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Amin Realty, L.L.C. v. Travelers Property Casualty Co.

June 20, 2006


The opinion of the court was delivered by: Roanne L. Mann, United States Magistrate Judge


Plaintiff Amin Realty, L.L.C. (" plaintiff" or " Amin") brings this action against defendant Travelers Indemnity Company (" defendant" or " Travelers"),*fn1 seeking a declaratory judgment that the defendant insurer breached its duty to defend and indemnify its insured, K&R Construction Corp. (" K&R"), in an underlying suit for breach of contract and negligence. Amin also seeks to collect on K&R' s confessed judgment in the amount of $257,943.00.

After the parties completed discovery and consented to have the case handled for all purposes by a magistrate judge, Travelers moved for summary judgment, contending that, under the policy at issue, it has no obligation to defend or indemnify K&R with respect to the claims against it. Amin cross-moved for summary judgment.

For the reasons that follow, Travelers' motion is granted, Amin' s cross-motion is denied, and the complaint is dismissedwith prejudice.

I. Background

Most of the material facts are undisputed.*fn2 In January 2000, Amin entered into a contract with K&R for the construction of a four-story building in Brooklyn. (Pl. Rule 56.1 St. ¶ 3; Compl. ¶ ¶ 7, 8.) K&R subcontracted with Commercial Builders, LTD (" Commercial") to install the foundation, and Commercial in turn retained Kings Ready Mix, Inc. (" Kings") to prepare, mix and pour the concrete for the project. (Pl. Rule 56.1 St. ¶ 3; Compl. ¶ 8.)

The day after Kings poured the concrete, Commercial determined that Kings had mixed it improperly, preventing it from hardening sufficiently. (Pl. Rule 56.1 St. ¶ ¶ 4-5; Pl. Mem. at 4.) As a result, the concrete, along with the adjacent steel decking, beams and metal joints, had to be removed and reinstalled. (Pl. Rule 56.1 St. ¶ 6.)

On April 22, 1999, Travelers had issued to K&R a Comprehensive General Liability (" CGL") insurance policy effective from July 8, 1999 to July 8, 2000 (" the Policy"). (Def. Rule 56.1 St. ¶ ¶ 1.) The Policy provides that Travelers " will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' " that is " caused by an 'occurrence.' "(Def. Ex. A-1 ¶ 1(a), (b).)*fn3 The Policy defines an " occurrence" as " an accident, including continuous or repeated exposure to substantially the same general harmful conditions." (Def. Ex. A-3 ¶ 12.) It defines " property damage," in relevant part, as " [p]hysical injury to tangible property, including all resulting loss of use of that property." (Def. Ex. A-3 ¶ 15.) The Policy contains numerous exclusions from coverage, including:

(2)(j): " Property damage" to . . . (5) That particular part of real property on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations, if the " property damage" arises out of those operations; or (6) That particular part of any property that must be restored, repaired or replaced because " your work" was incorrectly performed on it. (Def. Ex. A-2, A-3 ¶ 2.) " Your work" is defined as " [w]ork or operations performed by you or on your behalf; and [m]aterials, parts or equipment furnished in connection with such work or operations," and " includes [w]arranties or representations made at any time with respect to the fitness, quality, durability, performance or use of 'your work . . . .' " (Def. Ex. A-3 ¶ 19.)

On April 19, 2000, Amin filed a claim with Travelers, which responded by letter that, " [d]ue to the fact that [K&R] did not cause and was not responsible for the damage that occurred we must respectfully deny the claim for damages as no legal liability rests with our insured." (Def. Ex. E.) On October 13, 2000, plaintiff commenced an action in the Supreme Court of New York, Kings County, against K&R, Commercial and Kings for breach of contract and negligence, seeking $165,000 for property damage and $500,000 in business interruption costs. (Pl. Rule 56.1 St. ¶ 7; Def. Ex. B.) On February 2, 2001, Travelers issued a " declination of coverage" letter, notifying K&R that it had no duty to defend or indemnify K&R in the action because (among other things) the claimed loss did not constitute an " occurrence" under the liability Policy. (Def. Ex. F.) On September 7, 2004, K&R executed a confession of judgment in Amin' s favor, in the amount of $257,943.00. (Pl. Rule 56.1 St. ¶ 8; Def. Ex. D.)*fn4

Plaintiff commenced the instant action on December 1, 2004, in the Supreme Court of New York, Kings County, alleging that Travelers breached its agreement to provide a defense and indemnity to K&R, and requesting judgment in the amount of K&R' s confessed judgment, plus interest.*fn5 Defendant removed the action to this Court on January 13, 2005.

In support of its summary judgment motion, defendant argues that plaintiff' s loss did not arise from an " occurrence," and therefore did not trigger coverage under the Policy. (See Travelers' Memorandum of Law in Support of Motion for Summary Judgment [" Def. Mem."] at 3-6.) In addition, defendant contends that the Policy' s exclusionary clauses expressly preclude coverage for the type of losses plaintiff alleges. (Id. at 6-7.) In opposition to defendant' s motion and in support of its cross-motion for summary judgment, plaintiff argues that the installation of defective concrete on its premises constituted an " occurrence," and that the Policy exclusions on which defendant relies are inapplicable. (See Plaintiff' s Memorandum of Law In Support of Cross-Motion For Summary Judgment and in Opposition To Defendant' s Motion For Summary Judgment [" Pl. Mem."] at 6-18, 24-35.)

II. Discussion

A. Summary Judgment ...

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