Justia New York Court of Appeals Opinion Summaries

An entity engaged in the bail bond business may not retain the premium paid on a criminal defendant’s behalf when bail is denied and the defendant is never released from custody.Arthur Bogoraz was indicted on state law fraud charges. Plaintiffs, Bogoraz’s wife and family friends, entered into an indemnity agreement with Ira Judelson, a licensed bail bond agent affiliated with the International Fidelity Insurance Agency, to secure Bogoraz’s release from custody in exchange for a premium of $120,560. The district court denied the bail bond after a hearing, however, and Bogoraz was never released from custody. Judelson refused to return the $120,560 to Plaintiffs. The district court found that the indemnity agreement permitted Judelson to retain the premium. On appeal, the United States Court of Appeals for the Second Circuit certified a question of law regarding the issue to the Court of Appeals. The Court of Appeals held that, under the Insurance Law, an entity engaged in the bail bond business does not earn a premium for a bail bond if a court refuses to accept the bond following a bail source hearing and the principal is not released on bail. View "Gevorkyan v. Judelson" on Justia Law

Where an insurance policy is restricted to liability for any bodily injury “caused, in whole or in part” by the “acts of omissions” of the named insured, the coverage applies to injury proximately caused by the named insured.The Appellate Division denied summary judgment in favor of the insurance company on the issue of coverage after interpreting this policy language as extending coverage broadly to any injury causally linked to the named insured. The court also concluded that an additional insured may collect for an injury caused solely by its own negligence even where the named insured bears no legal fault for the underlying harm. The Court of Appeals reversed, holding that the language “caused, in whole or in part” requires the insured to be the proximate cause of the injury giving rise to liability, not merely the “but for” cause. View "Burlington Insurance Co. v. New York City Transit Authority" on Justia Law

Plaintiffs commenced this action seeking a declaration of coverage under a program of builder’s risk insurance furnished by Defendants for weather-related damage to a tower crane. The Appellate Division granted summary judgment declaring that Defendants had no obligation to provide coverage for the subject loss under the policy. At issue in this case was (1) whether the crane was covered in the first instance under the insurance provided for temporary works and, if so, whether the contractor’s tools exclusion defeated that initial grant of coverage; and (2) whether the contractor’s tools exclusion was ineffective because it would render the coverage granted in the first instance for temporary works illusory. The Court of Appeals affirmed, holding (1) assuming that the policy contains coverage for the crane in the first instance, the contractor’s tools exclusion would defeat that coverage; and (2) the contractor’s tools exclusion does not render the coverage afforded under the temporary works provision of the policy illusory. View "Lend Lease (US) Construction LMB Inc. v. Zurich American Insurance Co." on Justia Law

Luz Herrera was injured in an accident while operating a vehicle insured by Hanover Insurance Company, a no-fault insurer. Herrera also had private health insurance through Aetna Health Plan. Herrera received medical treatment for her injuries, and the medical providers submitted some of their bills directly to Aetna, who paid the bills. Aetna subsequently sought reimbursement from Hanover, but Hanover did not respond. Meanwhile, Aetna filed a lien against Herrera for reimbursement. Herrera then resubmitted all of the medical bills to Hanover and assigned her rights against Hanover to Aetna. Aetna then commenced this action against Hanover seeking reimbursement for the medical bills it paid on Herrera’s behalf. Supreme Court dismissed the complaint, concluding (1) because Aetna was not a “health care provider” under the no-fault statute, it was not entitled to direct payment of no-fault benefits; (2) Aetna was neither in privity of contract with Hanover nor an intended third-party beneficiary of Hanover’s contract with Herrera; and (3) Aetna could not maintain a subrogation claim against Hanover. The Appellate Division affirmed. The Court of Appeals affirmed, holding that New York’s Comprehensive Motor Vehicle Reparations Act statutory law and regulatory scheme does not contemplate reimbursement to a health insurer, as opposed to a health care provider. View "Aetna Health Plans v. Hanover Ins. Co." on Justia Law

The Glidden Company - now known as Akzo Nobel Paints LLC (ANP) - made, marketed, and sold lead paint. Based on a 1986 purchase agreement, Millennium Holdings LLC, which Appellant insurance companies insured, and its predecessors were required to indemnify ANP and its predecessors from 1986 to 1994. In turn, ANP and its predecessors were required to indemnify Millennium and its predecessors from 1994 onward. Beginning in 1987, a number of lead paint related lawsuits were filed against the predecessors of Millennium and ANP (the lead cases). Appellants satisfied Millennium’s obligations pursuant to monetary settlements reached in the cases. Appellants subsequently commenced this action against ANP seeking to be subrogated to the right of Millennium to indemnification against ANP. Supreme Court determined that the antisubrogation rule prohibited Appellants' right of subrogation. The Appellate Division affirmed. The Court of Appeals reversed, holding that there was no reason to apply to antisubrogation rule under the facts of this case, and therefore, the courts below erred in granting summary judgment for ANP on that basis. View "Millennium Holdings LLC v. Glidden Co." on Justia Law

At issue in this case was whether two companies (the Insureds) were entitled to coverage under additional excess policies issued to their predecessor by the Excess Insurers and, if so, how indemnity should be allocated across the triggered policy periods. The Delaware Court of Chancery granted summary judgment for the Insureds with respect to the availability of coverage and the allocation of liability under the excess policies, concluding that New York law applied to the dispute, that the Insureds were each entitled to coverage under the excess policies, and that the proper method of allocation was the all sums approach, as compared with the pro rata allocation method propounded by the Excess Insurers. After a trial, the Delaware Superior Court entered judgment largely in the Insureds’ favor. On appeal, the Delaware Supreme Court concluded that resolution of the parties’ disputes over allocation and exhaustion depended on unsettled questions of New York law. The Court of Appeals answered (1) under New York law, the contract language of the applicable insurance policies controlled the questions certified to the Court; (2) all sums allocation was appropriate based on the language of the policies at issue here; and (3) vertical, rather than horizontal, exhaustion was required before the excess policies attached. View "In re Viking Pump, Inc." on Justia Law

Defendant, Avanguard Medical Group, PLLC was accredited by the State of New York as a facility for the provision of office-based surgery (OBS). Plaintiffs (collectively, GEICO) commenced this action for a declaratory judgment that GEICO was not legally obligated under N.Y. Ins. Law 5102 to reimburse Avanguard for facility fees related to the use of its physical location and related support services. Supreme Court denied GEICO’s motion for summary judgment. The Appellate Division reversed and granted the motion, declaring that GEICO was not required to reimburse Avanguard for OBS facility fees. The Court of Appeals affirmed, holding that neither the applicable statutory nor regulatory framework mandate that a no-fault insurance carrier pay a facility fee to an accredited OBS center. View "Gov’t Employees Ins. Co. v. Avanguard Med. Group, PLLC" on Justia Law

In 2002, Plaintiffs commenced a proposed class action civil rights suit against the County of Rensselaer. The County invoked Selective Insurance Company’s duty to provide a defense under the policies that the company sold to the County. Selective agreed to defend the County in the action, subject to the insurance policy limits and the deductible. Selective’s counsel and the County agreed to settle the actions for $1,000 per plaintiff, determined to be slightly more than 800 individuals in total, with attorney fees also being recoverable. Selective abided by the terms of the settlement. The County, however, refused to pay Selective more than a single deductible payment. Selective then commenced this action for money damages, arguing that each class member was subject to a separate deductible. Supreme Court concluded that a separate deductible payment applied to each class member and that all legal fees should be allocated to one policy. The Appellate Division affirmed. The Court of Appeals affirmed, holding that the class action suit did not constitute one occurrence under the relevant policies’ definition of “occurrence” and that the attorney’s fees generated in defending that suit were properly allocated to the named plaintiff. View "Selective Ins. Co. of Am. v. County of Rensselaer" on Justia Law

The Court of Appeals held in Matter of State Farm Mut. Auto. Ins. Co. v. Amato that N.Y. Ins. Law 3420(f), which provides that all motor vehicle insurance policies must contain uninsured motorist coverage, has no application to police vehicles. Here, Respondent, a police officer, was injured when the driver of an underinsured vehicle struck the police car in which Respondent was a passenger and Michael Knauss was the driver. Knauss maintained an automobile liability insurance policy issued by State Farm that included a supplementary uninsured/underinsured motorist (SUM) endorsement. Respondent made a demand upon State Farm for underinsured motorist arbitration under the SUM endorsement of Knauss’s policy. State Farm refused payment, asserting that a police vehicle was not a covered “motor vehicle” within the meaning of the SUM endorsement. Supreme Court concluded that Knauss’s policy did not cover Respondent. The Appellate Division reversed, concluding that Amato was inapplicable to SUM coverage mandated by section 3420(f)(2) and defining “motor vehicle” for purposes of statutorily required SUM coverage as inclusive of police vehicles. The Court of Appeals reversed, holding (1) a police vehicle is not a “motor vehicle” covered by a SUM endorsement under section 3420(f)(2)(a); and (2) Amato remains binding precedent in this matter of statutory interpretation. View "Matter of State Farm Mut. Auto. Ins. Co. v. Fitzgerald" on Justia Law

Plaintiff is a health insurance company that offers a choice of federal government-regulated alternatives to Medicare known as Medicare Advantage plans. These plans allow Medicare-eligible individuals to purchase health insurance from private insurance companies. Those companies are reimbursed by the government for health care services provided to the plans’ members. Before the Supreme Judicial Court was Plaintiff’s demand for indemnification to cover losses resulting from health care claims for unprovided services paid through Plaintiff’s computer system. At issue was the coverage available to Plaintiff pursuant to Rider #3 of a financial institution bond issued by Defendant. The bond insured Plaintiff against various losses, and the Rider amended the bond to provide indemnification specifically for computer systems fraud. When Plaintiff suffered more than $18 million in losses for payment for fraudulent claims for services never actually performed under its Medicare Advantage plans, Plaintiff sought payment from Defendant for its post-deductible losses. Defendant denied coverage, and Plaintiff sued. Supreme Court granted summary judgment for Defendant. The Court of Appeals affirmed, holding that the Rider applies to losses resulting directly from fraudulent access, not to losses from the content submitted by authorized users. View "Universal Am. Corp. v Nat’l Union Fire Ins. Co. of Pittsburgh, PA" on Justia Law