720 Miller Ave Realty LLC v. Norguard Ins. Co.
| Decision Date | 02 October 2018 |
| Docket Number | Index No.: 507107/2017 |
| Citation | 2018 NY Slip Op 32742 (U) |
| Parties | 720 MILLER AVE REALTY LLC, Plaintiff, v. NORGUARD INSURANCE COMPANY and BASS UNDERWRITERS, INC.., Defendant(s). BASS UNDERWRITERS, INC., Third-Party Plaintiffs, v. MGI BROKERAGE, INC. Third-Party Defendants. |
| Court | New York Supreme Court |
At an IAS Term, Part 81 of the Supreme Court of the State of New York, held in and for the County of Kings, at the Courthouse, at 360 Adams Street, Brooklyn, New York, on the 2nd day of October, 2018.
PRESENT: HON. CARL J. LANDICINO, JSC
DECISION & ORDER
(Motion Seq. #2 & #3)
Recitation, as required by CPLR §2219(a), of the papers considered in the review of this motion:
Papers Numbered Notice of Motion/Cross Motion andAffidavits (Affirmations) Annexed 1/2, 3/4, Opposing Affidavits (Affirmations) 6, 7, 8 Reply Affidavits (Affirmations) Memorandum(s) of Law 5
After oral argument and upon review of the papers the Court finds as follows:
This action arises out of the alleged failure and refusal of Defendant NORGUARD INSURANCE COMPANY (hereinafter "Defendant Norguard") and its purported authorized agent Defendant BASS UNDERWRITERS, INC., (hereinafter "Defendant Underwriters") to inter alia, indemnify the Plaintiff 720 MILLER AVE REALTY LLC, (hereinafter "Plaintiff") for property damage purportedly sustained at 720 Miller Avenue, Brooklyn, New York (hereinafter "Subject Premises") as a result of a fire. While the parties disagree on the exact date, it is undisputed that there was a business-owner insurance policy issued by Defendant Norguard relating to Plaintiff in November of 2015 (Policy No.: SEBP723351) (hereinafter "the Policy") and it was apparently extended for coverage to include the date the alleged loss took place, December 27, 2016. (Plaintiff Attorney Affirmation in Support) (Defendant Norguard Affirmation in Opposition). After filing the claim and receiving a denial letter (Plaintiff Exhibit B) from Defendant Norguard dated January 17, 2016, Plaintiff commenced the instant action by Summons and Complaint on April 10, 2017.
Plaintiff 720 MILLER AVE REALTY LLC (hereinafter "Plaintiff") seeks the following relief (motion sequence #2) as against Defendant NORGUARD INSURANCE COMPANY (hereinafter "Defendant Norguard"):
"(1) granting summary judgment as against Defendants NORGUARD INSURANCE COMPANY...; or in the alternative (2) Striking Defendant Norguard's Answer for failing to provide Plaintiff 720 Miller Avenue Realty LLC, with adequate responses to its discovery demands, and for such other and further relief as this Court deems just and proper."
Additionally, Plaintiff by the same motion (motion sequence #2) sought the following relief against Defendant BASS UNDERWRITERS, INC. (hereinafter "Defendant Bass"): "(1) granting summary judgment as against Defendants....and BASS UNDERWRITERS, INC., ... and for such other and further relief as this Courts deems just and proper." However, by Stipulation dated March 9, 2018, Plaintiff withdrew the Motion for Summary Judgment as against Defendant Underwriters. Therefore, the remaining issues are Summary Judgment against Defendant Norguard and the alternative relief of striking its answer.
Plaintiff seeks to prove that after contacting its insurance broker, Third-Party Defendant MGI BROKERAGE, INC. (hereinafter "MGI"), in order to secure insurance for the Subject Premises, MGI contacted Defendant Underwriters to obtain a quote for same. Plaintiff contends that Defendant Underwriters is an insurance agent that is authorized to sell such insurance policies on behalf of Defendant Norguard. Plaintiff avers that during this period Defendant Underwriters sought more information. Specifically, this information purportedly related to the existence of a fire alarm system maintained at the Subject Premises. That information was allegedly exchanged via e-mail. Plaintiff contends that it was communicated that the Subject Premises did not contain a "[c]entral station fire alarm". Plaintiff further alleges that even with this information the policy was tendered by Defendant Underwriters to MGI for the Plaintiff on behalf of Defendant Norguard.
It is undisputed that the Policy contains a "Protective Safeguard Endorsement" which requires that the Plaintiff maintain an "Automatic Fire Alarm", however the Plaintiff avers that neither Plaintiff or MGI were aware of same and Plaintiff provides an e-mail exchange (Plaintiff Exhibit M) between Ben Lynch (an employee of Defendant Underwriters) and Lyle Hitt (Executive Vice President of Defendant Underwriters), that the protective endorsement and safeguard was issued by mistake and should have been removed. (Plaintiff Affirmation in Support; Plaintiff Exhibits C1, D2, E3, and M)
Defendant Norguard, in opposition4 to Plaintiff's Summary Judgment motion, contends that Defendant Norguard and Defendant Underwriters were never in communication concerning information regarding the subject Policy, that the renewal and original Policy included the language for the protective safeguard endorsement and that Defendant Norguard is not required, under the Policy to indemnifyPlaintiff for said claim. Defendant Norguard contends that the Plaintiff's motion is premature as depositions of Plaintiff, MGI, and representatives of the Defendants have not occurred. Additionally, Defendant Norguard asserts that a discrepancy as to the facts surrounding the policy, information exchanged and the alleged existence of an agency relationship, is reflected by the Affidavits submitted. Specifically, Defendant Norguard contends that this conflict in and of itself is sufficient to deny Plaintiff's motion for summary judgment in its entirety as a matter of law.
"Summary judgment is a drastic remedy that deprives a litigant of his or her day in court, and it 'should only be employed when there is no doubt as to the absence of triable issues of material fact.'" Kolivas v. Kirchoff, 14 AD3d 493 [2nd Dept, 2005], citing Andre v. Pomeroy, 35 N.Y.2d 361, 364, 362 N.Y.S.2d 131, 320 N.E.2d 853 [1974]. The proponent for the summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate absence of any material issues of fact. See Sheppard-Mobley v. King, 10 AD3d 70, 74 [2nd Dept, 2004], citing Alvarez v. Prospect Hospital, 68 N.Y.2d320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986]; Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 [1985].
Once a moving party has made a prima facie showing of its entitlement to summary judgment, "the burden shifts to the opposing party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action." Garnham & Han Real Estate Brokers v Oppenheimer, 148 AD2d 493 [2nd Dept, 1989]. Failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers. See Demshick v. Cmty. Hous. Mgmt. Corp., 34 A.D.3d 518, 520, 824 N.Y.S.2d 166, 168 [2nd Dept, 2006]; see Menzel v. Plotnick, 202 A.D.2d 558, 558-559, 610 N.Y.S.2d 50 [2nd Dept, 1994].
"As a general rule, the construction of terms and conditions of an insurance policy that are clear and unambiguous presents a question of law to be determined by the court." Commercial Union Ins. Co. v. Liberty Mut. Ins. Co., 36 A.D.3d 645, 645, 828 N.Y.S.2d 479, 480 [2nd Dept, 2007]. "Any ambiguity, however, must be construed against the insurer as the drafter of the policy." NIACC, LLC v. Greenwich Ins. Co., 51 A.D.3d 883, 884, 857 N.Y.S.2d 723, 724 [2nd Dept, 2008]. It is undisputed between theparties that the Protective Safeguard language is included. This dispute arises out of alleged facts and circumstances that occurred prior to the issuance of the policy and the relationship of the participating parties.
Generally, an agent/broker owes a common law duty to a client, upon a specific request, to "obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so..." but that the duty to advise, guide or direct the client in obtaining additional coverage does not continue. Murphy v. Kuhn, 90 N.Y.2d 266, 682 N.E.2d 972 (1997) see; Hoffend & Sons, Inc. V. Rose & Kiernan, Inc., 7 N.Y.3d 152 (2d. Dept. 2006); Hjemdahl-Monsen v. Faulkner, 204 A.D.2d 516 (2d. Dept. 1994). Specifically, for a client to set forth a claim for breach of contract against an insurance broker or agent, the party must establish "that a specific request was made to the broker for the coverage that was not provided in the policy." American Bldg. Supply Corp. v. Petrocelli Group, Inc., 19 N.Y3d 730, 979 N.E.2d 1181 (2012); Voss v. Netherlands Ins. Co., 22 N.Y.3d 728, 8 N.E.3d 823 (2014) The Court notes however, that if a special relationship between the client and the broker is found the broker may, even in the absence of a request from the client, be liable for a claim of negligence for failing to advise or direct the client in obtaining additional coverage. Voss v. Netherlands Ins. Co., 22 N.Y.3d 728, 8 N.E.3d 823 (2014); see, Hoffend & Sons, Inc. v. Rose & Kiernan, Inc., 7 N.Y3d 152, 851 N.E.2d 1149 (2006); Joseph v. Interboro Ins. Co., 144 A.D.3d 1105 (2d Dept. 2016). The Plaintiff does not make an argument that there was a special relationship. However, Plaintiff maintains that Defendant Norguard (as the insurer) owed a duty to Plaintiff to provide coverage based on the information Plaintiff provided to MGI and MGI provided to Defendant Underwriter. Therefore Plaintiff contends that Defendant Norguard breached its duty to Plaintiff.
The parties do not contend that Plaintiff was not in contact with Defendant Norguard or Defendant Underwriters directly. The request for coverage on the Subject Premises was made by Plaintiff to MGI. Plaintiff's Exhibit D is the Affidavit of the Chief Executive...
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