| 128 Hester LLC v New York Mar. & Gen. Ins.Co. |
| 2015 NY Slip Op 01870 [126 AD3d 447] |
| March 5, 2015 |
| Appellate Division, First Department |
[*1]
| 128 Hester LLC, Respondent, v New YorkMarine and General Insurance Company, Respondent-Appellant/Third-PartyPlaintiff-Appellant, and Tower Insurance Company of New York,Appellant-Respondent/Third-Party Defendant-Appellant, et al., Defendants, et al.,Third-Party Defendant/Third-Party Plaintiff, et al., Third-PartyDefendant. |
Mound Cotton Wollan & Greengrass, New York (Kevin F. Buckley of counsel),for Tower Insurance Company of New York, appellant-respondent/appellant.
Speyer & Perlberg, LLP, Melville (Gina M. Fortunato of counsel), for NewYork Marine and General Insurance Company, respondent-appellant/appellant.
[*2]Lerner, Arnold & Winston, LLP, New York(Johnathan C. Lerner of counsel), for respondent.
Order, Supreme Court, New York County (George J. Silver, J.), entered May 21,2014, which denied defendant insurers' motions for summary judgment dismissing thecomplaint, unanimously modified, on the law, to grant defendant Tower InsuranceCompany of New York summary judgment dismissing the complaint, the third-partycomplaint and all cross claims as against it, and otherwise affirmed, without costs.
Even if issues of fact exist as to whether the subject loss occurred during the Towerpolicy period, a material misrepresentation made at the time an insurance policy is beingprocured may lead to a policy being rescinded and/or avoided (see Kiss Constr. NY, Inc. v RutgersCas. Ins. Co., 61 AD3d 412 [1st Dept 2009]; Insurance Law§ 3105). Even innocent misrepresentations are sufficient to allow an insurerto "avoid the contract of insurance or defeat recovery thereunder" (Process PlantsCorp. v Beneficial Natl. Life Ins. Co., 53 AD2d 214, 216-217 [1976], affd 42NY2d 928 [1977]; East 115thSt. Realty Corp. v Focus & Struga Bldg. Devs. LLC, 27 Misc 3d 1206[A],2010 NY Slip Op 50572[U] [Sup Ct, NY County 2010], affd 85 AD3d 511 [1stDept 2011]), and where, such as here, an affidavit from Tower's underwriter and excerptsfrom its underwriting guidelines establish that the insurer would not have issued thepolicy if it had known the true nature of the risk, a material misrepresentation warrantingpolicy rescission can be determined as a matter of law (see Chester v Mutual Life Ins.Co. of N.Y., 290 AD2d 317, 317 [1st Dept 2002]).
On May 27, 2009, the New York City Department of Buildings (DOB) engineerobserved the "unsafe/collapse prone" condition of the subject premises, and on June 2,2009, the DOB issued its first Emergency Declaration in regard to that inspection.Plaintiff nonetheless submitted an insurance application to Tower that failed to mentionthis loss on June 17, 2009, and then remained silent until the Tower policy was issued onJuly 12, 2009. At a minimum, plaintiff was aware of this damage no later than July 2,2009, when it submitted the property loss notice to New York Marine (its formerinsurer). Tower's insurance application unequivocally asked for loss history; thus,plaintiff was under a duty to notify Tower as to this loss (Millar v New AmsterdamCas. Co., 248 App Div 272, 277 [4th Dept 1936]), and it failed to do so.
Summary judgment was properly denied as to New York Marine, as the affidavit ofits own expert attested to the fact that additional information must be obtained throughdiscovery to determine the exact time at which the loss occurred.Concur—Mazzarelli, J.P., Sweeny, Moskowitz, Clark and Kapnick, JJ. [PriorCase History: 2014 NY Slip Op 31334(U).]