Summary
holding that separation of insureds provision "does not negate the portion of the policy which precludes coverage to . . . the additional insured[] when no coverage is extended to . . . the named insured, on grounds of ambiguity"
Summary of this case from Cnty. of Niagara v. Neth. Ins. Co.Opinion
2012-12-4
ROBERT PITT REALTY, LLC, et al., Plaintiffs–Respondents, v. 19–27 ORCHARD STREET, LLC, et al., Defendants, Essex Insurance Company, et al., Defendants–Appellants. 19–27 Orchard Street, LLC, et al., Third–Party Plaintiffs–Respondents, v. Essex Insurance Company, Third–Party Defendant–Appellant.
Clausen Miller P.C., New York (Daniel S. Valinoti, and Mark J. Sobczak of the bar of the State of Illinois, admitted pro hac vice, of counsel), for appellants. Lewis Johs Avallone Aviles, Islandia (Elizabeth A. Fitzpatrick of counsel), for Robert Pitt Realty, LLC and The Hartford Insurance Company, respondents.
Clausen Miller P.C., New York (Daniel S. Valinoti, and Mark J. Sobczak of the bar of the State of Illinois, admitted pro hac vice, of counsel), for appellants. Lewis Johs Avallone Aviles, Islandia (Elizabeth A. Fitzpatrick of counsel), for Robert Pitt Realty, LLC and The Hartford Insurance Company, respondents.
MAZZARELLI, J.P., SWEENY, RENWICK, RICHTER, ROMÁN, JJ.
Order, Supreme Court, Bronx County (Mark Friedlander, J.), entered on or about December 13, 2010, which, to the extent appealed from as limited by the briefs, granted plaintiffs Robert Pitt Realty, LLC and the Hartford Insurance Company's motion for summary judgment declaring that defendant Essex Insurance Company (Essex) owed a duty to defend and indemnify Robert Pitt Realty, LLC in the underlying action, and denied the cross motion by defendants Essex and Markel Group for summary judgment declaring that Essex has no duty to defend or indemnify Robert Pitt Realty, LLC (Robert Pitt), The Hartford Insurance Company, 19–27 Orchard Street, LLC (19–27) and 24 & 27 Ochard Street Corp. (24 & 27) with respect to the underlying personal injury action, unanimously modified, on the law, plaintiffs' motion for summary judgment denied, defendants' cross motion granted to the extent of declaring that Essex has no duty to defend or indemnify 19–27 or 24 & 27, and otherwise affirmed, without costs.
This declaratory judgment action arises from an underlying bodily injury action brought by Victor Velez in which it is alleged that he was injured during the course and scope of his employment with defendant Avante Building & Consulting Corp. (Avante) on June 23, 2004. Avante was purportedly hired by 24 & 27 to perform work within premises owned by Robert Pitt and leased by 24 & 27.
The “Separation of Insureds Condition” contained within the Essex policy does not negate the portion of the policy which precludes coverage to Robert Pitt, the additional insured, when no coverage is extended to 24 & 27, the named insured, on grounds of ambiguity. Rather, it “primarily highlights the named insured's separate rights and duties, as well as makes clear that the limits of the policy are to be shared by all of the insureds ... [who] must share [the limit of coverage] equally; [and] it does not negate bargained-for exclusions, or otherwise expand, or limit coverage” ( DRK, LLC v. Burlington Ins. Co., 74 A.D.3d 693, 694, 905 N.Y.S.2d 58 [1st Dept.2010],lv. denied16 N.Y.3d 702, 2011 WL 135238 [2011] ). Thus, it does not render the policy's coverage or exclusion provisions ambiguous, and therefore, Robert Pitt's entitlement to coverage must be analyzed within the reasons cited by Essex's disclaimer to 24 & 27. Stated differently, as indicated in the insurance policy, whether Robert Pitt is entitled to coverage will generally turn on whether 24 & 27 is entitled to coverage.
Preliminarily, Essex establishes that the notice of the accident provided by 24 & 27, approximately three months after the accident in question, was untimely as a matter of law. Accordingly, since Essex timely disclaimed coverage to 24 & 27 on this basis, it properly denied coverage to 24 & 27. This, however, does not preclude coverage to Robert Pitt since although additional insured Robert Pitt, the out-of-possession landlord/owner of the premises where Velez was injured, was advised of the late notice provided by its tenant, the named insured, there was no specific disclaimer from Essex to Robert Pitt on this basis. Notwithstanding the policy's preclusionof coverage to Robert Pitt when no coverage was extended to 24 & 27, as a separate insured, Robert Pitt was entitled to its own disclaimer on grounds that it failed to timely notify Essex of the accident for which it seeks coverage ( Sport Rock Intl., Inc. v. American Cas. Co. of Reading, Pa., 65 A.D.3d 12, 17, 878 N.Y.S.2d 339 [1st Dept.2009] ). Since Essex failed to provide Robert Pitt with a timely disclaimer this defense was abandoned, and it cannot deny coverage to Robert Pitt on this ground ( see General Acc. Ins. Group v. Cirucci, 46 N.Y.2d 862, 864, 414 N.Y.S.2d 512, 387 N.E.2d 223 [1979];Greaves v. Public Serv. Mut. Ins. Co., 5 N.Y.2d 120, 124, 181 N.Y.S.2d 489, 155 N.E.2d 390 [1959] ).
Essex's denial of coverage to 24 & 27 on the ground that the incident did not occur at a covered location is unavailing and unsupported by the record. The deposition testimony and the lease clearly established that the premises at which the work in question was being performed was “the Building at 25 Robert Pitt Drive, Monsey, N.Y. 10952.” Accordingly, Essex would not have been able to deny coverage to 24 & 27 on this ground and thus cannot deny coverage to Robert Pitt on this ground either.
Based on the deposition testimony, factual issues remain as to whether, Essex has a duty to defend and indemnify 24–27 and thus Robert Pitt or whether the exclusion for “bodily injury” or “property damage” arising out of the acts or omissions of the named insured or its employees, other than general supervision of “work” performed for the named insured by the “contractor,” applies. Since whether Essex is entitled to deny coverage to 24 & 27 is dispositive on the issue of coverage to Robert Pitt, based on the foregoing, the motion court erred in granting summary judgment to plaintiffs.
Insofar as 19–27 owned the adjacent lot, a premise separate and apart from the premises covered under the policy, Essex had no duty to defend or indemnify it. Thus, Essex properly denied coverage to 19–27.