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A rolling dialogue of New York insurance coverage cases and issues
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A claim handling client asked me today on what date the statute of limitations for a third-party personal injury claim that would have expired on July 11, 2020 if New York's COVID-19 toll (if it was a toll and not a suspension--see my previous posts on this blog) had not been put in place now expires?
The answer can be found on Slide 33 of my November 3, 2020 presentation:
So the answer is? February 25, 2021.
NO-FAULT – CAUSATION – CORONARY BYPASS SURGERY – AAA ARBITRATION DECISION
Matter of United Health Services Hospital aao JK and Preferred Mutual Ins. Co.After reviewing the entire peer review and the submitted records, I find the peer provides a satisfactory medical rationale and relies on the facts present, so that Respondent has met its burden and proven, prima facie, that the hospital services and surgery related to his heart condition were unrelated to the motor vehicle accident.
It was in mid-April that I got the call. I was being drafted to a team of attorneys from over a dozen jurisdictions to defend one of my insurer clients in what was expected to be an incoming tsunami of COVID-19 business interruption lawsuits. For a seasoned insurance coverage attorney like me, this was my most recent call-up to The Bigs. The Show. The reason I spent all those formative coverage attorney years parsing sentences and hunting for the elusive Oxford comma.
Now seven months and three, fully briefed, pre-answer motions to dismiss (actually four--moved twice in one case) later, I could tell you everything you never wanted to know about the meaning of DPLOODT (direct physical loss of or damage to) property, "loss" and "damage", "of" and "to", and whether a virus is alive or dead or neither and why it might matter to a policyholder's business interruption claim.
But not in this post. Instead, I'll skip to and share with you the "scorecard" of sorts I've developed for cataloging and tracking the 72 COVID-19 business interruption ("BI" to the cool, commercial property kids) court rulings to date:
If you were unable to join us on November 3rd for a scintillating discussion (at least as scintillating as any discussion of the New York Civil Practice Law and Rules can be) about the expiration of New York's so-called COVID-19 toll (or was it a suspension?), turn the nearest light up to at least 6000K, grab another caffeinated drink, and click the image above for a recorded replay of my presentation. Running time is 55 minutes and 49 seconds of heart-pounding action. Mature audiences only.
If you prefer to read along with or in lieu of listening, my slide deck in PDF format is [click] here.
1. Subject to the state constitution, the federal constitution and federal statutes and regulations, the governor may by executive order temporarily suspend specific provisions of any statute, local law, ordinance, or orders, rules or regulations, or parts thereof, of any agency during a state disaster emergency, if compliance with such provisions would prevent, hinder, or delay action necessary to cope with the disaster.2. Suspensions pursuant to subdivision one of this section shall be subject to the following standards and limits:
a. no suspension shall be made for a period in excess of thirty days, provided, however, that upon reconsideration of all of the relevant facts and circumstances, the governor may extend the suspension for additional periods not to exceed thirty days each[.]
NO-FAULT – RICO AFFIRMATIVE ACTION – PRELIMINARY INJUNCTION STAYING COLLATERAL ARBITRATIONS & LITIGATION – MOTION TO DISMISS
GEICO v. Mikhail Strut, MD, RES Physical Medicine & Rehabilitation Services, PC, and Cheryle Hart, MDNo, this is not the set up to another lawyer joke. And I'm not asking for a friend.
On my LinkedIn account I recently shared Inc. Magazine's October 1, 2020 article entitled, "Ruth Bader Ginsburg Taught a Law Clerk the Secret to Strong Writing". Here's the article:
There is indeed a consistent thread throughout the law that distinguishes bare allegations from allegations proven by credible evidence, better known as "facts." Allegations, in general, are much easier to make than to prove. Misconduct allegations, in particular, are sometimes the product of an accuser feeling embarrassed or feeling insulted or feeling intimidated by the accused, as opposed to any actual wrongdoing by the accused. Allegations are also at times the product of less than laudable motives, such as secondary gain. Perhaps the most frightful aspect of allegations is their power to destroy. This seems particularly acute today, when so many receive their information from social media, where a keyboard is often wielded as a cudgel. It is a sad reality that in the modern world, all that is required to malign is an agenda, an audience and an accusation.
James H. Boomer, was born on August 13, 1922. He served during World War II as a Naval Aviator from 1942 to 1946. Justice Boomer graduated from the Syracuse University College of Law, summa cum laude, in 1948 and was admitted to practice that year. He served as this Court's first research assistant from January 1948-July 1949. He became the Corporation Counsel for the City of Rochester in 1949 and served in that capacity until 1961. Thereafter, he practiced law in Rochester until 1970 when he was elected to the Supreme Court in November 1970. He was designated to the Appellate Division, Fourth Department by Governor Hugh Carey in 1982. During his term he served as a Trustee to the Appellate Division Law Library and served as the Chair of the Indigent Criminal Appeals Management Counsel for the Seventh Judicial District. He also served briefly as a temporary judge of the Court of Appeals. Justice Boomer was an avid hiker and mountain climber, scaling Mount Kilamanjaro at the age of 70. He died during a hiking expedition on November 14, 1993.
No wonder the court had him do the this-is-how-you-should-write-your-reports training to each new class of law assistants. He was awesome AND awe-inspiring.
For the sixth time since New York's COVID-19 toll of "any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding, as prescribed by the procedural laws of the state, including but not limited to *** the civil practice law and rules, *** or by any other statute, local law, ordinance, order, rule, or regulation, or part thereof" went into effect, Governor Cuomo's office has further extended that toll for another 30 days.
The suspension in Executive Order 202.8, as modified and extended in subsequent Executive Orders, that tolled any specific time limit for the commencement, filing, or service of any legal action, notice, motion, or other process or proceeding as prescribed by the procedural laws of the state, including but not limited to the criminal procedure law, the family court act, the civil practice law and rules, the court of claims act, the surrogate’s court procedure act, and the uniform court acts, or by any statute, local law, ordinance, order, rule, or regulation, or part thereof, is hereby continued, as modified by prior executive orders, provided however, for any civil case, such suspension is only effective until November 3, 2020, and after such date any such time limit will no longer be tolled[.]
(1) you, as the named insured and, while residents of the same household, your spouse and the relatives of either you or your spouse;(2) any person while acting in the scope of that person's duties for you, except with respect to the use and operation by such person of a motor vehicle not covered under this policy, where such person is:
(i) your employee and you are a fire department;(ii) your member and you are a company, as defined in General Municipal Law section 100;(iii) your employee and you are an ambulance service, as defined in Public Health Law section 3001; or(iv) your member and you are a voluntary ambulance service as defined in Public Health Law section 3001;
(3) any other person while occupying:
(i) a motor vehicle insured for SUM under this policy; or(ii) any other motor vehicle being operated by you or your spouse ; and
(4) any person, with respect to damages such person is entitled to recover, because of bodily injury to which this coverage applies sustained by an insured under paragraph (1), (2), or (3) above.
Factually, the facts of the instant matter have even more in common with with those of Morette. In Morette, Anthony Morette, the sole owner of policyholder A.T. Morette Electric LLC, allegedly was struck by an unidentified motor vehicle while he was jogging. Ultimately, Mr. Morette's wife and daughter sought a declaratory judgment that the insurer, Merchants Mutual Insurance Company, was liable for SUM coverage (Morette, supra, 35 Misc. 3d at 201-202). The court denied the insurers' motion for summary judgment, rejecting Merchants' argument that because the LLC was the named insured, SUM coverage was unavailable. In reaching such conclusion, the court relied on a few key provisions, including the option to pay a premium for spousal liability coverage (id. at 206). It further noted that the exclusions page did not exclude the member of the LLC from injuries that were relevant to the facts at hand. Here, too, the option to purchase spousal liability coverage existed, and coverage for a bike accident was not excluded. In addition, the exclusions page indicates that petitioner had the discretion to provide coverage to the surviving spouse if the insured was deceased (NYSCEF Doc. No. 5, at 000029). Further, as respondent points out, petitioner provided a discount to the LLC because respondent took an accident prevention course, and this also weighs in favor of treating him as individually covered under the policy.
With both dictionary definitions and the weight of case law supporting Defendant’s interpretation of the term "direct physical loss," Plaintiffs’ additional arguments are unconvincing. First, Plaintiffs argue that because the insurance contract has specific exclusions for "loss of use" under some coverage lines but not for Income Protection coverage, the Court should infer that the Income Protection coverage covers losses such as Plaintiffs’. Plaintiffs' Motion at 13-14. But as already discussed, even if “loss of use” was covered, Plaintiffs would still have to show that the loss of use was a "direct physical loss” similar to those in the cases discussed supra at 5-7. And for the reasons explained in this order, there was no “direct physical loss” to Plaintiffs. Second, Plaintiffs argue that, unlike some similar insurance policies, their policies do not include a specific exclusion for pandemic-related losses. Id. at 19-20. But again, even in the absence of such an exclusion, Plaintiffs would still be required to show a 'direct physical loss.' Because they cannot do so, the Court grants summary judgment to Defendant.The case is Rose's 1, LLC et al. v. Erie Insurance Exchange and you can read the court's decision and order by clicking here.
"Insurance Law § 3420(f)(2) was enacted to allow an insured to obtain the same level of protection for himself [or herself] and his [or her] passengers which he [or she] purchased to protect himself [or herself] against liability to others'" (Matter of Prudential Prop. & Cas. Co. v Szeli, 83 NY2d 681, 686 [1994], quoting Mem of St Exec Dept, 1977 McKinney's Session Laws of NY at 2446). It is well settled that, "[u]nder Insurance Law § 3420(f)(2), an insured's [SUM] coverage is triggered when the limit of the insured's bodily injury liability coverage is greater than the same coverage in the tortfeasor's policy" (id. at 684). More particularly, when determining whether SUM coverage is triggered, "[t]he necessary analytical step . . . is to place the insured in the shoes of the tortfeasor and ask whether the insured would have greater bodily injury coverage under the circumstances than the tortfeasor actually has" (id. at 687), which "requires a comparison of each policy's bodily injury liability coverage as it in fact operates under the policy terms applicable to that particular coverage" (id. at 688).
Here, a comparison of the two policies at issue, in light of the circumstances of this case, demonstrates that plaintiff would be afforded greater coverage under his policy than under the tortfeasor's policy. The tortfeasor's policy would have provided plaintiff with only $100,000 of coverage for bodily injury, whereas plaintiff's policy would have provided him with up to $300,000 of coverage for bodily injury. Although plaintiff's SUM benefits would be reduced by the amount paid to his wife under the policy's $300,000 per accident maximum, he is still afforded more coverage under his policy than under the tortfeasor's policy because the bodily injury limit for an accident in which two people are injured would be $200,000 under the tortfeasor's policy, which is less than the coverage afforded by plaintiff's policy. Consequently, the SUM provision of plaintiff's policy was triggered (see Insurance Law § 3420[f][2][A]; Matter of Government Empls. Ins. Co. v Lee, 120 AD3d 497, 498-499 [2d Dept 2014]; Jones v Peerless Ins. Co., 281 AD2d 888, 889 [4th Dept 2001]).Okay, you SUM savants. What's the dispositive difference between the comparative coverage limits in this case and the comparative coverage limits in the seminal, controlling case of Prudential Prop. and Cas. Co. v. Szeli? Hint: it has to do with swapping the headings in the above table.
These submissions conclusively resolve all factual issues as a matter of law and conclusively disposes of the plaintiff's claims for breach of contract and breach of the duty of good faith and fair dealing inasmuch as it is well settled that a plaintiff's "failure to file proof of loss within 60 days after receipt of defendant's notice is an absolute defense to an action on the policy, absent waiver of the requirement by the insurer or conduct on its part estopping its assertion of the defense." Hunter v Seneca Ins. Co., 114 AD3d 556, 557 (2014) citing Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, 209-210 (1984).
In opposition, the plaintiff argues (i) that the defendant's motion pursuant to CPLR 3211(a)(1) relies upon the plaintiff's deposition testimony, and therefore is not properly founded upon documentary evidence, and (ii) the defendant should not be permitted to disclaim coverage as it only sent the demand to the plaintiff, not his insurance adjuster. The plaintiff's contentions are without merit. Contrary to the plaintiff's first contention, the defendant's submission of its demand of proof, with service, and the subsequent disclaimer of coverage are sufficient to establish the plaintiff's failure to respond within the 60-day time limit. See Hunter v Seneca Ins. Co., supra. Moreover, on a motion to dismiss pursuant to CPLR 3211(a)(1), documentary evidence may be supplemented by affidavits or deposition testimony that are not disputed. See Rosenbaum, Rosenfeld & Sonnenblick, LLP v Excalibur Grp. NA, LLC, 146 AD3d 489 (1 Dept. 2017). As the plaintiff does not dispute, in his deposition testimony or his opposition papers, that he did not timely respond to the defendant's demand, the court may properly rely on such evidence. See id.
Furthermore, to the extent that the plaintiff contends that the defendant's failure to serve its demand on his adjuster constitutes a defense to this motion, such an argument is contrary to the plain language of New York Insurance Law § 3407, which only requires service of the demand be made upon the insured. Therefore, the plaintiff fails to rebut the documentary evidence submitted by the defendant, and dismissal pursuant to CPLR 3211(a)(1) is granted.
As the action is dismissed pursuant to CPLR 3211(a)(1), the court does not reach the portion of the defendant's motion seeking to dismiss the complaint pursuant to CPLR 3211(a)(7).Can this decision be reconciled with the Bonavita v. GEICO decision that I blogged about last week? Is it because Stein did not dispute that he failed to submit a timely proof of loss? Tell me what you think in the comments below.
"A plaintiff seeking leave to enter a default judgment must file proof of proper service of the summons and the complaint, the defendant's default, and the facts constituting the claim" (Global Liberty Ins. Co. v Surgery Ctr. of Oradell, LLC, 153 AD3d 606, 606; see CPLR 3215[f]). "[A] default judgment in a declaratory judgment action will not be granted on the default and pleadings alone for it is necessary that [the plaintiff] establish a right to a declaration'" against the defendants (JBBNY, LLC v Dedvukaj, 171 AD3d 898, 902, quoting Dole Food Co., Inc. v Lincoln Gen. Ins. Co., 66 AD3d 1493, 1494; see Merchants Ins. Co. of N.H. v Long Is. Pet Cemetery, 206 AD2d 827, 828).Take-Away Point #1: Establishing one's entitlement on motion to declaratory relief requires more than what is minimally required to obtain a default judgment. Insurers must "establish their right" to the declaration, with a quantum of evidence equivalent to what is needed to avoid a directed verdict at trial.
Here, while the plaintiff submitted proof of proper service of the summons and the complaint, the non-answering defendants' default, and the facts constituting the plaintiff's claim, the plaintiff's submissions in support of the motion failed to establish its right to the declarations sought (see JBBNY, LLC v Dedvukaj, 171 AD3d at 903). As such, we agree with the Supreme Court's determination denying that branch of the plaintiff's motion which was for leave to enter a default judgment against the non-answering defendants.
A motion to dismiss a complaint pursuant to CPLR 3211(a)(1) on the ground that a defense is founded on documentary evidence may be appropriately granted only where the documentary evidence utterly refutes the plaintiff's factual allegations, conclusively establishing a defense as a matter of law (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; Leon v Martinez, 84 NY2d 83, 88; Rodolico v Rubin & Licatesi, P.C., 114 AD3d 923, 924). "[T]o be considered documentary,' evidence must be unambiguous and of undisputed authenticity" (Fontanetta v John Doe 1, 73 AD3d 78, 86; see Cives Corp. v George A. Fuller Co., Inc., 97 AD3d 713, 714). "[J]udicial records, as well as documents reflecting out-of-court transactions such as mortgages, deeds, contracts, and any other papers, the contents of which are essentially undeniable, would qualify as documentary evidence in the proper case" (Fontanetta v John Doe 1, 73 AD3d at 84-85 [internal quotation marks omitted]; see Cives Corp. v George A. Fuller Co., Inc., 97 AD3d at 714). Affidavits, deposition testimony, and letters are not considered documentary evidence within the intendment of CPLR 3211(a)(1) (see Rodolico v Rubin & Licatesi, P.C., 114 AD3d at 925; Cives Corp. v George A. Fuller Co., Inc., 97 AD3d at 714).
* * * * *
Here, the affidavits and letters submitted by GEICO in support of its motion did not constitute documentary evidence within the intendment of CPLR 3211(a)(1) (see County of Westchester v Unity Mech. Corp., 165 AD3d at 885; Attias v Costiera, 120 AD3d 1281). Moreover, the GEICO insurance policy and declaration sheets failed to show that the plaintiffs were not, as they alleged in the complaint, entitled to coverage under the temporary substitute auto and/or non-owned auto provisions of the GEICO policy. Therefore, GEICO's submissions did not utterly refute the plaintiffs' allegations or conclusively establish a defense as a matter of law (see 25-01 Newkirk Ave., LLC v Everest Nat. Ins. Co., 127 AD3d 850; AGCS Marine Ins. Co. v Scottsdale Ins. Co., 102 AD3d 899).An insurance policy is a contract, but the policy and policy declarations by themselves did not "utterly refute" the complaint's allegations and establish that plaintiffs were not entitled to coverage under the GEICO policy. While I certainly understand an insurer's desire for the earliest possible exit from an insured's DJ or breach of contract action, this case is another example of how challenging it is for an insurer to get a lawsuit dismissed on a substantive coverage defense before answering the complaint.
The central question is this: is plaintiff entitled to compensation above the $216,018.92 that has been paid by defendant?
The first factor that bears on the determination of the appropriate amount of damages is whether plaintiff has met her burden of proof. The burden here is one of preponderance. So long as plaintiff's proof is sufficient to suggest that her evidence carries sufficient weight to tip the balance in her favor, she meets that burden and, at least in the first analysis, is entitled to a finding in her favor. It is only if plaintiff has met that initial burden that the burden would shift to the defendant to come forward with evidence that at least re-balances the scale. If the defendant does this, it has overcome plaintiff's evidence and is entitled to a finding in its favor.
Plaintiff indicated at trial that the three (3) areas in which she was claiming entitlement to more than the defendant paid were: 1. Contents; 2. Code upgrades; and 3. An additional amount for the general cost of repair (Tr. 5-9).On page 21, Justice MacRae concluded:
On the basis of the foregoing, plaintiff is awarded the following amounts above the $216.018.92 already paid by defendant. For contents, $4.079.36; For the following code items: knob and tube wiring, $12,750.00; sheathing upgrade, $1,792.20; insulation upgrade, $1,699.50; and deck attachment, $1,675.00, for a total for code upgrades of $17,916.70; for a total award of $21,996.03.On July 17, 2020, the Appellate Division, Fourth Department, unanimously AFFIRMED Justice MacRae's decision and the corresponding judgment without writing. I surmise the Fourth Department concluded that Justice MacRae had written enough.
Is a New York Property Insurer Obligated to Disclose Copies of Its Adjuster and Expert Reports Prior to Litigation?I also created a poll on this question on LinkedIn (connect with me here). If you were interested in my blog post, you probably will be interested in the poll's results: