Nesmith v. Allstate

In this case, the Court of Appeals interpreted a “noncumulation clause” where members of different families were successively exposed to lead paint in the same apartment. Just as the Court similarly found in Hiraldo v. Allstate Ins. Co., the Court affirmed the Appellate Division’s ruling and held that the insurer’s maximum total liability is only one policy limit, even if the exposure happened to the children of different tenants during different tenancies.

Allstate Insurance Company issued a policy of liability insurance to the landlord of a two-family house in Rochester in September 1991. Within the policy, there was a “noncumulation clause” that stated there would be a limit of $500,000 in total liability, and “[a]ll bodily injury and property damage resulting from one accidental loss or from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss.” This policy was renewed annually in September 1992 and September 1993.

Felicia Young and her children lived in one of the two apartments in the house, and in July 1993, the Department of Health notified the landlord of the two-family house that one of Young’s children had an elevated blood lead level and that several areas in the apartment were in violation of State regulations governing lead paint. In August 1993, the Department notified the landlord that violations were corrected.

A month later, the Young’s moved out and Lorenzo Patterson, Sr. and Qyashitee Davis moved in to the apartment with their children. Once again, a child was found to have an elevated blood lead level and the Department of Health notified the landlord.

Nesmith brought this present action against Allstate for a declaratory judgment, claiming that a separate $500,00 limit applied to each family’s claim and that her grandchildren should receive an additional $350,000. While the New York Supreme Court granted the declaration, the Appellate Division reversed and held that the injury to Young’s children and Nesmith’s grandchildren resulted from “continuous or repeated exposure to the same general conditions,” so there was only one “accidental loss” within the meaning of the policy. This Court affirmed the Appellate Division’s ruling.

Nesmith argued that the injuries to her grandchild and Young’s child were separate losses since they did not result “from continuous or repeated exposure to the same general conditions.” The Court rejected this argument because while the children were not exposed to the exact same conditions, they were subject to the “general conditions.” Also, the record did not show that there were a new conditions since the landlord supposedly fixed the situation after being notified about Young’s child. The Court concluded that the landlord’s efforts were not completely successful, which caused the same general conditions to exist. Since the different children were exposed to the same general conditions, their injuries were part of a single “accidental loss” and only one policy limit is available to the two families.

24 N.Y.3d 520 (N.Y. 2014)

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Jones v. Town of Carroll

This appeal addressed the application of Town laws to Plaintiff’s land. In 1984, Plaintiff, Carol Jones (“Jones”), obtained a special use permit from Defendant, the Town of Carroll, allowing her to develop a construction and demolition landfill (“C & D landfill”) on her land. The Town’s Local Law No. I of 2005 (“2005 Law”) bars zoning ordinances being given retroactive effect against vested property rights. Town Local Law No. One of 2007 (“2007 Law”) is a health and safety regulation, prohibiting the construction of a solid waste management facility within the Town. The Court of Appeals found the 2007 Law not to be a retroactive zoning ordinance.

In Supreme Court, Plaintiff moved for summary judgment, alleging that the 2007 Law was arbitrary and capricious and that the law took her property without just compensation. Defendant responded that collateral estoppel applied, alleging that Jones I, also brought by Plaintiff against Defendant, was an action regarding the same issue. The Appellate Court reviewed whether collateral estoppel was appropriate.

In Jones I, the Court of Appeals determined whether the 2005 Law unconstitutionally deprived Jones of legal use of her land for a C & D landfill. It was held that the Law did not apply to the plaintiff since she had a vested right to use the land as a landfill before the zoning law was enacted. The Court of Appeals concluded that since the case from which this appeal stems, Jones II, involves the 2007 Law and not the 2005 Law, a different piece of legislation is at issue than in Jones I (57 A.D.3d 1379 (4th Dep’t 2008); 32 A.D.3d 1216 (4th Dep’t 2006). Therefore, the doctrine of collateral estoppel did not apply.

Addressing the merits of Plaintiff’s claim, the Supreme Court denied Plaintiff’s motion for summary judgment under the assertion that the 2007 Law was arbitrary and capricious. Plaintiff was found to have failed to demonstrate to the court that the Defendant’s actions were without legal justification. Plaintiff’s allegation that the 2007 Law took her property without just compensation was also rejected by the court, as she failed to show that a regulatory taking resulted from the law. It was noted that even if the 2007 Law had resulted in such a taking, declaring the law invalid, as Plaintiff sought, would not have been appropriate relief. Instead, a hearing to determine just compensation for the taking would have been proper.

The Supreme Court did not address Plaintiffs allegation that the 2007 Law was enacted in violation of the State Environmental Quality Review Act (“SEQRA”) after finding the law void as applied to Plaintiff. Because the issue was not addressed, the Appellate Court remanded the issue.

996 N.Y.S.2d 804 (4th Dep’t. 2014)

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Kimso v Ghandi

This appeal addresses a party’s ability to amend a pleading following trial and the full presentation of proof by both parties. Counterclaim plaintiff, Mahesh Gandhi and his two associates formed and held equal one-third interests in three corporations. The corporations were given a twenty million dollar loan from the U.S. Dept. of Housing and Urban Development (“HUD”), nine million dollars of that loan was loaned to the three associates as a shareholder loan—each associate made regular interest payments on that loan. Gandhi was removed as the corporations’ manager due to suspected misappropriation of funds. Gandhi filed a state action seeking to compel arbitration and the corporations filed a federal claim alleging multiple counts. Eventually, the parties reached a Settlement Agreement (“Agreement”) agreeing to end all actions and Gandhi sold his one-third interest, but no provision explicitly rid of Gandhi’s shareholder loan obligation.

The corporations stopped making payments to Gandhi after making twenty-three monthly payments during which Gandhi did not pay shareholder loan payments. The corporations filed an action seeking declaratory judgment to “offset the remaining amount they owed Gandhi under the Settlement Agreement against the money Gandhi owed the corporations on the shareholder loan notes.” Litigation continued, but both parties’ amended their pleadings. In the corporations’ amendment, they admitted they were “’joint and severally liable for the amounts due’. . .and ‘if Plaintiffs fail to make the full payments to Defendant as specified under Settlement Agreement, Defendant may allege that Plaintiffs are in default of the Settlement Agreement and that Defendant would be entitled to all his remedies.’” One month prior to trial, corporations filed motions to preclude Gandhi from presenting evidence/claiming payments due to him. The trial court deferred, but at trial allowed evidence about the agreement and back payments owed. Gandhi moved to conform the pleadings to align to the proof at trial, seeking to assert a counterclaim. The supreme court granted his motion, the corporations appealed and the appellate division reversed the trial court’s ruling—finding, the late amendment prejudiced the corporations. Gandhi appealed.

Here, the Court found that pursuant to N.Y. C.P.L.R. 3025, a party is permitted to amend a pleading “‘at any time by leave of court . . . before or after judgment to conform [the pleading] to the evidence.’” Furthermore, the Court found that where there is no prejudice to the party opposing the amendment, the court should grant leave to amend. The court has great latitude in exercising discretion over applications to amend pleadings and may only be reversed where there is an abuse of discretion. Here, the court found the appellate division did abuse its discretion because there was no prejudice to the corporations that would support a denial of Gandhi’s request to amend. The Court found that because the corporations had stated in their amended complaint that the sum of money they owed should be reduced by the money Gandhi owed them—explicitly addressing potential back payments—they were not permitted to allege prejudice from Gandhi’s demand for payments due to him. This is because “facts admitted in a party’s pleadings constitute . . .admission, and are conclusive . . .” Furthermore, the Court found that the corporations had elicited evidence that was the basis of Gandhi’s claim.

The Court reversed and remitted the case to the appellate division.

998 N.Y.S.2d 740 (N.Y. 2014)

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Town of Amherst v. Weiss

This appeal addresses the tolling of the statute of limitations in a legal malpractice action under the continuous representation doctrine. This appeal also considers whether an attorney who was hired by the Defendant-attorney to assist in the matter leading to the alleged malpractice had sufficient privity of contract with the client to be amenable to suit for legal malpractice as well. The Plaintiff, the Town of Amherst (the “Town”), hired the Defendant-attorney, Weiss, to investigate bringing disciplinary charges against one of the Town’s employees. Weiss then hired Gladl (together, “Defendants”), another attorney, to assist in bringing the charges. The two attorneys did work for the Town, including drafting the charges against the employee and presenting evidence on behalf of the Town at a disciplinary hearing before the Town Board. The hearing resulted in the termination of the employee, and the Defendants drafted the Town Board’s resolution to terminate the employee.

The employee challenged the termination, alleging that the Town Board had not properly appointed the hearing officer. The resolution and the first hearing were annulled, and a second hearing was required. The Town again retained the Defendants to represent the Town in the second hearing in order to, as stated by the court, “correct the legal error resulting in the need to nullify the first hearing and initial . . . terminat[ion of] the employee.” Town of Amherst v. Weiss, 120 A.D.3d 1550, 993 N.Y.S.2d 396, 399 (4th Dep’t. 2013). The Defendants prosecuted the employee at the second hearing and drafted another resolution. The employee challenged the second termination as well, and the Town again retained the Defendants to represent the Town and defend its decision to terminate the employee in a proceeding the Town expected the employee to initiate.

The Town sued the Defendants to recover the costs and expenses relating to the first annulled hearing, alleging that the Defendants were negligent in not advising the Town regarding proper appointment of the hearing officer. Defendant Weiss moved for summary judgment to dismiss the complaint, arguing that the action was time-barred by the three year statute of limitations for legal malpractice. Defendant Gladl moved to dismiss for the same reason, and also argued that he did not have sufficient privity of contract with the Town to be amenable to suit for legal malpractice. The Supreme Court granted Defendants’ motions for summary judgment. The Town appealed, and the Appellate Division, Fourth Department, reversed, holding that triable issues of fact existed as to whether the statute of limitations was tolled by continuing representation of the Town by the Defendants.

The court held that the Defendants’ doing work for the Town relating to the second hearing and resolution raised triable issues of fact as to whether that representation “‘pertain[ed] specifically to the matter in which [Defendants] committed the alleged malpractice[,]’” and therefore whether there existed continuous representation, tolling the statute of limitations. Weiss, 993 N.Y.S.3d at 399 (quoting Shumsky v. Eisenstein, 726 N.Y.S.2d 365, 369 (2001)). Had representation relating to the initial matter ceased after the first hearing, the statute of limitations would have run since the alleged malpractice was committed on the date of the improper first hearing. However, the court held that it could not say, as a matter of law, that the Defendants’ subsequent acts were not so interrelated to the initial matter as to constitute continuing and interconnected representation related to terminating the employee. Therefore, triable issues of fact existed as to whether the separate retainer agreements pertained to separate and distinct matters, or whether they pertained to the ongoing initial matter. Since questions existed on the issue, the court held that summary judgment was improper.

The court also held that the Town submitted enough evidence to raise a triable issue of fact as to whether there was actual privity of contract (or a relationship close enough to actual privity) between Gladl and the town to make Gladl amenable to suit, and that summary judgment on that ground was also improper.

993 N.Y.S.2d 396 (4th Dep’t. 2014)

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Grace v. Law

This appeal addresses whether a client’s failure to appeal the underlying action bars the client’s legal malpractice claim, an issue of first impression for the court. In October 2002, the plaintiff, John W. Grace began receiving treatment from Dr. Shoba Boghani for an eye condition at the Veteran’s Administration Rochester Outpatient Clinic. After Dr. Boghani cancelled the plaintiff’s July 2003 appointment, he was diagnosed with neovascular glaucoma during the next appointment, which was not until approximately one year later. This condition resulted in blindness in his left eye. After learning that the blindness may have been prevented if diagnosed sooner, the plaintiff hired defendants Robert L. Brenna, Jr. and Brenna, Brenna & Boyce, PLLC (the Brenna defendants) and initiated an administrative proceeding against the VA for its failure to reschedule an appointment sooner.

Delays in the proceeding led the Brenna defendants to recommend plaintiff retain Michael R. Law and Phillips Lytle LLP (the Law defendants) to pursue a medical malpractice action against the VA, but soon after the Law defendants initiated the action in federal court, they discovered a conflict of interest: Dr. Boghani was primarily employed by the University of Rochester, one of the their existing clients. Thereafter the plaintiff returned to the Brenna defendants for representation. The plaintiff added Dr. Boghani and the University of Rochester to the existing claim against the VA, but the United States District Court found that the action was time-barred and granted defendant’s motion for summary judgment. The court also found that since Dr. Boghani was an independent contractor, there was no jurisdiction for plaintiff’s claim that the VA Clinic was liable for the Dr.’s actions. The only surviving claim was that the VA was liable for medical malpractice for failing to reschedule the plaintiff’s appointment sooner.

After the Brenna defendant’s informed the plaintiff that success on this claim was unlikely, the plaintiff retained other counsel and brought an action in state court against the Brenna and Law defendants for legal malpractice for failing to bring suit against Dr. Boghani and the University in a timely fashion.

Here, the Court adopted the plaintiff’s “likely to succeed” standard in determining whether his claim was barred because of his failure to pursue an appeal for the underlying medical malpractice claim over the defendants “nonfrivolous or meritorious” standard, which would bar a legal malpractice claim when the plaintiff failed to pursue any appeal that a reasonable attorney would pursue. The Court held that the “likely to succeed” standard would require a plaintiff to, prior to commencing a legal malpractice claim, bring an appeal for the underlying action if he or she is likely to succeed on that claim; if not likely to succeed, the plaintiff would be free to pursue a legal malpractice claim without appealing the underlying action. Under this standard, the Court held that the defendants failed to meet their summary judgment burden, that the plaintiff raised a triable issue of fact regarding the statute of limitations, and affirmed the Appellate Division’s decision to deny the defendant’s motion for summary judgment.

997 N.Y.S.2d 334 (N.Y. 2014)

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Federal Rule of Criminal Procedure 5(D)

Effective December 1, 2014

Federal Rule of Criminal Procedure 5(d) describes the procedure for an initial appearance in a felony case. The rule has been amended to add an additional section to 5(d)(1), the section which describes what the judge must inform the defendant of. Prior to the amendment there were five subsections of Fed. R. Crim. P. 5(d)(1)(A-E), therefore the additional subsection (F) will make six. The amendment does not change any of the existing text of the rule, simply adds the language:

[T]hat a defendant who is not a United States citizen may request that an attorney for the government or a federal law enforcement official notify a consular officer from the defendant’s country of nationality that the defendant has been arrested–but that even without the defendant’s request, a treaty or other international agreement may require consular notification.

The need for the additional section that addresses defendants whom are not a citizen of the United States derives from Article 36 of the Vienna Convention on Consular Regulations as well as bilateral agreements with numerous countries. Although Article 36 states that arresting officers are primarily responsible, by incorporative the advice regarding notice into the initial appearance procedure, the goal is not to relieve those officers of the duty. Instead, it provides additional assurance that the United States’ treaty obligations are fulfilled, and makes a judicial record of them. The Committee concluded that the most effective and efficient way to provide this information is to ensure every defendant receives it. Although it is likely that only defendants whom are held in custody would make such a request, the language makes clear that every defendant should be afforded such advice.

Questions still remain as to whether Article 36 creates individual rights and or remedies that may be invoked in a judicial proceeding. This amendment does not address those questions, nor does it create said rights or remedies.

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Harwood v. Addison

This appeal concerns the termination of employment of a public employee. The Petitioner, Brenda Harwood, served as a senior account clerk typist in the City of Watertown’s Parks and Recreation Department. After a twenty-nine year career with the Department, the City brought incompetence and misconduct charges against Harwood, pursuant to Civil Service Law § 75. The Hearing Officer found that two of the charges could be sustained by the evidence, and found Petitioner guilty of one count of “fail[ing] to deposit cash and checks in a timely manner” and one count of “willfully misleading the City’s retained accountant.” The City also found that Petitioner was guilty of a second count of incompetence because she had “fail[ed] to bill for services in a timely manner.” Petitioner was found not guilty of the additional charges of incompetence and misconduct. As a result of the Hearing Officer’s findings, the City “terminated [Harwood’s] employment” with the Department. Petitioner filed suit in the Supreme Court pursuant to Civil Practice Law and Rules Article 78, and Supreme Court Justice Greenwood transferred this matter to the Appellate Division Fourth Department.

The Appellate Division reviewed each of the charges in turn, beginning with the Hearing Officer’s finding that Petitioner was guilty of “willfully misleading the City’s retained accountant.” The City alleged that Petitioner had been dishonest regarding a number of uncashed checks. However, the court found that evidence raised by Petitioner–namely, that she had previously stated that she had not deposited a check for the City–directly contradicted the City’s position that she lied about making the deposit. Therefore, the court found this count was “not supported by substantial evidence.”

The court next analyzed the remaining incompetence charges together, noting a number of mitigating factors in favor of a more lenient sentence for Petitioner. The court noted “that there were several factors beyond [Harwood’s] control that contributed in the delays” in making the deposits. Petitioner’s service to the City in her official capacity, although not named in her official job description, included a number of time-consuming clerical, scheduling, and other assorted responsibilities that “took in excess of 50% of her time.” Petitioner also suffered from an illness that forced her to intermittently miss work over a period of six months, and the court noted that because no one else in the office took over her assignments during that period, “several of [her] completed invoices were inadvertently deleted[.]” The court also relied on Petitioner’s “long service to the City and her previously unblemished work record[,]” the testimony demonstrating that “she was a hard worker and did her best to complete all of her assigned duties[,]” and that she often stayed late without extra pay to justify mitigating her sentence.

In assigning a proper sanction for Petitioner, the court explained that the initial punishment of termination was vastly disproportionate to the nature of the original charged offenses, noting the penalty was “so disproportionate to the offense, in the light of all of the circumstances, as to be shocking to one’s sense of fairness.” (citing Matter of Pell v. Board of Educ. of Union Free Sch. Dist. No. 1. of Towns of Scarsdale and Mamaroneck, Westchester Cnty., 313 N.E.2d 321, 326 (N.Y.1974)). Accordingly, the court found that a sentence of a two-month suspension without pay, rather than termination, was appropriate for the two remaining incompetence charges.

988 N.Y.S.2d 814 (4th Dep’t. 2014)

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Foots v. Consol. Bldg. Contrs., Inc.

This is an appeal and cross-appeal from three summary judgment rulings in a personal injury action. The plaintiff, James Foots, was an employee of the lessee, Sodexho, a commercial laundry business. As part of the lease, Grinder was responsible for structural improvements to the dilapidated building, and Sodexho was responsible for installing the industrial laundry equipment. Grinder hired RCM to manage the project, and subcontracted with Consolidated to construct repositories or linens. These repositories were four large pits, for which Consolidated also constructed wooden frames with plywood covers, in order for employees to safely push large laundry carts across the floor.

The plaintiff was injured in the course of his employment when he drove a forklift over a plywood-covered pit and the cover collapsed. He then sued 60 Grinder Street, LLC (“Grinder”); Rollins Construction Management, Inc. (“RCM”), Grinder’s agent; and Consolidated Building Contractors, Inc. (“Consolidated”), the subcontractor that constructed the pit and the plywood cover. In addition to a common-law negligence claim, the plaintiff sought recovery under Labor Law § 240(1), which required that the plaintiff be injured while erecting, demolishing, repairing, or altering the structure. He also sought recovery under Labor Law § 241(6), which required that plaintiff be injured while installing the industrial laundry equipment as part of the renovation. Lastly, he sought recovery under Labor Law § 200, which is not limited to construction work.

Defendant Grinder moved for summary judgment seeking to dismiss the plaintiff’s common-law negligence cause of action and his claims under Labor Law §§ 200, 240(1), and 241(6) claims. Grinder also moved for summary judgment on its cross-claims against Consolidated seeking contractual and common-law indemnification. The plaintiff moved for partial summary judgment on the issue of liability against Grinder for his Labor Law § 240(1) claim. Both Grinder’s motion and the plaintiff’s were denied, and both appealed. Consolidated moved for summary judgment and sought to dismiss plaintiff’s Labor Law §§ 200, 240(1), and 241(6) claims with respect to Consolidated. The trial court granted this motion, and plaintiff appealed.

The court held that none of the trial court’s rulings were error. Because Consolidated presented evidence that it had completed its contracted work and was not present on the work site at the time of the accident, and plaintiff failed to raise an issue of fact in this regard, Consolidated could not be held liable under any of plaintiff’s causes of action. Grinder failed to establish that Consolidated was negligent or that it exercised control over the injury-producing work, and therefore Consolidated was not required to indemnify Grinder.

The court further held that there were various issues of fact which made the denial of the other motions proper. The common-law negligence claim survived because there was an issue of fact raised as to whether Grinder had actual or constructive notice of the dangerous condition. For this same reason, and also because Grinder failed to establish that they did not control the work site, the Labor Law § 200 claim survived. The trial court properly denied both Grinder’s and plaintiff’s motions on the Labor Law § 240(1) claim because there were issues of fact whether the plaintiff was merely moving a “towel folder,” an activity not covered by this section, or whether he was making an alteration to the structure, which would have been covered. The same issue of fact precluded summary judgment on the Labor Law § 241(6) claim.

The court rejected any additional contentions of the parties and affirmed all the rulings of the trial court.

989 N.Y.S.2d 723 (4th Dep’t. 2014)

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In re: Thelen LLP

The Court of Appeals answers two certified questions that arose in two separate law firm bankruptcy cases, where the firms dissolved their partnerships. In Thelen, the partners included an “Unfinished Business Waiver” or “Jewel Waiver” in their partnership agreement. This waiver arose from Jewel v. Boxer, 156 Cal. App. 3d 171 (Cal. Ct. App. 1984) which held that absent an agreement to the contrary, profits derived from a law firm’s unfinished business are owed to the former partners in proportion to their partnership interests. Thelen’s bankruptcy estate attempted to recover the value of Thelen’s unfinished business for the benefit of the firm’s creditors. The estate argued that pending hourly matters were among a law firm’s assets.

In Coudert, the firm’s bankruptcy estate argued that the partners’ new firms were liable to Coudert for any profits derived from completing the client matters that they brought from Coudert to their new firms.

The court was asked by the District Court to answer two unresolved questions of New York law regarding the applicability and scope of the “unfinished business doctrine.”  First, is a client matter that is billed on an hourly basis the property of a law firm, such that, upon dissolution and in related bankruptcy proceedings, the law firm is entitled to the profit earned on such matters as the “unfinished business” of the firm? Second, if the first question is answered affirmatively, how does New York law define a “client matter” for purposes of the unfinished business doctrine and what proportion of the profit derived from an ongoing hourly matter may the new law firm retain?

The Court answered the first certified question in the negative and found it unnecessary to answer the second certified question.

The Court of Appeals held that law firms cannot have a property interest in future hourly legal fees because they are ‘too contingent’ in nature and too speculative to create a present or future property interest given the client’s right to hire and fire counsel. The dissolved law firm would only be entitled to the value of the case at the date of dissolution, with interest.

The Court discusses several public policy considerations for the ruling including encouraging client choice and attorney mobility. First, treating a dissolved firm’s pending hourly fee matters as partnership property would allow former partners of dissolved firms to profit from work they do not perform, at the expense of a former partner and his new firm. This creates an “unjust windfall” for the dissolved law firm. Additionally, it would encourage partners to leave their firms before dissolution, so they can keep the fees earned from client matters. Moreover, it would make it difficult for former partners to find new jobs if they must remit the profits from their work for existing clients to their old firms. Clients might also worry that their hourly fee matters are not getting enough attention if the law firm is prohibited from profiting from its work on them.  For those reasons the court held that no law firm has a property interest in future legal fees, and therefore those fees are not property under the unfinished business doctrine.

20 N.E.3d 264 (N.Y. 2014)

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Spoleta Construction, LLC v. Aspen Ins. UK Ltd.

This case on appeal concerns the notice provision of an insurance policy covering a third party contracted employee. The plaintiff in this case, Spoleta Construction, LLC, contracted defendant Hub-Langie Paving, Inc., to complete paving work on a construction job. Plaintiff was named as an additional insured of defendant’s policy. Defendant’s employee Shane VanDerwall (“VanDerwall”) was injured while working on the contracted job for plaintiff in October of 2008. VanDerwall commenced a negligence action against plaintiff and others following the incident. Plaintiff did not receive notice of the accident until December 2009, in a letter from VanDerwall’s attorney. In January 2010, plaintiff’s liability carrier sent a letter to defendant notifying it of VanDerwall’s claim, requesting that defendant put its own insurance carrier on notice. Plaintiff’s counsel then demanded that defendant defend and indemnify it in the underlying action. Defendant disclaimed coverage based on untimely notice.

Thereafter, plaintiff commenced a declaratory judgment action seeking a declaration that defendant provide insurance coverage to plaintiff in VanDerwall’s claim. Defendant moved to dismiss the complaint and the Supreme Court, Monroe County granted the motion. The Supreme Court Appellate Division, Fourth Department reversed the judgment and reinstated the complaint against defendant.

The court looked to the language of the insurance policy and noted that unambiguous provisions must be given their plain and ordinary meaning. Furthermore, in the face of ambiguity, the court noted that it must be construed in favor of the insured and against the insurer. In terms of notice, the court stated that notice requirements will be construed in favor of the insured with substantial compliance being sufficient.

The notice provision of defendant’s insurance policy detailed that the insurer has to be notified “as soon as practicable.” The court noted notice should include: how, when and where the accident happened; names and addresses of the injured and witnesses; and the nature and location of injury or damage that occurred. The court held that the December 2009 letter was a notice of an occurrence that could give rise to a claim, but not a claim under the policy. The court rationalized that the December 2009 letter was not a claim because it did not make any demand for payment nor advise that legal action was forthcoming. The court further held that the January 2010 letter constituted notice as soon as practicable to defendant, and that plaintiff was not required to provide notice so long as notice was given. Therefore, the court determined that the Supreme Court erred in dismissing plaintiff’s claim as a matter of law.

The dissent objected on the grounds that plaintiff failed to provide timely notice of an occurrence to defendant. The dissent sought to modify the judgment by denying part of defendant’s motion seeking to dismiss the declaratory judgment cause, reinstating that cause of action.  Further, the dissent would grant judgment to defendant by declaring that defendant had no duty to plaintiff. The dissent disagreed that plaintiff’s January 2010 letter to defendant constituted notice of an occurrence under the terms of the policy, reasoning the letter did not indicate that plaintiff was seeking coverage directly from defendant as an additional insured on the policy.

991 N.Y.S.2d 183 (N.Y. App. Div. 2014)

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