| Bread & Butter, LLC v Certain Underwriters at Lloyd's,London |
| 2010 NY Slip Op 08887 [78 AD3d 1099] |
| November 30, 2010 |
| Appellate Division, Second Department |
| Bread & Butter, LLC, Doing Business as BK Sweeney's,Respondent, v Certain Underwriters at Lloyd's, London,Appellant. |
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In an action to recover damages for breach of contract, the defendant appeals, as limited byits notice of appeal and its brief, from so much of an order of the Supreme Court, Nassau County(Palmieri, J.), entered April 10, 2009, as denied those branches of its cross motion which werefor summary judgment dismissing the cause of action to recover damages based upon theplaintiff's improvements and betterments claim and for summary judgment dismissing thecomplaint based upon the plaintiff's failure to comply with the limitation period set forth in thesubject contract of insurance.
Ordered that the order is affirmed insofar as appealed from, with costs.
In March 2000, the plaintiff purchased the subject restaurant from the prior owner. InDecember 2005, there was a fire at the premises. Thereafter, the plaintiff made a claim forinsurance coverage for the loss of improvements and betterments to the premises which itclaimed it purchased from the prior owner of the restaurant. The plaintiff claimed that, pursuantto the terms of the commercial lease, which it had assumed, those improvements never becamethe property of the landlord who owned the real property. However, the defendant insurer deniedthe plaintiff's improvements and betterments claim on the basis, inter alia, that the plaintiff hadneither made nor acquired the improvements as required to obtain coverage under the policy.
The plaintiff timely brought an action in federal court, but, upon receipt of documentsdemonstrating a lack of complete diversity, stipulated to a discontinuance of the action withoutprejudice. It then commenced suit in state court, whereupon the defendant asserted the defensethat, pursuant to the terms of the subject insurance contract, the action was untimely. TheSupreme Court denied those branches of the defendant's cross motion which were for summaryjudgment dismissing the plaintiff's improvements and betterments claim and for summaryjudgment dismissing the [*2]complaint based upon the plaintiff'sfailure to comply with the limitation period set forth in the subject insurance contract. We affirm.
At the time of the discontinuance of the federal action, the parties sufficiently expressed theirintent that the discontinuance was not on the merits, that it was without prejudice, and thatconsequently, the commencement of a new action within six months pursuant to CPLR 205 (a)was permitted (see George v Mt. Sinai Hosp., 47 NY2d 170, 180-181 [1979]; Matterof Walter, 29 AD3d 598, 599 [2006]; Bailey v Brookdale Univ. Hosp. & Med. Ctr.,292 AD2d 328, 329 [2002]). Accordingly, the Supreme Court correctly determined that theplaintiff's state court action was not untimely under the terms of the insurance contract.
In a dispute over insurance coverage, the insured bears the initial burden of establishing thatthe loss claimed falls within the scope of the policy (see Consolidated Edison Co. of N.Y. vAllstate Ins. Co., 98 NY2d 208, 220 [2002]). "Once coverage is established, the insurer bearsthe burden of proving that an exclusion applies" (id.). However, as the moving party withrespect to the cross motion for summary judgment, the defendant had the burden of establishingits prima facie entitlement to judgment as a matter of law (see Lancer Ins. Co. vWhitfield, 61 AD3d 724, 725 [2009]).
Viewing the facts in the light most favorable to the plaintiff (see Forrest v Jewish Guildfor the Blind, 3 NY3d 295, 315 [2004]; Pearson v Dix McBride, LLC, 63 AD3d 895[2009]), the defendant failed to demonstrate either that the improvements and betterments atissue were not installed by the plaintiff's predecessor but by the landlord or a previous tenant, or,that, to the extent that the improvements and betterments were owned by the plaintiff'spredecessor, they were not included in the sale of the business's assets. Consequently, thedefendant failed to make a prima facie showing sufficient to shift the burden to the plaintiff(see Ferluckaj v Goldman Sachs & Co., 12 NY3d 316, 321 [2009]). Likewise, thedefendant failed to demonstrate that the plaintiff's failure to provide certain requested documentsconstituted a "material breach" of the policy requirements or was "unexcused and willful" andthus that it was entitled to deny coverage based upon the policy exclusion for noncooperationwith the defendant's investigation of the claim (Matter of New York Cent. Mut. Fire Ins. Co.v Rafailov, 41 AD3d 603, 604 [2007]; see also High Fashions Hair Cutters v CommercialUnion Ins. Co., 145 AD2d 465, 466 [1988]).
In light of the foregoing, we need not reach the parties' remaining contentions. Covello, J.P.,Leventhal, Hall and Roman, JJ., concur. [Prior Case History: 23 Misc 3d 1109(A), 2009 NYSlip Op 50685(U).]