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03/11/04          TRIBECA BROADWAY ASSOCIATES, LLC v MOUNT VERNON FIRE INS. CO.

New York State Supreme Court, Appellate Division, First Department

Certificate of Insurance Issued by Broker Does Not Confer Coverage

Owner contracted with GDM for renovation work on its premises. The agreement included a hold harmless clause assuring that GDM hold the owner harmless for claims attributable to personal injuries arising from negligence by GDM, a subcontractor or anyone for whose acts they may be liable. The parties also agreed that GDM would maintain insurance indemnifying the owner for all liability arising from the work. GDM provided the owner with a certificate of insurance, which stated that GDM was insured and listed the owner as an additional insured. The certificate also included the statement: “this certificate is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage afforded by the policies below.” The policy itself did not list the owner as an additional insured. Subsequently, a Labor Law claim was made against the owner. The owner’s attorney tendered the defense of that action to GDM’s broker, seeking confirmation that owner was an additional insured under the policy. Several letters were exchanged over several months, leading to the instant declaratory judgment action by the owner claiming that GDM was contractually obligated to procure insurance on plaintiff’s behalf, that GDM procured the insurance through Mount Vernon, that plaintiff had demanded that Mount Vernon assume the defense and provide indemnification in the underlying action, that Mount Vernon had not disclaimed coverage, and that Mount Vernon was thus required to provide a defense. Mount Vernon admitted that it insured GDM; however, it claimed it had not received notice of the claim and that policy exclusions barred the claim. Plaintiff argued that any affirmative defenses were waived because of Mount Vernon’s failure to deny or disclaim coverage. Mount Vernon contended that the policy insured only GDM, that plaintiff was not identified thereon as either a named or an additional insured, that the certificate was not evidence of insurance, that the certificate had not been issued by Mount Vernon but only by GDM’s broker, and that the certificate clearly indicated that it did not extend coverage. Court held that a party that is not named an insured or an additional insured on the face of the policy is not entitled to coverage. Nor did the certificate of insurance in this case confer coverage. A certificate is only evidence of a carrier’s intent to provide coverage, but is not a contract to insure the designated party, nor is it conclusive proof, standing alone, that such a contract exists. Furthermore, it did not appear in this case that GDM’s broker had the authority to bind the carrier, for which it did not act as agent, so it could not on that basis estop the carrier from denying the existence of coverage. Insofar as the claim fell outside of the policy's coverage, the carrier was not required to disclaim as to coverage that did not exist. Under the facts of this case, GDM could not create rights and obligations as between plaintiff and the carrier.

 

03/08/04          ARMSTRONG v CALIBER ONE INDEMNITY CO.

New York State Supreme Court, Appellate Division, Second Department

Mortgagee must be Joined in Suit Affecting its Rights under Fire Policy

The plaintiff was the named insured on a homeowner’s policy issued by the defendant, insuring a residence in Hempstead. There was also a mortgage on the property, which was noted in the policy. Following a fire at the residence, plaintiff filed a claim of loss, which was denied by defendant. Thereafter, the plaintiff commenced this action, alleging three causes of action and seeking to recover damages for their losses under the policy. The third cause of action alleged that there was a mortgage and that irrespective of whether or not plaintiff was entitled to recover, the mortgagee was entitled to recover to the extent of its interest; the plaintiffs as third-party beneficiaries thereof are entitled to enforce this claim, and they have been damaged by the defendant’s failure to pay it. The plaintiff moved for summary judgment on their third cause of action. Defendant cross-moved for summary judgment dismissing the complaint in its entirety, or to compel the plaintiffs to join the mortgagee as a necessary party. Supreme Court granted the motion to the extent of determining that the policy contained a “standard mortgagee clause” and that the defendant was liable thereunder to the extent of the mortgagee’s interest. Appellate court held that, contrary to the Supreme Court’s determination, summary judgment should have been denied. The motion and orders affect the interest of the mortgagee, which was a necessary party to this action. Since the mortgagee was not joined, the subject branch of the motion should have been denied without prejudice to renewal after such joinder.

 

03/08/04          HOSPITAL FOR JOINT DISEASES v ALLSTATE INS. CO.

New York State Supreme Court, Appellate Division, Second Department

Thirty-day Period to Deny No-fault Claim Does Not Run Anew from Re-submission of Previously-denied Claim

In an action to recover unpaid benefits due under the no-fault provisions of the Insurance Law, plaintiff alleged in its complaint that the no-fault insurer was liable for two no-fault claims which were mailed on March 6, 2002, because it neither paid nor denied the claims within 30 days of receipt, as required by Insurance Law § 5106(a) and the corresponding regulation of the Insurance Department, 11 NYCRR 65.15(g) (3). No-fault insurer cross-moved for summary judgment dismissing the complaint, submitting evidence that before the medical services at issue were rendered, it had notified the its insured that it had terminated her no-fault benefits based upon an independent medical examination, and that the plaintiff had previously submitted claims for these same billings which the defendant timely denied. Supreme Court denied plaintiff's motion, granted the defendant’s cross motion, and dismissed the complaint. The appellate court affirmed. Under the no-fault law, a claimant whose claim for benefits has been denied is entitled to “seek immediate redress, and to recover both the amount of any overdue claim and reasonable attorney’s fees in securing payment.” A claimant may either file suit seeking payment of the claim, or, pursuant to Insurance Law § 5106(b), submit the dispute to arbitration, pursuant to simplified procedures promulgated by the Insurance Department. In this case, the plaintiff did neither, opting instead to repeatedly resubmit the denied claims, apparently in the hope that eventually the defendant would fail to issue a denial within 30 days of receipt. Court held, however, that the 30-day period in which to deny a claim for no-fault benefits does not run anew as the result of the re-submission of a previously-denied claim.

 

03/08/04          MATTER OF EMPIRE INS. CO. v DORSAINVIL

New York State Supreme Court, Appellate Division, Second Department

Coverage Lost for Insured’s Failure to Submit Sworn Statement after Hit-and-run Accident

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, court held appellants’ failure to file a sworn statement with its carrier after the hit-and-run accident, in accordance with a condition precedent to coverage under the uninsured motorist endorsement of the insurance policy, vitiated coverage. Permanent stay of arbitration was properly granted.

 

03/01/04          MURPHY v NUTMEG INS. CO.

New York State Supreme Court, Appellate Division, Second Department

Defense Required for All Claims Though Some Claims Excluded; Separate Counsel Required Where Multiple Insureds Seeking Contribution

Plaintiffs commenced this action seeking judgment declaring that defendants were obligated to defend and indemnify them in an underlying action pursuant to an errors and omissions policy. In the underlying action, the Town of Poughkeepsie asserted three causes of action against the plaintiffs, who were former Town board members, for RICO violations, breach of fiduciary duty, and negligence in connection with their approval of the purchase of a building for town police and court facilities. The policy excluded coverage for dishonest, fraudulent, and criminal or malicious acts of the insured, as well as acts arising out of an insured’s activities in a fiduciary capacity. Although Supreme Court correctly concluded that there was no basis to compel the defendants to defend the plaintiffs if the RICO violations and breach of fiduciary duty claims were the only claims for relief against the plaintiffs in the underlying action in light of the policy exclusions, defendants were required to defend the plaintiffs with respect to all claims for relief, as long as there remains a pending claim sounding in negligence, since the allegations set forth in that claim for relief fall within the scope of risks covered by the subject policy. Supreme Court properly denied that branch of the plaintiffs’ motion that was for summary judgment on their cause of action for indemnification, since there are triable issues of fact with respect to the plaintiffs' negligence in the underlying action. The insurer was also obligated to provide separate counsel for each of the plaintiffs, since each made a claim for contribution, and thus, the possibility of conflict existed.

 

03/01/04          MATTER OF ATLANTIC MUTUAL COMPANIES v CESERANO

New York State Supreme Court, Appellate Division, Second Department

Executive Not Insured under “Drive Other Car Coverage” for Use of Owned Vehicle; Disclaimer Not Required

Ceserano, formerly the vice president of sales for Effective Security, was injured while engaged in company business when her vehicle was struck by a vehicle owned and operated by Jarosz. Jarosz’s insurance carrier settled her action against him for the full amount of Jarosz’s insurance policy. Underinsurance coverage in the appellant’s own insurance policy was not triggered and the appellant therefore filed a claim for underinsurance benefits with Effective Security’s insurance carrier. The petitioner did not disclaim coverage, but when the appellant served a demand for arbitration, it commenced this proceeding to permanently stay the arbitration contending that there was no coverage under the policy. The policy included an endorsement entitled “Drive Other Car Coverage - Broadened Coverage for Named Individuals,” which provided liability coverage for an automobile not owned by Effective Security while being used by an executive officer, except for an automobile owned by that individual. The endorsement defined an “insured” as an executive officer using a covered automobile, as described in the endorsement. Petitioner did not dispute that the appellant was an executive officer, but contended that the endorsement provided only liability coverage, not underinsured motorist coverage, and that the coverage was not applicable because the appellant owned the vehicle. Court held that even assuming that underinsured motorist coverage was included in the endorsement, an issue it did not reach, the appellant, by definition, was not an “insured” since she owned the vehicle she was using. A disclaimer was not required because coverage did not exist under the terms of the policy in the first instance.

 

02/26/04          MUNDO v LIBERTY MUTUAL GROUP

New York State Supreme Court, Appellate Division, First Department

“Care, Custody and Control” Exclusion Applies to Property Damage to Trailer

Court holds that carrier was not obligated to defend or indemnify plaintiff in an underlying action for property damage sustained by a trailer that plaintiff was hauling. The policy’s Care, Custody or Control exclusion applied to “property damage to property owned or transported by the insured or in the insured’s care, custody or control.” Thus, any obligation to defend and indemnify for property damage was limited to vehicles that were neither owned by plaintiff nor being transported by him or otherwise under his care, custody or control when damaged. Since the trailer in question was under the care, custody or control of plaintiff at the time of the accident, the exclusion applied. The court found this result consistent with the policy’s declarations page, which indicated that plaintiff purchased coverage for “liability,” “personal injury protection” and “uninsured motorists,” but not, “trailer interchange comprehensive coverage,” “trailer interchange collision coverage,” “physical damage comprehensive coverage” or “physical damage collision coverage.” The policy was for “liability,” not “collision.”

 

02/26/04          FULMONT MUT. INS. CO. v  NEW YORK CENTRAL MUT. FIRE INS. CO.

New York State Supreme Court, Appellate Division, Third Department

Homeowner’s Exclusion for Damage to Property Owned by “The Insured” Deemed Ambiguous

Hutchinson owned a parcel of property on which there were various stores and rental apartments. The property was insured against fire loss by a policy procured from plaintiff. Hutchinson, along with his wife and stepson, Rockefeller, resided in one of the rental apartments. A homeowner’s policy was procured by Hutchinson from defendant to cover Hutchinson, his wife and Rockefeller for their negligent acts. Hutchinson’s property was later damaged by fire caused by Rockefeller’s failure to properly extinguish a cigarette. Plaintiff paid a claim to Hutchinson pursuant to its policy and Hutchinson executed a subrogation agreement pursuant to which plaintiff commenced an action against Rockefeller which resulted in a default judgment. Plaintiff then commenced this action against defendant relying upon the liability coverage of the homeowner’s policy. Court held that Rockefeller was an “insured” under the homeowner’s policy, but found an ambiguity in the exclusion section pertaining to the liability coverage, which provided there will be no coverage for “property damage to property owned by the insured.” The issue here was whether “the insured” is only the individual seeking coverage (Rockefeller), since the policy must be viewed as separate and distinct to him, or only Hutchinson, the property owner. Court found the use of “the” and “an” as a modifier for the term “insured” was further complicated by their use in other provisions of the policy where there was a clear intent to include all covered individuals as opposed to only “the insured.” Since it is settled that exclusionary clauses “must be specific and clear in order to be enforced” and that defendant failed to satisfy its burden of establishing the meaning it now attributes to this disputed clause as being subject to no other reasonable interpretation, court held that homeowner’s policy would be required to provide coverage.

 

Across Borders

 

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03/11/04          AMERICAN HOME ASSUR. CO. v POPE
8th Circuit

Insurer had Duty to Indemnify Claim against Insured for Breach of Common Law Duty to Warn of Future Danger of Abuse

Court reversed grant of summary judgment in favor of insurer in declaratory action, and granted defendant’s motion for summary judgment requiring that the insurer provide coverage. The defendant, who had been sexually abused by her father, had sued her father’s ex-psychologist, alleging a cause of action for violation of a state criminal code requiring a doctor to inform state authorities if they suspect a child will be sexually abused, and a cause of action for negligently failing to warn defendant or her mother of future danger of sexual abuse to the defendant by her father, when her father abandoned treatment. The district court granted summary judgment in favor of the insurer because the doctor’s insurance policy contained an exclusion for criminal conduct and, thus did not cover the defendant’s claim regarding the insured’s violation of the criminal statute. The court reversed. The court held that the defendant’s first claim, that the insured violated a criminal statute, was excluded from coverage even though the insured was not actually charged with the crime. However, the court held that the district court failed to consider the defendant’s second claim that the insured failed to warn her of future danger of abuse. The court found that that there was no exclusion for violation of this common law duty and, thus, the defendant’s claims are covered by the policy.

Bruce D. Celebrezze and Hank Brier, Sedgwick, Detert, Moran & Arnold LLP

 

03/09/04          LEVINE v STATE FARM MUT. INS. CO.

Maine Supreme Judicial Court

Underinsured Coverage Does Not Drop Down When Insured Fails to Reach Available Coverage

Does Maine’s uninsured/underinsured vehicle coverage law require underinsured vehicle policies to supplant available tortfeasor insurance coverage that is not timely sought by the injured insured? State Farm Mutual Automobile Insurance Company appeals from a judgment entered in the Superior Court (Kennebec County, Marden, J.) concluding that Nicole Levine, who was injured by the driver of an underinsured vehicle, was entitled to recover from State Farm, the underinsured vehicle insurance carrier of the driver in whose vehicle she was riding, when the coverage held by the tortfeasor became unavailable to Levine because of the passage of time before she filed her claim. It is undisputed that the tortfeasor’s coverage was less than the State Farm policy limits and that State Farm is responsible for that amount of underinsurance. Because the court concludes that State Farm is only liable for the amount by which the State Farm coverage exceeded the insurance held by the tortfeasor, judgment is vacated.

 

03/09/04          TWICHEL v MIC GENERAL INS. CO.
Michigan Supreme Court

Who Owns the Car?

Brady Sies had possession and control of the vehicle, as well as dominion and authority over the vehicle, and, thus, would commonly be understood to have “owned” it at the time of the accident. The facts that the entire purchase price had not yet been paid and that the technical transfer of title had not yet occurred are not dispositive. Brady, who had paid part of the purchase price and taken control of the truck with the intention of permanently possessing it, “owned” the vehicle as that term would be understood in ordinary usage. Because Brady "owned" the uninsured vehicle, uninsured motorist benefits are not recoverable under the policy

 

03/04/04          STATE FARM v HENERSON
Arkansas Supreme Court

Policy Can Require Physical Contact for UM Coverage

Section 23-89-403(a)(1) continues to be viable. The statute requires the plaintiff to prove that the other vehicle was uninsured and that a policy that relieves the plaintiff of that burden in hit and run cases where there is physical contact exceeds the statutory requirement. Under Ward, 535 S.E.2d 830, uninsured motorist statute requires a plaintiff to prove that the other vehicle is uninsured. Accordingly, State Farm was not legally obligated under section 23-89-403(a)(1) to provide any coverage for hit and run accidents where the plaintiff could not prove that the other vehicle was uninsured. Thus, its policy that relieved an insured of that burden where there is physical contact between the vehicles exceeded the requirements of the um statute. Moreover, the fact that State Farm chose to draw a line in its coverage between those hit and run accidents where there is actually a hit or physical contact and those where there is no such contact does not violate the law and is not therefore in contravention to public policy.

Jim Varner and Debra Herron, McNeer, Highland, McNunn and Varner, L.C.

 

03/04/04          STANDARD CONSTRUCTION CO. v MARYLAND CAS. CO.
Sixth Circuit (applying
Tennessee law)

Duty to Defend and Indemnify under CGL Policy where Property Damage Resulting from Trespass was Covered Claim and “Business Risk” Exclusions Inapplicable

6th Circuit Standard subcontracted disposal work to Terry Construction Company who obtained written permission from 6 landowners to dump construction debris on their property. A similar agreement was signed by the daughter of the 7th landowner. Believing it had permission of Love, the 7th landowner, Terry began dumping debris on her property, which was the subject of condemnation proceedings. The State demanded that dumping upon the Love property cease and subsequently, suit was instituted by Love against Standard, Terry, Bobo and the State of Tennessee. In reviewing the order of the district court, the appellate court noted that the act of deliberately dumping debris, with unforeseen and unintended consequences due to the insured’s negligence in failing to secure a valid agreement from the property owner, fell within the definition of “occurrence.” Additionally, the Court found that it was not the manner in which the dumping was performed (the “work”) that is faulty or caused damage, but rather that the dumping itself at the location in question was not authorized. Therefore, there is coverage under the “property damage” and the “your work” exclusion does not apply. Moreover, exclusion 2(j)5 does not apply.

Jim Varner and Debra Herron, McNeer, Highland, McNunn and Varner, L.C.

 

03/04/04          TURNER v MUT. SERVICE CAS. INS. CO.
Minnesota Supreme Court

Commercial Automobile Policies Need Not Provide UM or UIM Coverage for Out-Of-State Rental Vehicles

Plaintiffs were traveling on business to New Orleans, where they rented a car and, pursuant to company policy, declined addition insurance from the rental company. While driving in Baton Rouge, they were involved in a collision with a vehicle traveling in the wrong lane. The other car had policy limits of $25,000 per person and $50,000 per accident, and the plaintiffs' injuries well exceeded these limits. The employer's commercial liability policy provided UM/UIM coverage for anyone who uses, with the policyholder's permission, covered autos, which were defined as autos owned by the policyholder which were required by law to have UM/UIM coverage. The court held that, because Minnesota statutes had moved away from covering an individual and now tied coverage to a particular vehicle specified in the policy, the commercial policy did not provide UM/UIM coverage to the employees using a rental vehicle.

Bruce D. Celebrezze and Erin Adrian, Sedgwick, Detert, Moran & Arnold LLP

 

03/02/04          DOMTAR, INC. v NIAGARA FIRE INS. CO.
Minnesota Court of Appeals

Allocation Considered in Minnesota

Appellant Domtar, Inc., brought this action in 1998 against a number of its primary, umbrella, and excess liability insurers for breach of contract and a declaration that they must defend and indemnify it from claims arising out of soil and groundwater contamination at 56 of its former and current wood processing facilities. Several insurers have settled with Domtar and several others remain but are not part of this appeal, which involves only four high-level excess liability insurers and six of the 56 sites. The appellate court found that while issues involving damages and causation are often fact questions inappropriate for summary judgment, the district court here was entitled to reject for lack of proof Domtar's claim that discrete and identifiable events at each site caused the site damages. In its memorandum, the district court emphasized: "[Domtar] has had since 1998 to present concrete, specific information regarding the effect these sudden and accidental occurrences had at these sites. It has had since 1998 to connect the millions of dollars of damages to sudden and accidental events rather than to continuous and on-going operations at the plants. It has not done so." Thus, the district court did not err by allocating damages under pro rata by the time on the risk and in concluding that the damages at each of the six Domtar sites fail to trigger coverage under respondents' high-level excess policies.

Victoria Roberts, TRG

 

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MUNDO v LIBERTY MUTUAL GROUP

 

Order, Supreme Court, Bronx County (Dianne Renwick, J.), entered December 26, 2002, which, in a declaratory judgment action involving whether the subject business auto policy obligates defendant insurer to defend and indemnify plaintiff insured in an underlying action for property damage sustained by a trailer that plaintiff was hauling, granted defendant's motion for summary judgment declaring that it is not so obligated by reason of the policy's Care, Custody or Control exclusion, unanimously affirmed, without costs.

By its terms, the policy's Care, Custody or Control exclusion applies to "[p]roperty damage to property owned or transported by the insured or in the insured's care, custody or control." Thus, any obligation defendant has to defend and indemnify plaintiff for property damage is limited to vehicles that were neither owned by plaintiff nor being transported by him or otherwise under his care, custody or control when damaged. Since the trailer in question, which is owned by the subrogor of the plaintiff in the underlying action, was under the care, custody or control of plaintiff herein at the time of the accident, the exclusion applies. This conclusion appears consistent with the policy's declarations page, which indicates that plaintiff purchased coverage for "liability," "personal injury protection" and uninsured motorists," but not, inter alia, "trailer interchange comprehensive coverage," "trailer interchange collision coverage," "physical damage comprehensive coverage" or "physical damage collision coverage." As defendant maintains, the policy is for "liability," not "collision."

We would reach the same result, i.e., a declaration that defendant is not obligated to defend or indemnify plaintiff in the underlying action, even if we were to construe defendant's disclaimer as based exclusively, rather than additionally, on the claim that the damaged trailer is not the trailer listed on the policy's schedule of covered autos. In this regard, the disclaimer states that the VIN number of the trailer involved in the accident is 2A5WF8B4PTO53386, whereas the policy lists the covered trailer's VIN number as 2A9SWF8BOPT053392. Plaintiff contends that the two numbers are close enough to permit an inference that the difference is due to a typographical error. On the present record, there is nothing to support such inference and no further inquiry is warranted.

This constitutes the decision and order of the Supreme Court, Appellate Division, First Department.

 

FULMONT MUT. INS. CO. NEW YORK CENTRAL MUT. FIRE INS. CO.

 

Appeal from an order of the Supreme Court (Aulisi, J.), entered July 7, 2003 in Fulton County, which denied plaintiff's motion for summary judgment and granted defendant's cross motion for a declaratory judgment.

 

James Hutchinson owns a parcel of real property in the Town of Canajoharie, Fulton County on which there are various stores and rental apartments. The property was insured against fire loss by a policy of insurance procured from plaintiff. Hutchinson, along with his wife and stepson, Michael Rockefeller, reside in one of the rental apartments. A homeowner's policy was procured by Hutchinson from defendant to cover Hutchinson, his wife and Rockefeller for, inter alia, their negligent acts.

 

In March 2000, Hutchinson's property was damaged by fire caused by Rockefeller's failure to properly extinguish a cigarette. Plaintiff paid a claim to Hutchinson pursuant to the insurance policy and Hutchinson executed a subrogation agreement pursuant to which plaintiff commenced an action against Rockefeller which resulted in a default judgment. Plaintiff then commenced this action against defendant relying upon the liability coverage of the homeowner's policy. Plaintiff moved for summary judgment and defendant cross-moved for summary judgment seeking a declaratory judgment stating that it had no obligation to pay for plaintiff's loss. Supreme Court granted defendant's cross motion and this appeal ensued.

 

It is settled that “[w]here the provisions of [an insurance] policy 'are clear and unambiguous, they must be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement'“ (United States Fid. & Guar. Co. v Annunziata, 67 NY2d 229, 232 [1986], quoting Government Empls. Ins. Co. v Kligler, 42 NY2d 863, 864 [1977]). It is equally settled that an ambiguity in an insurance policy will be construed in favor of the insured (see Matter of Mostow v State Farm Ins. Cos., 88 NY2d 321, 326 [1996]; Butler v New York Cent. Mut. Fire Ins. Co., 274 AD2d 924, 925 [2000]), particularly when the ambiguity is in an exclusionary clause (see Matter of Metropolitan Prop. & Cas. Ins. Co. v Mancuso, 93 NY2d 487, 497 [1999]; Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [1984]; Breed v Insurance Co. of N. Am., 46 NY2d 351, 353 [1978]; General Acc. Ins. Co. v United States Fid. & Guar. Ins. Co., 193 AD2d 135, 137 [1993]; Campanile v State Farm Gen. Ins. Co., 161 AD2d 1052, 1054 [1990], affd 78 NY2d 912 [1991]).

 

While we find the provisions of the homeowner's policy to squarely place Rockefeller under the general definition of “insured,” an ambiguity arises in the exclusion section pertaining to the liability portion. “Section II - Exclusions” states that, with respect to “personal liability,” there will be no coverage for “property damage to property owned by the insured.”[1] The issue becomes whether “the insured” is only the individual seeking coverage, here Rockefeller, as plaintiff contends, since the policy must be viewed as separate and distinct to him (see Fadden v Cambridge Mut. Fire Ins. Co., 27 AD2d 487, 488 [1967], citing Greaves v Public Serv. Mut. Ins. Co., 5 NY2d 120 [1959]; see also Lane v Security Mut. Ins. Co., 96 NY2d 1 [2001]) or only Hutchinson, the property owner, as defendant contends[2] (see Butler v New York Cent. Mut. Fire Ins. Co., supra at 925). The use of “the” and “an” as a modifier for the term “insured” is further complicated by their use in other provisions of this policy where there is a clear intent to include all covered individuals as opposed to only “the insured.”[3] Since it is settled that exclusionary clauses “'must be specific and clear in order to be enforced'“ (General Acc. Ins. Co. v United States Fid. & Guar. Ins. Co., supra at 137, quoting Seaboard Sur. Co. v Gillette Co., supra at 311) and that defendant failed to satisfy its burden of establishing the meaning it now attributes to this disputed clause as being subject to no other reasonable interpretation (see Lane v Security Mut. Ins. Co., supra at 4-5; Allstate v Mugavero, 79 NY2d 153, 154 [1992]), plaintiff's motion for summary judgment should have been granted and defendant required to provide coverage (see Matter of Mostow v State Farm Ins. Cos., supra at 326; General Acc. Ins. Co. v United States Fid. & Guar. Ins. Co., supra at 139).

 

Cardona, P.J., Mercure, Mugglin and Kane, JJ., concur.

 

ORDERED that the order is reversed, on the law, with costs, plaintiff's motion granted, defendant's cross motion denied and it is declared that defendant has a duty to defend and indemnify Michael Rockefeller in an underlying action.

 

[1] There is no dispute that Rockefeller does not have an ownership interest in the property.

 

[2] Notably, defendant's proffered interpretation of “the insured” in this case is contrary to the position it took in Nancie D. v New York Cent. Mut. Fire Ins. Co. (195 AD2d 535, 537 [1993]).

 

[3] For instance, the policy clearly indicates coverage for personal property “owned or used by an insured while it is anywhere in the world,” and a disclaimer for property damage to “property owned by an insured.”

 

TRIBECA BROADWAY ASSOCIATES, LLC v MOUNT VERNON FIRE INS. CO.

 

Order, Supreme Court, New York County (Barbara Kapnick, J.), entered December 19, 2002, which, inter alia, granted plaintiff's motion for summary judgment to the extent of declaring that the defendant Mount Vernon Fire Insurance Company had a duty to defend plaintiff in an underlying personal injury action and denied defendant Mount Vernon's cross motion for summary judgment declaring that plaintiff is not an insured under the subject policy and that Mount Vernon is not obligated to defend or indemnify it in this action, unanimously reversed, on the law, without costs, the motion denied and the cross motion granted.

 

Plaintiff building owner contracted with defendant GDM Construction Services for renovation work on the premises. The construction agreement included a hold harmless clause assuring that GDM would hold the owner harmless for claims, including attorneys' fees, attributable to personal injuries arising from negligence by GDM, a subcontractor or anyone for whose acts they may be liable. The parties also agreed that GDM would maintain insurance in a specified amount indemnifying the owner for all liability arising from the contracted-for work. In that regard, GDM provided the owner with a certificate of insurance dated July 25, 1997. The certificate stated that GDM was insured for the specified amount, and it listed the plaintiff-owner as an additional insured. This certificate also included the statement: "[t]his certificate is issued as a matter of information only and confers no rights upon the certificate holder. This certificate does not amend, extend or alter the coverage afforded by the policies below." The policy itself does not list plaintiff-owner as an additional insured. Subsequently, defendant Alberto Nieves, claiming to have been injured on the premises, commenced a Labor Law action against GDM. By letter dated April 4, 2000, plaintiff-owner's attorney, Scott Brody, tendered the defense in that action to GDM's insurance broker, Allen Freeman, seeking confirmation that plaintiff-owner was an additional insured under the policy. By letter dated May 4, 2000, Brody again contacted Freeman, who responded that he had referred the claim to defendant-appellant Mount Vernon's New York agent, the Simon Agency.

 

On May 12, 2000, Brody asked Freeman to confirm that he had notified Mount Vernon of the claim, which required additional followup letters from Brody on July 6, 2000 and August 16, 2000, neither of which was acknowledged. Brody sent copies of these letters to the Simon Agency. On or about September 7, 2000, plaintiff-owner commenced the present declaratory judgment action, claiming that GDM was contractually obligated to procure insurance on plaintiff's behalf, that GDM procured the insurance through Mount Vernon, that plaintiff had demanded that Mount Vernon assume the defense and provide indemnification in the underlying personal injury action, that Mount Vernon had not disclaimed coverage, and that Mount Vernon was thus required to provide a defense. Mount Vernon, in its answer, generally denied the allegations, except to admit that at the relevant time period it insured GDM. It also claimed as affirmative defenses that it had not received notice of the claim and that policy exclusions barred the claim.

 

Plaintiff moved for summary judgment on the grounds noted above, and also argued that any affirmative defenses were waived because of Mount Vernon's failure to deny or disclaim coverage. In its cross motion for summary judgment, Mount Vernon contended that the policy insured only GDM, that plaintiff was not identified thereon as either a named or an additional insured, that the certificate of insurance was not evidence of insurance coverage, that the certificate of insurance had not been issued by Mount Vernon but only by GDM's broker, and that, in any event, the certificate clearly indicated thereon that it did not extend coverage. Affidavit evidence submitted by Mount Vernon averred that Mount Vernon had not insured plaintiff and that Freeman, insofar as he was not Mount Vernon's agent, had no authority to bind Mount Vernon. Mount Vernon also noted that it had not been a party to any agreement between plaintiff and GDM, and insofar as it had not insured plaintiff, it was not obligated to provide a defense. In response, plaintiff argued that Mount Vernon, under the terms of the policy, had obligated itself to provide coverage to a class of entities that included plaintiff. In this regard, the policy obligated the carrier to defend and indemnify those parties for whom its insured was contractually obligated under an "insured contract" to indemnify for bodily injuries. It also defined an insured contract as "[t]hat part of any other contract or agreement pertaining to your business . . . under which you assume the tort liability of another party to pay for bodily injury or property damage to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement." Mount Vernon contended that the policy contained no coverage for contractual indemnity. Mount Vernon included a copy of GDM's file with the motion to indicate that no application had been made to add plaintiff as an additional insured.

 

Initially, it is well established that the party claiming insurance coverage bears the burden of proving entitlement, and, as we have recently held, a party that is not named an insured or an additional insured on the face of the policy is not entitled to coverage (Moleon v Kreisler Borg Florman Gen. Constr. Co., 304 AD2d 337). Nor does the certificate of insurance in this case confer coverage. A certificate of insurance is only evidence of a carrier's intent to provide coverage but is not a contract to insure the designated party nor is it conclusive proof, standing alone, that such a contract exists (Buccini v 1568 Broadway Associates, 250 AD2d 466). Nor does it appear in this case that GDM's broker had the authority to bind the carrier, for which it did not act as agent, so that we would not on that basis estop the carrier from denying the existence of coverage (compare Bucon v Pennsylvania Manufacturing Association Ins. Co., 151 AD2d 207). Insofar as the claim fell outside of the policy's coverage, the carrier was not required to disclaim as to coverage that did not exist (cf. Worcester Ins. Co. v Bettenhauser, 95 NY2d 185; Zappone v Home Ins. Co., 55 NY2d 131 [no contractual relationship between claimant and carrier]; compare Handelsman v Sea Ins. Co., 85 NY2d 96 [claimants were insureds under policy, but coverage for incident was potentially barred by policy exclusion; disclaimer required]). Under the facts of this case, GDM could not create rights and obligations as between plaintiff and the carrier.

 

ARMSTRONG v CALIBER ONE INDEMNITY CO.

 

In an action to recover damages for failure to pay for a fire loss pursuant to an insurance policy, the defendant appeals (1), as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Segal, J.), dated March 6, 2003, as granted that branch of the plaintiffs' motion which was for summary judgment on the third cause of action and denied that branch of its cross motion which was for summary judgment dismissing the complaint in its entirety, and (2), by permission, from an order of the same court entered August 20, 2003, which, upon the prior order, directed it to issue payment satisfying the plaintiffs' mortgage.

 

ORDERED that the order dated March 6, 2003, is modified, on the law, by deleting the provision thereof granting that branch of the motion which was for summary judgment on the third cause of action and substituting therefor a provision denying that branch of the motion, without prejudice to renewal after joinder of a necessary party; as so modified, the order is affirmed insofar as appealed from; and it is further,

 

ORDERED that the order entered August 20, 2003, is reversed, on the law; and it is further,

 

ORDERED that the matter is remitted to the Supreme Court, Nassau County, for further proceedings consistent with this determination; and it is further, [*2]

 

ORDERED that one bill of costs is awarded to the defendant.

 

The plaintiff Derek Armstrong (hereinafter the plaintiff) is the named insured on a homeowners policy issued by the defendant, insuring a residence in Hempstead. The residence is allegedly titled in the name of his wife, the plaintiff Sharon Armstrong. Additionally, the plaintiff alleged that there is a mortgage on the property. The insurance policy notes the mortgage of "Roslyn National Mortgage ISAOA." Neither the deed, the mortgage, nor the note are included in the record on appeal.

 

On March 26, 2001, there was a fire at the residence. The plaintiff filed a claim of loss which was denied by the defendant. Thereafter, the plaintiff and his wife commenced this action, alleging three causes of action and seeking to recover damages for their losses under the policy. The third cause of action alleges, in substance: there is a mortgage and that irrespective of whether or not the plaintiffs are entitled to recover under the policy, the mortgagee is entitled to recover to the extent of its interest; the plaintiffs as third-party beneficiaries thereof are entitled to enforce this claim; and they have been damaged by the defendant's failure to pay it.

 

The plaintiffs moved, inter alia, for summary judgment on their third cause of action. The defendant cross-moved, inter alia, for summary judgment dismissing the complaint in its entirety, or to compel the plaintiffs to join the mortgagee as a necessary party. Insofar as is relevant to this appeal, the Supreme Court granted the motion to the extent of determining that the policy contained a "standard mortgagee clause" and that the defendant was liable thereunder to the extent of the mortgagee's interest, and embodied its determination in the first order appealed from. Based upon that order, upon notice, the plaintiffs settled the second order appealed from, which purports to effectuate the first order by directing the defendant to issue payment satisfying the mortgage.

 

Contrary to the Supreme Court's determination, that branch of the motion which was for summary judgment on the third cause of action should have been denied. The motion and orders affect the interest of the mortgagee, which is a necessary party to this action (see Syracuse Sav. Bank v Yorkshire Ins. Co., Ltd., 301 NY 403, 407; McDowell v St. Paul Fire and Marine Ins. Co., 207 NY 482, 485). Since the mortgagee was not joined, the subject branch of the motion should have been denied without prejudice to renewal after such joinder.

 

In light of this determination we need not reach the parties' remaining contentions.
FLORIO, J.P., KRAUSMAN, SCHMIDT and TOWNES, JJ., concur.

 

HOSPITAL FOR JOINT DISEASES v ALLSTATE INS. CO.

 

In an action to recover unpaid benefits due under the no-fault provisions of the Insurance Law, the plaintiff appeals from an order of the Supreme Court, Nassau County (Cozzens, J.), dated January 31, 2003, which denied its motion for summary judgment and granted the defendant's cross motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed, with costs.

 

The plaintiff Hospital for Joint Diseases, as assignee of its patient, alleged in its complaint that the defendant no-fault insurer was liable for two no-fault claims which were mailed on March 6, 2002, because it neither paid nor denied the claims within 30 days of receipt, as required by Insurance Law § 5106(a) and the corresponding regulation of the Insurance Department, 11 NYCRR 65.15(g)(3). Thereafter, the plaintiff made the same argument in a motion for summary judgment.

 

The defendant cross-moved for summary judgment dismissing the complaint, submitting evidence that before the medical services at issue were rendered, it had notified the plaintiff's assignor that it had terminated her no-fault benefits based upon an independent medical examination, and that the plaintiff had previously submitted claims for these same billings which the defendant timely denied. The Supreme Court denied the plaintiff's motion, granted the defendant's [*2]cross motion, and dismissed the complaint. The plaintiff appeals.

 

We affirm. Under the no-fault law, a claimant whose claim for benefits has been denied is entitled to "seek immediate redress, and to recover both the amount of any overdue claim and reasonable attorney's fees in securing payment" (Roggio v Nationwide Mut. Ins. Co., 66 NY2d 260, 262). A claimant may either file suit seeking payment of the claim, or, pursuant to Insurance Law § 5106(b), submit the dispute to arbitration, pursuant to simplified procedures promulgated by the Insurance Department. In this case, the plaintiff did neither, opting instead to repeatedly resubmit the denied claims, apparently in the hope that eventually the defendant would fail to issue a denial within 30 days of receipt. We hold, however, that the 30-day period in which to deny a claim for no-fault benefits does not run anew as the result of the re-submission of a previously-denied claim.

 

Since the plaintiff's complaint was predicated solely upon the defendant's failure to pay or deny the claims sent March 6, 2002, within 30 days of receipt, and the defendant established that it previously issued timely denials for identical claims submitted by the plaintiff, the defendant was properly granted summary judgment dismissing the complaint.

 

In light of the foregoing, we do not reach the parties' remaining contentions.

 

MATTER OF EMPIRE INS. CO. v DORSAINVIL

 

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, the appeal is from an order of the Supreme Court, Queens County (Thomas, J.), dated April 15, 2002, which granted the petition and permanently stayed arbitration.

 

ORDERED that the order is affirmed, with costs.

 

The appellants' failure to file a sworn statement with the petitioner Empire Insurance Company after the hit-and-run accident, in accordance with a condition precedent to coverage under the uninsured motorist endorsement of the insurance policy, vitiated coverage (see Matter of Legion Ins. Co. v Estevez, 281 AD2d 420; Matter of Aetna Life & Cas. v Ocasio, 232 AD2d 409). Accordingly, the Supreme Court properly granted the petition and permanently stayed the arbitration.

 

In light of our determination, we need not address the appellants' remaining contention.

 

MURPHY v NUTMEG INS. CO.

 

In an action for a judgment declaring, inter alia, that the defendants are obligated to defend and indemnify the plaintiffs in an underlying action entitled Town of Poughkeepsie v Thomas Espie, pending in the United States District Court for the Southern District of New York, under Docket No. 02 CIV 6995(CLB), the defendants appeal from so much of an order of the Supreme Court, Dutchess County (Dillon, J.), dated April 14, 2003, as granted that branch of the plaintiffs' motion which was for summary judgment declaring that the defendants are obligated to defend them in the underlying Federal action as long as there remains a pending claim sounding in negligence, and denied their cross motion for summary judgment declaring that they are not obligated to defend or indemnify the plaintiffs in the underlying Federal action to the extent of determining that the defendants are required to defend the plaintiffs in the underlying Federal action as long as there remains a pending claim sounding in negligence, and the plaintiffs cross-appeal from stated portions of the same order which, inter alia, denied those branches of their motion which were for summary judgment declaring that the defendants were obligated to defend and indemnify them on all claims for relief in the underlying Federal action, and to provide separate counsel for each of the plaintiffs Michael Dunagan, Mary Percesepe, Lorraine Treacy, Louis Lurraso, Patrick Hinkley, and Dennis Leary in the underlying Federal action.

 

ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the plaintiffs' motion which was for summary judgment declaring that the defendants are obligated to provide separate counsel for each of the plaintiffs Michael Dunagan, Mary Percesepe, Lorraine Treacy, Louis Lurraso, Patrick Hinkley, and Dennis Leary in the underlying Federal action and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed and cross-appealed from, without costs or disbursements; and it is further,

ORDERED that the matter is remitted to the Supreme Court, Dutchess County, for the entry of a judgment declaring, inter alia, that the defendants are obligated to provide separate counsel for each of the plaintiffs Michael Dunagan, Mary Percesepe, Lorraine Treacy, Louis Lurraso, Patrick Hinkley, and Dennis Leary in the underlying Federal action as long there remains a pending claim sounding in negligence.

 

The plaintiffs commenced this action seeking a judgment declaring that the defendants are obligated to defend and indemnify them in an underlying Federal action pursuant to an errors and omissions insurance policy. In the underlying Federal action, the Town of Poughkeepsie asserted, inter alia, three causes of action against the plaintiffs, who were former Town board members, for RICO violations, breach of fiduciary duty, and negligence in connection with their approval of the purchase of a building for town police and court facilities.

 

The subject policy clearly excluded coverage for, among other things, dishonest, fraudulent, and criminal or malicious acts of the insured, as well as acts arising out of an insured's activities in a fiduciary capacity. Although the Supreme Court correctly concluded that there was no basis to compel the defendants to defend the plaintiffs if the RICO violations and breach of fiduciary duty claims were the only claims for relief against the plaintiffs in the underlying Federal action in light of the policy exclusions (see Technicon Elecs. Corp. v American Home Assur. Co., 74 NY2d 66, 73; Physicians' Reciprocal Insurers v Blank, 258 AD2d 573; Tartaglia v Home Ins. Co., 240 AD2d 396), the Supreme Court also correctly found that the defendants were required to defend the plaintiffs with respect to all claims for relief, as long as there remains a pending claim sounding in negligence, since the allegations set forth in that claim for relief fall within the scope of risks covered by the subject policy (see Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 310). Therefore, the Supreme Court correctly denied that branch of the plaintiffs' motion which was for summary judgment declaring that the defendants are obligated to defend them on causes of action to recover for RICO violations and breach of fiduciary duty, and in denying that branch of the defendants' motion which was for summary judgment declaring that they were not obligated to defend the plaintiffs on the negligence claim for relief.

 

Further, the Supreme Court properly denied that branch of the plaintiffs' motion which was for summary judgment on their cause of action for indemnification, since there are triable issues of fact with respect to the plaintiffs' negligence in the underlying action (see Frontier Insulation Contrs., v Merchants Mu. Ins. Co., 91 NY2d 169; Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392; Cepeda v Varveris, 239 AD2d 536; General Acc. Ins. Co. of Am. v IDBAR Realty Corp., 229 AD2d 515).

 

However, the Supreme Court erred in denying that branch of the plaintiffs' motion which was to compel the defendants to provide separate counsel for each of the plaintiffs Michael Dunagan, Mary Percesepe, Lorraine Treacy, Louis Lurraso, Patrick Hinkley, and Dennis Leary, since each made a claim for contribution, and thus, the possibility of conflict exists (see Death v Salem, 111 AD2d 778).

 

Accordingly, we remit the matter to the Supreme Court, Dutchess County, for the entry of a judgment declaring, inter alia, that the defendants are obligated to provide separate counsel for each of the plaintiffs Michael Dunagan, Mary Percesepe, Lorraine Treacy, Louis Lurraso, Patrick Hinkley, and Dennis Leary in the underlying action as long as there remains a pending claim sounding in negligence.

 

RITTER, J.P., KRAUSMAN, TOWNES and COZIER, JJ., concur.

ENTER:

James Edward Pelzer

Clerk

March 1 2d dept.

 

MATTER OF ATLANTIC MUTUAL COMPANIES v CESERANO

 

In a proceeding pursuant to CPLR article 75 to stay arbitration of an underinsured motorist claim, the appeal is from an order of the Supreme Court, Putnam County (Hickman, J.), dated January 8, 2003, which granted the petition and permanently stayed arbitration.

 

ORDERED that the order is affirmed, with costs.

 

The appellant Grace Marie Ceserano, formerly the vice president of sales for Effective Security Systems, Inc. (hereinafter Effective Security), was injured while engaged in company business when her vehicle was struck by a vehicle owned and operated by Frank Jarosz. Jarosz's insurance carrier settled her action against him for the full amount of Jarosz's insurance policy. Underinsurance coverage in the appellant's own insurance policy was not triggered and the appellant therefore filed a claim for underinsurance benefits with the petitioner, Effective Security's insurance carrier. The petitioner did not disclaim coverage, but when the appellant served a demand for arbitration, it commenced this proceeding to permanently stay the arbitration contending, among other things, that there was no coverage for the appellant under the terms of the policy.

 

The policy issued by the petitioner included an endorsement entitled "Drive Other Car Coverage - Broadened Coverage for Named Individuals" which provided, in relevant part, liability coverage for an automobile not owned by Effective Security while being used by an executive officer, except for an automobile owned by that individual. The endorsement defined an "insured" as, among others, an executive officer using a covered automobile, as described in the endorsement. The petitioner did not dispute that the appellant was an executive officer, but contended that the endorsement provided only liability coverage, not underinsured motorist coverage, and that the coverage was not applicable because the appellant owned the vehicle. The Supreme Court agreed, concluded that a disclaimer was not required under the circumstances, and granted the petition.

 

Even assuming that underinsured motorist coverage was included in the endorsement, an issue we need not reach, the appellant, by definition, was not an "insured" since she owned the vehicle she was using. The Supreme Court properly concluded that a disclaimer was not required because coverage did not exist under the terms of the policy in the first instance (see Zappone v Home Ins. Co., 55 NY2d 131; State Farm Mut. Auto. Ins. Co. v John Deere Ins. Co., 288 AD2d 294).

 

In light of our determination, it is unnecessary to address the parties' remaining contentions.