| Francis v D & W Saratoga, Inc. |
| 2008 NY Slip Op 02106 [49 AD3d 597] |
| March 11, 2008 |
| Appellate Division, Second Department |
| Paul L. Francis, Plaintiff, v D & W Saratoga, Inc.,Respondent, and Washington Title, Appellant. Amrit Puran,Intervenor-Respondent. |
—[*1] Jeanette G. Stewart, New York, N.Y., for defendant-respondent. Kleinman, Saltzman & Bolnick, P.C., New City, N.Y. (Laurence D. Kleinman of counsel),for intervenor-respondent.
In an action pursuant to RPAPL article 15, inter alia, for a judgment declaring that a deedconveying certain real property is void, the defendant Washington Title appeals from an order ofthe Supreme Court, Kings County (Schneier, J.), dated November 13, 2006, which denied itsmotion for summary judgment dismissing the cross claims of the defendant D & W Saratoga,Inc., asserted against it and granted the cross motion of the defendant D & W Saratoga, Inc., ineffect, for summary judgment on so much of its second cross claim as was, in effect, for adeclaration that Washington Title is obligated to defend it in this action and for reimbursement ofattorney's fees, costs, and expenses incurred in defending the action. The appeal brings up forreview an order of the same court dated May 11, 2007, which, upon reargument, adhered to theoriginal determination (see CPLR 5517 [b]).
Ordered that the appeal from the order dated November 13, 2006 is dismissed, as that orderwas superseded by the order dated May 11, 2007, made upon reargument; and it is further,
Ordered that the order dated May 11, 2007 is affirmed; and it is further,[*2]
Ordered that one bill of costs is awarded to therespondents.
The appellant failed to make a prima facie showing that a claim made by the defendant D &W Saratoga, Inc. (hereinafter D & W), under a title insurance policy it issued to D & W was notcovered under the policy. Accordingly, the Supreme Court properly denied the appellant's motionfor summary judgment dismissing D & W's cross claims against it and, upon reargument,properly adhered to that determination.
The Supreme Court also properly determined that the appellant is obligated to defend D & Win the instant action under the terms of the title insurance policy. "[A]n insurer's duty to defendits insured arises whenever the allegations in a complaint state a cause of action that gives rise tothe reasonable possibility of recovery under the policy" (Fitzpatrick v American Honda MotorCo., 78 NY2d 61, 65 [1991]; seeAutomobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [2006]). "However, aninsurer can be relieved of its duty to defend if it establishes as a matter of law that there is nopossible factual or legal basis on which it might eventually be obligated to indemnify its insuredunder any policy provision" (Allstate Ins. Co. v Zuk, 78 NY2d 41, 45 [1991]). Theappellant failed to make that showing. Its contention that coverage for D & W's claim isprecluded under the policy because the basis for the claim, the conveyance of the subject propertypursuant to a purportedly fraudulent deed, was not known to the appellant or was not part of thepublic record as of the effective date of the policy, is unavailing. "[A] title insurer will be liablefor hidden defects and all matters affecting title within the policy coverage and not excluded orspecifically excepted from said coverage" (Citibank v Commonwealth Land Tit. Ins. Co.,228 AD2d 635, 637 [1996] [internal quotation marks omitted]; see U.S. Bank Natl. Assn. TR U/A DTD12/01/98 v Stewart Tit. Ins. Co., 37 AD3d 822, 824 [2007]). Here, the policy containsno specific exclusion from coverage in the event the deed conveying the property to D & W wasfraudulent.
The appellant's remaining contentions are without merit. Spolzino, J.P., Santucci, Angiolilloand Balkin, JJ., concur.