Stainless, Inc. v. Employers Fire Ins. Co.

• Decision Date: 10 July 1979
• Citation: 69 A.D.2d 27,418 N.Y.S.2d 76
• Parties: STAINLESS, INC. and Stainless Construction Company, Plaintiffs-Respondents, v. The EMPLOYERS FIRE INSURANCE COMPANY, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 76

418 N.Y.S.2d 76

69 A.D.2d 27

STAINLESS, INC. and Stainless Construction Company Plaintiffs-Respondents, v. The EMPLOYERS FIRE INSURANCE COMPANY, Defendant-Appellant.

Supreme Court, Appellate Division, First Department.

July 10, 1979.

Charles F. McGuire, New York City, of counsel (Gwertzman & Pfeffer, New York City), for defendant-appellant.

Marshall M. Kolba, New York City, of counsel (Ernest E. Rosenberg, New York City, with him on the briefs; Rein, Mound & Cotton, New York City, for plaintiffs-respondents.

FEIN, Justice.

Defendant insurer appeals from an order granting plaintiffs' motion for summary judgment on liability, directing an assessment of damages and denying defendant's cross-motion for summary judgment dismissing the complaint.

The action is brought to recover under an insurance policy issued by appellant (Employers) to Plains Television Corporation (Plains). Recovery of $209,958.25 is sought for damage to a television tower and appurtenant equipment, which collapsed from the weight of ice deposited on the structure during a storm. The complaint alleges that the policy issued by Employers to Plains provided coverage for all risk of loss or damage to the television tower and all integral parts, including transmitting equipment and appurtenant electrical and control apparatus. Although plaintiffs are not named in the policy, they assert benefits thereunder as third party beneficiaries.

Plains, an Illinois broadcaster, had contracted with RCA to install a 1,300 foot tower to be erected on Plains' property in Fithian, Illinois. Subsequently, RCA contracted with plaintiffs to design, fabricate and erect the tower. It is undisputed that no contractual arrangement existed between plaintiffs and Plains. Following the loss, plaintiffs recovered from their insurer, Hanover Insurance Company, under a builder's risk insurance policy in the amount of $204,740, procured pursuant to the agreement between plaintiffs and RCA and including the latter as an additional insured. The policy issued by defendant was procured by Plains, also in accordance with its contract with RCA. The property coverage provisions of the policy extended coverage to "Plains Television Corporation, and their subsidiary and affiliated companies or corporations as are now or may hereafter be constituted", as named assured. Coverage under the policy was limited to ". . . property belonging to the Assured, or in which Assured may have an interest, or for which the Assured may be liable, or for which the Assured may have assumed the liability prior to known loss or damage".

After payment to plaintiffs under the Hanover policy, this subrogation action was commenced by Hanover in the name of the insureds, plaintiffs, asserting a right to coverage under policy issued by defendant to Plains, the purchaser of the tower and appurtenant equipment under a conditional sales contract. Special Term, in granting plaintiffs' motion to dismiss the affirmative defenses alleged in the answer and for summary judgment on liability, and denying the cross-motion to dismiss the complaint, held that the policy was a property damage policy which expressly covered the tower that had been destroyed. The court found that since plaintiffs had an insurable interest in the tower, they could recover under the policy as third party beneficiaries. We are in agreement that Special Term erred in extending coverage contrary to the terms of the policy, which expressly covered only Plains as named assured.

Special Term placed undue reliance upon the fact that plaintiffs had an insurable interest in the tower. The existence of such an interest is, of course, necessary to the validity of a policy of insurance, since a policy on property wherein the insured has no interest or title is void. Generally, a person has an insurable interest in property if he would stand to profit or gain some advantage by its continued existence, or suffer some loss or disadvantage by its destruction (see 3 Couch on Insurance 2d, § 24:12 Et seq.; 4 Appleman, Insurance Law and Practice § 2123 Et seq.). Insurance Law § 148 precludes the enforcement of a policy of insurance issued in this state except for the benefit of one with "an insurable interest in the property" and defines "insurable interest" as ". . . any lawful and substantial economic interest in the safety or preservation of property from loss, destruction or pecuniary damage." The existence of an insurable interest, however, is not of itself sufficient to confer benefits under a policy extending coverage for property damage. Resort must be had to the terms of the policy to determine who is covered and the extent of coverage. Recognition of an insurable interest establishes only the existence of a legally recognizable interest which may be protected by insurance coverage. Special Term, however, inappropriately assumed that the fact that plaintiffs had an insurable interest in the tower and equipment was enough to qualify them as third party beneficiaries under the policy issued by Employers to Plains. We disagree.

We note as a preliminary matter that neither side has submitted appropriate papers required on a motion for summary judgment. The statute requires that such a motion be supported by affidavit by one with requisite knowledge of the facts, together with a copy of the pleadings and other available proof (CPLR 3212(b)). Affidavits and affirmations of counsel without requisite knowledge, are insufficient for that purpose and have been held to be without probative value. (DiSabato v. Soffes, 9 A.D.2d 297, 193 N.Y.S.2d 184; Philip A. Feinberg, Inc. v. Varig, 80 Misc.2d 305, 363 N.Y.S.2d 195, affd 47 A.D.2d 1005, 370 N.Y.S.2d 499). We have recently held that the statutory standard is not met by reliance upon deposition transcripts which, in the absence of proper affidavits, may impose an intolerable burden upon Special Term (see Executive Securities Corp. v. Gary, Sup., 413 N.Y.S.2d 674). Nor has either party submitted requisite proof in opposition to the motion by the other for summary relief. The law is well settled that a party opposing a motion for summary judgment must assemble and lay bare affirmative proof to demonstrate the existence of a genuine triable issue of fact (Shaw v. Time-Life Records, 38 N.Y.2d 201, 379 N.Y.S.2d 390, 341 N.E.2d 817; Capelin Assoc. v. Globe Mfg. Corp., 34 N.Y.2d 338, 357 N.Y.S.2d 478, 313 N.E.2d 776; DiSaboto v. Soffes, supra ; Manowitz v. Senter, 62 A.D.2d 898, 406 N.Y.S.2d 466, appeal dismissed 45 N.Y.2d 819 and 837, 409 N.Y.S.2d 209, 381 N.E.2d 607).

Despite the insufficiency in the papers submitted by both sides, the issue tendered appears to be strictly a legal one, relating to the appropriate construction of an insurance policy and whether coverage is afforded under facts which are not in dispute. Where the terms and conditions of a policy of insurance are ascertained, its coverage, meaning and intent present questions of law to be determined by the court (Dwight v. Germania Life Insurance Co., 103 N.Y. 341, 8 N.E. 654). The construction and interpretation of an insurance policy as is the case with other written instruments, is a question of law for the court, except that "when the language employed is not free from ambiguity, or when it is equivocal and its interpretation depends upon the sense in which the words were used in view of the subject to which they relate, the relation of the parties and the surrounding circumstances properly applicable to it, the intent of the parties becomes a matter of inquiry, and the interpretation of language used by them is a mixed question of law and fact." (Kenyon v. K. T. & M. M. A. Ass'n, 122 N.Y. 247, 254, 25 N.E. 299, 300). As was observed by our Court of Appeals in Hartford Acc. & Ind. v. Wesolowski, 33 N.Y.2d 169, 172, 350 N.Y.S.2d 895, 898, 305 N.E.2d 907, 909:

"If there is ambiguity in the terminology used, however, and determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence, then such determination is to be made by the jury . . . On the other hand, if the equivocality must be resolved wholly without reference to extrinsic evidence the issue is to be determined as a question of law for the court. (citing cases)."

The meaning of the language used in the policy must be found in the common sense and common speech of the average person (see State Farm Mut. Auto. Ins. Co. v. Bush, 46 A.D.2d 958, 959, 362 N.Y.S.2d 220, 222; Lewis v. Ocean Accident & Guarantee Corp., 224 N.Y. 18, 21, 120 N.E. 56, 57), in the light of "the reasonable expectation and purpose of the ordinary business man when making an insurance contract such as we have here" (Burr v. Commercial Trav. Mut. Accident Ass'n, 295 N.Y. 294, 301, 67 N.E.2d 248, 251), or, the meaning "which would be given it by the average man." Berkowitz v. New York Life Ins. Co., 256 App.Div. 324, 326, 10 N.Y.S.2d 106, 110; see also Miller v. Continental Ins. Co., 40 N.Y.2d 675, 676, 389 N.Y.S.2d 565, 566, 358 N.E.2d 258, 259).

Of course, since the policy is drawn by the insurer, it is to be liberally construed in favor of the insured (Miller v....