New York Civil Law

Appellate Division, Third Department Grants New Trial Regarding Ex Parte Communications With Plaintiff's Treating Physician

The New York Court of Appeals recently held in Arons v. Jutkowitz that a plaintiff who puts his or her physical or mental condition at issue must execute HIPAA-compliant authorizations.  This ruling allows defense counsel to conduct an ex parte interview with a a plaintiff's treating physician post-note of issue.  

What happens when defense counsel conducts an ex parte interview but does not seek HIPAA-compliant authorizations?

The Appellate Division, Third Department in Straub v. Yalamanchili recently affirmed a trial court's granting of the plaintiff's motion to set aside a jury verdict based on defense counsel's two ex parte interviews with the plaintiff's treating physicians without obtaining the plaintiff's authorization under HIPAA.  Notably, the motion to set aside the verdict was based on the interests of justice.  The Court noted that defense counsel, through the ex parte interviews, was able to obtain information that came as a complete surprise to the plaintiff's counsel and that plaintiff's counsel was unable to rebut.

New York Court of Appeals Addresses Insurance Law sec. 3420(d) Within Context of Insured Non-Cooperation

Plaintiffs' and defense attorneys struggle with the lack of defined time limits as applied to Insurance Law sec. 3420(d).  Section 3420 is the requirement in bodily injury and death cases that an insurer shall give an insured, injured person, or any other claimant written notice of a disclaimer or denial of coverage as soon as is reasonably practicable of the disclaimer of liability or denial of coverage .

In prior cases, the New York Court of Appeals has refused to set a bright-line deadline as it applies to sec. 3420(d).  What happens when the insurer is faced with an insured who is not cooperating in the defense of an action?  The lack of cooperation standard that an insurer must demonstrate is extremely high.  As such, a lot of time can pass before an insurer has enough evidence to demonstrate lack of cooperation.

The Court addressed that exact issue in Continental Cas. Ins. v. Stratford.  The case stemmed from a dental malpractice actions commenced against the insured Stratford.  The insured over a six-year period cooperated with his insurer only sporadically.  The Court held that there were issues of fact regarding the amount of time required for Stratford's insurer to evaluate his cooperation (or lack thereof) with the insurer.

A possibility exists that the reasoning in this decision applies beyond the non-cooperation context.  An insurer who can demonstrate a valid excuse for a disclaimer beyond the "industry-standard" 30-day time limitation can rely on this decision as additional support that the time limit is an elastic concept.

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.

New York Court of Appeals Will Address New York's No-Prejudice Rule

The big news regarding New York insurance law this past summer was that Governor Paterson signed a Bill eviscerating New York's long-standing no-prejudice rule (see Bill here: Download No-Prejudice.doc).

The New York Court of Appeals heard oral arguments in Sorbara Constr. Corp. v. AIU Ins. Co. yesterday regarding applying the no-prejudice rule where the insured failed to give timely notice to an excess insurer.  In Sorbara, the plaintiff became aware of its employee's accident and his ensuing lawsuit almost immediately, but did not notify defendant excess insurer for some 5½ years, until after the defendants in the underlying matter had instituted a third-party action against it.  The Appellate Division, First Department held that the insured's "protracted delay" relieved the insurer from defending or indemnifying the insured. 

Notably, the First Department held that notice under a workers' compensation policy (by the same insurer) does not constitute notice under a liability insurance policy.  The Court also noted that the plaintiff's own duty to provide notice to the excess insurer is not negated by the insurer's actual knowledge acquired from another source.

New York Civil Law will keep you apprised when the decision is handed down. 

New York Court of Appeals Addresses Partial Indemnification Provisions

This week, the New York Court of Appeals will address a long-awaited question: whether General Obligations Law sec. 5-322.1 allows for partial indemnification provisions.  In the Judlau v. Brooks Contracting, Inc., the Appellate Division, Second Department held that the statute does not contemplate partial indemnification provisions.

Judlau concerned an ironworker that Thunderbird Constructors, Inc. employed.  The ironworker was injured while working on an overpass in Queens, New York.  Thunderbird was the subcontractor for the project.  The general contractor had installed a safety cable to mark the end of the partially-dismantled overpass to prevent falls.  The injured worker grabbed the safety cable with his hand, but it gave way.  The worker fell 25 feet to the parkway below.  The worker sued the general contractor, and Supreme Court awarded him summary judgment on liability.

The general contractor commenced a third-party action against the subcontractor for contractual indemnification.    Supreme Court dismissed the general contractor's indemnification claim against Thunderbird upon finding that the general contractor had been negligent and its negligence was "a substantial factor in causing the accident."  It said, "[T]he court determines that the installation by [the general contractor] of a safety cable was done in an ineffective and unsafe manner because it broke.  The degree of negligence the court is not determining, but [the general contractor] is negligent at least to some degree, 1 percent, 10 percent, 20 percent, and ... is an active tort feasor, active negligence."  The court declined to consider partial indemnification. The Second Department affirmed, ruling the general contractor's indemnification claim was properly dismissed because the general contractor itself was found to be negligent.

NYCL will keep you apprised of the decision, which will likely be handed down in October 2008.

Insurance Coverage Opinion from Appellate Division, Third Department Raises Eyebrows

Back in 2005, the Appellate Division, Third Department in Elacqua v. Physicians' Reciprocal Insurers held that an insurer has a duty to inform its insured that he or she has the right to independent counsel paid for by the insurer where a matter concerns some covered causes of action and some that are not.  The Third Department recently had a chance to address a slightly different issue in Elacqua II.  The Third Department in Elacqua II held that the insurer's failure to inform the insureds that they had a right to select independent counsel of their choosing at defendant's expense pursuant to a company policy not to inform their insureds of that right constituted a deceptive practice under General Business Law sec. 349.

New New York Insurance Coverage Blawg -- Coverage Counsel

New Yorkers represent when it comes to the legal blogosphere.  Add another N.Y. blawger to the list: Roy Mura edits Coverage Counsel.  The blawg is case law focused and Roy is an experienced attorney, who offers his expertise to each post.  Please help me welcome Roy and Coverage Counsel to the blogosphere.

Tenuous Case of Respondeat Superior?

The decision in Campbell v. Munoz concerns an interesting fact pattern on whether an employee was acting within the scope of his employment when his actions allegedly caused the injury of the plaintiff.
The facts are odd.  The plaintiff injured herself while running away from a falling tree originating in her neighbor's yard.  Her neighbor's relative, the employee, was removing a tree free-of-charge.  The defendant Reliable Tree Service, Inc. allowed the employee to use its truck and equipment to perform the work.  Reliable also encourage the employee to engage two other crew members with the tree removal.

Nassau County, Supreme Court (Feinman, J.), concluded that an issue of fact existed as to whether Reliable's employees were engaged in the business of Reliable or acting within the express or implied authority of Reliable.

Recent New York Court of Appeals' Insurance Coverage Decision

The New York Court of Appeals decided Worth Contr. Co. v. Admiral Ins. Co. last week.  The issue on appeal addresses the interpretation of an additional insured endorsement, stating:

The additional insured endorsement of the Farm Family/Pacific policy provides in relevant part as follows: "WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you." Under paragraph 21 of the policy, the term "Your work" is defined to mean "(a) Work or operations performed by you or on your behalf; and (b) Materials, parts or equipment furnished in connection with such work or operations."

The plaintiff Worth Construction was general contractor on a construction site in White Plains.  Defendant Farm Family insured subcontractor Pacific Steel, hired by Worth to build a staircase.  Farm Family's insurance policy contains the already referenced additional insured endorsement covering Worth for liability arising out of its insured's operations at the White Plains project.

An injured worker, who was employed by a sub-subcontractor brought an underlying action against Worth in Westchester County for injuries allegedly sustained when he slipped on the stairs built by Pacific. At the time of the accident, Pacific had finished installing the metal pans on the stairs and was not scheduled to come back to the site to put up handrails until other trades had filled in the metal pans with concrete.  In the underlying Westchester action, Worth formally admitted that no negligence on Pacific's part contributed to the accident, resulting in Pacific's dismissal from the underlying action.

The Court of appeals reversed the Appellate Division's Order and reinstated the order of Supreme Court granting summary judgment to Farm Family.  Notably, the Court stated:

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.

Quick Post About Admissibility of Accident Report

Nunez v.  Levy is an interesting Labor Law case that contains an issue regarding the admissibility of  an accident report.  The defendants attempted to preclude the admission of the post-accident report into evidence because, among other things, it addressed opinions about post remedial repairs or measures.  Supreme Court, New York County held that the report was admissible, describing it as a post-accident evaluation of what caused the accident and how it occurred.