| Strauss Painting, Inc. v Mt. Hawley Ins. Co. |
| 2013 NY Slip Op 02480 [105 AD3d 512] |
| April 11, 2013 |
| Appellate Division, First Department |
| Strauss Painting, Inc.,Respondent-Appellant, v Mt. Hawley Insurance Company,Appellant-Respondent, and Metropolitan Opera Association, Inc.,Respondent-Appellant. |
—[*1] Richard Janowitz, Mineola, for Strauss Painting, Inc., respondent-appellant. Ahmuty, Demers & McManus, Albertson (William J. Mitchell of counsel), forMetropolitan Opera Association, Inc., respondent-appellant.
Order and judgment (one paper), Supreme Court, New York County (DorisLing-Cohan, J.), entered November 4, 2011, which granted Mt. Hawley InsuranceCompany's (Mt. Hawley) motion for summary judgment declaring that it has noobligation to defend or indemnify plaintiff in the underlying personal injury action,granted defendant Metropolitan Opera Association, Inc.'s (the Met) motion for summaryjudgment declaring that Mt. Hawley is obligated to defend and indemnify the Met in anunderlying personal injury action, denied Mt. Hawley's cross motion for summaryjudgment declaring that it is not obligated to defend or indemnify the Met in theunderlying action, and dismissed the Met's second and third cross claims against Mt.Hawley on the basis that they were abandoned; as amended by the order, same court andJustice, entered October 16, 2012, upon reargument, reinstating the Met's second andthird cross claims on the basis that they were not abandoned; as further amended byorder, same court and Justice, entered October 16, 2012, upon reargument, declaring thatMt. Hawley's duty to defend and indemnify is conditioned upon a finding of negligenceby plaintiff or those acting on plaintiff's behalf, unanimously modified, on the law, to (1)deny Mt. Hawley's motion for the dismissal of the complaint as against it upon thedeclaration that Mt. Hawley has no duty to defend and indemnify plaintiff, (2) to dismissthe Met's third cross claim against Mt. Hawley for expenses incurred in this action, (3) todelete that portion of the court's October 16, 2012 order upon reargument thatconditioned Mt. Hawley's duty to defend and indemnify the Met upon a finding ofnegligence by plaintiff in the underlying action and to declare that Mt. Hawley's duty todefend the Met shall arise and be conditioned upon a finding of an act or omission byplaintiff or one acting on plaintiff's behalf, and otherwise affirmed, without costs.
The court properly determined that Mt. Hawley is obligated to defend and indemnifythe Met in the underlying personal injury action. It is undisputed that there was a contractbetween [*2]plaintiff and the Met and that the contractrequired plaintiff to purchase insurance coverage naming the Met as an additionalinsured. It is also undisputed that plaintiff's commercial general liability (CGL) policyfrom Mt. Hawley contained an additional insured endorsement. The court correctlyrejected Mt. Hawley's interpretation of the contract language, as it would be inconsistentwith the terms of the contract and the policy (Bruckmann, Rosser, Sherrill & Co., L.P. v Marsh USA, Inc., 87AD3d 65, 70 [1st Dept 2011]).
The court also properly rejected Mt. Hawley's argument that it timely disclaimedcoverage to the Met on the basis of late notice. The only letters sent by Mt. Hawley to theMet were those intended to preserve its right to disclaim. These letters were insufficientto actually disclaim coverage (see Hartford Ins. Co. v County of Nassau, 46NY2d 1028, 1029 [1979]).
The wording of the court's declaration that the Met is entitled to defense andindemnity in the underlying action must be altered, however, to exclude the necessity of afinding of negligence by plaintiff in the underlying action. The additional insuredendorsement speaks in terms of "acts or omissions," not negligence. Thus, in the unlikelyevent that it would be found that some nonnegligent act by plaintiff caused the accident,the Met would still be entitled to coverage under the additional insured endorsement (see Admiral Ins. Co. v Joy Contrs.,Inc., 81 AD3d 521, 523 [1st Dept 2011], mod on other grounds 19NY3d 448 [2012]).
The Met is not entitled to reimbursement of expenses incurred in this action (seeNew York Univ. v Continental Ins. Co., 87 NY2d 308, 324 [1995]).
The court properly found that Mt. Hawley is not required to defend and indemnifyplaintiff in the underlying action. Plaintiff's notice of the accident to Mt. Hawley wasuntimely as a matter of law, and Mt. Hawley timely disclaimed coverage on that ground.Plaintiff's notice to its broker did not provide timely notice to Mt. Hawley. There is noindication that plaintiff's broker acted as an agent for Mt. Hawley or that the CGL policylisted plaintiff's broker as its agent (cf. Mighty Midgets v Centennial Ins. Co., 47NY2d 12 [1979]). Nor was plaintiff's alleged belief of nonliability reasonable under thecircumstances (see HermitageIns. Co. v JDG Lexington Corp., 99 AD3d 428 [1st Dept 2012]). Mt. Hawleywas entitled to a declaration in its favor, but the complaint should not have beendismissed as against it (see Lanza v Wagner, 11 NY2d 317, 334, 340 [1962],cert denied 371 US 901 [1962]). Concur—Friedman, J.P., Moskowitz,DeGrasse, Richter and Gische, JJ. [Prior Case History: 2011 NY Slip Op32706(U).]