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July 19, 1984


The opinion of the court was delivered by: GOETTEL


The defendant, The Fireman's Fund Insurance Company ("FFIC"), moves for summary judgment against the plaintiff, Wolf G. Tillman ("Tillman"). FFIC's motion, as originally filed, is based upon three separate groaunds. In particular, FFIC contends that Tillman has failed to state a claim upon which relief can be granted, that his suit is barred because of his failure to comply with statutorily imposed notice requirements, and that it is also barred because it was not filed within the limitations period imposed by the terms of the very policy upon which he attempts to base his recovery. *fn1" Establishment of any one of these grounds would provide a sufficient basis for granting FFIC's motion. Since the Court determines that FFIC has demonstrated Tillman's failure to state a cause of action, the motion for summary judgment is granted on that ground alone, without considering the other grounds.


 This case concerns a frustrated owner's attempt to obtain from an insurance company a judgment that was entered not against the insurance company but rather against one of its former insureds. The question is whether the insurance company, FFIC, is liable for a judgment entered in favor of the owner, Tillman, and against the insured, Lincoln Warehouse Corporation ("Lincoln"), for the purpose of compensating Tillman for the loss of property stored with Lincoln.

 The story begins in 1944, when Tillman's mother died and left an extensive and valuable collection of pottery and china. Her executor, for reasons not revealed in the papers, caused the collection to be stored in one of Lincoln's warehouses in New York City, where it was kept for many years.

 In 1963, when the estate was settled, Tillman became the owner of the collection. After receiving notification of this change in ownership, Lincoln held the collection in Tillman's name. Once, in 1966, he came briefly to look at one of the thirteen barrels in which the collection was stored, but he apparently did not otherwise check on the collection until May 23, 1969. On that date, when he came to pick up the collection, he examined the contents of the barrels only to find that the entire collection was missing.

 In May of 1970, Tillman sued Lincoln for the value of the lost collection. More than ten years later, on February 6, 1981, he obtained a judgment against Lincoln for approximately $1.5 million. One and a half years later, in September of 1982, after execution of the judgment had been duly issued against the property of Lincoln, it was returned unsatisfied. To this day, the judgment against Lincoln remains wholly unpaid, and Lincoln claims that it is insolvent.

 On November 19, 1982, Tillman commenced this suit against FFIC, setting forth two causes of action. In the first, he alleges that an FFIC liability policy issued to Lincoln was in full force and effect at the time of the loss of the collection and that FFIC is therefore liable to Tillman for the judgment of $1.5 million. Tillman's claim is that he is a third-party beneficiary of the policy and thus FFIC is liable to him under its terms. In the second cause of action, he alleges that no limitations period imposed by the terms of the policy should be construed to apply to his claim because FFIC had previously denied the existence of any such policy when directly questioned about it and, thus, should not now be able to take advantage of the 12-month limitations period for the commencement of suit that the policy imposes. *fn2"

 The facts with respect to this insurance policy, either as alleged by the plaintiff or as set forth by the defendant and not denied by the plaintiff, are as follows. In 1958, FFIC issued Policy No. FWP 2629-C (the "policy") to Lincoln. The policy provided two types of coverage for property stored in Lincoln's warehouses. Under the first provision, FFIC agreed to insure any stored property upon which its owner and Lincoln agreed to effect insurance for the account of the owner. Defendant's Exhibit 4, FFIC Policy No. FWP 2629-C, Coverage Endorsement "A". Clearly, FFIC was not providing this type of coverage for the Tillman collection. Tillman has presented no evidence to suggest that either he or the executor of his mother's estate ever requested such coverage under the FFIC policy or paid the requisite premium for such coverage. Furthermore, there is ample evidence that similar coverage was obtained separately under a policy issued by the American Surety Co. and that Tillman has already collected $150,000 under that policy.

 Under the second provision of the FFIC policy, FFIC agreed to insure Lincoln against any liability it incurred as a warehouseman or bailee for any physical loss of or damage to property stored for its customers on its premises. *fn3" Id., Coverage Endorsement "B". Under this second provision, however, coverage was expressly limited to Lincoln and not extended to its customers. "The coverage provided . . . is intended only for the protection of the Assured [Lincoln] and no action or proceeding based on the provisions hereof shall be brought in the name or for the benefit of the Assured's Customers or of any other person or corporation." Id.

 Despite this restrictive language, Tillman argues that the second provision of the policy makes him a third-party beneficiary of the policy. FFIC naturally argues to the contrary. FFIC contends that the policy was a contract solely between it and Lincoln and that no one other than Lincoln had a legal or equitable interest in the policy. In FFIC's view, Tillman was not and is not a third-party beneficiary of the policy and so has no standing to make a claim based on the common law rights of such beneficiaries.

 In addition, FFIC contends that, even if the second provision had covered any liabilities incurred by Lincoln before it cancelled the FFIC policy in 1965, it could not possibly have covered liabilities incurred thereafter. Tillman's rights, FFIC argues, could not be greater than those of Lincoln, and once Lincoln cancelled the policy and forfeited coverage, no third-party who thereafter filed a claim could possibly have any rights under the policy. *fn4"

 Finally, as noted earlier, FFIC contends that even if Tillman were considered a third-party, his claim would have to be dismissed because he failed to file it within one year of the discovery of the loss, as is required under the insurance policy.

 To these arguments Tillman responds by claiming that he is a proper third-party beneficiary of the policy. He also argues that his loss occurred before the cancellation of the policy in September of 1965 and that he can prove this fact. Finally, he claims that he could not have instituted this suit any sooner because ...

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