Pennsylvania Lumbermens Mut. Ins. Co. v. B&F Land Dev. Corp.
(2nd Dept., 1/16/2019)
Fatal accident involving a worker on defendant's property formed the basis of the estate's underlying action for personal injuries and wrongful death.
At the time of the accident, defendant B&F had a CGL policy in force with plaintiff, PLM. PLM received notice of the death on April 15, 2009, issued a reservation of rights on May 4, 2009, and denied coverage under the policy on June 22, 2009. PLM's coverage declination was based on: (1) the location of the loss not being a location listed on the policy; (2) the policy's exclusion for bodily injury arising out of B&F's ongoing operations; and (3) late notice.
Two months later, PLM commenced this action against B&F and the executor of the decedent's estate for a judgment declaring that PLM was not obligated to defend or indemnify B&F in the underlying action. B&F defaulted, but the executor answered.
In May 2016, PLM proceeded to a non-jury trial against the executor. PLM called only one witness, its vice president of claims. Over the executor's objection, and after a voir dire examination, Supreme Court admitted into evidence a copy of the policy which was proffered by PLM. The copy of the policy admitted into evidence, which had been compiled by PLM's claims VP based upon information contained in the underwriting file, did not specify a location for which the policy applied. Moreover, the copy of the policy admitted into evidence provided a different description of an endorsement titled "Exclusion- Designated Ongoing Operations" than a copy of the policy that PLM had produced during discovery. When questioned about the discrepancy, PLM's claims VP did not know which version of the endorsement applied to the policy issued to B&F. The executor did not call any witnesses and, after the parties submitted posttrial memoranda, Supreme Court issued an order granting PLM's application for a judgment declaring that it was not obligated to defend or indemnify B&F in the underlying action. The executor appealed.
In REVERSING Supreme Court's judgment in favor of PLM and ordering a new trial, the Second Department ruled that Supreme Court's admission of the policy copy over objection at at trial violated New York's "best evidence rule":
The best evidence rule requires the production of an original writing where its contents are in dispute and are sought to be proven (see Schozer v William Penn Life Ins. Co. of N.Y., 84 NY2d 639, 643; Stathis v Estate of Karas, 130 AD3d 1008, 1009; Kliamovich v Kliamovich, 85 AD3d 867, 869). Under an exception to the rule, "secondary evidence of the contents of an unproduced original may be admitted upon threshold factual findings by the trial court that the proponent of the substitute has sufficiently explained the unavailability of the primary evidence and has not procured its loss or destruction in bad faith" (Schozer v William Penn Life Ins. Co. of N.Y., 84 NY2d at 643 [citations omitted]). The proponent of the secondary evidence "has the heavy burden of establishing, preliminarily to the court's satisfaction, that it is a reliable and accurate portrayal of the original" (id. at 645).
Here, PLM failed to offer any explanation as to the unavailability of the primary evidence, i.e., the original policy. PLM also did not establish that the copy of the policy proffered at trial was a "reliable and accurate portrayal of the original" (id.). In that regard, during voir dire examination, Santoro acknowledged that he had compiled the copy of the policy proffered by PLM at trial based upon information contained in the underwriting file, and he could not explain the language discrepancy between that copy of the policy and the copy of the policy produced by PLM during discovery. Consequently, the Supreme Court should not have admitted into evidence the copy of the policy proffered by PLM at trial. The error was not harmless since, without the original policy or an accurate replication, PLM could not establish what locations were covered by the policy, what exclusions to coverage, if any, existed under the terms of the policy, or the insured's responsibilities with respect to providing notice of the claim to PLM (see Stathis v Estate of Karas, 130 AD3d at 1011).
At the retrial, if the "original" policy cannot be found and offered, someone needs to do a better job (1) explaining why the original is not available and (2) establishing that the copy is a reliable and accurate portrayal of the original.
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