Magistrate's Report Affirmed
Barry Zalma
Jul 12, 2023
Read the full article at https://lnkd.in/gCkXFJFZ and see the full video at https://lnkd.in/gqE678ic and at https://lnkd.in/griX8Ekb and at https://zalma.com/blog plus more than 4550 posts.
Midvale Indemnity Company (“Midvale”) sued Arevalos Construction Corp. (“Arevalos”), Victor Siguenza Zuniga (“Zuniga”), 625 Halsey LLC (“Halsey”), D&G Construction NY Inc. (“D&G”), and RM Construction and Development Corp. (“RM”) seeking a declaratory judgment relating to a commercial general liability insurance policy Midvale issued to Arevalos and an underlying lawsuit in New York state court, captioned Victor Siguenza Zuniga v. 625 Halsey LLC, Index No. 525911/2018 (the “Underlying Action”).
In Midvale Indemnity Company v. Arevalos Construction Corp., et al, No. 22-CV-97 (FB) (RML), United States District Court, E.D. New York (July 5, 2023) was asked to overturn the report and recommendations of the Magistrate Judge to acknowledge the default and order no coverage for defense or indemnity of anyone named in the Underlying action.
FACTS
D&G and Zuniga timely objected to the report of the Magistrate judge. These objections triggered the US District Judge's de novo review.
D&G, a subcontractor of Arevalos claiming coverage and a right to indemnification by Arevalos' insurer Midvale, and Zuniga, the injured tort claimant in the Underlying Action, has been named as defendants in this declaratory action by Midvale. D&G and Zuniga object to the Magistrate's finding that none of the named defendants was owed coverage under the policy.
DISCUSSION
D&G and Zuniga object to the conclusion that they lack standing to oppose Midvale's motion, its finding that none of the named defendants were entitled to coverage, and the scope of its declaratory relief.
The Magistrate recommended finding that D&G's subcontractor agreement with Arevalos imposed no duty on Midvale, a “stranger to that contract,” to D&G. He also found that “D&G does not claim to be a third-party beneficiary of the Policy,” that “the Policy does not indicate an intent to confer a benefit upon D&G or any other individual or entity other than Arevalos,” and that “Zuniga is not a named insured or third-party beneficiary under the Policy.”
In New York, a non-party to a contract generally lacks standing to enforce the agreement in the absence of terms that clearly evidence an intent to permit enforcement by the third party in question unless it establishes:
the existence of a valid and binding contract between other parties,
that the contract was intended for his benefit and that the benefit to him is sufficiently immediate, rather than incidental, to indicate the assumption by the contracting parties of a duty to compensate him if the benefit is lost.
The US District Judge concluded that the Magistrate did not err. He found that Arevalos was not entitled to coverage because of the policy's Multi-Unit and Tract Housing Residential Exclusion, which “excludes coverage for ‘[b]odily injury' arising out of any ‘construction operations' that involve a ‘housing tract' or ‘multi-unit residential building.'”
Since the Underlying Action seeks damages for a construction project falling under this exclusion: specifically, one for a four-story building with ten residential units the exclusion clearly applied. This scope of relief is proper because it is what Midvale requested in its Complaint, and because the Magistrate rightly found Midvale entitled to a default judgment. The Court adopted the relief recommended by the Magistrate but noted that it is only binding against the defaulting parties.
The Court overrules D&G and Zuniga's objections, adopts the Magistrate’s recommendation and directs the Clerk to enter a judgment granting Midvale's motion for a default judgment against Arevalos and RM and declaring that Midvale has no duty to defend or indemnify any party with respect to the Underlying Action.
ZALMA OPINION
Every defendant in a law suit wants it resolved with other peoples' money and even if they did not buy insurance to protect themselves will seek the benefits of insurance available to others. Claiming a benefit to an insurance contract as a result of a construction contract can be effective if the policy provided coverage. In this case there was no coverage because of a clear and unambiguous exclusion the insurer had no obligation to provide defense or indemnity to anyone. It pays to read the insurance policy before making a claim and filing a suit.
(c) 2023 Barry Zalma & ClaimSchool, Inc.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://zalmaoninsurance.locals.com/subscribe.
Consider subscribing to my publications at substack at https://barryzalma.substack.com/publish/post/107007808
Go to Newsbreak.com https://www.newsbreak.com/@c/1653419?s=01
Follow me on LinkedIn: www.linkedin.com/comm/mynetwork/discovery-see-all?usecase=PEOPLE_FOLLOWS&followMember=barry-zalma-esq-cfe-a6b5257
Daily articles are published at https://zalma.substack.com. Go to the podcast Zalma On Insurance at https://podcasters.spotify.com/pod/show/barry-zalma/support; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; https://creators.newsbreak.com/home/content/post; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library.
Please tell your friends and colleagues about this blog and the videos and let them subscribe to the blog and the videos.
Subscribe and receive videos limited to subscribers of Excellence in Claims Handling at locals.com https://lnkd.in/gfFKUaTf.
Consider subscribing to my publications at substack at https://lnkd.in/gcZKhG6g.
Go to Newsbreak.com https://lnkd.in/g8azKc34
Follow me on LinkedIn: https://lnkd.in/guWk7gfM
Go to the Insurance Claims Library – https://lnkd.in/gWVSBde.
Detail Charging Defendant for Fraud is Sufficient
Post 5242
Read the full article at https://lnkd.in/g_HVw36q, see the video at https://lnkd.in/gpBd-XTg and at https://lnkd.in/gzCnBjgQ and at https://zalma.com/blog plus more than 5200 posts.
Charges that Advises the Defendant of the Crime Cannot be Set Aside
In United States Of America v. Lourdes Navarro, AKA Lulu, No. 25-661, United States Court of Appeals, Ninth Circuit (December 4, 2025) Lourdes Navarro appealed the district court’s denial of her motion to dismiss the indictment and enter final judgment was in error.
FACTUAL BACKGROUND
The indictment alleged that insurers reimburse only for medically necessary services. Navarro performed unnecessary respiratory pathogen panel (RPP) tests on nasal swabs collected from asymptomatic individuals for COVID-19 screening.
Navarro billed over $455 million to insurers for those additional RPP tests that she knew to be medically unnecessary. These allegations constituted a plain, concise, and definite written ...
Louisiana Statute Prevents Enforcement of Contract Term Requiring Arbitration of Disputes
Post 5241
Read the full article at https://www.linkedin.com/pulse/international-convention-requiring-enforcement-award-barry-sttdc, see the video at and at and at https://zalma.com/blog plus more than 5200 posts.
In Town of Vinton v. Indian Harbor Insurance Company, Nos. 24-30035, 24-30748, 24-30749, 24-30750, 24-30751, 24-30756, 24-30757, United States Court of Appeals, Fifth Circuit (December 8, 2025) municipal entities including the Town of Vinton, et al sued domestic insurers after dismissing foreign insurers with prejudice. The insurers sought arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention”) but the court held Louisiana law — prohibiting arbitration clauses in such policies—controls, as the Convention does not apply absent foreign parties who ...
Refusal to Provide Workers’ Compensation is Expensive
Post 5240
Read the full article at https://lnkd.in/guC9dnqA, see the video at https://lnkd.in/gVxz-qmk and at https://lnkd.in/gUTAnCZw, and at https://zalma.com/blog plus more than 5200 posts.
In Illinois Department of Insurance, Insurance Compliance Department v.USA Water And Fire Restoration, Inc., And Nicholas Pacella, Individually And As Officer, Nos. 23WC021808, 18INC00228, No. 25IWCC0467, the Illinois Department of Insurance (Petitioner) initiated an investigation after the Injured Workers’ Benefit Fund (IWBF) was added to a pending workers’ compensation claim. The claim alleged a work-related injury during employment with the Respondents who failed to maintain workers’ compensation Insurance.
Company Overview:
USA Water & Fire Restoration, Inc. was incorporated on January 17, 2014, and dissolved on June 14, 2019, for failure to file annual reports and pay franchise taxes. It then operated under assumed names including USA Board Up & Glass Co. and USA Plumbing and Sewer. The business ...
Zalma’s Insurance Fraud Letter
Read the full article at https://lnkd.in/dG829BF6; see the video at https://lnkd.in/dyCggZMZ and at https://lnkd.in/d6a9QdDd.
ZIFL Volume 29, Issue 24
Subscribe to the e-mail Version of ZIFL, it’s Free! https://visitor.r20.constantcontact.com/manage/optin?v=001Gb86hroKqEYVdo-PWnMUkcitKvwMc3HNWiyrn6jw8ERzpnmgU_oNjTrm1U1YGZ7_ay4AZ7_mCLQBKsXokYWFyD_Xo_zMFYUMovVTCgTAs7liC1eR4LsDBrk2zBNDMBPp7Bq0VeAA-SNvk6xgrgl8dNR0BjCMTm_gE7bAycDEHwRXFAoyVjSABkXPPaG2Jb3SEvkeZXRXPDs%3D
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Zalma’s Insurance Fraud Letter
Merry Christmas & Happy Hannukah
Read the following Articles from the December 15, 2025 issue:
Read the full 19 page issue of ZIFL at ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
