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10/3/05 Gershow Recycling Corporation v. Transcontinental Insurance Company
Notice of Suit to the Insurance Broker is Not Prompt Notice to the Insurer; Broker is Agent of Insured, Not Insurer
A volunteer firefighter allegedly sustained physical injuries while fighting a fire. The insured was unaware of the firefighter's injuries. The firefighter commenced an action against the insured and when the insured received notice of the suit, immediately sent to the insured's insurance broker. However, the broker sent the papers to the wrong carrier. The insurer then promptly disclaimed coverage due to late notice of the action. The Court recognized that it is a common practice for insureds to notify their brokers, rather than their carriers, in the event of a claim or lawsuit. However, the Court emphasized that insureds do so at their peril since the law is clear: the policy requirement that the notice must be provided to the carrier trumps any informal arrangement or practice engaged in between insureds and their brokers.
10/3/05 Kings Park Industries v. Affiliated Agency, Inc
Suit Against Broker for Failure to Procure Excess Policy Premature as Judgment Not Yet Obtained
Insured commenced this action against insurance broker after discovering that the broker failed to procure an excess liability policy for which the insured had contracted and paid a premium. The Court finds the declaratory judgment action premature, since "the future event which would give rise to indemnification (i.e., liability on the part of the insured in excess of its primary liability coverage for an incident which occurred during the period at issue) is beyond the control of the parties and may never occur. " Presently, the insured had not sustained any damages as the result of the alleged actions of the broker, as there was neither been a judgment nor a settlement against the insured in the underlying personal injury action.
9/30/05 Clark v. Perry
Appellate Division, Fourth Department
Absent Evidence of Causation, Defendant's Proof of Pre-Existing Condition Carries the Day
Jody E. Briandi from our office successfully handled this one. Here, the Appellate Division affirmed the Lower Court dismissal of plaintiff's case as not meeting the serious injury threshold under Insurance Law § 5102 (d). The Court found our client had met his initial burden by submitting medical records and the report of the physician who conducted a medical examination on defendant's behalf that established plaintiff's alleged injuries sustained in the accident were preexisting. According to the report of our independent medical examiner, although "the accident may have aggravated chronic preexistent pain symptoms, it did not produce any significant new/novel symptoms" and "there is no medical evidence of any additional physical disability associated with the injuries sustained". In light of this "persuasive evidence that plaintiff's alleged pain and injuries were related to a preexisting condition" the burden shifted to the plaintiff to come forward with evidence addressing defendant's claimed lack of causation. The plaintiff failed to meet this burden.
9/30/05 Travelers Insurance Company v. Raulli & Sons
Is the Insurance Agent an Independent Agent or an Insurance Broker?
Travelers sought $523,565 in premiums allegedly remaining due on workers compensation policies issued to Raulli, which provided for calculation and payment of premiums on a retroactive basis. The Appellate Division reversed the lower court finding a question of fact whether the insurance agent acted as an "independent insurance agent," defined in terms of its "representation of [various] insurers or groups of insurers" (Insurance Law § 2101 [b]), or as an "insurance broker," defined in terms of its "soliciting, negotiating or selling any insurance ... contract ... on behalf of an insured" (§ 2101 [c]). As a general rule, an insurance broker acts as an agent of the insured. However, a "broker will be held to have acted as the insurer's agent where there is some evidence of action on the insurer's part or facts from which a general authority to represent the insurer may be inferred". Here, given the existence of an express agency agreement between plaintiffs and agent and the evidence of action on plaintiffs' part in supplying data to that agent to enable it to solicit Raulli's insurance business on behalf of plaintiffs, the Court found a triable issue of fact concerning whether that agent acted as plaintiffs' agent, i.e., as an independent insurance agent, or as Raulli's agent, i.e., as an insurance broker.
9/30/05 Merchants Insurance Company v. Gage Agency et al
Absent Privity of Contract or a Special Relationship, Agent Has No Duty to Insurer
Merchants issued an automobile policy to the Devitts based on an application signed by Mr. Devitt and Gage as the agent. In a separate proceeding, it was held that there were undisputed misrepresentations in the application and would have resulted in the policy not being issued had Merchants been aware of them. But, in that action, it was also held that the Devitts' son, who was making a claim on the policy, was "an innocent injured party and [was] entitled to the protections of ... the insurance policy." Merchants settled the claim with the son and sought recovery the agent. The Court finds in the present action that because the insurance agent was an agent of the insured, they owed no duty to Merchants unless there was privity of contract or a "relationship sufficiently approaching privity. Here, the agent merely represented that the insured's signature was bona fide.
9/30/05 Little v. Livingston Mutual Insurance Company
Valid Disclaimer Under Exclusion for Vacated Property? Question of Fact in this Case
Insurer disclaims coverage on the basis that the residence where the vandalism occurred had been vacant for more than 30 consecutive days immediately before the loss, thus rendering applicable the policy exclusion for a loss resulting from vandalism that occurs "at the insured premises while the residence is vacant for more than 30 consecutive days immediately before [the] loss." Court finds a question of fact as to whether the residence was vacant due to proof submitted by the insured that there was evidence that he was still residing there (furniture remained, automobiles parked near the premises and "tracks in the snow in and out" of the property).
9/30/05 Gallo v. Travelers Property Casualty
Valid Disclaimer Under Exclusion for Vacated Property? No Question of Fact in this Case
Insurer disclaims under policy exclusions for vacant and unoccupied property. This policy excluded coverage for "any cause of loss" if the building was "vacant" for 60 consecutive days immediately before the loss, and it excludes coverage for loss caused by vandalism if the building was "unoccupied" for 60 consecutive days immediately before the loss. Here, insured established as a matter of law that the building, comprised of three apartments, a storefront, a basement, and a garage, was not "vacant" inasmuch as the insured had sufficient "business personal property," i.e., furnishings, in the three apartments "to conduct his customary operations" of renting the apartments. Pursuant to the terms of the policy, a building is "unoccupied" if it "contain[s] personal property usual to the occupancy of the building while customary activity and operations are suspended." At the time of the loss, two people were customarily using the premises for various activities. Specifically, a friend of the insured used the storefront of the property as an outpost for his political campaign in running for public office. In addition, the insured's son-in-law used the basement and garage of the property to store equipment for his landscaping business and to perform maintenance on that equipment and, was at the building on a daily basis for the two to three years preceding the date of the loss.
9/30/05 Wayne Cooperative Insurance Company v. Woodward
Prompt Notice Found As Insured Was Not Aware of Possibility of Claim
Cleary fell from a forklift while he and Woodward were constructing a loft located in a barn on Woodward's property. Cleary informed Woodward that his own medical insurance would cover the cost of his injuries and that he did not intend to pursue legal action against Woodward. However, Cleary's medical insurer refused to provide coverage, and Cleary then made a claim under Woodward's liability policy with plaintiff. Wayne disclaimed coverage based on Woodward's failure to provide prompt notice of the accident and based on a policy exclusion for farm employees. The Appellate Division holds that there was a fair interpretation of the evidence supporting the court's determination that Woodward's failure to provide timely notice was reasonably excused by the fact that Woodward was not aware that there "might be a claim" under the policy until Cleary indicated to him that he would be making a claim. In addition, the Court upheld the Lower Court's finding that Cleary was an independent contractor rather than a farm employee and thus that the policy exclusion for farm employees was not applicable.
9/30/05 Connecticut Indemnity Insurance Company v. Laperla
Failure to Promptly Seek Discovery Results in Denial of Petition to Stay Arbitration
CPLR Article 75 proceeding to stay the UM arbitration pending completion of discovery by the insurer. The record established that insurer had "ample time within which to seek discovery of the insured as provided for in the insurance policy, and unjustifiably failed to utilize that opportunity".
9/29/05 Dooley v. Davey
Appellate Division, Third Department
Rejection of Surgery Without Need for Further Doctor Visits Sufficient Explanation for Treatment Gap
So often we see the treatment gap as fatal to plaintiff's ability to fend off a threshold motion under Insurance Law § 5102 (d). Here, we have an explanation for the gap that is found sufficient. In this case, the Third Department reverses a Lower Court finding that a 2½-year-old diagnosis on plaintiff's permanent consequential limitation claim did not have probative force and was insufficient to withstand dismissal. The Court concluded, and as the Court of Appeals has indicated, where the physician has concluded that a plaintiff's injuries are permanent and that further medical treatment is unnecessary, the physician's opinion will not be rejected based solely on the fact that it is not premised on a recent physical examination. Here the physician's affirmation stated that plaintiff declined surgery and, thus, the doctor recommended a course of conservative treatment which plaintiff could administer himself. The Court finds that this was a reasonable explanation for not returning to the doctor, and although the staleness of the physician's affirmation impacts its weight, the testimony offered by plaintiff were sufficient to avoid a finding that the evidence presented by plaintiff were deficient as a matter of law.
9/29/05 Kinsman v. Turetsky
Res Judicata Bars Action Subsequent to Dismissal on Serious Injury Threshold
Plaintiff sustained personal injuries following a collision with a motor vehicle operated by Turetsky. Plaintiff thereafter commenced an action alleging that plaintiff sustained a serious injury within the meaning of Insurance Law § 5102 (d). Defendants moved for summary judgment on the ground that plaintiff had not shown serious injury and Supreme Court granted the motion and that dismissal was affirmed by the Appellate Division. Plaintiff then commenced a second action alleging that plaintiff's economic loss arising from the same accident exceeded his basic economic loss under Insurance Law § 5102 (a) and § 5104 (a). The Court held the claim barred by the applicable four year statute of limitations. The Court rejects the plaintiff's contention that his claim for economic loss did not accrue at the time the prior action was commenced. The record reveals that this claim was viable before the statute of limitations had run and that plaintiffs could have moved to amend the complaint to add that cause of action and res judicata operates to bar this claim.
9/27/05 159 West 80th Street Corp v. Interstate Insurance Group
Failure of Plaintiff to Properly Respond to Discovery Demands Earns Dismissal of Action
Plaintiff's claimed it was denied a defense in an underlying action for premises liability because of defendant's negligence in issuing a policy that did not name plaintiff as the owner of the premises. Carrier demanded a bill of particulars specifying, inter alia, the issuance date, number and period of the subject policy. Plaintiff did not comply with the demand claiming the information was in carrier's "custody." The Lower Court directed the plaintiff to supplement this response but plaintiff again failed to properly respond. The motion court aptly described this response as "patently insufficient," and went on to note that plaintiff's opposition to the motion also failed to identify the "relevant insurance policy," or provide any additionally demanded particulars of the alleged negligence, such as the identity of defendant's representative who was advised of the error and the dates of the alleged communications. Complaint dismissed.
9/26/05 Gregorio v. Utica Mutual Insurance Company
When Grounds for Disclaimer Readily Apparent, Disclaimer Should Not be Delayed
Insured failed to provide Utica Mutual with timely notice of the claim in the first instance. The Supreme Court correctly determined, as a matter of law, that the carrier's delay in disclaiming coverage was too long since the basis for the denial was evident from the face of the late notice of claim by the insured and the accompanying complaint. This case reminds us that where the ground for disclaiming coverage should be readily apparent to the carrier when it first received notice of the claim, the requirement for timely notice is particularly applicable.
9/26/05 Nails 21st Century Corp. v. Colonial Cooperative Insurance Co.
A Real Nail Biter: Question of Fact as to Timely Notice by the Insured
Insured/nail salon commenced this action for a judgment declaring that the defendant insurance company was obligated to defend and indemnify it in a personal injury brought by a customer who was allegedly injured while receiving a pedicure. The plaintiff notified the defendant of the accident approximately 11 months after it occurred, when it received the summons and complaint. The defendant disclaimed coverage on the ground that the plaintiff failed to provide it with timely notice of the occurrence. The defendant argued that the nature of the injury was such that the insured should have provided notice at or near the time of the occurrence. The Court holds that compliance with a notice of occurrence provision in an insurance policy is a condition precedent to the insurance company's liability under the policy and whether an insured has given timely notice of an occurrence depends on the particular facts and circumstances. A triable issue of fact as to whether the plaintiff provided the defendant with timely notice of the occurrence existed.
9/26/05 Travelers Property Casualty v. Anthony Giorgio
Question of Fact as to Whether Wrongdoer had Notice of Insurer's Subrogation Rights
Water accumulation and flooding damaged the insured property soon after purchase by the insureds. The insureds filed a claim with Travelers for the loss. As a result, Travelers paid the claim in the amount of $54,321.76 and became subrogated to the insureds' "rights, claims and interest . . . against any person . . . for the loss." Travelers commenced this action to recover the sum it paid to the insureds. The insureds had also commenced an action against the seller of the real property and, thereafter, settled that action and signed a general release. The Court holds that Travelers demonstrated the existence of a factual question on the issue of whether the defendant had notice of the plaintiff's subrogation rights at the time of the execution of the release. This reiterates the principle that the primary wrongdoer cannot settle with the insured that will deprive the insurer of its subrogation rights when the insurer is not a party to the settlement and has made its payments before that settlement.
9/26/05 Warnock Capital Corp v. Hermitage Insurance Company
Extension Provision for Newly Acquired Property Applies, as Does Broker's Apparent Authority to Bind Insurer
Hermitage issued a CGL policy, procured by the Demonaco Agency, Inc., an insurance broker for the period between April 13, 2001, and April 13, 2002. Pursuant to the "coverage extensions" provision of the commercial property coverage portion of the policy, coverage was conditionally extended to any newly acquired property until either (1) 30 days after its acquisition, (2) Warnock reported the property's value to Hermitage, or (3) the policy expired. If Hermitage subsequently agreed to insure the parcel, a policy change endorsement would be issued and Warnock would be charged an additional premium.
Warnock purchased the subject premises the broker issued a binder temporarily extending coverage under the policy to the new property. It also submitted an application to Jersey Link for an endorsement to add the property to the policy. Jersey Link relayed the request to Hermitage, which notified Jersey Link on April 5, 2002, that Warnock's application was rejected. Two days later, on April 7, 2002, the premises were severely damaged by fire, several occupants were injured, and an infant was killed. Warnock demanded coverage from Hermitage, which disclaimed on April 12, 2002.
The Second Department affirmed the Supreme Court conclusion that the "plain and unambiguous language of the agreement extended the commercial property coverage portion of the policy to Warnock's newly acquired property." The coverage extension provision was effectuated because one of its conditions applied and none of the three explicit termination events (i.e., the passing of 30 days from the property's acquisition, Warnock's reporting of its value to Hermitage, or expiration of the policy) had occurred.
In addition, "although an insurance broker is generally considered to be an agent of the insured, a broker will be held to have acted as the insurer's agent where there is some evidence of 'action on the insurer's part, or facts from which a general authority to represent the insurer may be inferred'" Rendeiro v State-Wide Ins. Co., 8 AD3d 253. Here, the insured established its entitlement to summary judgment by submitting evidence indicating that Hermitage and Demonaco's course of conduct demonstrated that Demonaco maintained apparent authority to issue a binder on behalf of Hermitage.
9/26/05 Young v. Nationwide Mutual Insurance Company
Lack of Independent Judgment by Appointed Counsel can be Grounds for Liability Against Insurer
Intersection accident where both drivers (Young and Katz) sue each other. Young is assigned counsel by Nationwide. Katz moves against Young claiming Young was sole cause of the accident. Nationwide assigned counsel submits only an attorney affidavit in opposition. The Katz motion is granted and Young's own personal injury action is dismissed. Subsequently, Young commences a legal malpractice action against both Nationwide and the former counsel. Nationwide moves in the action to dismiss the complaint on the basis that it may not be held vicariously liable for any negligence or malpractice of the appointed counsel. The Court acknowledges that generally a liability insurer may not be held vicariously liable for the lapses of retained counsel exercising independent judgment on behalf of the insured (see Feliberty Damon, 72 NY2d 112). But, accepting Young's allegations as true and providing her the benefit of every possible inference, she claims that her attorneys were full-time employees of Nationwide and that, in her case, they did not exercise independent judgment on her behalf in the course of defending her in the underlying action. The Court concludes that dismissal as to Nationwide was premature at this point as the issue remains in controversy.
10/5/05 In the Matter of the Arbitration between the Applicant and Respondent
Arbitrator Timothy W. McNamara, Esq.
Insurer Successful In Proving Applicant Perpetrated Fraud By Staging A Motor Vehicle Accident.
Here is the Angle: The fraud defense burden of proof lies with the insurer raising it. This defense is difficult to prove, but in this case a combination of examinations of oath of the eligible injured person and his passengers, as well as the police accident report carried the day. In addition, we venture to add that it most likely did not sit well with the arbitrator that the Applicant failed to appear for the hearing.
The Applicant sought payment for plain film x-rays performed on April 21, 2003, of the eligible injured person. The insurer denied payment contending that the eligible injured person committed fraud by staging the motor vehicle accident.
The insurer, who bears the burden of proving fraud, submitted various examinations under oath (EUO) transcripts, police accident reports, and motor vehicle statements. A review of the documents submitted revealed that the individuals involved in the accident could not agree on the number of people in the motor vehicle, where each person was seated within the motor vehicle, and how long they had known each other. In addition, there was a discrepancy regarding whether anyone received medical attention at the accident scene, a description of the vehicle, and a description of the driver of the other motor vehicle. The one thing that was agreed upon was that the other motor vehicle sustained no damage. Also, the eligible injured person had been involved in four different accidents within the past 22 months with the same insurer and was also involved in another accident with a claim to a different insurer.
Furthermore, a review of the police accident report revealed that there were no passengers in the vehicle operated by the named insured.
Arbitrator McNamara held, based upon these facts, that the insurer sustained its burden of proving fraud in that the motor vehicle accident was staged.
Arbitrator Thomas McCorry, Esq.
Applicant's Attempt To Discredit Treating Orthopedic Surgeon By Asserting He is Known As A Defense Doctor Fails To Reinstate Chiropractic Benefits For Applicant.
Here is the Angle: If you are going to challenge a denial for chiropractic benefits it may be a better course not to attack the treating orthopedic surgeon. Rather, Applicant could have obtained an affidavit from the treating chiropractic as to the medical necessity of chiropractic care. The orthopedic surgeon only said the Applicant did not sustain any significant injury, not that chiropractic care was not needed.
The Analysis: The Applicant was involved in an October 21, 2001, motor vehicle accident. Applicant did not treat with chiropractor, Bryan Aldrich until July 29, 2002. Mr. Aldrich's report indicated that Applicant complained of left PSIS and Gluteal pain and recommended an eight week course of chiropractic adjustments.
Applicant treated with Dr. Lifeso, an orthopedic surgeon, on October 12, 2002, complaining of chronic low back pain due to the July 2002, motor vehicle accident. Dr. Lifeso's report indicated that the Applicant was working full time without restriction. Also, Dr. Lifeso's physical examination of the Applicant and diagnostic testing was normal. Dr. Lifeso opined that Applicant demonstrated no evidence of a significant injury.
Applicant's counsel, when presented with this report, argued that Dr. Lifeso's opinion should not be provided great weight as "a considerable part of the Doctors (sic) income is derived from doing medical examinations for defendants." Of course, Arbitrator McCorry went on to find that this argument had no weight as Dr. Lifeso was performing the examination upon referral from the TREATING physician.
Thereafter, Arbitrator McCorry held that upon review of the chiropractic independent medical examinations, the independent chiropractor's opinion was more persuasive that the treating chiropractor's opinion as to medical necessity.
10/4/05 Switzer v. State Farm Fire & Casualty Co.
United States District Court, Western District of Oklahoma
Policyholder Entitled to See Personnel File of Adjuster who Handled Claim
Switzer had a renter's policy of insurance with State Farm to cover personal property placed in storage. He alleges that he reported to State Farm that the property had become covered with mold and that the loss was covered under the State Farm policy terms. State Farm denied coverage. Switzer moved to compel personnel files for claims adjuster Glenda Jewell, including all performance evaluations, training development evaluations, reviews, results, observations, assessments, competency evaluations, reprimands, deficiencies, disciplinary actions, incentives, bonuses, awards and other work-related records. Judge Ralph G. Thompson ruled that Switzer is entitled to the production of the files. The judge ordered State Farm to produce the personnel file of Vassar from 1998 when she became an adjuster to the present. The judge said that State Farm may redact or remove from the file her home address, Social Security number and other personal information such as insurance and medical information.
Submitted by: Vicki Roberts - Riverstone Claims Management
9/30/05 State Farm Fire and Casualty Company v. Condon Photography
Ohio Court of Appeals
Insurer Not Obligated To Defend Or Indemnify Under Its Business-Insurance Policies For Federal Lawsuits Brought By Family Members Of Deceased Persons Whose Remains Were Impermissibly Manipulated And Photographed By Insured
Defendants-appellants Thomas Condon and his company Thomas Condon Photograph Ltd. ("Condon"), appealed from the trial court's judgment in favor of plaintiff-appellee State Farm Fire and Casualty Company on its complaint seeking a declaration that it was not obligated to defend or indemnify Condon under its business-insurance policies for federal lawsuits brought by family members of deceased persons whose remains were impermissibly manipulated and photographed by Condon in a morgue. Condon had argued before the appellate court that the trial court erred in entering judgment for State Farm because (1) the acts which were the bases of the federal plaintiffs' claims "occurred" while Condon was insured by State Farm; (2) the federal plaintiffs properly raised claims for personal injury and property damage; and (3) Condon did not willfully violate a penal statute. Because State Farm's policies excluded coverage for personal-injury claims arising from the willful violation of a penal statute, the appellate court affirmed the trial court's judgment.
Submitted by: Bruce D. Celebrezze and Jasbina Ahluwalia (Sedgwick, Detert, Moran & Arnold)
9/30/05 Purkey v. American Home Assurance Company
Tennessee Supreme Court
Family Or Household Exclusions In Automobile Liability Insurance Policies Do Not Violate Tennessee Law Or Public Policy
Janice W. Purkey ("Purkey") purchased an automobile insurance policy from her automobile insurer, respondent American Home Assurance Company ("AHA"), which included liability coverage. On June 24, 2003, Purkey was a passenger in her insured vehicle when the driver negligently lost control of the car and struck a guardrail, injuring Purkey. Purkey submitted a claim to AHA seeking coverage for the injury she sustained in the accident. AHA refused the claim, citing a "household" or "family" exclusion in the policy which provided, "We do not provide liability Coverage for any 'insured' for 'bodily injury' to you or any 'family member.'" Purkey filed a class action complaint in Tennessee state court seeking class action certification, injunctive relief, and a declaratory judgment that the exclusion was void as contrary to Tennessee law and public policy. AHA removed the case to the United States District Court, and the parties submitted cross motions for summary judgment. Prior to entering a ruling, the District Court issued a certification order certifying the following questions of law to the Tennessee Supreme Court: (1) Whether provisions in automobile insurance liability policies that exclude coverage for bodily injury to household or family members of the insured are void as contrary to Tennessee law or public policy as a result of the 1997 and 2001 amendments to the Tennessee Financial Responsibility Act; (2) If the answer to (1) is yes, is coverage only required up to the specified statutory limits or to the policy limits? And (3) if the answer to (1) is yes, on what date did these provisions become void? Because the Tennessee Supreme Court answered the first question in the negative, concluding that family or household exclusions in automobile liability insurance policies do not violate Tennessee law or public policy, it did not reach the second and third questions.
159 West 80th Street Corp v. Interstate Insurance Group
Marino & Veneziano, New York (Amelio P. Marino of
counsel), for appellants.
Fiedelman & McGaw, Jericho (Ross P. Masler of counsel), for
Order, Supreme Court, New York County (Diane A. Lebedeff, J.), entered on or about February 8, 2005, which granted defendant-respondent's motion for summary judgment dismissing the complaint as against it, unanimously affirmed, without costs.
Plaintiff's theory appears to be that it was denied a defense in an underlying action for premises liability because of defendant's negligence in issuing a policy that did not name plaintiff as the owner of the premises. In response to defendant's demand for a bill of particulars specifying, inter alia, the issuance date, number and period of the subject policy, plaintiff stated that the information sought was in defendant's "custody," and further indicated that defendant had issued several policies all of which misnamed the insured, and refused to correct the policies when advised of the error on at least four occasions. Directed to supplement this response, plaintiff responded that the original policy is in defendant's possession, and indicated that the error appeared on policies issued between 1998 and 2002, and perhaps others as well. The motion court aptly described this response as "patently insufficient," and went on to note that plaintiff's opposition to the motion also failed to identify the "relevant insurance policy," or provide any additionally demanded particulars of the alleged negligence, such as the identity of defendant's representative who was advised of the error and the dates of the alleged [*2]communications. Under the circumstances, the action was properly dismissed (CPLR 3042[d]; see Shaw v Bronfman, 284 AD2d 267 [2001], lv dismissed 97 NY2d 725 [2002]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: SEPTEMBER 27, 2005
Gregorio v. Utica Mutual Insurance Company
In an action, inter alia, for a judgment declaring that J.M. Dennis Construction Company Corp. is an additional insured under the insurance policy issued by Utica Mutual Insurance Company and that the carrier is required to defend and indemnify J.M. Dennis Construction Company Corp. in the main action, the carrier appeals from an order and judgment (one paper) of the Supreme Court, Nassau County (McCarty III, J.), entered September 29, 2004, which granted the cross motion of J.M. Dennis Construction Company Corp. for summary judgment, made the declaration, and denied its motion for summary judgment.
"A failure by the insurer to give [notice of disclaimer] as soon as is reasonably possible after it first learns of the accident or of grounds for disclaimer of liability or denial of coverage, precludes effective disclaimer or denial" (Hartford Ins. Co. v County of Nassau, 46 NY2d [*2]1028, 1029; see Matter of Fireman's Fund Ins. Co. of Newark v Hopkins, 88 NY2d 836; Matter of Aetna Cas. & Sur. Co. v Rosen, 205 AD2d 684; Kramer v Interboro Mut. Indem. Ins. Co., 176 AD2d 308; New York Cent. Mut. Fire Ins. Co. v Markowitz, 147 AD2d 461). This rule applies even where, as here, J. M. Dennis Construction Company Corp. (hereinafter J.M. Dennis) failed to provide Utica Mutual Insurance Company (hereinafter the carrier) with timely notice of the claim in the first instance (see Wasserheit v New York Cent. Mut. Fire Ins. Co., 271 AD2d 439; Matter of Aetna Cas. & Sur. Co. v Rosen, supra; Kramer v Interboro Mut. Indem. Ins. Co., supra; New York Cent. Mut. Fire Ins. Co. v Markowitz, supra). Where the ground for disclaiming coverage should have been readily apparent to the carrier when it first received notice of the claim, the requirement for timely notice is particularly applicable (see Wasserheit v New York Cent. Mut. Fire Ins. Co., supra). The Supreme Court correctly determined, as a matter of law, that the carrier's delay in disclaiming coverage was too long since the basis for the denial was evident from the face of the late notice of claim by J. M. Dennis and the accompanying complaint (see West 16th St. Tenants Corp. v Public Serv. Mut. Ins. Co., 290 AD2d 278). Therefore, the court properly granted the cross motion of J.M. Dennis for summary judgment and denied the carrier's motion.
The carrier's remaining contentions are without merit.
SCHMIDT, J.P., S. MILLER, SANTUCCI and SKELOS, JJ., concur.
Nails 21st Century Corp. v. Colonial Cooperative Insurance
In an action, inter alia, for a judgment declaring that the defendant is obligated to defend and indemnify the plaintiff in an underlying personal injury action entitled Parker v Nails 21st Century Corp., pending in the Supreme Court, Richmond County, under Index No. 12495/01, the defendant appeals from an order from the Supreme Court, Richmond County (Vitaliano, J.), dated November 22, 2004, which denied its motion for summary judgment, searched the record, and awarded summary judgment to the plaintiff declaring that the defendant is obligated to defend the plaintiff in the underlying action.
ORDERED that the order is modified, on the law, by deleting the provisions thereof which searched the record and awarded summary judgment to the plaintiff; as so modified, the order is affirmed, without costs or disbursements.
The plaintiff nail salon commenced this action for a judgment declaring that the defendant insurance company was obligated to defend and indemnify it in an underlying personal injury brought by a customer who was allegedly injured while receiving a pedicure. The plaintiff notified the defendant of the accident approximately 11 months after it occurred, when it received the summons and complaint. The defendant disclaimed coverage on the ground that the plaintiff failed to provide it with timely notice of the occurrence, as was required by its insurance policy. The defendant argued that the nature of the injury was such that the plaintiff should have provided notice at or near the time of the occurrence. The Supreme Court denied the defendant's motion, searched the record, and awarded summary judgment to the plaintiff. We modify. [*2]
Compliance with a notice of occurrence provision in an insurance policy is a condition precedent to the insurance company's liability under the policy (see Kaliandasani v Ostego Mut. Fire Ins. Co., 256 AD2d 310; Kim v Maher, 226 AD2d 350). Whether an insured has given timely notice of an occurrence depends on the particular facts and circumstances (see Kaliandasani v Ostego Mut. Fire Ins. Co., supra; Kim v Maher, supra). There are facts and circumstances, such as a good faith, reasonable belief in nonliability, that will excuse a delay in giving the required notice (see Kaliandasani v Ostego Mut. Fire Ins. Co., supra; Kim v Maher, supra). In such a case, notice is timely if given promptly after the insured receives notice that a claim against it will, in fact, be made (see E.T. Nutrition v Central Mut. Ins. Co., 201 AD2d 451). The burden of demonstrating the reasonableness of such an excuse is on the insured (see Kaliandasani v Ostego Mut. Fire Ins. Co. supra; Kim v Maher, supra). There is a triable issue of fact as to whether the plaintiff provided the defendant with timely notice of the occurrence. Thus, the plaintiff should not have been awarded summary judgment.
FLORIO, J.P., H. MILLER, RITTER and RIVERA, JJ., concur.
Nails 21st Century Corp. v. Colonial Cooperative Insurance Co.
Travelers Property Casualty v. Anthony Giorgio
Steven I. Hilsenrath, Brooklyn, N.Y., for appellant.
Raymond V. Nicotera, Purchase, N.Y., for respondent.
In a subrogation action to recover certain damages paid by the plaintiff to its insureds, the plaintiff appeals from so much of an order of the Supreme Court, Westchester County (DiBlasi, J.), entered April 16, 2003, as granted that branch of the defendant's motion which was for summary judgment dismissing the complaint.
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, that branch of the motion which was for summary judgment dismissing the complaint is denied, and the complaint is reinstated.
On December 28, 1998, Anthony Roffi and Deborah Roffi (hereinafter the insureds) purchased certain real property (hereinafter the property) from the defendant. Subsequent thereto, water accumulation and flooding allegedly damaged the property. On August 14, 1999, following Hurricane Floyd, the insureds allegedly sustained additional damage from flooding, and filed a claim with the plaintiff for the loss sustained by them. As a result thereof, the plaintiff paid the insureds the sum of $54,321.76 and became subrogated to the insureds' "rights, claims and interest . . . against any person . . . for the loss mentioned above."
In October 1999 the insureds commenced an action against the defendant and others. In October 2000 the plaintiff, as subrogee of the insureds, commenced the instant action to recover the sum of $54,321.76 that it paid to the insureds. In October 2001 the insureds settled their separate action with the defendant and signed a general release. Thereafter, the defendant moved, inter alia, [*2]for summary judgment dismissing the complaint in the instant action. The Supreme Court granted that branch of the defendant's motion which was for summary judgment dismissing the complaint. We reverse.
Contrary to the defendant's contention, in opposition to that branch of his motion which was for summary judgment dismissing the complaint, the plaintiff demonstrated the existence of a factual question on the issue of whether the defendant had notice of the plaintiff's subrogation rights at the time of the execution of the release (see Ocean Acc. & Guar. Corp. v Hooker Electrochemical Co., 240 NY 37, 46; United Healthcare Serv. Corp. v Schaumburg, 275 AD2d 410, 411; Silinsky v State-Wide Ins. Co., 30 AD2d 1, 3-4; cf. Nationwide Ins. Co. v Mocchia, 243 AD2d 692; Blacharsh v Hartford Ins. Group, 104 AD2d 839). Accordingly, the Supreme Court should have denied that branch of the defendant's motion which was for summary judgment.
The defendant's contention at oral argument that the Court of Appeals in Weinberg v Transamerica Ins. Co. (62 NY2d 379) abrogated the notice requirement discussed supra is without merit (id. at 384 n 4).
FLORIO, J.P., SCHMIDT, LUCIANO and RIVERA, JJ., concur.
Warnock Capital Corp v. Hermitage Insurance Company
In an action, inter alia, for a judgment declaring that the defendant Hermitage Insurance Company is obligated to defend and indemnify the plaintiff in an underlying action entitled O'Brien v Kanaris, pending in the Supreme Court, Kings County, under Index No. 42830/02, and to provide first-party coverage to the plaintiff for property damage, the defendant Hermitage Insurance Company appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Jackson, J.), dated March 11, 2004, as granted those branches of the plaintiff's cross motion which were for summary judgment declaring that it is obligated to defend and indemnify the plaintiff in the underlying action in an amount up to $1,000,000 and to provide first-party coverage to the plaintiff for property damage in an amount up to $250,000 and, in effect, denied its cross motion for summary judgment. [*2]
ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the plaintiff's cross motion which was for summary judgment declaring that the appellant is obligated to provide first-party coverage to the plaintiff for property damage in an amount up to $250,000, and substituting therefor a provision granting that branch of the plaintiff's cross motion which was for summary judgment declaring that the appellant is obligated to provide first-party coverage to the plaintiff for property damage in an amount up to $200,000; as so modified, the order is affirmed insofar as appealed from, with costs to the plaintiff, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that the defendant Hermitage Insurance Company is obligated to defend and indemnify the plaintiff in the underlying action entitled O'Brien v Kanaris, pending in the Supreme Court, Kings County, under Index No. 42830/02, in an amount up to $1,000,000 and to provide first-party coverage to the plaintiff for property damage in an amount up to $200,000.
The plaintiff, Warnock Capital Corp. (hereinafter Warnock), purchases and rehabilitates parcels of improved realty for resale. The defendant Hermitage Insurance Company (hereinafter Hermitage) issued a commercial general liability policy, procured by the defendant Demonaco Agency, Inc. (hereinafter Demonaco), an insurance broker, which insured Warnock for personal injury claims in an amount up to $1,000,000 per occurrence for the period between April 13, 2001, and April 13, 2002. Demonaco placed the policy through the defendant Jersey Link, Inc. (hereinafter Jersey Link), a wholesale broker which produced business for Hermitage in accordance with a March 20, 1998, agreement. Pursuant to the "coverage extensions" provision of the commercial property coverage portion of the policy, coverage up to $250,000 was conditionally extended to the plaintiff's newly acquired property until either (1) 30 days after its acquisition, (2) Warnock reported the property's value to Hermitage, or (3) the policy expired. If Hermitage subsequently agreed to insure the parcel, a policy change endorsement would be issued and Warnock would be charged an additional premium.
On March 28, 2002, Warnock purchased premises located at 228 Beach 87th Street in Rockaway and Demonaco issued a binder temporarily extending coverage under the policy to the new property. It also submitted an application to Jersey Link for an endorsement to add the property to the policy. Jersey Link relayed the request to Hermitage, which notified Jersey Link on April 5, 2002, that Warnock's application was rejected.
Two days later, on April 7, 2002, the premises was severely damaged by fire, several occupants were injured, and an infant was killed. Warnock demanded coverage from Hermitage, which disclaimed on April 12, 2002. An action to recover damages for negligence and wrongful death, entitled O'Brien v Kanaris, was thereafter commenced against Warnock and others in Supreme Court, Kings County.
Warnock subsequently commenced this action seeking, inter alia, a declaration that Hermitage is obligated to defend and indemnify it in the underlying action and to provide first-party coverage to it for the amount of $250,000 in property damage. Demonaco moved and Jersey Link cross-moved pursuant to CPLR 3211(a)(1) and (a)(7) to dismiss the complaint insofar as asserted against them. Additionally, Hermitage moved and Warnock cross-moved for summary judgment. The Supreme Court, inter alia, granted those branches of Warnock's cross motion which were for summary judgment declaring that Hermitage is obligated to indemnify it in the underlying action in an amount up to $1,000,000 and to provide coverage for first-party property damage in an amount up to $250,000. Hermitage contends, inter alia, that it is not bound by the coverage extensions [*3]provision because it rejected Warnock's application two days prior to the fire and that neither Demonaco nor Jersey Link had actual or apparent authority to issue a binder on its behalf.
Contrary to Hermitage's contention, the Supreme Court correctly concluded, inter alia, that the plain and unambiguous language of the agreement extended the commercial property coverage portion of the policy to Warnock's newly acquired property. "[A]n unambiguous policy provision must be accorded its plain and ordinary meaning" (Bassuk Bros. v Utica First Ins. Co., 1 AD3d 470, 471) and a court "may not disregard clear provisions which the insurers inserted in the policies and the insured accepted" (Baughman v Merchants Mut. Ins. Co., 87 NY2d 589, 592, quoting Caporino v Travelers Ins. Co., 62 NY2d 234, 239). The coverage extensions provision was effectuated because one of its conditions applied and none of the three explicit termination events (i.e., the passing of 30 days from the property's acquisition, Warnock's reporting of its value to Hermitage, or expiration of the policy) had occurred.
In addition, "[a]lthough an insurance broker is generally considered to be an agent of the insured, a broker will be held to have acted as the insurer's agent where there is some evidence of 'action on the insurer's part, or facts from which a general authority to represent the insurer may be inferred'" (Rendeiro v State-Wide Ins. Co., 8 AD3d 253, quoting Bennion v Allstate Ins. Co., 284 AD2d 924, 925; see U.S. Underwriters Ins. Co. v Manhattan Demolition Co., 250 AD2d 600). Here, the plaintiff established its entitlement to summary judgment as a matter of law by submitting evidence indicating that Hermitage and Demonaco's course of conduct demonstrated that Demonaco maintained apparent authority to issue a binder on behalf of Hermitage (id. at 600-601; Kamyr Inc. v St. Paul Surplus Lines Ins. Co., 152 AD2d 62). The evidentiary proof Hermitage provided in opposition to Warnock's cross motion and in support of its motion was insufficient to raise a triable issue of fact (cf. Rendeiro, supra at 253; Bennion, supra at 926). Hermitage's April 5, 2002, rejection was, moreover, merely conveyed to Jersey Link. Warnock was not notified of the disclaimer until April 12, 2002, five days after the fire.
However, the binder dated March 28, 2002, only provided for $200,000 in property damage coverage. The Supreme Court therefore erred in holding that Hermitage is obligated to indemnify Warnock for first-party property damage up to $250,000.
Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Kings County, for the entry of a judgment declaring that Hermitage is obligated to defend and indemnify Warnock in the underlying action in an amount up to $1,000,000 and to provide first-party coverage to it for property damage in an amount up to $200,000 (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 U.S. 74, cert denied 371 U.S. 901).
Hermitage's remaining contentions are without merit.
FLORIO, J.P., SCHMIDT, ADAMS and MASTRO, JJ., concur.
ENTER: [*4]
Young v. Nationwide Mutual Insurance Company
In an action to recover damages for negligence and legal malpractice, the plaintiff appeals from an order of the Supreme Court, Nassau County (Brandveen, J.), dated August 10, 2004, which granted the defendants' motion pursuant to CPLR 3211(a)(7) to dismiss the complaint.
ORDERED that the order is reversed, on the law, with costs, the motion is denied, and the complaint is reinstated.
On June 8, 2002, the plaintiff, Dannie Young, was the permissive driver of a car owned by another. The defendant Nationwide Mutual Insurance Company (hereinafter Nationwide) insured the vehicle. According to Young, on the afternoon of that date, she approached an intersection regulated in her direction by a stop sign. She stopped, looked both ways, saw no approaching traffic, entered the intersection, and was struck violently in her driver's-side front door by a car driven by Bernard Katz. Young suffered a pelvic injury, and was hospitalized for almost three weeks as a result of the accident. She gave her version of the accident to a representative from Nationwide's claim department in an interview, which was recorded and transcribed. Young's version of events raised a question whether Katz was partly responsible for the accident.
Katz sued Young in the Supreme Court, Queens County. Nationwide selected the defendant Epstein, Grammatico, Gann, Frankini & Marotta (hereinafter Epstein Grammatico) to defend Young in that case. Young sued Katz in the Supreme Court, Nassau County, retaining her [*2]own counsel to pursue her personal injury claim. In his action, Katz moved for summary judgment on the issue of liability, submitting an affirmation in which he set forth his version of the accident, which portrayed Young as completely at fault. On Young's behalf, Epstein Grammatico opposed solely with an affirmation of counsel, contending, in the main, that the motion was premature as there had not yet been depositions of the drivers. Epstein Grammatico did not obtain an affidavit from Young, or use her version of the accident, which she previously had furnished to Nationwide in her interview. Young alleges that she was not even informed that Katz had moved for summary judgment on the issue of liability.
The Supreme Court, Queens County, granted Katz's motion, finding that he made a prima facie showing of entitlement to summary judgment, and that nothing admissible had been tendered in opposition. Epstein Grammatico did not seek leave to reargue Katz's motion, nor did it take an appeal from the order granting Katz's motion.
Based on the order granting his motion in the Queens County action, Katz made a motion in Young's Nassau County action for summary judgment dismissing the complaint on the ground of res judicata. The Supreme Court, Nassau County, granted Katz's motion.
Young then brought the instant action against Nationwide and Epstein Grammatico, alleging causes of action to recover damages for negligence and legal malpractice. Among other things, she alleged that had the defendants asked for and submitted her affidavit in opposition to Katz's motion for summary judgment on the issue of liability in Katz's Queens County personal injury action, then Katz would not have prevailed therein, and her own personal injury action would not have been dismissed. She also claimed that Epstein Grammatico's attorneys were actually Nationwide employees. Fairly read, her complaint also alleges that Epstein Grammatico did not exercise independent judgment on her behalf.
In lieu of answering, the defendants moved pursuant to CPLR 3211(a)(7) to dismiss the complaint, contending that the complaint failed to state a cause of action. Nationwide also contended that, in any event, it could not be held vicariously liable for the torts of retained counsel.
The Supreme Court granted the motion to dismiss, and Young appeals. We reverse.
On the record at this early stage of the action, Young has causes of action that she ought to be allowed to further pursue against both of the defendants (see Guggenheimer v Ginzburg, 43 NY2d 268). In particular, the defendants argue that had Young's version of the accident been submitted in the Queens County action in opposition to Katz's motion for summary judgment, the result would not have been different. Thus, they contend, there was no causal connection between any alleged negligence or malpractice in that action, and Young's claimed damages. We disagree. We cannot say as a matter of law, on the current record, that had her version of the accident been submitted in the Queens County action, the result would have been the same (see e.g. Kaplan v Vanderhans, 12 AD3d 413).
Further, Nationwide contends that it may not be held vicariously liable for any negligence or malpractice of Epstein Grammatico. Generally speaking, a liability insurer may not be held vicariously liable for the lapses of retained counsel exercising independent judgment on behalf of the insured (see Feliberty Damon, 72 NY2d 112). However, accepting Young's allegations as true and providing her the benefit of every possible inference (see EBC I, Inc. v Goldman Sachs [*3]& Co., 5 NY3d 11) she claims that attorneys at Epstein Grammatico were full-time employees of Nationwide and that, in her case, they did not exercise independent judgment on her behalf in the course of defending her in the Queens County action. We therefore conclude that dismissal of her complaint insofar as asserted against Nationwide at the complaint stage was premature.
The defendants' remaining contentions are without merit.
Dooley v. Davey
Cross appeals from an order of the Supreme Court (Sheridan, J.), entered November 30, 2004 in Albany County, which, inter alia, partially denied defendants' motion for summary judgment dismissing the complaint.
In July 2001, plaintiff was allegedly injured when the vehicle he was driving was struck from the rear by a vehicle operated by Nicole Davey and owned by defendants. Plaintiff commenced the present action against defendants alleging serious injuries within the meaning of Insurance Law § 5102 (d). Following discovery, defendants moved for summary judgment dismissing the complaint, claiming that plaintiff was unable to establish the requisite serious injury.
Finding that the affirmation in opposition by plaintiff's orthopedist, John Whalen, was not probative because it was based upon a 2½-year-old diagnosis, Supreme Court granted defendants' motion dismissing plaintiff's permanent consequential limitation of use claim. With respect to plaintiff's claims of serious injury under the significant limitation and 90/180-day categories, Supreme Court denied defendants' motion for summary judgment. Both parties now appeal. [*2]
Initially, we must address the question of whether Whalen's affirmation is deficient as a matter of law in that 2½ years transpired between Whalen's last examination of plaintiff and the affirmation. Where no explanation is offered for a significant delay between a physician's last treatment of the plaintiff and a proffered medical opinion, the opinion has been rejected as lacking probative value (see e.g. Davis v Evan, 304 AD2d 1023, 1025 [2003]; Trotter v Hart, 285 AD2d 772, 773 [2001]). The Court of Appeals, however, has held that where the physician has concluded that a plaintiff's injuries are permanent and that further medical treatment is unnecessary, the physician's opinion will not be rejected based solely on the fact that it is not premised on a recent physical examination (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 355 [2002] [accepting testimony as probative when based on a four-year-old examination]).
Here, Whalen's affirmation states that plaintiff declined surgery and, thus, Whalen recommended that plaintiff continue a course of conservative treatment which plaintiff could administer himself, including exercise and medication. Plaintiff's testimony is consistent on this point, explaining that he used a back brace, stretching exercises and over-the-counter medication to control his pain, and that he had weighed the costs and benefits of surgery and decided against that option. Given that surgery the only other recommended treatment proposed by Whalen was unacceptable to plaintiff, and in the absence of any proof to the contrary, plaintiff has provided a reasonable explanation for not returning to Whalen after his last treatment in February 2002 [FN1]. Thus, although the staleness of Whalen's affirmation certainly impacts its weight, we deem the testimony offered by plaintiff and the details of Whalen's affirmation sufficient to avoid a finding that Whalen's affirmation is deficient as a matter of law (see id. at 355; Bent v Jackson, 15 AD3d 46, 58-59 [2005]; Brown v Achy, 9 AD3d 30, 33 [2004]; cf. John v Engel, 2 AD3d 1027, 1028-1029 [2003]; Davis v Evan, supra at 1025; Best v Bleau, 300 AD2d 858, 861 [2002]).
Turning to defendants' motion directed at plaintiff's claim that he suffered a permanent consequential limitation of use, we conclude that defendants met their initial burden of demonstrating their entitlement to summary judgment by tendering the affirmation of neurologist Christopher Calder who, based on a recent examination of plaintiff including an analysis of plaintiff's complaints, medical history and objective tests performed during the examination opined that plaintiff "has no permanent sequelae of the subject accident." In addition, Calder found "no objective evidence of any neurological deficit attributable to the subject accident" and, specifically, "no symptoms or signs of a right S1 radiculopathy." In contrast, however, Whalen opined that as a result of the accident, plaintiff suffered a herniated disc which had displaced a nerve root, substantially limiting his range of motion. Whalen based his findings on a physical examination, plaintiff's medical history, radiographs and his review of an MRI, and concluded that plaintiff's condition was permanent. Hence, we find that plaintiff submitted sufficient objective evidence to overcome defendants' prima facie showing and create a triable issue of fact concerning the existence of a serious injury pursuant to the permanent consequential limitation category (see Gehrer v Eisner, 19 AD3d 851, 852 [2005]; John v Engel, 2 AD3d 1027, 1029 [2003]).
Next, inasmuch as Calder found no credible evidence to support the conclusion that plaintiff suffered any neurological injury related to the accident, defendants also satisfied their initial burden that plaintiff did not sustain a serious injury in the significant limitation category [*3](see Burford v Fabrizio, 8 AD3d 784, 785 [2004]). Nevertheless, we find that plaintiff once again successfully raised a material issue of fact, relying upon Whalen's opinion that plaintiff objectively exhibited, among other things, a diminished range of motion. Accordingly, defendants were not entitled to summary judgment dismissing the significant limitation claim (see Gehrer v Eisner, supra at 852; John v Engel, supra at 1029).
Finally, based on Calder's assertion that any claimed postaccident symptoms were not credible, defendants satisfied their burden with regard to the 90/180-day category (see Palmer v Moulton, 16 AD3d 933, 934-935 [2005]). In his deposition, however, plaintiff testified that while he had been able to attend college classes at the start of the academic year three months after the accident, during the period between the accident and the beginning of that academic year he had been bedridden. He testified that the injury forced him to quit his job, refrain from activities such as swimming, jogging, skiing and riding his motorcycle, and limited the amount of time that he could stand on his feet to approximately 15 minutes. Combined with Whalen's affirmation, which provided objective evidence that a "medically determined injury flow[ed] from the accident," plaintiff's testimony that his customary activities were curtailed "'to a great extent'" sufficiently raised an issue of fact with respect to plaintiff's claimed serious injury pursuant to the 90/180-day category (Creech v Walker, 11 AD3d 856, 856 [2004], quoting Licari v Elliott, 57 NY2d 230, 236 [1982]; see Nichols v Turner, 6 AD3d 1009, 1012 [2004]).
Crew III, J.P., Mugglin, Rose and Kane, JJ., concur.
ORDERED that the order is modified, with costs to plaintiff, by reversing so much thereof as partially granted defendants' motion for summary judgment; motion denied in its entirety; and, as so modified, affirmed.
Footnote 1: The Court of Appeals has noted that "the law surely does not require a record of needless treatment in order to survive summary judgment" (Pommells v Perez, 4 NY3d 566, 574 [2005]).
Kinsman v. Turetsky
Spain, J.
Appeal from an order of the Supreme Court (Sheridan, J.), entered December 8, 2004 in Essex County, which granted defendants' motion for summary judgment dismissing the complaint.
Plaintiff Benjamin A. Kinsman (hereinafter plaintiff) sustained personal injuries following a collision with a motor vehicle operated by defendant Aaron Turetsky. Plaintiff and his wife, derivatively, thereafter commenced an action alleging that plaintiff sustained a serious injury within the meaning of Insurance Law § 5102 (d). Defendants moved for summary judgment on the ground that plaintiff had not shown serious injury and Supreme Court granted the motion, dismissing the complaint, which order was affirmed by this Court (17 AD3d 751 [2005], lv denied 5 NY3d 705 [2005]).
Plaintiffs then commenced the instant action, this time alleging that plaintiff's economic loss arising from the same accident exceeded his basic economic loss under Insurance Law
§ 5102 (a) and § 5104 (a). Defendants moved for summary judgment on the ground that the action was barred by res judicata and that the statute of limitations had expired because the action was commenced more than four years after the accident. Supreme Court granted the motion and dismissed the complaint. Plaintiffs appeal and we affirm.
Res judicata will bar litigation of a claim that was either raised, or could have been [*2]raised, in a prior action provided that the party to be barred had a full and fair opportunity to litigate any cause of action arising out of the same transaction and the prior disposition was a final judgment on the merits (see Lanuto v Constantine, 215 AD2d 946, 947 [1995]; see also McDonald v Lengel, 2 AD3d 1182, 1183 [2003]; Beck v Eastern Mut. Ins. Co., 295 AD2d 740, 741 [2002]). Notably, "'once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy'" (Hydro Investors v Trafalgar Power, 6 AD3d 882, 884 [2004], quoting O'Brien v City of Syracuse, 54 NY2d 353, 357 [1981]; see Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347 [1999]). Although plaintiff contends that his claim for economic loss had not yet accrued at the time that the prior action was commenced, the record reveals that this claim was viable before the statute of limitations had run and that plaintiffs could have moved to amend the complaint to add that cause of action (see Lanuto v Constantine, supra at 947; Harris v Melander, 61 AD2d 1058 [1978]). Inasmuch as plaintiffs instead commenced a new action based upon the same transaction, res judicata operates to bar this claim.
Plaintiffs' argument that the prior order did not terminate the action on the merits is equally unavailing. "[I]t is well settled that an order entered on a motion for summary judgment constitutes a disposition on the merits and, accordingly, is entitled to preclusive effect for purposes of res judicata" (Bardi v Warren County Sheriff's Dept., 260 AD2d 763, 765 [1999]; see Vinci v Northside Partnership, 250 AD2d 965, 965-966 [1998]). Because the nature of the prior order evinces that it was made on the merits and with prejudice to relitigation of the earlier claim, we discern no error in Supreme Court's dismissal of the complaint.
We have reviewed plaintiffs' remaining contentions, including their assertion that they may avail themselves of the tolling provisions of CPLR 205, and find that they are either rendered academic by the foregoing conclusion or lacking in merit.
Cardona, P.J., Peters, Carpinello and Kane, JJ., concur.
Connecticut Indemnity Insurance Company v. Laperla
Appeal from an order of the Supreme Court, Herkimer County (Michael E. Daley, J.), entered October 7, 2004 in a proceeding pursuant to CPLR article 75. The order denied petitioner's application.
AHMUTY, DEMERS & MC MANUS, ALBERTSON (BRENDAN T. FITZPATRICK OF COUNSEL), FOR PETITIONER-APPELLANT.
FINKELSTEIN & PARTNERS, NEWBURGH (GEORGE A. KOHL, 2nd, OF COUNSEL), FOR RESPONDENT-RESPONDENT.
It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously affirmed with costs.
Memorandum: In this proceeding commenced pursuant to CPLR article 75, Supreme Court did not improvidently exercise its discretion in denying petitioner's application for an order staying the underinsured motorist arbitration sought by respondent, pending discovery. The record establishes that "petitioner ... had ample time ... within which to seek discovery of the respondent insured as provided for in the insurance policy, and unjustifiably failed to utilize that opportunity" to obtain the discovery now sought (Allstate Ins. Co. v Urena, 208 AD2d 623; see e.g. Matter of New York Cent. Mut. Fire Ins. Co. v Gershovich, 1 AD3d 364; Matter of State Farm Ins. Co. v Smith, 255 AD2d 386; Matter of Allstate Ins. Co. v Faulk, 250 AD2d 674; cf. Matter of Liberty Mut. Ins. Co. v Almeida, 266 AD2d 547; Matter of Metropolitan Prop. & Cas. Ins. Co. v Keeney, 241 AD2d 455, 456).
Little v. Livingston Mutual Insurance Company
Appeal from an order of the Supreme Court, Erie County (Eugene M. Fahey, J.), entered January 19, 2005. The order, insofar as appealed from, denied defendant's motion for summary judgment dismissing the complaint.
HISCOCK & BARCLAY, LLP, BUFFALO (KRISTIE L. STROMECKI OF COUNSEL), FOR DEFENDANT-APPELLANT.
It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously affirmed without costs.
Memorandum: Supreme Court properly denied defendant's motion for summary judgment dismissing the complaint. Plaintiff commenced this breach of contract action after defendant disclaimed insurance coverage for a vandalism loss sustained by plaintiff during the period between February 28 and March 11, 2001. According to defendant, the residence where the vandalism occurred had been vacant for more than 30 consecutive days immediately before the loss, thus rendering applicable the policy provision excluding coverage for loss resulting from vandalism that occurs "at the insured premises while the residence is vacant for more than 30 consecutive days immediately before [the] loss."
We note at the outset that, in support of its motion, defendant submitted, inter alia, the billing records from the National Fuel Gas Distribution Corporation (NFGD) in attempting to establish the period during which the property was vacant. Defendant, however, failed to provide the requisite evidentiary foundation for their admission under the business records exception to the hearsay rule (see CPLR 4518 [a]; Contreras v Klein, 17 AD3d 395; Speirs v Not Fade Away Tie Dye Co., 236 AD2d 531, 532). The unsworn statement in a cover letter of an attorney for NFGD that the "records are maintained ... in the regular course of business" does not establish the requisite evidentiary foundation (see generally Matter of Leon RR., 48 NY2d 117, 122-123; Villager Constr. v J. Kozel & Son, 222 AD2d 1018, 1018-1019).
Even assuming, arguendo, that defendant met its initial burden on the motion by submitting records from the Niagara Mohawk Power Corporation establishing that utility service for the property was disconnected at least three months prior to the loss, we conclude that plaintiff raised a triable issue of fact in opposition. Although plaintiff testified at his deposition that he was unsuccessful in his attempts to collect rent from the tenants from November 2000 through February 2001, he further testified that, when he went to the property to attempt to [*2]collect rent and to check on the property during that time period, there were "tracks in the snow in and out" and "[e]verything was in place." In addition, plaintiff submitted the affidavit of his assistant, who averred that he was present at the residence on February 25, 2001, and observed "said premises full of the normal household furnishings and appliances." In addition, he observed "[n]umerous [items of] personal clothing ... throughout the kitchen and living room area," and he averred that "[i]n no way did the inspection reveal any sign of abandonment of the premises by the tenants." Finally, he averred that, when he drove past the residence "after February 25, 2001," he observed "several automobiles parked in the driveway." Thus, we conclude that there is an issue of fact whether the residence was vacant for more than 30 consecutive days immediately before the loss (see generally Zuckerman v City of New York, 49 NY2d 557, 562).
Wayne Cooperative Insurance Company v. Woodward
Appeal from a judgment (denominated order and judgment) of the Supreme Court, Wayne County (Stephen R. Sirkin, A.J.), entered July 1, 2004 in a declaratory judgment action. The judgment, among other things, declared that plaintiff has a duty to defend and indemnify defendant David Woodward in the underlying personal injury action commenced by defendant Thomas J. Cleary against defendant David Woodward.
It is hereby ORDERED that the judgment so appealed from be and the same hereby is unanimously affirmed without costs.
Memorandum: Plaintiff appeals from a judgment declaring that it has a duty to defend and indemnify defendant David Woodward in the underlying personal injury action commenced by defendant Thomas J. Cleary against Woodward. On January 30, 2001, Cleary fell from a forklift while he and Woodward were constructing a loft located in a barn on Woodward's property. Cleary informed Woodward that his own medical insurance would cover the cost of his injuries and that he did not intend to pursue legal action against Woodward. In mid- to late April 2001, however, Cleary's medical insurer refused to provide coverage, and Cleary then made a claim under Woodward's liability policy with plaintiff. Woodward's liability policy requires that prompt notice be given "if an insured becomes aware of anything that indicates there might be a claim under this policy." At the outset of May 2001, Woodward notified plaintiff of Cleary's accident, but plaintiff disclaimed coverage based on Woodward's failure to provide prompt notice of the accident and based on a policy exclusion for farm employees. After Cleary commenced the underlying action against Woodward, plaintiff commenced this action seeking judgment declaring that it has no obligation to defend Woodward in the underlying action. [*2]
Contrary to the contention of plaintiff, Supreme Court properly denied its cross motion for summary judgment. Although plaintiff met its initial burden of establishing that Woodward failed to provide the requisite prompt notice, thus vitiating coverage (see American Home Assur. Co. v International Ins. Co., 90 NY2d 433, 440), defendants raised an issue of fact whether Woodward's failure to provide timely notice was reasonably excused by the fact that Woodward was not aware of anything indicating that there "might be a claim" under the policy until Cleary indicated to him that he would be making a claim (see Kaliandasani v Otsego Mutual Fire Ins. Co., 256 AD2d 310, 311; cf. McCarthy v Nova Cas. Co., 239 AD2d 851, 852, lv denied 90 NY2d 807; cf. generally Dryden Mut. Ins. Co. v Greaser, 269 AD2d 792, 793). In addition, defendants raised an issue of fact whether Cleary was an independent contractor and thus did not fall within the ambit of the policy exclusion for farm employees (see generally Sikorski v Burroughs Dr. Apts., 306 AD2d 844, 846; Greene v Osterhoudt, 251 AD2d 786, 787).
We further conclude that the court properly granted judgment in favor of defendants after conducting a trial. Viewing the evidence in the light most favorable to sustain the judgment rendered following this nonjury trial (see Matter of City of Syracuse Indus. Dev. Agency [Alterm, Inc.], 20 AD3d 168, ___), we conclude that there is a fair interpretation of the evidence supporting the court's determination that Woodward's failure to provide timely notice was reasonably excused by the fact that Woodward was not aware that there "might be a claim" under the policy until Cleary indicated to him that he would be making a claim (cf. Dryden, 269 AD2d at 793; McCarthy, 239 AD2d at 852). In addition, we conclude that there is a fair interpretation of the evidence supporting the court's determination that Cleary was an independent contractor rather than a farm employee and thus that the policy exclusion for farm employees was not applicable (see generally Greene, 251 AD2d at 787-788).
Travelers Insurance Company v. Raulli & Sons
Appeal and cross appeal from an order of the Supreme Court, Onondaga County (Anthony J. Paris, J.), entered June 2, 2004. The order granted in part and denied in part plaintiffs' renewed motion for summary judgment.
It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by denying the renewed motion in its entirety and as modified the order is affirmed with costs to defendant Raulli & Sons, Inc.
Memorandum: Plaintiffs commenced this action initially against only Raulli & Sons, Inc. (Raulli), an insured under a series of workers' compensation policies issued by plaintiffs between [*2]1991 and 1994. Plaintiffs seek $523,565 in premiums allegedly remaining due on the policies, which provide for calculation and payment of premiums on a retroactive basis. In its answer, Raulli denied that it ever agreed to a retroactive increase in premiums. Raulli commenced a third-party action against Haylor, Freyer & Coon, Inc. (Haylor) and Haylor's former employee, Robert Rayo. Raulli alleged therein that, when it obtained the policies in question from Haylor and Rayo, they failed to inform Raulli that the premiums might be increased retroactively. Subsequently, plaintiffs named Haylor as a defendant in their action, seeking damages for breach of an express agency agreement between plaintiffs and Haylor and for negligent performance of Haylor's duties as plaintiffs' agent.
Raulli appeals from an order insofar as it granted plaintiffs' renewed motion for summary judgment in part, determining that Haylor "was the agent of defendant Raulli for purposes of the procurement of the insurance policies in question" and that plaintiffs are "entitled to partial summary judgment on the issue of liability." Plaintiffs cross-appeal from the order insofar as it denied their renewed motion for summary judgment in part, determining that "[q]uestions of fact remain as to the total amount due to [plaintiffs, and as to which entity, as between Raulli and Haylor, is] the ultimate payor or payors."
We agree with Raulli that Supreme Court should have denied plaintiffs' renewed motion in its entirety, and we therefore modify the order accordingly. The court erred in determining as a matter of law that Haylor acted as the agent of Raulli for purposes of the procurement of the insurance policies in question and thus erred in granting plaintiffs' renewed motion insofar as it sought partial summary judgment on liability against Raulli on that ground. The legal issue in this case is whether Haylor acted as an "independent insurance agent," defined in terms of its "representation of [various] insurers or groups of insurers" (Insurance Law § 2101 [b]), or as an "insurance broker," defined in terms of its "soliciting, negotiating or selling[] any insurance ... contract ... on behalf of an insured" (§ 2101 [c]). As a general rule, an insurance broker acts as an agent of the insured (see id.; Bohlinger v Zanger, 306 NY 228, 231-232, rearg denied 306 NY 851; Rendeiro v State-Wide Ins. Co., 8 AD3d 253; Ribacoff v Chubb Group of Ins. Cos., 2 AD3d 153, 154; Crimi v National Life Ins. Co., 1 AD3d 309, 310; Matter of Peerless Ins. Co. v Young, 298 AD2d 326, 327; Bennion v Allstate Ins. Co., 284 AD2d 924, 925). However, a "broker will be held to have acted as the insurer's agent where there is some evidence of action on the insurer's part or facts from which a general authority to represent the insurer may be inferred" (Indian Country v Pennsylvania Lumbermens Mut. Ins. Co., 284 AD2d 712, 714-715; see Rendeiro, 8 AD3d at 253; Bennion, 284 AD2d at 925; U.S. Delivery Sys. v National Union Fire Ins. Co. of Pittsburgh, Pa, 265 AD2d 402). Here, given the existence of an express agency agreement between plaintiffs and Haylor and the evidence of action on plaintiffs' part in supplying data to Haylor to enable it to solicit Raulli's insurance business on behalf of plaintiffs, we conclude that there is a triable issue of fact concerning whether Haylor acted as plaintiffs' agent, i.e., as an independent insurance agent, or as Raulli's agent, i.e., as an insurance broker (see Rendeiro, 8 AD3d at 253-254; Liverpool Club Corp. v Wausau Ins. Co., 299 AD2d 807, 808-809; Bennion, 284 AD2d at 925; U.S. Delivery Sys., 265 AD2d 402).
We have considered the contentions raised by plaintiffs on their cross appeal and conclude that they are without merit.
JoAnn M. Wahl
Merchants Insurance Company v. Gage Agency et al
Appeal from an order of the Supreme Court, Erie County (Peter J. Notaro, J.), entered August 25, 2004. The order, insofar as appealed from, denied the motion of defendants The Gage Agency, Inc., Claire S. Gage and Herbert L. Gage, Jr. for summary judgment dismissing the complaint against them and granted in part the cross motion of defendant Iroquois Services Corp.
It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by granting the motion and dismissing the complaint against defendants The Gage Agency, Inc., Claire S. Gage and Herbert L. Gage, Jr. and as modified the order is affirmed without costs.
Memorandum: Plaintiff issued an automobile insurance policy to F. Edward Devitt and Mary C. Devitt based on an application signed by F. Edward Devitt as the applicant and defendant Claire S. Gage as the producer (i.e., the agent). In a separate proceeding concerning the validity of the policy, Supreme Court concluded that the undisputed misrepresentations in the application were "substantial and would have resulted in the policy not being issued had the [plaintiff] been aware of them." The court further concluded, however, that the Devitts' son, who was making a claim on the policy, was "an innocent injured party and [was] entitled to the protections of ... the insurance policy." Plaintiff settled the claim with the Devitts' son and thereafter commenced this action against, inter alia, The Gage Agency, Inc., Claire Gage and Herbert L. Gage, Jr. (collectively, defendants) seeking to recover the amount it paid on the policy.
Before plaintiff had the opportunity to depose Claire and Herbert Gage, defendants moved for summary judgment dismissing the complaint against them, and defendant Iroquois Services Corp. (Iroquois) cross-moved for summary judgment dismissing the complaint or, alternatively, for a conditional order of indemnification against defendants. The court denied defendants' motion and that part of the cross motion of Iroquois seeking dismissal of the [*2]complaint against it but granted that part of its cross motion seeking a conditional order of indemnification against defendants. We conclude that the court should have granted the motion of defendants for summary judgment dismissing the complaint against them, and we therefore modify the order accordingly. We note that defendants do not contend on appeal that the court erred in granting that part of the cross motion of Iroquois seeking a conditional order of indemnification against them and thus are deemed to have abandoned their appeal from that part of the order (see Ciesinski v Town of Aurora, 202 AD2d 984).
With respect to the first cause of action, for "negligence and/or professional irresponsibility," we agree with defendants that, because they were the agents of the insured, they owed no duty to plaintiff insurer unless there was privity of contract or a "relationship sufficiently approaching privity" (Utica First Ins. Co. v Floyd Holding, 294 AD2d 351, 352, lv dismissed 98 NY2d 764; see Point O'Woods Assoc. v Those Underwriters at Lloyd's, London Subscribing to Certificate No. 6771, 288 AD2d 78, 79, lv denied 98 NY2d 611; see also Home Mut. Ins. Co. v Broadway Bank & Trust Co., 53 NY2d 568, 574; cf. Panepinto v Allstate Ins. Co., 108 Misc 2d 1079, 1081-1082). We also agree with defendants that there was neither privity of contract nor a special relationship sufficiently approaching privity (cf. Chaikovska v Ernst & Young, ___ AD3d ___ [Sept. 30, 2005]). The existence of a special relationship requires "'(1) an awareness by the maker of the statement that it is to be used for a particular purpose; (2) reliance by a known party on the statement in furtherance of that purpose; and (3) some conduct by the maker of the statement linking it to the relying party and evincing its understanding of that reliance'" (Parrott v Coopers & Lybrand, 95 NY2d 479, 484, quoting Prudential Ins. Co. of Am. v Dewey, Ballantine, Bushby, Palmer & Wood, 80 NY2d 377, 384, rearg denied 81 NY2d 955). The requisite special relationship does not exist here because the misrepresentations were in the application for insurance signed by the insured. Claire Gage, as the agent, merely represented that the insured's signature was bona fide. Thus, despite the fact that plaintiffs had not yet deposed Claire and Herbert Gage, we conclude that the court should have granted that part of the motion of defendants seeking summary judgment dismissing the first cause of action against them.
With respect to the second cause of action, seeking contractual indemnification from defendants and Iroquois based on an indemnification clause contained in the "Agency Agreement" between plaintiff and Iroquois, we agree with defendants that, despite the fact that Claire and Herbert Gage were not yet deposed, defendants were entitled to summary judgment dismissing that cause of action against them as well. Pursuant to the "Agency Agreement," Iroquois agreed to indemnify plaintiff for, inter alia, loss caused by its mishandling of any matter on behalf of plaintiff or any act or omission of Iroquois "in violation of any applicable law or rule ...." Defendants, however, were not parties to that agreement, nor did they otherwise have a contractual obligation to indemnify plaintiff.
Gallo v. Travelers Property Casualty
Appeal from an order of the Supreme Court, Erie County (Donna M. Siwek, J.), entered August 31, 2004. The order granted defendant's motion for summary judgment dismissing the complaint and denied plaintiff's motion for summary judgment.
It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously reversed on the law with costs, defendant's motion is denied, the complaint is reinstated, plaintiff's motion is granted, and the matter is remitted to Supreme Court, Erie County, for further proceedings in accordance with the following Memorandum: Plaintiff commenced this action to recover insurance proceeds for a building damaged by a fire resulting from vandalism. Supreme Court erred in granting defendant's motion for summary judgment dismissing the complaint and in denying plaintiff's motion for summary judgment. In support of its motion and in opposition to plaintiff's motion, defendant contended that it denied coverage based on the policy exclusions for vacant and unoccupied property. The policy excludes coverage for "any cause of loss" if the building was "vacant" for 60 consecutive days immediately before the loss, and it excludes coverage for loss caused by vandalism if the building was "unoccupied" for 60 consecutive days immediately before the loss. We conclude that plaintiff established as a matter of law that the building was neither vacant nor unoccupied for the requisite period of time, and thus we conclude that the court should have granted plaintiff's motion.
With respect to the issue whether the building was vacant, we note that, pursuant to the terms of the insurance policy at issue, a building is vacant if it "does not contain enough business personal property to conduct customary operations." Here, plaintiff established as a matter of law that the building, comprised of three apartments, a storefront, a basement, and a garage, was not "vacant" inasmuch as plaintiff had sufficient "business personal property," i.e., furnishings, in the three apartments "to conduct his customary operations" of renting the apartments (cf. 438 Manhattan Ave. v Insurance Co. of State of Pa., 251 AD2d 71; Lamoureux v New York Cent. Mut. Fire Ins. Co., 244 AD2d 645, 646). [*2]
Plaintiff also established as a matter of law that the building was not "unoccupied" for 60 consecutive days immediately before the loss. Pursuant to the terms of the insurance policy at issue, a building is "unoccupied" if it "contain[s] personal property usual to the occupancy of the building while customary activity and operations are suspended." Because the term "customary activity" is not defined in the policy, we afford that term its "plain and ordinary meaning" (Lamoureux, 244 AD2d at 646). Here, we conclude that plaintiff established as a matter of law that the building was not unoccupied for the requisite period of time inasmuch as there was unrefuted proof that two people were customarily using the premises for various activities. Specifically, a friend of plaintiff used the storefront of the property as an outpost for his political campaign in running for public office for the period from July 1999 until the beginning of November 1999, and the loss occurred later that month. In addition, plaintiff's son-in-law used the basement and garage of the property to store equipment for his landscaping business and to perform maintenance on that equipment and, according to his uncontroverted deposition testimony, he was at the building on a daily basis for the two to three years preceding the date of the loss. Because plaintiff established as a matter of law that neither policy exclusion is applicable to plaintiff's loss, we grant plaintiff's motion for summary judgment, and we remit the matter to Supreme Court for a hearing on damages.
Gershow Recycling Corporation v. Transcontinental Insurance Company
In an action for a judgment declaring that the defendant must defend and indemnify the plaintiff in an underlying action entitled Gibbs v Gershow Recycling Corporation, pending in the Supreme Court, Suffolk County, under Index Number 11179/01, the plaintiff appeals from a judgment of the Supreme Court, Suffolk County (Werner, J.), dated July 13, 2004, which, upon an order of the same court (Underwood, J.), dated December 6, 2003, granting the defendant's motion for summary judgment, dismissed the complaint.
ORDERED that the judgment is modified, by adding thereto a provision declaring that the defendant is not obligated to defend and indemnify the plaintiff in the underlying action entitled Gibbs v Gershow Recycling Corporation, pending in the Supreme Court, Suffolk County, under Index Number 11179/01; as so modified, the judgment is affirmed, with costs.
The plaintiff operates an automobile recycling business in Medford. On July 23, 1998, a fire occurred at the plaintiff's business premises. A volunteer firefighter allegedly sustained physical injuries while fighting the fire. The plaintiff allegedly was unaware of the firefighter's injuries. The firefighter and his wife (hereinafter the Gibbses) commenced the underlying action in April 2001, effectuating service pursuant to Business Corporation Law § 306. However, the [*2]defendant's registered agent on file with the Secretary of State could not be located by the Post Office. Thus, the service was returned as undeliverable. The Gibbses ultimately obtained a default judgment against the plaintiff.
The plaintiff allegedly first learned of the Gibbses' action on March 4, 2002, when it was served with a set of motion papers. The papers were immediately sent to the plaintiff's insurance broker. However, the broker sent the papers to the wrong carrier. This mistake was not discovered until August 2002. The broker thereafter sent the papers to the defendant which first received notice of the claim and the action on August 27, 2002. The defendant promptly disclaimed coverage due to late notice of the action.
When an insurance policy requires that notice of an occurrence or action be given promptly, notice must be given within a reasonable time in view of all of the facts and circumstances (see Eagle Ins. Co. v Zuckerman, 301 AD2d 493, 495; Merchants Mut. Ins. Co. v Hoffman, 56 NY2d 799, 801-802; Travelers Indem. Co. v Worthy, 281 AD2d 411). "Providing an insurer with timely notice of a potential claim is a condition precedent, and thus '[a]bsent a valid excuse, a failure to satisfy the notice requirement vitiates the policy'" (Sayed v Macari, 296 AD2d 396, 397, quoting Security Mut. Ins. Co. of N.Y. v Acker-Fitzsimons Corp., 31 NY2d 436, 440). It is uncontroverted that the defendant insurer did not receive notice of the underlying action until five months after the plaintiff allegedly first learned of the action. This five-month delay was unreasonable as a matter of law and justified the defendant's disclaimer (see Trepel v Asian Pacific Express Corp., 16 AD3d 405; see Sayed v Macari, supra; Serravillo v Sterling Ins. Co., 261 AD2d 384).
Contrary to the plaintiff's contentions, the fact that it may have provided timely notice of the action to its broker is of no consequence. The policy explicitly required the plaintiff to notify the defendant in the event of a claim or lawsuit. It is well settled that notice to a broker cannot be treated as notice to the insurer since the broker is deemed to be the agent of the insured and not the carrier (see Security Mut. Ins. Co. v Acker-Fitzsimons Corp., supra at 442 n 3; Matter of First Cent. Ins. Co., 3 AD3d 494; Bennion v Allstate Ins. Co., 284 AD2d 924; Travelers Indem. Co. v Worthy, supra; Serravillo v Sterling Ins. Co., supra at 385; Shaw Temple A.M.E. Zion Church v Mount Vernon Fire Ins. Co., 199 AD2d 374). Universal Underwriters Ins. Co. v Patriot Ambulette (149 AD2d 500), upon which the plaintiff relies, is distinguishable insofar as the carrier therein received actual notice of the underlying claim and dispatched an investigator well in advance of receiving the written notice delayed by the broker's error. Here, it is uncontroverted that the defendant first learned of the subject action five months after the plaintiff received notice thereof, and more than four years after the claim arose.
We recognize that it is a common practice for insureds to notify their brokers, rather than their carriers, in the event of a claim or lawsuit. However, we emphasize that insureds do so at their peril since the law is clear: the policy requirement that the notice must be provided to the carrier trumps any informal arrangement or practice engaged in between insureds and their brokers.
Finally, contrary to the plaintiff's contentions, the defendant's disclaimer was effective notwithstanding that it failed to show prejudice as a result of the delay (see Argo Corp. v Greater N.Y. Mut. Ins. Co., 4 NY3d 332). [*3]
The plaintiff's remaining contentions are without merit.
We note that since this is a declaratory judgment action, the Supreme Court should have directed the entry of a declaration in favor of the defendant (see Lanza v Wagner, 11 NY2d 317, 334, appeal dismissed 371 US 74, cert denied 371 US 901).
COZIER, J.P., S. MILLER, MASTRO and RIVERA, JJ., concur.
Kings Park Industries v. Affiliated Agency, Inc
In an action, inter alia, to recover damages for breach of contract and for declaratory relief, (1) the defendant appeals (a) from a decision of the Supreme Court, Nassau County (McCarty, J.), dated October 4, 2004, and (b), as limited by its brief, from so much of an order and judgment (one paper) of the same court entered November 22, 2004, as, upon denying that branch of its motion which was to dismiss the third cause of action and granting the plaintiff's cross motion for summary judgment on that cause of action, is in favor of the plaintiff and against it on that cause of action, and declared that it is obligated to hold harmless and indemnify the plaintiff for any loss it may sustain by reason of the absence of certain excess insurance coverage, and (2) the plaintiff cross-appeals from (a) the decision dated October 4, 2004, and (b) so much of the order and judgment (one paper) entered November 22, 2004, as, upon granting those branches of the defendant's motion which were to dismiss the first and second causes of action, dismissed those causes of action.
ORDERED that the appeal and cross appeal from the decision dated October 4, 2004, are dismissed, without costs or disbursements, as no appeal lies from a decision (see Schicchi v Green Constr. Corp., 100 AD2d 509); and it is further,
ORDERED that the order and judgment entered November 22, 2004, is reversed, on the law, without costs or disbursements, those branches of the motion which were to dismiss the first and second causes of action are denied, the branch of the motion which was to dismiss the third cause of action in granted, the cross motion is denied, the third cause of action is dismissed, and the [*2]first and second causes of action are reinstated.
The plaintiff commenced this action against the defendant insurance broker after discovering that the defendant failed to procure an excess liability policy for which the plaintiff had contracted and paid a premium. The first two causes of action sought recovery of the premium under negligence and breach of contract theories, while the third cause of action sought a declaration that the defendant was obligated to indemnify the plaintiff for any losses the plaintiff might sustain in the future as a result of not having the excess liability coverage in place for approximately one year. Following motion practice by the parties, the Supreme Court issued an order and judgment, inter alia, declaring that the defendant was obligated to indemnify the plaintiff for any losses it might incur as a result of the absence of the contemplated excess coverage for the period at issue. The court further dismissed the first and second causes of action, in effect, as academic, in light of its declaration. We reverse, dismiss the third cause of action, and reinstate the first and second causes of action.
A review of the record reveals that any declaratory judgment would be premature, since the future event which would give rise to indemnification (i.e., liability on the part of the plaintiff in excess of its primary liability coverage for an incident which occurred during the period at issue) is beyond the control of the parties and may never occur (see New York Public Interest Research Group v Carey, 42 NY2d 527, 531; Staten Is. Hosp. v Alliance Brokerage Corp., 137 AD2d 674, 676). "At this juncture the plaintiff has not sustained any damages as the result of the alleged negligence [and breach of contract] of the defendant[ ], as there has neither been a judgment nor a settlement against him in the underlying personal injury action" (Hesse v Speece, 204 AD2d 514). Accordingly, the plaintiff's claim for declaratory relief should have been dismissed as premature (see Hesse v Speece, supra; Staten Is. Hosp. v Alliance Brokerage Corp., supra; Cutro v Sheehan Agency, 96 AD2d 669).
In view of the foregoing, the plaintiff's first and second causes of action, which sought the alternative relief of recovery of the insurance premium it paid, should be reinstated as requested by the plaintiff. Accordingly, the plaintiff may elect to immediately pursue its claim for recovery of the premium, or it may await further developments in the underlying personal injury action which may ultimately support a viable indemnification claim.
FLORIO, J.P., ADAMS, MASTRO and LIFSON, JJ., concur.
Clark v. Perry
Appeal from an order of the Supreme Court, Erie County (Donna M. Siwek, J.), entered August 13, 2004 in a personal injury action. The order, inter alia, granted defendant's motion for summary judgment dismissing the complaint.
LIPSITZ, GREEN, FAHRINGER, ROLL, SALISBURY & CAMBRIA LLP, BUFFALO (JOHN A. COLLINS OF COUNSEL), FOR PLAINTIFF-APPELLANT.
HURWITZ & FINE, P.C., BUFFALO (JODY E. BRIANDI OF COUNSEL), FOR DEFENDANT-RESPONDENT.
Memorandum: Plaintiff commenced this action to recover damages for injuries she sustained when the vehicle in which she was a passenger was rear-ended by a vehicle driven by defendant. Supreme Court properly granted defendant's motion for summary judgment dismissing the complaint on the ground that plaintiff did not sustain a serious injury in the accident within the meaning of Insurance Law § 5102 (d). Defendant met his initial burden by submitting medical records and the report of the physician who conducted a medical examination on defendant's behalf establishing that plaintiff's alleged injuries sustained in the accident were preexisting. According to the report of that physician, although "the accident [at issue] may have aggr[a]vated chronic preexistent pain symptoms, it did not produce any significant new/novel symptoms" and "[t]here is no medical evidence of any additional physical disability associated with the injuries sustained" in the accident at issue. Because defendant submitted "persuasive evidence that plaintiff's alleged pain and injuries were related to a preexisting condition, plaintiff had the burden to come forward with evidence addressing defendant's claimed lack of causation" (Pommells v Perez, 4 NY3d 566, 580). Plaintiff failed to meet that burden and thus, "in the absence of objective evidence establishing the aggravation as opposed to the underlying condition," the court properly granted defendant's motion (Dabiere v Yager, 297 AD2d 831, 832, lv denied 99 NY2d 503; see Franchini v
Palmieri, 307 AD2d 1056, 1058, affd 1 NY3d 536).


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