Source: https://www.hurwitzfine.com/news/coverage-pointers-volume-ii-no-3
Timestamp: 2019-10-14 10:44:31
Document Index: 767191638

Matched Legal Cases: ['§5102', '§3420', '§3211', '§4226', '§349', '§4226', '§349', '§349', '§4226', '§ 3420', '§ 3420', '§ 3420', '§ 3420', '§ 3', '§ 5102', '§ 5102', '§ 5102', '§ 5102', '§ 5106', '§ 3211', '§ 3211', '§ 3211', '§ 3211', '§ 3211', '§ 4226', '§ 349', '§ 349', '§ 349', '§ 349', '§ 4226', '§ 349', '§ 4226', '§ 349', '§ 349', '§ 349', '§ 349', '§ 4226', '§ 4226', '§ 2123', '§ 4226']

Coverage Pointers - Volume II, No. 3 | Hurwitz & Fine, P.C.
Coverage Pointers - Volume II, No. 3
07/27/00: PINTO v. ALLSTATE INS. CO.
Court Finds Issues of Fact Preclude Summary Dismissal of Bad Faith Claim Arising Out of Failure to Settle
Plaintiff was seriously injured in an auto accident when her vehicle was struck head-on by another vehicle driven by Allstate’s insured. Allstate conceded liability in the negligence action brought against its insured because he had been driving the wrong way down a one-way street. As such, only the issue of damages was contested. Although the plaintiff claimed damages of $1 million, she offered to settle her claim for Allstate’s policy limit of $100,000 on several occasions during the trial. Allstate, however, never offered more than its pretrial settlement offer of $30,000, even when it became apparent that a large verdict was possible.. The jury returned a verdict well in excess of the policy limit.
After the trial, Allstate’s insured assigned to plaintiff his right to proceed against Allstate for the excess damages due to alleged bad faith in settlement negotiations. The plaintiff then commenced this action against Allstate for violating its implied covenant of good faith by recklessly rejecting the plaintiff’s settlement demands. Allstate moved for summary judgment, which was granted, but the Second Circuit reversed. The court observed that an insurance company’s exclusive control over a claim against its insured imposes a duty to act in good faith when deciding whether to settle a claim, and it may be liable for breach of that duty. The duty stems from an inherent conflict that arises between the insurer’s desire to settle the claim for as little as possible, and the insured’s desire to avoid personal liability in excess of the policy limits. An insurer acts in good faith when it gives equal consideration to the insured’s interest in avoiding liability in excess of the policy limit as it does to its own interests.
In reviewing the standard for bad faith in New York, the court explained that the duty is not breached by an insurer’s mistake in judgment or negligence. Instead, it must be demonstrated that the insurer acted with gross disregard of the insured’s interests, which requires a showing that it deliberately or recklessly failed to place its insured’s interests on equal footing with its own when considering a settlement offer. It can be shown by a pattern of behavior evincing a conscious or knowing indifference to the probability that a insured would be personally accountable for a large judgment if a settlement offer within policy limits were not accepted. (Sinister motive need not be demonstrated). The court held that a number of factors are considered, including plaintiff’s likelihood of success on liability, the potential damages award, the financial burden on each party if the insurer refuses to settle, whether the claim was properly investigated, and the information available to the insurer when settlement was offered.
The court rejected Allstate’s argument that there could be no recovery against it because its insured was judgment proof. Allstate’s actions exposed its insured to an excess judgment that could harm his credit rating and expose any assets he might have or subsequently acquire to lien or seizure. "To allow an insurer to escape bad faith liability because its insured lacks the ability to pay an excess judgment would introduce a perverse and undesirable incentive . . . discouraging rather than encouraging settlement." Finally, the court held that an exchange of a general release for an assignment of a bad faith claim operates to preserve the claim as if the parties had executed a covenant not to sue and thus a proper mechanism for pursuing the claim.
07/31/00: OBERLANDER v. MONARCH LIFE INS. CO.
New York Law Applied to Massachusetts Insurer for Policies Issued in New York
The plaintiff, a New York resident, purchased a disability policy from a Massachusetts insurance company licensed to do business in New York. The plaintiff purchased the policy in New York through a New York insurance agent. The plaintiff commenced this action for breach of contract when the insurer terminated disability benefits. The insurer moved to dismiss a cause of action alleging violations of Massachusetts’ consumer protection laws, which the court granted. The Court determined that a cause of action grounded in Massachusetts law did not lie because New York had more significant contacts with the case and had a greater interest in regulating the conduct of the insurer.
07/31/00: SAINTE-AIME v HO
Serious Injury Threshold: Herniated Disc Not "Serious Injury" without Objective Evidence of Extent or Degree of Physical Limitations Resulting from Injury
Plaintiff commenced this action for personal injuries following an auto accident. The defendant sought summary dismissal on the ground that the plaintiff did not sustain "serious injury" as required by Insurance Law §5102(d) and, in support of the motion, submitted affidavits of physicians stating that they had found no limitations. In opposition to the motion, the plaintiff submitted affidavits from her treating physicians, who had not seen the plaintiff for over two years. While one of her doctors found restrictions, the court noted that he had not specified the extent or degree of the purported limitations, nor did he set forth what objective tests were performed to support his conclusions. Under certain circumstances, a herniated disc may constitute a "serious injury", but the plaintiff failed to provide any objective evidence of the extent or degree of the alleged physical limitations resulting from this disc injury and its duration. The court also rejected the plaintiff’s claim that she was unable to return to work and perform her usual and customary activities -- no objective evidence substantiating a medically determined injury was proffered. The statements made by plaintiff’s doctors that the plaintiff did not work for three months after the accident were based solely upon the plaintiff's own self-serving statements and were therefore insufficient to defeat the motion.
07/27/00: BLACK v ALLSTATE INSURANCE COMPANY
Despite Unfairness, Auto Policy May Exclude Injured Spouse for Other Spouse’s Negligence
The husband’s estate filed a claim against his wife’s auto policy for injury and death arising out of an auto accident. The husband had been killed, and his wife severely injured, when the vehicle she owned and was operating was struck by another vehicle. The insurer denied coverage because Insurance Law §3420(g) excludes insurance coverage for any liability of an insured "because of death of or injuries to his or her spouse . . . unless express provision relating specifically thereto is included in the policy. This exclusion shall apply only where the injured spouse, to be entitled to recover, must prove the culpable conduct of the insured spouse." Since this case required the plaintiff to prove the culpable conduct of his spouse, the exclusion applied. The plaintiff argued that the exclusion was inappropriate because the purpose of the statute -- to prevent collusion -- was not implicated where one spouse was dead and the other incapacitated. The court agreed that the law was unfair, but concluded that any change in the law must come from the Legislature.
07/27/00: BUTLER v. NEW YORK CENTRAL MUTUAL INS. CO.
New York State, Appellate Division Third Department
SUM Coverage Endorsement Deemed Ambiguous -- Unclear whether Limit Applies to Insureds Independently or Cumulatively
laintiff was injured in a two car accident in which her mother was killed, and commenced an action against the other driver individually and as representative of her mother’s estate. She settled her individual claim for $25,000, the limit of the other driver’s policy, and settled the wrongful death claim for $30,000. Plaintiff then sought benefits under her supplemental uninsured motorist (SUM) endorsement. The insurer moved for summary judgment dismissing the claim, arguing that the $55,000 in settlements paid by the other driver exceeded the SUM policy limit of $50,000, and therefore precluded payment of any SUM benefit. The insurer argued that the settlements of both insureds (plaintiff and her mother) should be applied as offsets to the $50,000. The plaintiff argued that the maximum payment under the SUM endorsement is offset only by the $25,000 payment to her, leaving $25,000 available under the endorsement. The court agreed with the plaintiff. The endorsement was ambiguous because it was unclear whether the coverage limit applied to each insured independently or was cumulative. The court concluded that the ambiguity must be construed against the insurer.
07/27/00: ELSTON v. ALLSTATE LIFE INS. CO. OF NEW YORK
Notice of Policy Cancellation Not Required when Insured Pays Premium by Automatic Monthly Withdrawal
The insurer issued a term life insurance policy to insured’s husband. The premiums were paid by a monthly automatic withdrawal from the insured’s checking account. Payments under the plan continued without incident for several months until an attempt for premium withdrawal was refused for insufficient funds. The insurer notified the plaintiff that a double premium payment would be sought the following month, but that withdrawal was also refused for lack of funds. The insurer then sent a notice of premium past due. The insurer also sent a separate letter stating that automatic payments would no longer be permitted and plaintiff would be required to make quarterly payments. The insurer never received any payments for overdue or future premiums. Several months later, the plaintiff’s husband died, and she filed a claim for benefits. The claim was denied because the policy lapsed for non-payment of the premiums. The plaintiff argued that cancellation of the policy was void because the insurer failed to comply with the notice provision of Insurance Law 3211, which requires that an insurer issue a written notice of cancellation prior to terminating a policy for default in payment of a premium. The court upheld the insurer’s denial of coverage. Notice is not required under Ins. Law §3211 if the policy requires premium payments at monthly intervals.
07/27/00: RUSSO v. MASSACHUSETTS MUTUAL LIFE
Three-Year Statute of Limitation Applies to Actions Under Ins. Law §4226 and General Business Law §349
The plaintiff purchased an N-Pay life insurance policy (also known as a vanishing premium policy) from her insurer. When the plaintiff learned that she would be required to make premium payments beyond the seven-year projection, she commenced this action alleging violations of Insurance Law §4226 and General Business Law §349. The complaint was dismissed based on the running of the statute of limitations. The Court held that causes of action under General Business Law §349 and Insurance Law §4226, which impose liability not recognized in common law, were creatures of statute. Thus, the three-year limitation period set forth in CPLR 214(2) applied. The court also concluded that this time period applies regardless of whether the plaintiff is able to discern defendant’s alleged deceptive practices within the three years of the time she purchased her policy.
7/24/00: ST. LUKE'S-ROOSEVELT HOSPITAL v. AMERICAN TRANSIT INS. CO.
Completed Proof of Claim is Pre-Requisite to No-Fault Benefits
Plaintiff commenced this action to recover no-fault medical payments and moved for summary judgment. The motion was denied, however, because the plaintiff failed to submit a completed proof of claim as required under 11 NYCRR 65.15 [d], [g]. A completed proof of claim is a pre-requisite to entitlement to no-fault benefits.
From time to time we highlight significant cases of interest from other jurisdictions. This week we offer decisions from California and Minnesota:
08/04/00: PEERLESS LIGHTING CORP. v. AMERICAN MOTORISTS INS. CO.
Liability Insurer Providing Coverage for "Advertising Injury" has No Duty to Indemnify an Insured for Infringement of "Trade Dress" That Allegedly Arose Through the Insured’s Solicitation of a Single Customer Through a Competitive Bidding Process
When the insurer refused to provide a defense, the insured filed an action for declaratory relief. The trial court granted summary judgment in favor of insured on the ground that the carrier had a duty to defend as a matter of law. However, after a bench trial, the court concluded the insurer had no duty to indemnify the insured for the $195,000 it paid to settle the underlying suit. With respect to "advertising injury" coverage, the policy only provided coverage for offenses "committed in the course of advertising . . . goods, products, or services." Because, under the specific facts of this case, there is no evidence the offense (infringement of trade dress) was committed "in the course of advertising" as that phrase is commonly and reasonably understood, the court concluded that no potential for coverage existed and thus no duty to defend ever arose. In particular, the term "advertising" as used in the policy does not include an effort to sell, through a competitive bidding process, a product that was specifically manufactured for a single customer to meet the needs of a specific project. Consequently, it reversed the order granting summary judgment and affirmed the judgment after trial finding no duty to indemnify.
08/03/00: LEAMINGTON CO. v. NONPROFITS’ INS. ASSOC.
Failing to Timely File Proof of Loss Within 60 Days Not Necessarily Bar to Recovery
The Minnesota Standard Fire Insurance Policy's requirement that a proof of loss be submitted within 60 days is not a condition precedent to recovery, nor does a failure to timely submit a proof of loss necessarily operate as a complete bar to recovery. Summary judgment is inappropriate when there are material issues of fact with respect to whether a mutual mistake by the contracting parties to an insurance policy resulted in the omission of a third party as an additional insured on the policy.
See also: C5-98-2328 decided the same day.
07/28/00: SHAFFERY v. WILSON, ESLSER
Defense Counsel Retained by Insurer May Not Seek Indemnity by "Monitoring Counsel" When Sued for Malpractice
To the "chorus of cases" decreeing that a lawyer sued by a former client for professional negligence cannot seek indemnity from the lawyer subsequently retained by the client on the same matter, the Court of Appeal adds "a variation on a familiar refrain": When a lawyer whose fees were paid by his client's insurer is sued by the insurer for malpractice, the lawyer may not seek indemnity from the lawyers retained by the insurer to "monitor" the same case.
BLACK v. ALLSTATE INS. CO.
Judgment, Supreme Court , Bronx County (Barry Salman, J.), entered July 28, 1998, which granted plaintiff's motion for a declaratory judgment that "Allstate Insurance Company's liability insurance coverage upon Mirna Geonette Powell, as driver, extend to the infant son and spouse of decedent Michael Powell" and denied Allstate's cross -motion for a declaration that no coverage exists, unanimously reversed, on the law, without costs, plaintiff 's motion denied, defendant's cross-motion granted, and it is declared that, in accordance with Insurance Law § 3420(g), there is no insurance coverage under Allstate's policy for the acts of Mirna Geonette Powell as they relate to plaintiff's claims for personal injury and wrongful death against her.
Mrs. Powell was the driver of a car insured by Allstate when it was struck by a stolen car which was being pursued by the Mount Vernon police. Her husband was killed, she suffered severe and permanent brain damage rendering her incompetent, and their son was seriously injured.
Insurance Law § 3420(g) specifically excludes insurance coverage against any liability of an insured "because of death of or injuries to his or her spouse...unless express provision relating specifically thereto is included in the policy. This exclusion shall apply only where the injured spouse, to be entitled to recover, must prove the culpable conduct of the insured spouse." Contrary to the IAS court's holding, in order to proceed on his claims in the underlying action, plaintiff must prove the culpable conduct, i.e., negligence of defendant, the decedent's spouse. Nor is the court's reliance upon the Decedent Estate Law, as applied in Guilmette v Ritayik (39 AD2d 339), appropriate.
Plaintiff's complaints about alleged unfairness in this case are well taken because of the unlikelihood of collusion between the decedent husband and his widow, who was rendered incompetent as the result of injuries incurred in the same accident , and the anachronistic nature of § 3420(g). However, such complaints are best addressed to the Legislature , which is the body empowered to remedy any inequities in the statute (see, Yankelevitz v Royal Globe Ins. Co., 88 AD2d 934, affd 59 NY2d 928).
While not passing on the merits of the issue, we call the Legislature 's attention to the fact that the predecessor of § 3420(g) was originally enacted in 1937 after the Legislature enacted legislation (now General Obligations Law § 3-313) removing a married woman's disability at common law to bring suit against her husband for any wrongful or tortious act causing injury to her. The purpose of the statute was to protect insurers that had issued preexisting liability policies which would have covered causes of action not contemplated when the policies were issued. It was also intended to protect insurers from collusive interspousal claims. As a result of that now 62-year old statute, literally millions of married New York drivers are unaware that their automobile liability insurance policy, while providing coverage for every other passenger or person injured in an accident caused by the driver's negligence, does not provide any coverage when the injured passenger is their spouse.
OBERLANDER v. MONARCH LIFE INSURANCE COMPANY
Assail & Yoeli , LLP, New York, N.Y. (Michael Yoeli of counsel), for respondent.
In an action, inter alia, to recover damages for breach of an insurance contract and violations of the consumer protection statutes of the State of Massachusetts, the plaintiff appeals from so much of an order of the Supreme Court, Suffolk County (Doyle, J.), dated August 18, 1999, as granted the defendant 's motion pursuant to CPLR 3211(a)(7) to dismiss the second cause of action which alleged violations of the consumer protection statutes of the State of Massachusetts.
The plaintiff, a New York resident, purchased a disability insurance policy from the defendant, Monarch Life Insurance Company (hereinafter Monarch), a company incorporated in and having its principal place of business in Massachusetts , but licensed to do business in New York. The plaintiff purchased the policy in New York from a licensed resident insurance agent. The plaintiff commenced this action in New York, when, following a disabling injury and the initial receipt of benefits therefor, the defendant terminated his benefits.
The plaintiff's second cause of action alleges that the manner in which Monarch stopped payment violated the consumer protection laws of Massachusetts. Monarch moved to dismiss that cause of action, contending that under the applicable choice-of-law rules, the laws of New York govern, and a cause of action grounded in Massachusetts law does not lie.
Employing the interest-analysis test, the Supreme Court properly determined that New York had both the more significant contacts with this case and the greater interest in regulating the conduct of Monarch, because the alleged tortious behavior occurred in New York (see, Padula v Lilarn Properties, Corp., 84 NY2d 519; Schultz v Boy Scouts of America, 65 NY2d 189; Northwestern Mutual Life Ins. Co. v Wender, 940 F Supp 62). Further, because New York has the greater interest in regulating conduct within its borders, and a New York statutory scheme is in place to protect New York consumers , the applicable law is that of New York (see, CPLR 3211(a)(7); Padula v Lilarn Properties Corp., supra ; Northwestern Mutual Life Ins. Co. v Wender, supra; see generally, Leon v Martinez, 84 NY2d 83). Thus, the Supreme Court properly dismissed the second cause of action based on alleged violations of Massachusetts statutory law.
KRAUSMAN, J.P., GOLDSTEIN, FEUERSTEIN and SMITH, JJ., concur.
SAINTE-AIME v HO
In an action to recover damages for personal injuries, the defendant Lisa Suwai Ho, s/h/a Suk Wai Ho, appeals from an order of the Supreme Court, Kings County (Bernstein, J.), dated November 8, 1999, which denied her motion for summary judgment dismissing the complaint insofar as asserted against her on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs , the motion is granted, and the complaint is dismissed insofar as asserted against the appellant.
The affirmed medical reports which the appellant submitted in support of her motion for summary judgment made out a prima facie case 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, Gaddy v Eyler, 79 NY2d 955; Greene v Miranda, AD2d [2d Dept., May 15, 2000]; Jackson v New York City Tr. Auth., AD2d & nbsp; [2d Dept., June 5, 2000]). Notably, the neurologist, Dr. Rita Lempl, found no limitation of motion in any direction in the cervical spine or lumbar spine area, and the orthopedist, Dr. Daniel DeSimone, found a full range of motion of the cervical and lumbosacral spines. The plaintiff was examined by both doctors in September 1998, approximately 2 1/2 years after the accident.
The plaintiff's opposition papers failed to raise a triable issue of fact as to whether she had sustained a serious injury. The affidavits submitted by Dr. Scott Denny, achiropractor, and by Dr. Ernesto C. Resurreccion, a neurologist, and their respective reports incorporated therein, were based on their examinations of the plaintiff in March 1996, within a week of the accident, and approximately 3 1/2 years before the summary judgment motion. Significantly, the plaintiff was last treated by Dr. Denny in December 1996 , and there is no evidence that she was ever seen by Dr. Resurreccion after March 1996. Under these circumstances, there was insufficient proof of the duration of the plaintiff's alleged injuries (see, Schultz v Von Voight, 216 AD2d 451, affd 86 NY2d 865; Bucci v Kempinski, AD2d [2d Dept., June 19, 2000]).
Moreover, while Dr. Denny found restrictions in the range of motion in both the plaintiff's cervical and lumbar spines, he neither specified the extent or degree of the purported limitations (see, Linares v Mompoint, AD2d [2d Dept., June 26, 2000]; Beckett v Conte, 176 AD2d 774) , nor set forth what objective tests he performed in arriving at his conclusions concerning the alleged restrictions (see, Grossman v Wright, AD2d [2d Dept., May 8, 2000]; Smith v Askew, 264 AD2d 834). The plaintiff's other expert, Dr. Resurreccion, found a full range of motion of the back and neck upon his examination of the plaintiff.
Furthermore, while under certain circumstances a herniated disc may constitute a serious injury within the meaning of Insurance Law § 5102(d) (see, Chaplin v Taylor, AD2d ; [2d Dept., June 5, 2000]: Flanagan v Hoeg, 212 AD2d 756), the plaintiff failed to provide any objective evidence of the extent or degree of the alleged physical limitations resulting from this disc injury and its duration (see, Jackson v New York City Tr. Auth., supra; Greene v Miranda , supra; Guzman v Paul Michael Mgt., 266 AD2d 508).
The plaintiff's assertion that she was unable to return to work and perform her usual and customary activities after the accident , without objective evidence substantiating the existence of a medically-determined injury which caused the alleged limitation of her activities, was insufficient to create a triable issue of fact as to her inability to perform substantially all of her daily activities for not less than 90 of the first 180 days subsequent to the accident (see, Jackson v New York City Tr. Auth., supra; Bennett v Reed, 263 AD2d 800; Taylor v Taylor, 260 AD2d 571). The statements made by the appellant's experts in their reports that the plaintiff did not work for three months after the accident were based upon the plaintiff's own self-serving statements and therefore were insufficient to raise a triable issue of fact in the absence of any objective evidence (see, Watt v Eastern Investigative Bur. AD2d ; [2d Dept., June 5, 2000]). Moreover, the affidavit of Dr. Denny, the plaintiff 's chiropractor, in this regard consisted of nothing more than "conclusory assertions tailored to meet statutory requirements" (Lopez v Senatore, 65 NY2d 1017, 1019; see, Worley v Griffith, ; AD2d [2d Dept., June 12, 2000]).
Accordingly , the appellant's motion should have been granted.
BRACKEN, J.P., JOY and THOMPSON, JJ., concur .
GOLDSTEIN, J., dissents and votes to affirm, with the following memorandum, with which FEUERSTEIN, J., concurs.
On March 12, 1996, the plaintiff sustained personal injuries in an automobile accident. This action to recover damages for personal injuries was commenced on or about November 19, 1997. By notice of motion dated June 21, 1999, the appellant moved for summary judgment, asserting that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d). In support of the motion, the appellant submitted affirmed reports of a neurologist and an orthopedic surgeon, both of whom examined the plaintiff on September 15, 1998 , on behalf of the appellant. The neurologist noted in his report that a Magnetic Resonance Imaging (hereinafter MRI) of the plaintiff's back showed disc herniation at C5-6 and C6-7, as well as disc bulging at L2-3, L3-4, C3-4, and C4-5. He further noted that the plaintiff's "past history is negative". The neurologist also stated that, subsequent to the accident, the plaintiff stayed out of work as a home attendant until June 1996 and continued physical therapy until December 1996. At the time of the examination in September, 1998, the plaintiff still used a back brace "at times", took painkillers, and regularly used a heating pad.
The orthopedic surgeon noted that the plaintiff "lost approximately three months from work" as a result of the accident. His report reiterated the MRI findings, and noted that "[i]f the history is accurate, the claimant's complaints are causally related to the accident as described".
The plaintiff, in opposition, submitted an affidavit from a chiropractor reiterating the findings of the appellant's experts and indicating that her injuries were permanent. The plaintiff also submitted a physician's affirmation which incorporated the terms of the physician' s report stating that subsequent to the accident, the patient was "totally disabled for [sic] her usual occupation as a home health aide".
The Supreme Court denied the appellant's motion for summary judgment without comment. It is apparent from this record that the appellant failed to establish entitlement to judgment as a matter of law (see, Chaplin v Taylor, AD2d ; [2d Dept., June 5, 2000]). The majority acknowledges that a herniated disc may constitute a serious injury (see, Chaplin v Taylor, supra; Flanagan v Hoeg, supra). The herniated discs revealed by the MRI were fully described in the affidavits of the appellant's own experts. Additionally , the appellant's orthopedic surgeon stated that if the history given by the plaintiff were accurate, the herniated discs were causally related to the accident.
It is well settled that material relied upon by a defendant moving for summary judgment is properly before the court and may be considered in determining an application for summary judgment (see, Jackson v New York City Tr . Auth., AD2d [2d Dept., June 5, 2000]; Perry v Pagano, 267 AD2d 290; Raso v Statewide Auto Auction, 262 AD2d 387; Pietrocola v Battibulli, 238 AD2d 864).
The majority, in reversing the determination of the Supreme Court, selectively relies upon self-serving statements in the reports of the appellant's own experts, and purported insufficiencies in the plaintiff's opposition papers. However, since the appellant's evidence, considered as a whole , failed to establish her entitlement to judgment as a matter of law, the purported insufficiencies in the plaintiff's opposition papers need not be considered (see, Mariaca-Olmos v Mizrhy, 226 AD2d 437). Accordingly, there is no basis to reverse the determination of the Supreme Court .
ST. LUKE'S - ROOSEVELT HOSPITAL v AMERICAN TRANSIT INSURANCE COMPANY
In an action to recover no-fault medical payments under an insurance contract, the defendant appeals from (1) a decision of the Supreme Court, Nassau County (Burke, J.), dated October 19, 1999, and (2) a judgment of the same court dated November 29, 1999, which, upon the granting of the plaintiff's motion for summary judgment, is in favor of the plaintiff and against it in the principal sum of $3,570.28.
ORDERED that the judgment is reversed, on the law, and the motion is denied; and it is further,
A complete proof of claim is a prerequisite to entitlement to no-fault benefits including statutory interest and an award of an attorney's fee (see, Insurance Law § 5106[a]; 11 NYCRR 65.15[d], [g]). The plaintiff failed to submit a completed form to the defendant as required by 11 NYCRR 65.15(d)(6). Consequently , the plaintiff did not submit a proper proof of claim, and thereby failed to establish a prima facie case of entitlement to no-fault benefits (see, Interboro Gen. Hosp. v Allcity Ins. Co., 149 AD2d 569, 570). Since the plaintiff did not meet the initial burden of setting forth evidentiary facts sufficient to establish entitlement to judgment as a matter of law, the Supreme Court should have denied the motion (see, Coley v Michelin Tire Corp., 99 AD2d 795), regardless of the sufficiency of the opposing papers (see, Greenberg v Manlon Realty , 43 AD2d 968; Holtz v Niagara Mohawk Power Corp., 147 AD2d 857).
BRACKEN, J.P., JOY, THOMPSON, GOLDSTEIN and FEUERSTEIN, JJ., concur.
BUTLER v. NEW YORK CENTRAL MUTUAL FIRE INS. CO.
Appeal from an order of the Supreme Court (Castellino, J.), entered September 22 , 1999 in Chemung County, which granted defendant's motion for summary judgment dismissing the complaint .
Ethel M. Southard was seriously injured in a two-car motor vehicle accident on November 27, 1996 in which her 96-year-old mother, riding as a passenger in her car, was killed. In March 199 7 Southard, individually and as administrator of her mother's estate, commenced a negligence action against the driver of the other motor vehicle involved in the accident seeking damages for her injuries and her mother's wrongful death. Southard's claim was eventually settled for $25,000, the policy limit of the other vehicle, and the claim for the wrongful death of her mother was settled for $30,000. After Southard passed away, plaintiff brought this action seeking benefits under Southard's supplemental uninsured motorist (SUM) endorsement to her automobile liability insurance policy issued by defendant, which had a $50,000 liability limit. Defendant moved for summary judgment arguing that the $55,000 in settlements paid by the liability carrier for the other vehicle exceeded the SUM policy limit of $50,000 and precluded the payment of any SUM benefit to Southard. Supreme Court granted the motion finding defendant's interpretation of the offset provisions of the SUM endorsement clear, unambiguous and dispositive. Plaintiff now appeals .
The policy section which establishes the parameters for SUM payments reads as follows :
(a) The SUM limit [$50, 000]; and
(b) The motor vehicle bodily injury liability insurance or bond payments received by the insured or the insured's legal representative, from or on behalf of all persons that may be legally liable for the bodily injury sustained by the insured.
The SUM limits shown on the Declarations is the amount of coverage for all damages due to bodily injury in any one accident.
Defendant argues that the term insured set out in paragraph 6 (b) refers to both Southard and her mother, requiring the settlement sums of both insureds (totaling $55,000) to be applied as offsets to the SUM limit of $50,000, thereby eliminating SUM benefits. Plaintiff argues that defendant's maximum payment under the SUM endorsement is offset only by the $25,000 payment Southard received from the negligent party, leaving $25,000 for payment to plaintiff.
It is clear that both Southard and her mother fall within the policy definition of an insured. However, whether the reference to insured in paragraph 6 (b) refers to each independent insured, as plaintiff contends , or a cumulative grouping of all who qualify as insureds, as advanced by defendant, is not clear and creates an ambiguity which must be construed against the insurer and in favor of the insured (see , Guardian Life Ins. Co. of Am. v Schaefer, 70 NY2d 888, 890; Matter of Dube v Horowitz, 258 AD2d 724, 725). The test for determining whether an insurance provision is ambiguous "focuses on the reasonable expectations of the average insured upon reading the policy" (Matter of Mostow v State Farm Ins. Cos., 88 NY2d 321, 326-327). On the facts presented here, we are of the opinion that the average insured would reasonably expect that $2 5,000 of SUM coverage would be available under defendant's policy. Such an expectation would be consistent with the avowed purpose of SUM coverage, which is to protect the insured against accidents with both uninsured and underinsured motorists (see, 11 NYCRR 60-2.1), and necessitates a finding that Supreme Court improperly awarded summary judgment to defendant.
Crew III, J.P., Peters , Mugglin and Rose, JJ., concur.
ELSTON v. ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
Appeal from an order of the Supreme Court (Kane, J.), entered April 7, 1999 in Sullivan County, which granted defendant's motion for summary judgment dismissing the complaint.
Defendant issued two term life insurance policies, effective January 29, 1996, one for Floyd Elston, plaintiff's husband, naming plaintiff as the primary beneficiary and the other for plaintiff for the benefit of her husband. At the time of application, the Elstons made their initial payment by personal check and selected "the alternate payment plan" whereby the premiums would be paid by monthly automatic withdrawal of funds from their checking account at Ellenville National Bank. The bank authorization signed by the Elstons indicated, inter alia, that by choosing this option, defendant would be relieved from sending premium notices and would have the right to terminate the use of this payment method if a debit entry was refused by Ellenville National Bank -- the designated financial institution.
Payments were automatically withdrawn from the Elstons' checking account from March to May 1996 without incident. By letter dated June 18, 1996, they were notified by defendant that the June premium withdrawal was refused due to insufficient funds but that a double premium payment would be attempted in July 1996. This attempt was honored and a double premium payment was received. However, the August attempt for premium withdrawal was again refused for insufficient funds. Although the Elstons were duly notified that a double premium payment would be sought in September, that withdrawal attempt was refused for lack of funds.
By notice dated September 17, 1996, defendant contends that it sent the Elstons a notice of premium past due containing the following language on its reverse side: "Your premium should be paid by its due date. If the premium is not paid within the grace period of 31 days after its due date, the policy will terminate unless continued by a paid-up benefit option." Defendant also contends that it mailed another letter, under separate cover, indicating that the automatic withdrawal option would no longer be permitted, now requiring that quarterly payments be made directly to defendant. Defendant never received any payment for either the overdue or future premiums.
Floyd Elston unexpectedly died in a house fire on November 25, 1996. When plaintiff made a claim for benefits under the policy, defendant informed her that the policy had lapsed due to nonpayment since July 8, 1996. Plaintiff commenced this action to recover the proceeds of the policy. After issue was joined defendant moved for summary judgment, prompting plaintiff's contention that despite nonpayment she was entitled to the proceeds since defendant failed to comply with the notice provisions of Insurance Law § 3211. Notwithstanding her denial of ever having received correspondence and notices after the second refusal to honor the monthly automatic withdrawals, she contended that the ambiguity created by such letters must be found to inure to her benefit. Supreme Court granted defendant's motion for dismissal , prompting this appeal.
Insurance Law § 3211 (a) (1) requires an insurer to issue a written notice of cancellation prior to terminating a policy for a default in the payment of a premium . However, Insurance Law § 3211 (f) (2) details that written notice will not be required for " ;[a]ny policy of insurance requiring the payment of premiums monthly or at shorter intervals" so long as, in the case of life insurance, the insurer mails written notice within six months of termination stating the type and amount of any automatic nonforfeiture benefit in force. While plaintiff contends that the exception set forth in Insurance Law § 3211 (f) (2) is inapplicable since the policy at issue did not require payment of premiums at monthly intervals, thus taking it outside of the statutory language, we find the argument contrary to established law. Once the monthly automatic payment option for premiums was chosen the language of Insurance Law § 3211 was triggered, thus obviating the requirement that defendant provide written notification of cancellation prior to its termination of the policy (see, Brecher v Mutual Life Ins. Co. of N.Y., 120 AD2d 423, 427; see also, Fauer v Aetna Life Ins. Co., 70 F2d 693, 695; The Guardian Life Ins. Co. of Am. v Goduti-Moore, 36 F Supp 2d 657, 664). Notably, the bank authorization signed by the Elstons advised that by choosing this option, defendant would not be sending premium notices.
In response to this showing of entitlement to judgment as a matter of law (see, Zuckerman v City of New York, 49 NY2d 557, 562), plaintiff's proffer was insufficient. Plaintiff sought to establish that an ambiguity was created by the conflicting correspondence sent by defendant. Significantly , plaintiff not only denied ever having received these letters, but also failed to present any evidence indicating that the overdue premiums were paid during the 31-day grace period. With plaintiff having failed to raise a viable issue of fact, we decline to disturb the order entered.
Cardona , P.J., Spain, Mugglin and Lahtinen, JJ., concur.
RUSSO v. MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
Appeals (1) from an order of the Supreme Court (Relihan Jr., J.), entered May 1, 1997 in Tompkins County, which partially granted defendant's motion to dismiss the complaint, (2) from an order of said court, entered December 4, 1998 in Tompkins County, which denied plaintiff's motion to certify the proposed class, and (3) from an order of said court, entered February 2, 1999 in Tompkins County, which granted defendant's motion for summary judgment dismissing the complaint.
In 1989 plaintiff purchased an N-Pay life insurance policy (also known as a vanishing premium policy) from defendant. With an N-Pay life insurance policy, the insured pays premiums for a projected period of time, until the "Nth" year, at which time premiums no longer are required because dividends earned on the previous premium payments suffice to pay all future premiums.
When plaintiff learned that she would be required to make premium payments beyond the seven-year projection with which she had been presented, she commenced this action alleging numerous causes of action, including violations of Insurance Law § 4226 and General Business Law § 349. Defendant moved to dismiss the complaint on the ground that, inter alia, it failed to state a cause of action. Supreme Court partially granted defendant's motion insofar as it dismissed, inter alia, the General Business Law § 349 cause of action. Plaintiff thereafter moved for class certification, which motion was denied. Following joinder of issue and discovery, defendant moved for summary judgment dismissing the remaining causes of action contained in plaintiff's complaint . Supreme Court granted defendant's motion and this appeal by plaintiff ensued.[1]
We affirm but for reasons other than those elucidated by Supreme Court. We agree with defendant's contention that plaintiff's General Business Law § 349 cause of action is barred by the Statute of Limitations . In our view, there can be no doubt that General Business Law § 349 is a creature of statute (see, Gaidon v Guardian Life Ins. Co. of Am., 94 NY2d 330, 343) and that the three-year limitations period set forth in CPLR 214 (2) applies to a cause of action predicated thereon (see, Avdon Capitol Corp. v Nationwide Mut. Fire Ins. Co., 240 AD2d 353, 354). While we are not unsympathetic to plaintiff's contention that she was unable to discern defendant's alleged deceptive practices within three years of the time she purchased her policy of insurance, we nevertheless are constrained by the dictates of CPLR 201 and cannot extend the applicable Statute of Limitations by adopting a discovery rule in this case (see, Fourth Ocean Putnam Corp. v Interstate Wrecking Co., 66 NY2d 38, 43).
We likewise conclude that the three-year Statute of Limitations provided for in CPLR 214 (2) applies to plaintiff's Insurance Law § 4226 cause of action and, thus, such cause of action is time barred. The rationale employed by the Court of Appeals in Gaidon v Guardian Life Ins. Co. of Am. (94 NY2d 330, supra) in analyzing General Business Law § 349, in our view, is equally apt to Insurance Law § 4226. As the Court of Appeals stated :
In addressing the primary issues in these appeals, we must examine the components of both General Business Law § 349 and common-law fraudulent inducement. Although a person's actions may at once implicate both, General Business Law § 349 contemplates actionable conduct that does not necessarily rise to the level of fraud. In contrast to common-law fraud, General Business Law & sect; 349 is a creature of statute based on broad consumer-protection concerns * * *. Although General Business Law § 349 claims have been aptly characterized as similar to fraud claims * * * they are critically different in ways illustrated by the cases at bar (Gaidon v Guardian Life Ins. Co. of Am., supra, at 343 [citations omitted]).
As with a General Business Law § 349 claim, no proof of fraudulent intent is required to sustain an Insurance Law § 4226 violation, which is a critical distinction for Statute of Limitations purposes. Accordingly, inasmuch as Insurance Law § 4226 creates a liability for wrongs not recognized at common law, it is a creature of statute subject to the limitations period contained in CPLR 214 (2) (see generally, People ex rel. Holland v Parkway Mobile Homes, 245 AD2d 862, 863-864). Indeed, in Goldberg v Manufacturers Life Ins. Co. (242 AD2d 175, 180, lv dismissed lv denied, 92 NY2d 1000), the First Department held that Insurance Law § 2123 (containing identical language as that contained in Insurance Law § 4226 but proscribing actions of agents or representatives rather than insurers) is governed by the three-year Statute of Limitations provided for in CPLR 214 (2).
Spain, Mugglin, Rose and Lahtinen, JJ., concur.