Another year is rolling to a close and as we say "Goodbye to 2014" we pause to say "Thanks". 

We thank our clients in the Insurance Industry who have consistently placed their trust and confidence in us to provide the best and most cost effective representation for their companies and their insureds. We strive to produce the results required in often hostile environments. 

I also thank our dedicated staff and attorneys who have, year after year, produced remarkable victories. 

I started 2014 in Riverhead with three cases in a row, moved back to Queens in March for a long drawn out trial before Judge Lane, spent May and June in Nassau with back-to-back verdicts on three week trials, was back in Queens in July, and up to the Bronx for an August 8th verdict before Judge Tapia. From September on Brooklyn has been my home with the last case put to bed on December 15th.

The year ahead looks to be a busy one with the Plaintiff's bar anxious to move cases. After the first few weeks of bottlenecks in each county, life will resume with a steady pace of verdicts throughout the year. 

Some results from 2014 which deserve mention are:

1. A January 31th verdict in Kings County Supreme Court for Rich Brown, Celeste Hill v. Russell Dolecal (14932/11). The jury found our client 50% responsible and also found the Plaintiff sustained a serious injury under the threshold requirement of the No-Fault law. Total damages awarded were $2,500. This could be the lowest damage award of the year.
    
2. A Defense Verdict on damages on February 5th in Queens County Supreme Court for Paul Duer in the matter of Kim v. Schulman (700405/11).
    
3. A Defense Verdict on damages on February 6th in Bronx County Supreme Court for Tim Jones against two Plaintiffs in the matter of Charles Seltzer & Tannika Corbett v Cassandra Eugene (310283/09).
    
4. A Defense Verdict on March 28, 2014 for Paul Duer in Civil Court, Queens County, in the matter of Zheng v. Chiusano, (300639/12).
    
5. A Defense Verdict on threshold grounds before Judge Greco in Queens County Supreme Court for Tom Craven on May 20, 2014 in the matter of Nicole E. Madtes v Alicia Scher, (700475/12).
    
6. A great result on June 10, 2014 for Rich Brown in the case of Opal Stevens v. Absolute Trucking, Inc. in Kings County (Index No; 14869/11). The case was tried with "high/low" parameters of $25,000 - $225,000 in a Summary Jury Trial before Judge Solomon. The Jury verdict was $0 for pain and suffering (past and future) and $9,000 for lost wages. And, we were only found 60% at fault. Absent the "high/low" our client's share would have been $5,400.
    
7. A great result  for Lester Rodriguez for his verdict in Kings County before Judge Spodek on May 30th in the case of Noilya Ahadova v. Ner Bresler and Mark Lovy (Index No.: 20241/2011). The jury awarded the Plaintiff $56,000 for past lost earnings and $50,000 for past pain and suffering with no award for future alleged damages. The Plaintiff, a pedestrian, sustained fractures of the ulnar and radius bones in the right arm. She underwent open reduction internal fixation on August 30, 2011. In addition, her scalp was lacerated and was stapled closed. She was discharged from the hospital three days post accident. Among other challenges, our client was not present; suffering from Bi-Polar disorder; and on suicide watch at Staten Island Hospital. Despite a finding of 100% liability against our client, the award was less than our stipulated "high/low" agreement of $150,000.
    
8. A Defense Verdict on damages for Frank Scahill in the case of Byron Kjono v. Barbara Held (Index No 6792/07) on June 9, 2014 before Judge Brown in Nassau County.
    
9. A Defense Verdict on damages for Frank Scahill on August 8, 2014 before Judge Fernando Tapia of Bronx County in the matter of Adiani Gashi v. Victoria Vogel-Blumenthal (Index No.: 302761/10).
    
10. A Defense Verdict on liability for Tom Craven on October 2, 2014 in Suffolk County Supreme Court in Anthony J. Losito v. Barry L. Chandler, Luisa McConnell and Elizabeth Ortiz (Index No. 1872/12).
     
11. A Defense Verdict on liability on October 29th in Queens County Supreme Court for Paul Duer  in the matter of Boucher-Valot v. Valot (Index No.: 16503/12).
     
12. A Defense Verdict on liability on November 5th in Queens County Supreme Court for Gil Hardy in the matter of Lyons v. Boukas (Index No.: 722/12).
     
13. A Defense Verdict on liability on November 19th in Queens County Supreme Court, for Paul Duer in the matter of Jean Brun v. Carol Lee (Index No.: 16814/12).
     
14. A Defense Verdict on liability for Rich Brown on December 12th in the case of Foxworth v Wales before Judge Rothenberg. (Index No.: 3068/12). 
     
15. A Defense Verdict on liability for Tim Jones on December 22nd in the case of Jordania v Hardy (158129/13) in New York County before Judge Michael Stallman.
     

Let's keep the ball rolling in 2015. Best wishes to all for a Happy and Healthy 2015.

Andrea Ferrucci, Esq.

Congratulations to our Appellate and Motions Department led by Andrea Ferrucci Esq. for another impressive year with remarkable results. Highlights from the Appellate Division in 2014 include:

1. Sciafla v. Roman Catholic Church of Our Lady of Hope 116 A.D.3d 690, N.Y.A.D. 2 Dept.,2014. Keri A. Wehrheim Esq. on the brief.   
    
2. Bajada v. Spector 119 A.D.3d 622, N.Y.A.D. 2 Dept. 2014. Andrea E. Ferrucci Esq. on the brief. 
    
3. Gomez v. Our Lady of Fatima Church 117 A.D.3d 987 N.Y.A.D. 2 Dept.2014. Keri A. Wehrheim Esq. on the brief. 
    
4. Conrad v. Alicea 117 A.D.3d 560, N.Y.A.D. 1 Dept. 2014. Andrea E. Ferrucci Esq. on the brief. 
    
5. Desthers v. Espinal 121 A.D.3d 1035 N.Y.A.D. 2 Dept.2014. Andrea E. Ferrucci Esq. on the brief. 
    
6. Joseph v. Simmons 114 A.D.3d 644, N.Y.A.D. 2 Dept.2014. Keri A. Wehrheim Esq. on the brief.
    
7. Joaquin v. Franco 116 A.D.3d 1009 N.Y.A.D. 2 Dept.,2014. Andrea E. Ferrucci Esq. on the brief.
    
8. Billis v. Tunjian 120 A.D.3d 1168 N.Y.A.D. 2 Dept.,2014. Andrea E. Ferrucci Esq. on the brief.
9. Galarza v. J.N. Eaglet Publishing Group, Inc. 117 A.D.3d 488 N.Y.A.D. 1 Dept.,2014. Andrea E. Ferrucci Esq. on the brief.
    
10. Ramirez v. Mezzacappa 121 A.D.3d 770 N.Y.A.D. 2 Dept.,2014. Keri A. Wehrheim Esq. on the brief.
     
11. Ramirez ex rel. Freytes v. Molina 114 A.D.3d 540 N.Y.A.D. 1 Dept.,2014. Andrea E. Ferrucci Esq. on the brief.
     
12. Darzimanova v. Le Clere 122 A.D.3d 421 N.Y.A.D. 1 Dept.,2014. Andrea E. Ferrucci Esq. on the brief.
     
13. Nova Soto-Bay v. Prunty 115 A.D.3d 586 N.Y.A.D. 1 Dept.,2014. Keri A. Wehrheim Esq. on the brief.
     
14. Nationwide Mut. Ins. Co. v. Joseph-Sanders 121 A.D.3d 1003 N.Y.A.D. 2 Dept.,2014. Albert Galatan Esq. on the brief.
     
15. State Farm Ins. Co. v. Walker-Pinckney 118 A.D.3d 712 N.Y.A.D. 2 Dept.,2014. Albert Galatan Esq. on the brief.

The Appellate cases above, coupled with over 100 dismissals of pending actions on Summary Judgment motions save our clients millions of dollars in exposure. Our Appellate and Motions Department is among the best in the business, and we are proud of their achievements.

Unfortunately, the holidays produce a spike in accidents involving driving while impaired or intoxicated. According to the  National Highway Traffic Safety Administration, 32,719 people died in traffic crashes in 2013 in the United States including an estimated 10,076 people who died in drunk driving crashes, accounting for 31% of all traffic deaths that year.

What responsibility does a passenger hold for getting in the car with a driver who the passenger knows is intoxicated? Can the Defendant escape or diminish liability with an assumption of risk defense? 

"A passenger who is aware that intoxication has deprived the driver of reasonable control of the automobile may be found to be negligent, Strychalski v Dailey, 65 AD3d 546, 883 NYS2d 586 (2d Dept 2009); Bergeron v Hyer, 55 AD2d 1001, 391 NYS2d 767 (4th Dept 1977); Verdino v Hayes, 10 AD2d 978, 201 NYS2d 853 (2d Dept 1960); Burnell v La Fountain, 6 AD2d 586, 180 NYS2d 52 (3d Dept 1958). To take the issue to the jury there must be evidence, in addition to the fact that the parties drank together, from which impairment of driving ability can reasonably be inferred, Eisenberg v Green, 33 AD2d 756, 305 NYS2d 769 (1st Dept 1969); see Coleman v New York City Transit Authority, 37 NY2d 137, 371 NYS2d 663, 332 NE2d 850 (1975)."

The  jury charge in New York on this issue is PJI 2:87 Motor Vehicle Accidents-Comparative Negligence of Passenger:
 

"Generally, a passenger is not responsible for the negligence of the driver of the vehicle. A passenger is entitled to assume that the driver will use reasonable care and will obey the traffic laws until the passenger has knowledge of facts indicating that the driver will not do so. A passenger must, however, use reasonable care for his/her own safety. Reasonable care means that degree of care that a reasonably prudent passenger would use under the same circumstances. In deciding whether the Plaintiff used reasonable care, you should consider all the circumstances in connection with the accident and the facts as you find them, including ([use factors which the evidence supports, such as:] the condition of the highway, the traffic conditions, the condition of the weather and of visibility, the Plaintiff's knowledge and experience with respect to the highway, his/her knowledge of the competency, ability, skill and condition of the driver, and the driver's apparent awareness of potential dangers). If you find that the Plaintiff failed to use reasonable care for his/her own safety you will find that he/she was negligent and you must then consider whether such failure was a substantial factor in causing the Plaintiff's injury."

The case of Strychalski v Dailey, 65 AD3d 546, 883 NYS2d 586 (2d Dept 2009) is controlling law in the Second Department. Here, the the Plaintiff failed to establish as a matter of law that he was free from culpable conduct with regard to the causation of his injuries (see CPLR 1411; Arbegast v. Board of Educ. of S. New Berlin Cent. School, 65 N.Y.2d 161, 490 N.Y.S.2d 751, 480 N.E.2d 365; Beck v. Northside Medical, 46 A.D.3d 499, 846 N.Y.S.2d 662; Regan v. Ancoma, Inc., 11 A.D.3d 1016, 782 N.Y.S.2d 480; Halvorsen v. Ford Motor Co., 132 A.D.2d 57, 522 N.Y.S.2d 272). An individual who accepts a ride in a vehicle, with knowledge that the operator may be intoxicated, takes a risk that injury might occur. That risk should be considered as part of the analysis of the comparative negligence of the passenger and the operator of the vehicle (see generally Arbegast v. Board of Educ. of S. New Berlin Cent. School, 65 N.Y.2d at 166-170, 490 N.Y.S.2d 751, 480 N.E.2d 365; Beck v. Northside Medical, 46 A.D.3d at 500, 846 N.Y.S.2d 662; Regan v. Ancoma, Inc., 11 A.D.3d at 1016, 782 N.Y.S.2d 480; Halvorsen v. Ford Motor Co., 132 A.D.2d at 62, 522 N.Y.S.2d 272).

A complete investigation of the case is necessary to give an opinion on the ability to diminish an award to the Plaintiff based on comparative negligence. I suggest you obtain the plea allocution from the guilty plea the insured driver took to driving while intoxicated and vehicular assault. You can also make a FOIL request for his police file to ascertain his level of intoxication. Plaintiff's BAC should be on the toxicology screen in the hospital record. If they were both high numbers and they were both out drinking together, you have at least the building blocks of this defense.

In my experience, a jury is reluctant to charge a passenger with assumption of risk with a guilty plea of the driver to DUI and the serious injuries sustained by the passenger. You have a tough battle to prevail on that issue.

A Night at the Opera

Manuel Mayo was at the Metropolitan Opera on September 16, 2008, working on a ladder on the sixth floor when he fell and was injured. His accident, and subsequent lawsuit, wound up in the Court of Appeals with a decision issued on November 24, 2014 on multiple issues including timely notice of a claim. Here, the Court reiterated a long line of decisions holding that notice to the broker does not qualify as timely notice to the carrier:

 "We have long held that a policyholder's timely notice to a broker does not "constitute the notice contemplated by the [insurance] policy since a broker is normally the agent of the insured and notice to the ordinary insurance broker is not notice to the liability carrier." (Security Mut. Ins. Co. of N.Y. v. Acker-Fitzsimons Corp. 31 N.Y.2d 436, 442 n. 3 [1972]; see also Hartford Fire Ins. Co. v. Baseball Off. of Commr., 236 A.D.2d 334, 654 N.Y.S.2d 21 [1st Dept 1997] [late notice was not excused even though the policyholders "instructed their broker to inform (the primary and excess insurers) about the lawsuit shortly after its commencement"], lv denied 90 N.Y.2d 803 [1997]; Gershow Recycling Corp. v. Transcontinental Ins. Co., 22 A.D.3d 460, 462, 801 N.Y.S.2d 832 [2d Dept 2005] [a policyholder's "timely notice of the action to its broker is of no consequence" and thus does not excuse the failure to comply with notice obligations under an insurance policy] ). Our decision in Mighty Midgets does not alter this fundamental principle. Distinguishing the 1979 case of Mighty Midgets, Inc. v. Centennial Ins. Co. (47 N.Y.2d 12), the Court of Appeals held, "The record here does not support the proposition that the insurer and broker had a relationship sufficiently close to suggest that service to the broker was effectively service to the insurer." 
 

In this case, Strauss Painting, Inc. (Strauss)/ Creative Finishes, Ltd. (Creative) contracted with the Metropolitan Opera Association, Inc. (the Met) to perform work on the Met's premises. The contract required Strauss/Creative to procure three types of insurance: (1) workers' compensation insurance (paragraph [a] ); (2) owners and contractors protective liability (OCP) insurance with a combined single limit of $5 million (paragraph [b] ); and (3) comprehensive general liability (CGL) insurance, with combined coverage for property and bodily injury with a minimum single limit of $5 million, which might be met by umbrella coverage (paragraph [c] ). Neither Strauss nor Creative actually purchased an OCP policy to protect the Met.

At the time Strauss/Creative contracted with the Met, Strauss had in place a CGL policy issued by Mt. Hawley Insurance Company (Mt. Hawley) for the policy period including the accident date. The Court also held the Mt. Hawley policy would not cover the Met as an additional insured, therefore the timing of Mt. Hawley's disclaimer was irrelevant, "we do not reach and need not decide the question of whether Mt. Hawley promptly notified the Met that it was disclaiming coverage under that policy due to untimely notice (see Zappone v. Home Ins. Co., 55 N.Y.2d 131, 134 [1982] ["failure to disclaim coverage does not create coverage which (a liability) policy was not written to provide"] )." 

Read the decision here.

Duty to Defend "Intentional Acts"

Our insureds often do bizarre things. A recent case had the insured's son involved in a fight at a party, biting his adversary on the ear and in the stomach. What carrier contemplated such actions when they issued a Homeowner's policy?  Does the carrier have to defend such indiscretions when the inevitable lawsuit comes in?

A leading case regarding  disclaimer for Intentional Act is Automobile Insurance Company of Hartford v. Cook, 7 NY 3d 131 (Court of Appeals, 2006). Therein, the Court had to decide whether the Carrier had a duty to defend an insured sued in a wrongful death action, resulting from a shooting committed in self defense. The Court noted the size of the decedent was three times the size of Cook (the shooter), and the decedent had previously attacked Cook and injured him. The Complaint alleged that Cook "negligently discharged a loaded shotgun into the decedent's abdomen" and further separately alleged that this was intentionally done. Cook acknowledged that he knew the shot would injure the decedent, but he "had to stop him" and he did not anticipate killing him. The Court analyzed whether "an occurrence" was involved, giving rise to policy coverage, and if so, whether it was excluded, as  "expected or intended".  The Court noted that the duty to defend is "exceedingly broad," and the insurer is required to provide a defense where the allegations "suggest a reasonable possibility of coverage" Continental Cas. Co. v. Rapid American Corp., 80 NY 2d 640 (1993). If liberally construed, the claim is within the embrace of the policy, the insurer must defend its insured, no matter how groundless, false or baseless the suit may be. Ruder & Finn 180 v. Seaboard Sur. Co., 52 NY 2d 663 (1981). Importantly, our courts have held that the duty remains "even though the facts outside the four corners of the pleadings indicate the claim may not be covered". Fitzpatrick v. American Honda Motor Co., 78 NY 2d 61 (1991). Thus, the carrier may be required to defend under the policy, even though it may not be required to pay once the litigation has run its course.

            The Court of Appeals in Cook, supra, additionally held that unless the carrier can demonstrate that the allegations of the Complaint are "solely and entirely within the policy exclusions" and that the allegations are "in toto" subject to no other interpretation, the carrier owes the duty to defend. Allstate Ins. Co. v. Mugavero, 79 NY 2d 153 (1992).

            The Court of Appeals held, where the Complaint alleged negligence against Cook, the allegations, if proven, would fall within the scope of the policy as a covered "occurrence" (i.e. either an unintentional or unexpected event, or to an intentional event with an unintentional or unexpected result. Miller v. Continental Ins. Co., 40 NY 2d 675 (1976). The Court conceded that the fact finder could ultimately reject that Cook negligently caused decedent's death, given the evidence of intentional behavior, "but that uncertain outcome is immaterial to the insurer's duty to defend in an action where it is alleged that the injury was caused by the negligent conduct of the insured." 

If the complaint alleges "negligence" in the commission of the act, the more prudent course would be to defend under a reservation of rights. A separate declaratory judgment action may be required to disclaim coverage under the terms of the policy.

Lead Paint Exposure

Nesmith v Allstate Ins. Co. (2014 NY Slip Op 08217) decided on November 25, 2014 by the New York Court of Appeals dealt with the issue of lead paint exposure where members of different families were successively exposed to lead paint in the same apartment. In Hiraldo v Allstate Ins. Co. (5 NY3d 508 [2005]), the Court of Appeals interpreted a "non-cumulation clause" contained in a series of successively-issued liability insurance policies.

Hiraldo v Allstate Ins. involved a single child who had lived in a building for three years while three successive Allstate policies, each with a limit of $300,000, were in force. The Plaintiff claimed that the child had been exposed to lead paint continuously during the terms of all three policies, and that therefore $900,000 in coverage was available to him. The Court of Appeals rejected the argument, relying on a non-cumulation clause. The Court found the argument of the Hiraldo Plaintiffs to be inconsistent with the policy's plain statement that Allstate's liability was limited to the amount shown on the declaration page"[r]egardless of the number of . . . policies involved."

Here, the Court again rejected the argument where different families were exposed to the toxic lead paint, noting the children "were exposed to the same hazard, lead paint, in the same apartment. Perhaps they were not exposed to exactly the same conditions; but to say that the "general conditions" were not the same would deprive the word "general" of all meaning. Nesmith argues that, because the landlord made an effort to correct the problem after Young's children were exposed and before Nesmith's grandchildren moved in, the "conditions" that injured her grandchildren must have been new ones. But she makes no claim, and the record provides no basis for inferring that a new lead paint hazard had been introduced into the apartment. The only possible conclusion from this record is that the landlord's remedial efforts were not wholly successful, and that the same general conditions - the presence of lead paint - that endangered children's health continued to exist. Because Young's children and Nesmith's grandchildren were injured by exposure to the same general conditions their injuries were part of a single "accidental loss" and only one policy limit is available to the two families."

Read the decision here.

A.  NO---see Matter of Government Employees Ins. Co. v Johnson (2014 NY Slip Op 08433) decided on December 3, 2014 Appellate Division, Second Department. 

"[I]nsurance policies, like all contracts, should be enforced according to their terms unless they are prohibited by public policy, statute or rule" (Liberty Mut. Ins. Co. v. Aetna Cas. & Sur. Co., 168 A.D.2d 121, 131). "If an attempted exclusion is not permitted by law, the insurer's liability under the policy cannot be limited" (Matter of Liberty Mut. Ins. Co. [Hogan], 82 N.Y.2d 57, 60). Here, the exclusion contained in the uninsured motorist coverage endorsement of [the] personal automobile liability policy is not permitted by law. "Insurance Law § 3420(f)(1) requires that every automobile insurance policy contain an uninsured motor vehicle endorsement. Neither that statute nor any regulations applicable to it mentions any exclusions" (Matter of Liberty Mut. Ins. Co. [Hogan], 82 N.Y.2d at 60; cf. 11 NYCRR 60-1.1[c][3][i]; Ohio Revised Code 3937.18). Since the exclusion is "without the approval or protection of the law" (Rosado v. Eveready Ins. Co., 34 N.Y.2d 43, 48), it should not be given effect (see Matter of Liberty Mut. Ins. Co. [Hogan], 82 N.Y.2d at 58; Matter of Progressive Northeastern Ins. Co. v. Yeger, 30 AD3d 524, 525-526). Further, where as here, the policy does not contain a term stating that coverage is limited to the statutory minimum, if such exclusion is found to be invalid, no such limitation will be read into the policy (see Royal Indem. Co. v. Providence Washington Ins. Co. 92 N.Y.2d 653, 659; cf. Connecticut Indem. Co. v. Hines, 40 AD3d 903). Consequently, [the] policy must be read as affording liability up to its full limits." 

Read the decision here.

Mail Call

Only in the world of No-Fault litigation can the issue of timely mailing of a document launch thousands of lawsuits with an equal number of Court decisions.

The timely mailing of a claim for No Fault Benefits was addressed by the Appellate Term, First Department, on December 15, 2014 in Medcare Supply, Inc., Farmers New Century Ins. Co., 45 Misc.3d 135(A). Here, the carrier prevailed in the lower court with an affidavit from an employee indicating his familiarity in mailing procedures at the office and denying receipt of the claim. The Appellate Term reversed noting, "Although the affiant averred that there was no record of the underlying no-fault claim in his office's paper and computer files, he professed no personal knowledge of the practice and procedures put in place by defendant in connection with the handling of no-fault claims sent to its Oklahoma City office, the designated mailing address for the submission of such claims (see Westchester Med. Ctr. v. Philadelphia Indem. Ins. Co., 69 AD3d 613, 614 [2010] )."

In addition, "In any event, plaintiff, in opposition, raised a triable issue as to the mailing of the claim by producing a stamped mailing certificate tending to support its assertion that it timely mailed the no-fault claim to defendant at its designated Oklahoma City address (see LMK Psychological Servs., P.C. v. Liberty Mut. Ins. Co., 30 AD3d 727 [2006]; Badio v. Liberty Mut. Fire Ins. Co., 12 AD3d 229 [2004] )."

With No-Fault Trials now being adjourned well into 2017, is it possible the legislature or the Commission of Financial Services will revamp Regulation 68 in 2015?

See below from Testimony of The Medical Society of the State of New York Before The New York State Assembly Committee on Ways & Means and Senate Finance Committee on the Governor's Proposed Public Health Budget for State Fiscal Year 2014-2015:

"Staged automobile accidents leading to fake injuries, billing for testing or treatment which was not required or never occurred, and the criminal networks which may include various healthcare providers, insurance adjustors, attorneys, automobile repair shops, and others who promulgate such illegal behavior should and must be eradicated, with the need for legislation which will lead to effective prosecution."

Read the decision here.