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SPHERE DRAKE INS. CO., P.L.C. v. Y.L. REALTY CO.

October 17, 1997

SPHERE DRAKE INSURANCE COMPANY, P.L.C., Plaintiff,
v.
Y.L. REALTY COMPANY, KADISH MAZEL REALTY CORPORATION, DAVID BRADLEY MANAGEMENT, JANICE & RICHARD INVESTMENTS, INC., GLORIA ESTRADA, AN INFANT UNDER THE AGE OF 14 YEARS, BY HER MOTHER AND NATURAL GUARDIAN, CRUZ SALGADO AND CRUZ SALGADO, INDIVIDUALLY, Defendants.



The opinion of the court was delivered by: JONES

 BARBARA S. JONES

 UNITED STATES DISTRICT JUDGE

 I. Background

 Sphere Drake is a British insurance company that issued two general liability policies for a building located at 1121 Morrison Avenue, Bronx, New York. Y.L. Realty Company ("Y.L. Realty"), Kadish Mazel Realty Corporation ("Kadish Mazel"), *fn1" David Bradley Management ("David Bradley"), and Janice & Richard Investments, Inc. ("Janice & Richard") at one time or another were the owners and/or managers of that building. *fn2" David Bradley apparently became the managing agent of the building on March 5, 1992, following a foreclosure action by the Federal Home Loan Mortgage Corporation that resulted in the appointment of a receivership. On January 3, 1994, the building was resold to a new owner, who then appointed a new managing agent, not named in this suit.

 The insurance policies issued by Sphere Drake for 1121 Morrison Avenue contain a notice provision, requiring the insured to provide notice of an "occurrence" to Sphere Drake "as soon as practicable." An "occurrence" is defined as "an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured." The policies further require the insured, in the event of a claim or suit, to "immediately forward to the company every demand, notice, summons or other process received by him or by his representative." The policies also contain a "Pollution Exclusion" clause, by which coverage is excluded for "bodily injury or property damage arising out of the actual, alleged, or threatened discharge, dispersal, release or escape of pollutants . . . at or from premises owned, rented or occupied by the named insured."

 On or about January 10, 1994, Gloria Estrada and Cruz Salgado filed a lawsuit ("Estrada suit") in New York Supreme Court, Bronx County, alleging that from 1982 to 1992, Gloria Estrada "sustained severe, acute lead poisoning" as a result of "ingesting flaking and rotting paint chips" in her apartment in the Morrison Avenue building (Estrada Compl. P 11). The lawsuit named Kadish Mazel, David Bradley and Janice & Richard Investments as defendants.

 Sometime after the filing of the Estrada suit, Sphere Drake was notified of its duty as insurer of the building to defend the lawsuit and to indemnify the insured parties. Sphere Drake claims that this notification was not until October 28, 1994, over nine months after the complaint was originally filed. David Bradley disputes this, claiming that it forwarded a copy of the Estrada summons and complaint sometime around January 27, 1994, to an insurance broker who it believed was representing Sphere Drake. Subsequently, that brokerage firm notified Y.L. Realty and Kadish Mazel that it was not involved in insuring 1121 Morrison Avenue; David Bradley apparently only later learned of this information.

 On April 21, 1995, Sphere Drake filed the current action, seeking a declaratory judgment that the insurance policies for 1121 Morrison Avenue did not cover the Estrada lawsuit. The declaratory judgement action seeks relief based on three grounds: (1) that Y.L. Realty, et al. failed to comply with the notice requirements in the policies; (2) that the Pollution Exclusion clause in the policies precludes coverage for the alleged lead poisoning to Estrada; and (3) that Estrada's alleged injuries occurred outside of the period of coverage in the policies. On October 18, 1995, Sphere Drake moved for summary judgment based on the first and second of these grounds--untimely notification and preclusion by the Pollution Exclusion clause. This memorandum addresses Sphere Drake's motion for summary judgment based on those two claims.

 II. Discussion

 A. The Applicable Standard for Summary Judgement

 Summary judgement is appropriate only when "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). In deciding a motion for summary judgment, a court must resolve all ambiguities and draw all inferences in favor of the party against whom summary judgment is sought. Chambers v. T.R.M. Copy Ctrs. Corp., 43 F.3d 29, 36 (2d Cir. 1994). Summary judgment may be entered against the moving party, even if his opponent has ...


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