Cholshung Realty Corp. v New York Marine & Gen. Ins. Co.

Annotate this Case

Download PDF

Cholshung Realty Corp. v New York Marine & Gen. Ins. Co. 2012 NY Slip Op 32327(U) September 5, 2012 Supreme Court, New York County Docket Number: 111525/10 Judge: Donna M. Mills Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] JNEDON 911012012 I SUPREME COURT OF THE STATJ!: OF NEW YORK- NEW YORK COUNTY PRESICNT : DONNA M. MILLS PART SS Justice INDEX No. 11 1525/10 Plaintiff, NEW YORK MARINE & G E N K R U INSURANCE CO.. Answering Aflidavits- Exhibits Replying Affidavits CROSS-MOl'ION: M-OTION No. 004 SEQ. .. , - . - ---7 .- - YES -N 0 Upon the h e g o i n g papers, it is ordcrcd: SEE ATTAC'I-IBD M E M O M N U I I M DECISION Dated: DONNA r(ns GILLS, J.s*cb Check onc: - FINAL, FINAL DISPOSI'I'JON NON-FINAI, DISPOSI'I'ION [* 2] SUPREME CO'CJR'I'OF I'IIE STATE OF NEW YOKK COtJN'IY O F NEW YORK PAKT 58 C'HO1,SI I I J N G K I N , 1'Y C'OICI'., 1' lai i i tiff, 1N I)FX NUMBER 1 1 1 525/20 10 Mot. Set]. 004 JUIXMENT & ORDER Nb,W YORK MAKINE c9L GENERAL INSITRANC'I. ('0. M A l l t i t I , TNS1JIlANC'II UIMPANY, and Ilefcndaiits. -aga i ii s t- DONNA MILLS, ,I.: I n this action I'or 3 declaratory judgi-ucnt concerning liability itisurmce coverage, plaintill' Cholsliurig R.ealty Corp. (Cholshung) iiioves [or summary judgilicnt, piirs~iaritto CPLR 32 I 2 (b), declaring tlixt del'tndant Markel Tusurancc ('oinpany (Markcl) has a duty tu clelmd ad i summary juclgment in its favor, pursuant to C'PLR 32 12, clisiiiissiiig the complsint in its ciitircty 'I'he action has been discontinued as against delendant Ncw YoTk Marine t General Insurance k Co. (NYM). B a c kgro u I1 (I Cholsliuiig owlis the premises at 359 Third A V H ~ L Ncw Yorli C.'ouiity (tlic Building), I: K, portion ol'cvhich it leascd to 350 3rd Avc. 26 Restaurant Corp. (the llcstauraiit ) lbr a ten-year period as of January 1 , 1990. 'I'hc lease did not extend to aiiy part ol'the Building above Iht: street-lcvcl restauralit space, altliougli a ridcr allowed the Ilcstnui-ant w e 01. some hasclucnl space. On April 16, 2007, Kevin 1 logan, a firdigliter, was injiircd in h e Building while lighling persoiial injiirics against C~hnlsliLingand tlic Restaurant, C)JI June I O , 2008, in the Hogan Actioii. Pursuant to i t s Ieasc wjth C'liolshuiig (Milncr A f i - h i . , Ex. H), the KestauranL procured a liability insLirancc policy froin Markel, policy numbcr- 03ARC~1,AIIlOOOc)(Gihik Affll-iii., Ex. J), 1 [* 3] h r the period October IS, 2006 tlirough October 15, 2007, and a liability policy li.0111NYM, policy nuiiihcr 970(1500-033246. The Restaurant securcd a ccrtiGcnte ol' insurance lrom Markel, naming Cliolsliirng a s a11 :idditioiial insured. Milncr Affirm., Ex. D. Whcn C'holshung was served i n thc I logan Action, Sciicca InsLirarice C'onipany (Scncca), its general 1i;ibility insurance carrier, sought dclinse and iiidciiirii~~catioii .N M alone, by from Y 21 letter datcd July 10, 1008. I d , I:,s.I . Marlicl answcrcd instead, on July 22, 2008, AS "thc gcncral liabilily il-is~rrancc can-icr" for thc Reslaurant. Id., Ex. J. 11 denied clclkiise and indemnification to Cholsl~uiig, becairsc Markcl asserted that its initial investigation indicated a number- of "building code violations, some ol'wliicli would appear to he the sole rcsponsi bility o f the building owner/landlord." I d . Markcl has continued lo providc a dcfcnsc to the Restxirant in the I-Iogm Action. On August 27. 20 10, C'holsliutig coiniiienced thc instnnt action recluesling a declaratory judgment that i t is ail additional insurcd under the N Y M axid Markel policies, and li)r breach of coiilract against each clci'endanc. Id., Ex. F. (In h i g u s t 1 , 201 1 , tlic court denied both Markel's 1.10 1s h m g ' s s uinmary .j iidgIii cn t ino I i o 11 aii d C cross 111 otion for s 11 111ma ry j iidg tiic 11, with I c avc lo t rciicw [ipon completion o f discovery. Id., Ex. N . J q a l S t a 11d a t-ds ILlnder CI'I,K 32 12 (b), ;I summary j~rdgment"motion shall be granted il., ~ i p o i all Ilic i papers and proof'subniittcd, the C;LLIS~ of action or defense shall be established sullicienlly to warrant the court as a rnattcr of law in directing judgment in favor of any party." "The proponent o r a niotion li)r sununary judgiiicrit [pursuant to CTLR 32 121 rriiist dcmonstrate that therc arc 110 material issues of fact in dispute, aiid that iL is entitled to juclg~iient a iiiaiter ol'law." as ~ ) ~ / / / ~ / ~ ~ - ~ S l ~ ~11~ W ~ i/ ( .~s i/ ii , u /307AD3d ) ~ i i s oi /~ (J17iv 303. 306 ( 1 " I k p t 2007),citing W i ~ i t ~ , y w d v Nriru 1'0r.k Me(/. I ' ~ r i / c 64 N Y 2 d 8 5 1 8 5 3 ( 1 (JX.5). LJpon pro11ir orcviclcncc cstablishing ;.I. prii-ris r~ ~ f k i e case by the movant, "tlic party opposiiig a molion for sulmnary judgment hears the burden of 'produc[ingj evidentiary pruol in admissible l'orm suffkieiit to require a trial ol'iiiaterial questions of fncl.'" Z ' r ~ o [ ) h 11 Gr~/.sso, AD3d 5 3 5 , 545 (1'' Dcpt 2OOX), quoting Zrtc,krr./wmi 17 SO 2 [* 4] C3l.v o f ' N w I'ork, 49 NY2d 557, 562 (1980). IL'tliere is any d ~ ) ~ ias tto the existence o f a triable b issue ol'l'act, sumriia.ry J~idgmeiit niusl be denied. 23 1 ( 197X ); / ~ O t Z l h r 7/i.xtridc~r,s1' L'c~ppos, NY2d 46 221, 1IoLi.s. (.'or/). 298 A112cl 224, , 226 ( 1 L k p t 2002). Whcrc ( ; i . o . ~ s ~ i t1)/fl/ntrl'~trrntr/rJt~ / ~i a party I'ails to m c c ~ primii h i e burden, its summary judgment motion shall be denied its regardless of the sufficiency oi'tlie opposing papers. Multer q f ~ , S i c ~ g r90l ,h113d 937, 940 (2cl ~ Dcpt 20 1 1 ), citing M4negrwtl, 64 NY2d at 8 5 3 . 1) is c 11s s i o11 C'ovcragc is j31.uvicied by the Mi11 1 policy "only with rcspect to liabiliiy arising out o r the ownwhip, iiiaiii~cl-imce usc o r that part of. h e premises lwsed to" the Kestauraiit. (.;itniIi or Afliriii., Ex. I,, C'C; 20 1 1 01 96, 7 3 , It is ~indispiitedthal C'holshmg is an additioiial irisurccl uiider the Markel policy, as dcinonstratcd by documentary evidence, and Marltcl's acknowled~~iient here. "At tlic outset, it should be noted that Ilierc is 110 dispute that CI IOI,SI II JNG was unmed as an additional insured uiidcr- tlic suhjccl policy." C h i k Affirm., 7l 3 3 . Gcncrally. ai) aclclitiond insured eiiJoys thc saiiil: protection :is the namcd insured. Pe~*kr:i- Iror.1 Works o f ' N . Y. 11 7>~wcLerI m . C:.'o., 99 NY2d 30 1, 393 (2003); K W O ~ S ZW o ~ 11 N e w York ! i C g T n c C'o., 297 AD2d 544, 547 (1st Dept 2002). Herc, however,thc issue is izs not Cholshung's status undcr the Mtirltel policy, h i t rather factual reasoiis that iiiay have disqualiGed Cholshung fi'oiii coverage undcr the policy in this particular instance. In brief, Mal-kcl claims that C'liolsliiiiig I'rri1t.d 10 comply w i h thc notice provisions of the policy, and that I logan's injury occur I-ccl(I1.1t s i d c the I i ust a i i r m t s i l i s I ir ec3 premises . Notice I . 1 he Mark.el policy provides that the insured "must see to it that we arc notiticd as soon as practicable of an 'occiirre~ice'o r an offense which m i y result in a claim." I:(.; 00 0 1 07 98, Scction IV ( 3 )( a ) . M.arl<cl claims that C.lliolsliung f.;iiled to comply with this provision as ~rnderstooclby NC\YYorli law. Markcl's letter, datcd .luly 22, 2008, rcsponded to reqiiest by ; I Sen eca , Cho 1 s I uti g ' s genera 1 I i 3 bi 1i t y i n s u r d nc e c a r 1. i c r , fo r de fc11 se and i rid emn j f ic ut i cui h n i 3 [* 5] NYM. Admillcclly, Cliolshuiig did not make lhc rccluest directly to Markcl. According to Markel, servicc 01. the , siiiiiiiiotis and complaint i n the instant aclion was its first comrr-uniication with C.~holshurig, years after tlic inciclcnt and c ~ ~ ~ ~ i m e n c e of.e n t Hogan Actj.on. Gilnik m the Alllrm., 7 62. "The notice provision in tlic policy is a condition precedenl to coverage and, ahscnt a valid escusc, thc failure to satisfy the nolicc rcquirciiicnt vitiates the policy." '/i.nvc/o~s. /i,i,s, C'o. v Volwrnr ('oII.Y/I.. C ' o . , 300 AD?d 40, 42 ( 1 st Tkpt 2002); .4nicr.i~,~11? A>!fi,~. hli~l. /KY. I'o. v C:'n//,4 Lri/er,s,, 240 A132d 373, 373 ( 1 st Ikpt 1908) (bccausc tlic "aclclitioiial insurccls uridcr the policy[] liacl an independent obligation to give timely written nolice o l the claim against hxi, it is irrelevanl whctlicr Ithc insurer] acquired actual knowlcdgc o I' tlic occLiixiicc fro111[ otllcr insureds] . . ."). 'I'hc need l'or independent notice is Iicightencd when co-insureds may have adverse interests, S Clbolshung and the Iicstaiuanl may likely have. C,'i/,yo f ' N t w York v I; Jrivr.vloi:r Iris. ( '(1. (If'Aiii., 89 ADld 480, 4x9 ( 1 st Dcpt 20 1 1 ): Tr[rvc~/rw C.'o. v b'o/riiur Iris. Consti.. ('o., 300 A112d at 44. C:holshung, i n turn, nrgues that Marlccl waived a11 objection based u11 late notice when it clcclined uovcragc, i n j ts letter 01 J L ~22, 2008, solely becriiise of'alleged "building code Y violalions." 'I'lic letter iiialies iio mention ol'aiiy other reason t o rc.jcct tlic "tciiclcr- of dcfcrisc and iiiclcmnili~alion" f C'hulshiing. "A grourid o iiot wised in h e letter ol'disclaiiiicr may not latcr he asserted as an aflirinarivc dcfciisc." Hcnjcrrriiii Shupiro H c a l ~ p I'o. A112d 389, 389 (1st Ilcpt 2001); ,SPCJ c x l s ~ ~ C;cncr~ilr.l(:c~i. X (, h i , / / , IH 11 Agi.ic*i.dlicr.crl Ins. C'o., 287 1' C:'ii.iicci, 46 NY2cl 862, 864 ( I 979) ("since h i s ground [ollate noticc] was not raised in the Icttcr ofdisclaiiiicr, it rnay not hc asscrtcd now''). While 'lm iiiswei may rcscr-ve the righi l o disclaim on such diffcrciit or- alternative gi-o~incis i t m y l;.ltcr l i d to bc applicable" (L,S/LJCJ /tic*. 11 OneHcacor7 ;is l,[~iii&r ( h i q ~ LLL' , 63 ACI3d 33, 35 1 1 st I k p t 2000I), "NCLV- law establishes h a t York dccnied, a s a iuatter 01' law, to havc intended to waivc ;1 delense ai /rix insurcr is to coverage wlicrc other delenscs are asserled, and where the insurcr possesses sufkiciit Imowlcdge (actual or couslructivc) of the circuinstances regarding tlic ~uiiisserleddcfcnsc" ( A ' f ~ ~ of' NCW York 17 Arriro te 4 [* 6] I<ccrlfy C ' o r p . , 936 F2d 1420, 143 1 [2d Cir 19911). Marlicl'x utiavailing response to this rcasoniiig is that "it did iiot state that the notice it reccivcd was improper, because i t did nol receive a n y notice." Giliiik Aflirtn., 51 5 5 . I t tliereby dismisses Seneca's letler, which describes an iinltiiown iii.jLi1.y to 1 logan, jilcurred on April 16, 2007, ;it tlie lkstaurant, while hc triocl to put out a lire that originated in tlic licstaurant's kilclien area. However, Markel's response to Seneca defined its posture regarding C~holsliung, waives Markel's latcr attcinpt to disclaim coverage aiid bccausc of. Inte noticc. ~ I L / /of P I ~ ~ b'ircineii 's. Fwid Irzx C:'o. 0 f N c ~ ~ u rv. k H(.ykiris, 88 NY2d 836, 837 ( 1 996) ("An insurc.1-iiiiist give writtcil riotjce oi'disclaimcl- cin thc gro~md late notice as of socm as is ~-ciiso~iably pocsibic a k r il h s t Icarns oi'thc accident or ol'grouiids for clisclaiiiici-of liability, and I-ailurc to do so prccluclcs c f l c t i v e disclaimcr") (internal quotatiun marks and ci t at i 011s om i t t ccl) . AccidcntMarkel relics Iicavily on lJogan's deposition testimony oi'Ma~.cb 201 0 , in the Hogari 4, Action. (htiiili AI'iiriii.. lk. I:. T Togan wxs a Iiciitcnaut with lhe I-Irccoiiipany that rcsp011dcd10 thc fii-c in tlic 13uiIding u i i the niolning of April 16, 2007. 'l'lic Restaiiranl was oii street level, with four residciitial iloors ;hove, in a building that datcd back 90 years o r iiiorc. 1 logan Transcript at 103-1 04. He testilied that the lire originated a t street level, oii the first tloor, and that lie was directed to go one iliglit up, tlie second floor, "to stretch a line?" that is, to run cz tire Iiosc. I d . at 104- 105. I I C was tlic first oiie on the secoiici l l m r , ibllowcd by i'our or I?ve lircf~gli~ci~s. at 1 06- 107. Id. I logan spciit a I w minutcs, "assessing tlic situation Linclcr Iicavy siriolie condilioiis." fd. at 1 11. I I C h:id on I'd1 proteclive gear, and carricd a tlashlight and a11olfticcr's 1001, similar to a crow bar. I-le movcd forward with "a cluck walk," a cmuch/crawl that kept liiin low 10 the gro~md.I d . at 1 12- I 13. I IC went into ;in apat-tment,' then returned to thc cloorway where his crcw waited. I(,/. 1 IS- I 16. Hogan said that lie "li.11 into a hole . . . i i i tlic apartniciit above the at 5 [* 7] niain body of tii-c which W:LS below LIS." frl. a 103- I 10. Tie did not see the "holc h t was i bui~icd through iiom Ilic lire hclow" before he fkll into it. f at 1 IO. 1 lis riglit leg wciit into tllc d holc, at least shin-deep, and lie ikll iiirward, injuring his right wrist. firef5gIitcr was by his side, a i d was the only person to see MI. fd. at 144. As far as I loga11 fd.at 1 I O - I I 1 . kncw. no oiic else l'cll into tlic hole. Hognn "assumed that it w;is Iiiiii fd.at 1 18-1 19. Onc ;I grease lire" in the restaurant below. fd.at 123. He fclt "high lic3t1'in thc npnrtmcnt. I d . at 208. He said that he saw lire "extunding frum hclow" throiigh three or sc) I ~ ) l e iii the Iloor, but was uncertain wlicther lirc was cxtending through the s hole lie fell into. fd.a.t 160-161. However, later, he said that "I sholI1cln't say I saw tlic fire, I saw ttic glow. I t was a low orange gluw." Id. at 209-210. Wlicii then aslcecl dicl lie see any holes, lic t-cpliccl: "No. You redly couldn't scc aiiythiiig dire to the snioke conditioti." Id. at 2 IO. I le said thal "IC: Jordi lions wouldn't d l c ~ w to see aiiything" bcfol-c he sleppccl into the holc. iiic fd.at 22 I . Flogaii cstimritcd that h c liole was aboirt oiic foot in diaiiictei-, hrgc cilougl~ lit his to h o t , although he did iiol look at the hole C)IICL" l i e got out nf it. Id. at 223, 159. lle had 11~3 role in any ensuing investigation O F the tjre. I d . at 124- 125. 'l'hc Fire Incident Report ofthe B~ircau K Fire I i i v e s t i g ~ ~ ~datcd tlic dale 01' the U i~ii, i nc i de 11t , stat e s : "Ksaiiiinatiori showcd the lirc originatcd at thc iiicident prcniises, on the tirst lloor, in the Sunilower Diner, in the Icitclien, along the north wall, . . . in combustible inaterial (cooliing gt-case). 'I'lie lire extended via the 1111,(drafed by a rool-lop csliaust I'm), to the scconci tloor, apartiiwits 1 Csr 3, and f~irthcr extenclcct via open voicls to the third flow, apai-mcnts 3 & 4." Neb) Y(-)t-lc113s a bruacl view ol'tlir: scopc of'liability insurance coverage. Gcncrally, "the iiisiirer's chtty to li.irnisli ; clcfcnse is broader than its obligation to i n h i i i i f y . " h'cJir1mm.d,Sin.. I ('(1. 11 G'illciltc C'(j., 64N Y 2 d 304, 3 IO ( I W4). "'l'hc duty t o defciid arises whcncver thc allcgations in tlic complaint fall within tlic risk covereel by the policy." H/,rck.u. & Firm \I t5'eirhocrr.d X i i r . (.'o., 52 NY2cl 663, 669 ( 198 1 ). "An insul-cd's right to be accorded lcgnl 6 [* 8] representation is a contractual right and consideration upon which his premiuin is in part prcdicatccl, arid this riglit exists cvcii if debakblc tlicories arc nllcgcd insurccl." I r i ~ c i . r i ~ i ~ i o lnj ~ x !I i q C'o. I) qr iii tlw plcading against the C'on/iircnlcr/('(is. C'o., 35 NY.2d 322, 325 ( 1974). 'l'lic r-illcgcd ncgl igcrice complained ol'in the I l.og;iii Action ca~ised a r m hcyond llic licslaui-ant's h i 111I ii c di ;i It' 13rc I 11i s e s . A s the lie s t a ii rant 's 1 ns 11 rer , M ark c 1 had an o b 1 i gat i o 11t to C h(3Ish img , tlie Restaurant's additional iiisured, to d e l i i d OholshLing. 'l'hc physical boundaries of tlic R.estaurant arc not the legal boundaries ~)l'MarltcI's policy. Pirhlic LYwv. Mul. Iris. I.'o. Color, PV. Pliolo, 2OO AT12d 338, 339 (1st I k p l 2002) (Where 21 lire started in the ceiling of leased premises, "[i]C docs iiot iivail clcfc1-id;iiils ~cnaiit and insurer that the irnderlyiiig x i i o n s ;ire I'or damages o r injuries suslaincd by or in adjacent prcmiscs siiicc such damages and injuries r-csul~ed ikuiii h e I c i i ~ ) i ' L I S ol'tlic insurccl prenaises"); C:'zievcr,r s ~ v Qcicindt Is / ~ ' o ~ ) ~ ~ ~ s ~ h~hi 3 ~ 973, ~ ~ ~ ~ 1.1is~rihs.~ D. d ~ ~ 974 (3d l k p t 3004) ("Sinolce and watcr- damage to adjacenl property arc foreseeable conscqiieiiccs 01- ; lire, and plaintiN may rccover [or such daiiiage il' he cstahlislies dekndanls' i hi-cnch of cI 1.1t y ; i d pro x imi L O c m s c " ) , ' It is iiiiciispiitecl that the lire origiriuted on tlic insured prcitiiscs scnding snivlie aiid tlalncs I o other parts 01.. the BHuiIding. Just 3s tlic lire could not be liniitcd only to ~~reniiscs il-isur-edb y Mal-hel, the possible liability arising ii-om hc pcril cnnnot be so divided. 'I'hc fact that Hogan does tiot claim - . Ixirii - -. injuries is iitim;iterial. He was on tlie scene bccause o I'lire, and firc may - 7 [* 9] 8 [* 10] ENTER: 9

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.