COMMERCIAL PACKAGE POLICY – EMPLOYEE DISHONESTY COVERAGE – NUMBER OF OCCURRENCES – ANTI-STACKING PROVISION Dan Tait, Inc. v. Farm Family Cas. Ins. Co. (Sup. Ct., Albany Co., 7/2/2018) Over a five-year period, plaintiff's former bookkeeper stole ...

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Coverage Counsel - 5 new articles

When 5 + 3 = 1

COMMERCIAL PACKAGE POLICY – EMPLOYEE DISHONESTY COVERAGE – NUMBER OF OCCURRENCES – ANTI-STACKING PROVISION
Dan Tait, Inc. v. Farm Family Cas. Ins. Co.
(Sup. Ct., Albany Co., 7/2/2018)

Over a five-year period, plaintiff's former bookkeeper stole approximately $500,000 from his employer by: (1) making unauthorized purchases with company credit cards; (2) making unauthorized withdrawals from the company's line of credit; and (3) taking company inventory for personal use. Plaintiff made a claim for employee dishonesty coverage to its commercial package insurer, Farm Family.

Deeming the former bookkeeper's course of dishonest acts committed over multiple policy periods to constitute one "occurrence" under the language of the policy, Farm Family paid $15,000, representing the limit of the employee dishonesty coverage for one policy period. Plaintiff sued.

Under the subject policy, Farm Family agreed to pay for the direct loss of business property or cash "resulting from dishonest acts committed by [the named insured's] employees acting alone or in collusion with other persons[.]" The policy further provided that "[t]he most [Farm...

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Words Matter -- a Notice of Storage Lien That Lacks the Word "Lien" Is Invalid

AUTO – TOWING/STORAGE CHARGES – STORAGE LIEN LIEN LAW § 184(5)
Matter of Nissan Motor Acceptance Corp. v All County Towing
(3rd Dept., 5/18/2018)

On December 22, 2015, at the direction of local law enforcement, respondent All County Towing towed a vehicle to its facility. Shortly thereafter, respondent mailed a notice to the vehicle's owner and to petitioner, the vehicle's lienholder, advising that respondent had taken custody of the vehicle as a result of police impound, that storage fees were accruing daily and that once the vehicle was released from police impound it could be retrieved "upon full payment of all charges accrued" as of the date of release.

In April 2016, by order to show cause and petition, petitioner commenced this special proceeding to declare respondent's lien null and void. Upon petitioner's posting of a $10,000 bond, respondent released the vehicle to petitioner, joined issue and asserted, as an affirmative defense, that it had fully complied with the requirements of the Lien Law and was entitled to a lien in the amount of $6,501.51, which included $200 for towing, $5,750 for 115 days of storage, an administrative fee and taxes.
...

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Injured Party/Judgment Creditor Who Obtains Assignment of Insureds' Bad Faith Claim After Conclusion of Direct Action May Bring Second Action Against Liability Insurer

HOMEOWNERS – LIABILITY – EXCESS JUDGMENT – STANDING BAD FAITH – INSURANCE LAW 3420(A)(2) & (B)(1)
Corle v. Allstate Ins. Co.
(4th Dept., 6/8/2018)

Sometimes called New York's direct action statute, New York Insurance Law § 3420(b)(1) states:
(b) Subject to the limitations and conditions of paragraph two of subsection (a) of this section, an action may be maintained by the following persons against the insurer upon any policy or contract of liability insurance that is governed by such paragraph, to recover the amount of a judgment against the insured or his personal representative:
(1) any person who, or the personal representative of any person who, has obtained a judgment against the insured or the insured's personal representative, for damages for injury sustained or loss or damage occasioned during the life of the policy or contract[.]
Teeter accidentally shoots Corle, and Corle sues Teeter. Allstate disclaims coverage to Teeter, asserting that the accidental shooting was not a covered loss under the policy. Corle proceeds with his personal injury action against Teeter and obtains a judgment of over $350,000 against him.

Corle then sues...

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May a New York Property Insurer Communicate Directly with Its Insured Who Is Represented by a Public Adjuster?



This was yesterday's question of the day, one I'm asked from time to time. Each time I get this question I check New York's insurance laws and regulations. And each time I come to the same conclusion:

There is nothing in New York’s Insurance Law or Regulation 64 (11 NYCRR Part 216) that prohibits an insurer from communicating directly with its insureds who are represented by a licensed public adjuster. The insured and insurer, after all, are the parties of the first-part and second-part to the insurance contract. They should be able to communicate freely with one another. After all, if a public adjuster is not prohibited from communicating directly with an insurer that is represented by counsel, surely an insurer is not prohibited from communicating directly with its insured who is represented by a public adjuster, right?

Agree or disagree? Let us know by leaving a comment.


      
 


That's Incredible! (as a Matter of Law)

HOMEOWNERS – PROOF OF LOSS CONDITION – SUMMARY JUDGMENT
Finley v. Erie and Niagara Ins. Assn.
(4th Dept., 6/15/2018)

Russell Finley's home burned down. As was its contractual right under the policy, his property insurer, Erie and Niagara Insurance Association, requested a sworn proof of loss and denied coverage when it did not receive that proof of loss within the policy's required 60-day period. Finley sued and testified during his deposition that he had timely submitted the requested proof of loss.

Anyone involved in litigation knows that credibility ordinarily is a issue of fact for the factfinder(s) at trial. But are there ever instances in which a court may properly determine credibility as a matter of law?

Yes, reminds the Fourth Department, because motion and appellate courts are not required to shut their eyes "to the patent falsity of a defense."

Erie and Niagara successfully moved for summary judgment on its breach of the policy's proof of loss condition defense, and Finley appealed. In affirming summary judgment to the insurer, the Appellate Division, Fourth Department, held:
We reject plaintiff's contention that the court erred in granting...

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