New York CM Report of Recent Decisions (2007v3)
2007 Volume 3
A summary of significant recent developments in the law focusing on substantive issues of litigation and featuring analysis and commentary on special points of interest.
Articles in this report
Amendment To General Obligations Law Section 15-108 Encourages Plaintiffs To Voluntarily Discontinue Against Ostensibly Blameless Defendants, But At What Cost To The Remaining Defendants
New York General Obligations Law § 15-108 is an important statute to defense counsel practicing personal injury litigation in New York, because it establishes rules for apportionment of damages and contribution claims among joint tortfeasors in situations where one defendant in a multiple defendant lawsuit is released prior to trial.
Excess Carrier With "Follow Form" Policy Not Bound By Primary Carrier's Coverage Determination
The Massachusetts Supreme Judicial Court recently ruled that an excess insurer that issued a “follow form” policy, with policy terms identical to the primary policy, was not bound by coverage determinations made by the primary carrier. In Allmerica Fin. Co. v. Certain Underwriters at Lloyd’s London, 499 Mass. 621, 871 N.E. 2d 418 (2007), the Court held that an excess carrier was entitled to make an independent coverage determination and was not bound by the coverage determination of the primary carrier, even if the policy language of the excess policy was identical to the language of the primary policy.
Express Language Requiring Signed Contract Trumps Contrary Oral Agreement And Acts
In Jordan Panel Systems Corp. v. Turner Construction Co., N.Y.L.J. Sept. 24, 2007 at 18 (App. Div., 1st Dept.), the First Department affirmed Defendant’s motion to dismiss the Complaint, which asserted causes of action for breach of contract, promissory estoppel and recovery in quasi contract. Id. at 18. Plaintiff claimed that Defendant revoked an oral award of a subcontract after Plaintiff had already commenced performance, but Defendant countered that its written preliminary terms expressly required a fully executed written sub-contract before it will be bound, even if work on the subcontract had commenced. Id.
N.Y. Court of Appeals Affirms Holding Regarding An Insurer's Broad Duty To Defend Additional Insureds
New York’s highest court recently issued a decision affirming, in part, a decision by the First Department, holding that a carrier was obligated to defend a purported additional insured in an action where it had not yet been shown or established that an alleged injury arose from the named insured’s operations, despite language in the subject policy’s additional insured endorsement limiting coverage for the additional insured to cases where its liability arises out of the named insured’s ongoing operations for the additional insured. BP Air Conditioning Corp. v. One Beacon Ins. Group, 8 N.Y.3d 708, 840 N.Y.S.2d 302 (2007).
New York's Common Law "No Prejudice" Late Notice Rule Has Close Call With Legislature, And Despite Governor's Veto, The Issue Is Likely Not Over
Over the course of three days in June, 2007, just prior to the summer recess, a bill was introduced and passed by both houses of New York’s Legislature. Senate Bill Number 6306, introduced by Senator John A. DeFrancisco, contained proposed changes to New York’s civil law and practice rules pertaining to the insurance law.
Settlement Agreement Negotiated Without Consent Of Insurer Is Not Binding On Insurer That Provides A Defense Under A Reservation Of Rights
The New Jersey Appellate Division recently found that an insurer providing a defense under a reservation of rights to its insured, but excluded from settlement negotiations, was not bound by the resulting settlement agreement. The focus of the Court’s holding was that the insurer, while improperly denying coverage, nonetheless provided the insured with a defense. Therefore, the Court concluded, the insurer did not abandon its insured and the insured was obligated under the terms of the policy to avoid assuming any obligations without the consent of the insurer. As such, the Court held that the insurer was not bound by the terms of the settlement agreement.