Five Towns Nissan, LLC v Universal Underwriters Ins. Co.

Annotate this Case

Download PDF

Five Towns Nissan, LLC v Universal Underwriters Ins. Co. 2016 NY Slip Op 32316(U) November 22, 2016 Supreme Court, New York County Docket Number: 651164/2013 Judge: Jeffrey K. Oing Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] iSUPREME COURT OF THE STATE OF NEW YORK OF NEW YORK: COMMERCIAL PART 48 ~OUNTY ,-----------------------~----------------x FIVE TOWNS NISSAN, LLC, Plaintiff, Index No.: 651164/2013 -against- I Mtn Seq. Nos. 010, 011, 012 & 013 'UNIVERSAL UNDERWRITERS INSURANCE ,COMPANY, TOWER NATIONAL INSURANCE :COMPANY, AND PDP GROUP, INC., Defendants. DECISION AND ORDER / ~-----------------------------------~----x ~! bEFFREY K. OING, J. : Relief Sought Mtn Seq. No. 010 Defendant, Tower National Insurance Company ("Tower"), moves, pursuant to CPLR 3211(a) [7], for an order dismissing Count ,IV (declaratory judgment), Count VI faith), and part of Count II (breach of the duty of good (attorney's fees, costs and disbursements). Mtn Seq. No. 011 Plaintiff, Five Towns Nissan, LLC ("Five Towns"), moves, :pursuant to CPLR 3211(a) [7], or, in the alternative, pursuant to !CPLR 3212, for an order dismissing Tower's counterclaim for I ireformation. 1 '!Mtn Seq. No. 012 I I :I i Tower moves for summary judgment.dismissing the complaint ,against it. Five Towns cross-moves for an order compelling Jdisclosute from Tower. 2 of 11 [* 2] I Page 2 of Index No.: 651164/2013 Mtn Seq. Nos. 010, 011 012 & 013 10 Mtn Seq. No. 013 Five Towns moves, pursuant to CPLR 3025(b), for an order granting it leave to amend the complaint to add a cause of action against Tower based on General Business Law ("GBL") Tower cross-moves, pursuant to 22 NYCRR ~and § § 349. 130-1.1, for costs sanctions. Factual and Procedural Background Five Towns owns and operates an· au,tomobile dealership at 600 ~Burnside Avenue in Inwood, New York, that suffered losses from .,super-storm Sandy qn October 2 9, 2012. Its losses include :damages to its facilities and disruption of its business operations. 1 Five Towns had an insurance policy with Tower to insure against property damage and business income loss, covering the period from July 1, 2012 through July 1, 2013 (the "policy")~ ,The policy provides coverage for, among other things, property damage and business interruption. Five Towns claims that Tower '.wrongfully denied coverage for both categories of its losses, :property damage and business income, based on the water exclusion I ' iclause contained in the policy. The water exclusion clause at issue provides the following: B. Exclusions 1. We will not pay for loss or damage caused directly or indirectly by any of th~ following. Such loss or damage is exdluded regardless ~f any other cause or 3 of 11 [* 3] "· Page 3 of ;Index No. : 651164/2013 Seq. Nos. 010, 011 ]012 & 013 10 ~tn event that coritributes concurrently or in any sequence of .the loss. * * * g. Water (1) Flood, surface water, waves, tides, tidal waves, overflow of any body of ,water, or their spray, all whether driven by wind or not. (Buckley Affirm., 9/28/15, Ex. 1, Appendix, at A-230) In a prior decision and order, I granted Five Towns' motion :for partial summary judgment against Tower with respect to its claim for business interruption loss by finding that water ,exclusion was inapplicable to the business interruption coverage ··(NYSCEF Doc. No~ 162). The Appellate Division, First Department :!reversed and granted partial summary judgment to Tower: As there is no issue as to the application of the policy terms excluding losses due to the flooding that plaintiff claims, we grant partial summary judgment to defendant insurance company and make a declaration of no coverage. I ) ](Five Towns Nissan, LLC v Universal Underwriters Insurance Co., ·125 AD3d 580 [1st Dept 2015]). The Appellate Division "declared that the subject policy's flood exclus{on bars coverage for [Five ,:Towns'] loss of business income and extra expense" (Id.). Five Towns mov~d to reargue the Appellate Division's decision and for leave to appeal. Ip its brief in support of reargument and for leave to appeal, Five Towns argued that the 4 of 11 [* 4] a'.:ndex No.: 651164/2013 Mtn Seq. Nos. 010, 011 ,012 & 013 Page 4 of 10 Appellate Division should grant reargument and vacate that portion of its ruling which essentially found that the policy's flood exclusion includes Super-storm Sandy's storm surge (Buckley ~ffirm., ~rgued 9/28/15, Ex. 8, at 11). In that regard, Five Towns the follow~ng: ! This Court reversed the trial court's summary judgment ruling by Decision and Order dated February 26, 2015 (hereinafter, "Februaiy 26 Rulingn). The Court held Tower's Flood Exclusion applies to its Business Interruption coverage, and the Court sua sponte granted Tower summary judgment on this issue. Tower, however, aigues this Court went further and, through the following sentence, closed the door completely on Five Towns' Business Interruption coverage claim arising from Sandy's storm surge. It is declared that the subject policy's. flood exclusion bars coverage for plaintiff's loss of business income and extra expense~ If Tower correctly interprets the February 26 Ruling, then this Court resolved -- as a matter of lawi on an empty record, with no discovery or even argument of counsel -- the first impression issue in this State of whether an insurer's flood exclusion encompasses j Sandy's storm surge. Five Towns respectfully asks this Court to grant its reargument motion and: (1) vacate its purported ruling on the flood v. storm surge issue or, in the alternative, grant Five Towns leave to appeal this ruling; and (2) reverse its ruling that Tower's Flood Exclusion applies to it Business Interruption coverage or, in the alternative, grant Five Towns leave to · appeal this ruling. ~(Buckley I Affirm., 9/28/15, Ex. 8, pp. 9-10). The Appellate !Division denied Five Towns' motion to reargue and for leave to / 5 of 11 [* 5] / I I ,- Page 5 of !Index No. : 651164/2013 Mtn Seq. Nos. 010, 011 ,1012 & 013 10 ! I rppeal (Five Towns Nissan, LLC. v Universal Underwriters Ins. Co., I i2015 NY Slip Op 81273 (U) I [1st Dept 2015]) .. Discussion 'I i Five Towns' remaining claims against Tower are for property :;damage. In its Sl.lmmary judgment motion, Tower argues that as a I ~esult of the Appellate Division's decision finding that the 'I i ~load exclusion applies to Five Towns' business income claims, :t ~he property damage claims ihould necessarily ~lso be dismissed 11 recause they are based on th~ same Super-storm:Sandy water event. In opposition, Five Towns argues that the flood exclusion ~oes not include the Sandy-related storm surge that caused its I property damage. , Five Towns further ! ar~ues that neither this . bourt nor the Appellate Division corisidered or ruled on the issue 11 i ~f whether a storm.surge is a flood. ' J Contrary to Five Towns' argument, the Appellate Division k1early considered its 'I argu~ent that Sandy's storm surge does nbt •I ~all within the water exclusion, .I ·iargument. and implicitly rejected that In fact, the Appellate Division not only reversed this i Fburt's ftnding in favor of Five Towns, but also· searched.the !record and sua '.sponte granted Tower partial surr:unary judgment :i if ~eclaring that "th~'policy's flood exclusion bars coverage for - 'r 'i .. . . ([Five Towns']loss of business income" (Five Towns Nissan, LLC v i . ' ' Universal Underwriters Ins. Co., 125 AD3d 580 [1st Dept 2015]) .· I I 6 of 11 [* 6] Page 6 of !Index No. : 651164/2013 Mtn Seq. Nos-. 010, 011 :012 & 013 1 ~s 10 such, the Appellate Division found that the water resulting J ~rom Super-storm Sandy, and Five Towns' resulting damages, falls within the purview of the policy's flood exclusion. Thus, the Appellate Division decision granting Tower summary judgment,' and ,, I ~ts subsequent denial 0£ Five Towns' motion to reargue, is law of ,the case, namely, that the flood exclusion excludes the Super{ ~torm Sandy water event that caused Five Towns' property damage l(Board of Managers of the 25 Charles St. Condo. v Seligson, 106 AD3d 130 [1st Dept 2Q13] [" [A]ppellate court's resolution of an issue on a prior appeal constitutes the law of the ' ~inding on the Supreme Court"] cas~ and is [internal quotation marks ! bmitted]). Any finding to the contrary concerning property damage coverage would be at odds with the Appellate Division's declaration that the Super-storm Sandy water event causing loss of business income is barred by the policy's flood exclusion. Accordingly, Tower's motion for summary ju9gment (mtn seq. no. 012) is granted, and the remaining property damage claims are '! I hereby dismissed. Five Towns' cross-motion to compel discovery is denied. In light of this determination, Tower's motion to dismiss '(mtn seq. no. 010) is denied as moot. Five Towns' motion to dismiss Tower's counterclaim for teformation (mtn seq. no. 011) is granted, and the counterclaim 7 of 11 [* 7] I I Page 7 of iindex No. : 651164/2013 Mtn Seq. Nos. 010, 011 ;012 & 013 . 10 'I j Tower's counterclai~ seeks "refoi~ation of the )is dismissed. l ITower Policy as necessary to express the partie~' agreement~ i 1/ Junderstanding, and ~utual intent that the .Tower Policy does not I t..,__ .J i • ,)provide Business Income Coverage for losses, caused by 'Flood,' as· :1 )that te:r:_m is defined" in the, Tower Policy" (Thomas Affirm., 'I Ill/4/14, Ex. F). GiVen the Appellate. Division's declaration that 1l " ,/the "policy's flo_od exclusion bars coverage for plaintiff's loss I . )of business income and e~tra e~pense," II / . . (Five Towns Ni~san, LLC, . . - j125 AD3d 580), and this Court's £inding herein~ the counterclaimr :J justtciabl~ controversy. Jislno longer .a ' •I Five Towns moves for leave to amend the complaint (mtn seq. 'I ino. 013) to add a.cause of action against rower based on GBL 349. § Tower-cross-moves for the imposition of costs aqd , sanctions. 1 :I \ I ,, In support cif this'motion, . lpurposely sold it· an ambiguous Five Towns claims that. Tower ~policy that omitted the follo,wing ,\ ,[language: ,, ,I I 'I I iI ! .._ Flood, surface water, waves (including tidal wave 'and tsunami); tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind (~ncluding stor~ surge) I jFive Towns claims that the insurance industry realized the I jdeficiencies ih the pre-Hurricane Katiina flood exclusion. Thus, I 'i • 11n 2011, the Insurance Services Office ("ISO") 8 of 11 revised is Causes [* 8] Page 8 of Index No.: 651164/2013 Mtn Seq. Nos. 010, 011 012 & 013 ~f Loss-Special Form, the sam~ 10 form Tower used in the policy it ~old to Five Towns,. to include the above quoted ianguage. Five i! ~ Towns contends that Tower purposely sold i t a policy without the ~torm surge ~anguage, define the term flood, and that the Tower flood exclusion did not nor did it exclude the risk of storm ~urge. I The elements of a claim under GBL § 349 are: "(1), the i ~hallenged transaction was 'consumer-orientedr; ~ngaged (2) defehdant in deceptive or materially misleading acts or practices; and (3) plaintiff was injured by reason of defendant's deceptive or misleading conduct" (Denenberg v Rosen, 71 AD3d 187 2010]). [1st Dept The allegations in support of Five Towns' proposed cause ·of action for violation of GBL § 349 include: Tower knowingly, recklessly and wantonly sold a Policy to plaintiff that did not specifically exclude storm surge coverage. Tower's conduct likely would mislead a reasonable consumer, a~ting reasonably under the circumstances, into believing its policy covered the risk of loss due to storm surge. ' (Alfano Affirm., 10/27/15, Ex. J). While leave to amend will be granted upon a showing that the I !proposed "amendment is not palpably insufficient 6r clearly !devoid of merit" i (MBIA Insurance Corp. v Greystone & Co., Inc., .' :74 AD3d 499 [1st.Dept 2010]), given the procedural history of this case, the proposed new claim is devoid of merit. 9 of 11 The [* 9] Index No.: 651164/2013 Mtn Seq. Nos. 010, 011 012 & 013 Page 9 of 10 Appellate Division decision provided that "there is no 'issue as I to the application of the policy terms excluding losses due to the flooding that plaintiff claims" (Five Towns Nissan, LLC, 125 AD3d 580). In any event, this Court is not persuaded by Five Towns' conclusory allegation that it was misled into purchasing a I policy that omitted the storm ~urge term from the water exclusion. Accordingly, Five Towns' motion to amend is denied. '] sross-motion. for sanctions and Costs is also denied. Tower's The record does not support such an award. Accordingly, it is hereby ORDERED that Tower's motion for . s~mmary judgment dismissing . the complaint against it (mtn seq. no. 012)_is granted, and the complaint is hereby dismissed; and it is further ORDERED that Five Towns' cross-motion to compel is denied as I moot; and it is further ORDERED that Tower's motion to dismiss Count IV, Count VI, and part of Count II (mtn seq. no. 010) is denied as moot; and it is further ORDERED that Five Towns' motion for summary judgment dismissing Tower's counterclaim for reformation (mtn seq. no. Qll) is granted, and it is dismissed; and it is further I : ' 10 of 11 . [* 10] Index No.: 651164/2013 Seq. Nos. 010, 011 Q12 & 013 Page 10 of 10 ~tn ORDERED that· Five Towns' motion to amend the complaint (mtn !j seq. no. 013) is denied; and it is further ORDERED that Tower's cross-motion for sanctions and costs is ! denied. This memorandum opinion constitutes the decision and order of the Court. Dated: HON. JEFFREY K. OING, J.S.C. JEFFREY K. OH"'"'· .,,, 11 of 11 J.S.c.

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.