SectionsStatute of LimitationsContributory Negligence/Comparative FaultMed Pay/PIP SubrogationDeductible ReimbursementMade Whole DoctrineEconomic Loss DoctrineLandlord/Tenant SubrogationSpoliationParental ResponsibilityContribution ActionsSuspension of Drivers' LicensesAnti-Indemnity StatutesDiminution of ValueRecording ConversationsCriminal RestitutionHealth and Disability InsuranceFuneral Procession Traffic LawsWorkers’ CompensationDog Bite LawsEmployee Leasing LawsCondominium Waiver of Subrogation LawsAutomobile Total Loss ThresholdsAutomobile Total Loss Thresholds
STATUTE OF LIMITATIONS
- Personal Property3 YearsN.Y. C.P.L.R. § 214, et seq.
- Personal Injury/Death3 YearsN.Y. C.P.L.R. § 214, et seq.
- Personal Injury/Wrongful Death2 YearsN.Y. Est. Powers & Trusts Law § 5-4.1
- Personal Injury/Medical Malpractice2 Yrs./6 Mo.N.Y. C.P.L.R. § 214-a
- Breach of Contract/Written6 YearsN.Y. C.P.L.R. § 213(2)
- Breach of Contract/Oral6 YearsN.Y. C.P.L.R. § 213(2)
- Breach of Conract/Sale of Goods4 YearsN.Y. U.C.C. § 2-725
- Statute of Repose/ProductsN/AN/A
- Statute of Repose/Real Property - Engineers/Architects OnlyN/AN.Y. C.P.L.R. § 214-d
- Breach of Warranty/U.C.C.4 YearsN.Y. U.C.C. § 2-725(1)
- Workers’ Compensation3 YearsN.Y.C.L.S. Work Comp. § 29
Contributory Negligence/Comparative Fault
Pure Comparative Fault: Damaged parties can recover even if 99% at fault. Plaintiff’s damages will be reduced by their own liability, but not barred completely. N.Y. C.P.L.R. § 1411.
Med Pay/PIP Subrogation
Med Pay: Med Pay benefits are usually in the form of PIP, APIP, or OBEL benefits. Where Med Pay is paid, however, subrogation is prohibited in settlements under § 5-335 and in verdicts under § 4545. Under § 4545, damages for which the bodily injury claimant was insured may not be included in a verdict, but might still be possible, but the insurer would have to file suit separately to preserve this claim (which could be extinguished if the injured party settles).
Carrier can subrogate against a non-covered person and has a lien. N.Y. Ins. § 5104(b). Carrier also has common law subrogation rights for APIP benefits (additional PIP benefits in excess of basic PIP benefits) but does not have lien where APIP benefits not included in insured’s third-party lawsuit. This recovery claim does not qualify for inter-company arbitration. Federal Ins. Co. v. Hansen, 162 A.D.2d 224 (N.Y.A.D. 1990). Under N.Y. Veh. & Traf. Law § 341, a third-party lawsuit can be brought if a “serious injury” is sustained and monetary damages and/or non-economic damages exceed the no-fault PIP benefits. OBEL payments are treated as no-fault benefits.
PIP: No subrogation for first-party basic PIP benefits. N.Y. Ins. § 5104(a). Exceptions: (a) at least one vehicle weighs more than 6,500 lbs. or (b) one vehicle is used for transportation of person or property for hire (livery). This is done through inter-company Loss Transfer arbitration. There is also mandatory arbitration of “priority of payment” or “joint coverage” situations and voluntary UM arbitration. N.Y. Ins. § 5105(b) (2003). There is no lien or subrogation when both vehicles are insured.
No-Fault State. Verbal threshold. Enacted in 1974. No-fault law provides for payment of “basic economic losses” up to $50,000. N.Y. Ins. § 5104 allows for third-party suit for such basic economic losses or non-economic losses only if there is a “serious injury.” N.Y. Ins. § 5102 (2002) (Death, Dismemberment, or Serious Disfigurement).
The statute of limitations for Loss Transfer Arbitration is three years from each PIP payment. C.P.L.R. § 214(2). The statute of limitations for Additional PIP (APIP) is three years from the accident. Allstate Ins. Co. v. Stein, 807 N.E.2d 268 (N.Y. App. 2004). The statute of limitations for subrogation against non-covered person is three years from the accident. Safeco Ins. Co. v. Jamaica Water Supply Co., 444 N.Y.S.2d 925 (N.Y. 1981).
Automobile: Pro-Rata. In Physical Damage Claims. Specific notice requirements exist even if not pursuing subrogation. N.Y. Ins. Reg. 64, § 216.7(g) provides:
“Subrogation Agreements. (1) Where insured has received payment under physical damage coverage that is subject to a deductible, insured shall share, pro-rata, with the insurer any net recovery received by insurer from third parties. Within 30 calendar days of such recovery, insurer must mail or hand deliver to the insured its payment for the insured’s pro-rata share of the recovery; (2) Net recovery shall be the total recovery less the insurer’s allocated loss adjustment expenses attributable to such recovery. The formula for computing net recovery and the insured’s share of recovery of the deductible may be stated as follows:
Total Recovery – Allocated Loss Adjusting Expenses = Net Recovery
(Deductible ÷ Total Loss) X Net Recovery = Insured’s Share of Recovery
Application of Formula: Assume a loss of $500 subject to a $100 deductible with $50 in allocated loss adjustment expenses: (a) if there is full recovery of $500: computation of net recovery: $500 – $50 = $450; computation of insured’s share of recovery: $100/$500 x $450 = $90 (b) If there is a partial recovery of $300: computation of net recovery: $300 – $50 = $250; computation of insured’s share of recovery: $100/$500 x $250 = $50;
(3) Unless the insurer returns its insured’s full deductible, it shall attempt to effect full recovery in clear liability cases and shall not enter into any intercompany agreements that provide for the acceptance of lesser amounts on a formula basis; (4) If an insurer has paid a physical damage claim that is subject to a deductible and it has elected to pursue its subrogation claim, the insurer shall promptly attempt to effect recovery. If a dispute arises between two or more insurers regarding the subrogation recovery, and the insurers are unable to resolve it, the insurer seeking recovery shall submit the dispute to binding arbitration or a court action shall be commenced no later than 180 calendar days following the payment of the claim to its insured. (5) If an insurer has paid a physical damage claim that is subject to a deductible and it is pursuing its subrogation claim, the insurer shall notify its insured in writing of the status of its claim 120 calendar days after the date of the claim payment to its insured. An updated status letter shall be sent every 120 calendar days thereafter until the claim is either honored or rejected. (6) If an insurer has paid a physical damage claim that is subject to a deductible and it elects not to pursue its subrogation claim where the possibility of recovery exists, the insurer shall so notify its insured in writing within 60 calendar days after it has paid the claim, except that the notification shall be given at least 30 days prior to the running of any applicable statute of limitations or period required for notice of claim. If an insurer does not notify its insured within the time periods prescribed above and the statute of limitations or period required for notice of claim has expired, the insurer shall forthwith remit to its insured the full amount of the insured’s deductible.
In physical damage claims the insurer must promptly attempt to effect recovery. There are no specific requirements to include the deductible in the demand but the insured must be reimbursed a pro-rata share of any net recovery within 30 days of a recovery. If pursuing subrogation, the insurer must notify the insured in writing of status of its claim within 120 days after the claim is paid and every 120 days thereafter until the claim is honored or rejected. If not pursing subrogation, and if a possibility of recovery exists, the insurer must notify the insured within 60 days after the claim is paid (30 days if statute of limitations is running), or it will owe the insured 100% of the deductible.
Made Whole Doctrine
New York has applied and adheres to the existence of the Made Whole Doctrine. Winkelmann v. Excelsior Ins. Co., 626 N.Y.S.2d 994 (1995); U.S. Fid. & Guar. Co. v. Maggiore, 749 N.Y.S.2d 555 (2002). An insurer has no right of subrogation against its insured when the insured’s actual loss exceeds the amount it has recovered from both the insurer and the third party. Id. Where there are multiple plaintiffs, each insurer needs only to establish that its individual insured has been made whole before subrogation is allowed. Maggiore, supra. It seems that the Made Whole Doctrine is applicable only to situations in which the insured makes a recovery and the subrogated insurer is seeking reimbursement from the insured and out of that recovery. An insurer’s action based on partial subrogation through its insured will not necessarily interfere with the insured’s right to be made whole by the tortfeasor and the insurer need not delay its subrogation claim against the third party to avoid impairing the insured’s rights. Id.
The court in Winkelmann introduced the Made Whole Doctrine to New York in the context of equitable subrogation, and the court in Maggiore extended the Doctrine to contractual subrogation as well. Therefore, it appears that the equitable considerations, not the intent of the parties as evidenced by the terms of the policy, will govern in New York. Court applies “Make Whole” Rule despite a subrogation clause to the contrary, noting that allowing subrogation where insured is not fully compensated would be “contrary to the principal purpose of an insurance contract: to protect an insured from loss, thereby placing the risk of loss on the insurer [though] the insurer has accepted payments from the insured to assume this risk of loss.” Maggiore, supra. (quoting 16 Couch, Insurance 3d, § 223:136, at 152-153).
Economic Loss Doctrine
Majority Rule. Where a product fails to perform as promised due to negligence in either the manufacturing or installation process, a plaintiff is precluded from recovering tort damages for its economic loss. Suffolk Laundry Servs., Inc. v. Redux Corp., 238 A.D.2d 577, 578 (N.Y. App. 1997). Tort recovery in strict products liability and negligence against a manufacturer should not be available to a downstream purchaser where the claimed losses flow from damage to the property that is the subject of the contract. Bocre Leasing Corp. v. General Motors Corp., 645 N.E.2d 1195 (N.Y. 1995). An end-purchaser of a product is limited to contract remedies and may not seek damages in tort for economic loss against a manufacturer for damages to the product alone. Schiavone Constr. Co. v. Elgood Mayo Corp., 436 N.E.2d 1322 (N.Y. 1982). An exception for service contracts exists. MCI Telecommunications Corp. v. John Mezzalingua Associates, Inc., 921 F.Supp. 936 (N.D. N.Y. 1996). In sum, the “Economic Loss Rule reflects the principle that damages arising from the failure of the bargained-for consideration to meet the expectations of the parties are recoverable in contract, not tort.” Bristol-Myers Squibb, Indus. Div. v. Delta Star, Inc., 206 A.D.2d 177, 181 (N.Y. App. 1994). Failure of a component part is still considered to be part of the product, and a plaintiff cannot argue that the component part which caused damage to the greater product (such as defective switch in a vehicle causing the vehicle to burn) caused damage to “other property”. Trump Int’l Hotel & Tower v. Carrier Corp., 524 F.Supp.2d 302 (S.D. N.Y. 2007). All the parts are considered an “integrated unit”. Trump Int’l. Hotel & Tower, supra. An exception to the ELD exists when a defective product causes damage not only to the product itself, but also to other property. Arkwright Mut. Ins. Co. v. Bojoirve, Inc., 1996 WL 361535 (S.D. N.Y. 1996). When you have an abrupt, cataclysmic occurrence caused by defendant’s negligence, the ELD will not apply. State Farm Fire & Cas. Co. v. Southtowns Tele-Communications, Inc., 667 N.Y.S.2d 157 (N.Y. 1997). New York has flirted with another possible exception to the ELD. When the product is “unduly dangerous” such that the defect causes physical damage, presumably due to an accident, to either persons or property, some case law provides that a tort action may be maintained. Schiavone Constr. Co. v. Elgood Mayo Corp., 436 N.E.2d 1322 (N.Y. 1982). However, this “unduly dangerous” exception appears to have been rejected in subsequent decisions. Bocre Leasing Corp. v. Gen. Motors Corp. (Allison Gas Turbine Div.), 645 N.E.2d 1195 (N.Y. 1995).
New York has rejected the implied co-insured rationale and allowed the insurer to bring a subrogation claim against the tenant, absent an express agreement to the contrary. Galante v. Hathaway Bakeries, Inc., 6 A.D.2d 142, 176 N.Y.S.2d 87, 92 (N.Y. 1958). The principles underlying the Subrogation Doctrine and Anti-Subrogation Rule in New York does not support the fiction that the tenant is an implied co-insured of the landlord, and subrogation is therefore allowed. Phoenix Ins. Co. v. Stamell, 21 A.D.3d 118, 796 N.Y.S.2d 772 (N.Y.A.D. 4 Dept. 2005).
Third-Party Negligent Spoliation: The New York Court of Appeals declined to recognize such a cause of action under the facts of Met-Life Auto & Home v. Joe Basil Chevrolet, Inc., 1 N.Y.3d 478, 807 N.E.2d 865, 775 N.Y.S.2d 754 (N.Y. 2004). The Court in this case focused its decision on the non-existence of a duty giving rise to preservation of evidence and the lack of notice to preserve the evidence militated against establishing such a cause of action.
Employer Spoliation: Spoliation by an employer may support a common law cause of action when such spoliation impairs an employee’s right to sue a third-party tortfeasor. DiDomenico v. C & S Aeromatik Supplies, 252 A.D.2d 41, 682 N.Y.S.2d 452 (N.Y. 2d Dept. 1998). In other instances, New York courts have specifically rejected a cause of action for spoliation of evidence when the employer was not on notice that evidence would be needed. Monteiro v. R.D. Werner Co., 301 A.D.2d 636, 754 N.Y.S.2d 328 (N.Y. 2d Dept. 2003) (employer had no duty to preserve scaffold which allegedly caused plaintiff’s injuries and employer was not on notice that an action was contemplated against a third-party).
Sanctions: C.P.L.R. § 3126 permits sanctions, including dismissal for a party’s failure to disclose relevant evidence. Met-Life, 1 N.Y.3d at 482-83. New York courts will impose “carefully chosen and specifically tailored sanctions within the context of the underlying action” to remedy spoliation of evidence. For instance, a defendant may be granted summary judgment when the plaintiff negligently fails to preserve crucial evidence. Amaris v. Sharp Elecs., 758 N.Y.S.2d 637 (N.Y. App. Div. 2003). However, awarding summary judgment to the plaintiff for the defendant’s intentional destruction of evidence may be too drastic a remedy. Mylonas v. Town of Brookhaven, 759 N.Y.S.2d 752, 753-754 (N.Y. App. Div. 2003). But see Herrera v. Matlin, 758 N.Y.S.2d 7, 7 (N.Y. App. Div. 2003), aff’d 771 N.Y.S.2d 347 (N.Y. A.D. 2004) (physician’s loss of records amounting to professional misconduct warranted striking of answer).
Willful Misconduct. Liability imposed on parents when child willfully, maliciously, or unlawfully destroys property; liability imposed on parent when child, with intent to deprive an owner and/or custodian of property, or to appropriate the same to himself or herself or to a third person, knowingly enters or remains in a building and wrongfully takes, obtains or withholds property from the building in which the personal property is owned or maintained; liability imposed on parent when child falsely reports an incident or places a false bomb. McKinney’s General Obligations Law § 3-112(1).
The limit of liability is $5,000.00. Child must be between 10 and 18.
Modified Joint and Several Liability. Joint and several liability, except when it is a personal injury defendant less than 50% liable – then several liability and only for non-economic damages. N.Y. C.P.L.R. § 1601; Cooney v. Osgood Machinery, 612 N.E.2d 277 (N.Y. 1993).
Joint tortfeasors have a right to contribution, provided they have discharged the common liability of joint tortfeasors by payment or have paid more than their pro-rata share. Settlement or order must satisfy “all claims” arising out of the incident. Contribution may be sought in the underlying action or in a separate action. A joint tortfeasor who settles with a tortfeasor relieves that tortfeasor of any potential contribution liability to any other person. N.Y. C.P.L.R. § 1401; Sommer v. Fed. Signal Corp., 593 N.E.2d 1365 (N.Y. 1992). There is a two years statute of limitations from date of payment. Berlin & Jones, Inc. v. State, 381 N.Y.S.2d 778 (N.Y. Ct. Cl. 1976).
Suspension of Drivers' Licenses
Administrative Suspension: Upon receipt of evidence that proof of financial security is no longer in effect, the Commissioner will suspend the registration of the vehicle and the driver’s license of the registrant. N.Y. Veh. & Traf. Law § 318. Instead of filing a deposit of security, the uninsured driver may avoid suspension by filing a release or a written, executed installment agreement. N.Y. Veh. & Traf. Law § 335.
Judgment: The clerk/judge, upon written request of the judgment creditor after 15 days following entry of a judgment, will forward the Commissioner a certified copy of any unsatisfied judgment, requiring the Commissioner to suspend the license of the judgment debtor. N.Y. Veh. & Traf. Law § 336; N.Y. Veh. & Traf. Law § 332. Suspension will remain in effect until the judgment is stayed, satisfied, or discharged in bankruptcy, and the judgment debtor has provided proof of financial responsibility. N.Y. Veh. & Traf. Law § 337.
Contact Information: State of New York, Department of Motor Vehicles, 6 Empire State Plaza, Albany, NY 12228, (212) 645-5550, http://www.dmv.com/ny/new-york/drivers-license
Prohibits Intermediate Indemnity. Applies to Construction Contracts or Agreements. N.Y. Gen. Oblig. Laws § 5-322.1.
Not applicable to insurance contract or workers’ compensation agreement.
Diminution of Value
First Party: In Edwards v. Maryland Motor Car Ins. Co., 197 N.Y.S. 460 (N.Y. App. Div. 1922), the court held that diminution in value is damage embraced within the clause of the policy insuring the plaintiff against direct loss or damage by the peril of theft. The policy contained language that the insurance company had the option to “repair, rebuild, or replace the property lost or damaged with other of like kind and quality.” The court found that “diminution in value is damage embraced within the clause of the policy insuring plaintiff ‘against direct loss or damage’ by the perils of ‘theft, robbery or pilferage.’” The court went on to state that the liability is not severed by making the insurance company liable for actual cost of repairs or replacement. The court notes that this case allowed recovery for diminished value by finding coverage in another section of the insurance policy and not due to any obligation to repair the auto with like kind and quality.
Third Party: In Miller v. Sanchez, 6 Misc.3d 479, 789 N.Y.S.2d 850 (N.Y. City Civ. Ct. 2004), the court accepted the difference in value as the proper measure of tort damages. If the auto is of the type that appreciates in value, such as with rare automobiles, or is otherwise unique or brand new, third-party diminution of value damages for a motor vehicle are recoverable in addition to the cost of repairs even if the repairs restore the vehicle to its pre-accident condition. Franklin Corp. v. Prahler, 932 N.Y.S.2d 610 (N.Y. App. 2011); Rosenfield v. Choberka, 529 N.Y.S.2d 455 (N.Y. 1988) (vehicle “a few weeks” old); Parkoff v. Stavsky, 2013 WL 4528799 (N.Y. App. 2013) (Mercedes-Benz with only 398 miles); Franklin Corp. v. Prahler, 932 N.Y.S.2d 610 (N.Y. App. 2011) (class car).
One-Party Consent: It is not unlawful for an individual who is a party to or has consent from a party of an in-person or electronic communication to record and or disclose the content of said communication. N.Y. Penal Law § 250.00(1); N.Y. Penal Law § 250.05.
New York statute allows for restitution to be paid by criminal defendant to “victim” of their criminal conduct. N.Y. Penal Law § 60.27(1). Applicable case law states that an insurer will qualify as a “victim” for purposes of recovery of restitution payments. People v. Kim, 694 N.E.2d 421 (N.Y. 1998).
Health and Disability Insurance
Statute of Limitations: 3 Years. N.Y. C.P.L.R. § 214, et seq. Wrongful Death – 2 Years. N.Y. Est. Powers & Trusts Law § 5-4.1. Medical Malpractice – 2 Years and 6 Months. N.Y. C.P.L.R. § 214-a.
Subrogation of Medical and Disability Benefits are allowed. N.Y. S.B. 66002 amends C.P.L.R. § 4545 to preclude reimbursement from settlements (11/12/09), but an insurer can still intervene or file its own action for equitable subrogation prior to settlement. J.A. ex rel. Atkins v. Ja-Ru, Inc., 08 CIV.3640 DAB KNF, 2011 WL 990167 (S.D. N.Y. Mar. 15, 2011); Rizzo v. Moseley, 30 Misc. 3d 773, 774, 913 N.Y.S.2d 905, 907 (Sup. Ct. 2010). Made-Whole and Common Fund apply. U.S. Fid. & Guar. Co. v. Maggiore, 749 N.Y.S.2d 555 (2002); Seinfeld v. Robinson, 676 N.Y.S.2d 579 (1998).
Funeral Procession Traffic Laws
There are no state laws governing funeral processions, however, the state’s Vehicle and Traffic Laws do not provide any exceptions to following traffic control signals, except in the case of emergency vehicles. If a funeral procession is to be granted ability to disobey traffic signals, there most be a traffic officer present to regulate traffic. Vinci v. Charney, 80 N.Y.S.2d 521 (N.Y. 1948).
Statute of Limitations: 3 Years. N.Y.C.L.S. Work Comp. § 29.
Can Carrier Sue Third Party Directly: Yes, 30 days notice.
Recovery from UM/UIM Benefits: No.
Subrogation Against Medical Malpractice: Yes.
Subrogation Against Legal Malpractice: Yes.
Recovery Allocation/Equitable Limitations: (1) Fees, Expenses; (2) Carrier Fully Reimbursed; and (3) Net to Plaintiff.
Employer Contribution/Negligence: “Grave Injury” Contribution.
Attorney’s Fees/Costs: Kelly Formula.
Future Credit: Yes.
Auto No-Fault: Yes.
Dog Bite Laws
Dog owner will be held strictly liable for medical damages, but for all other damages the victim must prove that the owner knew (or should have known) of the dog’s dangerous propensities. N.Y. Agriculture & Markets Law, § 121(8).
Employee Leasing Laws
Neither the New York Workers’ Compensation Act or case law directly addresses employee leasing. However, the issue is addressed by Rule 11G of the New York Workers’ Compensation and Employers Liability Manual. New York refers to the employee leasing company as the “labor contractor”, and refers to the client company as the “client”. Although it does not apply to temporary workers, Rule 11G provides that both parties must provide workers’ compensation coverage for the leased employee but does not specifically extend the Exclusive Remedy Rule to the client company.
Condominium Waiver of Subrogation Laws
Associations shall, if by-laws or majority require, insure the building against loss or damage. There is no waiver of subrogation requirement in the statutes, but has been somewhat addressed through case law. N.Y. C.L.S. Real P. § 339-bb.
Requirement in condo by-laws that, if individual owners acquired insurance “for their own benefit,” such insurance had to contain waivers of subrogation against condo board of managers, was enforceable, and even if individual owners breached by-laws by acquiring insurance lacking waiver provisions, insurers were precluded from subrogating. Agostinelli v. Stein, 794 N.Y.S.2d 759 (N.Y. App. 2005).
Automobile Total Loss Thresholds
Percentage of Value: 75%
Cost for vehicle repair is 75% or more of retail value prior to being damaged by a nationally recognized compilation of retail values. 15 NYCRR § 20.20(c)(ii).
Automobile Total Loss Thresholds
Percentage of Value: 75%
Cost for vehicle repair is 75% or more of its fair market value prior to being damaged. N.C.G.S.A. § 20-71.3(d).