NEW YORK—No Fault Insurance
The plaintiff's summary judgment motion was denied as the court determined the plaintiff did not establish its prima facie case entitlement to summary judgment. On appeal, the order was affirmed, but the court held that the plaintiff established its prima facie case, yet the defendant raised an issue of fact precluding summary judgment.
Thereafter, the plaintiff filed a second motion, pursuant to CPLR §3212(g), seeking an order deeming the facts necessary to demonstrate plaintiff's prima facie case was established in the action, and the plaintiff was entitled to such relief based upon the decision on appeal of the summary judgment motion determining that plaintiff established its prima facie case. The court granted the motion and the defendant appealed.
The court reversed on the ground that a summary judgment motion determined whether the evidence submitted entitled the moving party to summary judgment. The order does not determine that the facts were incontrovertible and were thus deemed established for all purposes in the action. The court reasoned, "the very shifting of the burden of proof upon a finding that a plaintiff has demonstrated its prima facie entitlement to summary judgment presupposes that the defendant, in opposition, might be able to rebut any aspect of the plaintiff's case." Therefore, the motion should have been denied. A.B. Med. Services, PLLC v. Utica Mut. Ins. Co. (N. Y. App. Term, 2d Dept., July 8, 2011).
Hurwitz & Fine P.C.
NEW YORK—Late Notice
In November 2005, Solar, an electrical subcontractor, contracted with West-Fair Electric to provide the electrical work for a construction project undertaken by plaintiff ECF School (ECF). Under the contract with West-Fair, Solar agreed to defend, indemnify and hold harmless ECF and the project manager, Tishman, as well as to procure insurance for both entities. Solar obtained a general liability policy through Great American and named Tishman and ECF as additional insureds on its Certificate of Insurance. The notice provision of the policy required all insureds to notify Great American of an occurrence and any ensuing claim or suit "as soon as practicable," and to immediately provide Great American with any legal papers in connection with a claim or suit.
On July 20, 2006, Best, a Solar employee, was injured at the project site when she tripped over an extension cord in an area where Solar had not yet started work. She was taken by ambulance to the hospital and was advised to remain out of work for over a month. Solar completed an "Employer's Report" and "Supervisor's 24-Hour Incident Report" detailing the accident and medical attention received by Best. Solar also faxed both reports to its workers' compensation carrier, individual insurance broker (not a Great American agent), and Tishman.
Best, Tishman, and ECF in June 2007 each served a third-party complaint on Solar, impleading it as a third-party defendant to Best's lawsuit. Tishman forwarded Best's lawsuit to Great American in June 2007, and Solar forwarded the third-party complaint to Great American in August 2007, along with a request for coverage per the general liability policy. ECF did not provide notice to Great American of the occurrence or underlying action until December 2007. Great American refused to provide insurance coverage to all three entities based on late reporting.
Solar failed to provide timely notice of the occurrence because it did not notify Great American until August 2007. Its contention that it believed that Best's exclusive remedy was under the Workers' Compensation Law was not reasonable under the circumstances. Further, it was not reasonable for Solar to believe that a claim for defense and indemnity would not be made by Tishman and ECF. Nat. Union Fire Ins. Co. of Pittsburgh, PA. v. Great American E & S Ins. Co.(N. Y. App. Div., 1st Dept., July 7, 2011).
Hurwitz & Fine P.C.
NEW YORK—D&O Coverage/ "Securities Claims"/Right To Associate Counsel
The Second Circuit has ruled in MBIA, Inc. v. Federal Ins. Co. (2d Cir. July 1, 2011) that a bank was entitled to D&O coverage for costs that it had incurred in responding to subpoenas from the New York Attorney General's Office. The court rejected Chubb's "crabbed" interpretation of a subpoena as a mere discovery device, holding that it fell within the policy's coverage for "formal or informal administrative or regulatory proceeding or inquiry" so as to constitute a covered "securities claim."
Furthermore, the court ruled that MBIA had not breached the "right to associate" clause by failing to inform its insurers of the addition of an independent consultant to assist with its consultations with the SEC until close to the eve of settlement. The Second Circuit observed that the insured had given early notice of the settlement discussions that allowed the insurers an opportunity to exercise their option to intervene and monitor these discussions and was not required to continue to issue futile invitations. The Court declared, "where the insured gives the insurer an invitation to associate with adequate information about the claim under consideration for settlement, the insured has done what is required under this clause. This is not to say that the right to associate is a one shot opportunity, but it is not the insured's duty to return to the non-participating insurer each time negotiations about the same claim take a new twist and ask if the insurer still wants to opt out. . . ."