By Order dated March 26, 2013, Judge Ellen M. Coin granted National Union Fire Insurance Company of Pittsburgh, PA’s (“National Union”) motion for summary judgment dismissing Plaintiffs’, Lexington Park Realty (“Lexington Park”) and Eminent Realty, LLC (“Eminent”), Complaint. See Lexington Park Realty v. National Union Fire Ins. Co. of Pitt. PA, Index No. 651322-2011 (Sup. Ct. New York Co., March 26, 2013).
The litigation arose out of an insurance claim for the alleged theft of certain fixtures from and vandalism to an apartment building owned by Plaintiffs. The alleged thief and vandal, Classic New York Realty 2009 (the “Tenant”) leased the building from Eminent. Specifically, Eminent signed the lease agreement with the Tenant, and admittedly entrusted and transferred possession of the building to the Tenant. The insurance policy at issue excludes coverage for losses caused by such dishonest acts when committed by one to whom the property was entrusted.
Judge Coin dismissed Plaintiffs’ complaint based on her determination that Lexington established as a matter of law that the policy’s exclusion for “any claim arising out of employee dishonesty or theft and those to whom property was entrusted for any purpose applies and justifies denial of coverage.” As per the Court, under this exclusion, “the controlling element is the design of the owner rather than the motive of the one who obtained possession.” Judge Coin’s decision also noted an additional basis for granting National Union’s motion as against Lexington, because Lexington admitted it did not have an ownership or pecuniary interest in the building, and thus the Court found it had no insurable interest therein.
The decision was also reported in the April 10, 2013 edition of the New York Law Journal (Vol. 249, no. 68, pp. 1 & 21), as a Decision of Interest.
Michael Goldstein, Raymond Mastrangelo and Monica Matos-Desa have co-authord an article titled: "When Follow the Settlements Collides with a Reinsurer’s Right of Access to Records and Discovery," published on HarrisMartin Reinsurance website on May 7, 2013.
This case involved a claim for rain water damage under a commercial first-party property insurance policy. The insured, the Consulate General of Lebanon, claimed that the loss resulted from an internal plumbing overflow, which it alleged was a covered cause of loss. Hermitage Insurance Company presented evidence that the damage resulted from a clogged roof drain that allowed water on the flat roof of the insured's building to accumulate and enter the building after it washed over the roof door's saddle. Hermitage argued that these facts established that the insured's loss fell within the policy's exclusion for damage caused by rain water where that water did not enter through damage caused to the building's roof or walls. Hermitage also argued that the policy's exclusion for damage caused by the backup of sewers or drains barred coverage for this loss. Based on the evidence presented, Judge Saliann Scarpulla of New York County Supreme Court granted Hermitage summary judgment on both exclusions and denied the insured's cross-motion.