Tuesday, September 10, 2013

Reargument Granted in Insurance Coverage Case K2 Inv. Group, LLC

The Court of Appeals has granted reargument in the recently decided insurance coverage case K2 Investment Group, LLC v. American Guarantee & Liability Co.  In June, the Court of Appeals concluded that when a liability insurer has breached its duty to defend its insured, the insurer may not later rely on policy exclusions to escape its duty to indemnify the insured for a judgment against him. 
The Court does not give reasons for granting reargument but one commentator noted that the motion for reargument in K2 asked the Court to take another look at K2 and the Courts prior decision in Servidone Construction Corp. v. Security Insurance Co. of HartfordServidone, like K2, involved an insurer that breached its duty to defend, a subsequent demand to indemnify, and an argument that a claim was not within a policy's coverage.

Tuesday, September 3, 2013

Second Department Holds That New Jersey Law Applies To Insurance Policy For Purposes of Determining Validity of Late Notice Disclaimer

In Jimenez v. Monadock Constr., Inc., the Second Department applied New Jersey law to determine that an insurer was obligated to prove that it was prejudiced by its insured’s late notice.  The policy was issued to the insured, Bedroc Contracting, LLC in New Jersey through a New Jersey broker prior to January 17, 2009, the date on which the New York Insurance Law was amended to require insurers to prove prejudice when relying upon late notice as the basis for a disclaimer.  As such, the insurer argued that New York law applied because the underlying accident had occurred in New York and that the insurer was not obligated to prove that it was prejudiced by Bedroc’s late notice.  The Second Department held to the contrary.  The Court indicated that the “center of gravity” or “grouping of contacts” analysis would ordinarily be applied liability insurance contracts to hold that the policy is governed by the law of the jurisdiction “with the most significant relationship to the transaction... which the parties understood was to be the principal location of the insured risk”.  Where, however, the risk is spread across multiple states, the insured’s domicile is deemed to be the proxy for the principal location of the insured risk.  Here, the insurer understood that Bedroc was insured over multiple states and therefore Bedroc’s domicile, New Jersey, was deemed to be the proxy location and New Jersey law applied to the insurer’s late notice disclaimer.

Second Department Finds Questions of Fact In Labor Law Action Involving Falling Concrete Form

In Ross v. DD 11th Ave., LLC, the Second Department found that questions of fact existed as to whether the defendants had violated Labor Law 240(1), where a worker was injured by a falling concrete form.  The form was apparently adjacent to a form that plaintiff was removing.  The Court found that whether the form required securing for purposes of plaintiff’s work was a triable issue.  The Court rejected the defendants’ argument that securing the adjacent form would have been contrary to the objectives of plaintiff’s work, i.e. to remove the concrete forms.  Curiously, in support of its decision the Court cited Narducci v. Manhasset Bay Assocs., 96 N.Y.2d 259 (2001).  In Narducci, the plaintiff was injured by a falling window that was adjacent to the window that he was removing.  Unlike the Second Department here, the Court of Appeals found in Narducci that the adjacent object did not need securing for the purposes of the plaintiff’s work and dismissed the plaintiff’s section 240(1) claim.