In Nick’s Brick Oven Pizza, Inc. v. Excelsior Ins. Co., 2009 NY Slip Opinion 20763 (2nd Dept. 2009), the court held that the defendants were obligated to defend and indemnify Nick’s Brick Oven Pizza, Inc. in an underlying action based upon the determination that the employee operator of the motor vehicle involved in the subject accident was a temporary worker who was thus not included in the policy definition of “employees” and therefore not an insured under the policy.

In State Farm Indemnity Co. v. Moore, 58 A.D.3d 429 (1st Dept. 2009), the court held that the insurer had met its heavy burden and demonstrated lack of cooperation on the part of its insured. The matter involved a claim for uninsured motorist benefits which was premised upon the offending tortfeasor’s insurer’s disclaimer of coverage based upon its insured’s lack of cooperation. In response to the demand for uninsured motorist arbitration, State Farm petitioned to stay the arbitration, contending that the offending carrier had not demonstrated its insured’s lack of cooperation.

I always enjoy a good intentional act case and Clayburn v. Nationwide Mutual Fire Insurance Company, 2009 WL 89067 (3rd Dept. 2009) is one. Although not articulating any novel law, the court held that the insurer had waived its right to rely upon the criminal act exclusion to its policy, as it had failed to cite the exclusion in its disclaimer, citing well established law regarding the required specificity in a disclaimer.

I apologize for my lack of blogging . . .things have been busy. I'll try to make it up to all. There have been lots of coverage decisions by our appellate divisions. We also welcome (?) the effective date of the Prejudice legislation, which applies to claims made under policies issued or renewed after January 17, 2009. Plans are also being made for the New York State Bar Association's Spring Coverage Seminar which will be held in May in 5 venues across New York and which will focus on Additional Insured Coverage Issues.

Answering a certified question from the 2nd Circuit, the New York Court of Appeals in Briggs Avenue v. Insurance Company of Hanover, 2008 WL 4934062 (2008) upheld the insurer’s disclaimer of coverage based upon the insured’s failure to provide timely notice of the lawsuit. The insured claimed that it was not aware of the lawsuit until approximately 9 months after the lawsuit was commenced when it was served directly with a default motion, prompting it to provide notice to its insurer.

In Home Depot USA, Inc. v. National Fire & Marine Ins. Co., 2008 Slip Opinion 07867 (2nd Dept. 2008), the court addressed Home Depot’s status as an additional insured on a policy issued by National Fire & Marine to the underlying plaintiff’s employer, Westward Contracting, Inc.

Trigger of Coverage

In City of New York v. Philadelphia Indemnity, 2008 WL 06792,(2nd Dept. 2008), the court held that the City had demonstrated its entitlement to a defense as an additional insured, citing well –established principles of contract interpretation and opining that the interpretation urged by the defendant reflected extremely narrow coverage and would rewrite the policy without regard to the plaintiff’s reasonable expectations as expressed in the contract between it and the named insured.

In Medrano v. State Farm Fire & Casualty decided by the 2nd Department on September 2, 2008, the court, not surprisingly, affirmed the trial court and held that the insurer was obligated to defend the insured under a homeowner’s policy based upon allegations of negligence in the underlying complaint.

As expected, New York's governor has signed into law the prejudice legislation discussed in earlier posts. It will effect claims made under policies issued or renewed 180 days after its signing.