| Antoine v City of New York |
| 2008 NY Slip Op 09010 [56 AD3d 583] |
| November 18, 2008 |
| Appellate Division, Second Department |
| Marie Jacqueline Antoine, Plaintiff, v City of New York,Defendant, and Ocpard Realty Enterprises, LP, Defendant and Third-Party Plaintiff-Respondent.American Safety Indemnity Company, Third-Party Defendant-Appellant-Respondent; BilusBrokerage Inc., Third-Party Defendant-Respondent-Appellant. |
—[*1] Edward J. Garfinkel (Fiedelman & McGaw, Jericho, N.Y. [James K. O'Sullivan], ofcounsel), for third-party defendant-respondent-appellant Bilus Brokerage, Inc. Morris E. Barenbaum, Brooklyn, N.Y. (Vincent J. Licata and Louis A. Badolato of counsel),for defendant third-party plaintiff-respondent.
In an action to recover damages for personal injuries and a related third-party action, thethird-party defendant American Safety Indemnity Company appeals from so much of an order ofthe Supreme Court, Kings County (Hinds-Radix, J.), dated April 11, 2007, as denied its motionfor summary judgment dismissing the third-party complaint insofar as asserted against it, and thethird-party defendant Bilus Brokerage, Inc., separately appeals from so much of the same order asdenied its motion for summary judgment dismissing the third-party complaint and cross claimsinsofar as asserted against it.
Ordered that the order is modified, on the law, (1) by adding a provision thereto searching therecord and awarding summary judgment to the defendant third-party plaintiff Ocpard RealtyEnterprises, LP, against the third-party defendant American Safety Indemnity Company on theissue of liability, and (2) by deleting the provision thereof denying the motion of the third-party[*2]defendant Bilus Brokerage, Inc., for summary judgmentdismissing the third-party complaint and cross claims insofar as asserted against it andsubstituting therefor a provision granting that motion; as so modified, the order is affirmed, withone bill of costs to the third-party defendant Bilus Brokerage, Inc., and the defendant third-partyplaintiff Ocpard Realty Enterprises, LP, payable by the third-party defendant American SafetyIndemnity Company.
On or about April 15, 2004 the plaintiff Marie Jacqueline Antoine was walking in front of2561 Ocean Parkway in Brooklyn when she allegedly tripped and fell on a defect in the sidewalkabutting a building owned by Ocpard Realty Enterprises, LP (hereinafter Ocpard). Ocpard wasinsured under a policy procured by its insurance broker, Bilus Brokerage, Inc. (hereinafter Bilus),and issued by its carrier, American Safety Indemnity Company (hereinafter ASIC).
Antoine commenced an action against both Ocpard and the City of New York to recoverdamages for her injuries. Ocpard notified ASIC, but ASIC disclaimed, asserting that Ocpard hadbreached a warranty in its policy that the "insured premises, including but not limited to allbuildings, structures and parking lots, are in compliance with all federal, national, state and localcodes and/or requirements as respects fire, life safety (including, but not limited to: the NationalFire Protection Association Life Safety Code Standard 101), building construction and buildingmaintenance."
Specifically, ASIC claimed that, at the time its policy was issued, there were code violationsissued to Ocpard relating to the sidewalk where Antoine would later be injured, and that theviolations still existed one year later when Antoine actually fell.
Ocpard thereupon commenced a third-party action against ASIC and Bilus, alleging thatASIC was in breach of its insurance contract and that Bilus had breached its brokerage contractby failing to obtain a policy without the warranty provision. ASIC moved for summary judgmentdismissing the third-party complaint insofar as asserted against it and Bilus separately moved forsummary judgment dismissing the third-party complaint and cross claims insofar as assertedagainst it. The Supreme Court denied both motions, and ASIC and Bilus separately appeal.
"As with any contract, unambiguous provisions of an insurance contract must be given theirplain and ordinary meaning . . . [A] contract is unambiguous if the language it useshas a definite and precise meaning, unattended by danger of misconception in the purport of the[agreement] itself, and concerning which there is no reasonable basis for a difference of opinion. . . Thus, if the agreement on its face is reasonably susceptible of only onemeaning, a court is not free to alter the contract . . . If the terms of a policy areambiguous, however, any ambiguity must be construed in favor of the insured and against theinsurer" (White v Continental Cas. Co., 9 NY3d 264, 267 [2007] [citations and internalquotation marks omitted]; see Vigilant Ins. Co. v Bear Stearns Cos., Inc., 10 NY3d 170,177 [2008]). Indeed, where a policy's terms are ambiguous, the insurer can prevail only if it candemonstrate " 'not only that its interpretation is reasonable but that it is the only fairinterpretation' " (City of New York v Evanston Ins. Co., 39 AD3d 153, 156 [2007],quoting Primavera v Rose & Kiernan, 248 AD2d 842, 843 [1998]). The dispositive issuehere, therefore, is whether the warranty provision unambiguously applies to the City sidewalkoutside Ocpard's building or, if not, whether the only fair interpretation of that provision is that,at the time of the issuance of the policy, Ocpard in fact warranted to ASIC that the City'ssidewalk outside its premises was free of code violations.
The policy contains a provision entitled "Limitation of Coverage to Designated Premises or[*3]Operations" which, inter alia, lists the properties or"premises" for which coverage is afforded. The properties specified consist of certain apartmentcomplexes with no mention of surrounding sidewalks. Moreover, the warranty provision at issuespeaks of the "insured premises, including but not limited to all buildings, structures and parkinglots." It does not mention surrounding sidewalks and the term "premises" is not otherwise definedanywhere in the policy. It can hardly be said, therefore, that the warranty provisionunambiguously applies to the sidewalk in question.
In construing ambiguous language in a policy like this, the general rule is that insurancecontracts are to be interpreted according to the reasonable expectations and purposes of ordinarybusinesspeople when making ordinary business contracts (see General Motors AcceptanceCorp. v Nationwide Ins. Co., 4 NY3d 451, 457 [2005]; Belt Painting Corp. v TIG Ins.Co., 100 NY2d 377, 383 [2003]). Although, under New York law, the coverage afforded bya premises liability policy extends by implication to that portion of an outside sidewalk necessaryfor access to the covered premises (see ZKZ Assoc. v CNA Ins. Co., 89 NY2d 990[1997]; Ambrosio v Newburgh Enlarged City School Dist., 5 AD3d 410, 412 [2004];cf. New York Convention Ctr. Operating Corp. v Cerullo World Evangelism, 269 AD2d275 [2000]), we cannot say from that fact alone that a reasonable businessperson purchasing thispolicy would conclude that the only fair interpretation of its warranty provision would be thatcoverage is entirely eliminated if there are any violations relating to the sidewalk adjacent to theinsured property which sidewalk is owned by the City and not mentioned in the policy.
Accordingly, because the language of the warranty does not unambiguously apply to thesidewalk outside the premises, because the ambiguous warranty provision must be interpreted infavor of the insured and against the insurer unless a contrary construction is the only fairinterpretation, and because the inclusion of the City's sidewalk within the warranty provision isnot the only fair interpretation of that provision, we conclude, as a matter of law, that Ocpard didnot breach the warranty, that ASIC is therefore obligated to defend and indemnify, and thatnothing Bilus did or failed to do caused Ocpard to sustain damages. Spolzino, J.P., Fisher andDickerson, JJ., concur.
Carni, J. (concurring in part and dissenting in part, and voting to reverse the Supreme Court'sorder and grant the motion of the third-party defendant American Safety Indemnity Company forsummary judgment dismissing the third-party complaint insofar as asserted against it, and grantthe motion of the third-party defendant Bilus Brokerage, Inc., for summary judgment dismissingthe third-party complaint and cross claims insofar as asserted against it, with the followingmemorandum): I agree with the majority's conclusion that the coverage afforded by thecommercial general liability policy at issue includes the sidewalk section where the plaintifftripped and fell. Thereafter, insofar as ASIC's motion for summary judgment is concerned, Irespectfully dissent.
It is well settled that such policies extend to sidewalks incidental to and necessarily used foraccess to the premises (see ZKZ Assoc. v CNA Ins. Co., 89 NY2d 990 [1997]). Indeed, itis this well-settled rule that provides the basis for the insurer to evaluate the risk associated withissuing such a policy covering a particular location (see ZKZ Assoc. v CNA Ins. Co., 89NY2d at 991).[*4]
As part of that risk analysis, Ocpard made a warranty toASIC concerning the condition of the insured premises "including but not limited to allbuildings, structures and parking lots." This warranty allowed ASIC to accurately evaluate andrate, using the majority's language, the insured's "liability profile."
The policy was issued for the period of June 20, 2003 to June 20, 2004. There is no disputethat on June 3, 2003 the New York City Department of Transportation issued a notice ofviolation to Ocpard which recited that Ocpard's property was in violation of section 2904 of theNew York City Charter and section 19-152 of the Administrative Code of the City of New York,which require property owners to maintain the sidewalks adjacent to their property. The notice ofviolation identified the existence of, inter alia, a "trip hazard" and other defects in the sidewalksection at issue. The plaintiff allegedly tripped and fell on this sidewalk section on April 15,2004. There is no dispute that Ocpard was aware of the notice of code violations, the accuracy ofwhich it does not dispute, for over 10 months prior to the plaintiff's fall.
At the inception of the policy, Ocpard made two categories of warranty concerning thecondition of the property to the effect that the "insured premises" were in compliance with all (1)"federal, national, state and local codes," and (2) "requirements as respects fire, life safety(including, but not limited to: National Fire Protection Association Life Safety Code Standard101), building construction and building maintenance." The policy also provided that if theinsured failed to comply with any of the representations and warranties "at any time during the'policy period,' " then the named insured shall be deemed in breach of the policy.
In my view, Administrative Code § 19-152, entitled "Duties and obligations ofproperty owner with respect to sidewalks and lots," expressly applies to Ocpard as the abuttingproperty owner. That provision defines a substantial defect in a sidewalk as including, inter alia,trip hazard, loose sidewalk flag, cracked sidewalk flag and improper slope—all defectswhich the insured does not dispute existed in the sidewalk at the time of the plaintiff's trip andfall. Under the code, the owner of the property fronting or abutting the sidewalk—hereOcpard—is required to repair the defect within 45 days of notice thereof (seeAdministrative Code § 19-152 [c]).
There is no dispute that Ocpard did not repair the defect and the sidewalk remained incontinuous violation of the code up to and including the date of the plaintiff's trip and fall. I donot find anything ambiguous about the policy's language concerning Ocpard's continuousobligation to comply with this local code provision insofar as Ocpard simultaneously seeksliability coverage for bodily injury arising from the very same sidewalk.
Lastly, and perhaps most fundamentally, accepting as we must that the policy includes thesidewalk within the "premises" for the purpose of requiring coverage, I cannot find at the sametime that the warranty's more expansive and inclusively descriptive language that the "insuredpremises, including but not limited to all buildings, structures, and parking lots," were incompliance with local codes did not include the very same sidewalk. While the term "premises"for purposes of coverage is undefined, the warranty language is more expansive and inclusive ofthe sidewalk at issue because it contains the language "including but not limited to, all buildingsand structures." In other words, if we are to include the sidewalk within the singular word"premises," surely the same sidewalk must be included in the all-encompassing phrase "insuredpremises including but not limited to all buildings, structures and parking lots." I submit that weshould read and apply the policy in a uniform and consistent manner and I cannot reconcile theconclusion that the "premises" [*5]includes the sidewalk forcoverage purposes but does not include the same sidewalk within Ocpard's warranty concerningthe condition of the very same "insured premises." The majority's inconsistent reading of thepolicy is, in my mind, not a fair interpretation. I find it unreasonable for a business person, inreliance upon the word "premises," to expect and believe that he has liability coverage for bodilyinjury occurring on a defective abutting City sidewalk and at the same time believe that hiswarranty that the "insured premises, including but not limited to all buildings, structures andparking lots" are code compliant does not include the very same sidewalk.
Accordingly, I respectfully dissent in part.