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Osuna v. Government Employees Insurance Co.

United States District Court, E.D. New York

April 17, 2014

ROBERT OSUNA, Plaintiff,

Plaintiff is represented by Ian Anderson, Kew Gardens, NY.

Defendant is represented by Francis J. Scahill, Picciano & Scahill, P.C., Westbury, NY.


JOSEPH F. BIANCO, District Judge.

Plaintiff Robert Osuna ("plaintiff' or "Osuna") commenced this action against the Government Employees Insurance Company ("defendant" or "GEICO"), alleging that defendant owes a duty to defend and indemnify him in relation to a car accident that occurred while he was driving. Specifically, plaintiffs wife, Banu Osuna, was injured in the accident and has sued plaintiff in an effort to recover damages for her injuries. Plaintiff sought insurance coverage from defendant, but defendant disclaimed coverage because plaintiff's automobile insurance policy does not include spousal liability insurance. This lawsuit followed, in which plaintiff asserts the following claims: (1) defendant violated Section 3420 of the New York State Insurance Law ("Section 3420") by failing to make Supplemental Spousal Liability Insurance available to him, and by failing to notify him properly about the availability and cost of such insurance (first through fourth causes of action); (2) Banu Osuna was not plaintiff's spouse at the time of the accident (fifth and sixth causes of action); and (3) defendant is estopped from denying coverage (seventh cause of action).

Before the Court are cross-motions for summary judgment made pursuant to Rule 156 of the Federal Rules of Civil Procedure. For the following reasons, the Court denies plaintiffs motion in its entirety, and grants defendant's motion with respect to every claim except plaintiff's fourth cause of action. In particular, although it is uncontroverted that the 2009 policy at the core of this cage was a renewal policy, Osuna argues that Section 3420(g)(2) requires the notification of the availability of supplemental spousal liability insurance to be contained on the front of the premium in boldface type. The Court disagrees and concludes that such an interpretation of the statutory provision is fundamentally inconsistent with the plain language of this statutory provision. More specifically, the statute makes clear that the boldface type requirement applies only to policies that became effective on or after January 1, 2003, and not to renewals of policies originally issued prior to that date. Instead, the second sentence of that law addresses the situation present here-namely, when the policy was originally issued and became effective prior to the January 1, 2003 date but then was renewed after that date. In those situations, even though the boldface print is not required, a notice of the availability of supplementary spousal liability insurance (with an explanation of such coverage and the insurer's premium for such coverage) is still required at least once per year. Plaintiff contends that a renewal of a policy that was originally issued prior to January 1, 2003 is not subject to the less onerous, non-bold print notification requirement contained within the statute. However, the statute explicitly states in the second sentence, with respect to the less onerous requirement, that it applies to "motor vehicle liability policies issued pursuant to article six of the vehicle and traffic law, including those originally issued prior to January first, two thousand three." N.Y. Ins. Law § 3420(g)(2) (emphasis added). In other words, it is abundantly clear from the plain language of the statute that the policy here-which plaintiff does not dispute was originally issued in 2003 and renewed thereafter into 2009-does not fall within the policies requiring the boldface print, but rather falls within the policies that simply require the concise notification at least once per year in accordance with the second sentence of the statute. Thus, plaintiff's second cause of action and third cause of action, which claim that plaintiff did not receive boldface notification, cannot survive summary judgment. However, his fourth cause of action, which asserts that he did not receive any notification of the availability of the insurance, does survive summary judgment because (1) as a renewal policy, he was entitled to the notification set forth in the second sentence of Section 3420(g)(2), and (2) there is a clear factual dispute regarding whether he received such notification-defendant has submitted declarations and policy documents indicating that he received such notification, while plaintiff has submitted a sworn statement that he did not receive any notification of the availability of the supplementary spousal liability insurance in connection with his renewal policy. Therefore, a trial is necessary with respect to that factual dispute on the fourth cause of action.[1]

The Court granted defendant's motion for summary judgment with respect to every claim except plaintiff's fourth cause of action in an oral ruling on September 20, 2013. Following the Court's oral ruling, plaintiff's counsel indicated that he believed the Court's ruling regarding the policy precluded plaintiff from proceeding on the fourth cause of action. The Court explained to plaintiff's counsel that his understanding was incorrect and that he could proceed with the fourth cause of action regardless of the Court's ruling on the other claims. By Notice dated November 26, 2013, plaintiff's counsel indicated that plaintiff "abandons his Fourth Cause of Action in the above matter for the sole purpose of effecting an immediate appeal to the U.S. Court of Appeals, Second Circuit, against the U.S. District Court's oral ruling and order dismissing his First, Second, Third, Fifth, Six and Seventh Causes of Action." (Docket No. 60.) On December 9, 2013, the Court held a telephone conference, with counsel for both sides and Osuna, to ensure that Osuna and his counsel understood that (1) the Court had ruled that the fourth cause of action-regarding whether plaintiff had received proper notification under the second sentence of Section 3420(g)(2)- should proceed to trial, and (2) if plaintiff decided to abandon that claim, he would not be able to revive that claim in the future once the Second Circuit heard his appeal on the other causes of action for which summary judgment was granted in defendant's favor. The Court then told Osuna and his counsel that they could advise the Court of plaintiff's decision in writing once they received the Court's written ruling memorializing and supplementing the Court's oral ruling on the record. This Memorandum and Order constitutes the Court's written ruling.


A. Facts

As an initial matter, the Court notes that neither party has complied with Rule 56.1 of the Local Civil Rules of the United States District Courts for the Southern and Eastern Districts of New York ("Local Rule 56.1"), which requires that a party moving for summary judgment submit "a separate, short and concise statement" of the allegedly undisputed material facts, set out in numbered paragraphs, on which the moving party relies in arguing that there is no genuine issue to be tried. See Local Rule 56.1(a); see also Giannullo v. City of New York, 322 F.3d 139, 140 (2d Cir. 2003); Holtz v. Rockefeller & Co., Inc., 258 F.3d 62, 72 (2d Cir. 2001). Although the failure to file a Rule 56.1 Statement is, on its own, grounds for dismissal of a motion for summary judgment, see MSF Holding Ltd. v. Fiduciary Trust Co. Int'l, 435 F.Supp.2d 285, 304-05 (S.D.N.Y. 2006); Searight v. Doherty Enters., Inc., No. 02-CV-0604 (SJF) (JO), 2005 WL 2413590, at *1 (E.D.N.Y. Sept. 29, 2005), district courts have "broad discretion to determine whether to overlook a party's failure to comply with local court rules, " Holtz, 258 F.3d at 73. Thus, "[w]here parties fail to file Rule 56.1 statements of fact, the court may choose to accept all factual allegations of the opposing parties as true for the purposes of deciding the motion for summary judgment, or may alternately opt to conduct an assiduous review of the record.'" United States v. Kadoch, No. 96-CV-4720 (CBA), 2012 WL 716899, at *2 (E.D.N.Y. Feb. 17, 2012) (quoting Holtz, 258 F.3d at 73); see also Sawyer v. Wight, 196 F.Supp.2d 220, 225 (E.D.N.Y. 2002) (where parties have not followed the requirements of Rule 56.1, courts "may discretionarily choose to search the record of their own accord").

Because the record contains sufficient evidence that is easily reviewable in the parties' affidavits and exhibits, the Court has conducted a diligent review of the record and overlooks the failure by the parties to comply with the rule. A summary of the undisputed or uncontroverted facts is set forth below.[2]

Plaintiff was the named insured of GEICO automobile insurance policy number XXXX-XX-XX-XX, originally issued by defendant on August 8, 1999. ( See Decl. of Francis J. Scahill, Oct. 26, 2012 ("Scahill Oct. 26 Decl.") Ex. C, GEICO Certified Document U-31-DP-1 (7-07).) This insurance policy provided plaintiff with coverage for "damages which an insured becomes legally obligated to pay because of: -1. bodily injury sustained by a person; and 2. property damage-arising out of the ownership, maintenance or use (including loading or unloading) of the owned auto or a non-owned auto." (Scahill Oct. 26 Decl. Ex. C, GEICO Certified Document A3ONY (03-07), at 4.) The policy also contained a number of exclusions, including a spousal liability exclusion that stated, "Section I does not apply:... to any insured for bodily injury to the spouse of that insured. We will cover a spouse if named as a third party defendant in a legal action initiated by his or her spouse against another party." ( Id. at 5.)

On August 8, 2009, plaintiff renewed this insurance policy for the period from September 21, 2009 to March 21, 2010. (Scahill Oct. 26 Decl. Ex. C, GEICO Certified Document U-31-DP-1 (7-07).) Listed on the policy were a 2006 BMW sedan and a 2009 Audi sedan. (Scahill Oct. 26 Decl. Ex. C, GEICO Certified Document U-31-DP-36 (7-07); Aff. of Robert Osuna ("Osuna Aff.") ¶¶ 3-4.)

During this policy period, on October 4, 2009, plaintiff was driving the Audi sedan in inclement weather in Pennsylvania when the car skidded out of control. (Osuna Aff. ¶¶ 9-10.) Plaintiff's wife, who was in the passenger's seat, suffered serious personal injuries as a result of the accident. ( Id . ¶ 10.)

Thereafter, plaintiff notified defendant of the accident. ( Id. ¶ 11.) On December 31, 2009, defendant disclaimed coverage for spousal liability, citing the spousal liability exclusion in plaintiff's policy. (Pl.'s Mot. Ex. A, Letter from GEICO to Banu Osuna, Dec. 31, 2009.) Several months later, in a letter dated July 22, 2010, a claims examiner for defendant asked plaintiff's wife to "keep me updated on your progress" and stated that, after plaintiff's wife completed her medical treatment, the claims examiner would "review all your notes so [defendant] can make an offer for your claim." (Pl.'s Mot. Ex. A, Letter from GEICO to Banu Osuna, July 22, 2010.)

On October 3, 2011, plaintiff's wife filed suit against plaintiff in a New York state court, alleging that plaintiff's negligent driving caused the accident and her resulting injuries. (Decl. of Francis J. Scahill, Sept. 27, 2012 ("Scahill Sept. 27 Decl.") Ex. A, Compl., Osuna v. Osuna, No. 22298/2011 (N.Y. Sup.Ct. Oct. 3, 2011).) Again plaintiff submitted a claim for coverage to defendant, and again defendant disclaimed coverage, citing the spousal liability exclusion in the policy. (Scahill Sept. 27 Decl. Ex. D, Letter from GEICO to Robert Osuna, Jan. 17, 2012.) This lawsuit ensued.

B. Procedural History

Plaintiff initially commenced this action in New York Supreme Court, Kings County, on June 13, 2011. Defendant removed the action to this Court on July 27, 2011. On February 3, 2012, plaintiff moved for summary judgment, alleging that Section 3420(g) is an unconstitutional bill of attainder. The ...

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