| Jin Ming Chen v Insurance Co. of the State of Pa. |
| 2018 NY Slip Op 07245 [165 AD3d 588] |
| October 30, 2018 |
| Appellate Division, First Department |
[*1]
| Jin Ming Chen, Appellant, v Insurance Company of theState of Pennsylvania, Respondent. |
Kenneth J. Gorman, P.C., New York (Kenneth J. Gorman of counsel), for appellant.
Seiger Gfeller Laurie LLP, New York (Elizabeth F. Ahlstrand of counsel), forrespondent.
Judgment, Supreme Court, New York County (Eileen A. Rakower, J.), entered June 30,2017, adjudging defendant liable to plaintiff for $1,526,938 with costs and interest from May 2,2016, the date of the order granting partial summary judgment to plaintiff, for $159,638.23, for atotal award of $1,686,576.23, unanimously affirmed, without costs.
The specific interest-related questions at issue here did not become clear until after the May2, 2016 order; only then did Supreme Court clarify that excess insurer defendant (ICSOP) wasnot liable to plaintiff for the first $1 million of the judgment. ICSOP's failure to articulate itsposition on interest issues earlier does not support a finding of waiver, which requires anindication of an intentional relinquishment of a known right that, except for the waiver, thewaiving party would have enjoyed (seee.g. DLJ Mtge. Capital Corp., Inc. v Fairmont Funding, Ltd., 81 AD3d 563 [1st Dept2011]). Nor will waiver be implied "unless the opposite party is misled to his or her prejudiceinto the belief that a waiver was intended" (57 NY Jur 2d, Estoppel, Ratification and Waiver§ 89), and plaintiff did not suffer prejudice from ICSOP's delay, as Supreme Courtmade no decision about interest until it provided both parties an opportunity to brief theirrespective positions.
ICSOP's interest-related arguments were not impermissible under CPLR 2221 (d), sinceSupreme Court granted leave to reargue for the very purpose of enabling the parties to addressthe interest issue. As the record does not show that the court granted relief under CPLR 5019 (a),plaintiff's arguments about the scope of the court's authority under that statute are not relevanthere.
Plaintiff's interpretation of the "follow form" provision in the ICSOP policy is not persuasive.He acknowledges that a following form policy is read in accord with the terms and conditions ofthe underlying policy (see e.g. Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92NY2d 363 [1998]). However, he does not adequately take into account that the "terms andconditions" of the underlying Arch policy include, in its Supplementary Payments provision,Arch's agreement to cover prejudgment interest "on that part of the judgment we pay," i.e., thefirst $1 million, and "all" postjudgment interest on the "full amount of any judgment." The actualICSOP "follow form" provision, moreover, states: "Except for the . . . conditions. . . of this policy, the coverage provided by this policy shall follow the terms,definitions, conditions and exclusions of the First Underlying Insurance Policy as shown in Item4 of the Declarations." Among the "conditions" of the ICSOP policy is the "Maintenance ofUnderlying Insurance" provision, pursuant to which, and regardless of whether the insuredactually maintained such underlying insurance, ICSOP's excess coverage would be triggered onlyupon exhaustion of the "limits of insurance of the Underlying Insurance shown in Item 4 of theDeclarations," which "limits," in turn, were not reduced by, and thus included, the interestpayments set forth in the Supplementary Payments provision.
We disagree that either Ragins vHospitals Ins. Co., Inc. (22 NY3d 1019 [2013]) or Welsh [*2]v Peerless Cas. Co. (8 AD2d 373 [1st Dept 1959], affd8 NY2d 745 [1960]) supports plaintiff's position, given key distinctions in the policy language atissue in those cases. Finally, we disagree that the ICSOP policy provisions regarding"Maintenance of Underlying Insurance" and "Ultimate Net Loss" encompassed underlyingcoverage only to the extent of the $1 million per occurrence the primary policy provided. Thelanguage of the policies do not support this interpretation, and instead supports ICSOP's positionthat its coverage obligations were meant to be excess to all aspects of coverage afforded by theprimary policy—that is, not only the $1 million in coverage per occurrence, but also theSupplementary Payments, which, by their terms, did not reduce the Arch policy's insurancelimits.
We have considered the parties' remaining arguments and find them unavailing.Concur—Acosta, P.J., Friedman, Kapnick, Webber, Moulton, JJ.