NOTICE TO ADMIT CANNOT ESTABLISH PRIMA FACIE CASE IN NO-FAULT SUIT

NY First Acupuncture PC v. General Assurance Co., 127007 QCV2003 (Civil Court, Queens Co.) (Judge William A. Viscovich)

At the trial of this no-fault suit, neither plaintiff nor defendant insurer called any witnesses. Rather, plaintiff sought to introduce evidence supporting its case solely through a notice to admit pursuant to Section 3123(a) of the CPLR. The notice to admit sought admissions as to various statements contained therein, including acknowledgment by the defendant as to its receipt of the relevant claim forms and bills, and defendant's denial of or failure to pay same. It also sought admissions as to the genuineness of the various documents annexed thereto as well as the contents thereof, to wit, the assignment of benefits to plaintiff, the bills and the NF3 proofs of claim for acupuncture services rendered, the medical necessity of which is the issue at trial.

The defendant did not deny any of the items contained in the notice. Instead, it served a "Response to Notice To Admit", which objected to each of the requests contained in the notice to admit as "being palpably improper, as it demands Defendant concede many maters that are in dispute or clearly denied, and seeks admission of contested ultimate issues, rather than clear cut matters of fact." The Court held, "This response is insufficient given that the proper method for challenging a notice to admit is to seek a protective order pursuant to CPLR 3123. Nader v. General Motors Corp., 53 Misc 2d 515 (Sup. Ct., N.Y. County) aff'd 29 A.D.2d 632 (1st Dep't. 1967), Epstein v. Consolidated Edison Co., 31 A.D. 2d 746, (2nd Dep't 1969)."

"As such, Plaintiff argues that the statute requires that the statements and documents contained in its notice should be deemed admitted, thus establishing its prima facie case for entitlement to no-fault payments. Defendant also presented no witnesses but objected to the use of the notice, asserting that the admissions sought therein by plaintiff are improper subjects of a notice in a trial for no fault benefits. Both sides rested with the court reserving decision and requesting counsel for both plaintiff and defendant to submit memoranda of law on this issue."

"The issues presented for this court's determination are twofold: Should plaintiff's notice to admit and/or the statements and documentary items contained therein be admitted into evidence? If so, are the factual allegations therein deemed admissions by the defendant upon its failure to properly challenge the same, sufficient to establish plaintiff's prima facie entitlement to no-fault benefits?"

"Notices to admit are provided for in CPLR §3123(a) which provides, in pertinent part, that 'a party may serve upon any other party a written request for admission by the latter of the genuineness of any papers or documents *** described in and served with the request, or of the truth of any matters of fact set forth in the request, as to which the party requesting the admission reasonably believes there can be no substantial dispute at the trial and which are within the knowledge of such other party or can be ascertainable by him upon reasonable inquiry***'. It is well-settled that a notice to admit is 'a vehicle for resolving and eliminating from contention matters which, though factually relevant, are not really in dispute*** [ but not] to seek admissions of material issues or ultimate or conclusory facts' ( Villa v. New York City Housing Authority, 107 AD 2nd 619, 620 [1st Dept. 1985]; see Taylor v. Blair, 116 AD 2nd 204 [ 1st Dept. 1986 ]; Marine Midland Bank v. Custer, 97 AD 2nd 974 [ 4th Dept. 1983 - aff'd 62 NY 2nd 732] - re: the genuineness of defendant's signature). See also Risucci v. Homayoon, 122 AD 2nd 260 [ 2nd Dept. 1986 ] and Firmes v. Chase Manhattan Automotive Finance Corp., 2008 NY Slip Op. 00449[ 2nd Dept 2008 ]. The sole function of such a notice is to expedite the trial by eliminating from contention that which is public knowledge or easily provable and which the party reasonably believes is not in dispute."

"Defendant primarily relies on the recent Appellate Term decision in Bajaj v. General Assurance, 18 Misc 3rd 25 [ App. Term, 2nd & 11th Dists. 2007]. There, in reversing the trial court's decision awarding judgment to a no-fault provider based upon items contained in a notice to admit served on the defendant, the Court determined that, although the admissions sought by plaintiff were proper and the genuineness of the denial was deemed admitted, there was no concession as to the admissibility of plaintiff's claim form as a business record under CPLR §4518 so as to constitute proof of the contents therein, such as dates of service, the services rendered and the charges for such services. The Court then went further, holding that even if defendant had deemed admitted the genuineness of the claim form - it still remained plaintiff's burden to proffer evidence in admissible form*** to lay a foundation for the admissibility of the claim form as a business record***."

"Also supportive of defendant's position is the holding in PDG Psychological v. State Farm, 12 Misc 3rd 1183(A) [ Civil Court, City of New York, Kings Co 2006]), wherein it was held that a provider's notice to admit, to which bills, denial of claim forms and assignment of benefits were attached, was improper in that the admissions sought therein went to the heart of the matter - that is, the prima facie entitlement to no-fault benefits. As such, the notice to admit was determined to be an inappropriate mechanism for the admission of those facts."

"Taking strong and, in this court's opinion, understandable issue with the above decision is Seaside Medical, PC v. General Assurance Co.,16 Misc 3rd 758 (District Court of Suffolk CO., 1st Dist. 2007), wherein the court opined that based on the logic in the PDG decision, 'no issues whatsoever could ever be the subject of a notice to admit' in a no-fault case. That court went on to find that since none of the eight items in the notice to admit at issue therein (e.g., receipt of claims forms, payment of bills) individually rose to the 'heart of the matter', its use was proper, notwithstanding that collectively they could be dispositive of the action."

"Also worthy of serious consideration in this matter are the public policy arguments in favor of allowing the use of a notice to admit to prove a plaintiff's case as discussed by Civil Court Judge Thomas D. Raffaele in NY First Acupuncture., P.C., as assignee of Carline Dowdy v. General Assurance Company (Unpublished Opinion, Queens County Civil Court # CV-096709-03). In that matter, Judge Raffaele reluctantly follows the ruling in Bajaj, but then goes on to point out how that rule actually works to protract, rather than to expedite, the overall goals of New York's no-fault system, which are, in sum and substance, to expedite prompt compensation of basic economic losses without regard to fault or negligence... to 'ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists.' Citywide Social Work & PSY Serv PLLC v. Travelers Indemnity Co., New York Law Journal Volume 235, (3/31/06).... It is well established that 'no-fault reform was enacted to provide prompt uncontested, first-party insurance benefits.'  The ruling in Bajaj is simply inconsistent with these policy concerns as its implementation simply extends trial time and expense."

"Based on the above case law, the court initially finds that the plaintiff's notice to admit was proper in accordance with CPLR §3123 and that defendant's objection to its admission into evidence at trial is overruled."

"As to whether the notice to admit, together with the allegations contained therein are sufficient to establish plaintiff's prima facie case, this court is disposed to follow the decision and rational of the Seaside decision. That decision, however, was rendered by a lower court, while Bajaj was decided by the Appellate Term. Furthermore, there is no appellate decision in the Second Department regarding notices to admit in no-fault cases which hold contrary to Bajaj. While counsel for Plaintiff argues that 'all four judicial departments have held - and the Court of Appeals has affirmed - a Notice to Admit may be used to establish plaintiff's prima facie case.' (See Use of Notice to Admit in No-Fault Insurance Litigation NYLJ, August 6, 2007), the cases cited therein only seem to hint at such a possibility rather than specifically establishing a precedent which this court could follow."

"The court also takes notice that counsel for plaintiff... states that 'the Appellate Term (referring to its decision in Bajaj) simply cannot undo the effect of a statutorily created device that dispenses with the need to produce evidence.' While this court may agree with that assertion, it is similarly constrained to act. It is not the place of this court to simply undo and overrule precedents established by the Appellate Term of this Department. Consequently, the Bajaj decision is controlling and this court is compelled to follow it."

"Therefore, pursuant to Bajaj, the court finds that plaintiff herein has failed to set forth a prima facie case.  Accordingly, the court awards judgment to defendant and the complaint in this action is dismissed."

Larry Rogak

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SUIT ALLEGING SEXUAL ASSAULT BY HOMEOWNER'S SON IS NOT COVERED BY HOMEOWNER'S POLICY 

In this DJ action, the plaintiffs were insured under a homeowner's policy with defendant, and they sought  a judgment declaring that the defendant was obligated to defend and indemnify the plaintiffs in an underlying action entitled Maher v Kantrow.  The Supreme Court, Suffolk County (Baisley, J.), granted the defendant's motion for summary judgment.   The Appellate Division affirmed.

"In an underlying action, a minor alleges that she was physically detained and sexually assaulted in her own home on May 7, 2005, by the minor son of the plaintiffs in this action, Fred S. Kantrow and Marlene R. Kantrow (collectively hereinafter the Kantrows), and that she was under 14 years of age on the date of the incident."

"he plaintiffs in the underlying action are the infant plaintiff, by her mother, and the mother individually. The Kantrows are the only defendants named in the underlying action; the Kantrows' son is not named as a defendant. The plaintiffs in the underlying action allege that the infant plaintiff suffered serious injuries because of the Kantrows' negligent parental supervision, specifically their 'careless and negligent . . . failure to properly supervise their minor son, who the [Kantrows] knew had a predisposition to commit sexual acts.'   Further, they assert that the incident occurred 'due to negligent acts [by] the [Kantrows], in causing and allowing and/or permitting the infant plaintiff to be willfully, maliciously and physically detained and sexually assaulted, [and] in failing to prevent . . . the occurrence.'    The infant seeks to recover damages for physical and emotional injuries, while the mother asserts a derivative cause of action."

"The Kantrows thereafter commenced the instant action for a judgment declaring that the defendant insurer Security Mutual Insurance Company (hereinafter Security), their homeowner's insurer at the time of the alleged incident, is obligated to defend and indemnify them in the underlying action. Security moved for summary judgment, arguing that it properly disclaimed coverage because the conduct at issue in the underlying complaint was not an accident, and therefore not a covered 'occurrence' under the policy, and because the injuries resulting from the alleged sexual abuse and child abuse committed by the Kantrows' son was specifically excluded by the policy. The Supreme Court granted Security's motion. We affirm."

"Security properly disclaimed coverage under exclusion 1(h) of the subject policy, which specifically excludes 'bodily injury . . . caused intentionally by or at the direction of any insured.' In the underlying action, all of the injuries allegedly sustained by the infant plaintiff and her mother are alleged to have resulted solely from the intentional sexual assault of the infant plaintiff by the Kantrows' son, who is an 'insured' as defined by the policy. Further, exclusions 1(m) and 1(n) specifically exclude coverage for child abuse or sexual abuse, with such exclusions deemed to apply regardless of whether claims are made directly, indirectly, or derivatively as sounding in negligence. Thus, despite the fact that the underlying complaint couches its allegations against the Kantrows in negligence by asserting that the Kantrows permitted or failed to stop their son's conduct, coverage is excluded, since the gravamen of the underlying action seeks to hold the Kantrows liable for the injuries resulting from their son's intentional acts."

"Moreover, Security also properly disclaimed coverage on the ground that the alleged incident is not an accident, and therefore not a covered 'occurrence.'  Given that the Kantrows' son is alleged to have intentionally sexually assaulted the infant plaintiff in the underlying action, who at the time of the alleged incident was under 14 years old, any resulting injuries she sustained are deemed to have inherently flowed from his conduct."

"Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that Security is not obligated to defend and indemnify the Kantrows in the underlying action."

Larry  Rogak

NO-FAULT INSURER'S "SEAT BELT DEFENSE" DOES NOT PREVAIL AT TRIAL

In this no-fault benefits suit, the case proceeded to trial in Civil Court, Queens County.  It was stipulated that plaintiff proved its prima facie case, that defendant timely and properly denied plaintiff's claims and that no payments were made on the claims. The parties also stipulated that the sole issue at trial was whether the assignor's alleged injuries were causally related to the motor vehicle accident. Defendant called the assignor and a biomechanics expert as witnesses. Plaintiff did not call any witnesses. The court awarded judgment to plaintiff.  The Appellate Term affirmed. 

"A decision rendered by a court after a nonjury trial should not be disturbed on appeal unless it is clear that its conclusions could not have been reached under any fair interpretation of the evidence.  Having stipulated to plaintiff's prima facie case, defendant had the burden to proffer evidence in admissible form demonstrating that the assignor's alleged injuries were not causally related to the accident. Defendant failed to meet this burden."

"A fair reading of the assignor's testimony supports a conclusion that prior to the accident, the assignor was wearing a seat belt which was not working properly. Defendant's expert testified that, based upon his investigation, and his review of the documents, 'only an unrestrained occupant' could have made contact with the windshield. However, in his report, which was admitted into evidence, the expert concluded that any injuries sustained by plaintiff's assignor were 'causally attributed directly' to the improper use of the seat belt. In view of the conflicting inferences that could be drawn from the assignor's testimony and the expert's testimony and, indeed, the ambiguous statements by defendant's expert, we find no basis to disturb the court's determination accepting the assignor's testimony and finding in favor of plaintiff. Defendant's remaining contentions are either unpreserved for appellate review or without merit." 

Comment:   If the seat belt doesn't "catch" upon a sudden forward movement by the passenger, the passenger can hit the windshield.  However, I am surprised that the defense was relying on the expert's opinion that the injuries were caused by the failure to use a seat belt (which was further complicated by the expert's report that contradicted his own testimony, citing "improper use" of the seat belt).   So far as I know, there is no "seat belt defense" in no-fault suits.  In other words, the fact that a vehicle occupant doesn't wear a seat belt is no defense to no-fault benefits.   Therefore I don't understand the defense contention that the injuries were not caused by a motor vehicle accident.   If either the plaintiff or defense attorneys can shed some light on this, I will publish their insights.

Larry Rogak

DEFENDANTS CANNOT COMPEL DECEASED PLAINTIFF'S ATTORNEY TO HAVE ADMINISTRATOR APPOINTED

Pena v. Rucon Properties LCC, Index no. 21462/2005 (NYLJ 4/07/08)(Supreme Court, Bronx County) (Justice Dianne T. Renwick)

Edited by Lawrence N. Rogak

"On September 14, 2004, plaintiff Rafael Peña commenced this action seeking to recover money damages for personal injuries sustained during a slip and fall that occurred on August 15, 2004, at the premises owned and operated by defendants. Although plaintiff died in January 2007, no administrator of the Estate of Rafael Peña has been substituted in place of Rafael Peña. Defendants now move, pursuant to CPLR §1015, for a court order directing the attorney for the deceased plaintiff before his demise to have an administrator appointed to the Estate of the deceased plaintiff for the purpose of prosecuting this action. Although unopposed, the motion is denied for the reasons explained below."

"The case is abundantly clear that the former attorney for the now-deceased plaintiff has no authority to act once the client expired. See e.g., Gonzalez v. Ford Motor Co., 295 A.D.2d 474 (2nd Dept. 2002). Plaintiff's former counsel may not make a substitution for the decedent sua sponte, but must instead be granted the authority to do so from the prospective new plaintiff. Manhanaim Resort Corp. v. Samples, 156 AD2d 342 (2d Dept. 1989); Weber v. Bellinger, 124 A.D.2d 1009 (4th Dept. 1986). Further, once proper and valid substitution has been made, the new representative is by no means required or obligated to remain with the deceased plaintiff's legal authority."

"This does not imply, nor should be construed as saying that defendants are powerless to act once plaintiff died. There are two statutory exceptions to the stay that automatically results upon a party's death. While not statutorily required, defense counsel may take any affirmative steps to effectuate substitution on behalf of a deceased plaintiff. See CPLR §1021. Alternatively, CPLR §1021 grants the defendant the option of moving to dismiss for failure to make a timely substitution. See e.g., Washington v. Min Chung Hwan, 20 A.D.3d 303 (1st Dept. 2005); Palmer v. Selpan Elec. Co., 5 A.D.3d 248 (1st Dept. 2004)."

"However, before the action is subject to dismissal, the deceased plaintiff's family must be afforded a reasonable time to effectuate the required substitution. See Blank v. Schafrann, 206 A.D.2d 771 (3rd Dept. 1994). For example, in Gonzalez v. Ford Motor Co., 295 A.D.2d 474 (2nd Dept.,2002), the decedent's father, as administrator of decedent's estate, brought an action to recover damages for personal injuries and wrongful death. The father subsequently died, and defendants moved to dismiss the complaint for failure to appoint a substitute administrator within a reasonable time. The trial court dismissed the complaint and denied the motion of decedent's sister, who eventually had been substituted as administrator of the estate, to vacate its prior order as a nullity. The Appellate Division, however, vacated the dismissal holding that because no persons interested in decedent's estate had been provided with notice of the motions to dismiss, the Supreme Court lacked jurisdiction to act. See also, Blank v. Schafrann, 206 A.D.2d 771 (3d Dept. 1994)."

"In short, defendants' motion seeking, pursuant to CPLR §1015, a court order directing the attorney for the deceased plaintiff to have an administrator appointed to the Estate of the deceased plaintiff, for the purpose of prosecuting this action, is denied. Except for the aforementioned two statutory grounds, this Court lacks authority and jurisdiction over this action upon the death of plaintiff. See Tapal v. BFG Corp., 108 A.D.2d 849 (2nd Dept. 1985). Instead, counsel for defendants should do the necessary research required to ascertain the name and location of the deceased plaintiff's heirs, which would allow them to exercise one of the two statutory exceptions to the stay that automatically results upon a party's death. "

"This constitutes the Decision and Order of this Court."

Larry Rogak

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WHEN SLIP AND FALL VICTIM IS TAKEN AWAY BY AMBULANCE, INSURED CANNOT HAVE REASONABLE BELIEF THAT NO CLAIM WILL OCCUR

"Plaintiff issued a commercial general liability policy to the insured, a restaurant, that was to provide coverage for the insured's premises from February 3, 2004 through February 3, 2005. The policy contained a provision requiring the insured, "as soon as practicable," to provide notice to plaintiff of an 'occurrence' that may result in a claim."

"On January 29, 2005, Theodoratos slipped and fell near the women's restroom on the lower level of the insured's premises. Theodoratos was removed from the premises on a stretcher and transported by ambulance to a hospital. Employees of the insured were present when the accident occurred, were aware of the accident and offered assistance to Theodoratos. The manager of the insured, while not present when the accident occurred, was informed of the accident the day it occurred by other employees of the insured. Based on the information imparted to him by the employees, the manager has asserted in this litigation that he believed that the accident was 'caused by [Theodoratos'] own actions,' that no claim would be asserted against the insured and that 'no further action' was required."

"Approximately two and a half weeks after the accident, Theodoratos retained counsel to represent her in connection with the accident. Shortly after being retained, counsel requested the name and address of the licensee of the premises where the accident occurred from both the Westchester County Department of Health and the State Liquor Authority (SLA), and a copy of the police report regarding the accident generated by the New Rochelle Police Department. By a letter dated March 3, 2005, the SLA provided counsel with the name and address of the insured."

"Counsel sent a letter dated March 8, 2005 to the insured, notifying it that Theodoratos had sustained personal injuries on the premises as a result of the insured's negligence, and suggesting that the insured forward the letter to its insurance carrier so that they sic may investigate the occurrence and advise us as to what disposition they sic intended on making on this claim. After receiving no response from the insured, counsel sent a follow-up letter dated April 11, 2005. Counsel observed that he had not been contacted by the insured's insurance carrier despite his suggestion that the insured forward the March 8 letter to the insurance carrier, and stated that '[i]n view of the time element, a prompt response from your insurance company would be appreciated.'  Counsel had no further contact with the insured, and did not undertake any efforts to identify the insured's insurance carrier or notify the insurance carrier of the accident."

"Plaintiff did not receive notice of the accident until October 21, 2005, when it received from either the insured or the insured's broker a copy of the summons and complaint in Theodoratos' personal injury action, which was commenced on July 12, 2005. Following its investigation of the accident, plaintiff, by a letter dated November 17, 2005, disclaimed coverage on the ground that neither the insured nor Theodoratos timely notified plaintiff of the accident. Plaintiff commenced this action seeking a declaration that it has no duty to defend or indemnify the insured in Theodoratos' action. Supreme Court denied plaintiff's motion for summary judgment on the complaint, and this appeal ensued."

"Where a liability insurance policy requires that notice of an occurrence be given 'as soon as practicable,' such notice must be accorded the carrier within a reasonable period of time (Great Canal Realty Corp. v Seneca Ins. Co., 5 NY3d 742, 743 [2005]). The duty to give notice arises when, from the information available relative to the accident, an insured could glean a reasonable possibility of the policy's involvement (Paramount Ins. Co. v Rosedale Gardens, 293 AD2d 235, 239-240 [2002]).  Where there is no excuse or mitigating factor, the issue of reasonableness poses a legal question for the court,  rather than an issue for the trier of fact  (SSBSS Realty Corp. v Public Serv. Mut. Ins. Co., 253 AD2d 583, 584 [1998], quoting Hartford Acc. & Indem. Co. v CNA Ins. Cos., 99 AD2d 310, 313 [1984])."

"Here, plaintiff established as a matter of law that the insured failed to give plaintiff notice of the accident within a reasonable period of time. The accident involved a patron who slipped and fell on a floor on the insured's premises and had to be removed from the premises on a stretcher and placed in an ambulance. Moreover, the insured, through its employees (see Public Serv. Mut. Ins. Co. v Harlen Hous. Assoc., 7 AD3d 421 [2004]), knew about the accident on the day it occurred. Thus, although the duty to give notice arose on the day of the accident, the insured did not give plaintiff notice until almost nine months after it occurred — an unreasonable delay as a matter of law (see id.; DiGuglielmo v Travelers Prop. Cas., 6 AD3d 344, 346 [2004], lv denied 3 NY3d 608 [2004]; Paramount Ins. Co., 293 AD2d at 238, 241)."

"Seeking to avoid the consequences of its failure to give notice to plaintiff within a reasonable period of time, the insured asserts that it had a reasonable, good faith belief that the accident would not result in liability (see Great Canal Realty Corp., 5 NY3d at 743). As a matter of law, however, this excuse fails for the reasons just discussed — the insured's employees were aware of the accident, it involved a patron who slipped and fell on the insured's premises and the patron had to be removed by stretcher and transported by ambulance (see Paramount Ins. Co., 293 AD2d at 240-241; SSBSS Realty Corp., 253 AD2d at 585; see also DiGuglielmo, 6 AD3d at 346; Rondale Bldg. Corp. v Nationwide Prop. & Cas. Ins. Co., 1 AD3d 584 [2003]).  Moreover, the manager's professed belief that the accident was Theodoratos' own fault is insufficient to raise a triable issue of fact with respect to whether the insured had a reasonable, good-faith belief that the accident would not result in liability. As Justice Sullivan stated in Paramount Ins. Co. (293 AD2d at 240):  'The requirement of prompt notice of any occurrence that may result in a claim should not be interpreted in a way that the insurer is compelled to relinquish its right to prompt notice and all the benefits that accrue therefrom - a timely investigation and the opportunity, if appropriate, to dispose of the claim in its early stages, an opportunity that might be irretrievably lost in the case of delayed notice - by placing undue emphasis on the liability assessment of one not trained or even knowledgeable in such matters.'"

"Similarly, no triable issue of fact exists regarding the adequacy of the efforts of Theodoratos' counsel to ascertain the identity of plaintiff and notify it of the accident. An injured party, such as Theodoratos, has an independent right to notify an insurance carrier of an accident (see Insurance Law § 3420[a][3]). However, the injured party is required, in order to rely upon that provision, to demonstrate that he or she acted diligently in attempting to ascertain the identity of the insurer, and thereafter expeditiously notified the insurer (Steinberg v Hermitage Ins. Co., 26 AD3d 426, 428 [2006]; see also Lauritano v American Fid. Fire Ins. Co., 3 AD2d 564, 568 [1957], affd 4 NY2d 1028 [1958]  When the injured party has pursued his or her rights with as much diligence as was reasonably possible the statute shifts the risk of the insured's delay to the compensated risk-taker who can initially accept or reject those for whom it will bear such risks.  Stated differently, where the injured person proceeds diligently in ascertaining coverage and in giving notice, he [or she] is not vicariously charged with any delay by the assured (Jenkins v Burgos, 99 AD2d 217, 221 [1984]; see National Grange Mut. Ins. Co. v Diaz, 111 AD2d 700, 701 [1985])."

"Here, the evidence establishes as a matter of law that Theodoratos neither exercised reasonable diligence in attempting to ascertain the identity of plaintiff nor notified it of the accident. With regard to the latter, it is undisputed that Theodoratos did not give any notice to plaintiff; the belated notice received by plaintiff was supplied by the insured when it or its broker forwarded to plaintiff the summons and complaint in Theodoratos' action. Since Theodoratos did not assert her own right to provide notice, but rather relied on the insured to do so, her rights are derivative of the insured's (see Mount Vernon Fire Ins. Co. v Harris, 193 F Supp 2d 674, 679 [ED NY 2002]). Appel v Allstate Ins. Co. (20 AD3d 367 [2005]), Denneny v Lizzie's Buggies (306 AD2d 89 [2003]) and Cirone v Tower Ins. Co. of N.Y. (39 AD3d 435 [2007], lv denied 9 NY3d 808 [2007]), cited by the dissent, are distinguishable. In both Appel and Denneny, the injured party provided some form of belated notice to the insurance carrier. In Cirone, the Court found that the injured party's action to recover insurance proceeds pursuant to Insurance Law § 3420(a)(2) was not barred based upon her failure to give written notice to the carrier because the insured provided notice of the accident to the carrier and the injured party's counsel, upon being contacted by the carrier, provided the carrier information regarding the accident."

"With regard to the issue of reasonable diligence, shortly after the accident, Theodoratos' counsel made inquiries with both the Westchester County Department of Health and the SLA, seeking the name and address of the licensee of the premises where the accident occurred; no request for information regarding the insurer of the licensee was requested from these agencies or anyone else. The plain language of the requests shows that Theodoratos' counsel was seeking to ascertain the identity of the licensee of the premises, not the licensee's insurer, and thus these requests do not evince reasonable diligence by Theodoratos' counsel in seeking to identify plaintiff. For the same reasons, the mere request for a copy of the police report regarding the accident generated by the New Rochelle Police Department does not evince reasonable diligence."

"Even more importantly, however, Theodoratos' counsel's letter to the insured simply 'suggested" that the insured forward the letter to its insurance carrier. Counsel's subsequent letter stated only that 'a prompt response from [the insured's] insurance company would be appreciated.'  Neither letter is sufficient to raise a triable issue of fact regarding whether Theodoratos exercised reasonable diligence. Indeed, the undisputed fact that Theodoratos' counsel never even requested from the insured the name of its insurance carrier (nor undertook additional efforts to identify the carrier) compels the conclusion that Theodoratos did not exercise reasonable diligence."

"In sum, Supreme Court erred in denying plaintiff's motion because no triable issue of fact exists regarding whether the insured or Theodoratos provided timely notice of the accident to plaintiff. In light of our conclusion that plaintiff is entitled to summary judgment on that ground, we do not pass on plaintiff's remaining arguments in favor of reversal."

Two judges dissented.

Larry Rogak

NO-FAULT CLAIMANT'S TWO-DAY DELAY IN GIVING NOTICE IS EXCUSED; INSURER'S DENIAL DID NOT ADVISE OF RIGHT TO PROVIDE EXPLANATION

In this no-fault suit,  Encompass Insurance Company moved this Court for Summary Judgment.

"The facts underlying the motion are essentially uncontroverted. The plaintiff was involved in an automobile accident on April 30, 2005. Thereafter, the plaintiff made an appointment with his attorney to discuss the case and file a claim for so-called no-fault first party benefits, as well as any claim against any negligent party who may have caused the accident. The appointment between the plaintiff and his lawyer occurred on May 30, 2005, according to the papers submitted by the plaintiff's lawyer, and a claim was filed with the defendant company on behalf of the plaintiff on June 1, 2005.   Thereafter, the defendant denied the plaintiff's claim by letter dated June 9, 2005. As a result of this denial, the plaintiff instituted this action and this motion for summary judgment to dismiss the same is now before this Court."

"In opposition to the motion, counsel for the plaintiff advises that his client did not come into his office until the 30th day after the accident and that the same could not be filed for another two days due to some backlog of work, although the same was filed within 48 hours after the meeting between counsel and his client. It should be noted that for many years, plaintiffs had 90 days to file such a claim and only in recent years was the time limit reduced to 30 days by regulation. In any event, the Court finds that in the circumstances presented at bar, the Court cannot find that such a claim and the excuse proffered for the brief delay in filing the same was not unreasonable as a matter of law and indeed to hold otherwise, would be contrary to the spirit of the No-Fault Law's enabling legislation and intention to serve the public at a critical time in their life."

"Moreover, the Court finds that the notice given by the defendant insurer as set forth in Exhibit D of the defendant's motion papers, failed to fulfill its regulatory mandate that the claimant be notified of its right to justify an untimely submission with proper written justification as otherwise required in 11 NYCRR 65-3.3[e], especially since said regulation was meant to ameliorate the impact of the severely shortened time periods within which a claimant could file a claim (See, Radiology Today, PC, a/a/o Andre Radkevitch v. Citiwide Auto Leasing, Inc., d/b/a Dollar-Rent-A-Car, 15 Misc. 3rd 92, 94; and Westchester Medical Center a/a/o Christopher Andrews, et al, against Encompass Insurance Company and Allstate Insurance Company, 2007 NY Slip Op 52475U; 2007 NY Misc. Lexis 8522 [November 2, 2007])."

"Accordingly, the defendant's motion for summary judgment dismissing the action herein is denied in all respects without costs."

Larry Rogak

DRIVER WITH STOP SIGN STOPS BUT FAILS TO YIELD, GETS SUMMARY JUDGMENT AGAINST HIM

The plaintiffs were passengers in a vehicle operated by the defendant Edison Moposita, which collided with a vehicle operated by the defendant Roberto Luna at the intersection of Knickerbocker Avenue and Jefferson Street in Brooklyn. A stop sign at the subject intersection controls traffic traveling on Jefferson Street, but no stop sign controls traffic traveling on Knickerbocker Avenue. At their depositions, the plaintiffs testified that Moposita brought his vehicle to a complete stop at the stop sign on Jefferson Street before proceeding into the intersection, where his vehicle was struck by Luna's vehicle. Luna subsequently moved for summary judgment, contending that Moposita's negligence was the sole proximate cause of the accident because Moposita came through the stop sign at a high rate of speed and failed to yield the right of way. The Supreme Court, Kings County, denied the motion, finding, inter alia, that there was an issue of fact as to whether Moposita stopped at the stop sign prior to entering the intersection. The Appellate Division reversed.

"A driver who fails to yield the right-of-way after stopping at a stop sign controlling traffic is in violation of Vehicle and Traffic Law § 1142(a) and is negligent as a matter of law (Gergis v Miccio, 39 AD3d 468, 468; see Exime v Williams, 45 AD3d 633; Marcel v Chief Energy Corp., 38 AD3d 502). Here, Luna made a prima facie showing of his entitlement to summary judgment by submitting evidence that Moposita failed to properly observe and yield to cross traffic before proceeding into the intersection (Hull v Spagnoli, 44 AD3d 1007; Gergis v Miccio, 39 AD3d at 468-469; Bongiovi v Hoffman, 18 AD3d 686). As the driver with the right-of-way, Luna was entitled to assume that Moposita would obey the traffic laws requiring him to yield (see Hull v Spagnoli, 44 AD3d at 1007; McCain v Larosa, 41 AD3d 792, 793; Gergis v Miccio, 39 AD3d at 468-469).  The question of whether Moposita stopped at the stop sign is not dispositive, since the evidence established that he failed to yield even if he did stop (Morgan v Hachmann, 9 AD3d 400).  Although a driver with a right-of-way also has a duty to use reasonable care to avoid a collision (see Mateiasevici v Daccordo, 34 AD3d 651, 652; Cox v Nunez, 23 AD3d 427), in opposition to the motion the plaintiffs failed to raise an issue of fact as to whether Luna was comparatively negligent."

"Furthermore, the plaintiffs' contention that Vehicle and Traffic Law § 1140(a) required Luna to yield the right-of-way to a vehicle entering the intersection from a different highway is without merit. That provision pertains to uncontrolled intersections (see Vehicle and Traffic Law §§ 149, 1140[c]), and is superseded by Vehicle and Traffic Law §§ 1142 and 1172, which deal specifically with the rights and obligations of vehicles at intersections controlled by stop signs."

Larry Rogak

PEER REVIEW BY NURSE CAN BE VALID

"Defendant medical provider established prima facie its entitlement to judgment as a matter of law by demonstrating that the necessary billing documents were mailed to and received by plaintiff insurer and that payment of the no-fault benefits was overdue..   However, in opposition to the motion, plaintiff raised a triable issue of fact whether the claimed benefits were properly denied for lack of medical justification. Plaintiff was not required to set forth the medical rationale in the prescribed denial of claim form (see A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2007])."

"Nor is a nurse's review denying no-fault claims for lack of medical necessity per se invalid (see Channel Chiropractic, P.C. v. Country-Wide Ins. Co., 38 AD3d 294, 295 [2007])."

Comment:  The Channel Chiropractic case cited in this decision held the following with regard to peer reviews by nurses: "The court properly found that nurses' reviews denying no-fault claims for lack of medical necessity were not per se invalid, since a nurse's peer review may be competent to establish the admissibility of the medical opinions and conclusions provided that the reviewer's training, observations and actual experience to render such opinions are sufficiently set forth."

Larry Rogak 

PEER REVIEW REPORT WITH STAMPED SIGNATURE OF DOCTOR HELD NOT ADMISSIBLE ON SUMMARY JUDGMENT MOTION

THIRTY-SIX DAYS IS TOO LATE TO ISSUE LATE NOTICE DISCLAIMER, IF LATENESS OF NOTICE IS IMMEDIATELY APPARENT

"Plaintiffs commenced the underlying personal injury action against Susan Milliman seeking damages for injuries sustained by Elizabeth G. Morath (plaintiff) when the vehicle driven by Milliman struck the vehicle driven by plaintiff. At the time of the accident, plaintiff was insured under an automobile liability policy issued by defendant, which included supplementary uninsured/underinsured motorist (SUM) coverage. After plaintiffs settled the underlying action for the limit of Milliman's liability coverage, defendant denied SUM coverage and disclaimed liability based upon plaintiffs' failure to obtain defendant's prior written consent to the settlement, as required by the policy. Plaintiffs thereafter commenced this action seeking a declaration that defendant is obligated to provide SUM coverage."

"Supreme Court properly granted plaintiff's cross motion seeking summary judgment declaring that defendant must provide SUM coverage to plaintiffs for the accident in question. The record establishes that, as soon as defendant learned of the settlement, it possessed all of the information necessary to deny coverage and disclaim liability (see Squires v Marini Bldrs., 293 AD2d 808, 810, lv denied 99 NY2d 502; cf. Ace Packing Co., Inc. v Campbell Solberg Assoc., Inc., 41 AD3d 12, 15). In view of the failure of defendant to justify its 36-day delay in notifying plaintiffs of its disclaimer, the court properly concluded that the delay was unreasonable as a matter of law (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 70; Bovis Lend Lease LMB, Inc. v Royal Surplus Lines Ins. Co., 27 AD3d 84, 88-90; West 16th St. Tenants Corp. v Public Serv. Mut. Ins. Co., 290 AD2d 278, 279, lv denied 98 NY2d 605)."

Larry Rogak 

IF NO-FAULT INSURER DEMANDS A COMPLETED NF-3, THIRTY-DAY TIME TO PAY OR DENY DOES NOT BEGIN UNTIL NF-3 IS RECEIVED

In this no-fault suit, the parties agreed to a trial based on stipulated facts. The question of law before the court was whether plaintiff's failure to submit a prescribed NF-3 claim form in response to defendant's requests for additional verification of the claim tolled the 30 day period in which defendant had to pay or deny the claim.   The court here ruled that it did. 

Following the accident, plaintiff provided the assignor, Mr. King, with various assistive medical equipment which included a heating lamp with infrared element, a massager for reduction of muscle spasm and a TENS unit.   King assigned his rights to collect first-party no-fault benefits for the equipment to the plaintiff.  On May 6, 2005, Edward Shapiro, Esq., plaintiff's counsel, submitted a claim for the first-party no-fault benefits to defendant. After receiving the claim, defendant served upon the plaintiff a request for additional verification of the claim demanding that plaintiff submit a prescribed NF-3 claim form. When plaintiff failed to comply with the request, defendant made a follow-up request. The parties stipulated that the initial and follow-up request were made in accordance with protocols for requesting additional verification set forth in the no-fault regulations.

The Court stated, "While plaintiff has not yet provided defendant with a NF-3 claim form, plaintiff submitted other materials as proof of claim, including letters of medical necessity from Alex Khait, D.C. and Alexander Rozenberg, M.D., which indicate that Mr. King was diagnosed as suffering from unspecified neuralgia, radiculitis and lumbosacral and cervical injuries as a result of the accident."

"It is well settled that an insurer is required to either pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim.   An insurer's failure to pay a no-fault claim within 30-day renders no-fault benefits overdue.  The 30-day period may be extended if the insurer demands additional verification of the claim. If requested verification is not supplied to the insurer within 30 days from the insurer's initial request, the insurer is required to issue a follow- up request in accordance with 11 NYCRR 65.15 [e][2]. Parenthetically, a claim need not be paid or denied until all demanded verification is provided. Further, when a medical provider fails to provide properly requested verification of a claim, the 30-day period in which to pay or deny the claim does not begin to run, and any claim for payment by the provider is premature."

"The parties have stipulated that plaintiff submitted the claim on May 6, 2005 and that defendant's requests for a prescribed NF-3 claim form were made in accordance with the protocols for requesting additional verification of a claim. The parties have also stipulated that to date, plaintiff has not provided a prescribed NF-3 claim form which is also know as a verification of treatment by attending physician or other provider of health service form. The required contents of this form is contained in Appendix 13 of the Ch. III, Subch. B, Pt. 65 of Insurance Department Regulations."

"Plaintiff maintained at trial that defendant was required to 'accept proof of claim submitted on a form other than a prescribed form if it contains substantially the same information as the prescribed form' (Insurance Department Regulation 11 N.Y.C.R.R. § 65-3.5[f] ). Plaintiff further maintained that the various materials it provided to the defendant in connection with the claim met this requirement. Plaintiff argued that since defendant did not pay or deny the claim within 30 days of receipt of these materials, no-fault benefits are overdue."

"Defendant maintained that 11 N.Y.C.R.R. § 65-3.5[f] gave it the unconditional right to request the submission of a prescribed NF-3 claim from as additional verification of the claim and that since plaintiff has yet to provide one, the 30 day period in which it has to pay or deny the claim continues to be tolled."

"The question of law presented turns on how 11 N.Y.C.R.R. § 65-3.5(f) should be interpreted. 11 N.Y.C.R.R. § 65-3.5(f) provides:

An insurer must accept proof of claim submitted on a form other than a prescribed form if it contains substantially the same information as the prescribed form. An insurer, however, may require the submission of the prescribed application for motor vehicle no-fault benefits, the prescribed verification of treatment by attending physician or other provider of health service, and the prescribed hospital facility form.

"The starting point in any case of interpretation must always be the language itself, giving effect to the plain meaning thereof. Further, meaning and effect should be given to all language of a statute.  Words are not to be rejected as superfluous where it is practicable to give each a distinct and separate meaning.  Generally, the same canons of construction are applicable to legislation and administrative regulations."

"Applying these principles, 11 N.Y.C.R.R. § 65-3.5(f) should be interpreted as giving insurers the right to request the submission of one of the prescribed forms referred to in the regulation as additional verification of a claim, even where materials were submitted as proof of claim that contained substantially the same information that a prescribed form requires. This interpretation gives meaning and effect to all the language in 11 N.Y.C.R.R. § 65-3.5(f). If the court were to adapt plaintiff's urged construction, the court would in effect be rejecting as superfluous the entire second sentence of 11 N.Y.C.R.R. § 65-3.5(f) which unequivocally states that insurers may require the submission of a prescribed form. Further, it is not impracticable to give the first and second sentence of the regulation distinct and separate meanings. The first sentence can be viewed as controlling what insurers must accept as proof of claim but not as a limitation on what they may seek as additional verification of a claim. The second statement can be viewed clear direction that a request for a prescribed form is a valid request for additional verification."

"This result also comports with those reported cases which have addressed an insurer's entitlement to the submission of a prescribed no-fault forms as additional verification of a claim (see First Help Acupuncture, P.C. v. Progressive Northeastern Ins. Co.,15 Misc 3d 144(A), 2007 NY Slip Op. 51167(U) [App Term, 2d & 11th Jud Dists] (proof of insurer's timely denial of claim on the ground that on the ground 'a prescribed authorization or assignment of benefits was not submitted and/or was not properly executed' raised triable issue of fact as to plaintiff's entitlement to summary judgment); Metroscan Medical Diagnostics, P.C. v. Progressive Casualty Insurance Co., 15 Misc 3d 126 (A), 2007 NY Slip Op. 50500 (U) [App. Term, 9th & 10th Jud Dists] (30 day period tolled where plaintiff's failed to provide assignment of benefits in the form required by the No Fault regulations]; see also Doshi Diagnostic Imaging Services v. Progressive Insurance Co., 12 Misc 3d 144 (A), 2006 NY Slip Op. 51430 (U) [App. Term, 9th & 10thth Jud Dists] )."

"Based on the preceding analysis, this Court determines that defendant has demonstrated that the 30 day period in which it had to pay or deny the claim was tolled by its request for a prescribed NF-3 form. Hence, plaintiff has failed to establish that payment of no-fault benefits is overdue.  Accordingly, it is hereby ORDERED that judgment be entered in defendant's favor dismissing the claim as premature."

Larry Rogak

Plaintiff moved for summary judgment in this action seeking a declaration that one or more of the defendants were contractually obligated to defend and indemnify the insured, All American Flooring, in the underlying action.   Sirius Insurance Company and its claims adjuster UTC Risk Management, cross-moved for summary judgment in opposition to the motion. The main issue was whether plaintiff's delay in reporting an accident to its insurance carrier was based on a good-faith belief that it would not be liable to the injured party. For the reasons that follow, the Court denied plaintiff's motion and granted defendants' motion for summary judgment.

The underlying claim was brought by Isabel Rivera after she was allegedly injured as of result of the negligence of All American's employees who were hired to replace floor tiles in her apartment. Ms. Rivera claimed that on July 2, 2004 she was struck by a falling closet door, which the plaintiff's workers had removed during the course of their work. The next day the president of All American, Brian Murray, spoke with the building's superintendant, Senad Djokovic ("Sam").  Sam informed Murray that there had been an accident in Ms. Rivera's apartment and that she had been hurt, but she refused medical attention.

Following these events, Sam made a written report of the incident, and forwarded a copy to Murray a few weeks later. The report contained the following comments: "Resident in Apt 3E Isabel Rivera was hit by a closet door in the work area inside her apt, while All American Flooring Company was doing the repair on the floor. Pain in the left hand and the shoulder. Isabel Rivera refused offer by [Sam] to call the ambulance on a couple of occasions."

"While All American's policy on investigating this type of incident is unclear," held the Court, "Murray admits that, following his phone call with Sam, he did not make any effort to follow-up on Ms. Rivera's condition or to contact her. Murray made no additional inquiries regarding the accident and presumed from his contact with Sam that Ms. Rlvera had not been injured.""All American choose not to apprise defendants of any of the above events until January, 2005, when All American received written notification of Ms. Rivera's claim from her attorneys. At that time, All American forwarded the claim to its insurance broker, who forwarded it to UTC. After reviewing the claim, UTC disclaimed coverage due to late notice of the incident. The general liability policy issued by defendants required plaintiff to notify its carrier 'as soon as practicable of an `occurrence' or offense which may result in a claim.'"

"The phrase, 'as soon as practicable,'  is common among insurance policies and has been interpreted to require notice 'within a reasonable time under all circumstances'. Further, timely notification is a condition precedent to coverage and non-compliance vitiates the policy, as a matter of law.  The failure to satisfy this condition may be excused 'where the insured has a good-faith belief of non-liability, provided that belief is reasonable.'"

"Here, the burden of establishing the reasonableness of the excuse rests on All American. The facts in the record are not analogous to those in the following cases, relied on by All American to excuse its delay. A delay of 171 days was excused based on a policyholder's reasonable belief that he would be aware of the likelihood of a claim, due to his close familial relationship with the injured party (Argentina v. Otseqo Mut. Fire Ins. Co,, 86 N.Y.2d 748, 631 N.Y.S.2d 125 (1995)); failure to give immediate notice was excused where there was no indication of any injury to a third party and only trivial damage to insured's own property (Kelly v.Nationwide Mut. Ins. Co, 174 A.D.2d 481,483, 571 N.Y.S.2d 258); and a 7 1/2 month delay was overlooked when a young, unsophisticated policyholder genuinely believed that his oral notice to the insurance broker was sufficient (Mighty Midgets. Inc. v. Centennial Ins. Co,, 47 N.Y.2d 12,416 N.Y.S.2d 559 (1979))."

It may also be relevant on the issue of reasonableness, 'whether and to what extent, the insured has inquired into the circumstances of the accident or occurrence'. After being informed that Ms. Rivera had been hurt, All American made no additional inquiry into the incident and relied solely on the fact that Ms. Rivera had refused medical attention to conclude its belief of non-liability. Had plaintiff made any attempt to a follow-up, it may have discovered that, several weeks later, Sam observed Ms. Rivera wearing a cast or what appeared to be a cast on her arm."

"The Court cannot say that as a matter of law that plaintiffs failure to notify defendants of the occurrence on July 2, 2004 was based on a good-faith and reasonable belief that no claim would result from such events. All American had notice that Ms. Rivera was hurt. At the very least it should have followed up to see the extent of her injuries. Therefore, plaintiffs motion is denied. Nor does plaintiff raise any issue of fact regarding why the delay should be excused. ...The relevant facts in the present action are not in dispute and do not require inquiry into the parties' credibility.   A plaintiff's reasonableness may be determined as a matter of law, where there is no excuse or mitigating factor (Paul Developers, LLC v. Maryland Cas. Ins. Co.,  28 A.D.3d 443, 816 N.Y.S.2d 75 (2nd Dept., 2006)). All American's knowledge that Ms. Rivera was injured, but refused medical care, is not a sufficient excuse for the delay. Furthermore, the 'mere possibility of a claim should have alerted plaintiff to the necessity of promptly informing its insurance carrier' of its awareness of Ms. Rivera's injuries."

"Therefore, under the facts presented, All American failed to raise a triable issue of fact as to whether its delay in giving notice to its carrier was based on a reasonable, good-faith belief in non-liability.  Accordingly, it is ADJUDGED and DECLARED that defendants are not required to defend or indemnify plaintiff in the [underlying] action."

Larry Rogak

HEALTH INSURANCE FAQ

Q. What does HMO stand for?
 
A. This is actually a variation of the phrase, 'HEY MOE.'   Its roots go back to a concept pioneered by Moe of the Three Stooges, who discovered that a patient could be made to forget the pain in his stomach if he was poked hard enough in the eye.

Q. I just joined an HMO - How difficult will it be to choose the doctor I want?
 
A. Just slightly more difficult than choosing your parents.  Your insurer will provide you with a book listing all the doctors in the plan.  The doctors basically fall into two categories:  those who  are no longer accepting new patients, and those who will see you but are no longer participating in the plan.   But don't worry, the remaining doctor who is still in the plan and accepting new patients has an office just a half-day's drive away and a diploma from a third world country and an accent you can't understand.

Q.Do all diagnostic procedures require pre-certification?
 
A. No. Only those you need.
 
Q. Can I get coverage for my preexisting conditions?

A. Certainly, as long as they don't require any treatment.
 
Q. What happens if I want to try alternative forms of medicine?
 
A. You'll need to find alternative forms of payment.
 
Q. My pharmacy plan only covers generic drugs, but I need the name brand.  I tried the generic medication, but it gave me a stomachache.  What should I do?
 
A. Poke yourself in the eye.
 
Q. What if I'm away from home and I get sick?
 
A. Go home.
 
Q. I think I need to see a specialist, but my doctor insists he can handle my problem .  Can a general practitioner really perform a heart transplant right in his/her office?
 
A. Hard to say, but considering that all you're risking is the $20 co-payment, there's no harm in giving it a shot.
 
Q. Will health care be different in the next decade?
 
A. No, but if you call right now, you might get an appointment by then.

Q. Will Hillary's health care plan be better for me?

A. Let's put it this way: you know what they do for a horse when it breaks its leg?

Q. How about Obama's health care plan?  Is it any better?

A. Depends on how much faith you place in the power of "Get Well" cards.

Q. Why can't we get universal health care like they have in Canada?

A. Why don't you ask the many Canadians who come to the US for health care when they get seriously ill?

Q. What is "managed care"?

A. It's a type of health care system that makes you wonder how you managed to survive.

Q. What are we going to do about the 45 million Americans without health insurance?

A. Let them come to New York and claim they were in a car accident.  They'll get more free health care than they can use in twelve lifetimes.

Q. What if I wake up in the middle of the night with a sharp pain in my chest?

A. Take off the necklace with the religious charm and turn over onto your back.

Q. I found my 6 year old son playing "doctor" with the neighbor's girl.  Should I be worried?

A. No.  You should be worried if he starts playing "lawyer."

Q. My doctor found a dark spot on my chest x-ray.  Should I be worried?

A. Not at all.  A simple chemical treatment will take that dark spot right off the x-ray.

Q. Whenever I raise my right arm over my head, I get a sharp pain.  What should I do?

A. Keep your arm down.

Q. I have a "pins and needles" sensation all over my body.  What do you recommend?

A. Acupuncture.

Q. I hear a ringing sound on and off.  What should I do?

A. Try answering the telephone.

Q. My doctor told me to buy Kentucky jelly for my condition.  I've been taking it three times a day per his instructions but it tastes terrible.  Is there a better tasting substitute?

A. That's KY jelly you've been eating.  You'd better speak to your doctor for more precise instructions on how to use it.

Q. It hurts me when I press my cheek.  It also hurts when I press my shoulder.   And it hurts when I press my knee, my groin, and my foot.  What could be wrong with me?

A. You have a broken finger.

Q. If I give up smoking, drinking, and rich food, will I live longer?

A. No. It will just seem longer.

Q. My child swallowed a dollar bill yesterday.  He seems okay.  What should I do?

A. Keep an eye on him and watch for any change.

My first legal tome, Rogak's New York Insurance & Negligence Law, is being sold on ebay now by an independent seller.   This is an all-encompassing, complete desk book for attorneys and claims people.  It covers all general liability, auto liability, labor law, literally everything that could be covered by an insurance policy.

Some lucky buyer could pick up this rare gem now..... http://cgi.ebay.com/Rogaks-New-York-Insurance-Negligence-Digest-1999_W0QQitemZ270229897434QQihZ017QQcategoryZ2228QQrdZ1QQssPageNameZWD1VQQcmdZViewItemQQ_trksidZp1638Q2em118Q2el1247

Defendants Dollar Rent A Car and Citiwide Auto Leasing moved for an order removing these three consolidated actions from Richmond County because plaintiffs Lenox Neuropsychiatry P.C., Tribeca Medical P.C., and Richard A. Hellander MD PC chose an improper venue.

"Plaintiffs commenced these actions in Civil Court, Richmond County to recover payments for no fault insurance benefits, based upon health services and treatment rendered by plaintiffs to three individuals who were insured under automobile liability insurance policies written by the three defendants.[1]   Defendants timely submitted their answers which contained a plethora of affirmative defenses," wrote the Court.

"By separate motions, defendants argue that venue is improper in Richmond County pursuant to New York Civil Court Act ("NYCCA") §305(a), which provides in part that if 'the plaintiff is an assignee of the cause of action, the original owner of the cause of action shall be deemed the plaintiff for the purpose of determining proper venue.' Defendants assert that the assignors have no connection with the County of Richmond as two of them reside in Kings County and one resides in Queens County. Venue in Richmond County, therefore, is improper 'ab initio' and venue should be moved to Kings County and Queens County where the three assignors live. Defendants also hypothesize that plaintiffs chose Richmond County for their own convenience since both defendant Dollar Rent A Car and defendant Dollar Rent A Car, Citiwide Auto Leasing maintain their places of business in Brooklyn, as set forth in plaintiffs' summons. Finally, defendants assert that plaintiffs have forfeited the right to select venue in an action by choosing an improper venue in the first instance."

"In response, plaintiffs submitted an ad from the Verizon Staten Island Yellow Pages listing 'Dollar Rent A Car' and a toll free 1-800 number through which one can make world wide reservations. The advertisement contains no address, much less a Staten Island address, for Dollar Rent A Car. Plaintiffs contend that this ad is sufficient to demonstrate that defendants 'transact' business within the meaning of Civil Court Act §305(b)."

"Defendants submit that this proof is 'inconclusive' on its face and fails to prove that defendants actually transact business in Richmond County. Rather, defendants maintain their place of business in Kings County at an address listed on plaintiffs' summonses and do not maintain any office or transact any business in Richmond County. Defendants also submit that there are numerous 'Dollar Rent A Car' businesses in New York State that operate independently of each other, as garnered from the NY State Department of State Corporation ("DOS") and Business Entity databases, and that the 'lone phone book listing' submitted by plaintiffs 'does not reflexively prove that the instant defendants are in any way affiliated with Dollar Rent A Car' or that they transact business in Richmond County. Simply sharing a moniker is not indicative that two entities are actually related. Defendants' computer search revealed six entities that contain the moniker 'Dollar Rent A Car', plus an appendage, such as Dollar Rent A Car Systems, Inc. or Dollar Rent A Car, Inc. , which either have an address in New York to which the DOS will mail process, or has a New York registered agent. In neither of these circumstances is a Richmond County address listed."

"Defendants' argument as to why venue should be changed is incorrect. The issue presented by this case is not where the assignor resides for purposes of establishing the proper venue for plaintiff, but rather whether sufficient evidence has been produced that Dollar Rent A Car and Dollar Rent A Car, City Wide Auto Leasing 'transact business' in Richmond County."

"Pursuant to Civil Court Act (CCA) §305(b), 'a corporation ...shall be deemed a resident of any county wherein it transacts business, keeps an office, has an agency or is established by law.' In the leading case of Mingmen Acupuncture v. American Insurance. 183 Misc 2d 270 (Civil Ct., Bronx Co. 1999), the court set forth that pursuant to article 3 of the CCA, venue of a proceeding is initially chosen by the plaintiff based upon the residence of one of the parties (CCA 310, 305), and that 'unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed'.  Furthermore, upon a motion to change said venue, defendant bears the burden of establishing that 'plaintiff's choice of forum is not appropriate or that other factors and circumstances require that venue be changed.'"

"In Mingmen, supra, the court exhaustively reviewed the 'numerous divergent decisions' on whether the phrase 'transacts business' in CCA §305 must be given the same meaning as that given to the same phrase in the long arm jurisdictional provision of CPLR 302(a)(1).  It found that the term 'transacts business' for venue purposes must be construed in a more liberal fashion since the CCA venue statute does not contain the requirement set forth in the long arm jurisdiction statute (CPLR §302(a)) that the cause of action must arise out of the transaction of business.  While the long arm jurisdiction under CPLR §302(a) mandates the existence of some articulable nexus between the business transacted and the cause of action sued upon, under CCA §305, there need not be a nexus between the cause of action in issue and the business transacted by the corporation in that particular county."

"This distinction, according to the court, is in line with the more liberal construction that must be accorded to venue rules, since venue - 'the permitted situs of a proceeding, assumes that the court already is possessed with the personal and subject matter jurisdiction.'  Furthermore, venue choice, unlike those involving the jurisdiction of the court, does not result in the enlargement or impairment of substantive rights or obligations, and the commencement of a proceeding in the wrong county does not result in the dismissal of the case.    The Mingman court also reiterated that it takes far fewer contacts with a forum to establish that a defendant has transacted business than it takes to establish that 'it is doing business."

In Mingman, the court found the following evidence to support the contention that the defendant regularly issued policies to and transacted business with residents in Bronx County: plaintiff identified five insurance policies with name, Bronx address and policy number. Furthermore, the defendant did not controvert either plaintiff's proof or its broader allegation that defendant regularly engages in all the other ancillary activities necessary to transact such business:  'solicitation of Bronx residents, issuance of insurance policies, collection of premiums, forwarding of invoices and other correspondence.'"

"Defendant has not specifically addressed this standard in claiming that venue should not rest in Richmond County. Plaintiffs, on the other hand, have merely proffered one page from the Verizon's Staten Island Yellow Pages which lists a 1- 800 number for Dollar Rent A Car. Based upon the evidence submitted it is impossible to assess whether defendants transact business in Richmond. At this point, the court denies the motion to change venue based upon the precedent that defendants bear the burden of establishing that plaintiffs' choice of forum is not appropriate. Defendants may, however, renew this motion upon a showing of evidence that addresses the aforementioned standards." 

Editor's footnote: [1] Citiwide Auto Leasing Inc. formerly did business as a Dollar Rent A Car franchisee.   The corporation has been self-insured for the greater part of the no-fault claims brought against it, and therefore there is no "policy" involved but rather just a statutory requirement that the company provide no-fault benefits.

Comment: What should have distinguished this case from the line of cases which hold that insurance companies may be sued in any county where they sell policies, is that this defendant does not sell policies; it only rents cars, and it does not do so in Richmond.    All the business it transacts, it does at its car rental locations, none of which are in Richmond.  I'm surprised this point was not made by defendant's counsel.

Larry Rogak

HOTEL'S NEW YEAR'S EVE EVICTION OF GUEST WAS NOT PROXIMATE CAUSE OF SUBSEQUENT ACCIDENT

Dagen v. Marriott International Inc.,  NYLJ 4/24/08 (USDC - NDNY) (Kahn, j)

Edited by Lawrence N. Rogak

Plaintiff Jeffrey Dagen made reservations and paid for two rooms at the New York Marriott Marquis in Times Square, New York City for the nights of December 31, 2004 and January 1, 2005 for a total cost of approximately $4,000.  Plaintiff and his four guests checked into the hotel and ordered food and alcoholic beverages from room service at several points during the evening of December 31st. Room service continued delivering the orders until shortly before midnight.  Following a disturbance in or around Plaintiff's rooms involving Plaintiff and his party, Plaintiff and his guests were told to leave the hotel and Plaintiff was escorted out of the hotel by police officers.   Plaintiff then proceeded to his pickup truck, parked in a parking garage about six or seven blocks away.   Plaintiff did not seek alternative lodging for the night.  Plaintiff did not stop to buy coffee, and never considered stopping in a coffee shop or similar establishment to rest.  Plaintiff left New York City and drove toward Latham, New York on the Taconic Parkway because he misread the signs to the Thruway, despite having traveled to New York City several times per year over the previous few years, including through the Taconic Parkway at least one or two times per year in 2003 and 2004.

Plaintiff drove approximately ninety miles on the Taconic Parkway without incident or difficulty and without stopping for coffee or rest or to seek lodging.    As he approached the exit ramp for the Town of Taghkanic, Plaintiff decided to exit the Parkway to get gas for his truck. After about 100 yards on the exit ramp, Plaintiff reached a slippery part of the road, lost control of the car and skidded off the exit ramp, ultimately hitting a tree.   Plaintiff admitted that he was driving at 65 miles per hour immediately before he attempted to exit the Parkway, or 10 miles over the speed limit.   The New York state trooper who responded to the scene found that the roadway conditions were wet and glistening and that Plaintiff was traveling at an unsafe speed for these road conditions.   

Plaintiff sued the hotel for personal injuries sustained in the collision on the theory of negligence. Defendants' moved for partial summary judgment seeks to dismiss the negligence claim.

The Court hels, "Under New York state law, actionable negligence requires injury to the person or property as the proximate result of the allegedly negligent act.  A party cannot be found liable unless the alleged negligence was a proximate cause of the accident.   Courts generally have found that the issue of whether a defendant's conduct was a proximate cause in bringing about the plaintiff's injuries is a question for the jury; however, where only one conclusion may be drawn from the established facts,  the question of legal cause may be decided as a matter of law.   Thus, where the cause of an accident is undisputed, the question of whether an act or omission of the defendant proximately caused it may be decided by the court as a matter of law.   The mere fact that a condition allegedly created by the defendant furnished the occasion for the plaintiff's injury is not sufficient to create a factual issue as to proximate cause."  

"When a defendant's action merely furnished the condition or occasion upon which plaintiff's injuries were received but did not put in motion the agency by which the injuries were inflicted, no liability will attach.   Courts have thus declined to impose liability where in essence, the accident happened as a result of the driver's failure to control his vehicle and the defendants' alleged negligence  merely furnished the condition or occasion for the occurrence of the event rather than one of its causes."

"In this case, the undisputed facts indicate that Plaintiff lost control of his car after hitting a slick spot on the exit ramp from the Taconic Parkway. Immediately before attempting to exit the Parkway, Plaintiff admitted he had been traveling at 65 miles per hour, or 10 miles over the speed limit, and the New York State Trooper who responded to the scene found that Plaintiff was traveling at an unsafe speed for the wet road conditions. The accident occurred about 3 hours after Plaintiff left the hotel and after he had driven over 90 miles on the Taconic Parkway without incident, without difficulty, and without deciding to stop to rest or buy food or coffee. Although it is true that 'but for' his eviction from the hotel, Plaintiff would not have been on the exit ramp that night, the eviction merely furnished the condition or occasion for the occurrence of the accident. Defendants' eviction of Plaintiff cannot be considered to be the proximate cause of Plaintiff's tires losing grip with the road and his skidding off the exit ramp three hours later." 

"The Court notes that there are different factual situations where the Defendants could have been liable for injuries to Plaintiff under the heightened duty of care standard applied to innkeepers. Nevertheless, although it might have been unwise for the Marriott to kick a guest out into the streets of Manhattan just before midnight on New Year's eve, Plaintiff's injuries were caused by a slick spot on the exit ramp which he approached at an unsafe speed, and which caused him to lose control of his car. Any alleged negligence by the Defendants was not a proximate cause of his injuries."

"Accordingly, it is hereby ORDERED, that the Motion for Partial Summary Judgment  is GRANTED..."

Larry Rogak

PARTY WHO FILES BOND TO FREE SEIZED BANK ACCOUNT DOES NOT OWE POUNDAGE TO MARSHAL

"We are asked to decide in this appeal whether the posting of an appeal bond by a judgment debtor after a marshal has executed a levy on the judgment debtor's assets constitutes affirmative interference with a marshal's collection process, entitling the marshal to poundage fees. We conclude that the posting of an appeal bond by a judgment debtor is not affirmative interference. Since the marshal in this case cannot show his entitlement either under CPLR 8012 or any judicially created exception, he is not entitled to such fees."

"Commenced in 1991, this action arises from rent strike litigation involving luxury apartments located in Manhattan. Ultimately the landlord, plaintiff Solow Management Corp., prevailed in this case and obtained final judgments for rent arrears against several tenants. On July 29, 2004, a separate judgment for attorneys' fees was entered in the amount of $655,241.10, including interest, against tenant defendants Debra Tanger and Steve Tanger. Shortly after the judgment was entered and pending its appeal to the Appellate Division, plaintiff began enforcement proceedings, which included the service of a restraining order upon assets held by Merrill Lynch Pierce Fenner & Smith, Inc., on behalf of the Tangers."

"Solow then requested that a New York City Marshal serve an execution upon Merrill Lynch. On August 17, 2004, non-party New York City Marshal Jerome Janof purportedly served execution upon Merril Lynch, levying against the Tanger accounts. The next day, August 18, 2004, the Tangers filed an appeal bond ^[FN1] with Supreme Court, thereby staying all proceedings to enforce the judgment pursuant to CPLR 5519 (a) (2). No monies were ever collected by the marshal pursuant to the levy, and on June 21, 2005, the Appellate Division reversed Supreme Court's award of attorneys' fees to plaintiff. In July 2005, the restraint on the Merrill Lynch accounts was lifted and the marshal released the assets, save $32,916.55, the amount of poundage fees claimed ^[FN2]. On September 13, 2005, the marshal moved, pursuant to CPLR 8012, for an order awarding him poundage and statutory fees, settling the amount of the fees, and for a determination of which party or parties should pay the poundage."

"Supreme Court held that the marshal was entitled to $32,916.55 in poundage fees and that the Tangers were liable for this amount. Supreme Court further held that the filing of an appeal bond after the marshal had levied upon the Tangers' assets amounted to affirmative interference with the marshal's collection efforts. The Appellate Division reversed the award, stating that, in making such award, Supreme Court had "erroneously concluded that defendants had affirmatively interfered with the collection process by obtaining a bond for their appeal of plaintiff's judgment against them." We granted leave to appeal and now affirm."

"In determining whether a marshal is entitled to poundage and at what percentage, CPLR 8012 (b) (1) provides that
'A sheriff is entitled, for collecting money by virtue of an execution, an order of attachment, or an attachment for the payment of money in an action, or a warrant for the collection of money issued by the comptroller or by a county treasurer or by any agency of the state or a political subdivision thereof, or for collecting a fine by virtue of a commitment for civil contempt, to poundage of, in the counties within the city of New York, five per cent of the sum collected and in all other counties, five per cent upon the first two hundred fifty thousand dollars collected, and three per cent upon the residue of the sum collected.'"^[FN3]

"Since the marshal here failed to actually collect any monies pursuant to his levy, in order to be entitled to poundage, he must show facts that fall within one of the two statutory exceptions. The statutory exceptions authorizing poundage despite noncollection of assets apply when: (1)'a settlement is made after a levy by virtue of an execution' or (2) when the 'execution is vacated or set aside' (CPLR 8012 [b] [2] and [3]). In Personeni v Aquino (6 NY2d 35, 37-38 [1959]), we stated that since 'the right of a Sheriff to collect and receive poundage is wholly statutory and because . . . the statutory exceptions authorizing poundage for noncollection . . . are in derogation of common law they therefore must be strictly construed."

"A third judicially created exception applies when there has been affirmative interference with the collection process, thus preventing a marshal from actually collecting the levied assets through some affirmative action ^[FN4]. It is this third narrow exception upon which the marshal here relies, claiming that the judgment debtor, the Tangers, interfered with his collection of monies pursuant to his levy upon the Merrill Lynch accounts by posting an appeal bond."

"It is undisputed that the underlying judgment was never collected by the marshal pursuant to his levy; neither has there been a settlement in this case, nor a vacatur or setting aside of the execution. Therefore, in order for the marshal to be entitled to poundage, he must show affirmative interference that prevented him from completing the collection process. In Flack v State (95 NY 461 [1884]), we stated that in order 'to bring the claim of a sheriff within the provisions of the statute, it is essential that he or she show either the collection of the moneys called for, or some interference by the plaintiff [judgment creditor] with his execution of the process that is equivalent thereto.'   Here, it cannot be said that the Tangers, as judgment debtors, affirmatively interfered with the marshal's collection process merely by availing themselves of the right to appeal and by the posting of an appeal bond. While there exists some Appellate Division authority establishing that a judgment debtor can also be found liable for poundage fees based upon affirmative interference, we need not reach that issue here ^[FN5]. We merely hold that the posting of an appeal bond by a judgment debtor cannot constitute affirmative interference with a marshal's collection process."

"We agree with the Appellate Division that the filing of an appeal bond pursuant to CPLR 5519 did not require vacatur of the marshal's levy but only requires that all enforcement actions be temporarily stayed until there has been a determination as to the merits of the appeal. Indeed, if the Tangers lost their appeal, the marshal's levy would still be intact and he would be free to complete the collection process. To hold otherwise would discourage litigants from seeking further judicial review lest they be charged with poundage fees."

"While we agree that the marshal is not entitled to poundage fees, we disagree with the Appellate Division's conclusion that the marshal could protect his right to poundage only by insisting upon an application to the court for release of the levied funds pursuant to CPLR 5204. CPLR 5204 states that,  'Upon motion of the judgment debtor, upon notice to the judgment creditor, the sheriff and the sureties upon the undertaking, the court may order, upon such terms as justice requires, that the lien of a money judgment, or that a levy made pursuant to an execution issued upon a money judgment, be released as to all or specified real or personal property upon the ground that the judgment debtor has given an undertaking upon appeal sufficient to secure the judgment creditor.'"

"Certainly a stipulation, signed by both parties and the marshal, to vacate the levy could have protected the marshal's rights. Then CPLR 8012 (b) (2), providing for poundage 'where an execution is vacated or set aside,' would apply. But here, the marshal could not gain the benefit of the statute by unilaterally releasing the assets without notifying his principal, Solow. Indeed if Solow refused to agree to release the levied assets, then the Tangers would have been free to seek such release pursuant to CPLR 5204."

"Accordingly, the order of the Appellate Division should be affirmed, with costs."

Footnotes

PROPERTY OWNER LIABLE FOR SCAFFOLD LAW CLAIM EVEN IF TENANT CONTRACTS FOR WORK WITHOUT OWNER'S KNOWLEDGE

"On this appeal, we conclude that a property owner is liable for a violation of Labor Law § 240 (1) that proximately caused injury to a worker even though a tenant of the building contracted for the work without the owner's knowledge. We therefore reverse the order of the Appellate Division and grant plaintiff partial summary judgment."

"Defendant Consolidated Investing Company owned a commercial building located at 423 West 55th Street in Manhattan. C2 Media, LLC occupied the 11th floor of the building under a lease assignment from the original tenant, Chroma Copy International ^[FN1]. C2 Media agreed to abide by the terms of Chroma's lease, including a provision that the 'tenant shall make no changes in or to the demised premises of any nature without Owner's prior written consent.'  In addition, a rider to the lease stated that 'all renovations, decorations, additions, installations, improvements and or alterations of any kind or nature in the Demised Premises . . . shall require the prior written consent of Landlord.'  The lease also contained an indemnification clause in favor of Consolidated and obligated the tenant to obtain comprehensive liability insurance coverage naming Consolidated as an additional insured."

"In January 2000, plaintiff Christopher Sanatass, a mechanic employed by JM Haley Corporation, was directed to install a commercial air conditioning unit for C2 Media, which had hired JM Haley without notifying Consolidated. Upon arriving at the work site, plaintiff installed air conditioning ducts and drilled holes into the 10-foot-high ceiling to affix rods designed to hold the 1,500 to 2,500 pound commercial unit. When plaintiff and a coworker hoisted the air conditioning unit about seven feet off the ground, one of the manual material lifts failed, causing the unit to drop and knock plaintiff to the floor. Plaintiff sustained injuries when the unit nearly crushed him."

"Plaintiff and his wife, suing derivatively, commenced this action against, among others, Consolidated and Chroma, alleging violations of Labor Law § 240 (1) and § 241 (6). Consolidated cross-claimed against Chroma and brought a third-party action against Chroma and C2 Media seeking contribution and indemnification. Consolidated and plaintiff each moved for summary judgment. In support of his motion, plaintiff offered the affidavit of a licenced professional engineer, who concluded that the two portable lifts used to hoist the air conditioning unit were inadequate and failed because they had a lift capacity of only 1,000 pounds."

"Supreme Court granted Consolidated's motion and dismissed the complaint. The Appellate Division, with two Justices dissenting, affirmed, reasoning that under Abbatiello v Lancaster Studio Assoc. (3 NY3d 46 [2004]) Consolidated was not liable 'because the air conditioning installation was performed without its consent and in violation of the lease' (38 AD3d 332 [2007])^[FN2]. Plaintiff appeals as of right to this Court pursuant to CPLR 5601 (a)."

"At the outset, Consolidated does not dispute that plaintiff was not afforded proper safety devices or that his injuries were proximately caused by the inadequate lifts. It nevertheless contends that our Court can resolve this case on a threshold issue by concluding that plaintiff's work did not constitute an alteration and, therefore, plaintiff was not engaged in an activity protected by Labor Law § 240 (1). We address this question first."

"It is now settled that the term 'altering' as used in section 240 (1) 'requires making a significant physical change to the configuration or composition of the building or structure' (Joblon v Solow, 91 NY2d 457, 465 [1998]. Conversely, an alteration 'does not encompass simple, routine activities such as maintenance and decorative modifications' (Panek v County of Albany, 99 NY2d 452, 458 [2003])."

"To illustrate, in Joblon we determined that the plaintiff electrician's installation of an electric wall clock, which required the chiseling a hole in a concrete wall to extend electrical wiring from an adjoining room, was 'significant enough' to come within the statute.  Similarly, in Panek, the removal of a pair of 200-pound air handlers, requiring preparatory work consisting of the dismantling of a number of components of the cooling system and involving the use of a mechanical lift, constituted a significant change as a matter of law."

"Here, plaintiff drilled holes and affixed metal rods into the ceiling and installed air conditioning ducts as preparatory work. He then attempted to install a 1,500 to 2,500 pound air conditioning unit using two portable manual material lifts, at which point he sustained injuries as a result of an elevation-related hazard — a falling object. This work comfortably satisfies the alteration standard set by Joblon and Panek as a matter of law. We now turn to the issue that divided the Appellate Division."

"Plaintiff argues that Consolidated is an 'owner' within the meaning of Labor Law § 240 (1) and that Consolidated is liable for a statutory violation despite its lack of notice or control over the work. Consolidated counters that the courts below correctly applied Abbatiello in holding that an out-of-possession owner who has no knowledge of the work being done on its premises cannot be held liable under section 240 (1). Relying on the lease provision obligating the tenant to obtain the owner's permission before hiring a contractor to perform any alterations, Consolidated asserts that the tenant's breach severed any nexus between itself and plaintiff."

"Labor Law § 240 (1), commonly referred to as the 'scaffold law,' provides, in relevant part:  'All contractors and owners and their agents, except owners of one and two-family dwellings who contract for but do not direct or control the work, in the erection, demolition, repairing, altering, painting, cleaning or pointing of a building or structure shall furnish or erect, or cause to be furnished or erected for the performance of such labor, scaffolding, hoists, stays, ladders, slings, hangers, blocks, pulleys, braces, irons, ropes, and other devices which shall be so constructed, placed and operated as to give proper protection to a person so employed.'"

"In 1969, the Legislature expanded the scope of responsible parties from persons 'employing or directing another to perform labor' to 'all contractors and owners and their agents.'   The legislative history reveals that this amendment was intended to place 'ultimate responsibility for safety practices at building construction jobs where such responsibility actually belongs, on the owner and general contractor' rather than on the workers themselves.   In broadening the protection afforded by the statute, the Legislature reemphasized that section 240 was enacted for the purpose of protecting workers."

"We do not write on a blank slate when interpreting Labor Law § 240 (1). Indeed, a number of well-settled principles provide us with guidance. We have repeatedly stated that Labor Law § 240 (1) 'imposes absolute liability on owners, contractors and their agents for any breach of the statutory duty which has proximately caused injury' (Gordon v Eastern Ry. Supply, 82 NY2d 555, 559 [1993]; see also Blake v Neighborhood Hous. Servs. of N.Y. City, 1 NY3d 280, 289 [2003]).  To be sure, we have cautioned that an owner is not 'an insurer after having furnished a safe workplace' and that an accident, in and of itself, does not establish a statutory violation (Blake, 1 NY3d at 286, 289). But at the same time, it is clear that the statutory duty imposed by this strict liability provision is 'nondelegable and that an owner is liable for a violation of the section even though the job was performed by an independent contractor over which it exercised no supervision or control' (Rocovich v Consolidated Edison Co., 78 NY2d 509, 513 [1991]."

"Additionally, section 240 (1) is to be construed as liberally as may be for the accomplishment of the purpose for which it was thus framed' (Panek, 99 NY2d at 457)."

"In a trio of cases, we examined the liability of out-of-possession owners under the Labor Law. First, in Celestine v City of New York (59 NY2d 938 [1983], a worker who sustained injuries while building a subway line commenced a Labor Law action against the Long Island Rail Road Company (LIRR), the property owner. LIRR moved for summary judgment dismissing the claim, submitting that it should not be deemed an 'owner' for purposes of Labor Law § 241 (6) because the property was subject to an easement in favor of the City of New York and the New York City Transit Authority ^[FN3]. In declining to dismiss the section 241 (6) claim, the court rejected LIRR's argument, reasoning that the statute imposes a nondelegable duty on owners to furnish adequate protection to workers 'regardless of the absence of control, supervision or direction of the work.'"

"Next, in Gordon, an employee of Ebenezer Railcar Services brought a Labor Law § 240 (1) action against Eastern Railway Supply, the property owner, seeking damages for personal injuries occasioned when he fell from a ladder. On a motion for summary judgment, Eastern contended that it could not be liable as an owner under section 240 (1) because it had leased the property to Ebenezer, its wholly owned subsidiary, and "neither contracted to have the work performed nor was the work performed for its benefit" (82 NY2d at 559). Relying on Celestine, we disagreed and concluded that Eastern was responsible because liability 'rests upon the fact of ownership and whether Eastern had contracted for the work or benefitted from it are legally irrelevant.'"

"Finally, in Coleman v City of New York (91 NY2d 821 [1997]), an employee of the New York City Transit Authority suffered elevation-related injuries while performing repair work and pursued a Labor Law § 240 (1) claim against the City of New York as the property owner. The City claimed that it should not be strictly liable because it had leased the property to the Transit Authority and 'lacked any ability' to protect Authority workers based on the statutory scheme creating the Authority and governing their relationship.  We rejected the City's position, finding that Celestine and Gordon articulated a 'bright line rule' that section 240 (1) applied to all owners regardless of whether the property was leased out and controlled by another entity or whether the owner had the means to protect the worker. In so ruling, we also disavowed Robinson v City of New York (211 AD2d 600 [1st Dept 1995]), which had restricted the City's liability as an owner under the Labor Law because it had leased property to the Transit Authority and had no actual or potential control over the worksite and retained a right of re-entry for non-transit purposes only.  We determined that it was for the Legislature, not this Court, to carve out exceptions to the broad reach of owner liability under section 240 (1)."

"Here, like the defendants in Celestine, Gordon and Coleman, Consolidated seeks to avoid liability under Labor Law § 240 (1) by contending that it is not an 'owner' for the purposes underlying the statute. Relying on its lack of knowledge of plaintiff's work, undertaken at the behest of the tenant, Consolidated asks us to import a notice requirement into the Labor Law or, conversely, create a lack-of-notice exception to owner liability. But our precedents make clear that so long as a violation of the statute proximately results in injury, the owner's lack of notice or control over the work is not conclusive — this is precisely what is meant by absolute or strict liability in this context. We have made perfectly plain that even the lack of  'any ability' on the owner's part to ensure compliance with the statute is legally irrelevant. Hence, Consolidated may not escape strict liability as an owner based on its lack of notice or control over the work ordered by its tenant."

"Consolidated's reliance on our recent decision in Abbatiello is misplaced. In that case, plaintiff, a cable repair technician, was dispatched by his employer to an apartment building owned by Lancaster Studio Associates in response to a complaint by one of the building's tenants. In the course of accessing a junction box on the exterior of the building, plaintiff's ladder bent, causing him to fall and sustain injuries. As a result, he commenced an action against Lancaster alleging a violation of Labor Law § 240 (1). Although we observed that Lancaster was unaware of and did not consent to the plaintiff's presence on the property, these facts alone were not determinative of our affirmance of the dismissal of the complaint."

"Rather, in Abbatiello we carefully distinguished Celestine and its progeny, noting that in those cases a nexus existed between the out-of-possession owner and the plaintiff, be it by lease, easement or some other property interest. In Abbatiello, however, the injured cable technician was on the property solely 'by reason of provisions of the Public Service Law.'  Our analysis emphasized that section 228 of the Public Service Law established mandatory access for cable repair workers and that, but for this statute, the plaintiff 'would be a trespasser upon Lancaster's property'.   Public Service Law § 219 also rendered Lancaster 'powerless to determine which cable company is entitled to operate, repair or maintain the cable facilities on its property, since such decision lies with the municipality — the franchisor'. We concluded that, absent an adequate nexus between the worker and the owner, the cable technician was not entitled to the extraordinary protections of the Labor Law since he was not an 'employee' for purposes of section 240 (1); as such, Lancaster could not be liable for his injuries. Contrary to Consolidated's argument in the present appeal, Abbatiello did not announce a new notice requirement for section 240 (1) cases."

"Consolidated posits that, as in Abbatiello, it has an insufficient nexus with plaintiff to support absolute liability. We disagree. Consolidated leased the premises to a tenant who, in turn, hired plaintiff's firm to install a commercial air conditioning unit. True, Consolidated inserted a provision in the lease agreement requiring its tenant to obtain written permission before performing any alterations to the property. But the tenant's breach of this lease clause — while it may have some bearing on Consolidated's indemnification claim — did not sever the nexus ^[FN4]. Plaintiff was specifically employed by the tenant to perform work in Consolidated's building and, as between the owner and the worker, section 240 (1) clearly places the burden on the owner should a violation of the statute proximately cause injury. Unlike the cable technician in Abbatiello, the plaintiff in this case was an 'employee' for purposes of section 240 (1) and cannot conceivably be viewed as a 'trespasser.'"

"At bottom, Consolidated asks us to hold that an owner may insulate itself from liability by contracting out of the Labor Law. We decline its invitation to engraft this new exception onto the statute. To allow owners to do so by the simple expedient of a lease provision, as suggested by the dissent, would eviscerate the strict liability protection afforded by the Labor Law. As we have repeatedly stated, section 240 (1) exists solely for the benefit of workers and operates to place the ultimate responsibility for safety violations on owners and contractors, not the workers. Any modification to this strict liability statute must be made by the Legislature, not this Court."

"Accordingly, the order of the Appellate Division, insofar as appealed from, should be reversed, with costs, defendants-respondents' motion for summary judgment as to the Labor Law § 240 (1) cause of action denied and plaintiffs' motion for partial summary judgment as to liability on such cause of action granted."

SMITH, J.(dissenting) :

"I dissent because today's decision unwisely and unnecessarily increases the already heavy burden that Labor Law § 240 (1) places on New York property owners." 

"The statute says that, with exceptions not relevant here, 'all contractors and owners . . . shall furnish or erect, or cause to be furnished or erected' safety devices 'which shall be so constructed, placed and operated as to give proper protection' to workers. The duty of contractors and owners to provide 'proper protection' is nondelegable (Rocovich v Consolidated Edison Co., 78 NY2d 509, 513 [1991]). Indeed, an owner cannot escape the duty imposed by the statute even by ridding itself of possession of the property; we have held that landlords of leased property are liable as owners under section 240 (1) (Coleman v City of New York, 91 NY2d 821, 823 [1997]; Gordon v Eastern Ry. Supply, 82 NY2d 555, 559-560 [1993])."

"We have never addressed, however, the situation of a landlord that did not try to delegate responsibility for worker safety to its tenant, but retained in the lease the power to provide protection for workers — only to have the tenant ignore the lease provision. Here, the lease specifically prohibits the tenant from hiring a contractor to make any alterations in the premises without the landlord's prior written consent. A representative of the landlord testified that if a request for consent had been made 'we would want to know who the contractor was and we would want the contractor hopefully to be someone that was known and approved by the owner.' Whether such an inquiry would have prevented what happened in this case — the hiring of a contractor with unsafe equipment — will never be known, because the tenant violated the lease and never gave the landlord a chance to make the inquiry."

"I do not see how the statutory goal of preventing workplace accidents is advanced by holding a landlord liable in a situation like this. What could anyone expect the landlord to do to prevent the accident, other than what it did?  'The point of Labor Law § 240 (1) is to compel . . . owners to comply with the law, not to penalize them when they have done so' (Blake v Neighborhood Hous. Servs. of N.Y. City, 1 NY3d 280, 286 [2003]). The result the majority reaches effectively treats this landlord 'as an insurer' — contrary to our view of the purpose of the statute as expressed in Blake."

"This result can be justified only by a literal, mechanical reading of the statute, to say that any 'owner' is liable whenever a worker is not given proper protection, and is injured. We rejected such literalism in Abbatiello v Lancaster Studio Assoc. (3 NY3d 46 [2004]), where a cable television repairman was held to have no claim against a building owner who did not know the repairman was there, and could have done nothing about it if it had. I think we should follow the approach of Abbatiello here, where the tenant's breach of the lease prevented the landlord from learning of the worker's presence, rather than expand our already draconian rules of Labor Law § 240 (1) liability."

JURY VERDICT FOR PLAINTIFF WHO FELL EXITING BUS IS OVERTURNED ON APPEAL

In this action to recover damages for personal injuries, the defendant New York City Transit Authority appealed from a judgment of the Supreme Court, Kings County (Schneier, J.), which denied defendant's motion pursuant to CPLR 4401 to dismiss the complaint for failure to establish a prima facie case, after a jury found it 100% at fault and award $200,000 for past pain and suffering and $800,000 for future pain and suffering.   The Appellate Division reversed, and dismissed the complaint.

"The plaintiff commenced this action based upon the allegation that she sprained her ankle when she stepped off a bus operated by the defendant New York City Transit Authority (hereinafter the defendant). According to the plaintiff, the defendant was negligent because she was required to disembark from the bus at a location where the surface of the street was raised and uneven. The case proceeded to trial on the issue of liability, and at the close of the plaintiff's case on the issue of liability, the defendant moved pursuant to CPLR 4401 to dismiss the complaint for failure to establish a prima facie case. The Supreme Court denied the motion."

"A motion for judgment as a matter of law pursuant to CPLR 4401 may be granted only when, upon the evidence presented, there is no valid line of reasoning and permissible inferences which could possibly lead rational persons to the conclusion reached by the jury upon the evidence presented at trial, and no rational process by which the jury could find in favor of the nonmoving party (see Szczerbiak v Pilat, 90 NY2d 553, 556).  In considering such a motion, the trial court must afford the party opposing the motion every inference which may properly be drawn from the facts presented, and the facts must be considered in a light most favorable to the nonmovant Hand v Field, 15 AD3d 542."

"Contrary to the plaintiff's contention, viewing the facts in the light most favorable to her, the evidence adduced at trial was insufficient to establish a prima facie case of negligence against the defendant. The photograph submitted by the plaintiff of the area in question does not show a foreseeable hazard for which liability can be imposed, and even if it did show such a hazard, the bus driver could not have observed it from his vantage point."

"Furthermore, the plaintiff failed to establish that the defendant's rules imposed a duty owed to her by the bus driver, as she did not introduce any testimony regarding industry standards and generally-accepted practices."

Larry Rogak

N.Y. Firm Pre-emptively Sues Secretary Who Threatened Rape Suit Against Partner

¶ 2 Nutkin's early life was spent in the state of ferrae naturae, in the state

taking or possession of game or wildlife".1 For some unexplained reason,

1     34 Pa.C.S.A. § 2307(a).

who posts their property." Id.

justice and again before the common pleas court in a trial de novo based

Order dated 11/21/03. This timely appeal followed.2

2The Commonwealth Court of Pennsylvania is conferred with jurisdiction over

Wildlife Code. Commonwealth v. Neitzel, 678 A.2d 369, 370 n. 2 (Pa.

Super. 1996) (citing Dickerson v. Commonwealth, 587 A.2d 379, 380-81

(Pa. Cmwlth. 1991)). See also 42 Pa.C.S.A. § 762(a)(2)(ii)

a de novo trial on a summary offense has been summarized as follows:

[An appellate court's review of a] de novo trial on a

Neitzel, 678 A.2d at 370 n. 2. See also Pa.R.A.P. 741(a) (stating that

Commonwealth v. Parks, 768 A.2d 1168, 1171 (Pa. Super. 2001)

over which our review is plenary. R.M. v. Baxter, 565 Pa. 619, 624, 777

(a) General rule.–It is unlawful for any person to

Commonwealth.–Nothing in this title shall prohibit

meaning." Grom v. Burgoon, 672 A.2d 823, 825 (Pa. Super. 1996)

R.M., 565 Pa. at 626, 777 A.2d at 451; 1 Pa.C.S.A. § 1903(a). "When the

be disregarded under the pretext of pursuing its spirit." Id. (citing Pa.C.S.A.

prohibited where: (1) the wild birds or wild animals are lawfully taken3

3 The word "Take" in the context of the Game and Wildlife Code has been

of tagging and marking is in "accordance with the laws of the state . . .

creates an exception. See Commonwealth v. DeFusco, 549 A.2d 140,

statute must prevail"); Lookenbill v. Garrett, 490 A.2d 857, 861 (Pa.

Super. 1985) ( same); Wernersville State Hospital v. Peters, 659 A.2d

Readers say: - "It's the Bible of our office!"

                           "I wish I had this book ten years ago!"  

                           "It's so easy to read and understand!"

The First Comprehensive Book on New York No-Fault Ever Published One New York judge has described no-fault litigation as a "Frankenstein monster." The Court of Appeals has called it a "Rube Goldberg-like maze." And everyone involved, from claims examiners to medical providers to the lawyers who practice it, call it a mess. Since 1974, attorneys, insurance carriers and claimants alike have struggled to understand the poorly-written no-fault regulations. Judges have struggled to interpret those regulations and decide cases based on those interpretations. While the New York State Insurance Department has provided some opinions for guidance, for the most part the bench and the bar have dealt with this field like a busy intersection without traffic signals.
	Lawrence N. Rogak: Insurance Lawyer Lawrence N. Rogak has been practicing insurance law since 1981. He has litigated and arbitrated over 7,000 no-fault claims. Mr. Rogak has also written hundreds of law-related articles for such publications as The New York Law Journal, Claims Magazine, Insurance Advocate, Risk Management Magazine, and his own daily newsletter, The Rogak Report. He also has a prior book, "Rogak's New York Insurance Law." Mr. Rogak felt that it was about time someone wrote a complete guide to New York no-fault.
	All the confusion now made simple... Lawrence N. Rogak has divided no-fault into 89 major topics and hundreds of sub-topics. For each, he has provided authoritative statutes, case law, arbitration decisions and Insurance Department opinions to explain the topic and guide the reader. Plus, he has added his own commentaries with his opinions, observations, and practice tips. As if that weren't enough, the book also contains the complete No-Fault regulations, the No-Fault statutes, and all the official forms. ROGAK'S NEW YORK NO-FAULT LAW & PRACTICE was released in March 2007 and is available for ordering online right now. CLICK LINK BELOW FOR ORDERING. You can EMAIL Lawrence N. Rogak at: InsuranceLawyer@...
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NO FAULT DEFENSE THAT SERVICES WERE PERFORMED BY INDEPENDENT CONTRACTOR IS NOT WAIVED BY UNTIMELY DENIAL

In this no-fault suit, plaintiff moved for summary judgment and defendant cross-moved for summary judgment on the ground that plaintiff was seeking to recover for services performed by an independent contractor. The Civil Court, Kings County, denied plaintiff's motion for summary judgment and granted defendant's cross motion for summary judgment dismissing the complaint. This appeal by plaintiff ensued.

The Appellate Term held, "Where a billing provider seeks to recover no-fault benefits for services which were not rendered by it or its employees, but rather by a treating provider who is an independent contractor, it is not a 'provider' of the medical services rendered within the meaning of Insurance Department Regulations (11 NYCRR) § 65-3.11 (a) and is therefore not entitled to recover 'direct payment' of assigned no-fault benefits from the defendant insurer (see Health & Endurance Med. P.C. v State Farm Mut. Auto. Ins. Co., 12 Misc 3d 134[A], 2006 NY Slip Op 51191[U] [App Term, 2d & 11th Jud Dists 2006]; Craig Antell, D.O., P.C. v New York Cent. Mut. Fire Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50521[U] [App Term, 1st Dept 2006]; A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 9 Misc 3d 36 [App Term, 2d & 11th Jud Dists 2005]; A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co., 8 Misc 3d 132[A], 2005 NY Slip Op 51111[U] [App Term, 2d & 11th Jud Dists 2005])."

"In the case at bar, the claim forms submitted by plaintiff in support of its motion for summary judgment state that the treating professional was an independent contractor and, in opposition to defendant's cross motion, plaintiff concedes that the services were rendered by an independent contractor. Contrary to plaintiff's contention, said defense is nonwaivable and not subject to the preclusion rule ( M.G.M. Psychiatry Care P.C. v Utica Mut. Ins. Co., 12 Misc 3d 137[A], 2006 NY Slip Op 51286[U] [App Term, 2d & 11th Jud Dists 2006]; Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc 3d 52 [App Term, 2d & 11th Jud Dists 2005]). As a result, the court properly denied plaintiff's motion for summary judgment and granted defendant's cross motion for summary judgment dismissing the complaint.  In light of the foregoing, we reach no other issue."

Larry Rogak

LATE VERIFICATION REQUEST DOES NOT RE-START STATUTE OF LIMITATIONS FOR NO-FAULT SUIT

This court decision addresses a truly novel perspective on the statute of limitations issue.  The question here was whether a verification request, sent by an insurer long after the regulations allow, re-starts the clock on the running of the statute of limitations for bringing a no-fault suit.  The answer, per the Appellate Term (reversing Judge Lebedeff's decision in Kings County), is that it does not; nor does the plaintiff's voluntary compliance with that request.

In this no fault suit, MVAIC moved for summary judgment on the ground that the action was barred by the statute of limitations.  Plaintiff mailed the claims to MVAIC on October 9, 2001.  MVAIC admitted receipt of the claims on October 12, 2001.   Neither side produced or alleged a timely verification request that would have postponed the payment due date.  "Accordingly, the payment due date must be deemed to have been in November 2001 that is, 30 days after receipt of the claims," stated the Court.

For some unexplained reason, MVAIC sent a verification request to plaintiff 17 months later.  Plaintiff argued that MVAIC's verification request of March 3, 2003 postponed the payment due date.   The Court disagreed: "It was submitted beyond the date when payment became overdue, and therefore could not toll the payment due date.  We disagree with plaintiff's position that its gratuitous compliance with a verification request issued beyond the payment due date, or its apparent willingness now to unilaterally waive the time limit for the sending of a verification request, can render a belated verification request timely and, ultimately, postpone the accrual date of its cause of action. Neither the relevant statute nor the applicable regulations provide for such a waiver."

"In view of the foregoing, we find that plaintiff's cause of action accrued in November 2001.  Because plaintiff did not commence this action until January of 2006, it was barred by the three-year statute of limitations set forth in CPLR 214 (2)."

"Plaintiff contends, in effect, that MVAIC should be equitably estopped from taking the position that its own verification requests were untimely. Plaintiff also takes the more general position that MVAIC should be equitably estopped from raising the statute of limitations as a defense here. These arguments are best understood in the context of MVAIC's stated position and its practice at the time plaintiff's claim was being processed, which were that neither the 30-day time period for payment or denial nor the time limit for verification requests...  began to run until an injured person was "qualified" by MVAIC pursuant to Insurance Law § 5202.   Hence, in MVAIC's view at the time, since the assignor was not qualified until February 21, 2003, its request for additional verification of March 3, 2003, was timely. Under this line of reasoning, since plaintiff did not provide requested additional verification until December of 2005, its cause of action would not have accrued before January of 2006, and its lawsuit would have been timely."

"In New York Hosp. Med. Ctr. of Queens v Motor Veh. Acc. Indem. Corp.,  12 AD3d 429 [2004], the Appellate Division, Second Department, rejected MVAIC's position that its obligations only began upon qualification of the injured person.  Thus, under New York Hosp. Med. Ctr. of Queens, plaintiff's cause of action accrued in November 2001. Plaintiff argues, in effect, that MVAIC should be equitably estopped from disavowing its own prior position. MVAIC's conduct was deceptive, plaintiff maintains, because MVAIC's administrative process led plaintiff erroneously to believe that it had an active pending claim up until it provided additional verification in December of 2005. Plaintiff contends that this mistaken belief on its part was the pivotal factor in its delay in bringing the instant suit."

"Even if it is assumed, arguendo, that plaintiff's contention raises some sympathy for its plight, this does not mean that the doctrine of equitable estoppel should be applied against MVAIC. In Airco Alloys Div. v Niagara Mohawk Power Corp. (76 AD2d 68 [1980]), the Court said:
'The elements of estoppel are with respect to the party estopped: (1) conduct which amounts to a false representation or concealment of material facts; (2) intention that such conduct will be acted upon by the other party; and (3) knowledge of the real facts.'  Plaintiff has not demonstrated that MVAIC had 'knowledge of the real facts,'  in particular, knowledge of the fact that plaintiff's cause of action was going to accrue before the qualification process was completed. Indeed, it seems obvious that MVAIC was not aware of this fact."

"Plaintiff has demonstrated no attempt on MVAIC's part to make false representations or conceal. Rather, MVAIC simply and openly followed its interpretation of the applicable law and regulations. Indeed, plaintiff could have challenged this interpretation at any time, as did the plaintiff in New York Hosp. Med. Ctr. of Queens....    MVAIC's administrative process here, although ultimately held inconsistent with the statutory scheme, did not amount by any stretch of the imagination to 'thievery.' Thus, we reject plaintiff's argument that MVAIC should be equitably estopped from raising a statute of limitations defense."

Larry Rogak

Oxford Health Plan a/s/o Martha Delgado v. State-Wide Insurance Co., 2008 NY Slip Op 31224(U) (Supreme Court, New York County) (Judge: Deborah A. Kaplan)

Edited by Lawrence N. Rogak

This subrogation action arose from a motor vehicle accident wherein a vehicle driven by Martha Delgado collided with another. Delgado, who claimed to have suffered spinal and other injuries in the accident, received no-fault benefits from her automobile liability carrier, State-Wide Insurance Company, for medical expenses incurred from the date of the accident, June 4, 2004, until October 5, 2004.  

State-Wide discontinued the benefits based upon a late notice of claim. Thereafter, Delgado's health insurance carrier, Oxford Health Plan, paid for her medical expenses, which included a spinal surgery. In August 2007, Oxford, as purported subrogee of Delgado, commenced this action against State-Wide to recover $30,518.97, the sum it paid for Delgado's medical expenses.

Oxford asserted two causes of action, one sounding in breach of contract and one sounding in unjust enrichment or equitable subrogation. Oxford moved for summary judgment on the issue of liability.

In support of its motion for summary judgment, Oxford argued that the defendant's discontinuance of Delgado's no-fault benefits based on a failure to give timely notice within 30 days was improper because the denial notice failed to provide "that late notice will be excused where the applicant can provide reasonable justification of the failure to givetimely notice." Oxford argued that the improper discontinuance was a breach of State-Wide's contract with Delgado which required it to pay no-fault benefits and Oxford's consequent payment resulted in State-Wide being unjustly enriched in the sum of $30,518.97.

The Court held, "First, Oxford does not and can not assert that it may proceed under 11 NYCRR 65-3.1 1 which provides, in relevant part, that 'an insurer shall pay benefits for any element of loss, other than death benefits, directly to the applicant or, ... upon assignment by the applicant ... shall pay benefits directly to providers of health care services." Oxford, as a health insurer, is clearly not a 'provider of health care services.' Indeed, the courts have consistently afforded the regulation a narrow construction."

"Contrary to Oxford's contention, it may not assert a breach of contract claim against State-Wide on behalf of Delgado. Oxford, of course, is not in privity of contract with State-Wide, and has not shown it was an intended third-party beneficiary of the contract. Indeed, both Oxford and State-Wide were both contractually obligated, under separate and distinct policies, to pay first-party benefits to Delgado. Thus, even assuming that Oxford established that it demanded payment and State-Wide refused to pay, Oxford may not maintain this cause of action against this defendant."

"...In Federal Insurance Co., v Spectrum Ins. Brokerane Services, Inc., 304 AD2d 316 (1st Dept. 2003), the First Department held that the plaintiff insurer may not maintain an action against its insured's broker since the insured suffered no loss as result of broker's alleged negligence in failing to procure sufficient coverage for the insureds as additional insureds. The Court stated that 'lt is clear that plaintiff as subrogee is seeking to recover for its own, and not its insureds' loss.'  The same applies to the instant case."

"Nor may Oxford maintain a claim against this defendant under the principle of subrogation. 'Subrogation, an equitable doctrine, allows an insurer to stand in the shoes of its insured and seek indemnification from third parties whose wrongdoing has caused the loss for which the insurer is bound to reimburse.' Kaf-Kaf, Inc. v Rodless Decorations, Inc., 90 NY2d 654, 659 (1997). This right of subrogation is based upon principles of equity and natural justice and is intended to prevent unjust enrichment."

"As such, where, as here, an insured is driving a car and is hit and injured by another driver and files a claim with her insurer, the insurer then has the right, under the common law of subrogation, to 'stand in the shoes' of the insured and seek recompense from the third-party tortfeasor for the amount paid to the insured so long as the insured has been made whole. ELRAC, Inc. v Ward, 96 N.Y.2d 58, 75-76 (2001) quoting North Star Reins Corp. v Continental Ins. Co., 82 NY2d 281 (1994)."

"Under these principles, the Court of Appeals has held that a health insurer may sue a tobacco company for injuries allegedly sustained by its insured from smoking tobacco products. In Blue Cross and Blue Shield of N.J., Inc. v. Philip Morris USA lnc., 3 NY3d 200 (20041, the Court found that while the insurer had no standing to sue under General Business Law § 349, a consumer protection statute, it was not precluded from recovering damages in an action in equitable subrogation."

"Similarly, plaintiff Oxford may have a subrogation cause of action against the individual whose vehicle struck Delgado's vehicle, the 'third-party tortfeasor' spoken of in the decisional authority. However, research reveals and Oxford cites to no statutory or decisional authority which would authorize it to maintain a subrogation action against State-Wide to recover the sums it was contractually obligated to pay to its insured, Delgado. To allow it to do so would create an entirely new right of action unsupported by the long settled subrogation principles."

"Accordingly, Oxford's motion for summary judgment on the issue of liability is denied."

Larry Rogak

INJURY DOES NOT "ARISE OUT OF" CONTRACTOR'S CONSTRUCTION OF STAIRS WHEN PLAINTIFF SLIPS ON MATERIALS PLACED THERE BY A DIFFERENT CONTRACTOR

Clayton Park Development, LLC, owner of real property situated in White Plains, New York, retained plaintiff Worth Construction Co., Inc. as general contractor for the construction of an apartment complex. Worth subcontracted with Pacific Steel, Inc. for construction of a staircase and handrailings. As part of the subcontract, Pacific provided commercial general liability insurance through defendant Farm Family Casualty Insurance Company naming Worth and Clayton Park Development as additional insureds.

Pacific's work at the site involved the fabrication and installation of a staircase, which consisted of steel pan stairs and handrailings. Each individual stair was comprised of two "stringers" (or sides) welded to a steel pan. After Pacific installed the stairs, the project was turned over to Worth, who hired a concrete subcontractor to fill the pans. Once the concrete had been poured and walls were erected around the stairs, Pacific was to return to the site to complete its portion of the project by affixing the handrailings to the walls.

In November 2001, after the stairs had been installed but before the walls had been raised, Michael Murphy, a journeyman iron worker employed by Fasciano Iron Works Inc., sustained injuries when he slipped on fireproofing that had been applied to the stairs by subcontractor Central Enterprises. Pacific played no role in either contracting for or applying the fireproofing, nor did it subcontract with Fasciano for the performance of any work at the site.

Murphy commenced a personal injury action against Clayton Park Development as owner of the premises and Worth as the general contractor. Because the complaint alleged that Murphy was injured on the staircase installed by Pacific, Worth forwarded a copy of the complaint to Farm Family demanding defense and indemnification under the terms of the policy. When Farm Family did not respond to Worth's demand, Worth commenced a third-party action against Pacific seeking contribution and indemnification.

Worth also commenced a declaratory judgment action against Farm Family, seeking defense and indemnification in the underlying action and reimbursement of attorneys' fees it had expended to date in defense of the action.

The additional insured endorsement states in pertinent part:

"WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured [Worth] but only with respect to liability arising out of your [Pacific's] operations or premises owned by or rented to you" (emphasis supplied).

Both parties moved for summary judgment in the declaratory judgment action. Supreme Court initially declared that Farm Family was obligated to defend and indemnify Worth under the terms of the policy and ordered it to reimburse Worth for the attorneys' fees it incurred in defending the underlying action.

However, while the parties to the declaratory judgment action were awaiting the court's decision in that action, Pacific moved for summary judgment dismissing Worth's third-party complaint in the underlying action. In its response to that motion, Worth conceded that any negligence claim it asserted against Pacific in the third-party action lacked factual merit and should be dismissed.

Once Supreme Court dismissed Worth's third-party action against Pacific, Farm Family moved to renew its motion in the declaratory judgment action, asserting that, by its admissions, Worth had conceded that Murphy's accident did not arise out of Pacific's work or operations. Supreme Court granted Farm Family's motion, modified its previous decision and held that Worth's concession that Pacific was not negligent established as a matter of law that Murphy's accident did not arise out of Pacific's operations and therefore Farm Family was not required to defend or indemnify Worth under the terms of the policy.

In a 3-2 decision, the Appellate Division modified the order of Supreme Court, holding that, based on the definition of "Your work" in the policy, it was immaterial, for purposes of deciding additional insured coverage, whether Pacific had completed the installation of the stairs, whether its installation was negligent or whether Pacific or one of its contractors was Murphy's employer. Rather, for coverage purposes, it was "sufficient that [Murphy's] injury was sustained on the stairs."  We now reverse and reinstate the order of Supreme Court awarding Farm Family summary judgment.

An insurer's duty to defend "arises whenever the allegations within the four corners of the underlying complaint potentially give rise to a covered claim" (Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175 [1997]). This standard applies equally to additional insureds and named insureds (see BP Air Conditioning Corp. v One Beacon Ins. Group, 8 NY3d 708 [2007]).

Here, the additional insured endorsement states that Worth is an additional insured "only with respect to liability arising out of [Pacific's] operations." The phrase "arising out of" has been interpreted by this Court to "'mean originating from, incident to, or having connection with, and requires only that there be some causal relationship between the injury and the risk for which coverage is provided.

Worth contends that the simple fact that Murphy slipped on the staircase establishes as a matter of law that his accident arose out of Pacific's work because the staircase was part of the "materials" that Pacific was utilizing to fulfill its subcontract. Generally, the absence of negligence, by itself, is insufficient to establish that an accident did not "arise out of" an insured's operations.  The focus of a clause such as the additional insured clause here is not on the precise cause of the accident but the general nature of the operation in the course of which the injury was sustained.

Here, it is evident that the general nature of Pacific's operations involved the installation of a staircase and handrails. An entirely separate company was responsible for applying the fireproofing material. At the time of the accident, Pacific was not on the jobsite, having completed construction of the stairs, and was awaiting word from Worth before returning to affix the handrails. The allegation in the complaint that the stairway was negligently constructed was the only basis for asserting any significant connection between Pacific's work and the accident. Once Worth admitted that its claims of negligence against Pacific were without factual merit, it conceded that the staircase was merely the situs of the accident. Therefore, it could no longer be argued that there was any connection between Murphy's accident and the risk for which coverage was intended.

Nor does the fact that the stairs constituted "materials, parts or equipment furnished in connection with [Pacific's] work or operations" under the "Your work" provision, entitle Worth to defense and indemnification where, as here, Worth conceded that the stairs themselves were not a proximate cause of plaintiff's injury.

Accordingly, the order of the Appellate Division, insofar as appealed from, should be reversed, with costs, and the order and judgment of Supreme Court should be reinstated. 

Larry Rogak

WORKER IS HURT PULLING WALLET OUT OF HIS BACK POCKET WHILE BUYING COFFEE; INJURY HELD TO BE WORK-RELATED

This was an appeal from a decision of the Workers' Compensation Board, filed February 21, 2007, which ruled, among other things, that the claimant's injury did not arise out of his employment and denied his claim for workers' compensation benefits.

On the morning of March 14, 2005, claimant, an electrician and covered salaried co-owner of Town & Country Electric, reported to work at 7:55 A.M., discussed work plans for the week with his partner, and loaded his work truck with supplies and materials. He then drove to the site of his assigned electrical job. On the direct route to the job site, claimant went to a drive-through window to purchase coffee and a muffin and, when he reached for his money in his back pocket, he felt a "pop" in his back and experienced pain radiating down both legs and, later, paralysis in his right leg. He was hospitalized and diagnosed with herniated disks and underwent emergency transpedicular diskectomies, or disk and fragment removal, and decompression.

Claimant, unable to return to work until September 12, 2005, filed a claim for workers' compensation benefits, which the employer's workers' compensation carrier disputed. Claimant testified at a hearing, submitted medical evidence in support of his claim from his treating neurosurgeon and underwent two independent medical exams.

The Workers' Compensation Law Judge determined that claimant's injuries were work-related and awarded him benefits. On the carrier's appeal, the Workers' Compensation Board reversed, finding that claimant had deviated from his employment when he went to the drive-through and, thus, his injury did not arise out of his employment. The Board also concluded that the record did not support a finding of occupational disease. Claimant appealed.

The Appellate Division held, "To be compensable, an injury must arise out of and in the course of employment (see Workers' Compensation Law § 10). There is no dispute that claimant's injury occurred during the course of his employment, given that he had reported to the employer's office, loaded his work truck with supplies and was en route to his designated job site and, as such, had started his work day (see Matter of Gutierrez v Courtyard by Marriott, 46 AD3d 1241, 1242 [2007]). Since the injury occurred during the course of claimant's employment, a presumption arises that it also 'arose out of' the scope of his employment, unless the presumption is successfully rebutted by substantial evidence to the contrary (Gutierrez v Courtyard by Marriott, 46 AD3d at 1242; accord Matter of Camino v Chappaqua Transp., 19 AD3d 856, 856-857 [2005]; see Workers' Compensation Law § 21).  Activities which are purely personal pursuits are not within the scope of employment and are not compensable under the Workers' Compensation Law, with the test being whether the activities are both reasonable and sufficiently work related under the circumstances (Matter of Vogel v Anheuser-Busch, 265 AD2d 705, 705 [1999] [citation omitted]; see Matter of Richardson v Fiedler Roofing, 67 NY2d 246, 249 [1986]; Matter of Pagano v Anheuser Busch, 301 AD2d 977, 978 [2003])."

"Although the question of whether an activity constitutes a purely personal pursuit is one of fact for the Board to resolve, the Board's decision will not be sustained if it is unsupported by the evidence in the record.  While the Board recognized that claimant's accident occurred in the course of his employment, it concluded that he had deviated from his employment when he stopped for coffee while en route to his job site and, thus, the injury did not arise out of his employment. We find, however, that substantial evidence did not exist to support the conclusion that claimant was involved in a purely personal pursuit, and conclude that the presumption that his injury arose out of his employment has not been rebutted by substantial evidence to the contrary. Importantly, momentary deviations from the work routine for a customary and accepted purpose will not bar a claim for benefits  (Matter of Richardson v Fiedler Roofing, 67 NY2d at 249) and accidents that occur during an employee's short breaks, such as coffee breaks, are considered to be so closely related to the performance of the job that they do not constitute an interruption of employment (Matter of Pabon v New York City Tr. Auth., 24 AD3d 833, 833 [2005]; see Matter of Caporale v Dept. of Taxation & Fin., 2 NY2d 946 [1957], affg 2 AD2d 91, 92 [1956]; cf. Matter of Marquis v Frank's Vacuum Truck Serv., Inc., 29 AD3d 1038, 1039 [2006]; Matter of Balsam v New York State Div. of Empl., 24 AD2d 802, 803 [1965] [the claimant deviated from approved coffee break])."

"Claimant's undisputed testimony is that he briefly stopped at the drive-through for coffee on his direct route to his assigned off-premises job site, as he had done in the past given the lack of a coffee maker at his office. This constituted a momentary and customary break which did not interrupt his employment and which can only be classified as reasonable and work-related under the circumstances, and substantial evidence was not adduced supporting the conclusion that it was a deviation from his employment so as to preclude compensation. As the presumption was not rebutted, claimant's injury must be found to have arisen out of and in the course of his employment. In view of the foregoing, claimant's remaining contentions need not be addressed."

Comment:  Once again, coffee proves to be a hazardous material.   Who would have thought that the act of reaching for one's wallet to buy coffee at a drive-through window could be a work-related injury?

Larry Rogak