Source: https://www.hurwitzfine.com/news/coverage-pointers-volume-xiii-no-22
Timestamp: 2019-07-17 18:40:42
Document Index: 87829430

Matched Legal Cases: ['§ 11', '§2309', '§ 240', '§ 240', '§ 11', '§123', '§123', '§ 241', '§ 241', '§ 241', '§ 241', '§ 241', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 187', '§ 190', '§ 3729', '§ 1320', '§ 5102', '§ 5102', '§ 3420', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 11', '§ 11', '§ 20', '§ 20', '§ 240', '§ 240', '§ 240', '§ 3420', '§ 524', '§ 524', '§ 3420', '§ 3420', '§ 240', '§ 11']

Coverage Pointers - Volume XIII, No. 22 | Hurwitz & Fine, P.C.
Coverage Pointers - Volume XIII, No. 22
First things first: A hearty congratulations to our friend Tim Sullivan and to NAMICO Insurance Company for Tim’s elevation to President and CEO, of NAMIC Insurance Company, Inc. NAMIC) a specialty lines carrier that insures members of the National Association of Mutual Insurance Companies (NAMIC) and their agents.
Tim has been responsible for the claims operation at NAMICO for some time and has a true love for the insurance industry and a healthy affection for the lawyers associated with it. Delighted for both Tim and NAMICO.
I was fortunate to speak at the PLRB/LIRB Claims Conference in Orlando last week on the subject of Tender Benders. The presentation focused on the protocols and interrelationships between contractual tenders under indemnity agreements and additional insurance obligations. We welcome 20 new Coverage Pointers subscribers.
In their honor, the Second Department rendered a decision in Ramcharan v. Beach 20th Realty, LLC which is reported in this issue which deals with both a tender under an indemnity agreement (denied by the court) and a demand for protection under additional insured status (which was also denied – based on the underlying contract only requiring the provision of Certificates).
For our new subscribers, let me give you a few hints about how to get the most of our publication. Each issue is accompanied by a cover note – you’re reading it now. It contains some highlights of the issue (attached), a few historical notes about events that occurred exactly 100 years before that particular issue, as well as teasers from our editorial staff. Our regular columns include:
Kohane’s Corner which provides summaries of casualty cases in all areas, personal and commercial lines, D&O, E&O, etc.
Margo’s Musings reviews New York Serious Injury Threshold cases.
Audrey’s Angles summarizes No Fault decisions, both arbitration and judicial.
Peiper’s Property (and Potpourri) covers first party cases and miscellaneous decisions that just don’t fit anywhere else but are worth reporting;
Fijal’s Federal Focus selects federal judicial decisions from around the country that deal with coverage issues;
Jen’s Gems focuses on lower court coverage decisions.
Occasionally, Mike Perley adds a Liening Tower of Perley column on secondary payer and lien issues and others pop in with special columns when the need arises.
The first part of the issue contains the summaries and then the cases are reported in full in the second part of the newsletter. We keep this in MS Word format so you can copy and paste summaries of relevant cases into your claims files. If you are going to print the issue, you may choose to print only the summaries.
Where in the World is Hurwitz & Fine?
For those who don’t our issues with requisite religious fervor, as a reminder, we have an office in Albany, New York, staffed by our own Cassie Kazukenus. She’d love to work with you in the Capital District and up and down the Hudson and thereabouts!
Probably 80% of our coverage work is in New York City and its suburbs.
Presently, I’m in New York City today, serving as co-chair for the ACI Fire and Casualty Claims and Litigation Conference where I’m presenting, as well, on Defending and Managing Construction Defect Claims in the Fire & Casualty Context.
There are two cases in this issue that are “must reads;” one, because the court did the right thing (State ex rel Seiden) and the other, because what the court did was wrong (AIU v. Veras). The Seiden case revolves around a challenge to Acord Forms as fraudulent (when the policies described are not as broad as some may think they are) and the AIU decision involves a so-called late disclaimer.
If you want more than our report, we discuss the AIU decision in our interactive LinkedIn site, New York Insurance. We welcome you there.
One Hundred Years Ago -- Two One-Game Wonders
You KNOW I love baseball stories. Let me introduce you to Clint Prough, the first of two One Game Wonders (who happened to pitch for the same team, on the same day in the same game, one relieving the other). I was able to track down Clint’s grand-niece who sent me pictures of Clint as a baby but had little other information about him. I will tell you what I found out.
A century ago today, Clint pitched three innings for the Reds. It was his debut game in the majors and neither he nor his team had a very good day. Clint was brought in as a middle reliever. The official stats show that he pitched three complete innings, faced 15 batters, gave up two earned runs (of five that scored while he was on the mound), seven hits, walked one and struck out one. Here’s the story of the game, which appeared in an edition of the Lima Ohio News. I love the “every mother’s son of them” line in the article:
Pittsburgh, Apr 27 — The Reds went to pieces and the Pirates, every mother's son of them, began piling up runs this afternoon. It didn't stop until the score was 23 to 4. The Pirates used ten men and the Reds 16, including three pitchers. It was the record for the season for runs and hits.
Poor Clint – perhaps he was the scapegoat for the awful outing, but his three innings that day were the total sum of his major league experience, as reported a couple of weeks later in the Waterloo Times, his home state newspaper
Waterloo (Iowa) Evening Times
There has been a little more weeding out in the local garden during the week, Manager O'Day sending Pitcher Bill Prough back to Birmingham, whence he came. Prough had but one trial in a big league game, being sent in against the Pirates after Art Fromme had been chased to the scrub oaks. Prough was just what the doctor ordered for the Pirates' emaciated batting averages, and it wasn't long before he joined Fromme in the woods. In Prough's case it is a matter of a lack of experience, and so he goes back to Birmingham for further schooling."
Fromme had a 10-year career in the majors, pitching in 252 games and pitching in 1438 innings. Prough continued pitching in the minor leagues for another 14 years but never again made it to the Big Show.
As it turns out, Prough was relieved by one Hanson Horsey who, like Prough, never pitched before (or after). This was a one-trick Horsey. He pitched four innings, faced 27 batters, gave up 14 hits, gave up 10 earned runs, on 14 hits and ended up with an Earned Run Average of 22.50. Horsey remained in baseball but never made it to the Majors again. His death was reported on December 2, 1949, without a mention of his Major League appearance:
Millington, Md., Dec. 1, 1949 -- Hanson Horsey, Umpire-in-chief of the Class D Eastern Shore Baseball League, died unexpectedly at his home here today. He was 60. Horsey, who took a lifelong interest in baseball, was a pitcher the old Federal League. For many years he had officiated at college games and took the Eastern Shore League assignment when the loop was reactivated after World War II.
He had operated a lunch room in this Kent County town until about a year ago. Horsey is survived by his widow and his son, Hanson Horsey, Jr.
Notes from the Audrey’s Igloo:
I want to thank my out of state friends for contacting me on Monday concerned whether I was snowed in after they watched the Weather Channel. We received about 10” of snow where I live and were without power on Monday. However, that did not stop me from getting into the office because as one national newscaster stated – they are hearty in Buffalo. Since Monday the snow where I live has significantly melted and we have only a few inches while in the city there is no snow and dry streets.
Two issues to raise for this edition. The first is hats off to Travelers in the reported arbitration decision in ensuring its denial on lack of causal relationship with a two year treatment gap was based upon a peer review. We have seen many decisions over the years where the denial was not upheld on treatment gap issues because the claims professional reviewed the records and determined there was no way the treatment could be related to the accident. While many times in reviewing the records the reasonable person would agree that a 2 year treatment gap is not causally related you still need a medical opinion to support the denial. The second is that the issue of certificates of conformity is still alive. However, in the East-West Acupuncture case reported herein, the court granted the insurer’s summary judgment motion on the condition that it provides the certificate of conformity within 60 days when the plaintiff objected to the admissibility of the claims representative’s affidavit. The Appellate Term held that the court had the discretion and did not improvidently exercise that discretion to permit the insurer to obtain the certificate and give it nunc pro tunc effect.
Finally, the New York State Bar Association is presenting a CLE – Practical Skills – Basic Tort and Insurance Law Practice in Buffalo on June 13, 2012. This is a great program for newly admitted attorneys and claims professionals as it provides the basics on insurance coverage as well as auto insurance coverage and addressing Medicare Secondary Payer, workers’ compensation and no-fault liens as well as GOL 5-335 when settling a case. This is also a great refresher course for experienced attorneys and a great opportunity to ask some of the brightest coverage lawyers in Buffalo questions on auto insurance and drafting disclaimers. If you need more information please do not hesitate to email me at [email protected].
One Hundred Years Ago – Titanic Bodies Continue to Be Recovered
BODIES OF ASTOR AND STRAUS FOUND;
Funeral Ship Now Nearing Halifax with Them and Those of Other Titanic Victims
91 In the Identified List
But Some Errors in Transmission Apparently Hide Real Names
Mourners in Halifax to Claim Dead
The bodies of Col. John Jacob Astor, Isidor Straus, and Charles M. Hays, the late President of the Grand Trunk Railway have been recovered from the sea where the Titanic went down and are now on the cable ship Mackay-Bennett, which is due at Halifax on Monday with them, and bodies of other Titanic victims on board…
The good news, we’re pleased to offer another bumper crop of decisions this week.
The less than good news, most of the interesting decisions are found elsewhere other than this week’s potpourri section. We would direct your attention to the Ramcharan case reviewed in Kohane’s Corner. In that decision, the Second Department narrowly construed an insurance provision of a commercial lease. Essentially, the Court held that unless you unequivocally ask to be named as an additional insured, you don’t trigger “additional insured by contract” provisions. For practitioners that have been bludgeoned by the BP Air and Regal Construction decisions over the past few years, cases like Ramcharan and the Persaud decision that we reviewed in the last edition are welcome developments.
It has always been the case that Courts, post-Hooper Associates, would strictly construe indemnity provisions. Coming out of that decision and its progeny, was the argument that insurance procurement provisions, which usually go hand-in-hand with indemnity provisions, should be afforded the same level of construction. With the decisions in Persuad and Ramcharan, it would appear that there is certainly momentum to that effect. We also note that given New York’s long standing rules on the limitation of extrinsic evidence, it would also appear that certificates of insurance would be marginalized. Indeed, the court in Ramcharan held that a certificate of insurance, even a promise to obtain a certificate of insurance, does not rise to the level of an enforceable request to be named as an additional insured.
Regardless of where we go from here, it is an issue that deserves some attention. It also reminds us, one and all, to read all of the policies and contracts you’re reviewing. From start to finish…every time.
Finally, I would like to remind everyone of NBI’s upcoming Insurance Coverage Seminar which is scheduled for May 8th in Downtown Buffalo. If you’re in the area, and like this coverage stuff, we’d encourage you to give some thought to signing up. If you need more incentive, as part of an excellent group of speakers, Kathie Fijal has agreed to speak on evaluating a coverage case and pre-litigation techniques. In addition, I have been asked to lead a discussion on coverage mediation strategies. Hope to see you there.
That’s all for now. See you in May.
When Coverage Does Not Exist in the First Instance, No Obligation to Disclaim
Does the Court Mean It? A Two Week Delay in Disclaiming Is Too Late? Thousands Flee
Attack on ACORD 25 Certificates as Containing Misleading Description of Artisan Policies Rejected
My Baby Wrote Me a Letter – But Not This One
This One’s Worth Considering – Advising SUM Carrier of Intention to Binding Arbitration of Auto Personal Case Is NOT Request for Consent to Settle
Rockville Centre Did Not Provide SUM Coverage Under Its Self-Insured Retention and Thus Coverage Unavailable
Attention New PLRB Subscribers: Second Department Rules on Tender Issues – A Promise to Provide Certificates of Insurance Is Not a Promise to Provide Additional Insured Status.
Indemnity Promise on Behalf of Contactor and Its Subcontractors Is Inapplicable to Others Not in Privity With Promising Party
Court Refuses to Disturb Finding After “Framed Issue” Hearing, That Physical Contact Did Not Occur Between Vehicles
Insured Provided Sufficient Proof That It Did Not Know of Property Damage at Earlier Time; Conjecture Offered in Response Insufficient to Rebut Excuse
Reminder: A Chiropractor Cannot Affirm
Plaintiffs Fail to Raise Triable Issue of Fact in Opposition to Defendants’ Motions
Defendants Fail to Address Plaintiffs’ Claims Under the 90/180-Day Category
On Appeal, Trial Court Orders Are Reversed
Defendants’ Failure to Examine Plaintiff During Relevant Period Defeats Motion with Regard to 90/180-Day Category
Plaintiff’s Deposition Testimony and Bill of Particulars Defeats His 90/180-Day Claim
Appellate Court Affirms Dismissal as to One Plaintiff but Reverses as to Other
Blanket Denial Obviates Requirement for Applicant to Timely Submit Bills to Insurer
Denial Proper When Provider Does Not Specify Type of Durable Medical Equipment Prescribed
Two Year Treatment Gap Not Causally Related to Accident Based Upon Peer Review
Insurer Raised Issue of Fact on Medical Necessity Precluding Summary Judgment
Plaintiff’s Failure to Rebut Peer Review Does Not Raise Triable Issue of Fact on Lack of Medical Necessity
45 Days Is From Date of Service Until Provider Mails Bill, Not Until Insurer Receives Bill
Insurer Established Breach of Policy Condition by Failing to Attend Scheduled IMEs
Extrinsic Evidence Is Impermissible Where the Terms of the Contract Are Clear
Legal Malpractice Claim Survives Where, as Here, There Remains a Possibility of Coverage
Contractual Provisions for Attorneys’ Fees Must Be Strictly Construed
Alter-Ego, Who Is a Wholly Owned Subsidiary of Plaintiff’s Employer, Entitled to Worker’ Compensation § 11 Protection
Question of Fact Regarding the Interpretation of Guaranty Clause
A3507-A
Payment of Restitution Is Not Damages
No Additional Insured Coverage Where Accident Did Not Arise Out of Named Insured’s Operations or Premises Rented to It; Likewise, No Additional Insured Coverage Where Policy Contained No Additional Insured Endorsement
Where Injured Party Notified Hospital of the Accident and Completed a MV-104 Form, He Complied With the Requirement That the Accident Be Reported Within 24 Hours After the Occurrence to a Police, Peace, or Judicial Officer
Breach of Contract and Tort Claims Dismissed Where Insurer Complied With Arbitration Clause in Auto Policy
Policy That Expressly Stated It Was Excess and Would Not Contribute With Any Other Insurance Deemed Excess to Policy Silent on This Issue
INTERPRETING EMPLOYEE THEFT COVERAGE
That’s all for now. Stay in touch and let us know who else might enjoy this literary missive.
04/24/12 1812 Quentin Road, LLC v.1812 Quentin Road Condo. Ltd
The obligation to disclaim promptly in personal injury and wrongful death cases only exists where the claim falls within the grant of coverage and the denial is based on a policy exclusion or breach of policy condition. Here, Travelers established that the claim fell outside of the grant of coverage. Accordingly, coverage cannot be created by the mere passage of time or the failure to disclaim.
04/24/12 AIU Insurance Company v. Veras
The accident occurred on June 4, 2005. Veras and Richard were involved in an accident, Richard was driving a car owned by Wynder-Ortiz and insured by State Farm. State Farm did not learn of the accident from its insured. Four years later, it learned of the accident from Veras, when it was served with a default judgment taken against Richard and Wynder-Ortiz.
Although it completed its internal investigation and prepared letters of disclaimer within two weeks, State Farm waited another 15 days before sending out the letters. The court found that this “unexplained delay” was unreasonable. State Farm’s argument was that it was investigating other possible grounds for disclaimer but that excuse was insufficient.
Editor’s Note: Wrong, wrong, wrong. OK, in the recent George Campbell Painting case, the court held that one cannot excuse a delay in disclaiming based on a search for other grounds. We’re not arguing that part of the decision was incorrect.
However, IF it took two weeks to complete its investigation on late notice, it is then, at the conclusion of the two week investigation period that the clock starts to run on the disclaimer. It took only 14 days following the conclusion of the investigation for the carrier to send out the disclaimer. There is no precedent for shortening the insurer’s time to disclaim to 14 days. None.
04/24/12 State ex rel. Seiden v. Utica First Insurance Company
Utica Fire issued “artisan policies” to small contractors, often less expensive than other policies; some of those policies excluded commercial construction projects, excavation, underpinning, etc. Such policies often exclude claims from third parties such as third parties like the plaintiffs that sustained damage as the result of defendant contractors' work on adjacent buildings.
In New York City, general commercial construction activities require permits from the New York City Department of Buildings (DOB) and in February 2009, the DOB had specific coverage requirements which are not met by Artisan policies. DOB charges contractors a permit fee based on the total cost of a job. The total cost of the job includes the premium for insurance coverage.
Plaintiffs claim that Utica issued and renewed artisan policies to defendant contractors knowing that these contractors used Utica's policies to register with the DOB and receive permits to work. Utica issues ACORD Form 25 which states the level and type of coverage. There is nothing on the form about compliance with DOB rules and plaintiffs do not allege that the ACORD 25 form itself was false. Plaintiffs claim that these forms were used for DOB permits, that the forms describe "general liability" coverage, and are used to prove the existence of coverage.
Plaintiff Groppi is the property manager for a property adjoining where the named insured was working but learned that the artisan policy did not cover any earth moving work, including the excavation and underpinning work that had caused damage to Seiden's building.
Plaintiffs commenced this qui tam (“Whistleblowers”) action claiming that Utica was “looting of the public purse” by accepting fees that the DOB would have received had “regular” CGL policies been issued. There was no evidence that the plaintiffs had sued the owners of the neighboring property for the damage sustained.
There was no evidence that the ACORD forms were false so plaintiffs resorted to the argument that Utica somehow deliberately marketed the artisan policy to contractors as a means of satisfying the NYC General Contractor licensing requirements. However, plaintiffs have provided no factual allegations to support this theory. The sole allegation in the complaint regarding a "marketing scheme" is the conclusory statement that "Utica's cooperative network of insurance brokers knowingly targeted and distributed their deficient Artisan policy to Defendant Contractors within the City." There are no allegations that Utica or its representatives made statements to contractors that the artisan policies were sufficient to meet DOB licensing requirements.
Plaintiffs also contend that the artisan policies were useless. This is incorrect. These policies covered the work of small contractors and there was no evidence that Utica knew or should have known of any deceptive conduct on the part of the insureds (or would have had any obligation to do something about it, even if it knew). Thus, the allegations do not show that, even if Utica knew of the contractors' deceptions, Utica would have any obligation to do anything about those deceptions.
Simply put, selling artisan policies to defendant contractors and providing them with the ACORD form that lists the artisan policies as a "commercial general liability" type of policy is insufficient to allege liability under the NYFCA.
04/19/12 Citizens Insurance Co. of America v. Hatzigeorgiou
Citizens claimed that it timely disclaimed coverage by a letter dated July 9, 2008. In opposition, defendants assert that the July 9, 2008 letter was not a notice of disclaimer, but a reservation of rights, and that plaintiff did not disclaim coverage until commencing this declaratory judgment action more than two months after receiving notice of the underlying action. Citizens then moved to renew based on the "new facts" that it actually sent a letter disclaiming coverage on July 16, 2008 and that it never sent the "draft" letter dated July 9, 2008.
Plaintiff did not provide a reasonable justification for failing to present the July 16, 2008 letter on the prior motion. Counsel’s excuse that it inadvertently attached the wrong letter in its prior motion papers is unreasonable, given that, in reply to defendants' opposition to the original motion, plaintiff submitted a sworn affidavit from its agent attesting to the fact that the July 9,2008 letter was the disclaimer letter sent to defendants. The agent's affidavit on renewal asserting that the July 16, 2008 letter is the actual disclaimer letter contradicts her prior sworn affidavit that the letter was never sent.
04/19/12 State Farm Mutual v. Perez
State Farm provided Perez with SUM (underinsured motorist) coverage in the amount of $100,000. Perez was rear-ended by a vehicle with liability limits of $25,000. Perez send two letters to State Firm, the first notifying it of his intent to commence a negligence action against the tortfeasor and the potential for a SUM claim, and the second, dated May 28, 2010, stating that he and the tortfeasor agreed to a binding arbitration proceeding. Perez was awarded $50,000, issued a release to the tortfeasor for the $25,000 and then demanded SUM arbitration.
State Farm argued that it did not receive a written notice of an intention to settle or a request for its consent to settle with the tortfeasor, which was in violation of conditions 10 and 13 of the parties' SUM policy and sought a permanent stay of arbitration, alleging policy breaches.
Condition 10 of the parties' SUM policy specifically provides that if the insured elects to settle with a tortfeasor involved in a motor vehicle accident, "release may be executed with such party after thirty calendar days actual written notice to us . . . An insured shall not otherwise settle with any negligent party, without our written consent, such that our rights would be impaired" (emphasis added).
Perez argued that the failure of State Farm to object to the binding arbitration permitted him to settle without further notice to State Farm and without impairing rights to SUM coverage.
Court finds that notification of intention to arbitrate is not a notice of an intention to binding arbitration is not a notice of an intention to settle.
Editor’s Note: Frankly, that result was surprising. Let’s play it out in a situation where permission was requested. Plaintiff is considering binding arbitration of its resolve personal injury claim with tortfeasor. It asks the SUM carrier for consent to proceed with that binding arbitration, which will clearly result in a settlement of the personal injury case. Insurer does not respond. The arbitration proceeds and there is an award of $50,000.
The plaintiff’s lawyer then asks for consent to take the $25,000 policy limit and the insurer has two options, consenting or declining consent.
If the insurer consents at that point, there is no problem. The payment of the $25,000 is made and the SUM arbitration proceeds.
What happens if the insurer declines and agrees to advance the $25,000 under Condition 10? The tortfeasor’s insurer will object because its agreement to binding arbitration was based on its expectation and understanding that the arbitration would lead to a release of its insured from further litigation.
Will this decision portend the end of binding arbitration of auto personal injury cases without very specific consent on the part of the SUM carrier?
04/17/12 Matter of Village of Rockville Centre v. Ziegler
Ziegler was a police officer with the Village and was hurt while on duty when a car driven by Frazier collided with the police vehicle Ziegler was driving. Ziegler sued Frazier and another. State Farm, Frazier’s insurer, made an offer of settlement. The Village wrote to the attorneys for Ziegler, consenting to the settlement. The Village indicated that it had a policy of Supplementary Underinsured Motorists benefits with Markel with a limit of $500,000, subject to a $500,000 self-insured retention. Thereafter, Ziegler served a demand for arbitration on the Village. The demand indicated that the Village was "[s]elf insured up to $500,000 with [Markel] carrying an excess policy."
The Village and Markel sought an application to permanently stay arbitration of Ziegler's underinsured motorist claim, contending that no coverage was available to Ziegler because the Village was self-insured and its self-insured retention did not provide underinsured motorist coverage. The First Department found that the Village did not provide SUM coverage and therefore the petition to stay arbitration should have been granted.
Editor’s Note: Under Condition “10” of the mandatory SUM endorsement, consent must be sought from a SUM carrier before a personal injury claim against a defendant is resolved, because once the plaintiff issues a release, a SUM carrier’s subrogation rights are destroyed. That was why permission was sought by the plaintiff here. See the 04/19 Perez case above. One wonders why permission was granted if there was no SUM coverage available.
04/17/12 Ramcharan v. Beach 20th Realty, LLC.
Attention New PLRB Subscribers: Second Department Rules on Tender Issues – A Promise to Provide Certificates of Insurance Is Not a Promise to Provide Additional Insured Status. Indemnity Promise on Behalf of Contactor and Its Subcontractors Is Inapplicable to Others Not in Privity With Promising Party
On August 19, 2005, Ramcharan (“decedent”) was fatally injured while performing electrical work at a warehouse owned by Beach and leased to Unlimited. The decedent was employed by Excel. The estate of the decedent sued Beach, the owner and it commenced a third-party action against, among others, the lessee, Unlimited and the decedent’s employer, Excel.
Excel moved for summary judgment dismissing Beach's third-party cause of action alleging breach of contract for failure to procure insurance against it." The contract language merely requires the purchase of insurance. It did not require that the owner, Beach, be listed as an additional insured. Excel was required to provide Beach with certificates of insurance from all subcontractors listing Beach as an additional insured.
Beach also claim claimed that it had a valid contractual indemnification claim against United. However, the lease between Beach and Unlimited does not reflect Unlimited's "unmistakable intent" to indemnify Beach for any claim that does not result from any negligence on the part of Unlimited or Unlimited's contractors, agents, employees, or invitees. The lease provided that Unlimited is required to indemnify and hold harmless Beach "from all liabilities, obligations, damages . . . [and] claims . . . as a result of . . . the carelessness, negligence or improper conduct of [Unlimited], [Unlimited's] agents, contractors, employees, invitees or licensees." Unlimited established that Excel was a contractor retained by Beach, and therefore not an agent or contractor of Unlimited.
Editor’s Note: At the PLRB Claims Conference this past week, we were delighted to speak on the very topic of tenders under policies and contractual liability clauses. The Second Department accommodated us with this timely decision on topics discusses.
04/17/12 In The Matter of GEICO v. Tuzzo
Court declines to disturb the Supreme Court's determination, made after a framed-issue hearing, that there was no physical contact between the insured vehicle and an alleged hit-and-run vehicle.
Editor’s Note: To qualify for eligibility for Uninsured Motorists (“UM”) benefits in New York, based on a hit-and-run accident, there must be physical contact between the vehicles. If a demand for UM arbitration is made for UM benefits based on hit-and-run accident and insurer believes that physical contact did not occur, it must move for permanent stay of arbitration within 20 days of arbitration demand and the court may then conduct a “framed issue” hearing to resolve issue of physical contact. A failure to move for the stay will preclude the insurer from raising that issue in the future.
04/17/12 Fook Cheung Lung Realty Corp. v. Yang Tze River Realty
J & A provided its insurer with notice of plaintiff's property damage claim within a reasonable time. J & A demonstrated, with affidavits, when it arrived on the construction site, the extent of its duties and its lack of knowledge of the property damage until J & A's receipt of an attorney's letter in May of 2007. QBE argued that J & A had knowledge of the damage was based on conversations between plaintiff's president and a representative of the general contractor working at the adjoining premises and of complaints to the Department of Buildings. Those events would not necessarily have put J & A on notice, and it is mere conjecture that J & A was in fact told by others of the damage. QBE's claimed need for discovery to oppose the motion reflected an ineffectual mere hope. Since the notice was timely and that was the only coverage defense, the lower court properly ruled on indemnity obligations as well.
04/24/12 Gibbs v. Reid
Defendants submitted numerous expert affirmations stating that infant Gibbs had full range of motion in her cervical spine, and affirmations of a radiologist who opined that her bulging lumbar disc was degenerative. Even though defendants’ experts’ reports contained discrepancies in the normal values for certain ranges or motion, these discrepancies were insignificant because full range of motion in every plane was shown.
In opposition, plaintiffs failed to submit any evidence in admissible form and the chiropractor affirmed his report rather than submitting an affidavit as required of a chiropractor. As such, on appeal the trial court was reversed and summary judgment was granted to defendants.
04/24/12 Balsamo v. Weiss
Hendrickson v. Williams
In decisions without any factual details, on appeal the trial courts’ decisions are affirmed as defendants met their prima facie burdens of showing plaintiffs did not sustain serious injuries and plaintiffs failed to raise a triable issue of fact in opposition.
04/24/12 Quintanilla v. Campion
Pleasant v. M & Lenny Taxi Corp.
Jackson v. Draz
In all three matters, defendants failed to either adequately address, or address at all, the various claims alleged by plaintiffs, and in particular, failed to address the plaintiffs’ claims under the 90/180-day category. Therefore, defendants failed to meet their prima facie burdens and, on appeal, the trial courts’ orders denying their motions are affirmed without regard to the sufficiency of plaintiffs’ opposing papers.
04/24/12 Davis v. Wills
Fernandez-Velez v. O’Hara
Again, decisions without factual details. In Davis, the appellate court reversed the grant of defendant’s motion determining that plaintiff did, in fact, raise a triable issue of fact in opposition. In Fernandez-Velez, the appellate court reversed the trial court’s denial of defendant’s motion finding that plaintiff failed to raise a triable issue of fact in opposition.
04/17/12 Zinnah v. Isabella City Carting Corp.
On appeal, the trial court’s denial of defendants’ motion is affirmed as the record contained numerous issues of fact with respect to the alleged lumbar and cervical injuries, including MRI reports revealing multiple herniations, the affirmation of a neurologist noting loss of range of motion and attributing it to the accident, and the affidavit of a chiropractor rejecting allegations of degeneration as the cause of the injuries. In addition, defendants did not meet their burden with respect to the alleged 90/180-day claim as they did not have any expert examine plaintiff during the relevant period and could not show lack of causal relationship.
04/17/12 Cruz v. Rivera
In his bill of particulars, plaintiff alleged he was confined to bed for one week. During his deposition, he testified that he missed about a week of work. Therefore, defendant’s motion should have been granted with respect to the 90/180-day claim. However, plaintiff raised triable issues of fact with regard to the alleged injuries to his lumbar and cervical spine through the affirmation of his treating physician who reviewed MRI reports and found multiple herniations, bulges, persistent muscle spasms and range of motion restrictions which he quantified.
04/17/12 Belliard v. Leader Limousine Corp.
Separate motions were brought by defendants, and granted by the trial court, to dismiss the complaint asserted by two plaintiffs. On appeal, the Court found that plaintiff Belliard raised a triable issue of fact to defeat the motion as to him, but plaintiff Sepulveda did not and, therefore, defendants were properly granted dismissal of the complaint insofar as asserted by Sepulveda, but not as asserted by Belliard.
04/23/12 Applicant v. GEICO Ins. Co.
The seminal issue in this arbitration was whether the insurer’s blanket denial obviated the requirement for the medical provider to submit bills for medical services within 45 days after the service was rendered. The eligible injured person (“EIP”) was involved in a December 13, 2007, motor vehicle accident. On July 21, 2008, the insurer issued a blanket denial for orthopedic, physical therapy and diagnostic benefits based upon an independent medical examination. The medical provider sought reimbursement for therapy provided to the EIP when the bills were not submitted to the insurer for payment after the blanket denial was issued.
The assigned arbitrator began his analysis with State Farm Ins. Co. v. Domotor, 266 AD2d 219 (2d Dept. 1999), where the Appellate Division held that an insurer cannot after “repudiating liability, create grounds for its refusal to pay by demanding compliance with proof of loss provisions of the policy.” He then turned to subsequent decisions following Domotor but recognized that they are contrary to a 2004 Opinion Letter from the Office of General Counsel that requires continued timely submission of a claim after a general denial is issued. The assigned arbitrator determined that he was bound by the Domotor holding with the following two caveats. The first is that the EIP must have suffered an out of pocket loss. The second is that the medical provider must still establish a prima facie showing of medical necessity.
In this case the EIP sustained an out of pocket loss by repaying a Medicare lien. The EIP did establish its prima facie case through the submission of the medical bills and the reports from the treating physicians. The assigned arbitrator determined that the insurer did not meet its burden of establishing lack of medical necessity as the independent medical examination by Dr. Ronald Mann was not persuasive. Accordingly, an award was rendered in favor of the EIP.
04/20/12 WJW Med. Products, Inc. v. A Central Ins. Co.
The assignor was involved in a December 1, 2009, motor vehicle accident and came under the care of Richard Horvath, DC with complaints of righter shoulder pain as well as a burning sensation in the low back. Chiropractor Horvath prescribed, 12 days later, an interferential unit for the assignor’s back pain in order to provide better spinal support. The prescription did not specifically list the type of equipment prescribed and the bill listed the equipment under a generic durable medical equipment code. It was eventually determined that the equipment was an interferential unit.
The insurer denied the durable medical equipment upon an independent chiropractic examination by John Gaiser, DC. The assigned arbitrator found Chiropractor Gaiser’s report to be persuasive and that Applicant’s documents arguably did not set forth a prima facie case. This is because the equipment prescribed was not specified on the billing or the prescription. Also, it was perplexing to the assigned arbitrator how an interferential unit was for better spinal support when it is generally used for pain relief.
04/18/12 Total Care Rehab. Med. PC v. Travelers Home & Marine Ins. Co.
The assignor was involved in a January 6, 2009, motor vehicle accident and treated at the local hospital with complaints of neck and back pain. After a two year lapse in treatment, the assignor received treatment for neck and back pain. The insurer denied the treatment as not causally related based upon the peer review of Dr. Benjamin Greenblatt. Despite the treating physician testifying, the assigned arbitrator found Dr. Greenblatt’s opinion more persuasive.
04/17/12 Westchester Med. Ctr. a/a/o Peter Dilemme v. Lancer Ins. Co.
The plaintiff demonstrated its prima facie case entitlement to summary judgment through the submission of the billing form that was mailed and received by the insurer without payment after 30 days. The insurer raised a triable issue of fact that it timely requested additional verification and timely denied the bill within 30 days of receiving the requested additional verification. Thus, the plaintiff’s summary judgment motion was properly denied.
04/10/12 Hong Tao Acupuncture a/a/o Jose Rosales v. Praetorian Ins. Co.
The insurer’s summary judgment motion should have been granted as it submitted sworn and affirmed peer review reports that established medical necessity which the plaintiff failed to rebut.
04/10/12 New York Diag. Med. Care, PC a/a/o Austin Trout v. GEICO Cas. Ins. Co.
The plaintiff’s billing manager’s affidavit was sufficient to establish that the claim forms attached to the affidavit were timely mailed. The court rejected the insurer’s argument that the 45 days for submitting a medical bill to the insurer is counted from the date the service is rendered until the insurer actually receives the bill. Rather, it is plaintiff’s mailing of the bill. Since the plaintiff timely submitted its bill to the insurer it established its prima facie case entitlement to summary judgment. The insurer did not raise any triable issue of fact thus the plaintiff was properly entitled to summary judgment.
04/04/12 East-West Acupuncture a/a/o Michael Cousins v. Safeco Ins. Co. of Indiana
The lower court properly issued a conditional order granting the insurer’s summary judgment motion upon the insurer presenting within 60 days the certificate of conformity that accompanied the claims representative’s affidavit. The plaintiff argued that the claims representative’s affidavit, which was executed outside of New York, was inadmissible as it was not accompanied by a certificate of conformity. The court held that a court may permit a party to secure the certificate later and give it nunc pro tunc effect. The appellate term held that the lower court did not improvidently exercise its discretion in providing the insurer with time to cure the defect to comply with CPLR §2309 (c).
04/24/12 Great American Restoration Services, Inc. v. Lenti
After sustaining loss in a house fire, defendant retained Great American to cover holes in the premises, remove standing water, and salvage and store any personal items that were not destroyed. The agreement was reduced to a contract that, importantly, provided that Great American would be paid by insurance proceeds. However, should insurance not cover some, or all, of Great American’s work, defendant agreed to provide the remainder of any outstanding balance.
At the conclusion of Great American’s work, demand for approximately $50,000 was made upon defendant. Defendant refused to pay, and the instant action was commenced. In affirming the Trial Court, the Court noted that the clear and concise terms of the contract must be applied. Accordingly, the Court refused to review any extrinsic evidence, and affirmed Great American’s judgment against defendant.
04/26/12 Lue v Finkelstein & Partners, LLP
Plaintiff, while in the course of his employment with O’Connoll Electric, sustained injury when he fell from a scissors lift at a project site owned by K-Mart. Unfortunately, plaintiff did not preserve its right to proceed in a Labor Law § 240(1) against K-Mart after the latter filed for Chapter 11 bankruptcy protection. The result of which meant that plaintiff forewent a potential action under Labor Law § 240(1).
Thereafter, plaintiff retained new counsel who promptly effectuated a settlement against the supplier of the scissors lift. In addition, plaintiff commenced the instant malpractice action against his former attorneys. In their defense, defendants argue that K-Mart was bankrupt and self-insured. Accordingly, plaintiff would not have recovered even if the claim had been preserved. Moreover, defendants also argue that K-Mart did not qualify as an additional insured under O’Connell’s policy. This was despite the K-Mart/O’Connell Contract requiring that K-Mart be named as an additional insured, and providing that O’Connell would indemnity K-Mart.
In response to defendants’ positions, plaintiff noted that regardless of K-Mart’s insurance situation, it possessed a valid contractual indemnity claim against O’Connell. If instituted, any exposure K-Mart would have faced would have fallen within the coverage afforded under the O’Connell policy.
The Appellate Division started its analysis by noting that neither party to this action included a copy of the O’Connell policy. Thus, it could not be determined, as a matter of law, that K-Mart, in fact, did not qualify as an additional insured. If they did, as noted by the Appellate Division, plaintiff’s claim should have been preserved.
Moreover, the Court also appeared to acknowledge the potential for a contractual indemnity claim against O’Connell. However, where there was no evidence of K-Mart’s own negligence (or lack thereof), the Court could not decide as a matter of law that K-Mart would have possessed a valid pass through to O’Connell thereby creating solvency for plaintiff’s claims. Accordingly, the matter was remanded to the Trial Court for further proceedings.
04/20/12 Colonial Surety Company v. Genesee Valley Nurseries, Inc.
In this case, the Fourth Department reiterates the well-established principles that contractual indemnity provisions must be strictly construed to avoid creating an indemnity obligation where one was not specifically contemplated. This rule extends to claims for attorneys’ fees arising out of a contractual indemnity claim. Essentially, a party will not be obligated to provide indemnity for attorneys’ fees unless the contract specifically provides for it.
In the instant case, the indemnity clause at issue provided attorneys’ fees for “attempting to recover losses or expenses from [defendants] or third parties.” When faced with the breadth of this clause, the Fourth Department noted that if attorneys’ fees were not available in this circumstance, it is hard to imagine when the would ever be recoverable. Accordingly, the motion for contractual indemnification was granted.
04/19/12 Coonjbeharry v Altone Electric, LLC
Plaintiff sustained injury when his arm became entangled in an auger at a premises owned and operated by NY Rubber Recycling (“NYRR”). At the time of the incident, plaintiff was attempting to unclog a rubber jam, and all parties agree that he was acting within the scope of his employment with Permalife. Importantly, Permalife is the parent corporation of NYRR.
After the incident, plaintiff applied for, and was awarded, workers’ compensation benefits from Permalife. Thereafter, plaintiff commenced the instant action against NYRR and Altone Electric, LLC. NYRR responded by moving for summary judgment on the basis of Workers’ Compensation Law § 11’s statutory bar on employer liability. Altone also moved for summary judgment on the basis that it did not own, nor maintain, the augor or air-table where plaintiff sustained injury.
In affirming the Trial Court, the Appellate Division stated that NYRR was a wholly owned subsidiary of Permalife. As such, NYRR was nothing more than alter-ego of Permalife, and NYRR (as well as Permalife) were entitled to exclusivity protections of the Workers’ Compensation Law. In support of the decision, the Court noted that Permalife prepared and paid taxes on behalf of both Permalife and NYRR. It was also note that both Permalife and NYRR supervised, directed and controlled plaintiff’s daily work activities.
With regard to Altone’s motion, the Court also affirmed the Trial Court’s dismissal of plaintiff’s claim. In so holding, the Court noted that Altone did not install, nor maintain, the auger in question. Rather, uncontroverted testimony established that the machine was installed by a former Altone employee after he left the company’s employ.
04/12/12 Red-Kap Sales, Inc. v Northern Lights Energy Prods., Inc.
By way of December 2005 Agreement, plaintiff agreed to be the exclusive gasoline provider to defendant Northern. As part of the contract, Northern’s principal, Terry Young, executed a contract which contained a Guaranty of Payment of Loan Agreement. When Northern ceased operations in 2009, plaintiff commenced the above action against Northern and Mr. Young, individually.
With respect to the direct claim against Mr. Young, plaintiff argued that the Guaranty located within the 2005 Contract amounted to a personal guarantee signed by Mr. Young. Northern and Young argued that the Guaranty only provide rights against Northern, and did not constitute a personal guaranty.
Upon review of the contract, the Court noted that there is no indication that defendants intended Mr. Young to serve as a personal guarantor. Indeed, the Court noted that Mr. Young executed the document on behalf of Northern, in his capacity as an executive office of Northern. Nonetheless, the Court found a question of fact as the applicability of the clause at issue in the Red-Kap/Northern Contract.
Currently, homeowners’ liability carriers may refuse to issue a policy in instances where the homeowner owns certain dog breeds. This bill would ban homeowners’ liability carriers from refusing to issue, renew or charge an increased premium for the policy when the sole reason is the harboring or owning of any specific dog breed or mixture of breeds. However, a homeowners’ liability carrier will be allowed to refuse to issue, cancel or impose a higher premium where the dog is designated as a dangerous dog pursuant to Agriculture and Markets Law §123. Agriculture and Markets Law §123 allows for a determination as to whether a dog is dangerous when the dog has bitten or attacked a person. Essentially, this legislation would prohibit underwriting based on dog breed if the dog at issue does not have a history of aggression.
Personally, I think this is a good thing, but I am a biased dog owner.
This bill would prohibit insurers or motor vehicle repair facilities from recommending or requiring the use of Non-OEM crash parts unless the part is equal to or better than the comparable OEM crash part. If an insurer or motor vehicle repair facility recommends or requires the use of Non-OEM crash parts, they will be liable if the part fails to equal or exceed the comparable OEM part in terms of fit, form, finish, quality and performance. The liability will extend to replacement cost and property damage and bodily injury. The insurer will be excused if the damages are caused by the gross negligence of a motor vehicle repair facility. If the motor vehicle repair facility did not recommend or require the use of Non-OEM parts and installs Non-OEM parts, it will only be liable for damages caused by its gross negligence.
The proposed legislation defines recommend or require to mean:
(A) Allowing compensation under an insurance policy that equals the retail price of an aftermarket crash part or
(B) Listing a generic crash part in an itemized settlement offer or estimate.
04/12/12 Ryerson Inc. v. Federal Insurance Company
Seventh Circuit Court of Appeals – Illinois law applied
In 1998 Ryerson sold a group of subsidiaries to the EMC Group, Inc. [“EMC”] for $29 million. The following year EMC sued Ryerson, seeking rescission of the sale and restitution of the purchase price. EMC alleges that Ryerson had concealed an ominous impending development affecting one of the subsidiaries – the subsidiary’s largest customer had declared that unless it slashed its prices the customer would build its own plant and stop buying from the subsidiary. The customer repeated the demand for a price cut to EMC when EMC acquired the subsidiary from Ryerson; and when EMC failed to accede to the demand, the customer, as it had threatened to do, took its business elsewhere.
EMC’s suit charged Ryerson with fraudulent concealment intended to induce EMC to buy the subsidiary, breach of contract, and breach of warranty.
Federal Insurance Company [“Federal”] issued Ryerson an “Executive Protection Policy”, a liability insurance policy that required Federal both to indemnify it for judgment and settlement costs, and to reimburse it for defense costs, reasonably incurred by Ryerson in suits arising from risks covered by the policy. Federal refused Ryerson’s demand for reimbursement of defense costs on the ground that EMC’s claim against Ryerson was not a covered risk.
Three years into EMC’s suit against Ryerson, the parties settled, with Ryerson agreeing to make a “post-closing price adjustment” of $8.5 million “reflecting a change in the purchase price paid by EMC to Ryerson” for the purchase of the subsidiary who had gotten into trouble with the customer. Ryerson reported this as a “selling price adjustment” on its Form 10-K. Federal maintained its position with respect to coverage and Ryerson brought this declaratory judgment action seeking a declaration that Federal’s Insurance policy covered the $8.5 million that Ryerson refunded to EMC to settle EMC’s suit.
The insurance policy covers “all LOSS for which [the insured] becomes legally obligated to pay on account of any CLAIM . . . for a WRONGFUL Act [defined in the policy to include a ‘misleading statement’ or ‘omission’] . . . allegedly committed by the insured.
Federal denies that “loss” includes restitution paid by an insured, as distinct from damages, which are expressly denoted in the policy as a covered loss. The Court held that Federal was right because it determined that to hold otherwise would encourage fraud. Ryerson received $29 million from EMC for the subsidiaries, and agreed to give back $8.5 million to settle EMC’s fraud claims against it. The refund represented a return or part, or maybe all, of the profit that Ryerson had obtained by inducing EMC to overpay. The Court noted that if Ryerson can obtain reimbursement of that amount from the insurance company, it will have gotten away with fraud. The Court stated that if disgorging such proceeds is included within the policy’s definition of “loss”, thieves would buy insurance against having to return money they stole, and no one writes such coverage. Citing to various cases in Illinois, the 7th Circuit, the 5th Circuit and the U.S. Supreme Court, the court further noted that: no state would enforce such an insurance policy if it were written; for insurance purposes you cannot sustain a loss of something you do not (or should not) have; and, there is no insurable interest in the proceeds of a fraud.
The Court pointed out that a claim for restitution is a claim that the defendant has something that belongs of right not to him but to the plaintiff. On the other hand, a claim for “damages” in the proper sense of the word is different. By way of example the Court explained, if a car driven negligently hits and injures a pedestrian, the pedestrian will sue the driver for the monetary equivalent of the harm done to him, not for the “profit” that the accident generated for the driver – it generated no profit, it gave him nothing.
The Court further noted that a judgment or settlement in a fraud case could involve a combination of restitution and damages. If so, the insurance company would be liable for the damages portion in accordance with the allocation formula in the policy. Although in this case EMC did demand “restitution of the monies paid for the subsidiary, including transaction costs”, and reimbursing EMC for transaction costs would not be restitution because EMC gained nothing from the money that EMC paid its lawyers and accountants to handle the acquisition, Ryerson made no effort to allocate its loss between the loss of ill-gotten gains and other costs, so any claim to those cost has been forfeited.
04/13/12 333 Fifth Ave. Assoc., LLC v. Utica First Ins. Co., SPN Inc.
The underlying injured party sustained damage when he fell down an elevator shaft. Apparently, plaintiffs (the property owners) gave their tenants keys to the elevators. On the date of the loss, the injured party, an employee of SPN, Inc., borrowed an elevator key (even though SPN had its own) from another tenant, Perfume Valley Gift Shop, Inc. (“Perfume Valley”). When the injured party opened the elevator doors, he did not realize a car was not there and fell from the ground floor to the basement.
The issue in this case was what entity was required to pay for the settlement reached in the underlying action. At the time of the loss, SPN was insured by Utica First Insurance while Perfume Valley was insured by Tower. Perfume Valley was not a named defendant in the underlying action.
The court first considered Tower’s motion for summary judgment. Tower argued that plaintiffs did not qualify as additional insureds under its policy. The relevant provision provided “WHO IS AN INSURED (Section II) is amended to include as an Insured the persons or organizations shown in the Schedule as an insured but only with respect to liability arising out of your [Perfume Valley’s] operations or premises owned by or rented to you.” Tower argued that Perfume Valley was not named as a defendant in the underlying case. Also, the injured party was an SPN employee, the elevator doors were opened by an SPN employee and the accident did not occur on Perfume Valley’s leased premises. Plaintiffs opposed this argument by asserting that Perfume Valley was negligent in giving the injured party the elevator key. In considering this argument, the court disagreed and found that plaintiffs failed to establish negligence on the part of Perfume Valley.
Likewise, Utica First moved for summary judgment asserting that plaintiffs did not qualify as additional insureds. It argued that its policy did not contain an additional insured endorsement and there was no reference to the plaintiffs anywhere in the policy, including the Dec page. Plaintiffs submitted in opposition a Certificate of Insurance and two letters from an individual (who appears to be a Utica First claims adjuster) identifying plaintiffs as additional insureds. In dismissing this argument, the court held a certificate of insurance does not confer coverage or establish conclusively that it exists. Further, the claims adjuster did not bind the insurance company and his letters did not alter the fact that the primary policy did not have a provision naming plaintiffs as additional insureds.
Take Away: I am curious about the contents of the letters sent by Utica First’s adjuster. What did the claims adjuster say to plaintiffs? Did plaintiffs rely on the statements in the letters?
04/13/12 Attaway v. Motor Veh. Acc. Indem. Corp.
Plaintiff, a pedestrian, brought this motion seeking an order permitting him to bring an action against the Motor Vehicle Accident Indemnification Corporation (“MVAIC”) for injuries sustained when he was struck by an unknown driver. The MVAIC previously denied the claim alleging that plaintiff failed to comply with a condition precedent to coverage requiring a police accident report and/or a 911 call report made within 24 hours of the occurrence.
Plaintiff argued in opposition that since a hospital was only two blocks away, after he was struck, he chose not to wait for police to arrive. Instead, he walked to the hospital for treatment. At the hospital, he notified the staff of the hit-and-run accident. In addition, the next day he went to the local precinct to report the claim. The police gave him an MV-104 form to complete. Notably, an MV-104 is only required to be submitted by motorists/drivers involved in a motor vehicle accident, not pedestrians. Ultimately, Plaintiff argued that he did everything he could to report the accident and memorialize it.
The court agreed and granted his motion for leave to bring an action against the MVAIC.
04/04/12 Lanter v. Allstate Ins. Co.
This decision addresses a dispute over an arbitration clause in an auto policy. Plaintiff’s Mercedes Benz was damaged in a motor vehicle accident. He received a repair quote of $34,177.36. Defendant, the vehicle’s insurer, also provided a quote; however, it was much lower ($8,457.55). Plaintiff would not accept this offer and, as the parties could not agree on another shop to repair the vehicle, plaintiff invoked his rights under the appraisal clause of the policy, which provided:
Both you and us have a right to demand an appraisal of the loss. Each will appoint and pay a qualified appraiser. Other appraisal expenses shall be shared equally. The two appraisers, or a judge of a court of record, will choose an umpire. Each appraiser will state the actual cash value and the amount of loss. If they disagree, they’ll submit their differences to the umpire. A written decision by any two of these three persons will determine the amount of the loss.
After the two parties could not agree on an umpire, the court was forced to appoint one. It appears that the court appointed umpire agreed with plaintiff’s estimate; thereafter, defendant paid the amount demanded by plaintiff plus interest.
Apparently, this result was not sufficient as plaintiff brought this action alleging breach of contract, negligence and a prima facie tort. Defendant immediately moved to dismiss.
The court considered each cause of action separately. With regard to the breach of contract claim, defendant argued that it followed the requirements of the arbitration clause and paid the required amount following the umpire’s decision. Thus, it did not breach the contract. The court agreed noting that nothing within the policy required defendant to accept plaintiff’s choice of an appraiser. For the same reason, it denied the second cause of action. With regard to the tort claim, the court noted that merely alleging that the breach of contract arose from a lack of due care or failure to act “reasonably” will not transform an alleged simple breach of contract into a tort. Here, plaintiff failed to allege that defendant owed him a legal duty independent of a contractual duty, and that defendant breached that duty.
04/03/1 Morrisania Towers Hous. Co. Ltd. Partnership v. Lexington Ins. Co.
Plaintiffs are the owner and management company of a building in which the underlying plaintiff was shot and, ultimately, rendered a paraplegic. Plaintiff had a contract in place with McRoberts Protective Agency Inc. (“McRoberts”) to provide security for the property.
In the underlying action, both Plaintiffs and McRoberts were defended by McRoberts’ primary liability insurer, Arch Insurance Company (“Arch”). Plaintiffs brought this action seeking a determination that they qualified as insureds under McRoberts’ excess policy issued by Lexington Insurance Company and that the coverage provided by Lexington was primary to their own excess insurance policy issued by Liberty Mutual.
Initially, the court rejected Lexington’s argument that Plaintiffs were not entitled to coverage based on their failure to provide timely notice. The court held that Lexington’s one year delay in denying coverage on this ground waived its ability to rely on the notice provision. Next, the court considered priority of coverage. The Lexington policy apparently did not contain an other insurance clause; rather, the policy only provided that it would pay “on behalf of the insured that portion of the loss which the insured will become legally obligated to pay as compensatory damages…by reason of exhaustion of all applicable underlying limits…”
In comparison, the Liberty Mutual policy provided that it would pay amounts in excess of the self-insured retention. It went on to state that “[a]ny other insurance available to the insured shall be deemed to satisfy the insured’s responsibility for damages within the self-insured amount to the extent that such ‘other insurance’ actually pays for damages within the self-insured amount…this policy will not contribute with any other insurance.” “Other insurance” included any other valid and collectible insurance whether primary, excess or contingent.
Accordingly, the court noted that “an insurance policy which purports to be excess but contemplates contribution with other excess policies or does not by the language used negate that possibility must contribute ratably with a similar policy, but must be exhausted before a policy which expressly negates contribution with other carriers or otherwise manifests that it is intended to be excess over the other excess policies.” Thus, based on the language of these two policies, the Lexington policy was primary to the Liberty Mutual policy.
A federal Court of Appeals issued a recent decision excluding commercial crime coverage for an officer/shareholder’s criminal acts, and also holding that the policy did not cover claims arising from a non-shareholder’s aid and assistance in a scheme to embezzle almost $2 Million. Tactical Stop-Loss, LLCv. Travelers Casualty & Surety Co., 2011 WL 4503234 (8th Circuit September 30, 2011). The Court of Appeals held that the Travelers’ policy with Tactical Stop-Loss excluded coverage for criminal acts by an officer/shareholder, either acting alone or in collusion with others. This last part of the definition proves important in the resolution of this claim. The policy language defined an officer/shareholder as an officer owning over 25% of the company. The Circuit Court ruled that the policy also did not cover losses stemming from the Chief Operating Officer’s assistance rendered to the officer/shareholder because her acts only furthered the same basic embezzlement scheme, and did not cause Tactical to incur different or independent losses.
Tactical administered trust accounts for insurance companies that offered stop-loss, or excess health care coverage, for self-insured health plans. Apparently, the COO confronted the officer/shareholder when she noticed unauthorized money transferred from company accounts. He allegedly admitted the embezzlement scheme to her, but rather than report the wrongdoing, the COO decided to aid him in exchange for extra compensation and benefits. The COO created monthly reports and fraudulent receipts to help the officer/shareholder conceal stolen funds from clients.
When Tactical discovered the scheme, it made a claim on Travelers seeking coverage for the amount the COO helped the officer/shareholder embezzle. Tactical conceded the policy did not cover the officer/shareholder acts within the policy definition. However, Tactical asserted that the policy covered the COO’s dishonest acts because she was not an officer/shareholder.
Suit was filed in U.S. District Court for Missouri, and Travelers filed a summary judgment motion which was granted and then affirmed on appeal. Travelers said the COO’s actions fell under the policy exclusion because the officer/shareholder was guilty of criminal acts, and it was obvious from the facts and even the pleadings that the COO acted “in collusion” with him.
In affirming the District Court’s grant of summary judgment to Travelers, the Court of Appeals stressed that the policy excluded criminal acts by an officer/shareholder whether acting alone or “in collusion with others.” The appeals court held that the COO’s dishonest conduct did not independently cause any loss that was not the same loss as the loss proximately caused by the thefts of the officer/shareholder. In addition, the evidence showed that the COO had “colluded” with the embezzlement scheme and that the policy exclusion applied.
The lessons of this case are three-fold:
In analyzing policy coverage and losses, it is important to look at the essential proximate cause of the loss, and if that loss is not a covered occurrence or falls within an exclusion, a denial may be upheld even if accompanied by other losses or the conduct of others.
In many respects, a loss is a loss is a loss, and the loss caused by the officer/shareholder’s theft was no different a loss whether committed by the office/shareholder or alleged to be the act of a colluder or alleged co-conspirator such as the COO. Even if the COO was a different person and coverage was asserted as to her acts under a different theory, the same underlying loss was involved and not covered.
Pay careful attention to all parts of definitions within a policy since the policy language here with respect to “in collusion with others” obviously was of great benefit to Travelers in obtaining summary judgment denying this claim and winning an affirmance in the Court of Appeals.
04/18/12 Cornelius v. National Casualty Company
Uninsured Motorist Coverage Available to Employee Using Bucket Truck to Work on Elevated Power Lines
Plaintiff filed declaratory judgment action against defendant carrier seeking uninsured motorist coverage under insurance policy issued to plaintiff’s employer. Plaintiff was a lineman who sustained injuries while standing in the bucket of employer’s truck performing maintenance work on elevated power lines and systems. Defendant carrier provided coverage on truck including separate coverage for liability and uninsured motorist. Plaintiff asserted that injuries resulted from employer’s negligent maintenance of truck. Carrier relied on exclusion in liability coverage for bodily injury sustained by an employee. Trial court granted carrier’s motion for summary judgment, finding that uninsured motorist coverage only extended to accidents arising out of “normal use” of vehicle consisting of “transportation to and from destinations.”
Supreme Court reversed, holding that it was within the contemplation of the parties that a “normal and proper” purpose of the bucket truck and boom would be to “raise and lower workers” such as plaintiff. Supreme Court found that plaintiff had presented evidence to support claim of causal connection between employer’s alleged negligent maintenance of bucket truck and accident causing plaintiff’s injuries.
Submitted by: Gregory L. Cochran and Timothy M. Hayes of McKenna Storer
04/20/121 Brown v. Concord Group Insurance Company
Supreme Court of New Hampshire Interprets “Your Work” Exclusion in Insurance Coverage Action
Eugene Spencer, the insured, built a house in 2003. In 2007, the owners of the home contacted Spencer to repair a water leak near a sliding glass door. After Spencer repaired the problem, it reoccurred in 2009, and the home owner contacted a different contractor to fix the problem. The 2009 damage required extensive repairs at a substantial cost. The home owners filed a petition for declaratory judgment alleging that Spencer defectively repaired their house and that Concord Group was required to insure against the resulting damage. Concord Group filed a motion for summary judgment arguing that the property damage at issue was not caused by an “occurrence” because, regardless of whether the damage was to Spencer’s 2003 original construction of the home or his 2007 repairs, Spencer’s defective work did not cause damage to property other than his work product, and damage caused to his work product was excluded under the policy. The trial court granted Concord’s motion reasoning that both the 2003 original construction and 2007 repairs constituted one instance of “work” under the policy. The Supreme Court of New Hampshire disagreed. The Court held that Spencer’s 2003 construction and 2007 repairs were separate work products. Therefore, there was a material question of fact whether the damage in 2009 was caused by the 2003 original construction or the 2007 repair. The cause was reversed and remanded to the trial court.
Citizens Insurance Co. of America v. Hatzigeorgiou
Ryan & Conlon, LLP, New York (William F. Ryan of counsel), for appellant.
Pillinger Miller Tarallo, LLP, Elmsford (C. William Yanuck of counsel), for Aristotle Hatzigeorgiou, Alexandra G. Juliano, Michael Maglio, Global Entertainment Group, LLC and Play, respondents.
Arnold E. DiJoseph, P.C., New York (Arnold E. DiJoseph of counsel), for Anna Fernandez, respondent.
Order and judgment (one paper), Supreme Court, New York County (Joan A. Madden, J.), entered July 9, 2010, which denied plaintiff insurer's motion for summary judgment, and, upon searching the record, granted summary judgment to defendants insureds declaring that plaintiff is obligated to defend and indemnify defendants insureds in an underlying personal injury action, and order, same court and Justice, entered July 18, 2011, which, to the extent appealed from as limited by the briefs, denied plaintiff's motion for leave to renew, unanimously affirmed, without costs.
In its motion for summary judgment, plaintiff asserted that it timely disclaimed coverage for the underlying accident by letter dated July 9, 2008. In opposition, defendants asserted that the July 9, 2008 letter was not a notice of disclaimer, but a reservation of rights, and that plaintiff did not disclaim coverage until commencing this declaratory judgment action more than two months after receiving notice of the underlying action, which was untimely as a matter of law. Supreme Court agreed with defendants and denied plaintiff's motion. Plaintiff then moved to renew based on the "new facts" that it actually sent a letter disclaiming coverage on July 16, 2008 and that it never sent the "draft" letter dated July 9, 2008.
Supreme Court properly denied the motion to renew, as plaintiff did not provide a reasonable justification for failing to present the July 16, 2008 letter on the prior motion (see CPLR 2221[e][3]; Whalen v New York City Dept. of Envtl. Protection, 89 AD3d 416, 417 [2011]). Plaintiff's excuse that its counsel inadvertently attached the wrong letter in its prior motion papers is unreasonable, given that, in reply to defendants' opposition to the original motion, plaintiff submitted a sworn affidavit from its agent attesting to the fact that the July 9,2008 letter was the disclaimer letter sent to defendants. The agent's affidavit on renewal asserting that the July 16, 2008 letter is the actual disclaimer letter contradicts her prior sworn affidavit; accordingly, Supreme Court properly determined that the failure to submit the July 16, 2008 letter was more than mere law office failure.
Plaintiff is not entitled to summary judgment, as the July 9, 2008 letter was the only letter before the court on the original motion, and plaintiff asserts that the letter was never sent.
Fook Cheung Lung Realty Corp. v. Yang Tze River Realty Corp.
Abrams, Gorelick, Friedman & Jacobson, P.C., New York (Thomas R. Maeglin of counsel), for appellant.
Law Offices of Jeffrey S. Shein & Associates, P.C., Syosset (Charles R. Strugatz of counsel), for respondent.
Order and judgment, Supreme Court, New York County (Joan A. Madden, J.), entered April 27, 2010, granting J & A Concrete Corp.'s motion for summary judgment declaring that QBE Insurance is obligated to defend and indemnify it in an underlying property damage action, unanimously affirmed, with costs.
J & A provided its insurer with notice of plaintiff's property damage claim within a reasonable time (see Great Canal Realty Corp. v Seneca Ins. Co., Inc., 5 NY3d 742, 743 [2005]). J & A made a prima facie showing on its motion through the affidavit of its vice president stating the date that J & A arrived at the construction site and the extent of its duties and denying knowledge of the property damage until J & A's receipt of an attorney's letter in May of 2007, coupled with the deposition testimony of plaintiff's president regarding the date he first noticed the damage, which was before J & A's arrival. QBE's claim in opposition that J & A had knowledge of the damage before May of 2007 failed to raise an issue of fact, as evidence of conversations between plaintiff's president and a representative of the general contractor working at the adjoining premises and of complaints to the Department of Buildings would not necessarily have put J & A on notice, and it is mere conjecture that J & A was in fact told by others of the damage. QBE's claimed need for discovery to oppose the motion reflected an ineffectual mere hope (see MAP Mar. Ltd. v China Constr. Bank Corp., 70 AD3d 404 [2010]). In view of the foregoing, we also find that the determination as to the duty to indemnify was not premature.
In the Matter of GEICO v. Tuzzo
Lawrence R. Miles, Long Island City, N.Y., for appellant Hereford Insurance Company.
Nancy L. Isserlis, Long Island City, N.Y. (Francis M. Cerniglia of counsel), for appellant Manuel Santana.
Gail S. Lauzon (Montfort, Healy, McGuire & Salley, Garden City, N.Y. [Donald S. Neuman, Jr.], of counsel), for petitioner-respondent.
In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of an uninsured motorist claim, Hereford Insurance Company and Manuel Santana separately appeal from a judgment of the Supreme Court, Nassau County (Sher, J.), entered March 25, 2011, which, after a framed-issue hearing, granted the petition and permanently stayed arbitration.
Where, as here, a case is determined after a hearing held before a Justice of the Supreme Court, this Court's power to review the evidence is as broad as that of the Supreme Court, taking into account in a close case the fact that the Supreme Court had the advantage of seeing the witnesses (see Northern Westchester Professional Park Assoc. v Town of Bedford, 60 NY2d 492, 499; Matter of Government Employees Ins. Co. v Albino, 91 AD3d 870, 871; Matter of Allstate Ins. Co. v Tae Hong Ji, 81 AD3d 940, 940). We decline to disturb the Supreme Court's determination, made after a framed-issue hearing, that there was no physical contact between the insured vehicle and an alleged hit-and-run vehicle (see Matter of Government Empls. Ins. Co. v Albino, 91 AD3d at 871; Matter of Allstate Ins. Co. v Tae Hong Ji, 81 AD3d at 940; Matter of Government Employees Ins. Co. v Steinmetz, 51 AD3d 1022, 1022). Accordingly, the Supreme Court properly granted the petition and permanently stayed arbitration.
In the Matter of Incorporated Village of Rockville Centre v. Ziegler
Hammill, O'Brien, Croutier, Dempsey, Pender & Koehler, P.C., Syosset, N.Y. (Anton Piotroski of counsel), for appellants.
Joseph B. Fruchter, Hauppauge, N.Y. (Shayne, Dachs, Corker, Sauer & Dachs, LLP [Jonathan A. Dachs] of counsel), for respondent.
In a proceeding, inter alia, pursuant to CPLR article 75 to permanently stay arbitration of an underinsured motorist claim, the petitioners appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Parga, J.), entered February 28, 2011, as denied that branch of the petition which was to permanently stay arbitration.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and that branch of the petition which was to permanently stay arbitration is granted.
The respondent, Ernest Ziegler, a police officer with the Incorporated Village of Rockville Centre Police Department, was injured while on duty when a vehicle driven by Brian Frazier collided with the police vehicle Ziegler was driving. Ziegler and another individual commenced an action against Frazier and another individual. State Farm Mutual Insurance Company made an offer of settlement in that matter. The petitioner Incorporated Village of Rockville Centre (hereinafter the Village), by its attorneys, wrote to the attorneys for Ziegler, consenting to the settlement. In that letter, the Village indicated, in effect, that it had a policy with the petitioner Markel American Insurance Company (hereinafter Markel) providing supplementary uninsured/underinsured motorist coverage with a limit of $500,000, subject to a $500,000 self-insured retention. Thereafter, Ziegler served a demand for arbitration on the Village. The demand indicated that the Village was "[s]elf insured up to $500,000 with [Markel] carrying an excess policy."
The Village and Markel commenced this proceeding, inter alia, pursuant to CPLR article 75 to permanently stay arbitration of Ziegler's underinsured motorist claim. In seeking to permanently stay arbitration, the Village and Markel contended, among other things, that no coverage was available to Ziegler because the Village was self-insured and its self-insured retention did not provide underinsured motorist coverage. The Supreme Court, inter alia, denied that branch of the petition which was to permanently stay arbitration.
Under these circumstances, where the Village and Markel submitted evidence tending to show that the Village did not provide underlying underinsured motorist coverage, and where there was no agreement to arbitrate, the Supreme Court should have granted that branch of the petition which was to permanently stay arbitration (cf. Matter of State Farm Mut. Auto. Ins. Co. v Juma, 44 AD3d 963; Matter of State Farm Mut. Auto. Ins. Co. v Torcivia, 277 AD2d 321, 322).
State Farm Mutual v. Perez
Calendar Date: February 10, 2012
Before: Mercure, J.P., Lahtinen, Spain, Stein and McCarthy, JJ.
McNamee, Lochner, Titus & Williams, P.C., Albany (Scott C. Paton of counsel), for appellant.
Horigan, Horigan & Lombardo, P.C., Amsterdam (Peter M. Califano of counsel), for respondent.
Appeal from a judgment of the Supreme Court (Nolan Jr., J.), entered June 8, 2011 in Saratoga County, which granted petitioner's application pursuant to CPLR 7503 to permanently stay arbitration between the parties.
While insured by petitioner under a supplementary uninsured/underinsured (hereinafter SUM) policy in the amount of $100,000 per person, respondent was injured in a rear-end motor vehicle collision. The alleged tortfeasor maintained an insurance policy that provided liability coverage in the amount of $25,000. Respondent sent two letters to petitioner, the first notifying it of his intent to commence a negligence action against the tortfeasor and the potential for a SUM claim, and the second, dated May 28, 2010, stating that he and the tortfeasor agreed to a binding arbitration proceeding. Respondent was awarded $50,000 through arbitration. Shortly thereafter, respondent executed a general release with the tortfeasor in the amount of $25,000 and later notified petitioner of the arbitration award and filed a request for a SUM claim.
Petitioner denied the SUM claim on the grounds that it did not receive a written notice of an intention to settle or a request for its consent to settle with the tortfeasor, which was in violation of conditions 10 and 13 of the parties' SUM policy. Respondent then filed a request for SUM arbitration and, in response, petitioner sought a permanent stay of the arbitration pursuant to CPLR 7503. Supreme Court granted petitioner's application and respondent now appeals. We affirm.
Where an insurance policy "'expressly requires the insurer's prior consent to any settlement by the insured with a tortfeasor, failure of the insured to obtain such prior consent from the insurer constitutes a breach of a condition of the insurance contract and disqualifies the insured from availing himself of the pertinent benefits of the policy . . . unless the insured can demonstrate that the insurer, either by its conduct, silence, or unreasonable delay, waived the requirement of consent or acquiesced in the settlement'" (Matter of New York Cent. Mut. Fire Ins. Co. [Cavanagh], 265 AD2d 787, 788 [1999], lv denied 94 NY2d 760 [2000], quoting Matter of State Farm Auto. Ins. Co. v Blanco, 208 AD2d 933, 934 [1994], lv denied 85 NY2d 802 [1995]; see also Matter of Central Mut. Ins. Co. [Bemiss], 12 NY3d 648, 658 [2009]). Here, condition 10 of the parties' SUM policy specifically provides that if the insured elects to settle with a tortfeasor involved in a motor vehicle accident, "release may be executed with such party after thirty calendar days actual written notice to us . . . An insured shall not otherwise settle with any negligent party, without our written consent, such that our rights would be impaired" (emphasis added).
Respondent does not dispute that he was required to notify petitioner of his intent to settle, but contends that the second letter he sent to petitioner satisfied the written notice requirement or, alternatively, that petitioner acquiesced to the settlement by its silence. The May 28, 2010 letter that respondent relies upon states only that the parties in the tort action have agreed on "binding arbitration, with the defendant's exposure being limited to the extent of the applicable $25,000 policy." Noticeably absent from respondent's letter is any reference to any intention to settle; the letter expresses only an intent to arbitrate. Accordingly, we agree with Supreme Court that notice was not provided as required by the parties' SUM policy, which impermissibly impaired petitioner's subrogation rights (see Matter of Central Mut. Ins. Co. [Bemiss], 12 NY3d at 659; State Farm Mut. Auto. Ins. Co. v Taglianetti, 122 AD2d 40, 40-41 [1986]).
Respondent's reliance on petitioner's delay in responding to the May 28, 2010 letter as a waiver of any objections to the settlement also is unavailing. The cases cited by respondent involve an unreasonable delay after receiving notice of a settlement. As no proper notice was given here, these cases are inapplicable (see Matter of Hertz Claim Mgt. Corp. v Kulakowich, 53 AD3d 578, 579 [2008]; Bernstein v Allstate Ins. Co., 199 AD2d 358, 359 [1993]; Matter of State Farm Mut. Ins. Co. v Del Pizzo, 185 AD2d 352, 353 [1992]).
Ramcharan v. Beach 20th Realty, LLC.
Sacks and Sacks, LLP, New York, N.Y. (Scott N. Singer and Daniel Weir of counsel), for appellants-respondents.
Barry, McTiernan & Wedinger, Staten Island, N.Y. (Laurel A. Wedinger of counsel), for third-party defendant-respondent-appellant Excel Electric Co.
O'Connor, O'Connor, Hintz & Deveney, LLP, Melville, N.Y. (Eileen M. Baumgartner of counsel), for third-party defendant-respondent-appellant Unlimited Export, Inc.
Novak Juhase & Stern, LLP, Cedarhurst, N.Y. (G. Alexander Novak of counsel), for defendant third-party plaintiff-respondent-respondent.
In an action, inter alia, to recover damages for wrongful death, (1) the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Queens County (Sampson, J.), dated January 11, 2010, as granted those branches of the motion of the third-party defendant Excel Electric Co., and respective cross motions of the defendant third-party plaintiff, Beach 20th Realty, LLC, and third-party defendant Unlimited Export, Inc., which were for summary judgment dismissing the cause of action alleging a violation of Labor Law § 241(6), (2) the third-party defendant Excel Electric Co. cross-appeals, as limited by its brief, from so much of the same order as denied that branch of its motion which was for summary judgment dismissing the third-party cause of action asserted by the defendant third-party plaintiff, Beach 20th Realty, LLC, alleging breach of contract for failure to procure insurance against it, and (3) the third-party defendant Unlimited Export, Inc., separately cross-appeals from so much of the same order as denied that branch of its cross motion which was for summary judgment dismissing the third-party cause of action asserted by the defendant third-party plaintiff, Beach 20th Realty, LLC, seeking contractual indemnification against it and granted that branch of the cross motion of the defendant third-party plaintiff, Beach 20th Realty LLC, which was for summary judgment on that third-party cause of action.
ORDERED that the order is affirmed insofar as appealed from by the plaintiffs; and it is further,
ORDERED that the order is reversed insofar as cross-appealed from, that branch of the motion of the third-party defendant Excel Electric Co. which was for summary judgment dismissing the third-party cause of action asserted by the defendant third-party plaintiff, Beach 20th Realty, LLC, alleging breach of contract for failure to procure insurance against it is granted, that branch of the cross motion of the third-party defendant Unlimited Export, Inc., which was for summary judgment dismissing the third-party cause of action asserted by the defendant third-party plaintiff, Beach 20th Realty, LLC, seeking contractual indemnification against it is granted, and that branch of the cross motion of the defendant third-party plaintiff, Beach 20th Realty, LLC, which was for summary judgment on its third-party cause of action for contractual indemnification asserted against the third-party defendant Unlimited Export, Inc., is denied; and it is further,
ORDERED that one bill of costs is awarded to the defendant third-party plaintiff, Beach 20th Realty, LLC, payable by the plaintiffs, and one bill of costs is awarded to the third-party defendants Excel Electric Co., and Unlimited Export, Inc., payable by the defendant third-party plaintiff, Beach 20th Realty, LLC.
On August 19, 2005, Munesh Ramcharan (hereinafter the decedent) was fatally injured while performing electrical work at a warehouse owned by Beach 20th Realty, LLC (hereinafter Beach), and leased to Unlimited Export, Inc. (hereinafter Unlimited). The decedent was employed by Excel Electric Co. (hereinafter Excel), a company which had been retained by Beach to perform electrical work at the warehouse. The plaintiffs, as co-administrators of the estate of the decedent, commenced an action against Beach alleging, inter alia, that it violated Labor Law § 241(6). Subsequently, Beach commenced a third-party action against, among others, Excel and Unlimited.
The Supreme Court properly granted those branches of Excel's motion, and the separate cross motions of Beach and Unlimited, which were for summary judgment dismissing the cause of action alleging that Beach violated Labor Law § 241(6). To support a cause of action pursuant to Labor Law § 241(6), the particular Industrial Code provision relied upon by the plaintiff must mandate compliance with concrete specifications and must not simply declare general safety standards or reiterate common-law principles (see Misicki v Caradonna, 12 NY3d 511, 515). Here, the plaintiffs alleged a violation of section 23-9.8(k) of the Industrial Code (see 12 NYCRR 23-9.8[k]). This provision, however, lacks the specificity required to support a cause of action under Labor Law § 241(6) (see generally Rizzuto v L.A. Wenger Contr. Co., 91 NY2d 343, 349; Ross v Curtis-Palmer Hydro-Elec. Co., 81 NY2d 494, 504-505; Hricus v Aurora Contrs., Inc., 63 AD3d 1004, 1005). The plaintiffs' contention regarding an additional violation of Industrial Code (see 12 NYCRR 23-1.5[a]), raised for the first time on appeal by the plaintiffs, is not properly before us (see Dooley v Peerless Importers, Inc., 42 AD3d 199, 206; Thompson v Marotta, 256 AD2d 1124, 1125).
The Supreme Court should have granted that branch of Excel's motion which was for summary judgment dismissing Beach's third-party cause of action alleging breach of contract for failure to procure insurance against it. "A provision in a construction contract cannot be interpreted as requiring the procurement of additional insured coverage unless such a requirement is expressly and specifically stated. In addition, contract language that merely requires the purchase of insurance will not be read as also requiring that a contracting party be named as an additional insured" (Trapani v 10 Arial Way Assoc., 301 AD2d 644, 647; see 140 Broadway Prop. v Schindler El. Co., 73 AD3d 717, 718-719; School Constr. Consultants, Inc. v ARA Plumbing & Heating Corp., 63 AD3d 1029, 1030; Empire Ins. Co. v Insurance Corp. of N.Y., 40 AD3d 686, 688). Here, Excel demonstrated its prima facie entitlement to judgment as a matter of law by establishing that it was not contractually obligated to procure insurance coverage naming Beach as an additional insured based upon the language of its agreement with Beach. A plain reading of the written contract between Excel and Beach demonstrates that Excel was not required to procure insurance naming Beach as an additional insured. Rather, Excel was required to provide Beach with certificates of insurance from all subcontractors listing Beach as an additional insured. In opposition, Beach failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324).
Contrary to the Supreme Court's determination, Beach failed to demonstrate its prima facie entitlement to judgment as a matter of law on its third-party contractual indemnification cause of action against Unlimited, and Unlimited demonstrated its prima facie entitlement to judgment as a matter of law dismissing that third-party cause of action against it. The lease between Beach and Unlimited does not reflect Unlimited's "unmistakable intent" to indemnify Beach for any claim that does not result from any negligence on the part of Unlimited or Unlimited's contractors, agents, employees, or invitees (see Great N. Ins. Co. v Interior Constr. Corp., 7 NY3d 412, 417; Stern's Dept. Stores, Inc. v Little Neck Dental, 11 AD3d 674, 675; Moore v First Indus., 296 AD2d 537, 538). The lease provided that Unlimited is required to indemnify and hold harmless Beach "from all liabilities, obligations, damages . . . [and] claims . . . as a result of . . . the carelessness, negligence or improper conduct of [Unlimited], [Unlimited's] agents, contractors, employees, invitees or licensees." Unlimited established that Excel was a contractor retained by Beach, and that Beach's liability to the plaintiffs, if any, would be predicated upon the wrongdoing of Excel, and not upon any negligence on the part of Unlimited, or its agents, contractors, employees, or invitees. In opposition, Beach failed to raise a triable issue of fact (see Moore v First Indus., 296 AD2d at 538; Tarrazi v 2025 Richmond Ave. Assoc., 248 AD2d 609, 609). Accordingly, the Supreme Court should have denied that branch of Beach's cross motion which was for summary judgment on its third-party contractual indemnification cause of action against Unlimited, and should have granted that branch of Unlimited's cross motion which was for summary judgment dismissing that cause of action against it.
Zinnah v. Isabella City Carting Corp.
Reardon & Sclafani, P.C., Tarrytown (Michael V. Sclafani of counsel), for appellants.
Mitchell Dranow, Sea Cliff, for respondent.
Order, Supreme Court, Bronx County (Stanley Green, J.), entered August 3, 2011, which denied defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, without costs.
Assuming that defendants met their burden, the record presents triable issues of fact as to whether the injuries plaintiff sustained to his lumbar spine and to his cervical spine were serious within the meaning of section 5102(d). Plaintiff submitted the affirmed MRI reports revealing multiple herniations, as well as the affirmation of a neurologist who found diminished range of motion in multiple planes, and attributed the subject accident as the cause. Plaintiff also submitted the affidavit of his chiropractor who noted diminished ranges of motion, addressed causation, and explicitly rejected degeneration as the cause of the spinal injuries (see Yuen v Arka Memory Cab Corp., 80 AD3d 481 [2011]). In view of the foregoing, it is unnecessary to address plaintiff's proof with respect to the injuries he sustained to his left knee (see Linton v Nawaz, 14 NY3d 821 [2010]).
Defendants failed to establish their entitlement to judgment as a matter of law as to the 90/180-day claim. Defendants failed to meet their burden as to causation, and none of their experts examined plaintiff during the relevant period of time (see Feaster v Boulabat, 77 AD3d 440 [2010]; Alexandre v Dweck, 44 AD3d 597 [2007]).
Cruz v. Rivera
Guararra & Zaitz LLP, New York (Michael J. Guararra of counsel), for appellant.
Jonathan Rice, Dobbs Ferry, for respondent.
Order, Supreme Court, Bronx County (Alison Y. Tuitt, J.), entered July 14, 2011, which, insofar as appealed from as limited by the briefs, in this action for personal injuries sustained in a motor vehicle accident, denied defendant Felix Rivera's motion for summary judgment dismissing the complaint as against him, unanimously modified, on the law, to grant the motion to the extent of dismissing plaintiff's 90/180-day claim, and otherwise affirmed, without costs.
Defendant established his entitlement to judgment as a matter of law. Defendant submitted the affirmed report from an orthopedist who, based upon an examination of plaintiff, found full range of motion in the relevant parts of the body and concluded that all sprains/strains had resolved. Defendant also submitted plaintiff's bill of particulars and deposition testimony wherein he stated that he only missed about one week of work as a result of the accident.
Plaintiff raised triable issues of fact as to the existence of serious injuries to his cervical and lumbar spine. Plaintiff submitted, inter alia, the affirmation of his treating physician, who reviewed MRI reports finding disc herniations and bulges and, upon examination, found that plaintiff suffered persisting muscle spasms and limitations in multiple ranges of motion. Viewing the evidence in the light most favorable to plaintiff, the physician's attribution of a quantified percentage of loss of range of motion was sufficient to raise triable issues of fact (see Perl v Meher, 18 NY3d 208, 217 [2011]; Toure v Avis Rent A Car Sys., 98 NY2d 345, 350 [2002]). The unaffirmed MRI reports, which were referred to and not disputed by defendant's medical expert, and were relied upon by plaintiff's physician, were properly considered in opposition to the motion since they were not the sole basis for the findings of plaintiff's physician (see Rubencamp v Arrow Exterminating Co., Inc., 79 AD3d 509 [2010]).
Dismissal of plaintiff's 90/180-day claim is warranted in light of the allegation in his bill of particulars that he was confined to bed for only a week, and his deposition testimony that he missed about a week of work after the accident (see Hospedales v "John Doe", 79 AD3d 536 [2010]; McClelland v Estevez, 77 AD3d 403 [2010]).
We have considered the remaining contentions, including defendant's claim that there was an unexplained gap in treatment, and find them unavailing.
Belliard v. Leader Limousine Corp.
Manuel A. Romero, P.C., Brooklyn, N.Y. (Jonathan M. Rivera of counsel), for appellants.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Stacy R. Seldin of counsel), for respondents Leader Limousine Corp. and Manuel A. Duran.
Richard T. Lau, Jericho, N.Y. (Gene W. Wiggins of counsel), for respondents Barry M. Cohen and Jaime Vega, Jr.
In an action to recover damages for personal injuries, the plaintiffs appeal from an order of the Supreme Court, Kings County (Bayne, J.), dated May 17, 2010, which granted the motions of the defendants Leader Limousine Corp. and Manuel A. Duran, and the separate motions of the defendants Barry M. Cohen and Jaime Vega, Jr., for summary judgment dismissing the complaint insofar as asserted against them on the ground that neither plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is modified, on the law, by deleting the provision thereof granting those branches of the motion of the defendants Leader Limousine Corp. and Manuel A. Duran, and the separate motion of the defendants Barry M. Cohen and Jaime Vega, Jr., which were for summary judgment dismissing the complaint insofar as asserted by the plaintiff Teague Belliard, and substituting therefor a provision denying those branches of the separate motions; as so modified, the order is affirmed, without costs or disbursements.
In opposition to the defendants' prima facie showing that neither of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957), the plaintiff Teague Belliard raised a triable issue of fact as to whether he sustained a serious injury within the meaning of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208; Johnson v Cristino, 91 AD3d 604, 605; Young Chool Yoo v Rui Dong Wang, 88 AD3d 991). However, the plaintiff Alberto Sepulveda failed to raise a triable issue of fact as to whether he sustained a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Zuckerman v City of New York, 49 NY2d 557, 562). Accordingly, the Supreme Court erred in determining that the defendants were entitled to summary judgment dismissing the complaint insofar as asserted by Belliard against them, but properly determined that the defendants were entitled to summary judgment dismissing the complaint insofar as asserted by Sepulveda against them.
State ex rel. Seiden v. Utica First Insurance Company
Defendant Utica First Insurance Company appeals from the order of the Supreme Court, New York County (Joan A. Madden, J.), entered on or about April 12, 2011, which denied its motion to dismiss the amended complaint as against it.
Satterlee Stephens Burke & Burke LLP, New York (Thomas J. Cahill, Glenn Edwards and Michael H. Gibson of counsel), for appellant.
Balestriere Fariello, New York (John G. Balestriere of counsel), for respondents.
While we agree that reverse false claims are viable under the New York False Claims Act (State Finance Law § 187 et seq.) (NYFCA), we do not agree that plaintiff has stated one. We therefore reverse and dismiss the amended complaint as against defendant Utica First Insurance Company (Utica).
Defendant Utica is an insurance company that issued "artisan policies" to defendant contractors and others. It is undisputed that artisan policies provide coverage for small contractors, such as carpenters, plumbers and roofers. Artisan policies do not generally cover activities on commercial construction projects, such as excavation, underpinning, new concrete piers or additions. According to plaintiffs, artisan policies also do not cover the claims of third parties, such as plaintiffs, who are the owner and manager of two properties that sustained damage as the result of defendant contractors' work on adjacent buildings.
In New York City, general commercial construction activities require permits from the New York City Department of Buildings (DOB). It is undisputed that, as of February 2009, DOB required contractors performing this type of construction to have general liability insurance meeting specific coverage requirements. Artisan policies do not meet those requirements. DOB charges contractors a permit fee based on the total cost of a job. The total cost of the job includes the premium for insurance coverage.
Because artisan policies are more limited in their coverage, they are significantly less expensive than insurance for general construction work. Thus, according to plaintiffs, "to reduce their insurance costs, Defendant Contractors preferred these Artisan Policies, even if they did not cover the claims of third parties." Because DOB calculated the price of the construction permit on the total cost for the job, including insurance premiums, the lower cost for the artisan policy had the added benefit of reducing the permit fee. Plaintiffs claim that Utica issued and renewed artisan policies to defendant contractors knowing that these contractors used Utica's policies to register with the DOB and receive permits to work. Specifically, plaintiffs claim, Utica issued Association for Cooperative Research and Development (ACORD) Form 25 certificates of insurance to defendant contractors. This form can accompany almost any insurance policy and has approval from the Department of Insurance. An ACORD form is quite limited. It only states the level and type of coverage. There is nothing on the form about compliance with DOB rules and plaintiffs do not allege that the ACORD 25 form itself was false [FN1] . Instead, plaintiffs take issue with the way defendant contractors used the ACORD 25 form to obtain DOB permits. Because the form describes the artisan policy as providing "general liability" coverage, as opposed to automobile liability or workers' compensation coverage (the only two other types of coverage the ACORD form in the record lists), plaintiffs claim defendant contractors would use the ACORD form as part of their application to show proof of adequate general liability insurance. However, it is undisputed that artisan policies do provide a type of general liability coverage. Moreover, plaintiffs admit that "[t]hese ACORD 25 forms, issued by Utica to the Contractors, are all identical, do not reference the specific policy used by the insurer, nor do they state whether the Contractors are in compliance with all the Codes and Rules."[FN2]
According to the amended complaint, plaintiff Seiden is the president of Rockwell Development Corp. Rockwell owns a residential building adjacent to a building where Oriental Construction, one of the defendant contractors, was performing general construction work. The building allegedly sustained damage as a result of Oriental's construction activities. Also, a building that Seiden's mother owned became damaged during defendant contractor Kessler's work on adjacent property. Both Kessler and Oriental maintained artisan policies with Utica and both had used those policies to obtain a DOB permit. Plaintiff Groppi is the property manager for Rockwell. Although he attempted to report to Utica about the damage that Oriental's activities had caused, he discovered that the artisan policy did not cover any earth moving work, including the excavation and underpinning work that had caused damage to Seiden's building. Groppi received a similar response with respect to the other property, but Utica nevertheless sent an inspector to investigate the site. Plaintiffs reported to DOB, as well as the District Attorney's Office and the Department of Insurance, that contractors were using Utica's artisan policies to obtain permits from DOB. As of February 15, 2010, DOB no longer accepts artisan policies when licensing the type of work that Oriental and Kessler performed.
Plaintiffs commenced this qui tam action under section 189(1)(g) of the NYFCA in 2009. As required under section 190, plaintiffs gave the State of New York notice and opportunity to intervene. However, on January 6, 2010, the Attorney General for the State of New York declined to intervene and plaintiffs proceeded with this action on their own.
The NYFCA was enacted as part of a federal incentive to limit Medicaid fraud. It is not restricted to Medicaid fraud, however, but applies to any sort of looting of the public purse (see De Santis and Froehlich, False Claims Acts, City, State and Federal: Enlisting Citizens to Protect the Fisc, New York State Bar Association Government, Law and Public Policy Journal, at 64 [Winter 2011]). The public funds that plaintiffs claim Utica looted were the fees that DOB would have received had the contractors paid the larger premium inherent in the purchase of general liability insurance that would have covered the construction job. Plaintiffs seek to recover these fees from Utica on behalf of DOB and hope to receive a portion of the recovery pursuant to NYFCA § 190(6)(b). Plaintiffs also seek to recover attorneys' fees and expenses and "such other relief as the Court deems just and proper, or that is necessary to make Relators whole," but do not explain what they mean by "to make [r]elators whole" or whether the NYFCA provides for this recovery. There is nothing in the record to indicate whether plaintiffs have sued the owners of the neighboring properties for the property damage plaintiffs sustained.
The typical false claim involves the State paying out money because of a false claim. A "reverse false claim" occurs when someone uses a false record to avoid an obligation to pay the government (U.S. v Q Intl. Courier, Inc., 131 F3d 770, 773 [8th Cir 1997]). The NYFCA expressly provides recovery for reverse false claims in section 189(1)(g) against any person who "knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the state or local government" (emphasis added).
The NYFCA follows the federal False Claims Act (31 USC § 3729 et seq.) And therefore it is appropriate to look toward federal law when interpreting the New York act (see State of N.Y. ex rel. Jamaica Hosp. Med. Ctr., Inc. v United Health Group, Inc., 84 AD3d 442, 443 [2011]). To allege a reverse false claim, a plaintiff must state facts tending to show: "(1) that the defendant made, used, or caused to be used a record or statement to conceal, avoid, or decrease an obligation to [the government]; (2) that the statement or record was false; (3) that the defendant knew that the statement or record was false; and (4) that [the state] suffered damages as a result" (United States v Raymond & Whitcomb Co., 53 F Supp 2d 436, 444-445 [SDNY 1999] [internal quotation marks omitted]). Plaintiff must state a reverse false claim with particularity (see U.S. ex rel. Piacentile v Sanofi Synthelabo, Inc., 2010 WL 5466043, *8, 2010 US Dist LEXIS 137895, *21 [D NJ, Dec. 30, 2010, No. 05-2927(KSH)] ["a relator must provide particular details of a scheme to submit false claims'"]).
Given that the ACORD form does not contain anything false or misleading on its face, plaintiffs resort to the argument that Utica somehow deliberately marketed the artisan policy to contractors as a means of satisfying the NYC General Contractor licensing requirements. However, plaintiffs have provided no factual allegations to support this theory. The sole allegation in the complaint regarding a "marketing scheme" is the conclusory statement that "Utica's cooperative network of insurance brokers knowingly targeted and distributed their deficient Artisan policy to Defendant Contractors within the City." This is insufficient for the purposes of stating a reverse false claim. There are no allegations that Utica or its representatives made statements to contractors that the artisan policies were sufficient to meet DOB licensing requirements. These omissions are "especially glaring" given that Utica is a secondary actor who not only did not submit the false claim directly, but also supplied a document to the primary actor that was perfectly legal (see U.S. ex rel. Pervez v Beth Israel Med. Ctr., 736 F Supp 2d 804, 814-815 [SD NY 2010] [dismissing federal FCA claim against accountants and noting that the failure to plead facts with particularity was "especially glaring in the unusual context of FCA claims brought against a secondary actor—an outside auditor—rather than the provider that actually submitted the allegedly false claims"]).
As a fallback position, plaintiffs argue that Utica must have known that defendant contractors were misrepresenting its artisan policies to DOB because "Utica received claims against these Artisan policies that were in excess of the policies' coverage." This is a non sequitur. There is nothing improper about defendant contractors' possession of an artisan policy, provided that the artisan policy was not the only coverage on which they relied in applying for their license. Moreover, an insurance company's receipt of a notice of claim on an inapplicable policy does not raise an inference that the insurance company knows that fraud is involved, much less that it intends the fraud, particularly where, as here, the insured could have easily maintained another insurance policy.
Plaintiffs also contend that the artisan policies were useless. This is incorrect. These policies covered the work of small contractors. When defendant contractors applied for their policies, they did not have to disclose to Utica what activities they needed the policy to cover. And, even if they did disclose, it was not Utica's responsibility to advise defendant contractors as to what insurance would be adequate for particular purposes (see Garnerville Holding Co. v Kaye Ins. Assoc., 309 AD2d 541 [2003] [dismissing complaint against the defendant insurance broker because the broker had no duty to advise plaintiff "as to the amount of coverage it would be prudent to obtain"], lv denied 2 NY3d 705 [2004]). Thus, the allegations do not show that, even if Utica knew of the contractors' deceptions, Utica would have any obligation to do anything about those deceptions (see also Piacentile, 2010 WL 5466043, *9, 2010 US Dist LEXIS 137895, *25-26 [allegations concerning reverse false claim inadequate where the defendants did not submit the false claim directly and the plaintiff failed to allege "any existing obligation on the part of the defendants"]). Plaintiffs here in effect seek to require Utica to become the risk manager for defendant contractors, a role Utica does not, and should not, have.
Plaintiffs claim that "Utica knowingly caused the submission of these false records by creating ACORD 25 forms that described the Artisan policies simply as providing commercial general liability' coverage." There are several problems with this statement. First, "[t]he creation of general circumstances leading to the submission of false claims are insufficient to state a FCA violation" (see U.S. ex rel. Camillo v Ancilla Sys., Inc., 2005 WL 1669833, *4, 2005 US Dist LEXIS, *12 [SD Ill, July 18, 2005, No. 03-CV-0024-DRH]). Moreover, Utica did not create the ACORD 25 form. As plaintiffs admit in their brief, the ACORD, of which Utica is a member, issued the form for use in the insurance industry generally. In addition, the Department of Insurance approved the form. Finally, there is nothing false or misleading about describing the artisan policy as "commercial general liability" coverage. In fact, an artisan policy does provide this type of insurance and plaintiffs admit as much in their amended complaint.
United States ex rel. Schmidt v Zimmer, Inc. (386 F3d 235 [3d Cir 2004]) is not to the contrary. Defendant Zimmer was a manufacturer and distributor of orthopedic implants that allegedly gave rewards and bonuses if a customer (medical providers) purchased a certain amount of product. When the providers submitted claims for Medicare reimbursement for these implants, they allegedly did not disclose the money they received back from defendant supplier (id. at 237-238). This arrangement allegedly violated the Federal Anti-Kickback Act (42 USC § 1320a-7b) and therefore provided the threshold for a claim under the federal FCA (see id. at 244-245; U.S. ex rel. Westmoreland v Amgen, Inc., 812 F Supp 2d 39 [D Mass 2011] ["courts, without exception, agree that compliance with the Anti-Kickback Statute is a precondition of Medicare payment, such that liability under the False Claims Act can be predicated on a violation of the Anti-Kickback Statute"]; In re Pharm. Indus. Average Wholesale Price Litig., 491 F Supp 2d 12, 18 [D Mass 2007] ["Medicare program requires providers to affirmatively certify that they have complied with the Anti-Kickback Statute; failure to comply with the kickback laws, therefore, is, in and of itself, a false statement to the government"]; United States ex rel. Kneepkins v Gambro Healthcare, Inc., 115 F Supp 2d 35, 43 [D Mass 2000] [holding that alleged violations of the Anti-Kickback Statute were sufficient to state a claim under the False Claims Act, despite no express certification of compliance with applicable law]). Here, Utica's sale of policies to defendant contractors was legal, and nothing on the ACORD form from UTICA was false. In contrast, the certification in Zimmer actually contained false information.
Simply put, selling artisan policies to defendant contractors and providing them with the ACORD form that listed the artisan policies as a "commercial general liability" type of policy is insufficient to allege liability under the NYFCA.
Accordingly, the order of the Supreme Court, New York County (Joan A. Madden, J.), entered on or about April 12, 2011, which denied defendant Utica's motion to dismiss the amended complaint as against it, should be reversed, on the law, without costs, and the motion granted. The Clerk is directed to enter judgment dismissing the amended complaint as against defendant Utica.
Gibbs v. Reid
Baker, McEvoy, Morrissey & Moskovits, P.C., New York (Stacy R. Seldin of counsel), for Andre O. Reid and Charleen Temple Express, Inc., appellants.
Picciano & Scahill, P.C., Westbury (Thomas R. Craven, Jr., of counsel), for Jermaine A. Davis and Stacey A. Bonner, appellants.
Andrew C. Laufer, New York, for respondents.
Order, Supreme Court, Bronx County (Mary Ann Brigantti-Hughes, J.), entered March 24, 2011, which, insofar as appealed from as limited by the briefs, denied defendants' motions for summary judgment dismissing the complaint on the ground that plaintiffs did not suffer a serious injury within the meaning of Insurance Law § 5102(d), unanimously reversed, on the law, without costs, and the motions granted. The Clerk is directed to enter judgment in defendants' favor dismissing the complaint.
Defendants established prima facie that the infant Monique Gibbs's alleged cervical spine injury and plaintiff Sabrina Stewart's alleged cervical and lumbar spine injuries did not constitute serious injuries within the meaning of Insurance Law § 5102(d), by submitting affirmations by multiple experts reporting a full range of motion in all planes (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350, 353 [2002]). Any discrepancies in the experts' stated normal values for certain ranges of motion are insignificant, especially since a full range of motion was demonstrated in every plane (see Ovalles v Herrera, 89 AD3d 636 [2011]; Anderson v Zapata, 88 AD3d 504 [2011]). Moreover, defendants also submitted the affirmations of a radiologist who opined that Gibbs's bulging lumbar disc was degenerative in origin and that Stewart's cervical spine showed no herniations or bulges.
Plaintiffs failed to raise any issue of fact because none of their evidence was submitted in admissible form. Their chiropractor affirmed his reports, but chiropractors are not among those whose affirmations have the same force and effect as affidavits (see CPLR 2106).
AIU Insurance Company v. Veras
Picciano & Scahill, P.C., Westbury (Albert J. Galatan of counsel), for appellant.
John C. Buratti & Associates, New York (Julie M. Sherwood of counsel), for AIU Insurance Company, respondent.
Linda T. Ziatz, Forest Hills, for Jose M. Veras, respondent.
Order, Supreme Court, Bronx County (John A. Barone, J.), entered August 3, 2011, which, following a framed issue hearing, granted the petition to stay uninsured motorist arbitration between petitioner and respondent Veras, and directed that additional respondent State Farm Fire and Casualty Company provide Veras with coverage for his underlying claim, unanimously affirmed, with costs.
On June 4, 2005, respondent Veras and additional respondent Richard, who was driving a vehicle owned by additional respondent Wynder-Ortiz and insured by State Farm, were involved in an automobile accident. State Farm was not notified and did not learn of the accident from its insured. Nearly four years later, it learned of the accident from Veras, who served it with the judgment entered in his favor in the action he had commenced against Richard and Wynder-Ortiz. Although it completed its internal investigation and prepared letters of disclaimer within two weeks, State Farm waited another 15 days before sending out the letters. It was not error for the court to find this largely unexplained delay unreasonable (see Insurance Law § 3420[d]; First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 66 [2003]; Travelers Ins. Co. v Volmar Constr. Co., 300 AD2d 40, 42-43 [2002]; see also George Campbell Painting v National Union Fire Ins. Co. of Pittsburgh, PA, 92 AD3d 104 [2012]).
We reject State Farm's argument that the delay was due to its investigation of other possible grounds for disclaiming. State Farm's witness testified that the investigation was completed in two weeks. In any event, however, "just as we would not permit the insured to delay giving the insurer notice of claim while investigating other possible sources of coverage, should not permit the insurer to delay issuing a disclaimer on a known ground while investigating other possible grounds for avoiding liability" (George Campbell Painting, 92 AD3d at 115).
We have considered State Farm's remaining arguments and find them unavailing.
1812 Quentin Road, LLC v.1812 Quentin Road Condominium Ltd
Jeffrey A. Sunshine, P.C., Lake Success, N.Y., for appellants.
Lazare Potter & Giacovas LLP, New York, N.Y. (Stephen M. Lazare and Patricia Dee Bilka of counsel), for respondent Phoenix Insurance Company.
In an action, inter alia, to recover damages for breach of contract and negligence, the plaintiffs appeal (1) from an order of the Supreme Court, Kings County (Schmidt, J.), dated December 2, 2010, which granted the motion of the defendant Phoenix Insurance Company, also known as Travelers, for summary judgment dismissing the amended complaint insofar as asserted against it and denied their cross motion for summary judgment on the issue of liability against that defendant, and (2), as limited by their brief, from so much of an order of the same court, also dated December 2, 2010, as granted that branch of the motion of the defendants 1812 Quentin Road Condominium Ltd., and Tatiana Borodulina which was for summary judgment dismissing so much of the second cause of action as alleged breach of contract against the defendant 1812 Quentin Road Condominium Ltd.
ORDERED that the first order is affirmed; and it is further,
ORDERED that the second order is affirmed insofar as appealed from; and it is further,
ORDERED that one bill of costs is awarded to the defendant Phoenix Insurance Company, also known as Travelers.
The Supreme Court properly granted the motion of the defendant Phoenix Insurance Company, also known as Travelers (hereinafter Phoenix), for summary judgment dismissing the amended complaint insofar as asserted against it. Contrary to the plaintiffs' contention, Phoenix demonstrated, prima facie, a lack of coverage for the occurrence at issue, for which no disclaimer was required (see Handelsman v Sea Ins. Co., 85 NY2d 96, 99; Zappone v Home Ins. Co., 55 NY2d 131, 136-137; Schatz v St. Paul Fire & Mar. Ins. Co., 269 AD2d 380). In opposition, the plaintiffs failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562). For the same reason, the Supreme Court properly denied the plaintiffs' cross motion for summary judgment on the issue of liability against Phoenix.
Contrary to the plaintiffs' contention, the Supreme Court properly awarded summary judgment to the defendant 1812 Quentin Road Condominium Ltd. (hereinafter the Condominium), dismissing so much of the second cause of action as alleged breach of contract against it. "Where a unit owner challenges an action by a condominium Board of Managers, courts apply the business judgment rule" (Helmer v Comito, 61 AD3d 635, 636; see Matter of Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530, 539; Acevedo v Town 'N Country Condominium, Section I, Bd. of Mgrs., 51 AD3d 603; Schoninger v Yardarm Beach Homeowners' Assn., 134 AD2d 1, 10). "Under the business judgment rule, the court's inquiry is limited to whether the board acted within the scope of its authority under the bylaws (a necessary threshold inquiry) and whether the action was taken in good faith to further a legitimate interest of the condominium. Absent a showing of fraud, self-dealing or unconscionability, the court's inquiry is so limited and it will not inquire as to the wisdom or soundness of the business decision" (Schoninger v Yardarm Beach Homeowners' Assn., 134 AD2d at 9). Here, the Condominium and the defendant Tatiana Borodulina met their prima facie burden on their motion by submitting evidence that the Condominium acted within the scope of its authority under the bylaws and in good faith to further the interests of the Condominium. In opposition, the plaintiffs failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d at 562).
The plaintiffs' remaining contention, that the Supreme Court should have sua sponte imposed sanctions for spoliation of evidence, is not properly before this Court, as it is raised for the first time on appeal.
Balsamo v. Weiss
Raymond S. Voulo, Mineola, N.Y., for appellant.
Adams, Hanson, Finder, Hughes, Rego Kaplan & Fishbein, Lake Success, N.Y. (Kenneth Finder of counsel), for respondents.
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Nassau County (Mahon, J.), entered February 10, 2011, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
The defendants met their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendants submitted evidence establishing, prima facie, that the alleged injuries to the cervical and lumbosacral regions of the plaintiff's spine did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795).
In opposition, the plaintiff failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted the defendants' motion for summary judgment dismissing the complaint.
Davis v. Wills
Rosenberg & Gluck, LLP, Holtsville, N.Y. (Matthew H. Bligh of counsel), for appellant.
Richard T. Lau, Jericho, N.Y. (Joseph G. Gallo of counsel), for respondent.
In an action to recover damages for personal injuries, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Gazzillo, J.), dated May 6, 2011, which granted the defendant's 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) as a result of the subject accident.
The defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendant submitted evidence establishing, prima facie, that the alleged injuries to the cervical region of the plaintiff's spine did not constitute a serious injury within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795).
However, in opposition, the plaintiff submitted evidence raising a triable issue of fact as to whether the alleged injuries to the cervical region of his spine constituted a serious injury under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Perl v Meher, 18 NY3d 208, 217-218). Accordingly, the Supreme Court should have denied the defendant's motion for summary judgment dismissing the complaint.
Fernandez-Velez v. O'Hara
Martin, Fallon & Mullé, Huntington, N.Y. (Richard C. Mullé of counsel), for appellants.
Steven Louros, New York, N.Y., for respondents.
In an action to recover damages for personal injuries, etc., the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Suffolk County (Farneti, J.), dated October 4, 2011, as denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff Juan Fernandez-Velez did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is granted.
The defendants met their prima facie of burden of showing that the plaintiff Juan Fernandez-Velez (hereinafter the injured plaintiff) did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendants submitted evidence establishing, prima facie, that the alleged injuries to the cervical and thoracolumbar regions of the injured plaintiff's spine did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Rodriguez v Huerfano, 46 AD3d 794, 795).
In opposition, the plaintiffs failed to raise a triable issue of fact. Accordingly, the Supreme Court should have granted the defendants' motion for summary judgment dismissing the complaint.
Samuels & Associates, P.C., Rosedale, N.Y. (Violet E. Samuels 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 (Saitta, J.), dated August 4, 2010, which granted the defendant's motion for summary judgment dismissing the complaint on the ground that she did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
The defendant met his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendant submitted competent medical evidence establishing, prima facie, that the alleged injuries to the cervical region of the plaintiff's spine and right shoulder did not constitute serious injuries within the meaning of Insurance Law § 5102(d) (see Staff v Yshua, 59 AD3d 614; Rodriguez v Huerfano, 46 AD3d 794, 795). The defendant also submitted evidence establishing, prima facie, that the plaintiff did not sustain a serious injury under the 90/180-day category of Insurance Law § 5102(d) (cf. Leeber v Ward, 55 AD3d 563, 564).
In opposition, the plaintiff failed to raise a triable issue of fact. Accordingly, the Supreme Court properly granted the defendant's motion for summary judgment dismissing the complaint.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y. (Mead, Hecht, Conklin & Gallagher, LLP [Elizabeth Hecht], of counsel), for appellants.
Evan W. Kohn (Paris & Chaikin, PLLC, New York, N.Y. [Jason L. Paris], of counsel), for respondent.
In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Schmidt, J.), dated July 19, 2011, as denied their 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 defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendants failed to adequately address the plaintiff's claim that she sustained a medically-determined injury or impairment of a nonpermanent nature which prevented her from performing substantially all of the material acts which constituted her ususal and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (see Aujour v Singh, 90 AD3d 686, 686-687; Bangar v Man Sing Wong, 89 AD3d 1048, 1049).
Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint, without regard to the sufficiency of the papers submitted by the plaintiff in opposition (see Aujour v Singh, 90 AD3d at 687; Bangar v Man Sing Wong, 89 AD3d at 1049).
Skenderis & Cornacchia, P.C., Long Island City, N.Y. (Thomas Torto and Jason Levine of counsel), for appellants.
Daniel Chavez, Bronx, N.Y. (Elizabeth Mark Meyerson of counsel), for respondent.
In an action to recover damages for personal injuries, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Rothenberg, J.), dated June 16, 2011, as denied their 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 defendants failed to meet their prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendants failed to even address, much less satisfy, their burden with respect to the plaintiff's allegation that her brain sustained certain injuries as a result of the subject accident (see Safer v Silbersweig, 70 AD3d 921, 922; Hughes v Cai, 31 AD3d 385, 385-386).
Furthermore, the defendants failed to adequately address the plaintiff's claim that she sustained a medically-determined injury or impairment of a non-permanent nature which prevented her from performing substantially all of the material acts which constituted her ususal and customary daily activities for not less than 90 days during the 180 days immediately following the subject accident (see Bangar v Man Sing Wong, 89 AD3d 1048, 1049).
Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint, without regard to the sufficiency of the plaintiff's opposition papers (id.; see Safer v Silbersweig, 70 AD3d at 922; Hughes v Cai, 31 AD3d at 385-386).
Quintanilla v. Campion
Russo, Apoznanski & Tambasco, Westbury, N.Y. (Susan J. Mitola of counsel), for appellants.
Cannon & Acosta, LLP, Huntington Station, N.Y. (June Redeker of counsel), for respondent.
In an action to recover damages for personal injuries, the defendants appeal from an order of the Supreme Court, Suffolk County (Pastoressa, J.), dated March 16, 2011, which denied their motion for summary judgment dismissing the complaint insofar as asserted by the plaintiff Sonia Martinez on the ground that she 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 Sonia Martinez 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, 352; Gaddy v Eyler, 79 NY2d 955, 956-957). The defendants failed to adequately address the alleged injuries to Martinez's elbows and hips (see Martinez v Yi Zhong Chen, 91 AD3d 834, 835). Furthermore, the defendants failed to adequately address Martinez's claim that she sustained a serious injury under the 90/180-day category of Insurance Law § 5102(d) (see Rouach v Betts, 71 AD3d 977).
Accordingly, the Supreme Court properly denied the defendants' motion for summary judgment dismissing the complaint insofar as asserted by Martinez, regardless of the sufficiency of Martinez's opposition papers (see Martinez v Yi Zhong Chen, 91 AD3d at 835; Rouach v Betts, 71 AD3d at 977-978).
Coonjbeharry v. Altone Electric, Llc
Horigan, Horigan & Lombardo, P.C., Amsterdam (Peter M. Califano of counsel), for appellant.
Goldberg Segalla, L.L.P., Albany (Matthew S. Lerner of counsel), for Altone Electric, LLC, respondent.
Thuillez, Ford, Gold, Butler & Young, L.L.P., Albany (Daisy Ford Paglia of counsel), for Permalife Products, LLC, respondent.
Pennock Law Firm, Clifton Park (Leah Walker Casey of counsel), for New York Rubber Recycling, LLC, respondent.
Appeal from a judgment of the Supreme Court (Kramer, J.), entered May 9, 2011 in Schenectady County, which granted defendants' motions for summary judgment dismissing the complaint.
Plaintiff was seriously injured when, in the course of his employment at a rubber recycling facility operated by defendant New York Rubber Recycling, LLC, a wholly-owned subsidiary of defendant Permalife Products, LLC at Rotterdam Industrial Park, he attempted to clear a rubber jam in an auger and caught his arm in the machine, resulting in the amputation of his lower right arm. Thereafter, plaintiff — designating Permalife as his employer — received benefits under the Workers' Compensation Law, and then commenced this action for damages against Permalife, New York Rubber and defendant Altone Electric, LLC alleging negligence, strict products liability and failure to warn. Permalife and New York Rubber successfully moved for summary judgment on the ground that plaintiff's claim was barred against his employers by the exclusive remedy provisions of the Workers' Compensation Law (see Workers' Compensation Law § 11). Altone also moved for and was granted summary judgment on the grounds that it did not owe plaintiff a duty of care and, in any event, could not be held liable because it did not work on the machine that caused plaintiff's injury. On plaintiff's appeal, we now affirm.
"'As a general rule, when an employee is injured in the course of his [or her] employment, his [or her] sole remedy against [the] employer lies in his [or her] entitlement to a recovery under the Workers' Compensation Law'" (Len v State of New York, 74 AD3d 1597, 1599 [2010], lv dismissed and denied 15 NY3d 912 [2010], quoting Billy v Consolidated Mach. Tool Corp., 51 NY2d 152, 155 [1980]; see Workers' Compensation Law § 11). Thus, Permalife is shielded from liability because plaintiff applied for and accepted workers' compensation benefits, naming Permalife as his employer. The decision of the Workers' Compensation Board establishing Permalife as plaintiff's employer is final and binding, and may not be collaterally attacked by plaintiff in this action (see Feltt v Owens, 247 AD2d 689, 690-691 [1998]; Bonacci v Treffiletti Supermarkets, 205 AD2d 907, 908 [1994]). Further, in certain situations, i.e., where a parent and subsidiary corporation function as alter egos for one another, more than one entity may be considered a plaintiff's employer for purposes of workers' compensation (see Len v State of New York, 74 AD3d at 1599; Constantine v Premier Cab Corp., 295 AD2d 303, 303 [2002]). Here, we find, as a matter of law, that plaintiff was also an employee of New York Rubber.
It is undisputed that New York Rubber is a wholly-owned subsidiary of Permalife formed to extend Permalife's tire recycling business into the Capital District. The entities share coverage under an insurance policy and Permalife prepares and files tax returns for both entities. Although New York Rubber set plaintiff's wages and was responsible for the hiring and firing of employees at the Rotterdam facility, Permalife paid the healthcare benefits and wages for all employees working at the Rotterdam plant through a centralized payroll service, for which it was later reimbursed by New York Rubber. Plaintiff worked under the supervision and direction of both New York Rubber and Permalife employees. He was given an employee handbook issued by Permalife and enforced by New York Rubber. This evidence demonstrates the entities' "shared purpose, intermingling of finances and unity of management" and is sufficient to establish as a matter of law that New York Rubber was an alter ego of Permalife (Len v State of New York, 74 AD3d at 1600; see Carusone v Three Ctrs. [OLROHO] Assoc., 124 AD2d 317, 317 [1986]).
We also reject plaintiff's argument that New York Rubber can nevertheless be held liable to him because of its "independent assumption, by contract or operation of law, of the obligations and liabilities" of alleged third-party tortfeasor, Recovery Technologies Group, Inc. (hereinafter RTG) (Billy v Consolidated Mach. Tool Corp., 51 NY2d at 156; see Holmberg v Attractions Land, 230 AD2d 362, 364 [1997])[FN1]. Although RTG was a predecessor in interest to New York Rubber, RTG dissolved before the Rotterdam plant was opened and prior to the time the machinery involved in plaintiff's injuries was installed or operational. Further, there is no evidence that RTG played a role in designing or manufacturing the machinery involved in plaintiff's accident (compare Billy v Consolidated Mach. Tool Corp., 51 NY2d at 157, 162). Accordingly, as plaintiff has failed to allege any facts that would support an assumption of liability arising out of some wrongdoing by RTG independent of plaintiff's employment by New York Rubber, we find no basis to apply an exception to the exclusivity provisions of the Workers' Compensation Law (see Molinari v Kar-San Dev., 117 AD2d 194 [1986], affd on opinion below 69 NY2d 910 [1987]).
Supreme Court also correctly granted summary judgment to Altone. Altone owed no independent duty to plaintiff, a stranger to its contract with New York Rubber and Permalife, and thus can only be found liable if, by failing to exercise reasonable care when performing the contract, Altone "'create[d] an unreasonable risk of harm to [plaintiff], or increase[d] that risk'" (Kennedy v Atlas Fence, Inc., 90 AD3d 1122, 1123 [2011], quoting Church v Callanan Indus., 99 NY2d 104, 111 [2002]). Contrary to plaintiff's assertions that questions of fact exist as to whether Altone was responsible for wiring the machine involved in plaintiff's accident, the record clearly indicates that plaintiff was injured when he put his hand in a jammed auger connected to a Forsberg air table that was not wired or installed by Altone. Indeed, a former employee of Altone gave uncontradicted testimony that the air table was installed and the auger connected to it only after he had left Altone's employ and began to do all of New York Rubber's wiring work. Accordingly, any alleged negligence on the part of Altone in performing electrical work at the Rotterdam plant could not have caused plaintiff's injuries.
Footnote 1:Plaintiff's complaint named RTG as well as Distribution Unlimited, Inc., but plaintiff subsequently discontinued this action as against these entities.
Red-Kap Sales, Inc. v. Northern Lights Energy Prod, Inc.,
Pozefsky, Bramley & Murphy, Albany (Anthony Murphy of counsel), for appellant.
Harris Beach, P.L.L.C., Syracuse (Lauren H. Seiter of counsel), for respondent.
Appeal from an order of the Supreme Court (Drago, J.), entered January 13, 2011 in Schenectady County, which denied plaintiff's motion for summary judgment.
In December 2005, plaintiff and defendant Northern Lights Energy Products, Inc. entered into an agreement pursuant to which plaintiff would be the exclusive provider of gasoline to Northern Lights. Defendant Terry D. Young, the president and part owner of Northern Lights, signed the supply agreement and loan agreement on behalf of Northern Lights and, at that time, was also asked to sign a document entitled "Guaranty of Payment of Loan Agreement." In April 2009, after Northern Lights ceased operations, plaintiff commenced this action against Northern Lights for, among other things, breach of the loan agreement and against Young individually based upon the guaranty agreement. After judgment was entered against Northern Lights, plaintiff moved for summary judgment on its claim against Young individually. Finding the guaranty agreement to be ambiguous, Supreme Court denied the motion. Plaintiff appeals.
It is for the court to determine as a matter of law whether a written agreement is ambiguous by looking within the four corners of the document and the circumstances under which it was executed, and only if an ambiguity exists may extrinsic evidence be considered (see Kass v Kass, 91 NY2d 554, 566 [1998]; W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]; Ermiger v Black, 36 AD3d 1053, 1054 [2007]; Stuyvesant Plaza v Emizack, LLC, 307 AD2d 640, 640 [2003]). An agreement "is unambiguous if the language it uses has 'a definite and precise meaning, unattended by danger of misconception in the purport of the [agreement] itself, and concerning which there is no reasonable basis for a difference of opinion'" (Greenfield v Philles Records, 98 NY2d 562, 569 [2002], quoting Breed v Insurance Co. of N. Am., 46 NY2d 351, 355 [1978]; see Williams v Village of Endicott, 91 AD3d 1160, 1162 [2012]).
The document at issue is not titled "Personal Guaranty," but rather "Guaranty of Payment of Loan Agreement," and there is no language in the body of the document indicating that the signor is "personally" guaranteeing the loan agreement (compare Key Equip. Fin. v South Shore Imaging, Inc., 69 AD3d 805, 806-807 [2010]; Crown Tire Co. v Tire Assoc. of Fairport, 177 AD2d 974 [1991]; RCA Records v Wiener, 166 AD2d 221 [1990]; Crisafulli Bros. v Kilmartin, 100 AD2d 678, 679 [1984]). Moreover, like the document at issue in Stuyvesant Plaza v Emizack, LLC (supra), the guaranty agreement here was prepared by plaintiff and refers to an obligation incurred by "the undersigned," yet nowhere in the document is Young, individually, or anyone else identified as "the undersigned" (see id. at 640-641; compare Key Equip. Fin. v South Shore Imaging, Inc., 69 AD3d at 808; PNC Capital Recovery v Mechanical Parking Sys., 283 AD2d 268, 269-270 [2001], lv dismissed 96 NY2d 937 [2001], appeal dismissed 98 NY2d 763 [2002]; Crown Tire Co. v Tire Assoc. of Fairport, 177 AD2d at 974). Instead, the words "Corporate Officers" appear at the bottom of the document, under which Young signed his name, which could indicate that Young was signing in his corporate capacity (see Salzman Sign Co. v Beck, 10 NY2d 63, 67 [1961] ["where individual responsibility is demanded the nearly universal practice is that the officer signs twice — once as an officer and again as an individual"]; Stuyvesant Plaza v Emizack, LLC, 307 AD2d at 641).
Contrary to plaintiff's contention, "[t]his is not a case of an individual merely adding his or her corporate title while signing a document that contains language in the body of the agreement identifying such person as an individual guarantor" or otherwise unambiguously indicating that the document is a personal guaranty (Stuyvesant Plaza v Emizack, LLC, 307 AD2d at 641; see e.g. PNC Capital Recovery v Mechanical Parking Sys., 283 AD2d at 269-271; Florence Corp. v Penguin Constr. Corp., 227 AD2d 442, 443 [1996]; Crown Tire Co. v Tire Assoc. of Fairport, 177 AD2d at 974; Chemical Bank v Masters, 176 AD2d 591, 591 [1991]; RCA Records v Wiener, 166 AD2d at 221). Rather, here, it is unclear as to whether Young was guaranteeing the loan agreement in an individual or representative capacity, and therefore consideration of extrinsic evidence is necessary in order to determine the intent of the parties (see Stuyvesant Plaza v Emizack, LLC, 307 AD2d at 641; see also Star Video Entertainment v J & I Video Distrib., 268 AD2d 423, 423-424 [2000]). Inasmuch as the affidavits submitted on the motion contain conflicting accounts of the parties' intentions and understanding as to who was purporting to guaranty the underlying obligation in the loan agreement, summary judgment was properly denied (see Matter of Williams v Village of Endicott, 91 AD3d at 1163; Shook v Blue Stores Corp., 30 AD3d 811, 812-813 [2006]; compare Stuyvesant Plaza v Emizack, LLC, 307 AD2d at 641-642).
Great American Restoration Services, Inc. v Lenti
Hogan & Cassell, LLP, Jericho, N.Y. (Michael D. Cassell of counsel), for appellants.
King & King, LLP, Long Island City, N.Y. (Karl Silverberg of counsel), for respondent.
In an action to recover damages for breach of contract, the defendants appeal from (1) an order of the Supreme Court, Nassau County (Lally, J.), entered December 8, 2010, which granted the plaintiff's motion for summary judgment on the issue of liability and denied their cross motion to dismiss the complaint pursuant to CPLR 3211(a)(7), and (2) a judgment of the same court dated June 2, 2011, which, upon the order, is in favor of the plaintiff and against them in the total sum of $50,000.
"A written agreement that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of its terms" (Alvarez v Amicucci, 82 AD3d 687, 688; see MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640, 645; Evans v Famous Music Corp., 1 NY3d 452, 458). "Extrinsic evidence may not be considered unless it is determined as a matter of law that the agreement is ambiguous" (Burlington Ins. Co. v Utica First Ins. Co., 71 AD3d 712, 713; see Madison Ave. Leasehold, LLC v Madison Bentley Assoc. LLC, 8 NY3d 59, 66; South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272, 278).
After a fire at the defendants' house in Queens, they hired the plaintiff to temporarily cover holes in the roof, remove water from the premises, remove both salvageable and unsalvageable personal property, store such property, and remove debris. The plaintiff performed this work before another contractor began its work rebuilding the defendants' house.
The plaintiff established its prima facie entitlement to judgment as a matter of law by submitting the contract for the work, the language of which demonstrated a clear intent that the defendants would be responsible for any charges not covered by the defendants' insurance policy. The plaintiff also submitted proof that it satisfactorily completed the work and that the defendants did not pay the plaintiff pursuant to the contract.
Since the defendants failed to raise a triable issue of fact in response, the Supreme Court properly granted the plaintiff's motion for summary judgment on the issue of liability (see M & R Rockaway, LLC v SK Rockaway Real Estate Co., LLC, 74 AD3d 759, 760; cf. Altronix Corp. v Central Machining Specialties, Inc., 84 AD3d 991, 992; Alvarez v Amicucci, 82 AD3d at 688).
Contrary to the defendants' contention, the Supreme Court properly determined that the plaintiff's work at their house did not constitute "[h]ome improvement" as that term is defined in Administrative Code of City of New York § 20-386(2) and, therefore, the plaintiff did not require a license pursuant to Administrative Code of City of New York § 20-387(a). Accordingly, the plaintiff was not required to plead that it was duly licensed by the Department of Consumer Affairs of the City of New York (see CPLR 3015[e]) as a home-improvement contractor, and the Supreme Court, thus, properly denied the defendants' cross motion to dismiss the complaint pursuant to CPLR 3211(a)(7) for failure to plead that it was so licensed.
Colonial Surety Company v. Genesee Valley Nurseries, Inc.
Appeal from an order of the Supreme Court, Allegany County (Thomas P. Brown, A.J.), entered January 26, 2011. The order denied plaintiff's motion to amend a second amended judgment to include additional attorneys' fees, interest and other costs.
Underberg & Kessler LLP, Buffalo (Edward P. Yankelunas Of Counsel), For Plaintiff-Appellant.
Paul W. O'Brien, Defendant-Respondent Pro Se.
It is hereby ORDERED that the order so appealed from is unanimously modified on the law by vacating that part denying plaintiff's motion insofar as it sought to amend the second amended judgment to include additional attorneys' fees that plaintiff incurred in attempting to collect upon that judgment and to prevent defendant from fraudulently discharging that judgment in bankruptcy and granting the motion to the extent that it seeks reasonable attorneys' fees and as modified the order is affirmed without costs, and the matter is remitted to Supreme Court, Allegany County, for further proceedings in accordance with the following
Memorandum: Plaintiff commenced this action seeking damages pursuant to an indemnification agreement with, inter alia, defendants. Supreme Court subsequently struck the answer of Paul W. O'Brien (defendant) based on his failure to comply with an order directing him to post a certain amount of money as security for his obligations pursuant to the indemnification agreement, and the court entered judgment against him, followed by an amended judgment and a second amended judgment. We agree with plaintiff that Supreme Court erred in denying those parts of its motion to amend the second amended judgment to include additional attorneys' fees that plaintiff incurred in attempting to collect upon that judgment and to prevent defendant from fraudulently discharging that judgment in bankruptcy. We therefore modify the order accordingly, and we remit the matter to Supreme Court to calculate the amount of reasonable attorneys' fees to be awarded to plaintiff.
Initially, we note that plaintiff has not presented any argument on appeal concerning that part of its motion seeking to increase the amount of damages awarded in the second amended judgment by adding certain post-judgment interest, and it therefore is deemed to have abandoned that issue (see Ciesinski v Town of Aurora, 202 AD2d 984, 984).
"Under the general rule, attorney[s'] fees are incidents of litigation and a prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties, statute or court rule" (Hooper Assoc. v AGS Computers, 74 NY2d 487, 491). "[A] contract assuming th[e] obligation [to indemnify with respect to attorneys' fees] must be strictly construed to avoid reading into it a duty [that] the parties did not intend to be assumed" (Tudisco v Duerr [appeal No. 2], 89 AD3d 1372, 1376 [internal quotation marks omitted]). Furthermore, a party may not recover attorneys' fees arising from litigation with the other party to a contract unless an intent to provide for such reimbursement "is unmistakably clear from the language of the promise" (Hooper Assoc., 74 NY2d at 492; see Parkway Pediatric & Adolescent Medicine LLC v Vitullo, 72 AD3d 1513).
Here, the pertinent part of the indemnification agreement provides that defendant "agree[s] to . . . indemnify and save harmless [plaintiff] from . . . any and all . . . loss, costs, damages or expenses of whatever nature or kind, including fees of attorneys and all other expenses, including . . . costs and fees of . . . attempting to recover losses or expenses from [defendants] or third parties . . ." "If [that] broadly phrased agreement to indemnify did not include legal expenses incurred in [attempting to collect upon a judgment] . . ., it is difficult, if not impossible, to ascertain for what it was that [defendant] had agreed to indemnify" plaintiff (Breed, Abbott & Morgan v Hulko, 139 AD2d 71, 73, affd 74 NY2d 686). We therefore conclude that it "is unmistakably clear from the language of the [indemnification agreement]" that defendant must indemnify plaintiff for the costs of attempting to enforce that agreement (Hooper Assoc., 74 NY2d at 492), including the attorneys' fees for attempting to collect upon the second amended judgment and to prevent defendant from fraudulently discharging that judgment in bankruptcy.
Plaintiff's remaining contention is academic in light of our determination.
LUE v FINKELSTEIN & PARTNERS, LLP
Calendar Date: March 20, 2012
Before: Mercure, J.P., Lahtinen, Spain, McCarthy and Garry, JJ.
Finkelstein & Partners, LLP, Newburgh (James W. Shuttleworth of counsel), for appellants.
LaFave, Wein & Frament, P.L.L.C., Guilderland (Paul H. Wein of counsel), for respondent.
Appeal from an order of the Supreme Court (Catena, J.), entered March 31, 2011 in Montgomery County, which, among other things, granted plaintiff's motion for partial summary judgment.
In January 2002, plaintiff, while working for O'Connell Electric, fell from a scissor lift at a construction work site owned by K-Mart Corporation. Defendants failed to preserve plaintiff's Labor Law § 240 claim during K-Mart's chapter 11 bankruptcy, resulting in the claim being reduced to zero dollars by the Bankruptcy Court in 2004. Plaintiff, represented by new counsel, subsequently commenced an action against various defendants, but his claim against K-Mart was dismissed by Supreme Court (Cannizzaro, J.) based upon the Bankruptcy Court's order. No appeal was pursued from such dismissal.
Plaintiff eventually settled his claim against another defendant — United Rentals, Inc., the supplier of the scissor lift — for $235,000. He then brought this legal malpractice action, which was previously before us regarding a discovery dispute (67 AD3d 1187 [2009]), asserting that he would have had a larger recovery if his Labor Law § 240 strict liability claim against K-Mart had been preserved by defendants. Plaintiff moved for partial summary judgment on the issue of liability, and defendants cross-moved for summary judgment dismissing the complaint upon the ground that plaintiff could not prove that defendants' alleged malpractice caused him any damages beyond what he had recovered from United Rentals. Supreme Court granted plaintiff's motion and denied defendants' cross motion. Defendants appeal, arguing that since plaintiff cannot recover any damages other than those that he has already received, his motion for partial summary judgment should have been denied and their cross motion for summary judgment should have been granted.
We find that factual issues exist in this record precluding summary judgment to either party. In a legal malpractice action, "a plaintiff must demonstrate that the attorney 'failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession' and that the attorney's breach of this duty proximately caused [the] plaintiff to sustain actual and ascertainable damages" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007], quoting McCoy v Feinman, 99 NY2d 295, 301 [2002]). Defendants argue that, even if they had preserved a claim against K-Mart, funds would not have been available to collect on a favorable Labor Law § 240 cause of action because K-Mart was self-insured and the record does not establish that K-Mart was named as an additional insured on O'Connell Electric's policy with its insurer, Interstate Insurance Group. Plaintiff counters by contending that O'Connell Electric had agreed in a written contract to indemnify K-Mart as well as name K-Mart as an additional insured, and that an avenue to O'Connell Electric's insurer was provided by Insurance Law § 3420 and the 1978 Bankruptcy Code (see 11 USC § 524 [a], [e]).
The contract between O'Connell Electric and K-Mart had an indemnification clause [FN1] and also a clause requiring that O'Connell Electric include K-Mart as an additional insured. It is the general rule that there is no right to indemnification if the indemnitee does not sustain an actual loss (see Lang v Hanover Ins. Co., 3 NY3d 350, 354 [2004]; Jackson v Citizens Cas. Co., 277 NY 385, 389 [1938]; Bank of India v Trendi Sportswear, Inc., 2002 US Dist LEXIS 894, *10-14, 2002 WL 84631, *4-5 [SD NY 2002], affd 64 Fed Appx 827 [2d Cir 2003], cert denied 540 US 1074 [2003]). This rule had the effect of protecting an insurer from having to pay an injured party when its insured was insolvent or bankrupt. Thus, the Legislature long ago carved out an exception to the rule and "remedied this inequity by creating a limited statutory cause of action on behalf of injured parties directly against insurers" (Lang v Hanover Ins. Co., 3 NY3d at 354; see Coleman v New Amsterdam Cas. Co., 247 NY 271, 275 [1928]). This exception is authorized by the Bankruptcy Code (see 11 USC § 524 [a], [e]), and a personal injury plaintiff may pursue an action against a bankrupt defendant for the purpose of obtaining a judgment to be enforced against that defendant's insurer (see Lang v Hanover Ins. Co., 3 NY3d at 354-355; Green v Welsh, 956 F2d 30, 35 [2d Cir 1992]; Collier On Bankruptcy P 524.05 [16th ed]). Since it is well settled that an additional insured has the same protection as a named insured (see Kassis v Ohio Cas. Ins. Co., 12 NY3d 595, 599-600 [2009]; Pecker Iron Works of N.Y. v Traveler's Ins. Co., 99 NY2d 391, 393 [2003]), it follows that an Insurance Law § 3420 cause of action could be brought against the insurer of an additional insured.
Here, the contract required O'Connell Electric to name K-Mart as an additional insured. However, as defendants point out, there is no proof in the record that this was actually done. Establishing that a party is an additional insured is not generally difficult (see Kassis v Ohio Cas. Ins. Co., 12 NY3d at 599-600). But, the policy is not in the record and there is not even a sworn statement from a person with actual knowledge indicating such coverage was in place [FN2]. Under such circumstances, plaintiff has failed to establish as a matter of law that a potential claim existed under Insurance Law § 3420 against Interstate Insurance Group.
Nor does this record support the conclusion that the contractual indemnification claim was established as a matter of law as a way that plaintiff could have reached the funds of Interstate Insurance Group. Without addressing potential legal hurdles of such a reach (see generally Lang v Hanover Ins. Co., 3 NY3d at 353; Watson v Newell Indus., Inc., 67 AD3d 780, 781 [2009]; Matter of Lee v Maltais, 250 AD2d 951, 952-953 [1998], lv denied 92 NY2d 809 [1998]), we need only note that a contractual indemnification clause is not enforceable where there is active negligence by the indemnitee (see McKeighan v Vassar Coll., 53 AD3d 831, 833-834 [2008]). The record does not establish as a matter of law the role (if any) of K-Mart (the indemnitee) at the construction site or whether K-Mart was free from negligence.
Finally, we find unpersuasive defendants' assertion that plaintiff's strict liability claim under Labor Law § 240 would not have had potential additional value in the underlying litigation. Further, plaintiff submitted evidence which, when viewed most favorable to him, indicated that his injuries potentially had value beyond the amount for which he settled.
Mercure, J.P., Spain, McCarthy and Garry, JJ., concur.
ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as granted plaintiff's motion for partial summary judgment on the issue of liability; said motion denied; and, as so modified, affirmed.
Footnote 1: Plaintiff did not suffer a grave injury and, thus, common-law indemnification would not have been available to K-Mart against O'Connell Electric, plaintiff's employer (see Workers' Compensation Law § 11; Flores v Lower E. Side Serv. Ctr., Inc., 4 NY3d 363, 367 [2005]).
Footnote 2: It is not unheard of for contractors to fail to obtain such coverage despite agreeing to do so (see e.g. Kinney v Lisk Co., 76 NY2d 215 [1990]).