Monday, August 20, 2012

Mura & Storm's Biennial New York Coverage 2010-2012 Seminar

In three weeks and three days my office will again be hosting our biennial New York insurance coverage seminar, which is scheduled to be held in Amherst, New York, on Thursday, September 13, 2012.  If you are an insurance professional or service provider to insurance companies and would like to attend this seminar, click the image above, download and complete the registration form, and return it via email or fax to my office right away.

If you work at a company where others might be interested in attending this seminar or know of such people who might not otherwise see this post or be on our seminar invitation list, please forward this post to them by clicking here.   

This long-running seminar remains free for current clients of Mura & Storm (at least one new file since January 2010) and independent adjusters of my insurer clients.  The nominal cost for others is only $50 per person for six hours of intensive and content-packed insurance coverage case law discussion.  And snacks and drinks.  Can't beat the value.  As always, we'll cover New York property case law and statutory/regulatory developments in the morning, and New York liability/casualty case law and statutory/regulatory developments in the afternoon, which will also include separate break-out sessions for Auto/UM/SUM, No-Fault, and Homeowners/General Liability.  Attendance is limited to insurance claims and underwriting professionals and persons who provide services to the property and casualty insurance industry, such as independent adjusters and staff counsel. 

Some of you have already registered several of  your companies' underwriters.  That's an excellent idea I wish I had thought of years ago.  Please encourage your underwriters to attend.  I have found over the years that underwriters can benefit greatly from hearing how judges read and interpret insurance policies, which often differs from how underwriters do the same.

For those folks attending from out of town, the Ramada has set aside a limited number of rooms at a special rate of $79.00 per night if reservations are made by August 15, 2012.  Reservations should be made directly with the Ramada Hotel by calling (716) 636-7500 and mentioning my firm's name.

CLE approval for New York-admitted attorneys is pending. 

Hope to see you there. 

To Whom NY General Obligations Law § 5-335 May Concern...

I generally like the insurance professionals who volunteer their time to hear intercompany arbitration matters for companies like Arbitration Forums.  I really do.  They provide a valuable cost-savings service to those insurers who participate in intercompany arbitration.  But folks, please.  Please slow down and take the time to actually read the statute you're citing to deny and dismiss that med pay subrogation claim. 

On November 12, 2009, section 5-335 was added to the New York General Obligations Law (GOL).  That day I blogged about that bill and that section here. I quoted the new statutory sections, listed their effective dates, and explained what types of claims were and were not encompassed by the new law. 

Just recently a New York auto insurer client contacted me to report that intercompany arbitrators have been  routinely rejecting the company's med pay intercompany subrogation claims based on GOL § 5-335.  Reportedly, the arbitrators were citing that statute for the proposition that it statutorily precludes all such claims.  It does not. 

Assuming there has been no settlement between the insured and the negligent party against whom the auto insurer is subrogating (and be sure to verify that before filing your intercompany arb), your subrogation departments should include the following in their intercompany arb submissions:
Please note that New York General Obligations Law § 5-335(a) does not apply to preclude this subrogation claim.  That statute only applies to situations in which the injured person has entered into a settlement with the negligent party.  That statute states, in pertinent part:
Except where there is a statutory right of reimbursement, no party entering into such a settlement shall be subject to a subrogation claim or claim for reimbursement by a benefit provider and a benefit provider shall have no lien or right of subrogation or reimbursement against any such settling party, with respect to those losses or expenses that have been or are obligated to be paid or reimbursed by said benefit provider (emphasis added). 
There has been no such settlement, and the respondent’s insured is not a settling party within the meaning of section 5-335(a).  Thus, General Obligations Law § 5-335(a) does not apply to this matter to bar or preclude recovery of this subrogation claim. 

When Someone Other Than Your Named Insured Co-Owns the Insured Building

Gilbert v. Allstate Ins. Co.

(2nd Dept., decided 5/15/2012)

This is a bit of back fill.  But important back fill.

You insure one person but find out after a fire that destroyed the insured dwelling that another person, who is not listed or named on the policy, is listed as a co-owner on the property's deed.  There's no mortgagee.  Do you:

a.  pay 100% of the dwelling loss to just your named insured?
b.  pay 100% of the dwelling loss to both your named insured and the other co-owner? -or-
c.  pay 50% of the dwelling loss to just your named insured?

If you were Allstate, you do c., pay 50% of the dwelling loss to just your named insured.  And in the recent opinion of the Second Department, Appellate Division, you would be correct in doing so.

The plaintiff owned property as a tenant in common with a business partner, who was not a party to this action. In 1996 the plaintiff procured a policy of fire insurance on the property from Allstate solely in his own name. On October 2, 2009, the premises were destroyed by a fire. Allstate paid the plaintiff one-half of the value of the property on the ground that the plaintiff had only a one-half insurable interest in the property. The plaintiff, arguing that a tenant-in-common has an undivided right to the full use, enjoyment, and possession of the entire property (and therefore had a 100% insurable interest in that property), brought this action to recover the full value of the destroyed premises. The Supreme Court, Orange County (Slobod, J.), denied the plaintiff's motion for summary judgment on the issue of liability and granted Allstate's cross motion for summary judgment dismissing the complaint.

In AFFIRMING the grant of summary judgment to Allstate, the Appellate Division, Second Department, succinctly reasoned:
Insurance Law § 3401 limits a contract or policy of insurance to the insured's "insurable interest." When two cotenants own real property which is damaged by a fire and insurance is procured in the name of only one contenant, recovery under the policy is limited to the insured cotenant's one-half interest in the real property (see Graziane v National Sur. Corp., 120 AD2d 773, 775 [1986]; Krupp v Aetna Life & Cas. Co., 103 AD2d 252 [1984]).