Structure Tone, Inc. v Eurotech Constr. Corp.

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Structure Tone, Inc. v Eurotech Constr. Corp. 2011 NY Slip Op 32725(U) October 7, 2011 Supreme Court, New York County Docket Number: 116648/2009 Judge: Saliann Scarpulla 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. SCANNEDON 1011412011 [* 1] SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PRESENT: ,;! 4 ig a ; 4 I r-. p c I . Q .. PART Index Number : 116648/2009 STRUCTURE TONE 1 1 INDEX NO. vs EUROTECH CONSTRUCTION MOTION DATE Sequence Number : 002 MOTION SUMMARY JUDGMENT MOTION CAL. NO. were read on this motlon to/for The following papers, numbered 1 to Notice of Motion/ Order t o Show Cause Answering Affidavits - - Affidavits - Exhibits Replying Affidavits Cross-Motion: sa.NO. &! Yes n Exhibits ... I PAPERS NUMBERED F i k-E--BNo Upon the foregoing papers, it is ordered that this motion OCT 13 2011 NEW YORK COUNTY CLERKS OFFICE ?jt.f, J-S-C- [* 2] P I aint iffs , Index No. 116648/2009 -againstDECTSTON AND ORDER EIJROTECH CONSTRUCTION COW., QBE INSURANCE COMPANY and TLLINOIS NATIONAL 1NSIJRANCE COMPANY, FILED Defendants. x - - _ _ _ _ _ _ _ _ _ _ _ l ~ ~ ~ - - _ _ _ _ _ _ _ _ _ _ _ l _ l _ _ _ _ _ _ _ - - - - - - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ - - - - - - - - - - - - - For Plaintiffs: Barry, McTieiiian & Moore 2 Rector Street, 14 hFloor New York, N Y 10006 For Defendants Eurotech & QRE: Mendes & Mount, LLP 750 Sevcnth Avenue New York, NY IO0 19 NEW YORK COUNTY CLERKS OFFICE For Defendant Jllinois National lnsurancc Company: Sedgwick, DctcrL, Moran &Arnold, LLP 125 Broad Street, 3gthFloor New York, N Y 10004 i HON. SALIANN SCAKPULLA, J.: In this declaratory judgment action, defendant excess carrier, Illinois National Insurance Company ( Illinois ), under a policy issued to codefendant Eurotech Coiistruction Corp. ( Eurotech ), moves for an order dismissing the complaint (motion seq. 001). Eurotcch and priinary insurer, QBE Insurance Company ( QBE ), move for an order granting them suininary judgment disinissing the complaint and declaring that they have no duty to defcnd and indeinnifi plaintiffs (motion seq. 002) . Plaintiffs, Structure l oiie, lnc. ( Structure Tone ), Silverstcin Properties, Inc., 7 World 1 [* 3] Moody s Corporation ( Moody s ) (collectivcly plaintiffs ), allcged additional insureds uiider thosc policies, cross-inovc for an order granting them suininary judgment against QBE and Illinois. Motions 001 and 002 are consolidated lor disposition. Backpround Moody s, the lessee of certain floors at 7 World Trade Center, entered into a construction manageinenl contract with Structure Tone in connection with building out Moody s floors. IJnder that contract, Structure Tone was required to procure liability insurance for itself and naming, as additional insureds, Moody s, Moody s landlord, and others as may have been required. Structure Tone obtained a liability insurance policy from the New Hampshire Insurance Company which provided that the insurance was excess over any of the other insurance whether primary, excess, contingent or on any other basis: (1) LJnless such insurance [was] specifically purchased to apply as excess of this policy, or (2) you are obligated by contract to provide prirnary insurance. Structure Tone then subcontracted with Eurotech to perform carpentry work. The subcontract required Eurotech to obtain liability insurance in an amount of at least $4,000,000 combined single limit, naming Structure Toile and specific owners and othcrs, as inay have been rcquircd, as additional insureds. The coverage obtained was to LLapply on a primary basis irrespective of any other insurance . . . . Eurotech obtained primary liability insurance from QBE and excess coverage from Illinois. The QBE policy provided additional insured coverage against certain losses to [* 4] any cntity lor which Eurotech was obligated to procure such covcrage, as was required by any contract and/or as evidenced by the insurance certificate on filc with the company. A certificate of insurance, dated April 1, 2008, was issued by Eurotech s insurance agency naming QBE and Illinois as insurers, and indicating primary liability insurance of $1,000,000 pcr occurrence, and excess coverage of $10,000,000 per occurrencc. The certificate providcd that Moody s, (Silvcrstcin Propertics), 7 World Trade Center, Structure Tone and/or its subsidiaries and other related entities, its clients, and/or the building owners/managers were additional insureds. The lllinois policy s definition of an insured included any entity which was an additional insured in the policies set forth in thc schcduled underlying insurance. The schedulc listed the QBE policy. Coverage under the Illinois policy was to follow the terms, definitions, conditions and exclusions of Scheduled Underlying Insurance ... . The I l l h i s policy further provided that [ilf other valid and collectible insurance applie[dJ to damages that [were] also covered by this policy, this policy [would] apply excess of the Other Insurance. However, this provision [would] not apply if the Other Insurance [were] specifically written to be e x c m of this policy. (Emphasis in original). Pursuant to the Jllinois Policy, other insurance does not include insurance specifically purchased to be excess of this policy. No payment was 10 be made under the Illinois policy until the limits of scheduled undcrlying insurance and any other applicable insurance had bccn cxhausted. 3 [* 5] Nonparty , l hoinas McGinty s ( McGinty ), while working for Eurotech at 7 World Trade Center on April 17, 2007, allegedly stepped off a ladder onto construction debris, fell, and injured his knees, both ofwhich had undergonc surgery within the previous few years. McGinty surmised at his deposition that the debris had been caused by workers of anothcr subcontractor. McGinty continued to work until May 1,2007, but did not bring the alleged accidcnt io Eurotech s, Structure Tone s or any of the other plaintiffs attention; nor did he ever file a Worker s Compensation claiin or fill out any accident form for Eurotech. By letter dated September 1 1, 2008, McGinty s attorneys advised Structure Tone s Corporate Claims Manager, Veronica Lewis ( Lewis ), that McGinty was asserting a claim in connection with injuries he suffered as a resuli of the April 17, 2007 accident. Lewis forwarded the letter to AIG Domestic Claims, Inc. ( AlG ), New Hampshire Insurance Company s representative, for AIG to lender to QBE the defense and indemnity of Structure Tone and its indeinnitees. AIG, by letter to QBE dated October 2, 2008, advised it of McGinty s accident and of Eurotech s contractual obligations to defend, indemnify and obtain insurance on behalf of Structure Tone and its indcmnitees, and requested QBE provide Structure Tone and its indeinnitees with insurance, defense AIG s October 2 letter apparently incorrectly listcd Structure Tone s insurer as anothcr AIG entity, the Insurance Company of the Statc of Pennsylvania. 4 [* 6] and indemnification in connection with McGinty s claims. AIG s lettcr was issued before plainti ¬fs herein were served in thc McGinty action. QBE then began an investigation. In an e-inail dated October 10, 2008, Aqueel Rehman ( Kehman ) of Eurotech stated to an independent insurance adjuster rctained by Rockville Risk Manageineiit Associatcs ( Rockville ), QBE s claims administrator, that Eurotech had iio knowledge of the alleged accident until informed of it a few days earlier via an insurance company lettcr. Rchman s e-mail further indicates that he had been informed by the job site foreman, Neil Reilly ( Reilly ), that no accident had occurred and that McGinty had pre-existing knee problcnis. Rehinan provided the adjuster with Reilly s phone number. The adjuster c-mailed Rockville later that day and advised that follow-up with Reilly would ensue to ascertain whether the accident had ever been previously brought to Eurotech s attention. -By letter of October 13, 2008, Rockville, in response to AIG s October 2 letter, advised AIG d i t s insureds duties to notify QBE of an occurrence, and of any suit, as soon as practicable, and noted thit it had received notice of the accident almost a year and a half after it had occurred. Rockville indicated that it was in the process of investigating and was reserving all of its rights regarding the request for defense and indemnity, including the right not to participate in the defense of the McGinty matter. By letter dated January 14, 2009, Rockville advised AJG that QBE had agreed to provide a defense to Structure Tone, but that it was still concerned with AIG s delay in 5 [* 7] notifying it of the occurrence, and was continuing to reserve its rights to allow ¬or additional investigation of thc notice s timeliness. Rockville further advised AIG of its obligations to provide tiinely notice of any suit, and to iininediately provide all legal papers received in connection with any suit. The law firm of Fischetti & Pescc, LLP was thcn assigncd as a monitoring counsclor on behalf of QBE. Meanwhile, on October 1, 2008, McGinty filed a personal in.jury action in the Bronx against plaintiffs (the McGinty action ). Plaintiffs then commenced a third-party action against Eurotech. lssue was joined in the McGinty action on December 17, 2008. Thereafter, QBE, which had not yet been informed of the McGinty action by plaintiffs, schedulcd a May 7 , 2009 mediation between McGinty s counsel and QBE, which was represcnted in that mediation by Fischetti & Pesce. At that mediation, QBE s counsel was informed that McGinty had commenced an action seven months earlier. By letter dated May 20, 2d09, Rockville advised AIG that Structure Tone s sevenmonth failure to advise QBE of the McGinty action constituted a breach of QBE policy s tiinely notice o ¬ suit provision and that Structure Tone had also breached the policy s cooperation provisions. Consequently, QBE indicated that it was declining to defend and indemnify Structure Tone. PlaintiKs commenced this action against QBE, Illinois, and Eurotech on November 25,2009, seeking ajudgincnt declaring that each of the defendants owes them a duty to indemnify, defend, and/or to otherwise provide iiisurance coverage to plaintiffs for all 6 [* 8] risks Mling witliiii the scope of those policics, and directing that a hearing be held to assess damages as to plaintiKs defense costs, counsels fees, and disbursements in the defense of the McGinty action, and in coiiiineiicing this action. In about mid-December 2009, upon being served with the complaint, Illinois current counsel engaged in a series of e-mails with plaintiffs counsel. Illinois counsel advised, on December 18,2009, that the f ? m was in the process of becoming counsel for Illinois and had not yet obtained the case file. Counsel, therefore, requested an extension of Illinois time to answer until Fcbruary 1, aiid stated that, as had becn agrccd in another Structure Tone action, the extension [was] without prejudice to or waiver of any potential coverage dcf enses, including late notice. Plaintiffs counsel responded, ok as to the extcnsion and your other issues. Ilowcver, I ain requesting you waive any improper service affirmative defense. By letter of January 4, 20 10, Illinois counsel advised plaintiffs counsel that Illinois was investigating the coverage issues, and becausc plaintiffs counsel had advised that he was unaware o r when McGinty s claim and action were first reported to Illinois, Illinois was reserving its right to deny coverage based on violations of policy conditions. Illinois counsel further indicated that to the extent that McGinty s claim was first reported via the dcclaratory judgineiit action, the policy s notice provisions appeared to have been violated. That letter requcsted docuinentation from Structure Tone to assist Illinois in its invcstigatioii. Specilkally, docuinentation demonstrating Structure Tone s 7 [* 9] additional insured status as well as documentation and correspondence predating the McGiiity action and relating to his claim wcre requested. By c-mail or January 26, 20 10, Illinois counsel requcstcd an additional extension to February 15, and stated that as discussed bcfbrc, Illinois did not waive and rcscrved its right to assert a lack ol tiinely notice and any other policy dcfenses. Plaintiffs counsel responded, OK on the extension . . . . On February 12, plaintiffs counscl agreed to a week s extension of Illinois lime to answer, which extension was requested because the person from Illinois who had the authority to review the answer was traveling. 11 its February 23, 20 10 answer to plaintiffs complaint, Illinois asserted, as a ninth 1 affirmative defense, that plaintiffs had failed to comply with the policy s conditions that no insurcd would, except at that insured s own cost, voluntarily inake payment, assume any obligation, or incur aiiy expense ... without [Illinois ] consent, and regarding plaintifrs dutiescto give timely notice of the occurrence and suit and to iinmediately forward legal papers to Illinois. QBE and Eurotech asserted as affirmative defenses that plaintiffs f ailed to give timely notice of the occurrence and suit, and immediately provide legal papers concerning the suit. Motions and Cross MotiQn Illinois, which does not concede for purposes of this motion that plaintiffs are additional insureds under its policy, movcs for an order, pursuant to CPLR 321 1 (a) (1) and (a) (7),dismissing the complaint on the ground that plaintiffs failed to notify it of 8 [* 10] McGinty s alleged accident and his lawsuit as soon as practicable and iiniiiediately provide copics of tlic legal papers in that action, bul instcad provided notice when plaintifls served Illinois with process in the instant action, months after issue had been joined in the McCiinty action, and, thus, failcd io satisfy policy condjtians. QBE and Eurotech, which concede that plaintii ij: were additional named insureds under the QBE policy, iiiovu for an order granting them2 summary judgment dismissing the complaint on the ground that plaintiffs failed to provide notice of the McGinty action as soon as was reasonably practicable, and declaring that they have no duty to indemnify and defend plaintiffs under its policy. Plaintiffs oppose QBE and Eurolech s motion on tlic grounds that they were not advised of the accident by McGinty s counsel until September 2008, and that plaintiffs timely advised QBE of the occurrence, within 25 days after they learned of it. Additionally, plaintiffs assert that QBE and Eurotech untimely disclaimed coverage by waiting until Jatte May 2009 to do so, and that, in any event, such disclaimer was not based on the lailure to timely advise ofthc occurrence. Plaintiffs also argue that any failure to timely advise of suit was not prejudicial and is insufficient to warrant dismissal of the complaint as to QBE and Eurotech. Thus, plaintiffs seek summary judgment Eurotech and QBE do not seck lo distinguish between themselves on thcir motion. nor do they address the complaint s first cause of action predicated on Eurotech s alleged breaclics of its duties to procure the required insurancc. Accordingly, they will be treated as one for purposcs of their motion, and the merits of thc iirst cause of action will not be addressed. 9 [* 11] against QBE, adding that their failure to iininediately provide QBE with legal papers relating to the McGiiity action, was not prejudicial, and is therefore, not an impediment to granting p 1aint i ffs suiiiinary j udginent . Plaintiffs also oppose Illinois motion. Plaintiffs concede in their papers that the first notice to Illinois was its receipt ofprocess in this casc, but claim that because Illinois nevcr issued an unequivocal denial of coverage letter, it is barred from disclaiming coverage. Plaintiffs further argue that Tllinois claim that the complaint fails to state a cause of action was wholly conclusory. In reply, Illinois observes that plaintiffs have provided no excusc h ¬ailing to notify it earlier of McGinty s alleged accident and lawsuit. Additionally, 1 1inois argues that its assertion of its ninth affirmative defcnse 1 constituted a timely disclaiiner of coverage, bccause plaintiffs counsel agreed via c-mail to extcnd its time to answer, without prejudice to or waiver of any coverage defense. Illinois further claiiiis that it was entitled to undertake an investigation into all of its possible disclaimer grounds before it disclaimed coverage instead of disclaiming piecemeal, and that, therefore, its disclaimer in its answer, about two months after it was served in this action, was timely. Plaintiffs assert in support of their cross motion that because they are covered under the Tllinois policy (which policy plaintiffs urge affords priority of coverage over the New Hampshire Insurance Conipany policy) and Tllinois never issued a disclaimer of coverage after it was served with process, suniinary judgment is warrantcd, declaring that . [* 12] - Illinois has a duty to incleimify and defcnd them after QBE but before New Hainpshirc lnsurancc Company, and awarding pIaintiffs legal fces and costs incurred in thc McGinty action. Illinois opposes plaintif ¬s summary judgment motion based on their failure to timely give notice and provide legal papers, and adds that the lllinois policy is not triggered until plaintiffs coverage undcr the Ncw Hampshirc Insurance Company policy is exhausted. Discussion An iiisuraiicc policy s provision that notice of an occui-rence bc given as soon as practicable requires that notice be given within a reasonable time under all the circumstances. Security Mut. Ins. Co. of N, Y. v. Ackt?r-Fitzsirnons Corp., 3 1 N.Y.2d 436, 44 1 (1972); Zimmerman v. Peerless Jns. Co., - A.D.3d -, 2 0 11 NY Slip Op 05491 (2d Dept 201 1). An insured s untimely notice to an insurer of an occurrence vitiates the insurance contract, irrespective of whether a showing of prejudice has been made. Security Muf. Ins. Co. of New York v. Acker-Fitzsimons Corp., 3 1 N.Y.2d at 440; American Home Assur. Co. 1-1. lnlernativnal Ins. Co., 90 N.Y.2d 433 (1997) (same rule applied to excess carrier s policy). The purposes of this circuinscribed exception to the general rulc, that a party seeking to avoid its duty to perform under a contract is required to show a material breach or prejudice, are to permit the insurer to promptly investigate so as to protect itsell against fraud, set reserves, and take an early role in scttlemeiit negotiations. Brandon v. Nationwide Mut. h , s . Co., 97 N.Y.2d 491, 496 (2002). 11 [* 13] Ilowevcr, where the insured has provided timely notice of thc occurrence but has not timely providcd notice of legal action, denial of covcrage is not inandated in the absencc ofprejudice, because the notice of occurrence scrves the goals of the exccption. Id. at 497. In addition, a party s lackadaisical, as opposed to willful and obstructionist, behavior in f d i n g to forward suit papers does not entitle the insurer to disclaim coverage where timely notice of the occurrence has been provided and no prejudice has been I shown. Cily of New York v. Continental Cas. Co., 27 A.D.3d 28 (1 S t Dept 2005). Here, plaintiffs cstablished that QBE was given timely notice of the occurrence once plaintiffs learned of it. Timely notice was established through Lewis s affidavit, in which she asserted Structure Tone s lack of knowledge of the occurrence, until its receipt of McGinty s counsel s September 11, 2008 lettcr; Lewis s prompt forwarding of that letter to Structure Tone s carrier, resulting in AIG s October 2, 2008 letter to QBE notifying it of the occurrence; and McGinty s deposition testimony, that he never apprised Eurotech or any of the plaintiffs of his alleged accident. Moreovcr, even if the nolice of occurrence had been untimely, QBE did not timely disclaim on that ground and has failed to meet its burden of explaining its delay. QBE is, thereforc, precluded froin disclaiming coverage on that ground. Hartford Ins. Co. v. Counly of Nussau,46 N.Y.2d 1028, 1029 (1979); Hunter Roberts Constr. Group, LLC v. Arch Ins. Cn., 75 A.D.3d 404, 408-409 ( I Dept 2010). Kockville s letter of May 20, 2009 only disclaimed on the basis of the late notice of suit and failure to cooperate. No 12 [* 14] explanation has been profyered by QBE or Eurotecli ofwhy coveragc was disclaiincd on the ground of late notice of occurrence for the first time in their answer, served about eight months later. As to the latc notice of suit and failure to immediately forward legal papers, QBE has failed to set forth any facts demonstrating that it has been pre-judiced. The e-mails bctween the iiisurancc adjuster and Rehman, and between thc adjuster and Rockville, dcmonstrate that QRE was able to promptly undertake an investigation. QBE does not indicatc that it was impeded in its investigation. Also, QBE was able to participate in the mcdiation, and it does not dispute that discovery in the McGinty coininenced after it had notice of the suit. Accordingly, QBE and Eurotech s summary judgment motion, which was based only on the untimely notice of suit, is denied. The branch of plaintii fs cross motion seeking suminaryjudginent againsl QBE is granted to the extent that plaintiffs seek a judgment declaring that, in connection with the McGiiity matter, they are entitled to a defense, and to insurance coverage and indemnification, to the extent of the policy s limits, for all risks which fall within the scope of the policy issued by QRE. l hebranch of plaintiffs motion in which plaintiffs seeks recovery Irom QBE of plaintiffs legal fees and costs incurrcd in dcfending thc McGinty action is granted to the extent that fui-ther proceedings shall be conducted in the future to ascertain the ainouiit of any such expenses. See City qfNew York v. Cuniinentul Cas. Co., 27 A.D.3d at 33. Thc 13 [* 15] scheduling of such further proceedings, and the form of such proceedings, (State Farm Mut. Auto h . v. Sparucin, 25 A.D.3d 777 (2d Dept 2006) (plaintiff entitled to .jury s Co. trial in defendant insurer's declaratory .judgment action alleging plaintiff's untimely notice of claim, where plaintiff successfully moved to strike insurer's request for a nonjury trial)), shall be discussed at the next court conference. T note with respect to plaintiffs' requcst for expenscs, that the QBE policy contains a provision barring insureds, cxcept at their own expense, from making any payment, assuming any obligation, or incurring any expense without QBE's permission. This provision is pertinent to plaintiffs' request to recover expcnses incurred in the defense of the McGinty action because plaintiffs began defending that action without advising QSE. Illinois' motion to dismiss the complaint pursuant to CPLR 321 1 (a) (1) and (7) is denied. Coinpliancc with a policy's notice of occurrence provision is a condition precedent to coverage. Argo Corp. v. Greater N. Y. Mid, Ins. Co., 4 N.Y.3d 332,339 (2005); National Union Fire Ins. Conoj'Pittsburgh,PA v. Great American E & S Ins. Co., - AD3d -, 201 1 N Y Slip Op 05859, *2 (lstDept 201 1). As such, plaintiffs were not required to plead that they timely provided notice, but defendant would be required to plead noncompliance. See CPLR 3015 (a); 1199 Hous. Corp. v. International Fid, Ins. Con,14 A.D.3d 383 (1" Dept 2005). Therefore, the complaint states a cause of action as to Illinois. 14 [* 16] To support its motion to dismiss based upon docuxncntary evidence, Illinois relies on the tcrms of its policy. Howcvcr, the movant, on a CPLR 321 I (a) (1) motion, must I demonstratc that the documentary evidence submitted conclusively cstablishes a defense to the asserted claiins as a inattcr of law. Held v. Kuufman, 91 N.Y.2d 425, 430-43 1 (1998) quoting Leon v. Martinez, 84 N.Y.2d 83, 88 (1994). In other words, L[t]he documentary evidence inust resolve all factual issues and dispose or [a] plaintiffs claim as a matter of law. Foster v. Kovrzer, 44 A.D.3d 23,28 (1 Dept 2007). Here the insurance policy provisions, standing alone, d o not resolve all factual issues. Nonethelcss, while affidavits will almost never warrant disinissal under CPLR 32 I 1, Lawrence v. Graubard Miller, 11 N.Y.3d 588, 595 [ZOOS], thcy can be considered where they conclusively establish that [a plaintiff] has no cause of action. Held v. Kaujnun, 91 N.Y.2d at 430 (1998), citing Rovello v. Orofino Realty Co., 40 N.Y.2d 633,636 (1 976) HeR, plaintiffs counsel conccded in his affirmation in opposition to Illinois motion, his reply affirmation to Illinois opposition to plaintiffs suininary judgment motion, and again at oral argument, that Illinois first noticc of the occurrence and suit was when it was servcd with process in this action, about a year after plaintiffs served their answer in the McGiiity action. Plaintiffs do not assert that this notice of the occurrence and suit was timely. See e.g. American M i . f sMul. Ins. Co. v. C M Enters., 246 A.D.2d 373 ( I l k p t 1998) (notice of claiin first given in declaratory judgment s summons and complaint untimely 15 [* 17] wherc scrvcd nine months after underlying action commenccd and two ycars after plaintiffs learned of incident). Instead, plaintiffs merely assert in their opposition papers that a disclaimer of coverage letter was never issued as to plaintiffs failures to coinply with policy conditions, and that Illinois was, therefore, precluded from disclainiing coverage now. Plaintiffs add in their reply papers that the disclaimer set forth in Illinois answer was unavailing because plaintifi s extension of Illinois time to answcr did not constitutc an extension of its t h e to disclaim covcragc. This latter assertion is without merit. The general rule is that an insurer that wants to deny or disclaim coverage must do so as soon as it is reasonably possible, and when it fails in that regard, it is barred from doing so, irrespective of whether the insurcd has given timely notice of the occurrence. Hunter Rnhcrts Constr. Group, LLC v. Arch Ins. Co., 75 A.D.3d at 408-409. The burden is on the insurer to explain its delay, the reasonableness of which usually presents a question offact. Id. at 409. Although the reasonableness of the insurer s delay is computed from the time when thc insurer adequately acquires knowledge of the facts supporting the disclaimer (id,), insurer is the entitlcd to conduct a prompt, reasonable investigation into other possible grounds for disclaiiner . . . , so as to avoid pieceInca1 disclaimers. DiGuglielmo v. Travelers Prop. Cas., 6 A.D.3d 344, 346 (1 Dept 2004) (internal citation and quotation marks omitted). Further, a reservation of rights letter is irrelevant to the issue of whether the insurer has 16 [* 18] tiinely issued a disclaimer notice. HartJirdIns. Co. v. County ofNassau, 46 N.Y.2d at 1029. Nevertheless, here Illinois did not simply issue a reservation of rights letter. Nor did plaintiffs - at a time when Illinois counsel was still in the process of being retained, had not yet received the filc, and had not yet conducted an investigation - merely consent to the extension of time to answer. Rather, plaintiKs agreed to Illinois other issues, the only other issue being that the extension of time was without prejudice to or waiver of any potciitial coverage defenses, including late notice. Clearly, thc import of Illiiiois counsel s request and plaintiffs counsel s consent in this context was that the passage of time grantcd by the extension would not pre,judice Illinois defenses, including those involving late notice. Otherwise, the 1-equcstand consent would be meaningless. Moreover, it is readily apparcnt that plaintiffs agreed to that accommodation because they 4 werc siinultaneously requesting that Illinois waive any improper service dcfense. In addition, Tllinois was entitled to investigate other possible grounds for disclaiming, including whether plaintiffs wcre additional insureds and had knowledge of the occurrcnce in advance of McGinty s lawsuit. In light of the foregoing, the papers conclusively establish the untimeliness of the notice of occurrence and suit and the forwarding of legal papers in that suit, and that Illinois defenses wei-c timely asserted in its answer. American Mfix. Ins. Co. v. CMA Mut. Enters., 246 A.D.2d at 373; Thomson v. Power Auih. ofStnte ofN.Y., 21 7 A.D.2d 495, 17 [* 19] 497 ( I st Dept 1995). Even assuming, for argument s sake, that Illinois was not entitled to affirmative rclicf 011 the basis of its CPLK 32 1 1 motion, 011 searching the record, it would be entitled to summary judginent on plaintiffs cross motion. Accordingly, Illinois motion is grantcd to the extent that a declaration is issued that it has no duty to defend, indemnify, or provide coverage to plaintiffs in connection with the McGinty matter, and plaintiffs cross motion is denied. Lunza v. Wagner, 1 1 N.Y.2d 3 17, 334, appeal dismissed 371 U.S. 74, cert denied 371 US 901 (1962); Cusumano v. Extell Rock, LLC, A.D.3d , 201 1 N Y Slip Op 05935, * 1 (lstDept 201 1); Rotblut v. 150 E. 77* Corp., 79 St. I A.D.3d 532 ( I Dcpt 20 10) (whcre plaintiff not entitled to declaration sought, court erred in dismissing complaint, and should have issued a declaration in defcndant s favor). In light of this determination, I do not reach the issues raised by the cross motion of whether the plaintiffs were additional insureds under the Illinois policy and, if so, whether that policy would be trigger4 only after the exhaustion of coverage under the New Hampshire Insurance Company policy. See Bovis Lend Lease LMB, Inc. v. Great Am. Ins. Co., 53 A.D.3d 140 (1 st Dept 2008). ln any event, the issue of priority between the Illinois and New Hampshire Insurance Company policies cannot be determined in the absence of the latter entity, which is a necessary party. David Christa Constr., Inc. u. Americcrn /fame Assur. Co., 4 1 A.D.3d 12 1 1 (4 Dept 2007). In accordance with the foregoing, it is 18 [* 20] ORDERED that thc branch of plaintiffs Structure Tonc, Inc., Silverstein Properties, Inc., 7 World Trade Company, and Moody s Corporation s cross motion, in which they seek an order granting thein summary j udginent against Illinois National Insurance Coinpany on plaintiffs third cause of action, is denied; and it is hither ORDERED that defendant Illinois National Insurance Coinpany s motion (00 l), in effect for an order dcclaring that it has no duty to provide coverage to, and to defend and indemnify plaintiffs in connection with thc McGinty matter, is granted with costs and disbursements as taxcd by the Clerk of the Court; and it is lirrther ADJUDGED and DECLARED that defendant Illinois National Insurance Company has no duties to provide coverage to and to defend and indemnify any of the plaintiffs herein in coniiection with the McCrinty matter; and it is i urther ORDERED that defeiidanls Eurotech Construction Corp. and QBE Insurance Company s suimnary judgnicnt motion (002) is denied; and it is firther i ORDERED that the branch of plaintiffs Structure Tone, Inc., Silvcrstcin Properties, Inc., 7 World l rade Company, and Moody s Corporation s cross motion seeking summary judgment against QBE Insurance Company on that part of plaintiffs second cause of action which seeks a declaration that said defendant is obligated, in the action of Thoinus McG inty v. Structwe-Tone, Inc., Silverstein Propertips, Inc., 7 World Trade Company, L.P., and Moody s Corporation, Tndex No. 307933l2008, Bronx County, to d e h d , provide coverage to, and indemnify, on a priinary basis, the plaintiffs, as 19 [* 21] additional insureds, to the extent of the QBE Insurance Company s policy limits, for all risks wliich fall within the scope of thc policy issued, is granted; and it is furthcr ADJUDGED and DRCLAW1) that plaintiffs, Structurc-Tone, Inc., Silverstein Properties, 7 World Trade Company, L.P., and Moody s Corporation, arc additional insureds under thc QRE policy issued to Eurotcch Construction Corp., and defendant QBE Tnsurancc Company is obligated to provide, on a primary basis, coverage and a dcfciise to the plaintifrs, Structurc-Tone, Inc., Silverstcin Properties, Inc., 7 World Trade Company, L.P., and Moody s Corporation, in the said action pending in Bronx County, and is to indemnify them, to the extent of that policy s limits, for all risks which fall within thc scope of the policy issued by QBE; and it is further ORDERED that the branch orplaintiffs summary judgment cross motion, which seeks recovery ii-om QHE Insurance Company of plaintif fs legal fees and costs incurred in the dcfense of the McGinty action pending in Bronx County, is granted to the extent that fui-ther proceedings shall be conductcd in the future tu ascertain the amount of any such expenses, and the scheduling of such further proceedings, and their form, shall be discussed at thc next court confcrence, and any application which plaintiffs are advised to make for costs and disbursements in this action, can be made in such further proceedings; and it is further ORDERID that the declaratory judgment portion of the second cause of action, and the third cause of action against Illinois National Insurance Company are severed, 20 [* 22] and tlie balance of the second cause of action asserted against QBE Insuraiice Company and tlie first cause o l action asserted against defendant Eurotech Construction Corp. shall continue; and it is further ORDERED that tlie parties are to appcar for a conference on December 14,2011 at 2 p.m. ai 80 Centre Street, Room 279 lhis conslitutcs the decision and ordcr of the Court. Dated: New York, New York October 7,201 I FILED OCT 13 2011 ENTER: CLERKS OFFICE 21

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