Wade Clark Mulcahy LLP

News Excluded or Not Covered? That is the Question December 8, 2010 < Back Share to: New York Insurance Law §3420(d)(2), which requires written notice of coverage denials “as soon as is reasonably possible,” has vexed the insurance industry. Courts have ruled that delays as short as 30 days violate the statute’s reasonableness standard. A failure to give timely notice results in a waiver of the potential coverage defense. But what happens if the occurrence giving rise to the claim is not covered at all under the policy form? Does late notice stymie the insurers ability to avoid a defense and indemnity obligation? Recently, the Second Circuit took up that issue in NGM Insurance Company v. Blakely Pumping, Inc., 593 F.3d 150 (2010). There, relying on the “auto” exclusion to a business owner’s policy, NGM disclaimed coverage to a company executive who crashed his pickup truck into plaintiff’s car. After publication of the disclaimer, the executive reminded NGM that the policy contained an endorsement extending coverage for the use of a “Hired Auto” or “Non-Owned Auto.” With that pushback, NGM issued a supplemental disclaimer, contending that the executive’s personal pickup was neither a “Hired Auto” nor a “Non-Owned Auto.” The trial court ruled that NGM had waived its right to disclaim coverage because, on the known facts, it had violated Insurance Law § 3420 (d)(2). But the Second Circuit, following Zappone v. Home Insurance Co., 55 N.Y.2d 131 (1982), determined that Insurance Law §3420(d)(2) applies only when the denial of liability is based upon an exclusion in the policy which, without the exclusion, would provide coverage. Then, the court determined that the definitions of “Hired Auto” and “Non-Owned Auto” did not qualify as exclusions, and thus held that NGM had not waived its right to assert that its policy did not cover the auto accident. The question of what constitutes an “exclusion” is often fact sensitive. But the critical distinction between an exclusion and an occurrence that is simply not covered must be kept in mind when facing the jeopardy of “late notice” in New York. If you would like more information about this decision, please contact Dennis Wade. http://caselaw.findlaw.com/us-2nd-circuit/1506043.html Previous Next Contact

News “Urine Trouble” for Intentional Act, Court Tells Insurer (NY) January 30, 2020 < Back Share to: In Unitrin Auto Home Ins Co. v. Sullivan, the Second Department declined to apply the intentional acts exclusion to bar coverage for a claim arising out of a claimant’s injury after being hit with a cup of urine. In 2005, the insured was driving a car covered by a policy issued by Unitrin Home and Auto Insurance Company (“Unitrin”) along with two passengers. For unknown reasons, the parties wished to empty a cup filled with urine on a passerby. However, the passenger, apparently unintentionally, hit the passerby in the face with the cup itself, causing personal injuries. The claimant filed a personal injury action against the insured. After various motion practice, the only surviving claim against the insured was for intentional tort. Unitrin subsequently disclaimed coverage based on policy exclusions for intended injury and for intentional acts. The trial court granted summary judgment to Unitrin, finding that, because the harm flew directly from intentional conduct, i.e. the desire to empty the contents of the cup, the harm is deemed intentionally caused. This was the case, the trial court held, “irrespective of the insured's subjective intent and notwithstanding that the actual injuries may have been more extensive than he anticipated.” On appeal, the Second Department reversed and held that a triable issue of fact existed as to whether the events constituted an “accident” under the policy. Specifically, the court held that, although there was evidence the parties intended to douse the claimant with urine, “there was no intent to throw the cup and strike” the claimant. The court distinguished cases where “the intentional act exclusion applies regardless of the insured's subjective intent.” In these cases, such as sexual abuse of a child, the exclusion applies regardless of the whether the perpetrator lacked subjective intent of causing harm. The Unitrin decision further limits the extent to which courts will bar coverage for intentional acts, even if the ultimate harm directly flows from the intentional conduct. Thanks to Douglas Giombarrese for his contribution to this post. Please email Georgia Coats with any questions. Previous Next Contact

News Alec Baldwin Sued For Wrongful Death Of Cinematographer February 25, 2022 < Back Share to: In a well-publicized incident which took place in October 2021, cinematographer Halyna Hutchins was shot and killed by actor Alec Baldwin on the set of the movie “Rust.” On February 15, 2022, the Hutchins family filed a wrongful death lawsuit in New Mexico’s 1st Judicial District Court against the movie’s producers and certain cast and crew members, including Alec Baldwin. At the time of the accident, Baldwin and Hutchins were rehearsing a “line up” shoot-out scene in an old, abandoned church. Baldwin was seated approximately four feet away from Hutchins when he pointed a revolver at her, causing it to discharge. According to the Complaint, “the sole purpose of a line up for this scene was to confirm the positioning, frame and focus of the cameras for a close-up shot of Baldwins’ hand and the revolver he was holding. It is alleged that “Baldwin’s possession of a real revolver, let alone a revolver loaded with any ammunition at all, was unnecessary to achieve this purpose.” The Complaint alleges that Baldwin refused training for the “cross-draw” maneuver he was performing when the weapon discharged. Though Baldwin fired the bullet that killed Hutchins, Plaintiffs assert claims for recklessness and negligence against numerous others involved in the production. More specifically, the defendants were allegedly aware of several firearm safety issues and complaints on the set, took cost cutting measures and failed to remedy the situation or take adequate precautions for firearm safety. This high-profile lawsuit will include a complex negligence analysis involving the culpability of numerous parties, including whether Ms. Hutchins should have some responsibility for the accident which caused her death. Several other lawsuits have been filed by cast members and it is unlikely that meaningful discovery will take place while a decision regarding potential criminal charges is pending. WCM will monitor the litigation and report on any significant developments. Thank you to Alexandra Deplas for her contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News NJ Appellate Division Disagrees Over Retroactivity Of Scutari Amendment July 21, 2009 < Back Share to: In Hand v. Philadelphia Insurance Company, the New Jersey Appellate Division decided that the “Scutari Amendment,” N.J.S.A. 17:28-1.1(f), could be applied retroactively to an action commenced prior to the statute’s enactment. The Scutari Amendment essentially bars step-down provisions in motor vehicle liability policies issued to corporate or business entities which lower uninsured or underinsured motorist coverage for employees to the limits of coverage available to the employees under their personal policies. The Court’s decision in Hand was in direct disagreement with the recent case of Olkusz v. Brown wherein another panel of the Appellate Division decided that the amendment did not apply retroactively. In Hand, the court disagreed with the Olkusz decision and determined that the legislature implicitly meant for the amendment to be applied retroactively. Of note, despite its conclusion, the Hand court declined to apply the statute retroactively to the facts of that particular case stating that it would have imposed a manifest injustice upon the defendant insurer. Thanks to Claudia Condruz for her contribution to this post. http://www.judiciary.state.nj.us/opinions/squibs08-09.pdf Previous Next Contact

News Too Many Auto Accidents Stop Causation Chain (NY) May 13, 2022 < Back Share to: In Smith v. Gray, 2022 WL 1418973 (2d Cir. 2022), the Second Circuit Court of Appeals affirmed a judgment of the United States District Court for the Eastern District of New York, and the Court found that a physician’s expert report needs to be specific and undisputed if a defendant puts forth persuasive evidence that the plaintiff’s injury is related to a preexisting condition in order for a plaintiff to recover under New York’s “No Fault Insurance Law.” In Smith, the plaintiff admitted that he had been involved in multiple vehicular accidents, prior to the accident at issue, as well as one subsequent accident. The District Court granted Defendant's motion for summary judgment, holding that Plaintiff had failed to raise a genuine issue of material fact as to whether the accident at issue proximately caused Plaintiff’s present injuries. Under New York’s “No Fault Insurance Law,” a plaintiff cannot recover non-economic damages from a motor vehicle accident unless he sustains a serious injury. A serious injury includes a personal injury which results in significant limitation of use of a body function or system. Here, the defendant made a prima facie showing that Plaintiff’s injury was not caused by the accident at issue. Defendant’s expert opined that there was no evidence of trauma from the alleged incident and that any injuries present on an MRI were likely of long-standing duration consistent with age-related conditions. Upon this showing, the burden shifted to the Plaintiff to raise a genuine issue of fact as to causation, which Plaintiff failed to explicitly do. Plaintiff’s expert report merely stated that Plaintiff’s “injuries to both his cervical and left shoulder were causally related to the accident [at issue].” This speculative expert conclusion was held to be insufficient to show causation exists between an incident and alleged injuries, given the many accidents at issue here. Additionally, to support causation, an expert report must explain its causality conclusion or rebut the notion that Plaintiff’s injuries were due to a pre-existing condition. This case reveals that targeted litigation tactics and focusing a motion on the same can yield successful results. Thanks to Paige Baldwin on her contribution to this article. Should you have any questions, please contact Matthew Care. Previous Next Contact

News On The Fence: Jury To Decide Whether A Makeshift Fence Is An Open And Obvious Or Dangerous Condition (NY) November 4, 2022 < Back Share to: It is well settled in New York that while an owner of real property has a duty to maintain a reasonably safe premises, it has no duty to protect or warn against open and obvious conditions that are not inherently dangerous. Whether a condition is dangerous or defective is generally an issue of fact for the jury. In Crowley v. 585 Route 25A Holding LLC., Suffolk County Supreme Court addressed these issues in deciding whether a makeshift condition on a property constituted an open and obvious or dangerous condition. Plaintiff sued the defendant for personal injuries after falling over a makeshift fence made of rubber water hose strung across wooden posts while attending a parade on defendant’s property. Plaintiff alleged that defendant caused or created a dangerous condition and that defendant’s negligence was the proximate cause of plaintiff’s injuries and damages. Plaintiff testified at deposition that it was his first time attending the parade at that specific location and that he did not see the hose prior to the accident. A defense witness testified that the makeshift fence was actually a “partition” that had been in place for at least five years before the accident. Defendant moved for summary judgment, arguing that it did not have a duty to plaintiff since the makeshift fence was an open and obvious, and not inherently dangerous condition. Defendant further argued that its actions were not the proximate cause of plaintiff’s injuries. Plaintiff argued that fact questions as to these issues existed, so a trial was necessary. The Court agreed with plaintiff and denied defendant’s motion for summary judgment, finding that the defendant failed to establish that the makeshift fence was an open and obvious and not inherently dangerous condition. Based on testimony that plaintiff was unable to see the rubber hose prior to tripping over it and was previously unaware of its existence, the Court found that a jury could reasonably conclude that the makeshift fence was a dangerous condition. The Court found that these were fact issues for a jury to decide. The Crowley case demonstrates that even where a makeshift condition on a property might be obvious and easily seen, a New York court will leave the determination as to whether it is open and obvious or dangerous to a jury where testimony suggests that a plaintiff had no prior knowledge or awareness of the condition. Thank you to Arianna Arca for her contribution to this post. Please contact Andrew Gibbs with any questions. Previous Next Contact

News Sanctions Or A Slap-On-The-Wrist? (NY) November 11, 2022 < Back Share to: In Castillo v. Charles (2022 NY Slip Op 06103), an action to recover damages for personal injuries, the Appellate Division Second Department, department modified the lower courts order striking the plaintiff’s pleadings, as it was “too drastic of a remedy” (see Turiano v. Schwaber, 180 AD3d 950, 952; see also Arpino v. F.J.F. & Sons Elec. Co., Inc., 102 AD3d at 211). Here, plaintiff violated court multiple court orders including those directing her to appear for a continued deposition. Plaintiff also failed to disclose photographs referenced in her first deposition, and failed to provide authorizations to obtain records from certain medical providers. The court agreed that the record supports an inference of willful and contumacious behavior, striking the pleading, in this instance, was too drastic of a remedy. The court modified the lower courts order, granting defendant’s motion only to the extent of precluding plaintiff from using the undisclosed photographs at trial, directing plaintiff to provide medical authorizations demanded by defendants and directing plaintiff’s counsel to personally pay $3,000 as a sanction to defendant. Sanctions are intended to reinforce the notion that all parties must “play by the rules”. This decision hands out a slap-on-the-wrist as a penalty for plaintiff, while ignoring the fact that failing to disclose evidence could be detrimental to opposing counsel’s ability to make or defend their case. Thanks to Kara Nelson for her contribution to this article. Should you have any questions, please contact Heather Aquino. Previous Next Contact

News High School Football Players Not Barred From Suing For Sideline Condition (NY) August 18, 2017 < Back Share to: A recent NY case dealt with whether High School football players assume the risk of getting injured on a steel plate on the sidelines. In September 2010, Andrew Deserto, Jr., a high school student in Goshen Central School District, allegedly was injured while playing in a varsity football game at Franklin D. Roosevelt High School, located in Hyde Park Central School District. Mr. Deserto allegedly was tackled by two players from the opposing team and forced out of bounds, causing him to hit his head on a steel plate covering a pole vault pit several feet from the football field sideline. As a result of the accident, Mr. Deserto filed a lawsuit in Orange County Supreme Court against Goshen Central School Districk and Hyde Park Central School District, claiming the placement of the steel plate in the vicinity of the playing field unreasonably increased the risk of injury to the players. Both school districts moved for summary judgment, arguing that the lawsuit should be dismissed because it was barred by the legal doctrine known as the primary assumption of the risk. The Supreme Court did not agree that the case should be dismissed without a jury ruling on whether the placement of the steel plate in the vicinity of the playing field unreasonably increased the risk of injury to the football players. The Supreme Court’s decision was appealed, and the Appellate Division focused on whether the risk at issue was a “commonly appreciated risk.” The Court’s decision held that “pursuant to the doctrine of primary assumption of risk, a voluntary participant in a sporting or recreational activity consents to those commonly appreciated risks which are inherent in and arise out of the nature of the sport generally and flow from such participation.” Further, participants in sporting events are “not deemed to have assumed the risks of reckless or intentional conduct, or concealed or unreasonably increased risks." In line with these principles, the Court ruled that “[a]n educational institution organizing a team sporting activity must exercise ordinary reasonable care to protect student athletes voluntarily participating in organized athletics from unassumed, concealed, or enhanced risks." Ultimately, the Appellate Division decided that the Supreme Court’s decision was correct in determining that the defendants were not entitled to summary judgment because they failed to eliminate a triable issue of fact as to whether the placement of the steel plate in the vicinity of the playing field unreasonably increased the risk of injury to the participants. Thanks to George Parpas for his contribution to this post and please write to Mike Bono for more information. Previous Next Contact

News Expert Required for a Battle of the Experts April 19, 2017 < Back Share to: Oftentimes it is difficult to decipher between normal wear and tear--a non-covered loss--versus damage due to an occurrence. Experts may be needed to show the difference. In Fazio v. State Farm Fire & Cas. Co., the insured submitted a claim for property damage following a storm. The insurer denied claim on the basis that the damage was actually caused by age, wear and tear or improper installation, which was barred from coverage by a policy exclusion. During discovery, the insurer produced an expert report evidencing its position that the insureds’ loss was caused by age, wear and tear or improper installation – as opposed to weather damage – thus, providing expert evidence that the insureds’ loss fell squarely within one of the policy’s exclusions. The insureds did not produce any expert reports. The insurer moved for summary judgment seeking a declaration of no coverage, and the court granted the motion. In reaching its decision, the court noted that, while the insureds may have presented sufficient information to meet their initial burden that their claim fell within the purview of coverage, the insureds failed to produce any evidence refuting the insurer’s expert report that the insureds’ damage fell within a policy exclusion. As such, the court concluded there was no coverage since no question of fact existed regarding the cause of the insureds’ loss. Accordingly, this case illustrates the importance of retaining an expert to opine on the cause of an insured’s loss, as the failure to produce an expert report or rebuttal expert report could result in a court determining there is no question of fact regarding the cause of an insured’s loss – and thus, potentially resulting in a finding of coverage. Thanks to Colleen Hayes for her contribution to this post.   Previous Next Contact

News Defense Employees’ Testimony Creates Question Of Fact October 12, 2011 < Back Share to: In [i]Fragale v. City of N.Y.[/i], a case involving an alleged slip and fall, the First Department reversed the trial court’s decision that granted the defendant’s motion for summary judgment. The First Department held that issues of fact existed with respect to whether the defendant had constructive notice of the claimed condition. The lower court ignored the statements and testimony of the defendant’s employees as to whether there was an ongoing and recurring dangerous oil condition in the area where the plaintiff fell and that was routinely left undressed. Indeed, the defendant’s superintendent conceded that the floor was oily “for weeks and months.” Additional evidence was submitted that one of the defendant’s supervisors routinely performed maintenance on vehicles in the area where the plaintiff’s accident occurred, potentially creating the hazardous condition by causing oil to spill on the floor. For these reasons, questions of fact precluded summary judgment. Thanks to Lora Gleicher for her contribution to this post. http://www.courts.state.ny.us/reporter/3dseries/2011/2011_07138.htm Previous Next Contact

News An Unexplained Delay of 28 Days In Disclaiming Coverage May Be Untimely May 18, 2010 < Back Share to: Zevrone Realty Corporation, a holding company for a residential apartment building in the Bronx, sought coverage from its insurers for a sexual assault claim. Bronx Justice Kenneth Thompson, Jr. accepted, as a factual matter, that Zevrone's notice of the occurrence was untimely (a delay of almost one year to report an incident that would likely give rise to a claim against management). But Judge Thompson was asked to determine whether the insurers delay in issuing disclaimers on grounds of late notice were untimely. Citing the general principle that an insurer must give written notice of disclaimer as soon as is reasonably possible after it first learns of grounds for disclaimer of liability, Judge Thompson found that a delay of 98 days was unreasonable as a matter of law (thus granting summary judgment against Federal Insurance Company), and ruled that American International's delay of 28 days raised a question of fact as to whether the delay was "reasonable" under the circumstances (thus allowing the action to continue against American). Previous Next Contact

News Court Holds that Coverage Disputes Preclude Appraisal in Long-Running Lawsuit for Superstorm Sandy Damages (NY) October 29, 2020 < Back Share to: In a coverage dispute relating to property damage and lost income sustained by chocolatier Madelaine Chocolate Novelties after Superstorm Sandy, Magistrate Judge Steven Gold of the Eastern District of New York recently rejected Great Northern Insurance Company’s effort to force appraisal of the claim. In 2018, the Second Circuit overturned a 2017 Eastern District of New York decision which granted summary judgment to the Queens-based chocolatier based on the application of the policy’s “flood” exclusion, which barred coverage for damage caused by waves, tidal water, or the overflowing of the oceans. The case is likely headed to trial in the coming months. At this late stage of litigation, Great Northern moved to compel appraisal based on the policy’s Appraisal Clause, which applies where the parties “disagree on the value of the property or the amount of the loss.” Under New York law, issues relating to liability and/or coverage are not subject to appraisal; rather, only the issue of damages is subject to such a clause. While there were also issues regarding whether the demand for appraisal was made in good faith and whether it was untimely, Madelaine ’s primary argument opposing the motion is that there remains a large dispute as to how the parties interpret the phrase “replacement cost” – i.e., whether or not it refers to the replacement cost for used machinery or new machinery. Separately, Madelaine pointed to the dispute over whether certain costs would be calculated as part of their business interruption damages. Although the order by Judge Gold denying Great Northern’s motion did not expound upon the rationale (and a transcript of oral argument was not made available at the time of publishing), there is analogous support in the case law for Madelaine’s position that likely formed the basis for Judge Gold’s decision. Specifically, in Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 261 F.Supp.2d 293 (S.D.N.Y. 2003) the court held that the specific determination of the scope of the phrase “Restoration Period” was a coverage dispute for the court and not subject to appraisal. Great Northern did cite a decision from later proceedings in the same case, Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 279 F.Supp.2d 235 (S.D.N.Y. 2003), where the court held the appraisal panel could determine the actual length of the period; however, the court did so only after it determined how that period could be determined. Applying that logic to this case, only after a court determines what makes up the “replacement cost” can an appraisal panel determine its value. Thanks to Doug Giombarrese for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes. Previous Next Contact