| SUS, Inc. v St. Paul Travelers Group |
| 2010 NY Slip Op 05853 [75 AD3d 740] |
| July 1, 2010 |
| Appellate Division, Third Department |
| SUS, Inc., Doing Business as Sangiovese Restaurant, et al.,Respondents, v St. Paul Travelers Group et al., Appellants, et al.,Defendant. |
—[*1] Devereaux Baumgarten, New York City (Michael J. Devereaux of counsel), forrespondents.
Peters, J.P. Appeal from an order of the Supreme Court (Cahill, J.), entered May 19, 2009 inUlster County, which, among other things, partially denied certain defendants' motion to dismissthe amended complaint.
Plaintiff SUS, Inc. owned and operated the Sangiovese Restaurant in the Town of Pine Bush,Ulster County, and leased the property from plaintiff New Prospect Properties, LLC. In 2008, afire completely destroyed the restaurant, including the building and its contents. At the time ofthe fire, SUS had an insurance policy providing commercial general liability (hereinafter CGL)insurance and businessowners' property insurance coverage. New Prospect was expressly namedas an "[a]dditional [i]nsured" on an endorsement to SUS's CGL coverage, but was not namedunder SUS's business property coverage.
After certain claims made by plaintiffs under the policy were denied, they commenced theinstant action against, among others, defendants St. Paul Travelers Group, Travelers Indemnity[*2]Company, Travelers Indemnity Company of America, St.Paul Travelers Companies, Inc., St. Paul Fire and Marine Insurance Company and Charter OakFire Insurance Company (hereinafter collectively referred to as the Travelers defendants). TheTravelers defendants thereafter moved, pursuant to CPLR 3211 (a) (1) and (7), to dismiss thecomplaint except as against Charter Oak, alleging that none of the other Travelers defendantswere insuring companies under the policy. They also sought to dismiss any claims for damage tothe building itself as not covered under the policy, and to remove Sangiovese Restaurant andNew Prospect as plaintiffs. Supreme Court granted that portion of the motion which soughtremoval of Sangiovese Restaurant as a plaintiff, and otherwise denied the motion. The Travelersdefendants now appeal.
At this procedural point in the litigation, we afford the complaint a liberal construction,accept the facts alleged therein as true and give plaintiffs the benefit of every possible favorableinference (see Hurrell-Harring v Stateof New York, 15 NY3d 8, 20 [2010]; Leon v Martinez, 84 NY2d 83, 87-88[1994]; Lazic v Currier, 69 AD3d1213, 1213-1214 [2010]). "When the motion to dismiss is premised upon documentaryevidence, 'such motion may be appropriately granted only where the documentary evidenceutterly refutes [the] plaintiff's allegations, conclusively establishing a defense as a matter of law'" (Crepin v Fogarty, 59 AD3d837, 838 [2009], quoting Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326[2002]; see Erie Ins. Group v NationalGrange Mut. Ins. Co., 63 AD3d 1412, 1413 [2009]). Where, as here, we are called uponto determine whether a contract's provisions are ambiguous, we must determine "as a matter oflaw whether they lack a definite and precise meaning and provide a reasonable basis for adifference of opinion" (Weston vCornell Univ., 56 AD3d 1074, 1075 [2008] [internal quotation marks and citationsomitted]; see Pozament Corp. v AESWestover, LLC, 27 AD3d 1000, 1001 [2006]; CV Holdings, LLC v Artisan Advisors, LLC, 9 AD3d 654, 656[2004]).
The Travelers defendants argue that the complaint must be dismissed except as againstCharter Oak because the policy's clear and unambiguous language provides that only CharterOak, and none of the other Travelers defendants, issued the policy. In support of the motion,defendants proffered the applicable insurance policy together with the "Businessowners PropertyCoverage Special Form" and additional insured endorsements. Both the Common PolicyDeclarations and Businessowners Coverage Part Declarations plainly list Charter Oak as the"[i]nsuring [c]ompany." Furthermore, the "Common Policy Conditions" portion of the policyexpressly provides, under the section entitled "Insuring Companies," that "[i]n return forpayment of the premium, we agree with the Named Insured to provide the insuranceafforded by a Coverage Part forming part of this policy. That insurance will be provided bythe company indicated as insuring company in the Common PolicyDeclarations. . . The companies listed below . . . have executedthis policy" (emphasis added). Three of the six Travelers defendants, including Charter Oak, arelisted below that language.
Despite plaintiffs' contention to the contrary, we cannot conclude that the word "we" in thefirst sentence of the aforementioned provision is ambiguous. Although plaintiffs suggest that theterm "we" could reasonably be interpreted to mean that "the companies listed below" agreed toprovide the insurance, the policy explicitly provides that, throughout the policy, "[t]he words'we,' 'us' and 'our' refer to the Company providing this insurance." As is plainly set forth in thedeclarations pages under the heading "[i]nsuring [c]ompany," Charter Oak is the only partyproviding the insurance. Given that the [*3]policy clearly andunambiguously provides that Charter Oak is the only party providing the insurance,[FN1]the complaint should have been dismissed against all of the other Travelers defendants.
While plaintiffs also claim that the Travelers defendants may be held liable for the conductof their wholly owned subsidiary, Charter Oak, it is well settled that "such liability can never bepredicated solely upon the fact of a parent corporation's ownership of a controlling interest in theshares of its subsidiary" (Billy v Consolidated Mach. Tool Corp., 51 NY2d 152, 163[1980]; see Daniels v Zelco, Inc., 159 AD2d 538, 540 [1990]). Rather, "there must bedirect intervention by the parent in the management of the subsidiary to such an extent that thesubsidiary's paraphernalia of incorporation, directors and officers are completely ignored"(Billy v Consolidated Mach. Tool Corp., 51 NY2d at 163 [internal quotation marks andcitation omitted]; see Horowitz v Aetna Life Ins., 148 AD2d 584, 586 [1989]). Sinceplaintiffs have neither alleged nor submitted any facts indicating that the other Travelersdefendants exercised such a level of dominion and control over Charter Oak, there is no basisupon which to predicate liability against them (see Mitchell v TAM Equities, Inc., 27 AD3d 703, 708 [2006]; Lipton v Unumprovident Corp., 10AD3d 703, 705 [2004]; Baratta v Kozlowski, 94 AD2d 454, 456 [1983]).
We also agree with the Travelers defendants that any claims under the policy by NewProspect, the landlord and owner of the premises, must be dismissed because New Prospect isnot named to any extent under SUS's businessowners' property coverage (see Insurance Corp. of N.Y. v CohoesRealty Assoc., L.P., 50 AD3d 1228, 1229-1230 [2008]; Gap, Inc. v Fireman's Fund Ins. Co.,11 AD3d 108, 111 [2004]). Although New Prospect is named as an "additional insured"under SUS's CGL coverage, the standard CGL policy—like the one at issuehere—does not cover damage to property owned by the insured, but rather providescoverage for liability to third parties pursuant to a judgment or settlement (see Gap, Inc. vFireman's Fund Ins. Co., 11 AD3d at 111; see also Great N. Ins. Co. v Mount VernonFire Ins. Co., 92 NY2d 682, 688 [1999]). No such third-party liability claims are beingasserted here.[FN2]Since New Prospect is not named under SUS's businessowners' property coverage and its statusas an additional insured under the CGL policy does not entitle it to any coverage in thisfirst-party liability claim, any claims asserted by New Prospect must be dismissed.
Finally, we agree with the Travelers defendants that the policy provides no coverage fordamage to the building itself and, therefore, SUS's claims for any such damage must bedismissed. The policy's "Businessowners Property Coverage Special Form" provides coveragefor "Covered Property"—which includes "[b]usiness [p]ersonal [p]roperty," and"[b]uilding, meaning the building or structure described in the Declarations"—"if a Limitof Insurance is shown in the Declarations for that type of property" (emphasis added).While the "Businessowners Declarations" sets forth a limit of insurance for "Business PersonalProperty" and other coverage extensions, such as accounts receivable and fine arts, no limit ofinsurance is shown for the building. As such, we find that the subject building is not coveredunder the clear language of the businessowners' property coverage part of the policy.Furthermore, for the reasons previously discussed, the CGL portion of thedeclarations—which provides a limit of insurance of $300,000 for "Damage to PremisesRented to You"—is not applicable to SUS's first-party liability claim for damage to thebuilding. In that regard, the CGL coverage expressly limits the insurer's liability to SUS to thosesums that SUS becomes legally obligated to pay as property damage arising from a coveredevent, and there is no allegation that SUS had been found legally obligated to pay any of thedamages alleged (see 87-10 51st Ave.Owners Corp. v Steadfast Ins. Co., 39 AD3d 700, 701 [2007]). For these reasons,Supreme Court should have dismissed all claims by SUS seeking recovery for damage to thebuilding.
Rose, Lahtinen, McCarthy and Egan Jr., JJ., concur. Ordered that the order is modified, onthe law, without costs, by reversing so much thereof as denied the motion of defendants St. PaulTravelers Group, Travelers Indemnity Company, Travelers Indemnity Company of America, St.Paul Travelers Companies, Inc., St. Paul Fire and Marine Insurance Company and Charter OakFire Insurance Company to (1) dismiss the complaint against all said defendants except CharterOak Fire Insurance Company, (2) dismiss all claims for damage to the building itself, and (3)dismiss all claims asserted by plaintiff New Prospect, LLC; motion granted to said extent; and,as so modified, affirmed.
Footnote 1: That the word "Travelers" andits logo appear at the top of the declarations pages and certain portions of the policy arecopyrighted by one of the Travelers defendants does not serve to create an ambiguity where noother exists.
Footnote 2: Indeed, the endorsement to theCGL coverage specifically provides that, as an additional insured, New Prospect was covered"only with respect to liability arising out of [SUS's] ongoing operations performed for [NewProspect] at the location designated above; or [a]cts or omissions of [New Prospect] inconnection with [its] general supervision of such operations."