New York Insurance Coverage Law Update

September 1, 2010 | Insurance Coverage

Legal Bulletin

Court Upholds One-Year Time Limit For Suit Against Homeowners Insurer

A homeowner brought suit on March 26, 2010 to recover benefits under a homeowners insurance policy with respect to an alleged theft from her home on January 5, 2007. The insurer maintained that the action was time barred because it had not been brought within one year as required by the policy. In finding for the insurer, the court explained that the parties to an insurance contract may agree to a “shorter limitations period than that proscribed by law,” and that a “12-month limitations period in a policy has been found to be reasonable, valid and enforceable.” The court rejected the homeowner’s contention that the insurer had misled her into delaying institution of her suit. The court also rejected the homeowner’s contention that her bad faith claim survived. [Schindler v. Travelers Companies, Inc., No. 103947-2010 (Sup. Ct. N.Y. Co. Aug. 12, 2010).]

Allegations Sufficient To Find Obligation To Defend Additional Insured Under “Caused By” Provision

An employee of Metal Sales Company, Inc., who was working on the construction of the Manhattan Family Court building, brought a personal injury suit against the project’s general contractor, which then brought a third-party action against Metal Sales and W&W Glass Systems, Inc. The general contractor alleged that, in the event the general contractor was held liable for the injuries to the Metal Sales employee, such liability was caused by the negligence of W&W and/or Metal Sales, rendering these third party defendants liable to the general contractor. The insurance policy obtained by Metal Sales included an additional insured endorsement providing coverage “with respect to liability caused by your ongoing operations performed for that insured.” W&W claimed to be an additional insured under the endorsement. The court held that the allegations of the third-party complaint were sufficient to trigger the insurer’s duty to defend W&W. [W&W Glass Sys., Inc. v. Admiral Ins. Co., 2010 N.Y. Slip Op. 32120(U) (Sup. Ct. N.Y. Co. July 29, 2010).]

Assignor’s Failure To Timely File Claim With MVAIC Dooms Its Action

After a health care provider brought suit against the Motor Vehicle Accident Indemnification Corp. (MVAIC) to recover assigned first-party no-fault benefits, MVAIC moved for summary judgment on the ground that there was no coverage due to the failure of the provider or its assignor to file a timely notice of claim. The court explained that the filing of a timely affidavit providing MVAIC with notice of intention to file a claim was a condition precedent to the right to payment from it. Because the submissions in support of MVAIC’s summary judgment motion showed that the provider’s assignor had failed to timely file a notice of claim, and given that the provider failed to demonstrate that its assignor had sought leave to file a late notice of claim, MVAIC was entitled to summary judgment, the court concluded. [Central Radiology Servs., P.C. v. MVAIC, 2010 N.Y. Slip Op. 51454(U) (2d Dep’t App. Term. Aug. 12, 2010).]

Court Finds Additional Insured Coverage Under Policy of Claimant’s Employer

An electrician alleged that he was injured when he tripped while exiting the restroom at a construction project. He brought suit against the general contractor which sought coverage as an additional insured under the general liability policy of the electrician’s employer. The policy provided additional insured coverage where required by contract for liability arising out of the employer’s work. The court noted that its “earlier decision, saying that the provision in the purchase order regarding contractual indemnification is void against public policy, is not determinative of the validity and enforceability of the insurance procurement provision.” The court held that the claimant’s injury arose out of the employer’s work on the project and, therefore, the general contractor qualified as an additional insured. [Lehr Constr. Co. v. Continental Cas. Co., 2010 N.Y. Slip Op. 32165(U) (Sup. Ct. N.Y. Co. Aug. 13, 2010).]

In-House Counsel May Invoke Attorney-Client Privilege In Medical Doctor’s Suit Seeking Payment Of Disability Claims

Before his medical license was revoked, a medical doctor filed disability claims with a number of insurance carriers. The insurers denied the claims and the doctor filed suit. He deposed the in-house counsel for one of the insurers and objected when the outside law firm representing the insurer invoked the attorney-client privilege. The doctor contended that the attorney waived the privilege by answering some of the questions posed to him. The court rejected that argument, explaining that a blanket invocation of the privilege would have been improper and the insurer was “required to invoke it question by question.” The court also rejected the doctor’s assertion that the in-house counsel was working as a non-lawyer, finding that, viewing the lawyer’s role in the case and judging by his sworn testimony, he had “been consulted and provided services as an attorney, not as a non-attorney.” [Desai v. Provident Mut. Life Ins. Co. of Phila., 2010 N.Y. Slip Op. 32058(U) (Sup. Ct. N.Y. Co. Aug. 2, 2010).]

Reprinted with permission.  All rights reserved. 

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