Opinion
106903/04.
Decided July 15, 2005.
In this action for a declaratory judgment regarding whether or not the plaintiff insurance company ("the insurer") is obligated to defend and indemnify its insured's pursuant to a lead poisoning policy, the insurance company and the defendants' owner and management company (collectively "the insureds") move and cross-move respectively for summary judgment. The underlying personal injury action was brought by Flor Cruz in behalf of herself and her infant son, Eric Cruz. That suit is against the insureds in this action — the owner of the premises and the managing agent. For the reasons that follow, the Court grants the cross-motion of the insureds and denies the motion of the insurer.
The infant's claim is based on the reading of a blood-lead level of 10 mcg/dl. When the suit was brought against the insureds, the insurance company appeared but reserved their rights under the insurance policy. Approximately 3½ weeks later, it disclaimed on the ground that the policy required a reading of at least 15 mcg/dl. to invoke the policy. The defendants countered that the local and state authorities had determined that a blood-lead level of 10 mcg/dl. or more constituted blood poisoning and that given such unanimous agreement amounted to a public policy which should prevail over the ponderous and ambiguous language of the insurance company. The insureds also argue that the insurance company waited too long to disclaim, and therefore, waived the disclaimer.
Section 4, paragraph 1 of the policy obligates the insurance company to pay a tenant for bodily injury caused by lead-based paint where the bodily injury was first documented and reported during the policy period set forth in the policy.
No dispute has been raised as to the elevated blood-lead level occurring or whether the complaint was made within the appropriate policy period. The 12 exclusions listed under "Section D-Exclusions" of the policy make no mention of the minimum amount of blood level that is excluded from the policy. As the insured has pointed out, it is only when we get to Section E-"Definitions" that we find in paragraph 8 that "First documented or first documentation means the earliest finding by a physician or other licensed health care professional that a lead level of 15 micrograms per decileter or more has been found in the blood of the Claimant."
Is the definitions section the place where one would be expected to find such an exclusion? Shouldn't this exclusion have been listed in the exclusions section with such simple and straight-forward language as "any blood level under 15 mcg/dl. is excluded from coverage under this contract"? Better still, why not a modification of paragraph 1 of Section A at the forefront of the agreement to "1. We will pay on behalf of the insured all sums . . . which insured shall become legally obligated to pay as damages to a tenant for such tenant's bodily injury caused by a lead-based paint incident which causes a blood-lead level of 15 mcg/dl." (Underlined matter is the modified language suggested by the Court.) This is a far superior method of communication than the forced and contorted language in the definition's section.
It is inconceivable to this Court that anyone — sophisticated businessman or not — would reasonably be expected to look in the definition's section for such an important exclusion. To the argument that this is a definition not an exclusion, I respond, "A rose by any other name . . ."
The First Department has roundly criticized such draftsmanship in stating that an insurance policy is required to be drafted with "clear and unmistakable language." ( Commissioners of the State Insurance Fund v. Insurance Co. Of North America, 173 AD2d 423, at 423, 570 NYS2d 51, 52 [1st Dept 1991], affd 80 NY2d 992, 592 NYS2d 648) The law in this state dictates that insurance policies are to be liberally interpreted in favor of the insured ( Miller v. Continental Ins. Co., 40 NY2d 675, 389 NYS2d 565, and exclusions, especially, must be expressed in clear and unmistakable language ( Seaboard Sur. Co. v. Gillette Co., 64 NY2d 304, 311, 486 NYS2d 873, 376 [1984]; Commissioners of the State Insurance Fund v. Insurance Co. Of North America , supra). The insurer fails to satisfy these criterion.
The Court cannot say that as a matter of law the delay in this action amounts to a waiver of any disclaimer, especially since such a delay must be coupled with a holding that the reason for the disclaimer must be obvious ( West 16th Street Tenants Corp. v. Public Service Mutual Insurance, 290 AD2d 278, 736 NYS2d 34 [1st Dept 2002], lv to appeal den 98 NY2d 605, 746 NYS2d 279 [Table No. 1-10, 194]); 2833 Third Ave. Realty v. Marcus, 12 AD3rd 329, 784 NYS2d 863 [1st Dept 2004]). None of these cases has held that a delay of less than 30 days merits waiver of dismissal. Nor could the Court proclaim as a matter of law that the reason for the delay was obvious from the fact of the complaint. It might very well be that those responsible for asserting the delay had trouble themselves reading the convoluted language of the insurance policy that their company generated. Accordingly, it is
ORDERED, DECLARED and ADJUDGED that:
1. The cross motion is granted and the main motion is denied;
2. Plaintiff insurer must defend and indemnify plaintiff's L.M.C. Realty LLC and WOLKO Management in the action being litigated in New York County under Index No. 102023/03
3. Plaintiff cannot disclaim indemnifying the Landlord-Defendants in the underlying action on the ground that the infant plaintiff, Eric Cruz, did not have a blood-lead level of at least 15 mcg/dl.
4. Costs and disbursements are awarded to the defendants, together with $50 motion costs; and it is further
ORDERED that the infant plaintiff and his mother shall present one Bill of Costs.