Connolly v. Peerless Insurance
873 F. Supp. 2d 493
E.D.N.Y2012Background
- This is a breach of contract action for underinsured motorist benefits arising from an Oct. 13, 2007 car accident.
- Connolly, a front-seat passenger, settled her tort claim with the at-fault driver’s insurer for $25,000.
- Peerless issued SUM coverage with a $500,000 limit but contends no serious injury occurred under NY Insurance Law §5102(d).
- The tortfeasor’s insurer paid the plaintiff the full UM/UIM coverage available from that policy ($25,000).
- Peerless moved for summary judgment arguing Connolly did not suffer a “serious injury” under §5102(d) and, alternatively, sought dismissal of certain damages claims; the court denied the motion in part.
- The court analyzed whether the plaintiff’s injuries meet the “serious injury” standard and whether the plaintiff may recover consequential damages for bad-faith handling of the claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Connolly’s injuries qualify as a ‘serious injury’ under NY Ins. Law §5102(d). | Connolly’s cervical and lumbar spine injuries and right shoulder impingement constitute permanent consequential and significant limitations. | The defendant contends the injuries are degenerative or preexisting, not causally related to the accident, and there is no substantial evidence of a serious injury. | There are triable issues of fact regarding serious injury; summary judgment denied. |
| Whether the physician opinions in the record establish causation and permanency sufficient to create a triable issue. | Medical reports support causation and permanency of injuries from the accident. | Defendant’s examinees and other evidence undermine causation and permanency. | Triable issues exist; crediting conflicting expert opinions, summary judgment denied. |
| Whether Connolly can recover consequential damages for bad-faith handling under the covenant of good faith and fair dealing. | Bi-Economy recognizes consequential damages for insurance bad faith. | Consequence damages require specialization of loss arising from delay or denial; defendant argues limited scope. | Conclusions denied; the court denies summary judgment on the consequential damages claim too. |
| Whether the two defense IME reports (Varriale and Brennan) taint the integrity of the defense or create conflicts of interest. | Defense IMEs corroborate plaintiff’s injuries; the reports were obtained in defense interest. | The reports were obtained by affiliates; claims handling separation preserved HIPAA and no direct control by Peerless. | Not dispositive for summary judgment; admissibility and credibility are issues for trial. |
Key Cases Cited
- Perl v. Meher, 18 N.Y.3d 208 (N.Y. 2011) (no-fault record credibility and permanency; contemporaneous ROM not required; credibility for fact-finder to weigh)
- Trigg v. Gradischer, 6 A.D.3d 525 (2d Dept. 2004) (treating physicians’ permanency evidence can raise a triable issue)
- Gaddy v. Eyler, 79 N.Y.2d 955 (N.Y. 1992) (no-fault; burden-shifting on serious injury)
- Bi-Economy Mkt. v. Harleysville Ins. Co. of N.Y., 10 N.Y.3d 187 (N.Y. 2008) (consequential damages for insurer's bad faith in adjusting claims)
- Franco v. Supreme Poultry, Inc., 91 A.D.3d 818 (2d Dept. 2012) (triable issues on serious injury where evidence exists)
- Luigi v. Avis Cab Co., Inc., 96 A.D.3d 809 (2d Dept. 2012) (defendant’s examining physician’s findings can preclude summary judgment if they show significant limitation)