New York Insurance Coverage Law Update

Assault And Battery Exclusion Bars Coverage Where Security Guard Allegedly Threw Glass At Plaintiff’s Face

After a fight broke out at the “Beauty Bar” in Manhattan, a woman sued Jinx-Proof Inc., contending that she had been injured when a security guard threw a glass at her face. Jinx-Proof’s commercial general liability insurer asserted that there was no coverage for the woman’s intentional tort and negligence claims because of the policy’s assault and battery exclusion. A declaratory judgment action ensued, and the court granted summary judgment to the insurer. The court explained that the pleadings demonstrated that the underlying incident fell within the assault and battery exclusion, which applied if no cause of action would exist but for the alleged assault and battery. [QBE Ins. Corp. v. Jinx-Proof Inc., 2011 N.Y. Slip Op. 32237(U) (Sup. Ct. N.Y. Co. Aug. 15, 2011).]

Absentee Homeowner Is Not Entitled To Defense Or Indemnity

A construction worker allegedly was injured while working at a house owned by the insured. The homeowner’s insurer dis-claimed coverage, asserting that the policy required that the insured live on the property to be covered but that she never resided there. Specifically, the policy excluded coverage for personal injuries arising out of premises that were not an “insured location,” which was defined as the dwelling “where you [the policyholder] reside and which is shown as the ‘residence premises’ in the Declarations.” The court found that the insured had intended to move to the property after it was renovated. It then ruled that because the insured was an “absentee owner,” the insurer was not obligated to defend or to indemnify the insured in connection with the worker’s claims. [Tower Ins. Co. of N.Y. v. Khan, 2011 N.Y. Slip Op. 32249 (U) (Sup. Ct. N.Y. Co. Aug. 12, 2011).]

 Default Judgment Against No-Fault Provider Dooms Its Action Against Insurer

After an insurer brought an action in the Supreme Court, Nassau County against a health care provider and obtained a default judgment, the provider sued the insurer in New York Civil Court to recover no-fault benefits for services it allegedly had rendered. The Civil Court dismissed the provider’s action on the ground of res judicata. [Altercare Acupuncture, P.C. v Utica Mut. Ins. Co., 2011 N.Y. Slip Op. 51639(U) (N.Y. Civ. Ct. Aug. 30, 2011).]

Assignors’ Failure To Attend Scheduled IMEs Dooms Provider’s Suit For No-Fault Benefits

After a health care provider sued an insurer to recover no-fault benefits, the insurer moved to dismiss on the ground that the plaintiff’s assignors had failed to appear for an independent medical examination (IME). The court determined that the insurer had sufficiently established that the IME notices had been timely sent to the plaintiff’s assignors, that they had failed to appear for the IMEs, and that denial of claim forms had been timely mailed in accordance with the insurer’s standard office practices and procedures. Explaining that an assignor’s appearance at an IME was a condition precedent to the insurer’s liability, the court concluded that the insurer was entitled to summary judgment. [Shoreline Healing Acupuncture Group, P.C. v. American Tr. Ins. Co., 2011 N.Y. Slip Op. 51531(U) (2d Dep’t App. Term Aug. 4, 2011).]

Federal Court Voids Apportionment Of Loss Clause In Fire Insurance Policy

After the insured sued for the full $14,388,000 policy limit under a fire insurance policy, the insurer moved to dismiss the complaint to the extent the insured sought recovery above the insurer’s 38 percent apportioned share of the loss under the policy. The insured countered that the policy’s apportionment of loss clause was void as a matter of law. The court voided the apportionment of loss clause in the policy, concluding that it had no real purpose other than to make a $5,467,440 policy appear to be a $14,388,000 policy. The court rejected the insurer’s contention that the apportionment of loss clause was analogous to a valid co-insurance clause under New York law, finding it “fundamentally different” from a co-insurance clause. It stated that a co-insurance clause involved a partial loss, not a total loss, and that unlike a co-insurance clause, which was designed to encourage homeowners to properly value their property, the apportionment of loss clause had no such purpose. [Quaker Hills, LLC v. Pacific Indemnity Co., No. 10 Civ. 421 (DAB) (S.D.N.Y. Aug. 15, 2011).]

 Reprinted with permission.  All rights reserved.