New York CM Report of Recent Decisions (2010v2)
2010 Volume 2
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.
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Articles in this report
Additional Insured Coverage Is Not Permitted
In Hargob Realty Associates, Inc. v. Fireman’s Fund Insurance Company, 901 N.Y.S.2d 657 (2d Dep’t 2010), the Appellate Division, Second Department, issued a decision rejecting three alternative arguments put forth in favor of conferring additional insured status to an apparent indemnitee of a carrier’s named insured. This insurance coverage dispute arose out of a construction site accident and resulting underlying personal injury action. Hargob Realty Associates, Inc. (“Hargob”) entered into a construction contract with U.S.A. Interior, LLC (“USAI”), pursuant to which USAI was to perform demolition work at the premises owned by Hargob.
Court Holds That Expert’s Affidavit Fails To Prove Causation
In 2004, Miriam MacLennan’s house burned down. MacLennan stated that the fire started on her bed, within a blanket warmer. She dragged the blanket warmer off the bed, and then the fire spread to the rest of the house. “A few days after the fire, MacLennan reportedly told two different persons – a fire investigator and the insurer’s investigator – that she purchased the blanket in question three or four years previously (about 2001) from Jobbers.” Barnstable County Mutual Insurance Company v. New England Jobbers of Falmouth, 76 Mass.App.Ct. 1136, 927 N.E.2d 927 (2010). MacLennan did not have a sales receipt nor did she know the manufacturer.
Damages To A Swimming Pool Were Excluded From Coverage
The Appellate Division, Fourth Department recently upheld an insurer’s disclaimer of an insured’s claim for damages to a swimming pool based upon a provision in the insurance policy excluding damages caused by “pressure or weight of water.” Gravino v. Allstate Insurance Company, 902 N.Y.S.2d 725, 73 A.D.3d 1447 4th Dep’t 2010. Pursuant to the ruling, the Court unanimously reversed on the law and granted the insurer’s motion for summary judgment, dismissing the insured’s Complaint. Gravin at 725.
Insurer Owes No Coverage Where Insured Failed To Comply With The Policy's Notice Requirement
The Appellate Division, First Department recently determined that an insurer owes no coverage for an environmental contamination cleanup claim because the insured failed to provide timely notice of its claim pursuant to the policy’s terms and conditions. Travelers Indem. Co. v Orange & Rockland Utils., Inc, 2010 NY Slip Op 4254 (1st Dep’t 2010).
Potential Exposure From Non-Plead Claims – First Department Decision Highlights The Broad Powers Of Arbitrators
New York's Appellate Division for the First Judicial Department recently upheld an arbitrator’s award of joint and several liability, even though the plaintiff failed to plead same as a theory of recovery. See Frankel v. Sardis, 2010 NY Slip Op. 5280 (1st Dep’t 2010).
Purchaser Of Assets May Be Held Liable For Tort Claims Arising Out Of Seller's Products
In American Standard, Inc. v. OakFabco, Inc., 14 N.Y.3d 399 (N.Y. 2010), the Court of Appeals held that a successor corporation may be held liable for tort claims based on the predecessor’s defective products where the sales agreement under which the successor obtained the predecessor’s assets contains language assuming certain liabilities. Defendant purchased Plaintiff's boiler business under a sales agreement providing that the purchase was “subject to all debts, liabilities, and obligations connected with or attributable to such business and operations.” Under the sales agreement, the term “liabilities” was defined to include “all the debts, liabilities, obligations and commitments . . . existing and outstanding” on the closing date of the agreement. Id. at 402.
Timeliness Of Insured’s Suit Against Insurer Is Measured From The Date The Insured’s Claim Accrued, Not The Date On Which Damage Was Incurred
The United States Court of Appeals for the Second Circuit recently found that a contractual suit limitations clause in a homeowner’s insurance policy began to run when the insured’s claim against the insurer accrued, not the date on which damage was incurred. In Fabozzi v. Lexington Insurance Company, 601 F.3d 88 (2d Cir. 2010), the Second Circuit analyzed the long-standing history of contractual suit limitations clauses under New York law and found that specific language is necessary to tie a suit limitations period to the date the loss or damage occurred.
Plaintiffs owned and occupied a 136 year old building in New York City. Yenem Corp. v. 281 Broadway Holdings, 2010 WL 2572864 (1st Dep’t June 29, 2010). Defendants were the owners, developer and excavator of the adjoining property. “Plaintiffs assert that defendants’ excavation work undermined the foundation, causing the building to lean by approximately nine inches. As a consequence, the Department of Buildings issued a vacate order….” Plaintiffs sought recovery from Defendants for their damages, physical and economic.
