The 2nd Circuit Court of Appeals has certified to the New York Court of Appeals, the question of whether an insurer’s disclaimer should be sustained where the insurer cited the insured’s failure to comply with the policy condition requiring the insured to timely notify the insurer that a suit was commenced, but the insured did not receive the lawsuit until the default motion was made. Briggs Avenue, LLC v. Insurance Corporation of Hanover, (2008).

The long awaited decision of the New York Court of Appeals in Bi-Economy v. Harleysville, 2008 WL 423451 was issued on February 19, 2008. New York’s highest court held that under the circumstances presented, the insured had stated a viable claim for consequential damages in the breach of contract action, a departure from New York law. Previously, only New York’s 1st Department in Acquista v. New York Life Insurance, 285 A.D.2d 73 had recognized the availability of consequential damages for an insurer’s breach of the duty to investigate, bargain and settle claims in good faith.

In Cendant Car Rental Group v. Liberty Mutual, 2008 N.Y. Slip Op 01094, the Appellate Division 2nd Department on February 5, 2008 reversed the trial court and denied plaintiff's motion for summary judgment. Was this because of a novel argument not considred by the trial court? Read on.

Lewis Johs recently successfully litigated the inapplicability of an automobile policy to the acts of the insured in striking a number of pedestrians with his automobile in Manhattan. The insured struck some 27 pedestrians during two rampages with his motor vehicle on February 12 and 14, 2002. Relying upon a statement that the insured had given a detective several days after the incident and his conduct in driving his automobile at high speeds in an area crowded with pedestrians, the court noted that any reasonable person would expect such conduct to result in bodily injury.

In York Speciality Food, Inc. v. Tower Insurance Company of New York, 2008 NY Slip Opinion 00614 decided by New York's Appellate Division, 1st Department on January 31, 2008, the court held that notice by the insured provided 8 months after the loss was untimely as a matter of law, noting that the insurer was not obligated to demonstrate that it was prejudiced by the untimely notice, which as we know, will likely change when New York abandons its status as one of the few states that does not require such a showing by amending Insurance Law 3420.

In a disclaimer premised upon the insured's failure to cooperate in breach of policy conditions, the 2nd Department held the insurer had established its insured's failure to cooperate--no easy feat in New York-- but nonetheless held the carrier was obligated to defend and indemnify its insured in two underlying actions, finding the carrier's delay in disclaiming was unreasonable. In Continental Casualty v. Stradford, 2007 N.Y.

In yet another decision interpreting the “Earth Movement” exclusion under a homeowner’s policy, the Appellate Division, Second Department in Labate v. Liberty Mutual, 2007 N.Y. Slip Opinion 09366 (2nd Dept. 2007) held the insurer was entitled to summary judgement and an order dismissing the complaint, finding the damages sustained by the plaintiff were excluded by the policy’s exclusion for losses due to earth movement . . .

In Evangelos Car Wash v. Utica First, 2007 N.Y. Slip Opinion 09201, the Appellate Division Second Department held that the insured’s notice given three months after the loss, where the insured proffered no excuse for the delay, was untimely as a matter of law.

The Second Department in Bedessee Imports Inc. v. Cook, Hall & Hyde, Inc., 2007 NY Slip Opinion 09352 (2nd Dept 2007), affirmed the trial court’s grant of summary judgement to the plaintiff as against Cook, Hall & Hyde (CHH), noting that an agent or broker may be held liable under theories of breach of contract or negligence for failing to procure insurance, where the insured provides proof that the agent or broker breached the agreement to obtain insurance or failed to exercise due care in the transaction.

The Court of Appeals reversed the 2nd Department and held that a claimant must establish that they have sustained a serious injury in order to recover under a policy’s optional Supplementary Uninsured Endorsement (SUM). The Court relied upon Regulation 35-D, which was promulgated by the Insurance Department to interpret Insurance Law section 3420 (f)(2) and to establish a standard form for SUM coverage in order to eliminate ambiguity, minimize confusion and maximize its utility.