Source: https://www.hurwitzfine.com/news/coverage-pointers-volume-viii-no-14
Timestamp: 2019-07-17 12:48:54
Document Index: 480130161

Matched Legal Cases: ['§ 3420', '§ 3105', '§ 3105', '§65', '§65', '§65', '§ 130', '§ 130', '§ 5102', '§ 110', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', 'art, 80', 'art 92', '§ 3203', '§ 3203', '§ 332', '§ 3105', '§ 3105', '§ 3420', '§ 5211', '§ 5202', '§ 5208']

Coverage Pointers - Volume VIII, No. 14 | Hurwitz & Fine, P.C.
Coverage Pointers - Volume VIII, No. 14
Happy New Year and welcome to our several new subscribers. For those of you who have just joined our happy band of interactive subscribers, I use this column to provide some insight into the current issue or perhaps focus on some highlights or trends we're seeing. Do feel free, as so many of you do, to write to us with questions ([email protected]) or call me on my direct line, 716.849.8942.
Let me start out with some good news. We welcome to our law firm, Attorney Steven Peiper. Steve joins our coverage team from another Buffalo law firm; he has been toiling in the coverage fields since he began practicing and he adds another solid element to our state-wide coverage practice group. As a reminder, we handle insurance coverage matters anywhere in the State of New York and regularly serve in "expert witnesses" and consultants for out-of-state carriers and counsel.
OK, enough of the niceties. Now to vent.
I'm a little annoyed at the courts this week. Really I am.
You may know that in New York, every lawyer must post in his or her office, a Statement of Client Rights. It's a fine document, adopted by the courts to assure clients that they know how they should expect to be treated by their attorneys. You are supposed to find it in the lobby of every law firm in New York. I wonder, sometimes, whether the courts understand what they have required we tell our clients. And I wonder whether they believe it.
Number "9" of the Statement reads quite simply:
Now think about that. A client is entitled to have objectives. Who can argue? And included in those objectives is whether or not to settle your matter. That's a very clear and understandable statement. The right to settle carries with it the corresponding right NOT to settle. If a client decides not to settle, that client has the right to have his, her or its case tried before a judge or jury. In fact, that right is guaranteed by the Seventh Amendment to the United States Constitution - it is a right you'll find in the Bill of Rights.
So why am I venting. I am venting because many judges are penalizing parties, particularly defendants and insurers, for deciding to exercise their right to have a jury decide their cases, for choosing not to settle when it is felt that a settlement is wrong. It's one of the reasons that jury trials are vanishing as a means to resolve disputes. Think it's my imagination? Read the December 28th Tooker decision in this week's Coverage Pointers where the Appellate Division, First Department, held that monetary sanctions might be appropriate if a lawyer appears in defense of a case without settlement authority from the insurer. That's plain wrong.
Must there be settlement authority in every case? Can't a defendant or an insurer decide to allow a jury to make a decision without offering a dime?
If anyone is interested in the vanishing the jury trial, I'm part of panel with the national President of ABOTA and a past President of the New York State Trial Lawyers Association on the subject before the Torts, Insurance & Compensation Law Section of the New York State Bar Association at the State Bar's Annual Meeting in NYC on January 25th. Let me know and I'll send over my remarks. My paper is entitled: The Vanishing Jury Trial and the Lawyer's Role in Reversing the Trend.
And while I'm being cranky, I'm not happy with the Appellate Division, Third Department either. In a decision handed down yesterday, in New York Central Mutual the court missed the distinction between "intentional acts" exclusions and "intentional results" exclusions. One focuses on conduct, one on intended or expect results. This court didn't notice the difference.
OK, I'll stop venting and bring you a message from Audrey Seeley, the Queen of No Fault. By the way, at least one client believes the firm should provide her with a tiara, and we're considering it:
Happy New Year! It has been quite a start to the New Year in no-fault - particularly in litigation. There are a number of recent decisions regarding the sufficiency of the insurer's evidence as to proof of mailing of a denial or verification request. The key to prevailing on this issue appears to be ensuring that the individual who is testifying as to the mailing procedure should have specific knowledge of the procedure and that it was followed. While these decisions do not address it, I wonder if an affidavit of mailing or proof of mailing from the post office would be useful.
There is also an interesting new decision from down state holding that interest on a claim that was untimely denied does not accrue until the arbitration or action is commenced. This decision applies to the assignee of an eligible injured person. I note that in-house counsel for a carrier was kind enough to divulge that case as it does not appear to be reported yet. We thank him for sharing this with our readers. We also encourage you to send us similar decisions so that we can keep everyone informed about the ever changing no-fault world.
Thanks Audrey. You'll find in this issue, an interesting variety of appellate decisions, including Mighty Mark Starosielec's review of No Fault Threshold cases. This week's issue contains:
Read the Words. Read the Words. Court Confuses Intentional Result and Intentional Act Exclusions
In Rare Case, Landlord NOT Entitled to Additional Insured Status Under Tenant's Policy
Unclear Whether Carrier had Obligation to Provide Uninsured Motorist Benefits
You Want the Money? You Fill Out the Forms
Deal is a Deal -- Agreement to Hold Payments in Trust for Carrier are Binding
Very Difficult to Overturn Arbitration Award
Material Misrepresentation Can Void Policy, but Here Question of Fact
Life Insurance Company Missed Two Year Incontestability Period Because of Language it Selected in Policy
The Policy Means What the Policy Says and Cannot be "Reformed" without Proof of Fraud or Mutual Mistake
Proper to Stay Declaratory Judgment Action Involving Excess Policies when Declaratory Judgment Action Respective Primary Policies has been Pending for 24 Years
Sanctions Vacated Against Liability Carrier for Failure to Provide Settlement Authority But for WRONG Reason. Coverage Pointers' Editors Aghast
When Opposing Doctors Agree on At Least a Definite Limitation of Motion of Plaintiff, an Issue of Material Fact Has Been Created
Corporate Defendants Out but Driver Defendant Still in Lawsuit After Order Regarding Summary Judgment Motion Affirmed in Part and Modified in Part
Compare and Contrast: Defendants Must Compare Findings of Plaintiff's Limitations to That of a Healthy Person of the Same Age, Weight and Height as Plaintiff
Complaint Dismissed as Plaintiff Fails to Show Injury was Accident-related
Mind the Gap: 15-month Gap in Medical Treatment Must Be Adequately Explained
What Tests?: Plaintiffs Must Explain and Set Forth Objective Findings to Survive Summary Judgment
When Party Dies, Defendants Must Wait Until a Proper Substitution is Made Before Court will Entertain a Motion for Summary Judgment
Chiropractic Care Not Medically Necessary As No Evidence Refuting IME Recommendation But Surgery Medically Necessary As Peer Review Did Not Contain Opinion On Services Inconsistent With Generally Accepted Practice
Interest On An Untimely Denied Claim Will Accrue When The Arbitration Or Action Is Filed - This Rule Will Apply To The Eligible Injured Person's Assignee
General Affidavit from Corporate Officer Attaching Documents Claiming To Be Business Records Insufficient To Demonstrate Prima Facie Case Entitlement to Summary Judgment
Insurer's Affidavit Sufficient to Demonstrate Denial Timely Issued But Issue Of Fact Exists On Medical Necessity
Team Leader's Testimony On General Office Mailing Procedures Insufficient To Demonstrate That Verification Request Mailed And Even If Found Sufficient Failure To State Dates Of Verification Requested And Received Rendered Denial Defective
Finally, and there has to be a finally, don't forget to register for the Federation of Defense & Corporate Counsel Litigation Management College or Graduate Program (depending upon experience). I'll be reprising my role as the instructor of Coverage College in the Graduate Program again this year. Links are below.
Thanks for sticking with me this long. Keep those cards and e-mails coming in.
13th Annual Litigation Management College & 4th Annual Graduate Program
June 17 - 21, 2007
4th Annual Graduate Program
Graduate Program Brochure, click here
On-line Registration for the Graduate Program, click here
13th Annual Litigation Management College
Litigation Management College Brochure, available soon!
On-line Registration for the LMC, click here
1/11/07 New York Central Mut. etc. v. Wood and Progressive Northeastern Ins. Co.
They are different, you know. One exclusion focuses on the intent of the insured to cause injury, the other focuses on the intention to do the act.
Amber Wood and friends were tenting in state park when Young drove his car over her tent causing her serious injuries. Young plead guilty to “hypothetical crime” (whatever that is) of attempted reckless assault and in plea colloquy stated that his motivation was to retaliate against some of Wood’s friends who has assaulted one of Young’s friends. He was sentenced to 11 years in prison.
You can guess what happened next. Wood sues Young and seeks recovery from Young’s motor vehicle policy. Progressive, the auto carrier, denies liability, asserting that the “intentional act” exclusion eliminated coverage. Wood then seeks uninsured motorists coverage from her own carrier, New York Central. New York Central brings an application to stay arbitration, asserting that Progressive has an obligation to defend and indemnify Young (and therefore no UM coverage under NY Central policy) and Progessive sought a declaration that intentional act exclusion precluded coverage.
Exclusion eliminates coverage for "bodily injury or property damage caused by an intentional act of an insured person or at the direction of an insured person."
Question posed by the court was whether the exclusion applies, or, as court put it, “'whether there is any possible factual or legal basis upon which to find that the bodily injuries inflicted upon [Wood] were not "expected or intended" by [Young].'"
Wrong question! That question would be relevant to an “intentional result” exclusion, not an intentional ACT exclusion.
Young stated, in both his statement to police and during the plea colloquy, that he did not know that Wood, or anyone else, was in the tent when he ran over it. Defendant argued that the subjective intent of the insured is not in all cases dispositive because, at times, the resultant harm is deemed "inherent in the nature" of the wrongful act, regardless of the actor's expressed intent.
The Court holds that a jury could find that Young did not know that the tent was occupied so it might be merely reckless rather than intentional conduct. Although a jury could conclude that Young must have appreciated the substantial risk that a tent would be occupied at such an early hour of the morning, his conduct would not be intentional, but reckless, if he disregarded that known risk in a desire to wreak havoc and damage property without forming a specific intent to drive over an occupied tent. Question of fact to be determined by a jury.
Editors Note: Sure would be nice if the Courts not only quoted the exclusions properly but actually read the words. Here, the court may be right that the driver may not have intended injury but this is not an intentional injury exclusion but intentional act exclusion. There s a difference but the court ignored that. The insured admitted he intended to run over the tent.
1/11/07 Prestige Properties and Development Co., Inc. v. Montefiore Medical Center
Appellate Davison, First Department
In Rare Case, Landlord NOT Entitled to Additional Insured Status Under Tenants Policy
Prestige owns commercial property located in the Bronx and leased space to Montefiore Medical Center. The tenant, Montefiore, was to obtain insurance coverage for Prestige, and did through Hanys Insurance Co. An employee of Montefiore was injured when part of the ceiling in a common area of property fell and struck her and she sued Prestige. Prestige tenders to Hanys and Hanys refuses to defend. Court agrees with Hanys that Prestige is not an additional insured under this policy. The policy covers Prestige only if action seeks to impose liability on Prestige for Montefiore’s negligent acts OR if Montefiore was at fault and accident occurred in common area. Hanys properly declined coverage based on the injured employee's allegation that the accident occurred in a common area and there was no proof of any negligence on the part of Montefiore.
Editors Note: This was a more restrictive “additional insured” clause than has been seen in older policies and newer ISO form are surely restricting breadth of additional insured status. Read your policies carefully because this rare result will surely become more common as newer forms take hold.
1/11/07 In re ELRAC, Inc. v. Brooks
ELRAC (Enterprise Rent-a-Car) relied on a Certificate of Liability Insurance naming it as an additional insured on certain policies issued by Travelers to Bronx Brake. Travelers contends that the only policy it issued to Bronx Brake was for commercial general liability insurance with a hired and non-owned auto endorsement for third-party claims, and that neither the terms of that policy nor Insurance Law § 3420(f) requires it to provide uninsured motorist benefits. Since court could not determine from record whether Travelers issued auto policy naming Bronx Brake as additional insured, matter remanded for a hearing.
Editors Note: Any regular reader of this column will remember that ELRAC never seems to win ANYTHING in the courts. Here, at least temporarily, the streak continues.
1/11/07 In re Sybil Willingham v. Huston
Petitioner failed to provide certain required information to MVAIC when she filled out her Notice of Intention to Make a Claim. Even after being advised of the omissions, she failed to supplement the form with the necessary information. Among the missing information was establishment that she was a "qualified person." So? She loses.
1/9/07 Ferrante v. Wold
Pursuant to the express terms of the agreement, the sum of $25,000 paid by the insurer for uninsured motorist benefits was to be held in trust for the company’s benefit and repaid to Allstate in the event that the plaintiff settled or obtained a judgment in his favor in the action. When the plaintiff received a $75,000 judgment, he contended that he should not have to pay back the $25,000 because it violated a New Jersey non-subrogation statute. Court holds that an agreement is an agreement. The insurer was entitled to enforce it and the insured had to pay back the $25,000.
1/9/07 In the Matter of David Mounier v. American Transit Insurance Company
Appears to be a challenge to a SUM arbitrator’s award. Without proof that the award under review was arbitrary, capricious, or irrational, or that there was misconduct on the part of the arbitrator, award will not be overturned. In any event, the challenger failed to meet his burden of proving, by clear and convincing evidence, that any impropriety on the part of the arbitrator prejudiced his rights or the integrity of the arbitration process.
1/9/07 Tyras v. Mount Vernon Fire Insurance Company
Mount Vernon, by way of counterclaim, sought to rescind a policy of insurance issued to the defendants H. Mauro & Sons, Inc., and Henry Mauro (hereinafter collectively Mauro) on the basis that the latter allegedly misrepresented material information in Mauro's application for insurance. Insurance Law § 3105(a) defines a representation as a "statement as to past or present fact, made to the insurer . . . at or before the making of the insurance contract as an inducement to the making thereof," and "a misrepresentation is a false representation, and the facts misrepresented are those facts which make the representation false." Such a statement is material if "knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such a contract" (Insurance Law § 3105[a]]. Here, each side raised a question of fact as to whether a misrepresentation was made and if so, whether it was “material.”
1/9/07 Security Mutual Life Ins. Co. v. Harpaul
Defendants are the owner and insured of two life insurance polices issued by plaintiff Security Mutual. The policies each contain a clause which states that plaintiff "will not contest this policy after it has been in force, during the Insured's lifetime, for two years from the earlier of its Policy Date or Issue Date." The policy date set forth in each agreement is November 1, 2002 and the issue date set forth in each agreement is November 8, 2002 and December 3, 2002, respectively.
Plaintiff served a complaint on November 8, 2004, claiming, inter alia, that defendants had fraudulently obtained the insurance policies. Defendants moved to dismiss the complaint on the ground that the period in which to contest the policy had expired. Plaintiff maintained that the policies did not become incontestable until at least two years after they had been in force, and that the policies were not in force prior to November 8, 2002.
Under New York law, the phrase "in force" — where not separately defined in the agreement — has been interpreted as the date of issuance Although New York law provides that a policy cannot be contested after being in force during the life of the insured for two years from its date of issue the parties are free to set an earlier date. Insurer was free to, and did in fact, provide more favorable terms to its insured by allowing an earlier date to trigger the incontestability period.
Fraud claim also dismissed because insurer did not plead particulars of fraud in complaint as law requires.
1/9/07 Greater New York Mutual Ins. Co., v. United States Underwriters Ins. Co. Appellate Division, First Department
The Policy Means What the Policy Says and Cannot be “Reformed” without Proof of Fraud or Mutual Mistake
A policy should be given its unambiguous meaning and policies limited to certain premises are surely enforceable. Here, the accident occurred at a different location and the insured sought to reform the policy – to correct it -- to expand the coverage to the other location. Reformation was not permitted. A party seeking reformation must demonstrate in no uncertain terms not only that mistake or fraud exists, but exactly what was really agreed upon between the parties. Once an insurance policy has been received, it constitutes presumptive knowledge of its terms and limits.
A claim for reformation of a written agreement must be grounded upon either mutual mistake or fraudulently induced unilateral mistake. Here there was no such proof.
1/9/07 Certain Underwriters at Lloyd's London, v. Pneumo Abex Corporation
In view of the 24-year pendency of the federal litigation involving the obligations of primary insurers to provide coverage and indemnity for underlying asbestos-related claims, the motion court properly exercised its discretion in staying this action in favor of that litigation, and companion litigation concerning the obligations of excess insurers.
12/28/07 Tooker v. Morrisey and Allstate Insurance Company
Sanctions Vacated Against Liability Carrier for Failure to Provide Settlement Authority But for WRONG Reason. Coverage Pointers’ Editors Aghast
You know, sometimes, decisions really both us. This one does. Defense counsel shows up at settlement conference with everything but settlement authority. Carrier apparently wanted to conduct additional discovery and wasn’t prepared to make offer at that time. Court sanctioned insurer $1200 for sending defense counsel without authority. Appellate court vacated settlement because lower court did not give insurer a “reasonable opportunity to be heard” before imposing sanction, based on a court rule.
The Court rule cited allows sanction for counsel’s failing to appear at a settlement conference, not for failing to make a settlement offer. Are the courts now forcing defendants to sacrifice their Seventh Amendment right to a jury trial? Why MUST settlement authority be authorized? Why can’t the carrier decide to offer NOTHING if that’s the proper evaluation? Will plaintiffs be sanctioned as well for failing to make settlement demands, if they choose to have a jury render a verdict in a case? Nevah.
Will sanctions be imposed if the court doesn’t believe the settlement offer is high enough? Sheesh. We can go on ….
What the court SHOULD have said is that any party has a right to a jury trial. It is guaranteed by the US and State Constitutions. Nobody MUST settle.
1/11/07 Hall v. Barth
Court affirmed lower court’s order denying defendant’s motion for summary judgment. Here, defendants offered the affirmation of their examining physician, an orthopedic surgeon, who noted that plaintiff had a definite limitation of motion of the cervical spine in all directions and ultimately concluded that plaintiff had a mild partial temporary disability from the accident. In opposition, plaintiff proffered, inter alia, the affidavit of his treating physician and orthopedic surgeon. The treating physician stated detected muscle spasm of the neck and, as late as December 2004 and April 2005, plaintiff had suffered almost total loss of motion of his neck, which he attributed to the April 27, 2004 accident. Court held “the findings of significant limitation of motion by defendants’ examining physician, together with treating physician’s findings and opinion, create an issue of material fact as to whether plaintiff has sustained a significant limitation of use of a body function or system.”
1/11/07 New York Cent. Mut. Fire Ins. Co. v. Wood
Driving a Vehicle over an Occupied Tent May Not Be Intentional: Defendant’s Insurance Company is still on the Hook for a Duty to Defend When Act May be Considered Reckless
Defendant Young had previously driven his vehicle at 6:15 a.m. to retaliate against an alleged assault against one of his friends, injuring Wood. He was later sentenced to 11 years in prison after pleading guilty to the hypothetical crime of attempted reckless assault. Defendant Progressive Northeastern Insurance Co. denied coverage under the intentional act exclusion in its policy. Plaintiff moved for summary judgment and defendant cross-moved, seeking a declaration that it has no duty to defend or indemnify Young. Supreme Court granted summary judgment to plaintiff and denied defendant's cross motion. Defendant appealed.
Here, the dispositive inquiry to determine whether this intentional act exclusion applies is “whether there is any possible factual or legal basis upon which to find that the bodily injuries inflicted upon [Wood] were not ‘expected or intended’ by [Young]” In this regard, Young stated, in both his statement to police and during the plea colloquy, that he did not know that Wood, or anyone else, was in the tent when he ran over it. The Court did not agree with defendant’s argument that: cause and effect cannot be separated; that to do the act is necessarily to do the harm which is its consequence; and that since unquestionably the act is intended, so also is the harm.
Here, Young’s assertion, if credited, that he did not know that the tent was occupied could provide a sufficient basis for a jury finding that his conduct was merely reckless, rather than intentional or expected. Accordingly, a factual question exists as to whether Young intended the resultant harm and, thus, Supreme Court properly denied defendant’s cross motion for summary judgment.
1/9/07 Squires v. Mumphery
Here, corporate defendants (Budget Rent-A-Car and Avis Rent-A-Car) appealed order denying motion for summary judgment. Appellate Division modified order in so far as allowing corporate defendants out of the lawsuit because they were able to demonstrate, via a certified New York State Vehicle Title Record, that another entity, PV Holding Group, actually owned the vehicle the date of the rear-end accident. Defendant driver remained in lawsuit however as Appellate Division held plaintiff did raise a triable issue of fact as to whether she sustained a “significant limitation of use of a body function or system” as a result of the accident.
1/9/07 Frey v. Fedorciuc
Compare and Contrast: Defendants Must Compare Findings of Plaintiff’s Limitations to That of a Healthy Person of the Same Age, Weight and Height as Plaintiff
Here, defendants failed to meet their prima facie burden of showing that plaintiff did not sustain a serious injury. Defendants’ examining neurologist did note the plaintiff had limitations in the range of motion of his cervical spine and lumbar spine. The defendants’ examining orthopedic surgeon noted that the plaintiff had limitations in the range of motion of his cervical spine and lumbar spine, as well as his left shoulder. Both experts concluded that the plaintiff was not disabled and that all of his injuries had resolved. They further concluded that while the plaintiff did show limitations during range of motion testing in various regions of his body, these limitations were due merely to his “age.” Both experts failed to compare those findings to the normal range of motion of a person the plaintiff's age, thereby leaving the court to speculate as to the meaning of those figures.
1/9/07 Chan v. Casiano
Lower court’s order denying defendant’s motion for summary judgment was reversed. Here, defendants met their prima facie showing that plaintiff did not sustain a serious injury. In response, the plaintiff failed to raise a triable issue of fact. While the plaintiff submitted a radiologist’s report which suggested a meniscus tear, the report failed to indicate that this tear was caused by the subject accident. The plaintiff’s orthopedist failed to offer objective medical proof showing a significant impairment of a body function caused by this injury. Further, neither the plaintiff nor her examining physician adequately explained the 4½-year gap in treatment between the conclusion of the plaintiff’s medical treatment in 2002 and the physical examination conducted in January 2006, in response to the defendant’s summary judgment motion.
1/9/07 Black v. Regalado
Order granting defendant’s motion for summary judgment was affirmed as neither plaintiff satisfied the serious injury threshold by submitting, in opposition, “objective medical proof of a serious injury causally related to the accident in order to survive summary dismissal.” Additionally, plaintiff relied on unsworn medical documentation which, inter alia, failed to adequately explain the reason for the 15-month gap in medical treatment.
1/9/07 Otero v. 971 Only U, Inc.
What Tests? Plaintiffs Must Explain and Set Forth Objective Findings to Survive Summary Judgment
Not only did plaintiff fail to set forth any new facts not offered on a prior motion which had granted defendants’ summary judgment, but plaintiffs also failed to explain a gap in treatment of more than a year. Moreover, plaintiffs’ medical submissions failed to specify what objective tests, if any, were performed, to explain the significance of findings or to set forth objective findings of either a specific percentage of the loss of range of motion or sufficient description of the qualitative nature of the limitations based on the normal function, purpose and use of the body part (Vasquez v Reluzco, 28 AD3d 365 [2006]). The submissions also failed to meet the statutory test of demonstrating an inability to perform substantially all of the material acts that constitute the injured plaintiff’s usual and customary daily activities for 90 of the 180 days following the accident, to establish a causal connection between the MRI findings and the accident or to discuss the degenerative changes that the MRI revealed (Mullings v Huntwork, 26 AD3d 214 [2006]).
1/4/07 Lugo v. GE Capital Auto Lease
Lower court initially granted defendant’s motion for summary judgment dismissing the complaint for lack of a serious injury. However, during the pendency of this personal injury action, individual defendant Sekoa Kante died. Three months later, defendant GE Capital moved for summary judgment. Plaintiff cross-moved to stay the action until the appointment of a proper representative for Kante. Appellate Division held: “The death of a party divests a court of jurisdiction to conduct proceedings in an action until a proper substitution has been made pursuant to CPLR 1015(a).” Accordingly, the motion court’s order is void.
1/9/07 In the Matter of the Arbitration between the Applicant and Respondent
Chiropractic Care Not Medically Necessary As No Evidence Refuting IME Recommendation But Surgery Medically Necessary As Peer Review Did Not Contain Opinion On Services Inconsistent With Generally Accepted Practice.
Here is the Angle: An insurer’s denial for chiropractic services based upon four independent medical examinations was upheld because the Applicant failed to submit evidence that adequately refuted the recommendations contained in the independent examination. Yet, the insurer’s denial for surgery based upon a peer review was not upheld because the opinion alone, without evidence that the medical services were not consistent with general accepted medical or professional practice, was insufficient to establish lack of medical necessity. We note that the reasoning for the later part of this decision was based upon down state case law.
We are seeing more and more decisions relying upon down state case law as the basis for awarding in favor of the Applicant. It is not clear that the Applicant is bringing these cases to the Arbitrator’s attention, but the Arbitrator does have the authority to independently raise an issue she deems relevant to making an award which is consistent with the Insurance Law and implementing Regulations. In any event, it is recommended that not only the insurer but also their defense counsel become familiar with these cases and be prepared to respond to questions the arbitrator presents at an arbitration relying upon down state cases.
The Analysis: The Applicant, eligible injured person (“EIP”), sought reimbursement for chiropractic and surgery medical expenses as a result of a February 22, 2002, motor vehicle accident.
The insurer’s denials for chiropractic care were based upon four independent medical examinations (“IME”) conducted by Julius Horvath, D.C. The insurer also argued that some of the chiropractic bills were not timely submitted thereby precluding reimbursement. The denial for surgery to the cervical spine performed by Dr. P. Jeffrey Lewis was based upon a peer review conducted by Dr. Donald H. Frank.
Arbitrator O’Connor upheld the insurer’s denials for chiropractic care partially on the basis that the Applicant failed to produce any documentation that the bills were timely submitted to the insurer for payment. She also upheld the insurer’s denials on the basis that the Applicant’s evidence failed to adequately refute the chiropractic IME recommendations.
The insurer’s denial for cervical spine surgery was not upheld based upon the peer review report. Arbitrator O’Connor, relying upon downstate case law, reasoned that under CityWide Social Work & Psychological Servs. v. Travelers Indem. Co., 3 Misc3d 608 (Civ. Ct. Kings Cty. 2004), an insurer’s expert opinion alone, without evidence that the services provided were inconsistent with generally accepted medical/professional practice is insufficient for demonstrating lack of medical necessity. Moreover, Arbitrator O’Connor relying upon Alliance Medical Office, P.C. v. Allstate Ins. Co., 196 Misc2d 268 and Nir v. Allstate Ins. Co., 7 Misc3d 544 (Civ. Ct. Kings Cty. 2005) held that an insurer’s denial based solely upon a peer review will not be upheld as the courts will not second guess a doctor who decided that a medical test is necessary for diagnosis and treatment, that is not inconsistent with generally accepted medical practices. We note that a review of the medical bills at issue did not reveal that a medical test was part of the bills for which reimbursement was sought. The only bills at issue were medical services provided in the form of surgery.
1/3/07 East Acupuncture, P.C. a/a/o Arkady Derin et. al. v. Allstate Ins. Co.,
(NY Sup. App. Term, 2d and 11th Jud. Dist.)
Interest On An Untimely Denied Claim Will Accrue When The Arbitration Or Action Is Filed – This Rule Will Apply To The Eligible Injured Person’s Assignee.
Here is the Angle: Interest on an untimely denied claim will accrue 30 days from the date the claim is submitted. Interest will be stayed if the applicant, which includes an eligible injured person’s assignee, does not commence an arbitration or action within 30 days after receipt of the untimely denial. Then once the arbitration or action is commenced interest will begin to accrue.
The Analysis: Plaintiff and defendant could not agree on the date in which interest accrued for claims that the defendant issued an untimely denial. The issue was submitted to the court who decided in plaintiff’s favor that interest accrued from 30 days after the claim’s submission. The defendant argued that interest accrued from the date plaintiff commenced the action to recover the benefits.
Under 11 NYCRR §65-3.8(c) and insurer is obligated to pay or deny a claim within 30 calendar day of receipt of proof of claim. Under 11 NYCRR §65-3.9(a) interest will accrue when payment of the no-fault benefits are overdue. Benefits are overdue if not paid within 30 calendar days of when the insurer receives a claim or verification.
However, under 11 NYCRR §65-3.9(c) when the claim is denied an applicant must request arbitration or commence an action “within 30 days of receipt of the denial of claim form or payment of benefits calculated pursuant to the Insurance Department regulations.” Interest is barred until that action is taken by the applicant.
The court noted that the purpose of assessing interest is to sanction insurer for late payment not for an untimely denial of claim. In the case where there is no payment of the claim AND an untimely denial interest accrues 30 days from the date the claim is submitted. However, interest is stayed where the claimant fails to file for arbitration or commence an action within 30 days after receipt of the untimely denial. Thereafter interest continues to accrue once arbitration or an action is commenced.
Then the court launched into a lengthy reasoned discussion about whether the regulatory provision requiring applicants to file an arbitration or action within 30 days of receipt of the denial applied to assignees. Ultimately, the court concluded that the regulation includes an eligible injured person’s assignee.
1/3/07 Mega Supply & Billing, Inc. a/a/o William Borrero v. Progressive Cas. Ins. Co.
2007 NY Slip Op 50023U (NY Sup. App. Term, 2d Dept.)
General Affidavit From Corporate Officer Attaching Documents Claiming To Be Business Records Insufficient To Demonstrate Prima Facie Case Entitlement To Summary Judgment.
Here is the Angle: The Plaintiff’s corporate officer submitted an affidavit that failed to lay the proper foundation for the admission of documents as business records to present a prima facie case for summary judgment. The affidavit contained no allegation that the officer had personal knowledge of the Plaintiff’s practices and procedures to permit admission of the documents as business records.
The Analysis: Plaintiff’s motion for summary judgment was denied as it failed to demonstrate a prima facie case entitlement to summary judgment. The Plaintiff submitted an insufficient affidavit from a corporate office of the company which also attached various documents. The affidavit conclusory stated that the documents attached to the affidavit were business records. The insurer argued that the corporate officer’s affidavit failed to lay a sufficient foundation for the documents. The court agreed holding that the affidavit did not demonstrate the corporate officer possessed personal knowledge of the plaintiff’s practices and procedures so as to admit the records as business records in support of plaintiff’s summary judgment motion.
1/2/07 Mid Atlantic Med. P.C. a/a/o Joseph Colvin v. GEICO Gen. Ins. Co.
2007 NY Slip Op 50014U (NY Sup. App. Term, 2d Dept.)
Insurer’s Affidavit Sufficient To Demonstrate Denial Timely Issued But Issue Of Fact Exists On Medical Necessity.
Here is the Angle: The Plaintiff’s summary judgment motion was denied based upon the insurer successfully demonstrating that it issued a timely denial through an affidavit from the claims examiner. The sufficiency of the insurer’s affidavit in support of a timely denial is a mystery and continues to be since this decision does not discuss the substance of the affidavit.
The Analysis: The court initially found that Plaintiff’s motion papers in support of summary judgment were insufficient as it failed to establish the mailing of the NF-3 form to the insurer. Just as you thought the insurer may prevail the court held that the insurer cured the Plaintiff’s defect when it submitted an affidavit acknowledging receipt of the claim and attaching the denial. Wait. Don’t move on to the next decision yet as this one is not over. Then the court held that the insurer raised an issue of fact precluding summary judgment in plaintiff’s favor. The insurer submitted an affidavit from its claims examiner that sufficiently attested to the insurer’s procedure regarding mailing, in particular an additional verification request and denial of claim. The affidavit sufficiently stated a description of the “standard office practice or procedure designed to ensure that items are properly addressed and mailed” giving rise to the presumption of proper mailing. GREAT! So what does the affidavit have to state? Unfortunately, the decision did not divulge that information. Therefore, the insurer’s denial was found to be timely not precluding it from arguing lack of medical necessity which issue raised an issue of fact.
12/21/06 Carothers v. Progressive Cas. Ins. Co.
2006 NY Slip Op 52479U (Civil Court Kings County, Judge Gold)
Team Leader’s Testimony On General Office Mailing Procedures Insufficient To Demonstrate That Verification Request Mailed And Even If Found Sufficient Failure To State Dates Of Verification Requested And Received Rendered Denial Defective.
Here is the Angle: This case calls into question who is the appropriate person an insurer should place on the witness stand to testify as to the mailing of a verification request. Does it need to be the person who dropped the envelope in the mail? Can it be the person who prepared the verification request coupled with a copy of the proof of mailing from the post office? Can it be the person who prepared the verification request coupled with an affidavit of mailing from the company mail room? Here, the litigation team leader’s testimony as to the general office procedure for mailing of denials was found to be insufficient. However, it appears that even if the insurer could have sufficiently demonstrated that the verification request was mailed its denial still would have been struck. Why? Well, the court indicates that the fact that the denial did not state the date verification was requested and received rendered it defective, even if the insurer issued a timely denial.
The Analysis: At trial, the Plaintiff, to establish its prima facie case, elicited the testimony from a Mr. Rodriguez who testified that it was his job to generate a NF-3 from information sent from the medical provider over a secure internet website. Mr. Rodriguez further testified that it was his duty to not only prepare the NF-3 but also to place the required documents in an envelope, address the envelope, seal the envelope, take the envelope to the post office, and obtain a proof of mailing which he would scan into his computer system. The Plaintiff also offered the NF-3 form Mr. Rodriguez prepared, the Assignment of Benefits form, the proof of mailing, as well as a copy of the treating physician’s referral and MRI report. The Plaintiff also admitted into evidence the NF-10 for the limited purpose of establishing that the insurer received the medical bill (citing to A.B. Med. Serv., P.L.L.C. v. New York Cent. Mut. Fire Ins. Co., 3 Misc3d 136(A)).
The court denied the insurer’s motion for a directed verdict at the close of Plaintiff’s proof on the ground that Plaintiff failed to lay the proper foundation to admit its documents into evidence. The court reasoned that the proper foundation was laid through Mr. Rodiguez’ testimony even though he had no personal knowledge as to accuracy of the documents:
Where an entity routinely relies upon the business records of another entity in the performance of its own business and fully incorporates said information into the records made in the regular course of its business, the subsequent record is admissible notwithstanding that the preparer lacked personal knowledge of the information’s accuracy.
Quoting, Pine Hollow Med. P.C. v. Progressive Cas. Ins. Co., 2006 Slip Op. 51870U. Mr. Rodriguez, who was employed by the billing company whose regular business was to prepare the Plaintiff’s medical bills based upon information the medical provider gave to it and maintained the records in the regular course of its business the proper foundation was laid.
Thereafter, the burden shifted to the insurer to demonstrate to substantiate the basis for its denial. The insurer attempted to argue that the medical services were not medically necessary. However, the court held that the insurer had to overcome “fatal defects” in its denial – namely an untimely denial. The court also held that the denial was not factually sufficient as there was an inadequate notice of the factual basis and medical rationale for the denial (Amaze Med. Supply v. Allstate Ins. Co., 3 Misc3d 43, A.B. Med. Servs. P.L.L.C. v. GEICO Cas. Ins. Co., 2006 NY Slip Op. 26133).
The insurer attempted to demonstrate, through the testimony of a litigation team leader, that the denial was not untimely since verification was timely requested thereby tolling the 30-day timeframe. The team leader testified as to the timely denial as a verification request was mailed to the medical provider, responded to, and a denial timely issued. The team leader also testified that the denial was factually sufficient as the peer review report, which was the basis for the denial, was attached. The team leader testified that while she was not responsible for mailing the verification request she did work in the processing office at one point in time where she was responsible for processing verification requests. She was able to testify as to the procedure for mailing verification requests. However, upon cross examination the team leader admitted that only three copies of the verification request are printed and none of which are mailed to the eligible injured person. Yet, sometimes a fourth copy is printed. She also testified that while she worked in the processing office she would fill in all relevant boxes on a denial. In this case, the boxes regarding verification were empty. The team leader also testified that while she worked in the processing office a peer review report was not routinely attached to a denial.
The insurer’s denial was not upheld as the team leader’s testimony regarding mailing procedures for the verification was vague and conclusory, as well as lacking knowledge of the procedure designed for mailing. Despite this, the court determined that the team leader’s testimony did help strengthen the Plaintiff’s case that the bills were actually mailed to the insurer. Further, the insurer failed to establish that a sufficient factual basis for the denial. There was insufficient evidence to demonstrate that the peer review was actually attached and mailed with the denial and the explanation for the denial was devoid of any mention that the report was attached. In addition, the failure to completely fill out the denial as the verification request date was omitted as well as the date the verification was received also rendered even a timely denial defective.
01/08/07 CLARK V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
Seventh Circuit Determines How To Calculate An Underinsured Motor Vehicle As Defined By Indiana Code Section 27-7-5-4(b)
Plaintiff, her husband and two children were injured in a motor vehicle collision in Indiana. The car that Plaintiffs’ were driving was insured by State Farm. Plaintiff and her husband settled with the other driver’s (Akers) insurance for a payment of $100,000 each which left $100,000 of the policy’s per accident limit remaining to resolve the Clark children’s claims. Plaintiffs submitted a claim to State Farm, for an underinsured motor vehicle (UIM). To determine whether a plaintiff can recover under the Indiana Code for underinsured motorist statute, the Court had to determine whether the Plaintiffs’ collective recovery from Akers’ insurer was equal to the UIM per-accident liability limit in State Farm’s policy. The Court determined the amount was equal and the Court granted State Farm’s summary judgment motion.
Submitted by: Michael A. Tanenbaum and Robin J. Greene (Sedgwick, Detert, Moran & Arnold)
1/8/07 Mariposa Farms, LLC. v. Westfalia-Surge, Inc.
Expert’s Method Was Valid Under Daubert & Kumho and Additional Expert Testimony Which Should Not Have Been Permitted Did Not Impact Outcome
District Court’s outcome was in favor of Plaintiff for negligence and breach of warranty resulting from installation and operation of defective equipment despite allowing testimony of an expert that the Court admitted it had erred in permitting. Defendant/Appellants appealed the Courts denial of its motion for judgment as a matter of law or in the alternative, a new trial, due to grounds that both experts’ testimony should have been precluded. The Tenth Circuit upheld outcome, stating that expert relied on processes allowed under Daubert & Kumho and the second expert’s testimony which should not have been permitted, did not change the outcome as there was sufficient evidence to support the verdict.
Submitted by: Michael A. Tanenbaum, Reena Khanna – Sedgwick, Detert, Moran & Arnold
1/2/07 CHILDTIME CHILD CARE, INC. V. COLONY INS. CO.
Summary Judgment for Insurer Reversed Where Question of Fact of Whether Damaged Items Excluded under Policy.
Court of Appeals of Florida, First Division
Plaintiff was a business that filed a claim for damage to furniture in its building. Plaintiff hired a floor/carpet cleaning company to clean its floors. The cleaning company subsequently moved all of the Plaintiff’s furniture outside while cleaning. While outside, the Plaintiff’s furniture was substantially damaged. The Plaintiff’s former director testified that the cleaning company was never instructed to take the furniture outside, and she would have objected had she known of the company’s intent. Plaintiff filed a claim against the cleaning company, who filed a claim against their insurer. The insurer denied coverage under the exclusion in the policy for personal property in the possession of the insured. The trial court found that there was no issue of material fact whether the property was in the control of the cleaning company. The Court of Appeals reversed, based in part on the premise that exclusions in an insurance policy must be even more strictly construed against the insurer than coverage clauses. The Court found the exclusion to be ambiguous, and therefore determined there remained a material question of fact as to whether the property was in the possession of the insured.
Submitted by: Mark Gesk and Ian Walchesky of Wayman, Irvin, & McAuley, LLC
Tooker v. Morrisey and Allstate Insurance Company
Sweetbaum & Sweetbaum, Lake Success (Marshall D.
No brief or appearance on behalf of respondent.
Order, Supreme Court, New York County (Emily Jane Goodman, J.), entered on or about June 1, 2006, which, in an action for personal injuries sustained in a car accident, imposed a sanction of $1200 on defendant's liability insurer when defendant's attorney appeared at a settlement conference without authority to settle, unanimously reversed, on the law, without costs, the sanction vacated and the matter remanded for a hearing.
We remand for a hearing since it does not appear that the insurer was given a reasonable opportunity to be heard on why it sent an attorney to a settlement conference who, as stated in the order on appeal, was "without any authority or knowledge of the case" (see 22 NYCRR § 130-1.1[d], § 130-2.1[d]). The record, which consists only of the order on appeal imposing the sanction and the orders of this Court granting leave to appeal and staying imposition of the sanction, does not permit review of the insurer's excuse. We note defendant's brief, which represents that a settlement offer could not be made at the time of the settlement conference because plaintiff had not yet submitted to a medical examination by defendant's doctors. If such were the circumstances, the refusal to make a settlement offer would not appear to have been frivolous.
Hall v. Barth
Roemer, Wallens & Mineaux, L.L.P., Albany
(Matthew J. Kelly of counsel), for appellants.
John P. Kingsley, Catskill, for respondents.
Appeal from an order of the Supreme Court (Lalor, J.), entered April 6, 2006 in Greene County, which denied defendants' motion for summary judgment dismissing the complaint.
Plaintiff Robert K. Hall (hereinafter plaintiff) was involved in a motor vehicle accident on April 27, 2004 when the automobile he was driving collided with a truck parked on the side of the road that was jutting halfway into his lane of travel. As a consequence, plaintiff and his wife, derivatively, commenced this personal injury action against the driver and owner of the truck. After issue was joined and discovery completed, defendants moved for summary judgment dismissing the complaint on the ground that plaintiff had not sustained a serious injury as defined by Insurance Law § 5102 (d). Supreme Court denied the motion and this appeal ensued.
In support of their motion, defendants offered the affirmation of their examining physician, an orthopedic surgeon, who noted that plaintiff had a definite limitation of motion of the cervical spine in all directions and that forward flexion was limited to 20 degrees and extension to 10 degrees. Nevertheless, he concluded that plaintiff had a mild partial temporary disability from the accident.
In opposition to defendants' motion, plaintiff proffered, among other things, the affidavit of Neil Colman, his treating physician and orthopedic surgeon. Colman stated that upon examination of plaintiff, he detected muscle spasm of the neck and, as late as December 2004 and April 2005, plaintiff had suffered almost total loss of motion of his neck, which Colman attributed to the April 27, 2004 accident. Suffice to say that the findings of significant limitation of motion by defendants' examining physician, together with Colman's findings and opinion, create an issue of material fact as to whether plaintiff has sustained a significant limitation of use of a body function or system.[FN1]
Mercure, J.P., Peters, Spain and Carpinello, JJ., concur.
Footnote 1: While defendants argue that plaintiff has not established that he was prevented from undertaking his usual and customary daily activities for at least 90 of the 180 days following the accident, we need note only that plaintiff did not allege that his injuries qualified for the 90/180 category of serious injury in his complaint or bill of particulars and we, therefore, have not addressed this issue.
New York Cent. Mut. Fire Ins. Co. V. Wood
Hanson & Fishbein, Albany (Mark O. Chieco of
Capasso & Masaroni, L.L.P., Schenectady (Thomas
F. Garner of Ross Law Offices, Middleburgh, of counsel), for
Amber M. Wood, respondent.
Flink Smith, L.L.C., Latham (Jeffrey D. Wait of
counsel), for New York Central Mutual Fire Insurance Company,
Appeal from that part of an order of the Supreme Court (Lamont, J.), entered February 9, 2006 in Schoharie County, which denied the cross motion of defendant Progressive Northeastern Insurance Company for summary judgment declaring that it had no duty to defend or indemnify defendant Charles Young.
Defendant Amber M. Wood was camping with friends in a state park located in the Town of Berne, Albany County when, at 6:15 in the morning, defendant Charles Young drove his vehicle over her tent causing her serious injury. Young subsequently pleaded guilty to the hypothetical crime of attempted reckless assault (see Penal Law §§ 110.00, 120.10 [3]) and, in the plea colloquy, stated that his motivation for driving over one of the tents in Wood's campsite was to retaliate against some of Wood's campsite companions who had allegedly assaulted one of Young's friends. He was given a sentence of 11 years in prison.
Wood commenced a personal injury action seeking recovery from Young's motor vehicle insurance carrier, defendant Progressive Northeastern Insurance Company (hereinafter defendant). Defendant denied coverage under the intentional act exclusion in its policy. Wood then commenced arbitration with plaintiff her own motor vehicle insurance carrier pursuant to her policy's uninsured/underinsured motorist provision. Plaintiff obtained a stay of the arbitration in order to commence the instant action seeking a declaration that defendant is obligated to defend and indemnify Young. Plaintiff moved for summary judgment and defendant cross-moved, seeking a declaration that it has no duty to defend or indemnify Young. Supreme Court granted summary judgment to plaintiff and denied defendant's cross motion. Defendant appeals from the denial of its cross motion.
Defendant argues that it properly disclaimed insurance coverage to Young because his policy expressly excludes from coverage "bodily injury or property damage caused by an intentional act of an insured person or at the direction of an insured person." The dispositive inquiry to determine whether this intentional act exclusion applies is "'whether there is any possible factual or legal basis upon which to find that the bodily injuries inflicted upon [Wood] were not "expected or intended" by [Young]'" (Pennsylvania Millers Mut. Ins. Co. v Rigo, 256 AD2d 769, 770 [1998], quoting Home Mut. Ins. Co. v Lapi, 192 AD2d 927, 928 [1993]; accord Smith v New York Cent. Mut. Fire Ins. Co., 13 AD3d 686, 687 [2004]; see Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137-138 [2006]). In this regard, Young stated, in both his statement to police and during the plea colloquy, that he did not know that Wood, or anyone else, was in the tent when he ran over it. Defendant argues, nevertheless, that the subjective intent of the insured is not in all cases dispositive because, at times, the resultant harm is deemed "inherent in the nature" of the wrongful act, regardless of the actor's expressed intent (Allstate Ins. Co. v Mugavero, 79 NY2d 153, 161 [1992]; see Slayko v Security Mut. Ins. Co., 98 NY2d 289, 293 [2002]). In other words, under certain circumstances, "'cause and effect cannot be separated; that to do the act is necessarily to do the harm which is its consequence; and that since unquestionably the act is intended, so also is the harm'" (Progressive N. Ins. Co. v Rafferty, 17 AD3d 888, 889 [2005], quoting Allstate Ins. Co. v Mugavero, supra at 160).
Here, Young's assertion, if credited, that he did not know that the tent was occupied could provide a sufficient basis for a jury finding that his conduct was merely reckless, rather than intentional or expected. Although a jury could conclude that Young must have appreciated the substantial risk that a tent would be occupied at such an early hour of the morning, his conduct would not be intentional, but reckless, if he disregarded that known risk in a desire to wreak havoc and damage property without forming a specific intent to drive over an occupied tent. Had the tent not been occupied, Young's act would not have caused injury to Wood. Accordingly, a factual question exists as to whether Young intended the resultant harm and, thus, Supreme Court properly denied defendant's cross motion for summary judgment (see Slayko v Security Mut. Ins. Co., supra at 293; Allstate Ins. Co. v Zuk, 78 NY2d 41, 47 [1991]; cf. Progressive N. Ins. Co. v Rafferty, supra at 889; Smith v New York Cent. Mut. Fire Ins. Co., supra at 688).
Cardona, P.J., Mercure, Mugglin and Lahtinen, JJ., concur.
Squires v. Mumphery
Reardon & Sclafani, P.C., Tarrytown, N.Y. (Vincent M. Sclafani
and Michael V. Sclafani of counsel), for appellants.
Lever & Stolzenberg, White Plains, N.Y. (Wendi M. Edelman
and David B. Lever of counsel), for
In an action, inter alia, to recover damages for personal injuries, the defendants appeal from so much of an order of the Supreme Court, Nassau County (Robbins, J.), dated April 4, 2006, as denied their motion for summary judgment dismissing the complaint.
ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the motion which was to dismiss the complaint insofar as asserted against the defendants Budget Rent-a-Car, Inc., and Avis Rent a Car System, Inc., and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed from, with costs to the plaintiff.
On the evening of July 24, 2003, a motor vehicle operated by the plaintiff was struck from behind by a motor vehicle operated by the defendant Nicole M. Mumphery. After the plaintiff commenced the instant action, the defendants moved for summary judgment dismissing the complaint insofar as asserted against the defendants Budget Rent-a-Car, Inc., and Avis Rent a Car, Inc. (hereinafter collectively the corporate defendants), on the ground that neither of them owned the offending vehicle at the time of the accident. In the second branch of their motion, the defendants sought summary judgment dismissing the complaint as to all the defendants, based on the alleged failure of the plaintiff to have sustained a serious injury within the meaning of Insurance Law § 5102(d).
In support of the first branch of the motion, the defendants submitted a Certified New York State Vehicle Title Record which showed that the current owner of the offending vehicle, as of May 5, 2003, was an entity known as PV Holding Corp. This evidence established a prima facie case that neither of the corporate defendants owned the aforesaid motor vehicle at the time of the accident (see Alvarez v Prospect Hosp., 68 NY2d 320, 324). Notably, the plaintiff failed to address this ground for dismissal in opposition to the motion or on this appeal. Moreover, the record does not present any issues of fact on this matter (see CPLR 3212[b]).
While the evidence presented by the defendants established a prima facie case that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), the evidence submitted by the plaintiff in opposition to the motion demonstrated that, as a consequence of the accident, she suffered a torn meniscus of the right knee, which prevented her from engaging in activities in which she had previously participated. This evidence raised a triable issue of fact as to whether she sustained a "significant limitation of use of a body function or system" (Insurance Law § 5102[d]; see Pollas v Jackson, 2 AD3d 700, 701) as a result of the accident. Accordingly, the defendant Nicole M. Mumphery was not entitled to summary judgment dismissing the complaint insofar as asserted against her.
SCHMIDT, J.P., SANTUCCI, LIFSON and COVELLO, JJ., concur.
Frey v. Fedorciuc
David Katz & Associates, LLP, New York, N.Y. (Salvatore J.
Sciangula of counsel), for appellant.
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Kings County (Schneier, J.), dated October 14, 2005, 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).
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). To establish their entitlement to summary judgment on the issue of serious injury the defendants were required to submit admissible medical evidence demonstrating that the plaintiff's range of motion in his cervical spine, lumbar spine, and left shoulder were not significantly limited in comparison to the normal range of motion one would expect of a healthy person of the same age, weight, and height (see Powell v Alade, 31 AD3d 523). The defendants' examining neurologist noted in his report that the plaintiff had limitations in the range of motion of his cervical spine and lumbar spine. The defendants' examining orthopedic surgeon noted in his report that the plaintiff had limitations in the range of motion of his cervical spine and lumbar spine, as well as his left shoulder. Both experts concluded that the plaintiff was not disabled and that all of his injuries had resolved. They further concluded that while the plaintiff did show limitations during range of motion testing in various regions of his body, these limitations were due merely to his "age." Both experts failed to compare those findings to the normal range of motion of a person the plaintiff's age, thereby leaving the court to speculate as to the meaning of those figures (see Powell v Alade, supra; Manceri v Bowe, 19 AD3d 462). Since the defendants failed to meet their initial burden of establishing a prima facie case, it is unnecessary to consider whether the plaintiff's opposition papers was sufficient to raise a triable issue of fact (see Powell v Alade, supra; Manceri v Bowe, supra; Coscia v 938 Trading Corp., 283 AD2d 538).
SCHMIDT, J.P., RIVERA, SKELOS and LUNN, JJ., concur.
Chan v. Casiano
Wade T. Morris (Pollack, Pollack, Isaac & De Cicco, New
York, N.Y. [Brian J. Isaac and Julie T.
Mark] of counsel), for respondent.
In an action to recover damages for personal injuries, the defendant appeals from an order of the Supreme Court, Kings County (Schmidt, J.), dated March 7, 2006, which denied his motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
The defendant made a prima facie showing that the plaintiff did not sustain a serious injury to her left knee within the meaning of Insurance Law § 5102(d) as a result of the subject motor vehicle accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955). In opposition, the plaintiff failed to raise a triable issue of fact. The affirmed medical report of the plaintiff's examining neurologist established that the plaintiff had full range of motion of the left knee, the left knee was stable, and showed no evidence of effusion. While the plaintiff submitted a radiologist's report which suggested a meniscus tear in March 2001, the report failed to indicate that this tear was caused by the subject accident. The plaintiff's orthopedist failed to offer objective medical proof showing a significant impairment of a body function caused by this injury. Neither the plaintiff nor her examining physician adequately explained the 4½; -year gap in treatment between the conclusion of the plaintiff's medical treatment in 2002 and the physical examination conducted in January 2006, in response to the defendant's summary judgment motion (see Pommells v Perez, 4 NY3d 566, 574; see also D'Alba v Yong-Ae Choi, 33 AD3d 650; Gomez v Epstein, 29 AD3d 950), or that the alleged meniscus tear was unresolved or objectively manifest at the time of the present examination.
CRANE, J.P., MASTRO, SANTUCCI and LIFSON, JJ., concur.
Black v. Regalado
Order, Supreme Court, Bronx County (Nelson S. Roman, J.), entered January 27, 2005, which granted defendant's motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.
Defendant demonstrated prima facie entitlement to judgment by submitting competent medical evidence that neither plaintiff satisfied the serious injury threshold of Insurance Law § 5102(d) (Franchini v Palmiere, 1 NY3d 536 [2003]). Plaintiffs failed to satisfy their evidentiary burden of submitting, in opposition, "objective medical proof of a serious injury causally related to the accident in order to survive summary dismissal" (Pommells v Perez, 4 NY3d 566, 574 [2005]). The unsworn medical documentation submitted by plaintiffs was not properly before the court, and thus was correctly not considered (Grassi v Angerami, 79 NY2d 813 [1991]). We also note the affirmation by plaintiff's medical expert failed to explain adequately the reason for the 15-month gap in their treatment, and their excuse was not supported by the record.
Otero v. 971 Only U, Inc.
Law Office of Scott B. Schwartz, PLLC, New York (Scott B.
Schwartz of counsel), for appellants-respondents.
Marjorie E. Bornes, New York, for respondents-appellants.
Order, Supreme Court, Bronx County (Barry Salman, J.), entered February 2, 2006, which, to the extent appealable, denied plaintiffs' motion to renew a prior ruling dated September 21, 2005, granting a motion by defendants 971 Only U and Drame for summary judgment dismissing the complaint, and restored to active status the claims against defendants Rodriguez and Garcia, unanimously modified, on the law, that portion of the order restoring the claims against Rodriguez and Garcia to active status vacated, and otherwise affirmed, without costs.
Plaintiffs failed to set forth any new facts not offered on the prior motion that would change the prior determination (CPLR 2221[e][2]). Even assuming they had presented new facts that were previously unavailable, they failed to demonstrate that plaintiff Richard Otero suffered a serious injury as defined by Insurance Law § 5102(d). Plaintiffs' submission failed to explain a gap in treatment of more than a year, which is fatal to a claim of serious injury (Pomells v Perez, 4 NY3d 566, 574 [2005]).
Furthermore, the medical submissions failed to specify what objective tests, if any, were performed, to explain the significance of the findings of a positive straight-leg-raising test, or to set forth objective findings of either a specific percentage of the loss of range of motion or sufficient description of the qualitative nature of the limitations based on the normal function, purpose and use of the body part (Vasquez v Reluzco, 28 AD3d 365 [2006]). The submissions also failed to meet the statutory test of demonstrating an inability to perform substantially all of the material acts that constitute the injured plaintiff's usual and customary daily activities for 90 of the 180 days following the accident, to establish a causal connection between the MRI findings and the accident (Smith v Brito, 23 AD3d 273 [2005]), or to discuss the degenerative changes that the MRI revealed (Mullings v Huntwork, 26 AD3d 214 [2006]).
Without establishing a serious injury, plaintiffs have no basis for proceeding against any of defendants.
Lugo v. GE Capital Auto Lease
Bader, Yakaitis & Nonnenmacher, LLP, New York (John Jo
Nonnenmacher of counsel), for appellant.
counsel), for GE Capital Auto Lease, respondent.
Order, Supreme Court, Bronx County (Janice L. Bowman, J.), entered on or about January 10, 2005, which granted defendant's motion for summary judgment dismissing the complaint for lack of a serious injury within the meaning of Insurance Law § 5102(d), and denied plaintiff's cross motion pursuant to CPLR 1015(a) to stay the action, unanimously reversed, on the law, without costs, the order vacated, the cross motion denied as academic and the matter remanded for further proceedings.
On March 2, 2004, during the pendency of this personal injury action, individual defendant Sekoa Kante died. By notice of motion dated June 15, 2004, defendant GE Capital moved for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury as required by Insurance Law § 5102(d). Plaintiff cross-moved to stay the action until the appointment of a proper representative for Kante. The motion court denied plaintiff's cross motion and granted defendant's summary judgment motion. This was error and we reverse.
"The death of a party divests a court of jurisdiction to conduct proceedings in an action until a proper substitution has been made pursuant to CPLR 1015(a)" (Silvagnoli v Consolidated Edison Empls. Mut. Aid Socy., 112 AD2d 819, 820 [1985]). Accordingly, the motion court's order, made before the substitution of Kante's representative, is void (id.; see Cueller v Betanes Food Corp., 24 AD3d 201 [2005], lv denied 6 NY3d 708 [2006]). Given that a proper substitution has since been effected, we entertain the appeal to the limited extent of vacating the order and remanding the matter for further proceedings, which may include defendants moving anew for summary judgment (see Faraone v National Academy of Tel. Arts & Sciences, 296 AD2d 349, 350 [2002]).
Certain Underwriters at Lloyd's London, v. Pneumo Abex Corporation
Order, Supreme Court, New York County (Herman Cahn, J.), entered July 29, 2005, which granted the motion of defendant PepsiAmericas, Inc. to stay this action in favor of litigation in the United States District Court for the District of Columbia, unanimously affirmed, with costs.
In view of the 24-year pendency of the federal litigation involving the obligations of primary insurers to provide coverage and indemnity for underlying asbestos-related claims, the motion court properly exercised its discretion (see Pierre Assocs., Inc. v Citizens Cas. Co., 32 AD2d 495, 496-497 [1969]) in staying this action in favor of that litigation, and companion litigation concerning the obligations of excess insurers.
While the parties and issues in this action and the federal litigation are not completely identical, and the federal litigation involving the obligations of excess insurers was commenced three years after the present action, the familiarity of the federal court with the issues, the substantial identity of the parties, and the interdependence of the issues involving primary and excess insurers, weigh in favor of adjudicating the federal litigation in advance of this action (see Asher v Abbott Labs., 307 AD2d 211 [2003], lv dismissed 98 NY2d 728 [2002]). If issues and obligations raised in this action remain unresolved at the conclusion of the federal litigation, this action can be reactivated. Plaintiffs, who remained inactive for 20 years, as well as the appealing defendants, have not demonstrated that they will be prejudiced by a stay.
Greater New York Mutual Insurance Co., v. United States Underwriters Insurance Co.
Miranda Sokoloff Sambursky Slone Verveniotis, LLP, Mineola
(Adam I. Kleinberg of counsel), for appellant.
Thomas D. Hughes, Greater New York Mutual Insurance
Company, New York (Richard C. Rubinstein of counsel), for
Order, Supreme Court, New York County (Ira Gammerman, J.H.O.), entered January 11, 2005, which denied defendant United States Underwriters Insurance Company's motion pursuant to CPLR 3211(a)(1) to dismiss the complaint, unanimously reversed, on the law, with costs, the motion granted and the complaint dismissed. The Clerk is directed to enter judgment accordingly.
It is well established that when interpreting an insurance contract, as with any written contract, the court must afford the unambiguous provisions of the policy their plain and ordinary meaning (United States Fid. & Guar. Co. v Annunziata, 67 NY2d 229, 232 [1986]; Roundabout Theatre Co. v Continental Cas. Co., 302 AD2d 1, 6 [2002]), and " may not make or vary the contract of insurance to accomplish [its] notion of abstract justice or moral obligation'" (Teichman v Community Hosp. of W. Suffolk, 87 NY2d 514, 520 [1996], quoting Breed v Insurance Co. of N. Am., 46 NY2d 351, 355 [1978]). Moreover, provisions contained in an insurance policy which limit coverage to certain premises are enforceable (see Allcity Ins. Co. v Borrello, 19 AD3d 621, 623 [2005]; Mazzuoccolo v Cinelli, 245 AD2d 245, 247-248 [1997], see generally 2619 Realty v Fidelity & Guar. Ins. Co., 303 AD2d 299 [2003], lv denied 100 NY2d 508 [2003]).
In this matter, there is no dispute that the incident underlying the insurance claim occurred at an address other than the only address delineated in the policy to which coverage would apply. Plaintiffs, however, seek reformation of the insurance policy to reflect the "correct" scheduled location, specifically, the address where the incident occurred.
Reformation, as this Court once observed:
"is not a mechanism to interject into the writings terms or provisions not agreed upon or suggested by one party but rejected by the other. (Schmidt v Magnetic Head Corp., 97 AD2d 151, 159.) Nor may it be used to relieve a party from a hard or oppressive bargain.' (Backer Mgt. Corp. v Acme Quilting Co., 46 NY2d 211, 219.) The burden upon a party seeking reformation is a heavy one since it is presumed that a deliberately prepared and executed written instrument accurately reflects the true intention of the parties: [T]he proponent of reformation must show in no uncertain terms not only that mistake or fraud exists, but exactly what was really agreed upon between the parties.' (South Fork Broadcasting Corp. v Fenton, 141 AD2d 312, 314, lv dismissed 73 NY2d 809.)"
(William P. Pahl Equip. Corp. v Kassis, 182 AD2d 22, 29 [1992], lv dismissed in part and denied in part, 80 NY2d 1005 [1992]). Moreover, once an insurance policy has been received, it constitutes presumptive knowledge of its terms and limits (J.R. Adirondack Enters. v Hartford Cas. Ins. Co., 292 AD2d 771 [2002]; Hess v Baccarat, 287 AD2d 834, 836 [2001]).
A claim for reformation of a written agreement must be grounded upon either mutual mistake or fraudulently induced unilateral mistake (Chimart Assocs. v Paul, 66 NY2d 570, 573 [1986]; Goldberg v Manufacturers Life Ins. Co., 242 AD2d 175, 179 [1998], lv dismissed in part and denied in part 92 NY2d 1000 [1998]). In the case of mutual mistake, it must be alleged that "the parties have reached an oral agreement and, unknown to either, the signed writing does not express that agreement" (Chimart Assoc. v Paul, 66 NY2d at 573; accord Phillips v Phillips, 300 AD2d 642, 643 [2002]), whereas in the case of unilateral mistake, it must be alleged that one party to the agreement fraudulently misled the other, and that the subsequent writing does not express the intended agreement (Rosen Auto Leasing, Inc. v Jacobs, 9 AD3d 798, 800 [2004]; New York First Ave. CVS v Wellington Tower Assocs., 299 AD2d 205 [2002], lv denied 100 NY2d 505 [2003]). A bare, conclusory claim of unilateral mistake, which is unsupported by legally sufficient allegations of fraud, fails to state a cause of action for reformation (Barclay Arms v Barclay Arms Assoc., 74 NY2d 644, 646 [1989]; George Backer Mgt. Corp. v Acme Quilting Co., 46 NY2d 211, 218-219 [1978]). The essential elements of a claim of fraud are misrepresentation of a material fact, falsity, scienter and deception (Barclay Arms, 74 NY2d at 646-647; Channel Master Corp. v Aluminum Ltd. Sales, Inc., 4 NY2d 403, 406-407 [1958]).
In the matter at bar, plaintiffs have failed to set forth a claim for mutual mistake as there is no clear allegation that defendant was ever directed to change the policy coverage from the address that was originally insured to a new location adjacent thereto. Plaintiffs also fail to state a claim for unilateral mistake, as the complaint does not allege fraud with the requisite particularity (see CPLR 3016[b]; Barclay Arms, 74 NY2d at 647).
Security Mutual Life Ins. Co. v. Harpaul
Shapiro Forman Allen Save & McPherson LLP, New York
(Laurie J. McPherson of counsel), for appellants.
Clifford Chance US LLP, New York (Anthony M. Candido of
Order, Supreme Court, New York County (Herman Cahn, J.), entered March 13, 2006, which denied defendants' motion to dismiss the complaint as time-barred, unanimously reversed, on the law, with costs, and the motion granted. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.
Plaintiff served a complaint on November 8, 2004, claiming, inter alia, that defendants had fraudulently obtained the insurance policies. Defendants moved to dismiss the complaint on the ground that the period in which to contest the policy had expired. Plaintiff maintained that the policies did not become incontestable until at least two years after they had been in force, and that the policies were not in force prior to November 8, 2002. The motion court did not resolve this issue. Instead, the court found that an evidentiary hearing was required to determine whether the parties intended New York or New Jersey law to apply.
We reverse. Regardless of which state law controls, the complaint is time-barred. Under New York law, the phrase "in force" — where not separately defined in the agreement — has been interpreted as the date of issuance (see Guardian Life Ins. Co. of Am. v Schaefer, 70 NY2d 888 [1987]). Although New York law provides that a policy cannot be contested after being in force during the life of the insured for two years from its date of issue (see Insurance Law § 3203[a][3]), the parties are free to set an earlier date (see Kosierowski v Madison Life Ins. Co., 31 AD2d 930 [2d Dept 1969], lv denied 25 NY2d 737 [1969]). This is underscored by New York statutory law which provides that insurance policies may contain provisions "which the superintendent deems to be more favorable to policyholders" (Insurance Law § 3203[a]). Thus, plaintiff was free to, and did in fact, provide more favorable terms to its insured by allowing an earlier date to trigger the incontestability period.
New Jersey statutory law, on the other hand, specifically provides that the incontestability period "shall commence upon the earliest of the date of issue, the policy date and any other effective date [emphasis added]" (NJ Admin Code 11:4-41.3[b]
[3][I]). No other effective date is defined within the policies. Therefore, as defined by the policies themselves and consistent with New Jersey law, the trigger date, as defendants maintain, is the earlier policy date.
Having provided, within the four corners of the agreements, that the earlier date — as between the policy and issue dates — triggers the incontestability clause, plaintiff is bound, under both New York and New Jersey law, by the agreement's plain language (see Ledon v Havemeyer, 121 NY 179 [1890]; Tigue v Commercial Life Ins. Co., 219 AD2d 820 [1995]; Lucier v Williams, 366 NJ Super 485, 841 A2d 907 [2004]).
Plaintiff maintains that even if the two-year contestability period had expired, its common law fraud claim for damages nevertheless survives. However, "where a policy provides that it shall be contestable except for certain matters and fails to list among those defenses fraud, the defense of fraud is barred" (Appleman, Insurance Law & Practice § 332). This applies to
policies issued in New York (see New England Mut. Life Ins. Co. v Doe, 93 NY2d 122, 130-131 [1999]) and New Jersey (see Prudential Ins. Co. Of Am. v Connallon, 108 NJ Eq. 316, 154 A 729 [1931]). Indeed, had plaintiff wanted a longer time period in which to advance a fraud claim, it could have easily protected itself by including within its other enumerated exceptions to the incontestability clause an exception for fraudulent misrepresentations (see New England Mut. Life Ins. Co., 93 NY2d at 131; see also Berkshire Life Ins. Co. v Weinig, 290 NY 6, 9-10 [1943]). In any event, even assuming a separately pleaded common law fraud cause of action could be maintained beyond the expiration of the incontestability period, the cause of action is not pleaded with the requisite particularity under either state statute (see CPLR 3016[b]; NJ Court Rule 4:5-8[a]).
We need not reach the parties' remaining contentions in light of our determination.
Tyras v. Mount Vernon Fire Insurance Company
Miranda Sokoloff Sambursky Slone Verveniotis, LLP, Mineola,
N.Y. (Steven Verveniotis and Todd D. Kremin of counsel), for
Herzfeld & Rubin, P.C., New York, N.Y. (David Hamm and
Herbert Lazar of counsel), for
In an action, inter alia, for a judgment declaring that the defendant Mount Vernon Fire Insurance Company is obligated to defend and indemnify the defendants H. Mauro & Sons, Inc., and Henry Mauro in an action pending in Supreme Court, Queens County, under Index No. 49847/02, entitled Tyras v H. Mauro & Sons, the defendant Mount Vernon Fire Insurance Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Ruchelsman, J.), dated May 13, 2005, as denied that branch of its motion which was for summary judgment on its counterclaim to rescind the policy.
The defendant Mount Vernon Fire Insurance Company (hereinafter Mt. Vernon) counterclaimed, inter alia, to rescind a policy of insurance issued to the defendants H. Mauro & Sons, Inc., and Henry Mauro (hereinafter collectively Mauro) on the basis that the latter allegedly misrepresented material information in Mauro's application for insurance. Insurance Law § 3105(a) defines a representation as a "statement as to past or present fact, made to the insurer . . . at or before the making of the insurance contract as an inducement to the making thereof," and "a misrepresentation is a false representation, and the facts misrepresented are those facts which make the representation false." Such a statement is material if "knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such a contract" (Insurance Law § 3105[a]]. "[M]aterial misrepresentations . . . if proven, would void the . . . insurance policy ab initio" (Taradena v Nationwide Mut. Ins. Co., 239 AD2d 876; see also Sun Ins. Co. Of N.Y. v Hercules Sec. Unlimited, 195 AD2d 24); however, "the issue of materiality [of misrepresentation] is generally a question of fact for the jury" (Parmar v Hermitage Ins. Co., 21 AD3d 538, 540).
Here, after Mt. Vernon made out a prima facie case for summary judgment, the plaintiff raised questions of fact both as to the issue of Mauro's alleged misrepresentation and whether such misrepresentation, if any, was material. Accordingly, the court properly denied that branch of Mt. Vernon's motion which was for summary judgment to rescind the subject policy (see Carpione v Mutual of Omaha, 265 AD2d 752; Continental Ins. Co. v RLI Ins. Co., 161 AD2d 385; see generally Alvarez v Prospect Hospital, 68 NY2d 320).
The remaining contentions are without merit.
In the Matter of David Mounier v. American Transit Insurance Company
David Mounier, New York, N.Y., appellant pro se.
Marjorie E. Bornes, New York, N.Y., for respondent.
In a proceeding pursuant to CPLR article 75 to vacate an arbitration award, the petitioner appeals from an order of the Supreme Court, Kings County (Harkavy, J.), dated March 11, 2005, which denied the petition and confirmed the arbitration award.
The arbitration award under review was not arbitrary, capricious, or irrational (see CPLR 7511[b][1][iii]; Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223; Friedman v Gleeson, 300 AD2d 404). Moreover, the appellant waived any objection to the alleged misconduct or partiality of the arbitrator on the basis of purported ex parte communications with the respondent's counsel (see Matter of Reilly v Progressive Ins. Co., 5 AD3d 776, 777; Matter of Crystal City Police Benevolent Assn. [City of Corning], 91 AD2d 843). In any event, the appellant failed to meet his burden of proving, by clear and convincing evidence, that any impropriety on the part of the arbitrator prejudiced his rights or the integrity of the arbitration process (see Matter of Hausknecht v Comprehensive Med. Care of N.Y., 24 AD3d 778, 780, citing Matter of James A. Smith Contr. v Stahl, 162 AD2d 688; Matter of Montague Pipeline Tech. Corp. v Grace-Lansing & Grace Indus., 238 AD2d 510). Accordingly, the Supreme Court properly denied the appellant's petition and confirmed the arbitration award (see CPLR 7511[e]).
Ferrante v. Wold
Jonathan Rice, New York, N.Y., for plaintiff-appellant-respondent.
Barry, McTiernan & Moore, New York, N.Y. (Laurel A.
Wedinger of counsel), for defendants-
In an action to recover damages for personal injuries, (1) the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Kings County (Ruchelsman, J.), dated November 18, 2004, as denied that branch of his motion which was to retain the sum of $25,000, representing the sum paid by Allstate Insurance Company to him in connection with a claim for uninsured motorist benefits pursuant to a receipt, release, and trust agreement between him and Allstate Insurance Company, (2) the defendants appeal from a judgment of the same court dated January 10, 2005, which, upon the defendants' alleged failure to comply with a stipulation of settlement of the action dated November 22, 2004, is in favor of the plaintiff and against them in the principal sum of $75,000, and (3) the defendants appeal, as limited by their brief, from so much of an order of the same court dated April 21, 2005, as granted that branch of the plaintiff's motion which was to enforce the stipulation of settlement agreeing to settle the action for the sum of $75,000.
ORDERED that the appeal from the order dated November 18, 2004, is dismissed; and it is further,
ORDERED that the order dated April 21, 2005, is affirmed insofar as appealed from; and it is further,
The appeal from the order dated November 18, 2004, must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeal from the order dated November 18, 2004, are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).
On July 20, 1999, a motor vehicle owned and operated by the plaintiff was involved in an accident with a vehicle owned by the defendant Tri State Service Co. (hereinafter Tri State) and operated by the defendant Gregory C. Wold. Tri State's insurer, Reliance Insurance Company, was insolvent, and therefore the plaintiff's claim was administered by the New Jersey Property-Liability Insurance Guaranty Association (hereinafter the NJPLIGA), in accordance with the New Jersey Property Liability Insurance Guaranty Association Act (hereinafter the Act) (see NJSA 17:30A-1-20). Pursuant to NJSA 17:30A-12, the plaintiff was required to exhaust his rights under any insurance policy, including uninsured motorist coverage, before he could file a claim against the NJPLIGA. Under former NJSA 17:30A-12(b), the amount payable under a covered claim "shall be reduced by the amount of recovery under any such insurance policy."
The plaintiff sought uninsured motorist benefits from his insurer, Allstate Insurance Company (hereinafter Allstate), and received payment in the sum of $25,000 as payment for his uninsured motorist claim. However, as consideration for the payment of $25,000, the plaintiff executed a "receipt, release, and trust agreement" (hereinafter the agreement) with Allstate stating, inter alia, that such amount was to be "held in trust" by the plaintiff and repaid to Allstate if the plaintiff recovered for his loss "as the result of judgment, settlement, or otherwise." Pursuant to a so-ordered stipulation of settlement dated November 22, 2004 (hereinafter the stipulation), the plaintiff settled the action for the sum of $75,000. Pursuant to the stipulation, the action was "settled for the sum of $75,000" and "the settlement [was] subject to" the provisions of the Act. Subsequently, the Supreme Court entered judgment in favor of the plaintiff in the principal sum of $75,000, upon the stipulation, and upon the defendants' failure to pay.
"Where the terms of an agreement are clear and unambiguous, the agreement should be enforced according to the plain meaning of its terms without the need to examine extrinsic evidence to determine the parties' intent" (Royal Sun Alliance Ins. Co. v Travelers Ins. Co., 15 AD3d 563; see Greenfield v Philles Records, 98 NY2d 562, 569; W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162). Pursuant to the express terms of the agreement, the sum of $25,000 paid by Allstate for uninsured motorist benefits was to be held in trust for Allstate's benefit and repaid to Allstate in the event that the plaintiff settled or obtained a judgment in his favor in the action. Contrary to the defendants' contention, enforcing the agreement does not permit Allstate to bypass the nonsubrogation provisions of NJSA 17:30A-5(d), as Allstate sought recovery from the plaintiff pursuant to the agreement, not from the NJPLIGA. Since judgment in the action was entered in the sum of $75,000 in the plaintiff's favor, Allstate is entitled to be repaid the sum of $25,000 held in trust for its benefit by the plaintiff. Thus, the Supreme Court properly denied that branch of the plaintiff's motion which was to retain the sum of $25,000.
A stipulation of settlement entered into in open court constitutes a binding contract which must be strictly enforced (see Aivaliotis v Continental Broker-Dealer Corp., 30 AD3d 446; Overeem v Neuhoff, 281 AD2d 606; Cobrin v De Luna, 143 AD2d 723; Furgang v Epstein, 106 AD2d 609). Here, pursuant to the express terms of the stipulation, the parties agreed to settle the action for the sum of $75,000. The fact that the settlement was subject to the Act did not alter the settlement amount. Pursuant to former NJSA 17:30A-12(b), the plaintiff's recovery from the NJPLIGA was only subject to offset "by the amount of recovery" under his Allstate policy. Since there was no recovery for the plaintiff's benefit under the Allstate policy, the settlement amount was not subject to any offset. Thus, the Supreme Court also properly entered judgment in the sum of $75,000 in favor of the plaintiff.
RIVERA, J.P., SPOLZINO, GOLDSTEIN and SKELOS, JJ., concur.
In re ELRAC, Inc., v. Brooks
Carol R. Finocchio, New York, for appellants.
Carman, Callahan & Ingham, LLP, Farmingdale (Michael F.
Ingham of counsel), for ELRAC, Inc., respondent.
Order, Supreme Court, Bronx County (Alan J. Saks, J.), entered January 23, 2006, which, to the extent appealed from as limited by the briefs, denied Travelers' cross petition for permanent stay of the arbitration demanded against it by respondent Brooks, unanimously reversed, on the law, without costs, and the cross petition granted to the extent of granting a temporary stay of the arbitration sought by Brooks pending further proceedings on the issue of coverage.
Brooks, an employee of additional respondent Bronx Brake and Alignment, was injured while operating a vehicle owned by petitioner, which he was returning from Bronx Brake's repair shop to petitioner's premises after repairing it pursuant to an agreement between petitioner and Bronx Brake. The agreement required Bronx Brake to maintain automobile liability, commercial general liability, garage keeper's and worker's compensation insurance coverage and to name petitioner as an additional insured on these policies.
Petitioner argues that additional respondents Travelers are responsible for providing uninsured motorist benefits to Brooks under an automobile liability insurance policy issued to Bronx Brake naming petitioner as an additional insured. In support of this argument, petitioner relies on a Certificate of Liability Insurance naming it as an additional insured on certain policies issued by Travelers to Bronx Brake. Pointing to that same Certificate, Travelers contends that the only policy it issued to Bronx Brake was for commercial general liability insurance with a hired and non-owned auto endorsement for third-party claims, and that neither the terms of that policy nor Insurance Law § 3420(f) requires it to provide uninsured motorist benefits.
Since we are not able to determine from the record whether Travelers issued an automobile liability insurance policy to Bronx Brake naming petitioner as an additional insured, a framed issue hearing, after discovery, must be held to resolve this question. Accordingly, the matter is remanded to Supreme Court for further proceedings.
In re Sybil Willingham v. Huston
Finkelstein & Partners, Newburgh (George A. Kohl, 2nd of counsel), for appellant.
Connors & Connors, P.C., Staten Island (Robert J. Pfuhler of counsel), for respondent.
Order, Supreme Court, Bronx County (Yvonne Gonzalez, J.), entered July 8, 2005, which, to the extent appealed from as limited by the briefs, denied petitioner leave to sue respondent MVAIC and Farm Family Insurance Company, unanimously affirmed, without costs.
Petitioner failed to provide certain required information to MVAIC when she filled out her Notice of Intention to Make a Claim. Even after being advised of the omissions, she failed to supplement the form with the necessary information. Among the missing information was establishment that she was a "qualified person" (Insurance Law § 5211[a][1]), which would have required proof of her New York residency (§ 5202[b][I]) in light of her South Carolina address. Nor did she demonstrate, as evident from the record, that she undertook reasonable efforts to establish the uninsured status of the vehicle's owner or operator
(§ 5208[a][1][B],[a][3][A][ii]).
New York Central Mut. Fire Ins. Co. v. Wood and Progressive Northeastern Ins. Co.
Prestige Properties and Development Co., Inc. v. Montefiore Medical Center
Sheridan of counsel), for appellants.
(Nicholas P. Calabria of counsel), for respondents.
Order, Supreme Court, Bronx County (Mark Friedlander, J.), entered on or about August 28, 2006, which granted defendants' motion for partial summary judgment to the extent of dismissing the second cause of action and granted plaintiffs' cross motion for partial summary judgment to the extent of directing defendant insurer to provide a defense to plaintiff Prestige in an underlying action, unanimously modified, on the law, the first and sixth causes of action dismissed, plaintiffs' cross motion denied, and otherwise affirmed, with costs in favor of defendants payable by plaintiffs. Appeal from decision, same court and Justice, entered September 8, 2005, unanimously dismissed, without costs.
Plaintiffs (collectively Prestige) are the owners/operators of commercial property located in the Bronx. Prestige leased certain space, defined in the lease as the "demised premises," to defendant Montefiore Medical Center. Under the lease, Montefiore was obligated to obtain certain insurance coverage for Prestige, which it did through defendant Hanys Insurance Company. During the course of Montefiore's tenancy, one of its employees claimed she was injured in a common area hallway of the demised premises when part of the ceiling fell and struck her. The employee commenced a personal injury action against Prestige (the underlying action). After Hanys refused to undertake Prestige's defense in the underlying action, Prestige commenced the instant action alleging, inter alia, that Montefiore breached its obligation to defend and indemnify Prestige.
Defendants moved for partial summary judgment, and plaintiffs cross-moved for, inter alia, a declaration that Hanys was obligated to defend and indemnify plaintiffs in the underlying personal injury action. As relevant to this appeal, Supreme Court denied defendants' motion to dismiss the first and sixth causes of action relating to contribution and indemnification, and granted plaintiffs' cross motion to the extent of directing that Hanys provide a defense to plaintiff Prestige.
Prestige is not an additional insured for the loss alleged in the underlying action. Reading the insurance policy as a whole (see MDW Enters. v CNA Ins. Co., 4 AD3d 338, 341 [2004]), Prestige would be covered as an additional insured only if the underlying action sought to hold Prestige vicariously liable for Montefiore's negligent acts, if the underlying accident arose from Montefiore's "use, occupancy, construction or repair" of the demised premises, or if the accident occurred in a common area and Montefiore were at fault.
Prestige's attempt to circumvent the "common area" exception to coverage is unavailing. Positing that the duty to provide coverage is determined by the allegations in the complaint and terms of the policy (see Incorporated Vil. of Cedarhurst v Hanover Ins. Co., 89 NY2d 293, 298 [1996]), Prestige argues that since the complaint in the underlying action does not allege that the accident occurred in a common area, defendants may not rely on that allegation as set forth in the bill of particulars to decline coverage. The proposition is at best doubtful. In any event, the final "amended complaint," which supersedes all previous pleadings, specifies that the accident occurred in a "common area." Thus, Hanys properly declined coverage based on the injured employee's allegation that the accident occurred in a common area, unless Montefiore's negligence contributed to the accident. Notably, the record is devoid of any evidence that Montefiore's negligence caused a portion of the ceiling to fall.
Moreover, Prestige also fails to raise a triable issue of fact as to any relationship between the ceiling collapse and Montefiore's "occupancy, construction or repair" of the demised premises (see Greater N.Y. Mut. Ins. Co. v Mutual Mar. Off., 3 AD3d 44, 47-48 [2003], citing General Acc. Fire & Life Assur. Corp., Ltd. v Travelers Ins. Co., 162 AD2d 130 [1990]).
Finally, Prestige's attempt to trigger coverage based on its status as Montefiore's real estate manager is improperly raised for the first time on appeal, and, in any event, without merit. Since the underlying complaint does not allege any negligence by Montefiore and Prestige did not come forward with any evidence of such negligence, defendants should have been granted summary judgment dismissing the first and sixth causes of action. Concomitantly, the award of summary judgment to Prestige, directing Hanys to defend them in the underlying action, was erroneous, since Prestige is not an additional insured under the policy.