New York Civil Law

New York Court of Appeals Grants Leave to Appeal In Supplementary Uninsured/Underinsured Motorist Dispute

Last Thursday, the New York Court of Appeals granted leave to appeal in Allstate Ins. Co. v. Rivera.  Rivera concerns the interpretation of the Supplementary Uninsured/Underinsured Motorists endorsement of Allstate's automobile insurance policy.  Allstate insured a vehicle that collided with a vehicle that was insured by a non-party insurer.

 Under the Allstate policy, the limits for both third-party bodily injury and for the supplementary uninsured/underinsured motorists endorsement were in the amount of $25,000 for each person and $50,000 for each accident, the same limits as in the non-party insurer's policy.  The non-party insurer paid the five occupants of the Allstate vehicle $50,000, thereby exhausting the policy.   Those occupants then sought additional funds under the SUM endorsement, apparently claiming that the non-party insurer had limits less than the Allstate policy because the non-party had paid the four passengers part of the policy limits.

The Appellate Division, Second Department rejected that argument, interpreting 11 NYCRR 60-2.3(f).  The Court reasoned that the non-party insurer's payments to an "other persons" injured in the accident did not reduce the amount of the bodily injury coverage provided by the non-party insurer to an amount "less than" the third-party bodily injury liability limit of the Allstate policy.

NYCL will keep you apprised of the appeal as it develops.

New York Court of Appeals Addresses "Law Office Failure" Excuse Within Context of CPLR 3404

The New York Court of Appeals addressed a CPLR 3404 recently in Okun v. Tanners.  In Okun, the "law office failure" excuse could not win the day for the plaintiff.  The case concerned CPLR 3404, which provides that after a case is struck from the calendar because of a missed calendar call, it must be restored within a year or will be dismissed as abandoned.

On November 11, 2002, the plaintiff in Okun commenced a breach of contract action against the defendant, and a note of issue was filed on July 23, 2004. On May 9, 2005, Supreme Court struck the action from the trial calendar based on the plaintiff's counsel's failure to appear at four pretrial conferences between January 26, 2005 and May 9, 2005.  On the same day the action was struck from the trial calendar, the defendant's counsel mailed a copy of the order to the plaintiff's counsel. 

In January 2007, the defendant moved to dismiss the action based on the plaintiff's failure to move to restore the action within one year, and the plaintiff cross moved to restore the action.  In support of the cross motion, the plaintiff's counsel stated that he had no notice of the May 9, 2005 conference, insinuated that he had no notice that the action had been struck from the trial calendar, and asserted that the “plaintiff never actively manifested an interest to abandon the prosecution of this matter.”  At oral argument on the motions, the plaintiff’s counsel offered the following excuse for the failure to prosecute: “[F]rom May 9th [, 2005] . . . what happened to this case can only be called law office failure. It just fell through the cracks.”

The Court of Appeals held that the plaintiff's conclusory and unsubstantiated claim of law office failure was not a reasonable excuse for 20-month delay in pursuing breach of contract action after it was struck from calendar.  The Court also held the plaintiff's inactivity between the time the action was marked off the calendar and defendant's motion to dismiss fails to rebut the presumption of abandonment that arose pursuant to CPLR 3404.

The Court’s terse memorandum opinion carriers several lessons.  First, a motion to dismiss the matter after the plaintiff has moved to restore the action to the calendar is unnecessary.  The action is dismissed by operation of law.  Second, a plaintiff will have to come forward with a legitimate excuse for his or her failure to restore the matter; the frequently tossed-around “law office failure” excuse does not cut it.

It's extremely helpful to read the Appellate Division, First Department's Majority and Dissenting opinions, here.

New York Court of Appeals Addresses Discovery Issues

The New York Court of Appeals this upcoming Session will address an issue of discovery in Those Certain Underwriters at Lloyds, London v. Occidental Gems, Inc.  The appeal concerns a Special Referee's recommendation (1) that the defendant business produce a witness (who lives in Belgium) for a deposition in New York, and (2) that the defendant business produce testimony and documents of a confidential arbitration proceeding in Belgium to which the defendant business is not a party.  The discovery dispute arises out of a declaratory judgment between an insurer and insured (the defendant business) regarding a claim for allegedly stolen diamonds.

Although the facts of the case appear to be fact-specific, the Court's decision on the appeal will no doubt expand on the sparse case law on discovery and deposition, specifically. 

New York Court of Appeals Addresses Certified Question Regard Insurance Policy's Notice Provision

This upcoming week, the New York Court of Appeals will address the following certified question in Briggs Avenue LLC v. Insurance Corp. of Hanover.  Here is the issue:

When an injured party begins its suit against an insured by serving process on the Secretary of State, who, under New York corporate and limited liability company law, is the insured's agent for such service, does this service suffice to trigger the provisions in the relevant insurance policy that require the insured to inform its insurer in a timely manner that a suit has been brought, where: (a) the insurance policy does not expressly refer to notice that a suit has been brought being (a) the insurance policy does not expressly refer to notice that a suit has been brought being given to an insured's "representative" rather than the insured itself, and (b) the insured plausibly argues that - due to its failure to update its address with the Secretary of State - it had not received actual notice that the suit had been brought?

Briggs Avenue LLC, the owner of an apartment building at 2570 Briggs Avenue in the Bronx, was informed when part of the ceiling in one of the apartments fell down in May 2003, but apparently it was not informed that Nelson Bonilla, the son of the tenant, had been injured.  Briggs did not notify its liability insurer, Insurance Corporation of Hannover (ICH), of the incident.  When Bonilla filed a $2 million negligence suit against Briggs in July 2003, he served the complaint on New York's Secretary of State, who serves as Briggs's agent for service of process under New York law.  The Secretary of State forwarded copies of the complaint to the address it had on file for Briggs, but the company did not receive them.  Briggs had moved its office and failed to advise the Secretary of State of its new address. 

Briggs became aware of the lawsuit in late March or early April of 2004, when Bonilla moved for a default judgment and directly served the papers on Briggs at its new address.  Briggs then notified ICH of the lawsuit.  ICH disclaimed coverage, contending that Briggs violated the notification conditions of the policy by failing to notify ICH for eleven months after the ceiling fell and eight months after the suit was filed.  The policy required Briggs to notify ICH "as soon as practicable of an 'occurrence' or an offense which may result in a claim," notify it "as soon as practicable" when a suit is filed, and "immediately" send ICH any papers received in connection with a lawsuit.

 

Excellent Article on Chief Judge Kaye's Responsibilities

Newsday published this excellent article on Chief Judge Judith Kaye's responsibilities as the Chief Judge of the New York Court of Appeals.  If anything, Chief Judge Kaye is downplaying the amount of work she puts into her job.

New York Department of Insurance Webcasts Today

I just learned today that the New York Department of Insurance will be providing a webcast today at 10:00 a.m. You can access the webcast here. Please excuse the appearance, I'm mobile blogging.

First Time New York State Bar Association Has Webcast of Section Executive Meeting

You are invited to view the Torts Insurance & Compensation Law Section in action. On October 7th (this Tuesday), the Section's Executive Committee will hold its quarterly meeting at the New York Bar Center. The first hour of this meeting will be broadcast over the internet and available for viewing at www.nysba.org/TICLWebcast.  To view the webcast, simply access the link above on the day of the meeting and follow the directions on the screen.

Among the items on the agenda will be the Section's consideration and proposal of legislation to amend Insurance Law 3420(d). Also known as the disclaimer statute, the Executive Committee will examine whether it should require a policyholder or claimant show prejudice when an insurer's disclaimer is late, but otherwise valid. The Executive Committee will also address adoption of a strategic plan, and upcoming Section events.

This will be the first webcast by any NYSBA Section of one of its events.