Grace v Castlepoint Ins. Co.

[*1] Grace v Castlepoint Ins. Co. 2017 NY Slip Op 50005(U) Decided on January 5, 2017 Supreme Court, Kings County Rivera, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 5, 2017
Supreme Court, Kings County

Andrea Grace, Plaintiff,

against

Castlepoint Insurance Company and TOWER GROUP, INC., , Defendants.



504139/2013



Attorney for Plaintiff

Avi Rosengarten, Esq.

1704 Avenue M

Brooklyn, NY 11230

718-627-4460

Attorney for Defendant

Max W. Gershweir

570 Lexington Avenue — 8th Floor

New York, NY 10022

646-625-4000
Francois A. Rivera, J.

Recitation in accordance with CPLR 2219 (a) of the papers considered on the joint notice of motion of the defendants Castlepoint Insurance Company and Tower Group, Inc. (hereinafter the Insurers), filed on November 14, 2016 under motion sequence number one, for an order pursuant to CPLR 2001 staying the instant action. Plaintiff Andrea Grace (hereinafter Grace) has not opposed the motion.

Notice of Motion

Affirmation in Support

Exhibits A-E

BACKGROUND

On July 23, 2013, Grace commenced the instant action for damages for breach of an insurance contract and for a declaratory judgment by electronically filing a summons and complaint with the Kings County Clerk's office. The Insurers interposed a joint answer dated September 30, 2013.

The complaint alleges that in January of 2012, the Insurers issued a commercial general liability insurance policy (hereinafter the policy) to Grace. The policy was effective February 27, 2012 and insured the premises known as 1239 Nostrand Avenue, Brooklyn, New York (hereinafter the premises).

In August of 2011 the roof of the premises collapsed due to heavy rains. The resulting water damage caused the tenants to vacate the upper floors. Grace reduced the rent of the ground floor tenants to induce them to remain but they also eventually vacated the premises. Grace then filed a timely claim with the Insurers seeking coverage to repair [*2]the roof and for the loss of rent. The Insurers neither paid the claim nor issued a disclaimer letter.

LAW AND APPLICATION

Annexed as exhibit C to the instant motion is an order of the Superior Court of the State of California, City and County of San Francisco (hereinafter the California Court)

dated July 28, 2016 (hereinafter the Conservation Order). The Conservation Order appoints the Insurance Commissioner of the State of California as conservator of the assets of CastlePoint Insurance Company and restrains all litigation against it. The Conservation Order states that all references to CastlePoint National Insurance Company, "shall be deemed to include all . . . predecessor entities," including CastlePoint Insurance Company.

The Insurers contend that the instant action is subject to the Conservation Order and must be given full faith and credit pursuant to U.S.C.A. Constitution Article 4 § 1. To accomplish this the Insurers seek an order pursuant to CPLR 2001 staying the instant action. CPLR 2201 provides that the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just.

Grace has not opposed the motion. A stay by a court in another state enjoining and restraining all claims against an insured of an insolvent liability insurer is entitled to full faith and credit, and has the effect of suspending all proceedings against the insured as of its effective date (Dambrot v REJ Long Beach, LLC, 39 AD3d 797, 799 [2nd Dept 2007] citing Beecher v Lewis Press Co., 238 AD2d 927 [4th Dept 1997]).

In this instance the Conservation Order enjoins and restrains the litigation of all claims against the insurance company. Applying the rationale articulated in the Dambrot and Beecher case, the Court finds that the stay provisions of the Conservation Order is indeed applicable to the instant action and is entitled to full faith and credit. The Insurers motion to stay the instant action pursuant to CPLR 2001 is granted. The stay shall remain in effect until such time as the California Court lifts the injunction of litigation against CastlePoint.

CONCLUSION

The joint notice of motion of the defendants Castlepoint Insurance Company and Tower Group, Inc. for an order pursuant to CPLR 2001 staying the instant action is granted. The stay shall remain in effect until such time as the California Court lifts the injunction of litigation against CastlePoint.

The foregoing constitutes the decision and order of this Court.

Enter:

J.S.C.