Madera v Allstate Ins. Co.

[*1] Madera v Allstate Ins. Co. 2006 NY Slip Op 51004(U) [12 Misc 3d 1162(A)] Decided on May 31, 2006 Supreme Court, Kings County Knipel, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 31, 2006
Supreme Court, Kings County

Julio Madera, Plaintiff,

against

Allstate Insurance Company, et ano., Defendants.



37962/02



Julio Madera (Plaintiff)

Attorney - Gruvaman, Diordano & Glavs

111 John Street - Suite 800

New York, NY 10038

(212) 931-9951

Allstate Insurance Company & Dawn Bulford (Defendants)

Attorney - Longo & D'Apice

26 Court Street - Suite 1700

Brooklyn, NY 11242

(718) 855-5684

Lawrence S. Knipel, J.

Upon the foregoing papers, plaintiff Julio Madera moves for an order, pursuant to CPLR 3212, granting summary judgment declaring that Allstate Insurance Company (Allstate) is obligated to defend and indemnify defendant Dawn Bluford, pursuant to an insurance policy issued by Allstate to Bluford, for damages resulting from an injury suffered by plaintiff. Allstate cross moves for an order, pursuant to CPLR 3212, granting summary judgment declaring that it has no such obligation.

This action arises out of a personal injury lawsuit. On September 15, 1998, plaintiff was allegedly injured when he tripped and fell in an interior stairway in a multiple dwelling building located at 1415 Dekalb Avenue in Brooklyn (the insured premises). Thereafter, plaintiff commenced an action against Bluford, the owner of the building, under Kings [*2]County Index No. 1717/00 (the underlying action). There is a dispute between Allstate and plaintiff as to when plaintiff's attorney notified Allstate, who had issued an insurance policy to Bluford covering the insured premises, that a lawsuit had been commenced. However, both parties appear to concede, for the purposes of this motion, that Allstate received notice of the claim no later than December 10, 1999. Moreover, it is not disputed that, in a letter dated February 7, 2000, Allstate notified Bluford that it was disclaiming any and all obligations under its insurance policy with Bluford.

Bluford failed to appear in the underlying action, and, on May 2, 2000, this court [Hubsher, J.] granted plaintiff's motion for a default judgment. On November 15, 2000, following an inquest, judgment was granted in plaintiff's favor and against Bluford in the amount of $75,000.00.

In this action, plaintiff seeks an order declaring that Allstate is obligated to indemnify Bluford for the amount of the aforementioned judgment. Specifically, plaintiff claims that the insurance policy issued to Bluford provided coverage for the injury sustained by plaintiff and that, in any event, Allstate's disclaimer was untimely, and lacked sufficient specificity.

"Pursuant to Insurance Law § 3420 (d), an insurance carrier is required to provide the insured with timely notice of its disclaimer or denial of coverage on the basis of a policy exclusion" (see e.g. Moore v Ewing, 9 AD3d 484, 487 [2004]). However, where the noncoverage arises from a lack of inclusion, not a policy exclusion, a timely disclaimer of coverage is not required (see e.g. Markevics v Liberty Mut. Ins. Co., 97 NY2d 646 [2001]; Continental Casualty Co. v Luhrs, 299 AD2d 357, 358 [2002]). "Under such circumstances, the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed" (National Union Fire Ins. Co. v Utica First Ins. Co of Pittsurgh, Pa.., 6 AD3d 681, 682 [2004]), quoting Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188 [2000]; see Zappone v Home Ins. Co., 55 NY2d 131, 137-138 [1982]; Atlantic Mut. Companies. v Ceserano, 5 AD3d 382, 383-384 [2004]; State Farm Mut. Auto. Ins. Co. v John Deere Ins. Co., 288 AD2d 294, 297 [2001]).

Here, the homeowner's insurance policy issued by Allstate to Bluford defines "insured premises", inter alia, as "residence premises" or "any premises used by an insured person in connection with the residence premises." Further, "dwelling" is defined in that policy as a "one, two, three or four family building structure where [the insured] reside[s] and which is principally used as a private residence."

Michael Gonzalez, a claim service adjuster employed by Allstate who was assigned to investigate plaintiff's claim, testified at a deposition that as part of his investigation he discovered that Bluford was listed in the telephone directory as residing at 240 West 129th Street in New York County. According to Gonzalez, when an investigator met with Ms. Bluford at that address, Ms. Bluford informed the investigator that she never owned the insured premises. Mr. Gonzalez later spoke with Ms. Bluford on the telephone and she advised him that she had been friends with a gentleman named Phillip Hunter and, because Hunter did not have a good credit rating, he asked Bluford if she would buy the insured [*3]property from a man named John Badu, and later transfer the property to Hunter.[FN1] Ms. Bluford told the investigator that she did not even know how to get to the insured premises.

When asked by Gonzalez why there was an insurance policy issued to her for the insured premises, Ms. Bluford stated that she had never applied for that insurance and that someone else, possibly Hunter, may have used her name to secure that coverage. Further investigation by Allstate revealed that a deed had transferred ownership of the insured premises to Bluford on July 16, 1998, and that she was still the record owner of the insured premises. Finally, an Allstate agent went to the insured premises and advised Gonzalez that his investigation revealed that no one there knew of Ms. Bluford. Based on this investigation, Allstate disclaimed coverage; one of the grounds for this disclaimer, explained Gonzalez, was that the insured did not reside at the insured premises as required by the policy.

The facts of this case are remarkably similar to those in Metropolitan Property & Cas. Ins. Co. v Pulido (271 AD2d 57 [2000]). There, plaintiff was injured at premises owned by the insured's daughter and son-in-law; the insured did not reside at those premises. As in the instant case, the insurance policy defined the insured premises as premises at which the insured resides. There, too, the plaintiff argued that the insurance company had failed to timely disclaim coverage for his injury under the policy. The court disagreed, stating,: it is reasonable to conclude that the policy at issue was intended (and indeed was unambiguously written) so as to only provide liability coverage to the insured at their residencewhich was either the premises described or any other place where they actually lived....The policy cannot be read to provide coverage to a location where the insured did not reside, even if they owned such premises. Accordingly, if the insured did not live at the [insured property] , then their homeowners' liability policy coverage never applied to this location, and thus there was no requirement that [the insurance company] timely disclaim.

(Metropolitan Property & Cas. Ins. Co., 271 AD2d at 378) [internal citations

omitted].

Here, too, it is undisputed that Bluford never resided at the insured premises and, thus, the subject policy did not provide coverage. Accordingly, Allstate was under no duty to disclaim coverage and the issue of whether the disclaimer was timely is, thus, irrelevant (Metropolitan Property & Casualty Ins. Co., 271 AD2d at 378). [*4]

However, an action for a declaratory judgment is not subject to dismissal merely because plaintiff is not entitled to the declaration it seeks (Lanza v Wagner, 11 NY2d 317 [1962]). Instead, rather than dismiss the complaint, the court should make an appropriate declaration of the rights and obligations of the parties with respect to the subject matter of the litigation (Sweeney v Cannon, 30 NY2d 633 [1972]). Accordingly, the motions of Allstate and plaintiff are resolved to the extent that the court declares that Allstate has no duty to defend or indemnify Dawn Bluford with respect to the underlying action.

This constitutes the decision, order and judgment of the court.

E N T E R,

J. S. C. Footnotes

Footnote 1: In support of its motion, Allstate attaches a written statement by Bluford dated February 1, 2000, in which she corroborates the account given by Gonzalez as to this conversation and in which she reiterates that she never lived in the insured premises.