Sunday, November 23, 2008

Failure to State -- Second Department Changes Its Mind

Butler v. Catinella

(2nd Dept., decided 11/18/2008)

Spotted this over at Dave Gottlieb's CPLR Blog.  Not a coverage case, but relevant to coverage litigation.

Didn't realize this, but until last week, the rule in the Second Department had been that a failure to state a cause of action defense was not properly asserted in an answer as an affirmative defense but only via a motion to dismiss pursuant to CPLR Rule 3211(a)(7). The Second Department has now abandoned that rule, holding that in the absence of a pre-answer motion, a defendant may assert the defense of failure to state a cause of action in her answer.

In coverage litigation, the question sometimes arises of what defenses the insurer is obligated to assert as "affirmative defenses" in its answer.  My office uses this rule of thumb:  any substantive coverage defenses that are based on policy exclusions or conditions we assert as affirmative defenses.  The Second Department offers this explanation of what an affirmative defense is:
Affirmative defenses, such as those set forth in CPLR 3018(b), as a general rule, would be "deemed waived if not raised in the pleadings" (Surlak v Surlak, 95 AD2d 371, 383). CPLR 3018(b) includes two alternative definitions of an affirmative defense. In this regard, an affirmative defense is any matter "which if not pleaded would be likely to take the adverse party by surprise" or "would raise issues of fact not appearing on the face of a prior pleading" (CPLR 3018[b]). CPLR 3018(b) lists those commonly referred to as traditional affirmative defenses, but concludes that "[t]he application of this subdivision shall not be confined to the instances enumerated." Therefore, the list of affirmative defenses included in CPLR 3018(b) is not all inclusive. 
Question for the readers:  what about a coinsurance defense, i.e., when the defendant insurer contends that the plaintiff insurer owes either primary or co-primary insurance to a mutual insured?  Something that must be asserted as an affirmative defense? 

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