Books For Less, LLC v Arm-Capacity of New York, LLC

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Books For Less, LLC v Arm-Capacity of New York, LLC 2013 NY Slip Op 30060(U) January 11, 2013 Sup Ct, New York County Docket Number: 652031/12 Judge: Cynthia S. Kern 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. [*FILED: NEW YORK COUNTY CLERK 01/14/2013 1] INDEX NO. 652031/2012 NYSCEF DOC. NO. 131 RECEIVED NYSCEF: 01/14/2013 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY ~--. PRESENT: u.\~ Cj~,,1\~ S KERN . J.S.C. PART _ __ Justice Index Number: 652031/2012 INDEX NO. _ _ _ __ BOOKS FOR LESS, LLC MOTION DATE _ _ __ VS. ARM- CAPACITY OF NEW YORK, LLC SEQUENCE NUMBER: 005 MOTION SEQ. NO. _ __ DISMISS The following papers, numbered 1 to _ _ , were read on this motion to/for - - - - - - - - - - - - - No(s) . _ _ _ _ __ Notice of Motion/Order to Show Cause - Affidavits - Exhibits No(s). _ _ _ _ __ Answering Affidavits - Exhibits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ No(s). _ _ _ _ __ Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ I I I Upon the foregoing papers, it is ordered that this motion is is decided in accordance W\tb tftE! annexed decision. w u i= en ::J .., o l- e w 0:: 0:: W u.. W 0:: ~ oJ en z 0 u.. en ::J I- U c:( W ~ 0:: en (!) w Z 0:: - en ~ _ 0 W ..J en oJ c:( 0 u u.. Z ~ o i= o ~ t- 0:: 0 u.. _ _ _-.l..:t,---cr-L.....:.......--, J.S.C. CYNTHIA S. KERN 1. CHECK ONE: ..................................................................... 2. CHECK AS APPROPRIATE: ........................... MOTION IS: 3. CHECK IF APPROPRIATE: ................................................ 0 0 0 CASE DISPOSED GRANTED [J DENIED SETTLE ORDER ODO NOT POST ~ NON-FINA{gifpOSITION o GRA~T~D IN PART 0 OTHER o SUBMIT ORDER o FIDUCI~RY APPOINTMENT 0 REFERENCE [* 2] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: Part 55 ___________ J _____________________ ____________________ ---------------J{ ~ BOOKS FOR LESS, LLC bd BOOK OUTLET, LLC, i . Plaintiffs, IndeJ{ Nc. 652031112 DECISION/ORDER -againsti' ARM-CAPACITY OF NEW YORK, LLC, LOVULLO , b ASOCIATES, INC. and CERTAIN UNDERWRITERS AT LLOYD'S LONDON, i Defendants. -----------~---------------------------------------------------------J{ " HON. CYNTHIA KERN;' J.S.C. I !I Recitaticn, as required by CPLR 2219(a), .of the papers ccnsidered in the review .of this mcticn fcr: j Numbered Papers ;, " Nctice c{Mcticn and Affidavits AnneJ{ed ................................... . ., il 1 aVlts Answenng Affid· .................................................................. . , 11 Replying Affidavits ........... !......................................................... . .. : ~ EJ{hlbltS .. ¢........................... :...................................................... . 1.2 3,4 5,6 7 Plaintiffs ccmmenced the instant acticn against defendants seeking tc reccver under an " ,; insurance,pclicy they maintained with defendant Certain Underwriters at Llcyd's, Lcndcn , i ~ ("Llcyd's1'). Defendant ARM-Capacity .of New Ycrk, LLC ("ARM") ncw mcves fcr an Order I 'I pursuant t.o CPLR § 3211 (a)(7) dismissing plaintiffs' ccmplaint, .or, in the alternative, pursuant I' " tc CPLR § 2201 staying the instant acticn pending the cutccme .of the ccntrcversy between Ii plaintiffs and Llcyd's. Defendant LcVullc Asscciates, Inc. ("LcVullc") alsc mcves fcr an Order pursuant tc CPLR § 3211 (1)(7) dismissing plaintiffs' ccmplaint, .or, in the alternative, pursuant " tc CPLR § 2201 staying the instant action pending the outccme .of the ccntrcversy between I' I: plaintiffs and Llcyd's. The abcve mcticns are ccnsolidated fcr dispcsiticn. Fcr the reascns set [* 3] , forth belo,w, both ARM's motion and LoVullo's motion are granted. The relevant facts are as follows. In or about 2008, plaintiffs obtained insurance coverage for their wholesale book warehouse located at 540 N. Laurel St., Bridgeton, New Jersey (the i ~ 'l "subject property") from F~reman's Insurance Fund ("Fireman's Fund"). ARM, as the insurance broker on behalf of plaintiffs, filled out the application to obtain the insurance. On or about ,: April 19, 2009, the subject property sustained a loss as a result of a windstorm which resulted in water druriage (the "first lot,,). ARM prepared and submitted a claim to and negotiated and j obtained payment from Fireman's Fund for the first loss. Subsequently, Fireman's Fund issued a l I: Notice ofNonrenewal of the insurance policy, effective December 13,2010, based on the first 'i, loss. . I On December 8,2010, ARM contacted LoVullo, Lloyd's agent, seeking to find , replacement coverage for plaintiffs. Lo Vullo provided ARM with a quote for the requested coverage'and an application for insurance was submitted to LoVullo by ARM. Plaintiffs thus ~ obtained replacement Decemb~r co~mercial general liability policy from Lloyd's for the policy period of 13, 2010 to December 13, 2011 (the "Policy"). On August 18, 2011, plaintiffs Ii sustained a loss to the subject property as a result of a windstorm and filed a claim with Lloyd's in the amount of$727,01O!98. On November 3,2011, Lloyd's made a partial payment to : II ' . plaintiffs in the amount of$200,000 pending completion of its investigation of the claim. On or ; about May 29, 2012, Lloyd's sent plaintiff a Notice of Rescission in which Lloyd's rescinded the Policy, denied coverage for the claim and demanded the return of the partial payment of , $200,000 due to the i! failur~ to disclose the first loss on the application for insurance. " On or about June 12,2012, plaintiffs filed the instant action seeking to recover for the r I: 2 [* 4] loss to th~ subject property from Lloyd's under the Policy. As against ARM, plaintiffs allege that ARM assisted plaintiffs in preparing the application for the Policy and that if there were any l I misrepresentations in the application that caused Lloyd's to rescind the Policy, ARM is responsible. As against LoVullo, plaintiffs allege that as Lloyd's agent, LoVullo was negligent " in not informing Lloyd's of the first loss as it was aware of the first loss as a result ofa chain of I e-mails between ARM and1the LoVullo representative. Both ARM's motiol and LoVullo's motion for an Order pursuant to CPLR § 3211 (a)(7) to dismiss plaintiffs' complaint on the ground that plaintiffs' claims against them are premature and not yet ripe are granted. "A justiciable controversy must involve a present, rather than hypothetical, contingent or remote, prejudice to the plaintiff." Ashley Builders Corp. v. Town of II Brookhaven, 39 A.D.3d 442 (2d Dept 2007). "The dispute must be real, definite, substantial, and I sufficiently matured so as to be ripe for judicial determination." Id It is well-settled that a cause of action ~tis not enforceable until damages are sustained." IDT Corp. v. Morgan Stanley Dean ; I Witter & Co., 12 N.Y.3d 132, 140 (2009), citing Kronos, Inc. v. A VX Corp. , 81 N.Y.2d 90, 94 (1993). I~ the instant actiO!, plaintiffs' claims against ARM and LoVullo do not establish a : justiciabl~ ' controversy as the claims have not yet accrued against these defendants. Plaintiffs' j. complaint': alleges In the event,that Lloyd's is found to have properly rescinded the Policy, to h~ve properly demanded that plaintiffs return the partial payment, and to have properly refused to pay plaintiffs the balance due in the sum of$527,01O.98 ... any such finding would be because ARM breached its duty to plaintiffs and acted negligently by failing to obtain adequate insurance .... In the event that Lloyd's is found to have properly rescinded the Policy, to have properly demanded that plaintiffs return the partial I' ~ 1 3 [* 5] payment, J~ to have properly refused to pay plaintiffs the balance due for personal property loss in the sum of $527,01 0.98 ... then plaintiffs shall be entitled to recover from Lo Vullo ... (emphasi~ added). : As plaintiffs' complaint makes clear, plaintiffs will not have a justiciable II controversy against ARM or Lo Vullo until a judicial determination is made that the Policy was I' rightfully!:rescinded by Lloyd's based on the material misrepresentations in the application for insurance~ Until such a determination is made, no valid claim against ARM or Lo Vullo has II accrued as plaintiff has sustained no damages. I II Pl~intiffs' assertion that their allegations against ARM and LoVullo should not be dismissed as they compris~~an alternative theory of recovery is without merit. Only if Lloyd's is found to have no obligation under the Lloyd's Policy will plaintiffs have a claim against ARM and LoVullo. Therefore, contrary to plaintiffs' assertion, the allegations against ARM and , II LoVullo do not establish all alternative theory of recovery, which would permit plaintiffs to i recover concurrently from any of these defendants at plaintiffs' election, but rather they establish :1 , a contingent claim, which is dependent on the adjudication of the controversy between plaintiffs . !~ and Lloyd's. Further, plaintiffs' assertion that ARM and LoVullo's motion to dismiss on the ground that the claims are not yet ripe must be denied because they are confusing liability with I 1i damages is without merit. The judicial determination of whether Lloyd's had a legitimate basis to rescind1the Policy will decide whether plaintiff has a cause of action against ARM and " i! LoVullo in the first place and not which of the defendants is liable. Ifit is found that Lloyd's i ! was not entitled to rescind the Policy, then plaintiffs will be unable to maintain any cause of action against ARM or LoVullo. Thus, as plaintiffs' claims against ARM and LoVullo have not I' yet accrued, both ARM's m'otion and LoVullo's motion to dismiss the complaint must be ., 4 [* 6] granted .. Afcordingly, defendant ARM's motion and defendant LoVullo's motion for an Order 'i pursuant to CPLR § 3211 (a)(7) dismissing plaintiffs' complaint are granted. The Clerk is hereby .1 II directed to dismiss plaintiffs' complaint as against defendants ARM and LoVullo only. This . 1 constitutes the decision and order of the court. I: Dated: IJ\\\\3 Enter: ~Oj( -------------------------J.S.C. CYNTHIA S.. KERN .ts.c. / 5

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