Morrisania Towers Hous. Co. LP v Lexington Ins.
2012 NY Slip Op 30935(U)
April 3, 2012
Sup Ct, New York County
Docket Number: 116364/10
Judge: Manuel J. Mendez
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SUPREME COURT OF THE STATE OF NEW YORK
- NEW YORK COUNTY
MANUEL J. MEIJDE
MORRlSANiA TOWERS HOUSING COMPANY LIMITED
PARTNERSHIP, NHPMN MANAGEMENT, LLC, AND
LIBERTY MUTUAL INSURANCE COMPANY,
LEXINGTON INSURANCE COMPANY,
MOTION SEQ. NO.
The following papem, numbered 1 to
MOTION CAL. NO.
were read on thio motion to dlrmlss and for summary
. r 1 1 7
Notlce of Motlonl Order to Show Cause
Upon a reading of the foregoing cited papers, it is ordered and adjudged that
defendantâs motion to dismiss on the grounds that a defense is founded upon
documentary evidence and the complaint falls to state a cause of action is denled,
plaintiffsâ cross- motion for summary Judgment Is granted.
Plaintiffs bring this action for a determination of rights with respect to the
Lexington policy and for a declaratory judgment that once coverage under the Arch
pollcy covering the plalntlffa Morrisanla and NHPMN Is exhausted, Lexington is
required to provide a defense and Indemnity to them for the claims alleged In a
consolidated action pending in Supreme Court County of Bronx under Index number
17848105. Plaintiffs also seek judgment declaring that coverage under the Liberty
Mutual Policy is excess over the coverage afforded by the Lexington pollcy.
Relevant Facts(1nsurance coverage)
Morrlsania Towers Housing Company ( hereinafter âMorrlsaniaâ) is the owner of
premises located at 280-300 East 161mt.
Street Bronx, New York( hereinafter the
âlpremisesâ) NHPMN Management Company ( hereinafter âNHPMNâ ) is Morrisanlaâs
Managing Agent. McRoberts Protective Agency Inc., ( hereinafter âMcRobertaâ ) is a
security agency. On August 1,2004 Morrisanla, through Its agent NHPMN entered into
an agreement with McRoberts for McRoberts to provide security services at the
premises. The agreement commenced on August I,
2004 and was to end on July 31,
2005. As part of the agreement McRoberts was to carry and malntain Insurance
coverage and âto hold owner harmless from any and all liability or damage or claims
for damage for personal injury, Including death, as well as property damages whlch
may arise from the negilgent acts of [McRoberts].â [See Foley Affidavit Exhibit C].
McRoberts obtained a policy of Insurance from Arch Insurance Company ( No.
BSPKG00454 ) covering the period October 5,2004 through October 5,2005, with a
General Aggregate limit of $5,000,000 dollars and a per occurrence llmlt of $1,000,
000. It also obtained an Excess coverage policy through Lexington Insurance
Company ( No. 1155109 ) covering the period December 1,2004 through October 6,
2005, with an aggregate limit of $2,000,000 per occurrence. The Lexington policy lists
the Arch policy as the underlying policy. Morrlsania and NHPMN are covered under an
excess policy of insurance issued by Liberty Mutual ( No. EBI-661-004162-103) with an
General Aggregate limit of $14,166,666 and a bodily Tnjurylproperty damage limit of
$l,000,000[see Foiey Affidavit Exhibit A, B and E],
The Lexington Policy, lists the Arch pollcy as the Underlying insurance and
provides coverage for the loss which the Insured is obligated to pay by reason of
exhaustion of all applicable underlying limits. This pollcy contains a notice provision
requiring the insured to immediately notlfy Lexington in writing of any occurrence
which may reasonably be expected to result In a claim under the pollcy. The named
Insured is required to give immediate written notice of any claim which is reasonably
likely to Involve the policy.
The Liberty Mutual Policy provides coverage in excess of a $600,000 self-insured
amount and âin excess of other valid and collectlble insurance, whether primary,
excess, contingent or on any other basis, except any such insurance purchased by the
Insured specifically to apply in excessâof thls Insurance. If the Insured has â other
Insuranceâ, greater than or equal to [$500,000] then all amounts payable or retained
under such âother insuranceâ, but not less than [$600,000].â The Liberty Mutual Policy
âwill not contribute with any other Insuranceâ. [see Foley Affidavit Exhibit E pg. 13,14,
20 and 211.
The underlying action concerns a 2005 shooting of Raymond Albert0 Carreras
by Sonia Meekins and Baklm Meekins, that occurred at the property owned by
Morrisanla, managed by NHPMN and for which McRoberts provided security. Carreras
was shot, while In front of his mother, and rendered a paraplegic. Carreras and his
mother Yolanda Lopez brought suit In Supreme Court Bronx County under index No.
17848106 against Morrisanla, McRoberts, Sonia Meekins and Bakim Meekins on June
20,2005. On May 5,2008 Carreras and Lopez brough suit in Supreme Court Bronx
County under index No. 303699108 against NHPMN. The actions were consolidated
under index number 17848l05.
On August 2,2006, Wilson Eiser, defense counsel for Morrlsania sent a letter to
defense counsel for McRoberts regarding the Agreement of August 1,2004 and
tenderin0 the defense and indemnlflcation of the action on behalf of Morrisania to
McRoberts. On August 25,2006 Carol Meriam, Esq., of Brownyard Claims
Management, Inc., responded to Wilson Elserâs letter, denying negligence on the part of
McRoberts and disclalmlng coverage based on late notice. [see Cross motion Exhibit D
and E 1.
On November 2,2006 Wilson Elser replied to Ms. Meriam objecting to the denial
of tender on numerous grounds, requesting confirmation of coverage and copies of the
policy of insurance and declaration page. As to the late notice claim Wilson Elser
pointed out that McRoberts is a named defendant and that Cross-claims were asrrerted
against It in October 2005 as such they were to have placed Brownyard Claims
Management on Notice. Finally Wilson Elser argued that It was giving notice of the
claim as per the policy âas soon as practicable.â By letter dated November 22,2006,
Ms. Meriam responded reiterating her previous denials of coverage. None of the letters
from Ma. Meriam identified McRobertâs insurance carrier.[ see Cross motion Exhibits G,
H, I and J 1.
Preliminary conference orders were issued, ordering McRobert.8 to provide the
name of their insurance carrier. It was not until January 23, 2007 that Morrisanla
learned that Arch insurance had issued a liability policy to cover McRoberts.
McRoberts provided the name of the wrong excess carrier and It wasnât until June of
2009 when counsel for Morrisanla and NHPMN learned that Lexington insurance could
be the excess carrier. On June 3,2009 counsel for Morrisania and MHPMN wrote to
Lexington notifying it of the claims and requesting that It conflrm receipt of notice of
the actions and that it will be providing coverage. Lexington responded with a request
for additional information. On July 16, 2009 counsel for Morrisania and NHPMN
provided the information requested, reiterated the request for conflrmation and their
position on coverage. Receiving no Answer from Lexington, again on July 2, 2010
counsel for Morrisania and NHPMN wrote to Lexlngton provldlng it with a pollcy
number, period of coverage and a copy of the declarations page. Counsel also
requested confirmation that Lexington would be providing coverage for this matter. On
July 30,2010 Lexington wrote to Morrisanla and NHPMNâs counsel disclaiming
coverage [see Cross motion Exhibits B, C, F, L, M, N, 0, P, Q, R, S, T, U and v].
Plaintiffs commenced this declaratory judgment action. defendant now moves
to dismiss and plaintiffs cross move for summary judgment. Defendant claims that it is
not obligated to provide coverage because notice was untimely. Plaintlff claims that
notice was timely, as It was made as soon as they learned Lexington was the carrier
and the disclaimer of coverage was untimely, as it was made over one year after
recelving notice of claim.
insurance Law 5 3420 (d )( 2) requires an insurer under a liability policy delivered
or Issued for delivery In this state to disclaim liability or deny coverage for death or
bodily inJury arising out of a motor vehicle accident or any other type of accident
occurring within this state, to give written notice as soon as reasonably possible of
such disclaimer of liability or of coverage to the insured and the injured person or any
other claimant. Timeliness of an insurerâs disclaimer is measured from the point in
tlme when the insurer first learns of the grounds for disclaimer of liability or denial of
coverage ( Ewing v. Moore, 9 A.D. 3d 484,781 N.Y.S. 2d S I [P.
Dept. 2004 I).
Courts have interpreted this provision as requiring the insurer to give prompt
notice and not delay the issuance of a disclaimer that the insurer knows to be valid
untli It completes Ita investlgatlon of other possible grounds for dlsclalmer. As such
the fallure of the insurer to give written notlce of disclaimer or denlal of coverage for a
personal Injury claim as soon as reasonably possible, after flrst learning of the
accident or the grounds for dlsclaimer of liability or denial of coverage, precludes the
effectiveness of the disclaimer or denial. Any uncertainty as to the existence of
coverage is irrelevant to an inburerâs ability to issue a timely disclaimer based on an
insuredâs breach of a condition precedent to coverage, such as a late notice of claim,
that is known to the insurer ( George Campbell Painting v. National Union Fire
Insurance Company of Pittsburgh, PA, 92 A.D. 3d 104,937 N.Y.S. 2d 164 [lDt.
Courts have found a four month delay In disclalmlng Insurance coverage on the
ground that an additional insured failed to notify the insurer âas soon as practicableâ of
the accident to be unreasonable as a matter of law, absent an explanation why anything
beyond a cursory investigation was necessary to determine whether the additional
insured had tlmely notified it of the claim( Hunter Roberts Construction Group, LLC., v.
Arch Insurance Company, 75 A.D. 3d 404,904 N.Y.S. 2d 52 [IDt.
Dept. 20101). An
unsatisfactory explanation for the delay will render the notice of disclaimer or denlai of
coverage unreasonable as a matter of law ( Moore v. Ewing, 9 A.D. 3d 484,781 N.Y.S.
2d 51, Supra,) insurerâs unexplained delay in notlce of dlsclaimer 45 days after It had
Information about the claim unreasonable as a matter of law; Worcester lnerurance
Company v. Bettenhauser, 95 N.Y.2d 186,734 N.E. 2d 745,712 N.Y.S. 2d 433 ,
failure to deny coverage for more than one year unreasonable; Agoado Realty Corp, v.
United International Insurance Company, 260 A.D. 2d 112,699 N.Y.S. 2d 335 [lât.
19991, unexplained delay of approximately one year dlsclaimer of coverage for a
wrongful death suit arising out of a tenantâs murder unreasonable as a matter of law,
regardless of whether the insured was prejudiced).
Strict scrutiny of facts supporting an insurerâs noncooperation defense to
coverage is required to protect Innocent injured partles from suffering the
consequences of lack of coverage ( Hunter Roberts Construction Group, LLC, v. Arch
Insurance Company, 75 A.D. 3d 404,904 N.Y.S. 2d 52, Supra).
Plaintiffs In the underlying action, innocent injured partlea, who sustained
serious physical Injuries rendering Carreras paraplegic as a result of the gunshot
wounds would suffer the consequences of McRoberts neglect In providing timely
insurance information or fliing a prompt notice of claim with its carrier. In any event,
Lexington waited for over a year from the time it was flrst notified of the claim by
Morrisanla and NHPMNâs counsel before disclaiming coverage. This over one year
delay is unreasonable as a matter of law and untimely.
Arch insurance company policy BSPKG00454 is the primary and underlying
policy listed in Lexingtonâs excess coverage policy. The question to be answered is
which must be exhausted flrst as between Liberty Mutual policy No. EBI-661-004102-103
and Lexington policy No. 1155109 or do they contribute ratably.
An insurance policy is a contract between the insurer and the insured and the
extent of coverage is controlled by the relevant policy terms, including a given pollcyâs
priority vis-a vis other policies. it is the policy provisions that control priority of
coverage ( Bovis Lend Lease LMB, Inc., v. Great American Insurance Company, 53 A.D.
3d 140,855 N.Y.S. 2d 459 [lmt.
Dept. 20081). An insurance policy which purports to be
excess coverage but contemplates contribution with other excess policies or does not
by the language used negate that possibility must contribute ratably with a similar
policy, but must be exhaustad before a policy whlch expressly negates contribution
with other carrienr or otherwise manifests that it is intended to be excess over other
excess policies ( 15 Couch on Insurance Q 220:42; Vassar College v. Dlamond State
Insurance Company, 84 A.D. 3d 942,923 N.Y.S. 2d 124 [ â .Dept. 20111). An excess
policy that provides the final tier of coverage cannot be invoked prior to the exhaustlon
of all primary and excess policies ( Tishman Construction Corp., v. Great Amerlcan
ins., Co, S3 A.D. 3d 416,861 N.Y.S. 2d 38 [lot. 20081).
The Lexington pollcy lists the Arch insurance pollcy as the underlying policy
and is excess insurance to the Arch Insurance policy. Lexington has obligated itself to
pay âon behalf of the Insured that portion of the loss which the insured will become
legally obligated to pay as compensatory damages...by reason of exhaustion of all
applicable underlying limit . . Under the SELF-INSURED RETENTION Lexingtonâs
policy states ââ in the event of exhaustlon of the aggregate limits of liability of the
underlying insurance policy as stated in section II of the declarations, this policy will
continue In force as underlying insurance subject to the insuredâs retention of an
amount equal to that stated In the declaratlons a8 self insured retention.â No other
relevant language is Included in the copy of the policy annexed to defendantâs papera
[see Foley Affidavit Exhibit B 1.
Liberty Mutual has obligated Itself to pay amounts in excess of the self-insured
amount.( See policy Section VI 4.a ). The policy further statesâ Any other insurance
available to the insured shall be deemed to satlsfy the insuredâs responsibility for
damages withln the âself Insured amountâ to the extent such âother insuranceâ actually
pays for damages within the âself insured amountâ. ... this policy wlll not Contribute with
any other insurance.â ( Policy Sectlon VI 4.d ). The police defines âOther insuranceâ
to mean any other valid and collectible insurance, whether primary, excess, contingent
or on any other bash, except any such insurance purchased by the Insured specifically
to apply in excess of this insurance.â
The Lexington policy becomes the underlying pollcy after exhaustion of the
applicable underlying limit of $1,000,000 of the Arch insurance policy. Once the
$2,000,000 limit of the Lexington policy is exhausted, since the Liberty Mutual policy is
in excess of âany other insurance policyâ then the Liberty Mutual policy Is obligated to
In order to prevail on a motion for summary judgment, the proponent must
make a prima facie showing of entitlement to judgment as a matter of law,
through admlssible evidence, eliminating all material lasues of fact.(Klein V. City
of New York, 89 NY2d 833; Ayotte V. Gervasio, 81 NY2,$JW,Alvarez v. Prospect
Hospltal, 68 NY2d 320). Once the moving party has qaqWcEthese standards, the
burden shffts to the opponent to rebut that prima facie showing, by producing
contrary evidence, In admissible form, sufficient to require a trial of material
factual issues(Kaufman V. Silver, 90 NY2d 204; Amatulll V. Delhi Constr. Corp.,77
NY2d 625; iselin & Co. V. Mann Judd Landau, 71 NY2d 420). In determining the
motion, the court must construe the evidence in the ilght most favorable to the
non-moving party(SSBS Realty Corp. V. Public Service Mut. Ins. Co., 263 AD2d
683; Martin V. Brigg8, 235 192).
Plalntlffs have made a prima fade ahowlng of entitlement to judgment as a matter
of law, eliminating all material Issues of fact. It is now incumbent upon the defendant to
raise a factual issue, this defendant has failed to do.
Accordingly, it is ORDERED that defendantâer motion to dlsmlss on
documentary evidence and for the complaintâs failure to state a cause of action is
denled, and It Is further
ORDERED, that plalntlffsâ cross motion for summary judgment Is granted, and it
ORDERED, ADJUDGED and DECLARED, that defendant LEXINGTON
INSURANCE COMPANY, is required to defend and Indemnify MORRlSANlA and NHPMN
for the claims alleged in the consolidated action pending in Supreme Court Bronx
County under index number 17848106 entitled RAYMOND ALBERT CARRERAS AND
YOLANDA LOPEZ, plaintiffs against - MORRlSANlA TOWERS HOUSING COMPANY
LIMITED PARTNERSHIP, MCROBERTS PROTECTIVE AGENCY, INC., SONIA MEEKINS,
BAKIM MEEKINS AND NHPMN MANAGEMENT, LLC., -defendants-, and it is further,
ORDERED, ADJUDGED and DECLARED that coverage under the LIBERTY
MUTUAL POLICY is excess over the coverage afforded by Lexlngton under the
This constitutes the decision, order and judgment of this court.
MANUEL J. MENDEZ
Manuel J. Mendez
X FINAL DISPOSITION
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