New York Insurance Coverage Law Update

 Court, Not Arbitrator, Must Decide Whether Accident Involved an Uninsured Motorist

After Alexander Aizin was involved in a motor vehicle accident, he sought arbitration of his claim against his automobile insurer for uninsured motorist benefits. The insurer moved for a stay of arbitration, arguing that, based upon the police accident report, Aizin was not involved in a motor vehicle accident involving an uninsured motorist because both of the other vehicles had insurance coverage. Aizin contended that there had been a fourth vehicle involved in the accident that had struck his vehicle and left the scene. The court ruled that the issue of whether there was physical contact with Aizin’s vehicle by a hit-and-run vehicle was to be determined by the court, not an arbitrator, and it ordered a hearing on that issue. [Matter of Allstate Ins. Co. v. Aizin, 2013 N.Y. Slip Op. 00079 (App. Div. 2d Dep’t Jan. 9, 2013).]

Fraud Vitiates Coverage Under Art Policy, Court Rules 

Renaissance Art Investors, LLC, argued that a fraud exclusion in art policies issued by AXA Art Insurance Corporation did not bar coverage for its claim despite allegations that one of its principals had engaged in fraud because it believed that it was purchasing  “all-risk comprehensive cover-age that included coverage for fraud. The court disagreed, stressing that, as a matter of law, insurance coverage, even under an all-risk policy, extends only to fortuitous losses. [Renaissance Art Invs., LLC v. AXA Art Ins. Corp., 2013 N.Y. Slip Op. 00438 (App. Div. 1st Dep’t Jan. 29, 2013).]

No Coverage For Construction Worker’s Claim in Absence of Agreement Naming Property Owner an Additional Insured 

After the owner of a construction site was sued for injuries allegedly suffered at the site, the owner sought coverage as an additional insured under a policy that had been issued to a subcontractor’s supplier. The insurer disclaimed, and the owner sued. The trial court denied the insurer’s motion for summary judgment, and the appellate court reversed.  The appellate court explained that, under the policy, there had to be an express written agreement between the subcontractor’s supplier and the owner for the owner to be an additional insured. The appellate court rejected the owner’s argument that the title of a policy provision made the owner an additional insured, found that no agreement existed between the owner and the subcontractor’s supplier, and concluded that the insurer was entitled to summary judgment. [AB Green Gansevoort, LLC v. Peter Scalamandre & Sons, Inc., 2013 N.Y. Slip Op. 00031 (App. Div. 1st Dep’t Jan. 8, 2013).]

Insurer Rebuts Presumption that It Received a Copy of Default Judgment Against Its Insured 

The plaintiff sued Allstate Insurance Company in a direct action to satisfy a default judgment he obtained against Allstate’s insured in a personal injury action. 

The plaintiff alleged that the day after the judgment, his attorney mailed a copy to Allstate and that Allstate’s disclaimer was untimely.  The trial court denied the plaintiff’s motion for summary judgment, and he appealed. The appellate court affirmed. It found that Allstate had rebutted the presumption that it had received a copy of the default judgment by submitting an affidavit by its claims examiner detailing Allstate’s mail-handling and record-keeping procedures and denying that Allstate received a copy of the judgment or any notice of the underlying action until it was served with process in the direct action. [Brito v. Allstate Ins. Co., 2013 N.Y. Slip Op. 00144 (App. Div. 1st Dep’t Jan. 15, 2013).]

Insured’s Failure to Appear at EUOs Dooms Provider’s Suit for Assigned First-Party No-Fault Benefits 

After a healthcare provider sued an insurer to recover assigned first-party no-fault benefits, the insurer moved to dismiss on the ground that its insured had not appeared at scheduled examinations under oath (“EUOs”). The trial court ruled for the insurer and the provider appealed. The appellate court affirmed, finding that the insurer had demonstrated that its insured had failed to appear at the duly scheduled EUOs and, therefore, had failed to satisfy a condition precedent to coverage. [Flatlands Med., P.C. v. State Farm Mut. Auto. Ins. Co., 2013 N.Y. Slip Op. 50071(U) (App. Term 2d Dep’t Jan. 14, 2013).]