Congratulations to Andrea Ferrucci for the successful appeal of a summary judgment liability finding against our client, Kelly Black, in an action pending in Suffolk County Supreme Court. The Appellate Division, Second Department, in Winter v. Black decided on May 23, 2012 (2012 NY Slip Op 04002) repeated a theme that is constantly found in orders regarding summary judgment motions and what can be considered "black letter law" on the subject, "To be entitled to summary judgment, the movant must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case (see Alvarez v Prospect Hosp., 68 NY2d 320, 324).   

 The failure of an insured to cooperate in the defense of an action can be grounds for disclaimer of coverage. The Seminal case in New York on this topic is Thrasher v. United States Liability Insurance Company, 19 N.Y.2d 159, (1967).

In Thrasher v. United States Liability Insurance Company, supra, the Court of Appeals stated:

"Since the defense of lack of co-operation penalizes the plaintiff for the action of the insured over whom he has no control, and since the defense frustrates the policy of this State, that innocent victims of motor vehicle accidents be recompensed for the injuries inflicted upon them . . ., the courts have consistently held that the burden of proving the lack of co-operation is a heavy one indeed. Thus, the insurer must demonstrate that it acted diligently in seeking to bring about the insured's co-operation . . .; that the efforts employed by the insurer were reasonably calculated to obtain the insurer's co-operation . . .; and that the attitude of the insured, after his co-operation was sought, was one of 'willful and avowed obstruction.'"

What effect does a lawsuit filed by an insured against his carrier have on the issue of 'non-cooperation'?  As you all know, Section 3001 of the CPLR was amended, effective January 19, 2009,  allowing a party who has brought a claim of personal injuries or wrongful death to maintain a Declaratory Judgment action directly against the insurer as provided in Section 3420(a)(6) of the New York Insurance Law.  An interesting case from the often ignored Title Insurance realm was issued by the Appellate Division, Second Department on May 15, 2012 entitled, All State Properties v. Old Republic National Title Insurance Co. (2012 NY Slip Op 03790). In this action, the plaintiff commenced litigation to quiet title (shhhhh) within a month of putting the Title Insurance carrier on notice of the claim. The Appellate Division stated  "While the mere act of commencing suit against one's insurer does not, standing alone, constitute noncooperation sufficient to relieve the insurer of its obligations under the policy (see Emigrant Mtge. Co., Inc. v Washington Tit. Ins. Co., 78 AD3d 1112), here, the plaintiff's non-cooperation was established by the fact that it also precipitously brought its own action on the claim, instead of affording Old Republic a reasonable time within which to investigate the claim and determine how to proceed. Since the plaintiff failed to raise a triable issue of fact in response to Old Republic's showing that the plaintiff was in material breach of the insurance policy due to its failure to cooperate, that branch of Old Republic's cross motion, which was for summary judgment dismissing the complaint insofar as asserted against it, was properly granted."

Read full decision here. 

 Bar Exam Question:

A & B were married on December 9, 2006. A previously underwent surgery at Maimonides Hospital and claimed malpractice against the surgeon as a result of an operation pre-marriage on June 7, 2006.  

After marriage, A filed a malpractice claim and B sought recovery under a loss of consortium theory. A died on September 26, 2009 and B was appointed her administrator and thereafter filed a claim for wrongful death versus the hospital and the surgeon which was consolidated with the malpractice claim. Can B recover on his loss of consortium claim? If the answer is "No" what effect would the claim by "B" have that the couple held themselves out as Husband and Wife while vacationing in Pennsylvania?

Answer, as per the Appellate Division Second Department in Holmes v Maimonides Medical Center decided on May 1, 2012 (2012 NY Slip Op 03410):

A "cause of action for loss of consortium does not lie if the alleged tortious conduct and resultant injuries occurred prior to the marriage" (Anderson v Eli Lilly & Co., 79 NY2d 797, 798; see Briggs v Butterfield Mem. Hosp., 104 AD2d 626). Accordingly, Holmes cannot recover on her loss of consortium claim for any malpractice that occurred prior to December 9, 2006, including the surgery (see Anderson v Eli Lilly & Co., 79 NY2d at 798; Cliquennoi v Michaels Group, 178 AD2d 839, 841; Lesocovich v 180 Madison Ave. Corp., 165 AD2d 963; Briggs v Butterfield Mem. Hosp., 104 AD2d at 626).

Holmes's contention that New York should recognize that she and Cruz had been married because they previously held themselves out as husband and wife while vacationing in Pennsylvania is without merit. "[A]lthough New York does not itself recognize common-law marriages, a common-law marriage contracted in a sister State will be recognized as valid here if it is valid where contracted" (Matter of Mott v Duncan Petroleum Trans., 51 NY2d 289, 292 [citations omitted]). Here, however, Holmes failed to sufficiently allege that she and Cruz entered into a common-law marriage in Pennsylvania (cf. Matter of Catapano, 17 AD3d 672, 673; Matter of Landolfi, 283 AD2d 497, 499).

Mental Hygiene Law

We can all agree that substance abuse and mental illness can affect a person's level of stress, ability to work and life expectancy. In a personal injury claim, can a plaintiff refuse to authorize the release of HIV-related information, alcohol/drug treatment information and mental health information which the defendant seeks to obtain on the issue of plaintiff's life expectancy and claims for future loss of earnings?  CPLR 3101(a) provides for "full disclosure of all matter material and necessary in the prosecution or defense of an action."  Public Health Law § 2785(2) and Mental Hygiene Law § 22.05 and § 33.13 grant any individual the protections of confidentiality for the specific material sought. Does the plaintiff waive that confidentiality by pursuing a claim for future damages? Public Health Law § 2785(2)(a) gives a court discretion to grant an application for the disclosure of confidential HIV-related information upon a showing of "a compelling need for disclosure of the information for the adjudication of a criminal or civil proceeding." Mental Hygiene Law § 22.05 provides that the records of a person who receives chemical dependence services shall be released only in accordance with Mental Hygiene Law § 33.13. MHL  § 33.13(c)(1) which provides that mental health information shall not be released except "upon a finding by the court that the interests of justice significantly outweigh the need for confidentiality."

What do the Appellate Courts' rule on this issue?  In Del Terzo v Hospital for Special Surgery, decided on May 10, 2012 by the Appellate Division, First Department (2012 NY Slip Op 03713) the Court stated, "As a general matter, disclosure is warranted where records of a sensitive and confidential nature relate to the injury sued upon (see Napoleoni v Union Hosp. of Bronx, 207 AD2d 660, 662 [1994]).

In Napoleoni we allowed discovery of treatment records pertaining to a mother's substance abuse during her pregnancy in a medical malpractice action brought on claims of negligence in prenatal care, labor and the delivery of a baby (id.). The interests of justice standard under Mental Hygiene Law § 33.13 has not been met in this case where defendants seek the disclosure of confidential records on the basis of nothing more than a generalized assertion that substance abuse and mental illness can affect a person's level of stress, ability to work and life expectancy."

Read full decision here.

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Florida Law (title 37, § 627.409)  permits the retroactive rescission of an automobile insurance policy if there has been a material misrepresentation in an application for insurance, whereas New York prohibits such a retroactive rescission but permits an insurer to deny benefits to a claimant who was a participant in the fraud (see 

Matter of Integon Ins. Co. v Goldson, 300 AD2d 396 [2002]).

Under New York law, an insured, or an assignee of an insured, may be denied no-fault benefits where an insurer submits evidence in admissible form showing that the insured had fraudulently procured the insurance policy (see 

New Millennium Psychological Servs., P.C. v Commerce Ins. Co., 34 Misc 3d 127[A], 2011 NY Slip Op 52286[U] [App Term, 2d, 11th & 13th Jud Dists 2011]).

 

The Appellate Term, Second Department addressed the interplay of Florida and New York law in 

W.H.O. Acupuncture, P.C. as Assignee of Lawrence Sherman v.  Infinity Property & Casualty Co.  decided on May 25, 2012 (2012 NY Slip Op 22142). In this case Lawrence Sherman was in a motor vehicle accident in New York, operating a vehicle he insured under a Florida policy issued by Infinity. Infinity submitted proof that Sherman was not a Florida resident; he did not garage his vehicle in Florida; and, the address on his insurance application was fraudulent. Infinity sought the application of Florida Law. The application of Florida Law would entitle Infinity to a lesser standard than New York, "An insurer's failure to rescind a motor vehicle policy in accordance with the statutory notice of cancellation procedures of Florida Statutes Annotated, title 37, § 627.728 does not preclude or abrogate the insurer's ability to void the policy ab initio pursuant to Florida Statutes Annotated, title 37, § 627.409 (see 

United Auto. Ins. Co. v Salgado, 22 So 3d 594, 600-601 [Fla 2009])."

 

Here under a "grouping of contacts" analysis, the Appellate Term held Florida Law controls and the Insurer's summary judgment application was properly granted by Judge Jodi Orlow of Civil Court, Queens County.

Read full decision here.