| Insurance Corp. of N.Y. v Cohoes Realty Assoc., L.P. |
| 2008 NY Slip Op 02937 [50 AD3d 1228] |
| April 3, 2008 |
| Appellate Division, Third Department |
| Insurance Corporation of New York, Appellant, v CohoesRealty Associates, L.P., et al., Defendants, and Travelers Indemnity of Illinois,Respondent. |
—[*1] Robinson & Cole, L.L.P., New York City (Thomas J. Donlon of counsel), forrespondent.
Cardona, P.J. Appeal from an order of the Supreme Court (McNamara, J.), entered March29, 2007 in Albany County, which granted a motion by defendant Travelers Indemnity of Illinoisfor summary judgment declaring that defendant Cohoes Realty Associates, L.P. is not an insuredunder an insurance policy issued to defendant Arcy Plastic Laminates, Inc.
On May 17, 1999, a fire occurred at commercial premises owned by defendant CohoesRealty Associates, L.P., located in the City of Cohoes, Albany County. Although the exact causeof the fire was not determined, an investigation indicated that the damage was exacerbated due tothe failure of the sprinkler system. The fire resulted in damage to various business property usedby certain of Cohoes Realty's tenants, including defendant Arcy Plastic Laminates, Inc. At thetime of the fire, Arcy was insured by defendant Travelers Indemnity of Illinois (hereinafterdefendant) with a policy providing two types of coverage: commercial general liability insurance(hereinafter CGL) and business owners' property insurance. As relevant herein, Cohoes Realtywas expressly named on an endorsement to Arcy's CGL coverage as an "additional insured," butnot named to any extent under Arcy's business property coverage.
Following defendant's payment of some of Arcy's claims for property damage and businessinterruption pursuant to the business owners' property insurance coverage, Arcy, along with othertenants whose property was damaged in the fire, commenced a negligence action against CohoesRealty, citing the defective sprinkler system, to recover damages not reimbursed by insurance.Defendant then brought a separate subrogation action against Cohoes Realty seekingreimbursement of the damages paid to Arcy under its policy. These actions were consolidatedand later settled, subject to a stipulation that, among other things, plaintiff, Cohoes Realty'sliability insurer, reserved the right to litigate certain issues related to defendant's policy. Inconnection with that stipulation, plaintiff commenced this action seeking, among other things, ajudgment declaring that, due to Cohoes Realty's status as an additional insured under Arcy's CGLcoverage, defendant was not permitted to sue Cohoes Realty in subrogation. Furthermore,plaintiff sought a ruling that defendant was obligated to reimburse plaintiff and/or share in thecosts of defending and indemnifying Cohoes Realty in the actions brought against it bydefendant, Arcy and the other tenants. Defendant's motion for summary judgment was grantedand a declaration that Cohoes Realty was not its insured was issued, prompting this appeal.
Initially, we conclude that, since Cohoes Realty was only an additional insured under Arcy'sCGL coverage and not named under its business owners' property coverage, Supreme Courtproperly held that defendant had no duty to defend herein (see Glens Falls Ins. Co. v City ofNew York, 293 AD2d 568, 570 [2002], lv dismissed 98 NY2d 764 [2002];Federal Ins. Co. v Commerce & Indus. Ins. Co., 187 AD2d 278, 278-279 [1992], lvdenied 81 NY2d 710 [1993]). We do not agree with plaintiff's contention that Cohoes Realtywas entitled to a defense based upon the language of the "Additional Insured-Managers orLessors of Premises" endorsement to Arcy's CGL coverage. Notably, not only does the CGLportion of Arcy's policy exclude property owned by the insured from its coverage (see Utica Mut. Ins. Co. v Watertown Indus.Ctr. Local Dev. Corp., 9 AD3d 836, 837 [2004]), but the endorsement cited by plaintiffprovides that, as an additional insured, plaintiff was covered "only with respect to liability arisingout of the ownership, maintenance or use of that part of the premises leased to [Arcy]." Contraryto plaintiff's argument, it is apparent that this language only refers to liability stemming fromthird-party actions, not any potential liability of the landlord or property owner (see generallyZKZ Assoc. v CNA Ins. Co., 89 NY2d 990, 991 [1997]; New York Convention Ctr.Operating Corp. v Cerullo World Evangelism, 269 AD2d 275, 276 [2000]; Maggio vFrank Mercogliano, Inc., 262 AD2d 612, 613 [1999]; see also Federal Ins. Co. vCommerce & Indus. Ins. Co., 187 AD2d at 278 [holding that it "does not accord withcommon sense" to require an insurer to defend the same party it is suing in subrogation]).Consequently, since Arcy's CGL policy did not cover Cohoes Realty under the subjectcircumstances, nor was there a reasonable expectation of such coverage, no factual issuesregarding a duty to defend, or indemnify, on the part of defendant were presented (see GlensFalls Ins. Co. v City of New York, 293 AD2d at 570).
Next, we find unavailing plaintiff's interrelated argument that, given Cohoes Realty's statusas an additional insured under Arcy's CGL coverage, defendant is estopped pursuant to theantisubrogation rule from seeking reimbursement for the damages that defendant already paid toArcy. Notably, the antisubrogation rule prevents an insurer from commencing a suit against itsown insured arising out of the risk for which the insured was covered (see Dominion Ins. Co.,[*2]Ltd. v State of New York, 305 AD2d 779, 781 [2003]; see also Lodovichetti v Baez, 31 AD3d718, 719 [2006]). Here, since Arcy's CGL insurance did not cover the subject loss andCohoes Realty was not added to the business owners' property insurance, Cohoes Realty cannotbe considered defendant's "insured" herein and the antisubrogation rule is simply inapplicable(see Glens Falls Ins. Co. v City of New York, 293 AD2d at 570).
We find similarly lacking in merit plaintiff's contention that a "waiver of subrogation" clausein the lease agreement between Cohoes Realty and Arcy bars defendant from seeking subrogationherein. As pointed out by Supreme Court, issues concerning the interpretation of the terms ofArcy's lease with Cohoes Realty were not preserved in the parties' stipulation. In any event,irrespective of the stipulation, the record does not support plaintiff's argument that questions offact as to waiver exist. Not only does it appear that a condition in the lease required for waiver ofsubrogation to occur was not met (see e.g. Commerce & Indus. Ins. Co. v Admon Realty,168 AD2d 321, 323 [1990]; Harlington Realty Corp. v S.L.G. Discount Corp., 162 AD2d176, 177 [1990]), plaintiff failed to assert that waiver of subrogation was properly pleaded as anaffirmative defense in the pleadings (see e.g. F.G.L. Knitting Mills v 1087 FlushingProp., 191 AD2d 533 [1993]).
The remaining issues raised by plaintiff, including its claim that summary judgment wasprematurely granted, have been examined and found to be unpersuasive.
Mercure, Spain, Lahtinen and Kane, JJ., concur. Ordered that the order is affirmed, withcosts.