The opinion of the court was delivered by: SWEET
For reasons unrelated to the substance or disposition of these motions, this opinion supersedes this Court's opinion of March 21, 1996, on the same motions in all respects. The Clerk of Court will withdraw that opinion from the record. It will be refiled under seal and superseded by this Opinion in reason and effect.
In this action to recover under insurance policies, Defendants the Marine Insurance Co., Ltd., No. 2 A/C, the Threadneedle Insurance Co., Ltd., the Threadneedle Insurance Co., Ltd., A A/C, Indemnity Marine Assurance Co., Ltd., No. 1M A/C, Norwich Union Fire Insurance Society, Ltd., No. 1 A/C, Sovereign Marine & General Insurance Co., Ltd., S 81, the Tokio Marine & Fire Insurance Co. (UK), Ltd., Taisho Marine & Fire Insurance Co. (Europe), Ltd., Storebrand Insurance Co. (UK), Ltd. (collectively, the "Primary Insurers"), subscribing to policy of insurance number 4S/0034/9/91 (the "Primary Policy"), and Henry Raymond Dumas, an underwriter at Lloyd's, London, on behalf of himself and all those other Lloyd's underwriters (the "Excess Insurers", or, collectively with the Primary Insurers, the "Insurers") subscribing to policy of insurance number 4S/00723/91 (the "Excess Policy" or, collectively with the Primary Policy, the "Policies") have moved 1) for summary judgment against Plaintiffs 6247 Atlas Corporation ("Atlas") and the Merchants Bank of New York (collectively, "Plaintiffs"); 2) to dismiss for failure to state a claim; and 3) for an order compelling the Federal Bureau of Investigation, the United State Attorney for the Southern District of New York, and the New York City Police Department to comply with subpoenas and discovery requests, or, in the alternative, for a stay pending compliance with those subpoenas and requests.
For the reasons discussed herein, the motion for summary judgment will be granted, and the other motions will, therefore, be denied as moot.
Atlas, a dealer in precious stones, metals, and jewelry, is a New York corporation with its principal place of business located at 2 West 46th Street, Suite 702, in Manhattan (the "Premises"). Its principals are Joseph Harati ("Harati") and Ishai Karniel ("Karniel"). Harati and Karniel are fugitives residing in Israel, having left the United States at least in part to avoid facing charges stemming from the alleged burglary at the Premises.
The Merchants Bank of New York, a corporation chartered under the laws of New York State, is a secured creditor of Atlas.
The Primary Insurers are a syndicate of insurance companies which underwrote the Primary Policy for a twelve-month period beginning on approximately February 7, 1997. The Primary
Policy extended insurance coverage to Atlas, as the assured party, and to the Bank, as the loss payee, against risks to Atlas' goods while on the Premises up to a maximum of $ 1,000,000. The Primary Policy has a $ 10,000 deductible. An additional endorsement to the Primary Policy was issued for another $ 1,000,000.
The Excess Insurers issued to Atlas excess insurance coverage under the Excess Policy, which extended additional coverage in the amount of $ 1,000,000. The Excess Policy incorporated all terms and provisions of the Primary Policy, and Atlas' total coverage was thus $ 3,100,000, less a deductible of $ 10,000.
Facts and Prior Proceedings
On June 25, 1991, a burglary allegedly took place on the Premises. Atlas submitted a claim seeking indemnification under the policies for goods allegedly stolen. In support of its claim, Atlas submitted a sworn Proof of Loss, wherein it alleged that $ 6,133,693.31 worth of merchandise had been stolen. Of those goods, $ 3,055,121.31 had been taken on consignment from other dealers (the "Memoholders").
After an investigation, Defendants denied liability on the theory that the burglary had been staged and that Atlas had committed fraud, had made misrepresentations, had failed to comply with a sales and transaction clause, and had failed to cooperate with Defendants' investigation.
Plaintiffs filed their Complaint on September 29, 1992, and Defendants answered on December 10, 1992. Subsequently, the remaining memoholders were interpleaded. On April 27, 1995, Defendants filed this motion, and the matter was argued and deemed fully submitted on December 13, 1995.