted Fairmont's motion and denied the plaintiffs' cross motion. The plaintiffs appeal. We affirm.
" [A]n agent or broker may be held liable for neglect in failing to procure insurance, with liability limited to that which would have been borne by the insurer had the policy been in force'" (Andriaccio v Borg & Borg, 198 AD2d 253, 253, quoting Kinns v Schulz, 131 AD2d 957, 959; see Santaniello v Interboro Mut. Indem. Ins. Co., 267 AD2d 372; Island Cycle Sales & Khlopin, 126 AD2d 516, 518). "A broker who negligently fails to procure a policy . . . stands in the shoes of the insurer, and is liable to . . . indemnify [the plaintiff] for any judgment which would have been covered by the policy" (Island Cycle Sales v Khlopin, 126 AD2d at 518).
Here, assuming that Fairmont was negligent in obtaining insurance for the plaintiffs, Fairmont established, prima facie, that Royal properly disclaimed coverage on the ground that the insured location, i.e., the subject premises, was not Schwartz's "residence premises," as defined under the policy, on the date of the fire and, thus, its negligence, if any, was not the proximate cause of the plaintiffs' damages (see 730 J & J, LLC v Fillmore Agency, Inc., 22 AD3d 741; Metropolitan Prop. & Cas. Ins. Co. v Pulido, 271 AD2d 57, 61; see also Andriaccio v Borg & Borg, 198 AD2d at 254). In opposition, the plaintiffs failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562). Accordingly, the Supreme Court properly granted Fairmont's motion for summary judgment dismissing the complaint insofar as asserted against it and denied the plaintiffs' cross motion for summary judgment on the issue of liability against Fairmont.
MASTRO, J.P., COVELLO, BELEN and HALL, JJ., concur.
SHELDON v HENDERSON & JOHNSON CO., INC.
Appeal from an order of the Supreme Court, Onondaga County (Deborah H. Karalunas, J.), entered April 30, 2009 in a personal injury action. The order granted defendants' motions for summary judgment and dismissed the complaint.
RUSSELL, RUSSELL & GRASSO, PLLC, CENTRAL SQUARE (DAVID S. GRASSO OF COUNSEL), FOR PLAINTIFFS-APPELLANTS.
GOLDBERG SEGALLA LLP, SYRACUSE (SANDRA J. SABOURIN OF COUNSEL), FOR DEFENDANT-RESPONDENT HENDERSON & JOHNSON CO., INC.
LAW OFFICES OF THERESA J. PULEO, SYRACUSE (JOHN F. PFEIFER OF COUNSEL), FOR DEFENDANT-RESPONDENT POMCO, INC.
It is hereby ORDERED that the order so appealed from is unanimously modified on the law by denying the motion of defendant POMCO, Inc. in part and reinstating the common-law negligence claim and the derivative cause of action against that defendant and as modified the order is affirmed without costs.
Memorandum: Plaintiffs commenced this Labor Law and common-law negligence action seeking damages for injuries sustained by James P. Sheldon (plaintiff) when he allegedly slipped and fell on snow and ice in the parking lot of premises exclusively maintained by defendant POMCO, Inc. (POMCO) as a tenant in possession. We agree with plaintiffs that Supreme Court erred in granting that part of the motion of POMCO seeking summary judgment dismissing the common-law negligence claim against it. We therefore modify the order accordingly. POMCO met its initial burden with respect to the common-law negligence claim by submitting evidence establishing that there was a storm in progress at the time of the accident (see Brierley v Great Lakes Motor Corp., 41 AD3d 1159, 1160). In opposition to the motion, however, plaintiffs raised a triable issue of fact with respect to whether the hard-packed snow and ice that caused the accident existed prior to the storm (see Martin v Wagner, 30 AD3d 733, 735). In addition, plaintiffs raised a triable issue of fact by submitting the affidavit of a meteorologist stating that there was no storm on the day in question and that any ice on the ground did not form on that day (see generally Bullard v Pfohl's Tavern, Inc., 11 AD3d 1026).
We reject plaintiffs' further contention that the court erred in granting that part of the motion seeking summary judgment dismissing the Labor Law § 241 (6) cause of action against POMCO. It is well settled "that a [work site] within the meaning of Labor Law [§ ] 241 (6) is not limited to the actual area where the construction work is to be performed and includes adjacent areas that are part of the construction site, such as passageways or walkways to and from the work area" (Zito v Occidental Chem. Corp., 259 AD2d 1015, 1016, lv dismissed 93 NY2d 999). Here, the parking lot in which plaintiff fell was not a "passageway[] or walkway[]" and thus did not constitute part of the work site (id.).
Contrary to plaintiffs' contention, we conclude that the court properly granted the motion of defendant Henderson & Johnson Co., Inc. (Henderson) for summary judgment dismissing the complaint against it. In support of its motion, Henderson submitted evidence establishing that, as a contractor performing work on the interior of an existing building, it had no duty to maintain the parking lot in a safe condition (see Barends v Louis P. Ciminelli Constr. Co., Inc., 46 AD3d 1412, 1413). Plaintiffs failed to raise a triable issue of fact in opposition to the motion.
Temperino v DRA, Inc.
Winget, Spadafora & Schwartzberg, LLP, New York, N.Y.
(Kenneth A. McLellan and Christina M. Rieker of counsel), for third-party
defendant/second third-party defendant-appellant.
Talisman & DeLorenz, P.C. (Paul F. McAloon, P.C., New
York, N.Y., for plaintiff-respondent.
Conway Farrell Curtin & Kelly, P.C., New York, N.Y.
(Jonathan T. Uejio of counsel), for defendant
third-party plaintiff/second third-party
Bivona & Cohen, P.C., New York, N.Y. (Elio Di Berardino
and Anthony J. McNulty of counsel),
for third-party defendant-respondent.
Wedinger of counsel), for defendant Olympic
Plumbing & Heating Services, Inc.
In an action to recover damages for personal injuries, the third-party defendant/second third-party defendant, Gloron Agency, Inc., appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Ambrosio, J.), dated December 1, 2008, as denied its cross motion, in effect, for summary judgment dismissing the complaint insofar as asserted against the defendant third-party plaintiff, DRA, Inc., dismissing all cross claims of the defendant third-party plaintiff/second third-party plaintiff, Rockefeller University, asserted against the defendant third-party plaintiff, DRA, Inc., and for summary judgment on the third-party claim of the defendant third-party plaintiff, DRA, Inc., against the third-party defendant Rutgers Casualty Insurance Co.
ORDERED that the order is modified, on the law, by deleting the provisions thereof denying those branches of the cross motion of the third-party defendant/second third-party defendant, Gloron Agency, Inc., which were, in effect, for summary judgment dismissing the complaint insofar as asserted against the defendant third-party plaintiff, DRA, Inc., and dismissing the cross claim of the defendant third-party plaintiff/second third-party plaintiff, Rockefeller University, asserted against the defendant third-party plaintiff, DRA, Inc., and substituting therefor provisions granting those branches of the cross motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.
The defendant third-party plaintiff, DRA, Inc. (hereinafter DRA), contracted with the defendant third-party plaintiff/second third-party plaintiff, Rockefeller University (hereinafter the University), to perform carpentry work as part of the University's renovation of one of its buildings. The plaintiff, an electrician, allegedly was injured when he fell from a ladder during the course of his work on the renovation project. DRA moved for summary judgment dismissing the complaint insofar as asserted against it and all cross claims asserted against it by the University, and for summary judgment on its claim against the third-party defendant Rutgers Casualty Insurance Co. The complaint alleged claims sounding in common-law negligence and violations of Labor Law §§ 200, 240(1), and 241(6). The third-party defendant/second third-party defendant, Gloron Agency, Inc. (hereinafter Gloron), cross-moved, among other things, in effect, for summary judgment dismissing the complaint and all cross claims insofar as asserted against DRA, and thereupon, to dismiss the second third-party complaint insofar as asserted against it as academic. In Gloron's supporting attorney affirmation, it adopted and incorporated DRA's arguments and, in effect, sought the same relief as DRA. The Supreme Court, inter alia, denied DRA's motion and Gloron's cross motion. Gloron appeals the denial of its cross motion, essentially standing in DRA's shoes vis-À-vis the plaintiff and the University (see CPLR 1008).
"Labor Law § 240(1) imposes a nondelegable duty upon owners, contractors, or their agents to provide proper protection to a worker performing certain types of construction work" (Aversano v JWH Contr., LLC, 37 AD3d 745, 746). "A general contractor will be held liable under Labor Law § 240(1) if it was responsible for coordinating and supervising the entire construction project and was invested with a concomitant power to enforce safety standards and to hire responsible contractors" (id.). In order to hold a contractor such as DRA "absolutely liable for violations of Labor Law §§ 240 and 241, there must be a showing that [it] had the authority to supervise and control the work giving rise to these duties" (Kehoe v Segal, 272 AD2d 583, 584). "The determinative factor on the issue of control is not whether a subcontractor furnishes equipment but whether it has control of the work being done and the authority to insist that proper safety practices be followed" (id.; see Everitt v Nozkowski, 285 AD2d 442, 443).
Here, the record established that DRA was not a general contractor or a statutory agent for purposes of liability under Labor Law § 240(1) and § 241(6). Rather, the record showed that the University, not DRA, selected, paid, and coordinated the contractors, scheduled and monitored the work, ensured that its safety guidelines were followed, and retained the authority to stop the work. In opposition, the plaintiff failed to show the existence of a triable issue of fact. Accordingly, DRA was entitled to summary judgment dismissing the Labor Law § 240(1) and § 241(6) claims insofar as asserted against it (see Aversano v JWH Contr., LLC, 37 AD3d at 746; Kehoe v Segal, 272 AD2d at 584).
Additionally, DRA was entitled to summary judgment dismissing the Labor Law § 200 and common-law negligence claims insofar as asserted against it. At his deposition, Alexander Kogan, the University's associate vice-president for plant operations, testified that there were no complaints about, inter alia, debris or sawdust in the construction area, and that DRA did a good job of cleaning up. DRA's owner, Richard J. Arrabito, testified that DRA cleaned up the dust it created as it was doing its work. Additionally, the plaintiff's deposition testimony indicated that the ladder he was using at the time of his accident belonged to the defendant Olympic Plumbing & Heating Services, Inc. The plaintiff also testified that the room he was working in "looked clear, clean," and that any sand or dust which might have caused the ladder to sway or slip came from sandblasting rather than carpentry. This established that DRA did not create the condition complained of (see Chowdhury v Rodriguez, 57 AD3d 121). In opposition, the plaintiff failed to show the existence of a triable issue of fact (see generally Alvarez v Prospect Hosp., 68 NY2d 320, 324).
The above recounted testimony was sufficient to make a prima facie showing that DRA had no responsibility for the plaintiff's injuries. Since, in response, the University failed to show the existence of a triable issue of fact, its cross claims seeking indemnification against DRA should also have been dismissed (id.).
Barrios v City of New York
Fabiani Cohen & Hall, LLP, New York, N.Y. (Joseph J. Rava and
Mary J. Joseph of counsel), for appellants Skanska USA Building,
Inc., Barney Skanska, Inc., and Barney Skanska Construction
Robert Cardali & Associates, LLP (Arnold E. DiJoseph, P.C.,
New York, N.Y. [Arnold E. DiJoseph
III], of counsel), for plaintiff-
(Barry P. Schwartz and Deborah A.
Brenner of counsel), for defendants-
respondents City of New York and
In two related actions to recover damages for personal injuries, the defendants Skanska USA Building, Inc., Barney Skanska, Inc., and Barney Skanska Construction Company appeal, as limited by their brief, from so much of an order of the Supreme Court, Richmond County (Aliotta, J.), dated October 28, 2008, as granted that branch of the plaintiff's motion which was for summary judgment against them in both actions on the issue of liability on her Labor Law § 240(1) cause of action.
The defendants Skanska USA Building, Inc., Barney Skanska, Inc., and Barney Skanska Construction Company (hereinafter collectively Skanska), contend that the Supreme Court improperly granted that branch of the plaintiff's motion which was for summary judgment against them in both actions on the issue of liability on her Labor Law § 240(1) cause of action because Skanska was a separate prime contractor not in contractual privity with the plaintiff's employer, and because Skanska was a construction manager. We disagree.
As a general rule, a separate prime contractor is not liable under Labor Law § 240 or § 241 for injuries caused to the employees of other contractors with whom they are not in privity of contract, so long as the contractor has not been delegated the authority to oversee and control the activities of the injured worker (see Russin v Louis N. Picciano & Son, 54 NY2d 311, 317-318; Aversano v JWH Contr., LLC, 37 AD3d 745). However, where a separate prime contractor has been delegated the authority to supervise and control the plaintiff's work, the contractor "becomes a statutory agent' of the owner or general contractor" (Russin v Louis N. Picciano & Son, 54 NY2d at 318; see Walls v Turner Constr. Co., 4 NY3d 861, 863-864). Here, although Skanska was not in contractual privity with the plaintiff's employer, the record establishes that Skanska had been delegated a significant degree of authority to supervise and oversee on-site safety matters. Skanska's contract with the site developer, the New York City Economic Development Corporation (hereinafter NYCEDC), required it, inter alia, to inspect the site and report safety issues to the resident engineer and NYCEDC, to develop a quality control plan taking into account "safety aspects" of the work to be performed, and to meet with contractors and discuss their individually developed safety plans for compliance with, among other things, state law. Further, a project manager for Skanska testified at his deposition that Skanska employed safety officers who had the authority to bring safety concerns to the attention of the individual contractors' foremen. Under these circumstances, we find that Skanska was a statutory agent of the owner, and was therefore liable for the plaintiff's injury under Labor Law § 240(1) (see Walls v Turner Constr. Co., 4 NY3d at 864).
We also reject Skanska's contention that it is not a responsible party under Labor Law § 240(1) because it was a "construction manager" and not a "general contractor." "The label of construction manager versus general contractor is not necessarily determinative" (Walls v Turner Consr. Co., 4 NY3d at 864; see Tomyuk v Junefield Assoc., 57 AD3d 518, 520; Lodato v Greyhawk N. Am., LLC, 39 AD3d 491, 493). Rather, the critical question is whether the construction manager was delegated supervisory control and authority over the work being done when the plaintiff was injured (see Walls v Turner Constr. Co., 4 NY3d at 863-864). As previously discussed, Skanska was delegated supervisory authority by the NYCEDC to oversee and control the work of the various on-site contractors, particularly with respect to safety issues. Accordingly, under the facts of this case, Skanska's title of "construction manager" does not relieve it from the duties imposed by Labor Law § 240(1) (see Tomyuk v Junefield Assoc., 57 AD3d at 520; Lodato v Greyhawk N. Am., LLC, 39 AD3d at 493).
We decline to search the record and award Skanska summary judgment dismissing the cross claims of the defendants City of New York in Action No. 1 and New York City Economic Development Corporation in Action No. 2 for contractual and common-law indemnification against them as requested in its brief.