Dean v Tower Ins. Co. of N.Y. (2012 NY Slip Op 07142) and Bentoria Holdings, Inc. v Travelers Indemnity Co. (2012 NY Slip Op 07141) were both decided on October 25, 2012. 

In Dean v. Tower Insurance Company, Judge Ciparick issued the majority opinion on the question of "residence premises" found in a homeowner's insurance policy. Here the plaintiffs purchased a homeowners policy prior to the closing date from Tower Insurance Company. Post closing the insured discovered extensive termite damage to the home which took over a year to repair. The purchaser never moved into the home, although they renewed the policy one year after the closing date. Fifteen months post closing, with the house still vacant, a fire destroyed the house. Tower disclaimed coverage stating, "Our investigation revealed the dwelling was unoccupied at the time of the loss. Accordingly, this dwelling does not qualify as a 'residence premises' there is no coverage for this claim under your policy." In the definitions section of the policy, "residence premises" was defined as: "The one family dwelling . . . where you reside." Judge Ciparick found the term ambiguous noting, "The standard for determining residency for purposes of insurance coverage requires something more than temporary or physical presence and requires at least some degree of permanence and intention to remain" (Government Empls. Ins. Co. v Paolicelli, 303 AD2d 633, 633 [2d Dept 2003] see also Matter of Aetna Cas. & Sur. Co. v Gutstein, 80 NY2d 773, 775 [1992]; Matter of Allstate Ins. Co. [Rapp], 7 AD3d 302, 303 [1st Dept 2004]).... Further, because the term "reside" is not defined in the contract making the term "residence premises" ambiguous, it is arguable that the reasonable expectations of an average insured (see Cragg, 17 NY3d at 122) is that occupancy of the premises would satisfy the policy's requirements.... Courts have held that "[a] householder need not necessarily have conventional, or, indeed, any furniture in a house to occupy it. His presence in it for sleeping and eating and working purposes can literally constitute occupancy. He can, if he will, sleep and eat on the floor or on improvised devices."

Bentoria Holdings, Inc. v Travelers Indemnity Co.  involved an "earth movement" exclusion in a property damage policy for a building in Brooklyn. 

The building suffered cracks as a result of an excavation being conducted on the lot next door to it. Plaintiff submitted a claim, which Travelers rejected, relying on the earth movement exclusion. The Court of Appeals previously addressed this issue in Pioneer Tower Owners Assn. v State Farm Fire & Cas. Co. (12 NY3d 302 [2009]), with a finding that earth movement exclusions using identical language are not applicable to losses caused by excavation. 

In Bentoria Holdings, Travelers prevailed as their policy was amended to add the term. "man-made" to the definition of movement of earth. "By expressly excluding earth movement due to man-made or artificial causes," the policy contradicts the idea that "the intentional removal of earth by humans" is not an excluded event. This policy cannot reasonably be read to cover the damage on which plaintiff's claim is based."

Read Dean v. Tower Insurance  here.

Read Bentoria Holdings, Inc. v. Travelers here.  

Typically an expert's affidavit is needed for a plaintiff to defeat a motion for summary judgment, creating a question of fact, sufficient for the trial court to deny the motion. 

What happens when the plaintiff files a Note of Issue and Certificate of Readiness without exchanging an expert's report pursuant to CPLR 3101(d)? Defense counsel routinely cited Construction by Singletree, Inc. v Lowe (55 AD3d 861, 866 N.Y.S.2d 702), as standing for the proposition that a party's failure to disclose its experts pursuant to CPLR 3101(d)(1)(i) prior to the filing of a Note of Issue and Certificate of Readiness, by itself, requires preclusion of an expert's affirmation or affidavit submitted in support of a motion for summary judgment.

Rivers v. Birnbaum (2012 NY Slip Op 6935 decided by the Appellate Division, Second Department on October 17, 2012, with Judge Belen writing the majority opinion, reversed that assumption. The Second Department rule now allows a party to offer a late exchange, in opposition to the summary judgment motion.  Citing the absence of time limits by the legislature who enacted CPLR 3101(d), the court found the expert affidavit can be considered in opposition to the motion, post note of issue, where there had been no previous exchange.

"We recognize that CPLR 3101(d)(1)(i) is part of CPLR article 31, which governs the discovery process. We further recognize that, generally, when a party files a note of issue and certificate of readiness, it must affirm that "[d]iscovery proceedings now known to be necessary [have been] completed" (22 NYCRR 202.21). However, as previously discussed, the Legislature omitted a specific deadline by which a party must respond to a CPLR 3101(d)(1)(i) request, and the statute itself specifically vests a trial court  [*15] with the discretion to allow the testimony of an expert who was disclosed near the commencement of trial. 

Thus, the statutory scheme provides that, even where one party requests trial expert disclosure during discovery pursuant to CPLR 3101(d)(1)(i), a recipient party who does not respond to the request until after the filing of the Note of Issue and Certificate of Readiness will not automatically be subject to preclusion of its expert's trial testimony. 

Accordingly, the failure of a party to exchange expert information pursuant to CPLR 3101(d)(1)(i) before the filing of a note of issue and certificate of readiness will not divest a trial court of the discretion to consider an affirmation or affidavit submitted by that party's experts in the context of a timely motion for summary judgment."

Legislative Update - Attorney Liens

On October 4, 2012, Governor Cuomo signed into law Senate Bill 1546 / Assembly Bill 5275 which comes into effect on January 1, 2013. This Bill amends the Judiciary Law to allow attorneys to attach a charging lien to the proceeds of any recovery obtained as the result of arbitration, mediation, or any pre-litigation negotiated settlement.     

An attorney who is discharged without cause has three remedies to recover the value of his or her legal services: the retaining lien, the charging lien, and the plenary action in quantum meruit (Butler, Fitzgerald & Potter v Gelmin, 235 A.D.2d 218, 218-19, 651 N.Y.S.2d 525). These remedies are not exclusive, but cumulative.

The "retaining lien" gives an attorney the right to keep, with certain exceptions, all of the papers, documents and other personal property of the client which have come into the lawyer's possession in his or her professional capacity as long as those items are related to the subject representation (Lerner v Seigel, 22 A.D.2d 816, 254 N.Y.S.2d 802). This type of lien is founded upon physical possession, and an attorney may forfeit its retaining lien by voluntarily giving away any of the items to which it may have attached.

(Annotation, Attorney's Retaining Lien: What Items of Client's Property or Funds Are Not Subject to Lien, 70 ALR 4th 827; First Nat'l Bank & Trust Co. v Hyman   Novick Rlty Corp., 72 A.D.2d 858, 859, 421 N.Y.S.2d 733 [retaining lien cannot be satisfied by property not in the possession or control of the attorney]). Further, an attorney's retaining lien generally lasts "until [the attorney's] disbursements have been fully paid and, as a general rule, his fee has been determined." (Cosgrove v Tops Mkts, Inc., 39 Fed Appx 661, 664).  

The second remedy available to an attorney for recovery of his or her fee is the Judiciary Law § 475 "charging lien." This can be employed both while the action is pending, and in a separate lawsuit (Citizen's Bank, supra). 

Judiciary Law § 475, entitled, "Attorney's lien in action, special or other proceeding," provides:  The [charging] lien is predicated on the idea that the attorney has by his skill and effort obtained the judgment, and hence 'should have a lien thereon for his compensation, in analogy to the lien which a mechanic has upon any article which he manufactures.'  Williams v Ingersoll, 89 NY 508, 517 (1882)  (Butler, Fitzgerald & Potter v Sequa Corp., 250 F.3d 171, 177; see also LMWT Realty Corp v Davis Agency, 85 N.Y.2d 462, 467-468, 626 N.Y.S.2d 39, 649 N.E.2d 1183). 

Further, enforcement of a charging lien is founded upon the equitable notion that the proceeds of a settlement are ultimately "under the control of the court, and the parties within its jurisdiction, [and the court] will see that no injustice is done to its own officers" (Rooney v  Second Ave R. Co., 18 NY 368, 369;   see also Fischer-Hansen v Brooklyn Heights R.R., 173 NY 492, 502, 66 N.E. 395, 33 Civ. Proc. R. 326; Rosenman & Colin v Richard, 850 F.2d 57, 60). 

However, an attorney's recovery under Judiciary Law § 475 is contingent upon his client reaching a favorable outcome, because the charging lien is a specific attachment to the funds which constitute the client's recovery (Butler v Sequa, supraat 177). Moreover,  "the plaintiff must show that he comes within the statute by establishing the facts alleged in his complaint, and the action is open to any defense tending to show that no lien ever existed, or that if it once existed it was discharged with the consent of the plaintiff, or was waived or forfeited by his misconduct or neglect" (Fischer-Hansen, supra at 502).

A third remedy is a plenary action in quantum meruit for the reasonable value of the services rendered (Butler v Sequa, supra at 179; Smith v Boscov's Dept Store, 192 A.D.2d 949, 596 N.Y.S.2d 575; Bruk v Albin, 270 A.D.2d 441, 442, 704 N.Y.S.2d 648; Cushion v Nemes, 266 A.D.2d 126, 698 N.Y.S.2d 670, lv denied 94 NY2d 760, 727 N.E.2d 577, 706 N.Y.S.2d 80). 

This cause of action accrues immediately upon an attorney's discharge, and, unlike the "retaining lien" or the "charging lien," it can be exercised by the attorney against all of the former client's assets (Butler v    Gelmin, supra at 219). In determining the value of the attorney's services provided to the client prior to discharge, a number of variables are considered.

"While the terms of the percentage agreement is one factor that may be taken into account ..., it is not to be considered the dispositive factor .... Other factors, such as the nature of the litigation, the difficulty of the case, the time spent, the amount of money involved, the results achieved and amounts customarily charged for similar services in the same locality, for example, should also be considered" (Smith v Boscov's, supra 192 A.D.2d at 950-51[citations omitted]).

A defendant's payment of settlement proceeds, while on notice of a charging lien, is made at a defendant's peril. (see Schneider, Kleinick, Weitz, Damashek & Shoot v. City of New York, attached). 

A Court applied this principle to similar facts presented in Morgan v Drewry, (285 App Div 1, 135 N.Y.S.2d 171). In that case, the lien was held by an attorney who was not the attorney of record at the time of the settlement. 

Consistent with Fischer, we concluded that, "where a defendant settles a claim or cause of action, the lien of the plaintiff's attorney attaches to the amount agreed upon in settlement the instant the agreement is made and the law will not permit the defendant to say it has nothing in its hands to satisfy the lien. (Fischer-Hansen v Brooklyn Heights RR Co, 173 NY 492, 66 N.E. 395, 33 Civ. Proc. R. 326; Sargent v McCleod, 209 N.Y. 360; Matter of Levy, 249 N.Y. 168, 163 N.E. 244)." (Morgan, supra at 5).