Jericho Atrium Assoc. v Travelers Prop. Cas. Co. of Am.
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Jericho Atrium Assoc. v Travelers Prop. Cas. Co. of Am. 2011 NY Slip Op 33172(U) November 30, 2011 Supreme Court, Nassau County Docket Number: 8831/11 Judge: Denise L. Sher 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] SCAN 0' SHORT FORM ORDER SUPREME COURT OF THE STATE OF NEW YORK PRESENT: HON. DENISE L. SHER Acting Supreme Cour Justice TRIAL/IAS PART 32 NASSAU COUNTY JERICHO ATRIUM ASSOCIATES Index No. : 8831/11 Plaintiff Motion Seq. Nos. : 01 , 02 Motion Dates: 09/21/11 - against - 10/25/11 THE TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA d//a TRAVELERS INSURANCE COMP ANY and d/b/a TRAVELERS Defendant. The followin papers have been read on these motions: Papers Numbered Notice of Motion (Seq. No. 01), Affirmation, Affdavits and Exhibits and Memorandum of Law Notice of Cross Motion (Seq. No. 02), Affirmation, Affidavit and Exhibits and Memorandum of Law Affrmation in Opposition to Cross- Motion and in Further Support of Motion Reply Affirmation to Opposition to Cross- Motion Upon the foregoing papers, it is ordered that the motions are decided as follows: Defendant moves (Seq. No. 01), pursuant to CPLR 3212 , for an order granting it , pursuant to summar judgment and dismissing plaintiffs Third-Par Complaint; and moves CPLR 3001 , for ai order declarng that defendant has no obligation to defend or indemnify plaintiff in connection with the underlying lawsuit brought by Mar and Joseph Bozzello in Nassau County Supreme Court , under Index No. 984/1 0 (" Bozzello Action J4U [* 2] Plaintiff opposes defendant's motion and cross-moves (Seq. No. 02), pursuant to CPLR 3001 , for an order declaring that defendant has a duty to defend plaintiff in the Bozzello Action and that defendant has improperly disclaimed its obligation to defend plaintiff in the Bozzello Action; for an order that defendant is responsible for all legal expenses expended by plaintiff in defending the Bozzello Action , directing defendant to reimburse plaintiff for attorneys ' fees and legal costs incured in defense of the Bozzello Action to date and directing defendant to take over the defense of the Bozzello Action immediately; and for an order declaring that if plaintiff is found liable to the Bozzellos in the underlying lawsuit , then defendant is liable to plaintiff in the above captioned action on a theory of contractual indemnity. Defendant opposes the crossmotion. By way of the underlying lawsuit , the Bozzello Action , Mar and Joseph monetar damages for the bodily injuries allegedly sustained by Mar Bozzello seek Bozzello on August 10 2007 , when she slipped and fell on or about the premises known as 500 North Broadway, Jericho, County of Nassau , State of New Yark (" subject premises ). The instant action was commenced by plaintiff against defendant via Third-Par Complaint seeking a declaration that defendant is required to defend and indemnify plaintiff in the Bozzello Action. Defendant has counterclaimed against plaintiff in the instant action , seeking a declaration that defendant is not obligated to provide coverage to plaintiff under the policy of insurance , Travelers General Liability Policy No. YPNY - 630- 8172B 182- TIL- 07 (" Travelers policy ), that defendant issued to National Birchwood Corp. ("National" )/plaintiff with regard to the Bozzello Action. In its summar judgment motion (Seq. No. 01), defendant submits that it provided coverage for the subject premises until July 31 , 2007 , at which time the subject premises was [* 3] removed from coverage under the Travelers policy, at the request of plaintiff. Plaintiff had allegedly advised defendant that it was sellng the subject premises and that it would not own said premises as of July 31 , 2007. Defendant argues that, since the subject premises was not insured under the Travelers policy on the date of loss (August 10 , 2007), plaintiff is not entitled to any coverage under the Travelers policy. Defendant adds that the insuring agreement ofthe Travelers policy has not been triggered because the subject premises would have had to be scheduled on said policy as a covered location and , as of July 31 2007 it was not. Defendant contends that the burden is on plaintiff to prove that it is entitled to coverage under the Travelers policy, which , defendant argues , it is unable to do. Defendant submits the Affidavit of Kirk Plevka , a Technical Specialist for Travelers , as evidence that the subject premises was removed from the Travelers policy by Endorsement ILT0070987 , effective July 31 2007. Defendant additionally submits the Affdavit of Joan Grant , an Executive Officer for Travelers , as evidence that the subject premises was deleted from coverage effective July 31 , 2007 , at the request of National/plaintiff and that defendant was advised that National/plaintiff was sellng the property and would no longer own it as of that date. In conjunction with the removal of the subject premises and other related properties from the Travelers policy, defendant refunded premium to National/plaintiff. Plaintiff cross-moves (Seq. No. 02) for an order that defendant owes a duty to plaintiffto represent plaintiff in the Bozzello Action pursuant to the general liability policy issued by defendant. Plaintiff argues that " d)efendant' s obligation to defend Plaintiff in the Bozzello Action is obviated ' only ifit could be concluded as a matter oflaw that there is no possible factual or legal basis on which rthe insurer l might eventually be held to be obligated to indemnify [* 4] (the insuredl under any provisions of the insurance policy ' and it is premature for Travelers to assert , at this junctue , that there is no possible factual or legal basis upon which it might be obligated to defend and indemnify Plaintiff; and if, under any interpretation of the facts and pursuant to any legal theory, Plaintiff is found liable for Mar Bozzello s injury in the Bozzello Action , then Defendant , as Plaintiffs general liability insurer , is liable to indemnify Plaintiff for her injur pursuant to the same legal theory. Plaintiff does not deny that , on or about July 31 , 2007 , title to the subject premises was transferred by its owner , plaintiff, to AGMB Jericho Atrium , LLC. It also does not deny that the subject premises was deleted from the Traveler s policy effective July 31 , 2007. It fuher concurs that , on August 10 2007 , the date of Mary Bozzello s alleged accident , plaintiff did not own the subject premises. Plaintiff submits that Mar Bozzello commenced the Bozzello Action against plaintiff seeking recovery for an injur which allegedly occured on the subject premises on August 10 2007 , ten days after plaintiff had transferred ownership of said premises to AGMB Jericho Atrium, LLC. Plaintiff states that the " Cour of Appeals has recognized that ' (a)s a general rule liability for dangerous conditions on land does not extend to a prior owner of the premises (citation omitted). Bittolffv. Ho s Development Corp. , 77 N. Y.2d 896 , 898; 571 , N. 2d 72 (1991). The narow exception to the general rule is that cours have recognized is ' (w)here there is an undisclosed condition , the vendee has no knowledge of this condition , or where the vendor actively conceals it , the liability remains with the vendor until the vendee has had a reasonable time to discover and remedy it (citations omitted). Farragher v. City of New York , 26 A.D.2d 494 496; 275 N. 2d 542 (1S! Dept. 1966). Plaintiff asserts that Mary Bozzello is seeking recovery against plaintiff under the narow [* 5] exception to the general rule ("the prior owner exception ) where " liabilty may be imposed (against a prior owner) where a dangerous condition existed at the time of the conveyance and the new owner has not had a reasonable time to discover the condition, if it was unown , and to remedy the condition once it was known (citations omitted). Corp. , supra. See Bittrolj v. s Development The allegations set forth in the Bozzello Action state a cause of action against plaintiff which falls under the narow "prior owner exception " to the general rule of premises liability,. Plaintiff submits that the Cour of Appeals has clearly stated (i)fthe complaint contains any facts or allegations which bring the claim even potentially within the protection purchased , the insurer is obligated to defend. See Technicon Electronics Corp. v. American Home Assurance Co. 74 N. Y.S.2d 66 544 N. Y.S.2d 531 (1989). Plaintiff argues that (w)hile denying any and all liability for Mary Bozzello s injury, Mar Bozzello has set forth allegations which if found to be true by the trier of fact , fall under the ' prior owner exception ' and would bring her claim within the liability protection purchased by plaintiff from defendant.... Plaintiff respectfully submits that if the Bozzellos are entitled to recovery against Plaintiff for any conduct which it would have been engaged in during its ownership of the Premises when it was covered by the Policy, then Defendant is contractually liable to not only defend Plaintiff in the Bozzello Action pursuant to the terms of the Policy but ate liable to Plaintiff for indemnification of Bozzellos ' claims. Given that the Bozzello Action Complaint states allegations which potentially bring the claim against Plaintiff within the protection purchased , as a matter of law , Defendant is obligated to defend Plaintiff in the Bozzello Action. It would work an injustice and be an uneasonable interpretation of prevailing case law for any cour to find that a general liability insurance company has no duty to defend a prior owner of real propert where the case law permits a claim to be asserted against a prior owner in certain circumstances for an injury on [* 6] premises that were sold when that prior owner was covered by a general liability insurance policy for the premises. Plaintiff further contends that " (i)funder any interpretation of the facts and pursuant to any legal theory, Plaintiff is found liable for Mar Bozzello any conduct on Plaintiffs s injur in the Bozzello Action for par taken while it was owner of the Premises and insured by Defendant , then by extension , Defendant , as Plaintiff s general liability insurer for that period , is liable to indemnify Plaintiff for her injur pursuant to the same legal theory. While Plaintiff expects to prove that it is not liable to Mary Bozzello in the Bozzello Action under the "prior owner exception " which would , in turn , result in a finding that Defendant is not liable to indemnify Plaintiff in that action , it nevertheless would be premature for this Court to grant a prior to anv declaratory judgment with respect to Defendant's duty to indemnify Plaintiff determination on Plaintiffs liability in the Bozzello Action In opposition to plaintiff s cross-motion , defendant reasserts its position that it has no coverage obligations to plaintiff in this matter because the insuring agreement of the Travelers policy has not been triggered. It once again submits that, once the subject premises was deleted . from the Travelers policy, there was no liability coverage available at the subject premises , and more specifically, no liability coverage for plaintiff on the date of loss- August 10 , 2007. As such , there is no coverage under the Travelers policy for the incident at issue in the Bozzello Action and defendant has no obligation to defend or indemnify plaintiff in the Bozzello Action. Defendant additionally argues that plaintiff s cross-motion " fails as a matter of law because it begins with a faulty premise. Jericho relies on well settled law, recognizing the fact that an insurer s duty to defend is broader than its duty to indemnify. While this is certainly true as a general rule , Jericho completely misses the point that the insurer s obligation is only 6- . [* 7] within the coverage afforded by the policy See Lionel triggered where facts are alleged Feedman, Inc. v. no coverage fact of this dispute is that there was of the loss 27 N. Y.2d 364 318 N. Y.S.2d 303 (1971).... The simple Glens Falls Ins. Co. afforded under the Travelers Policy on the date , as the Subject Premises were removed from coverage at the request of the plaintiff just ten days prior. This is an ' occurrence ' based policy. In other words , coverage is only triggered by bodily injur or property damage which occurs during the policy period. Logic dictates , therefore , the question of whether there is a duty to defend or indemnify can never be reached , as there was no coverage in place on the date of the loss for the Subject Premises. The question of Jericho s potential liability to the plaintiff in the Underlying Action raised by counsel in opposition is irrelevant for the puroses of this coverage dispute. The fact that Jericho mayor may not be responsible for a dangerous condition- does not trigger coverage under the policy. In reply to defendant' s opposition , plaintiff asserts that " d)efendant Travelers is obligated to defend Plaintiff in the Bozzello Action on the theory that the cause of the occurence ' which is the basis for (sic) Bozzello Action is allegedly the result of condition that arose during the policy period. If Plaintiff is liable to the Bozzellos for an injury caused by conditions that arose prior to the sale of the propert where the injur occurred , then Defendant Travelers is liable to defend and indemnify Plaintiff for same. In order to determine whether defendant is obligated to defend plaintiff in the Bozzello Action , an examination of the Complaint in that Action and the insurance policy between plaintiff and defendant is required. See BP Air Conditioning Corp. v. One Beacon Ins. Group, 3d 708 840 N. Y.S.2d 302 (2007). On a motion for summar judgment pursuant to CPLR ~ 3212 , the proponent must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient [* 8] See Sheppard-Mobley evidence to demonstrate the absence of any material issues of fact." King, 10 A.D. 3d 70 , 3d 627 , 797 aff' d as mod. 4 N. 778 N. Y.S. 2d 98 (2d Dept. 2004), 68N. Y.2d 320 , 508 N. (1986); Winegradv. New York University Medical Center 64 N. Y.2d 851 , 487 N. Y.S.2d Y.S. 2d 403 (2005), v. citing Alvarez (1985). " Failure to make such prima facie Prospect Hospital, 2d 923 316 showing requires a denial of the motion , regardless of the sufficiency of the opposing papers. See Sheppard-Mobley v. King, supra at 74; Alvarez Once the Prospect Hospital , supra; Winegrad v. New York University Medical Center, supra. movant's burden is met , the burden shifts to the opposing par to establish the existence of a Alvarez v. Prospect Hospital, supra material issue of fact. at 324. The evidence presented by the opponents of summar judgment must be accepted as true and they must be given the benefit of See Demishick v. Community Housing Management Corp. , 34 every reasonable inference. citing Secofv. Greens Condominium , 158 A.D. 3d 518 824 N. Y.S. 2d 166 (2d Dept. 2006), A.D.2d 591 551 N. Y.S.2d 563 (2d Dept. 1990). (I)t is well settled that an insurer s ' duty to defend (its insured) is ' exceedingly and an insurer wil be called upon to provide a defense whenever the allegations of the complaint suggest. . . a reasonable possibility of coverage. at 714 Beacon Ins. Group, supra 131 , 818 N. Y.S. 2d 176 (2006), Y.2d 640 Fire v. See BP Air Conditioning Corp. quoting Automobile Ins. Co. of Hartford v. One Cook 7 N. YJd quoting Continental Cas. Co. v. Rapid-American Corp. , 80 593 N. Y.S. 2d 966 (1993). Cas. Co. broad' See also Pioneer Towers Owners Ass v. State Farm 12 N. Y.3d 302 880 N. Y.S.2d 885 (2009). "' The duty to defend (an) insured () . .. is derived from the allegations of the complaint and the terms of the policy. If (a) complaint contains any facts or allegations which bring the claim even potentially within the protection purchased , the insurer is obligated to defend.''' See BP Air Conditioning Corp. v. One Beacon '" [* 9] at 714 quoting Technicon Electronics. Corp. v. American Home Assur. Ins. Group, supra 74 N. Y.2d 66 544 N. Y.S. 2d 531 (1989), rearg. den. 893 , 74 N. Y.2d 547 N. Y.S. 2d 851(1989). See also Franklin Development Co. , Inc. v. Atlantic Mut. Inc. 60 AD.3d 897 , 876 N. Global Const. Co. , (2d Dept. 2009); LLC v. Essex Ins. Co. 52 A. Co. 2d 103 3d 655 860 N. Y.S.2d 614 (2d Dept. 2008). This is so even if the complaint against the insured advances '" additional claims which fall outside the policy s general coverage or within its exclusory provisions. at 714 Conditioning Corp. v. One Beacon Ins. Group, supra quoting Town of Massena Healthcare Underwriters Mut. Ins. Co. 98 N. Y.2d 435 , 749 N. of the complaint are irrelevant" and therefore See BP Air S.2d 456 (2002). " The merits an insurer may be required to defend under the contract even though it may not be required to pay once the litigation has ru its course. at 714 quoting Town of Massena v. Air Conditioning Corp. v. One Beacon Ins. Group, supra Healthcare Underwriters Mut. Ins. Co. , supra Cook, supra Const. Co. , at 137. See BP at 444 and Automobile Ins. Co. of Hartford See also Franklin Development Co. , Inc. LLC v. Essex Ins. Co. , supra. v. Atlantic Mut. Inc., supra; Global An insurer is relieved of its obligation to defend its insured only "' when " as a matter of law. . . there is no possible factual or legal basis upon which the insurer might eventually be held to be obligated to indemnify the claimant under any provision of the insurance policy " or ' when the only interpretation of the allegations against the insured is that the factual predicate for the claim falls wholly within a policy exclusion.''' Franklin Development Co. , Inc. Ins. Co. , supra v. Atlantic Mut. Inc. , supra; Global Const. Co. , LLC v. Essex at 900- 901 quoting Bruckner Realty, LLC v. County Oil Co. , Inc. 40 A.D. 898 838 N. Y.S.2d 87 (2d Dept. 2007); 830 N. Y.S.2d 299 (2d Dept. 2007); City of New York v. Evanston Ins. Co. 39 A. Global Const. Co., LLC v. Essex Ins. citing Automobile Ins. Co. of Hartford v. Cook, supra at 137; Co. , Bruckner Realty, LLC supra 3d 153 at 656 and v. County [* 10] Oil Co. , Inc. , supra at 900. Cas. See also Pioneer Towers Owners Ass ' n v. State Farm Fire Co. , supra. In the Bozzello Action Complaint , Mar Bozzello is seeking recovery against plaintiff under the " prior owner exception " to the general ' rule that liability for dangerous conditions on land does not extend to a prior owner of the premises. The Bozzello Action Complaint asserts a cause of action against plaintiff in which liability may be imposed against plaintiff, as the prior owner of the subject premises , for an alleged dangerous condition , which existed at the time of the conveyance , and the new owner did not have a reasonable time to discover said condition , if . it was unkown , and to remedy said condition once it was known. As the Conditioning Corp. v. One Beacon Ins. Group, supra Cour held in BP Air (i)f (a) complaint contains any facts or allegations which bring the claim even potentially within the protection purchased , the insurer is obligated to defend. " This Court finds that the Bozzello Action Complaint does indeed contain allegations which "bring the claim even potentially within the protection purchased. " The Bozzello Action Complaint alleges that the condition which caused Mar Bozzello s injuries , for which plaintiff should be held liable , existed when plaintiff was covered by the Travelers policy. Since " an insurer s ' duty to defend (its insured) is ' exceedingly broad' and an insurer wil be called upon to provide a defense whenever the allegations of the complaint ' suggest. . . a reasonable possibility of coverage " the Cour finds that defendant has a duty to defend plaintiff in the Bozzello Action. Accordingly, defendant's motion (Seq. No. 01), pursuant to CPLR ~ 3212 , for an order granting it summar judgment and dismissing plaintiffs Third- Par Complaint; and , pursuant to CPLR ~ 3001 , for an order declaring that defendant has no obligation to defend or indemnify DENIED. plaintiff in connection with the Bozzello Action is hereby 10- [* 11] Plaintiffs cross-motion (Seq. No. 02), pursuant to CPLR ~ 3001 , for an order declaring that defendant has a duty to defend plaintiff in the Bozzello Action and that defendant has improperly disclaimed its obligation to defend plaintiff in the Bozzello Action; for an order that defendant is responsible for all legal expenses expended by plaintiff in defending the Bozzello Action; for an order directing defendant to reimburse plaintiff for attorneys ' fees and legal costs incured in defense of the Bozzello Action to date and directing defendant to take over the GRANTED. defense of the Bozzello Action immediately is hereby Defendant is directed to defend plaintiff in the Bozzello Action in Nassau County Supreme Cour , under Index No. 984/10 , and to reimburse plaintiff for all attorneys ' fees and See Sarin v. CNA Financial Corp. legal costs incured thus far in defending itself in that action. supra. The Cour additionally notes " an insurer s obligations to pay attorney s fees and costs in connection with a declaratory judgment action is incidental to the insurer s contractual duty to defend. See National Grange Mut. Ins. Co. v. T. Y.S.2d 877 (4 Dept. C. Concrete Canst., Inc. 43 AD. 3d 1321 , 843 2007). With respect to plaintiff s application for order declaring that if plaintiff is found liable to the Bozzellos in the underlying lawsuit , then defendant is liable to plaintiff in the above captioned action on a theory of contractual indemnity, plaintiffs right to indemnification shall be determined upon the resolution of the Bozzello Action, Index No. 984/10 . Corp. v. Security Ins. Co. of Hartford 64 N. Y.2d 419 488 N. See Servidone Const. 2d 139 (1985). After the trial/settlement of the Bozzello Action , an Inquest wil be held to determine the amount defendant must pay to reimburse plaintiff for the attorneys ' fees and costs incurred in defending itself in the Bozzello Action thus far. 11- [* 12] All paries shall appear for a Certification Conference in Nassau County Supreme Cour IAS Part 32 , at 100 Supreme Cour Drive , Mineola, New York , on December 20 , 2011 , at 9:30 This constitutes the Decision and Order of this Court. /DENISE L. SHER, A. Dated: Mineola , New York November 30 , 2011 . ENTER' DEC 05 2011 NAISAU COUNTY COU CL,," 0"10. 12-
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