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Second Department recognizes degeneration as a basis to move for summary judgment July 25, 2018

Cavitolo v Broser, 2018 NY Slip Op 05442 (2d Dept. 2018)

“In opposition, the plaintiff failed to raise a triable issue of fact. The affirmation of the plaintiff’s expert failed to address the findings of the defendant’s examining radiologist that the magnetic resonance imaging of the plaintiff’s left shoulder, taken shortly after the accident, revealed only pre-existing degenerative conditions (see Franklin v Gareyua, 136 AD3d 464, 465-466, affd 29 NY3d 925, 926; Chery v Jones,62 AD3d 742, 742-743; Ciordia v Luchian, 54 AD3d 708, 708-709).”

Franklin is a First Department case.  Chery and Ciordia are Second Department  Pre-Pehrl cases from 2008 and 2009.  I sense the “affd” is what caused the Second Department to rejoin the other three departments in requiring an affidavit to meaningfully refer or rebut the  degeneration defense.

Bad Faith and Allstate July 21, 2018

Roemer v Allstate Indem. Ins. Co., 2018 NY Slip Op 05392 (3d Dept. 2018)

(1) “A covenant of good faith and fair dealing is implicit in every insurance contract and encompasses not only any promise that a reasonable promisee would understand to be included, but also that “a reasonable insured would understand that the insurer promises to investigate in good faith and pay covered claims” (New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995]; accord Bi-Economy Mkt., Inc. v Harleysville Ins. Co. of N.Y., 10 NY3d 187, 194 [2008]; see Gutierrez v Government Empls. Ins. Co., 136 AD3d 975, 976 [2016]). In turn, “consequential damages resulting from a breach of the covenant of good faith and fair dealing may be asserted in an insurance contract context, so long as the damages were within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting” (Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d 200, 203 [2008] [internal quotation marks and citations omitted]; accord Yar-Lo, Inc. v Travelers Indem. Co., 130 AD3d 1402, 1403 [2015]). As relevant here, to establish a prima facie case of bad faith, it must be established “that the insurer’s conduct constituted a gross disregard of the insured’s interests — that is, a deliberate or reckless failure to place on equal footing the interests of its insured with its own interests when considering a settlement offer” (Pavia v State Farm Mut. Auto. Ins. Co., 82 NY2d 445, 453 [1993]; see Smith v General Acc. Ins. Co., 91 NY2d 648, 653 [1998]). In establishing a claim for bad faith, although not an exhaustive list, “the courts will consider the facts and circumstances surrounding the case, including whether liability is clear, whether the potential damages far exceed the insurance coverage and any other evidence which tends to establish or negate the insurer’s bad faith in refusing to settle”

(2)  “Defendant contends that there is no evidence in the record demonstrating that it acted in bad faith or engaged in conduct constituting a gross disregard of its insured’s interests such that it established its entitlement to summary judgment dismissing the complaint. We disagree. In support of its motion, defendant submitted, among other things, a copy of plaintiff’s summons and complaint and plaintiff’s verified bill of particulars. A review of the insurance claim process as set forth therein demonstrates that, the day after plaintiff’s residence was destroyed by fire, plaintiff submitted a standard fire claim form notifying defendant of the loss and defendant thereafter commenced an investigation. While the investigation was pending, defendant advanced plaintiff $5,000 for the removal of debris from the property pursuant to its insurance policy. The Warren County Fire Investigation Office subsequently determined that the cause of the fire was accidental such that there appears to be no dispute that the accident is covered by the insurance policy. Additionally, for the following 12 months, defendant paid plaintiff for additional living expenses in accordance with the terms and coverage limits provided for in its insurance policy. When initial settlement negotiations thereafter proved unsuccessful, plaintiff commenced the appraisal process pursuant to the terms of the insurance policy, and each party thereafter hired their own independent appraiser to determine the amount of loss. In June 2011, the appraisers mutually agreed upon the amount of loss; however, on July 1, 2011 — 16 months after plaintiff’s residence was destroyed by fire — defendant unexpectedly disclaimed coverage on the basis that plaintiff did not have insurable interest in the property.

We find that defendant failed to present any admissible evidence in support of its motion to explain why, after 16 months of investigation (see generally Insurance Law § 2601 [a] [4]), it only disclaimed coverage after the parties’ independent appraisers had reached a mutual agreement as to the amount of loss incurred. At no point prior to paying plaintiff various benefits to which he was otherwise entitled under the insurance policy, or during settlement negotiations or the appraisal process, did defendant ever indicate to plaintiff that coverage might ultimately be denied because he was apparently not the titled owner of the property — a fact of which plaintiff avers he made his insurance agent aware prior to purchasing the subject policy.

1.5 million dollar scope and post-concussive injury July 21, 2018

Castillo v MTA Bus Co., 2018 NY Slip Op 05134 (2d Dept. 2018)

“The plaintiff further testified: “[The bus driver] just slammed me to the back . . . of the bus . . . . She drove away at a fast pace and that’s when I landed all the way to the back of the bus in a seated down position with my left leg under me.” According to the plaintiff, her fall was of sufficient force that she lost consciousness.”

“During the damages trial, the plaintiff submitted evidence that she sustained disc bulges in almost the entirety of her cervical spine—C2-3 through C7-T1—resulting in diminished range of motion. She also submitted evidence that she sustained lumbar disc bulges at L3-4 and L5-S1, resulting in left S1 radiculopathy, meaning that a loss of function in the S1 nerve caused weakness and loss of sensation in the plaintiff’s left leg. Further, the plaintiff presented testimony that she sustained torn lateral and medial menisci in her left knee, requiring arthroscopic surgery, and that she may need a knee replacement in the future. Moreover, according to the trial testimony, the plaintiff developed postconcussive syndrome following the accident, and she will experience the effects of postconcussive syndrome for the rest of her life.”

“The jury found that the plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d), and awarded her the sum of $500,000 for past pain and suffering and the sum of $1,000,000 for future pain and suffering over 10 years. On November 2, 2015, the Supreme Court entered a judgment in favor of the plaintiff and against the defendant in the principal sum of $1,500,000. The defendant appeals.”

“The award of damages for past and future pain and suffering did not deviate materially from what would be reasonable compensation”

Just let this one sink in for a little bit.

A new caveat on the one year period to enter a judgment July 21, 2018

Josephson v State Farms Ins. Co., 2018 NY Slip Op 51132(U)(App. Term 2d Dept. 2018)

“In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which granted a motion by defendant State Farm Insurance Company (sued herein as State Farms Insurance Company) to vacate a default judgment that had been entered on February 9, 2016, upon defendant’s failure to appear at a calendar call of the case on June 30, 2008, and to dismiss the complaint pursuant to CPLR 3215 (c) for failure to enter the default judgment within one year. Plaintiff did not rebut defendant’s motion papers by demonstrating that it had taken proceedings for the entry of a judgment within one year of defendant’s calendar default on June 30, 2008 (see CPLR 3215 [a]). As CPLR 3215 (c) provides that “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed,” the Civil Court did not abuse its discretion in [*2]granting defendant’s motion to vacate the default judgment and dismiss the complaint ”

We have seen the one year period to dismiss due to the failure to tale a default judgment when a  judgment it not taken within one year to answer or reply to a counterclaim.  This is a new twist.  When a calendar default occurs, the failure to enter a judgment within one year serves as an abandonment of the action.    I have never seen this one before but I will keep this case on my short list.

A declaratory judgment to nowhere July 21, 2018

Jamaica Wellness Med., P.C. v Mercury Cas. Co., 2018 NY Slip Op 51128(U)(App. Term 2d Dept. 2018)

Upon a review of the record, we find that, as the March 23, 2016 Supreme Court order in the declaratory judgment action merely awarded a default judgment to Mercury against Jamaica’s assignor, but did not declare the rights of Mercury as against Jamaica (see Hirsch v Lindor Realty Corp., 63 NY2d 878 [1984]; Suburban Bindery Equip. Corp. v Boston Old Colony Ins. Co., 150 AD2d 767 [1989]; Metro Health Prods., Inc. v Nationwide Ins., 48 Misc 3d 85[App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]), the Supreme Court order cannot be considered a conclusive final determination of Jamaica’s rights and, thus, can have no preclusive effect on the no-fault action at bar (see Promed Orthocare Supply, Inc. v AIG Advantage Ins. Co., 50 Misc 3d 128[A], 2015 NY Slip Op 51886[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; cf. Vital Meridian Acupuncture, P.C. v Republic W. Ins. Co., 46 Misc 3d 147[A], 2015 NY Slip Op 50222[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). Consequently, the Civil Court should not have dismissed the complaint based on the Supreme Court order. In light of the foregoing, we reach no other issue.

This embarrassment speaks for itself.