Drohan & Drohan llp Back to Table of Contents Home Page Insurance Update Vol. 1 No. 1 / January, 2000 For Drohan & Drohan LLP Corporate Insurance Clients Quick reference summary report of recent New York Trial Court and Appellate decisions involving insurance coverage, civil procedure and negligence.

Insurance Law Late Notice Defense Succeeds Insurer’s claim dismissed against excess insurers Civil Procedure Declaratory judgment inappropriate vehicle to determine future obligations under policy Amendment of Bill of Particulars permitted one month before trial Separate bill of particulars required for each defendant and need to provide calculation for special damages Amendment of Complaint to name correct defendant denied Negligence Issues of notice and expert reliability referred to Magistrate

Insurance Law Late Notice Tower Insurance Co. of New York v. Greenwich Street Meat & Food Corp. (January, 24, 2000, Third Department) Late Notice defense upheld where store owner failed to provide notice of a slip and fall accident on a timely basis. Store owner provided notice 16 months after the incident occurred. Court held that under the policy notice was to be provided as practicably as possible. By failing to provide notice on a reasonable basis, Tower was prevented from properly investigating incident. In addition, the Court held that even if prejudice was lacking, a failure to satisfy the late notice requirement vitiates the policy. The insurer need not show prejudice before it can assert the defense of noncompliance with a policy provision. Late Notice Liberty Mutual Insurance Co. v. Prudential Insurance Co. (December 28, 1999, First Department), involved a declaratory action by Liberty against two excess insurers for indemnification in connection with an accident in which Liberty paid in excess of “step down” coverage. The Court noted that an insurer [plaintiff] has a right of subrogation, but no such right exists against the insured for a claim arising from the covered risk. The Court granted summary judgment to defendants, citing the anti-subrogation rule. Civil Procedure Declaratory Judgment In National Union Fire Insurance Co. v. Red Apple Group (October 25, 1999, First Department) the Court granted plaintiff’s motion to dismiss holding that where a plaintiff has an adequate alternative remedy, a declaratory judgment action does not lie. Plaintiff sought declaration as to future coverage of indemnification agreements entered into by its insured. A dispute over an indemnification agreement existed between the insured and its commercial property lessor. In so holding, the Court noted that an insured is not in a confidential relationship with their insurer. A failure to disclose facts relating to indemnification does not necessarily give rise to a claim for fraud or fraudulent concealment, in particular where the insurer has the opportunity to seek the undisclosed information. In this case, one of the individual defendants had misstated facts during a deposition in the underlying dispute. Since the defendant had not misstated facts to the plaintiff insurer, plaintiff could not rely on such misstatements to limit coverage. Bill of Particulars In Levitt v. 643 Broadway, Inc. (December 9, 1999, Second Department), the Court permitted an amendment of the bill of particulars and service of an expert medical exchange one month prior to trial. The action involved personal injuries sustained by plaintiff when she slipped and fell from a top step of a stairway in defendant’s premises. Defendants argued that permitting the amendment of the bill of particulars would severely prejudice the defense, as it proffered an entirely new theory of liability. The initial expert affidavit was provided in opposition to defendants motion for summary judgment, and alleged a defective condition concerning the angle of the step and violation of Section 27-375(e) of the Administrative Code. Plaintiff then made a cross motion to amend the bill of particulars in accordance with the expert affidavit. In permitting the amendment, the Court held that notice of slippery and hazardous condition of the step had been alleged in plaintiff’s prior bill of particulars, although no mention of an Administrative Code violation had been made. In addition, the Court denied defendant’s motion for summary judgment since there were issues of fact as to notice and whether the defendant created the condition based upon the plaintiff’s expert’s affidavit. There was proof that defendant had renovated the building some time earlier. Bill of Particulars In Murphy v. Hoppenstein (January 25, 2000, First Department), the Court held Plaintiff was required to serve a responsive bill of particulars for each defendant and to specify the manner in which special damages were calculated. Plaintiff had provided one set of bill of particulars for all defendants and failed to provide proper calculation for special damages of $200,000. Court noted object of Bill of Particulars was to amplify the pleadings, limit the proof and prevent surprise at trial. Amended Complaint In Yi v. ITT Sheraton Corp. (December 9, 1999, Second Department), the Court denied plaintiff's motion to amend the complaint for a third time to name the correct defendant. The action involved personal injuries sustained at the Sheraton La Guardia East Hotel. Plaintiff had incorrectly listed plaintiff as ITT Sheraton Corporation d/b/a Sheraton La Guardia East Hotel. Plaintiff sought to amend the caption to read Sheraton La Guardia East Hotel. In opposition, defendants demonstrated that they had informed plaintiff nearly two years earlier that Sheraton La Guardia East Hotel was but a trade name. The Hotel was operated by Cooper Investors, Inc. Despite this, plaintiff had failed to amend the caption to include Cooper. In reply to defendant’s opposition, plaintiff then sought to amend the caption to include Cooper. In denying plaintiff’s motion, the Court noted that in determining whether to allow an amendment pursuant to CPLR 3025(d), the Court should consider how long the party was aware of the facts upon which the motion was predicated and whether a reasonable excuse was proffered. Since plaintiff was aware of the correct defendant for nearly two years, and had failed to provide a reasonable excuse as to why the caption was not amended, the Court refused to allow the amendment. Negligence Slip and Fall In Stevenson v. British Airways (December 9, 1999, United States District Court, Eastern District) defendant’s moved for summary judgment alleging that plaintiff had failed to prove a prima facie case of negligence. Plaintiff alleged that she slipped and fell while walking in the British Airway terminal at John F. Kennedy Airport. Plaintiff hired an expert after seeking an adjournment of the motion for summary judgment. The expert submitted an affidavit stating the annual stripping of the terrazzo floor was “insufficient in frequency”, causing a wax buildup. The plaintiff additionally cross moved to permit the late exchange of the above expert report. Defendant argued that the affidavit was served untimely and should not be considered. The Court denied both motions with leave to renew, instead referring to a Magistrate Judge the issue of whether plaintiff’s expert affidavit was untimely, and if the opinion was reliable. This was done in accordance with the recent Kumho Tire Company LTD v. Carmichael case, 526 U.S. 137, 119 S. Ct. 1167 (1999) case holding that a trial judge’s “gatekeeping” obligations apply to testimony based on “technical” and “other specialized knowledge”.

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