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Ten Seventy One Home Corp. v. Liberty Mutual Fire Insurance Co.

June 18, 2008

TEN SEVENTY ONE HOME CORP. AND MORTON G. YUTER, PLAINTIFFS,
v.
LIBERTY MUTUAL FIRE INSURANCE COMPANY, JOSH NEUSTEIN, LEONARD W. HUTCHINGS, AND JUDY HUTCHINGS, DEFENDANTS.
LIBERTY MUTUAL FIRE INSURANCE COMPANY, THIRD-PARTY PLAINTIFF,
v.
GREENWICH INSURANCE COMPANY, THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION & ORDER

This is an insurance case in which defendant/third-party plaintiff Liberty Mutual Insurance Company ("Liberty Mutual") seeks a declaration that plaintiffs Ten Seventy One Home Corp. ("Ten Seventy One") and Morton G. Yuter are covered by insurance policies issued by third-party defendant Greenwich Insurance Company ("Greenwich"). The Greenwich policies do not list the premises at which the accident at issue here occurred, and as a result Greenwich has moved to dismiss Liberty Mutual's third-party complaint. Greenwich's motion is granted.

BACKGROUND

The following facts are drawn from the complaint and third-party complaint, as well as documents integral to the complaints, and are assumed to be true as they must be on a motion to dismiss. On June 14, 2002, defendant Leonard W. Hutchings,*fn1 an employee of the New York City Department of Buildings, was injured in an accident at 3001 Arlington Avenue in the Bronx, New York ("3001 Arlington"). Plaintiff Morton G. Yuter caused the accident by closing the 3001 Arlington's overhead garage door onto Hutchings' head, striking Hutchings on his head and neck, and causing serious, severe, and permanent injury. Plaintiff Ten Seventy One and defendant Josh Neustein own 3001 Arlington and use it as an office space from which they operate, administer, and maintain a number of rental properties throughout Manhattan and the Bronx.

On or about May 25, 2005, Hutchings and his wife, defendant Judy Hutchings, filed suit in the New York Supreme Court, Bronx County, against Yuter, Neustein, and Ten Seventy One, seeking damages for personal injuries sustained in the accident (the "Underlying Action"). Liberty Mutual, with which Ten Seventy One held insurance policies, disclaimed coverage for Ten Seventy One and Yuter in connection with the Underlying Action. Yuter and Ten Seventy One, in turn, filed suit in New York Supreme Court, Bronx County, seeking coverage from Liberty Mutual for defense and indemnification in the Underlying Action. By Notice filed December 13, 2007, Liberty Mutual removed the action to this Court.

Liberty Mutual then commenced the instant third-party action against Greenwich, filing its complaint on January 9, 2008. The complaint alleges that Greenwich is obligated to provide defense and indemnification to Ten Seventy One and Neustein pursuant to two separate insurance policies. Both of the policies provide coverage for the date on which the accident occurred, but neither of them lists 3001 Arlington as an insured premises.

The first of these policies is a commercial general liability insurance policy numbered WGG 5001567 (the "567 Policy"), with effective dates from February 15, 2002 through February 15, 2003. Under the heading "Limitation of Coverage to Designated Premises or Project," the 567 Policy contains an exclusion that, in pertinent part, provides coverage for "bodily injury, property damage, personal and advertising injury and medical expenses arising out of . . . [t]he ownership, maintenance or use of the premises shown in the Schedule and operations necessary or incidental to those premises . . . ." The Schedule lists apartment buildings located at 74-78 Post Avenue and 682 Academy Street, both in New York, New York.

The second policy is numbered WGG 5001564 (the "564 Policy"), and was also effective from February 15, 2002 through February 15, 2003. The named insured on the 564 Policy is 2486, LLC. Neustein and Ten Seventy One are listed as additional named insureds. Like the 567 Policy, the 564 Policy includes an endorsement entitled, "Limitation of Coverage to Designated Premises or Project." Under that heading, the 564 Policy contains an exclusion identical to the one in the 567 Policy, providing coverage for "bodily injury, property damage, personal and advertising injury and medical expenses arising out of . . . [t]he ownership, maintenance or use of the premises shown in the Schedule and operations necessary or incidental to those premises . . . ." The Schedule lists apartment buildings located at 2821 Bridges Avenue and 2486 Morris Avenue in the Bronx, and at 502 West 213th Street and 620 West 182nd Street in Manhattan.

By their terms, both policies also provide coverage for accidents occurring throughout the United States and in some international territories. Each policy indicates that it "applies to bodily injury and property damage . . . caused by an occurrence that takes place in the coverage territory." "Coverage territory" is defined broadly as the United States, international waters or airspace, and, under limited circumstances, "[a]ll parts of the world."

In this third-party action, Liberty Mutual seeks a declaration that Ten Seventy One, Yuter, and Neustein are insureds under one of those policies, and that the Greenwich policy is the primary policy for the accident which injured Hutchings. Liberty Mutual also seeks reimbursement for expenses incurred in connection with the Underlying Action. Greenwich has moved to dismiss, contending that Liberty Mutual has failed to state a claim upon which relief can be granted because the policies issued by Greenwich do not provide coverage for the 3001 Arlington Avenue address.

DISCUSSION

When considering a motion to dismiss under Rule 12(b)(6), a trial court must "accept as true all factual statements alleged in the complaint and draw all reasonable inferences in favor of the non-moving party." McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir. 2007) (citation omitted). At the same time, "conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to defeat a motion to dismiss." Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328, 337 (2d Cir. 2006) (citation omitted). A court must apply a "flexible plausibility standard, which obliges a pleader to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible." Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007) (citation omitted). "To survive dismissal, the plaintiff must provide the grounds upon which his claim rests through factual allegations sufficient to raise a right to relief above the speculative level." ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007). In deciding the motion, a court may consider "any written instrument attached to [the complaint] as an exhibit, materials incorporated in it by reference, and documents that, although not incorporated by reference, are integral to the complaint." Sira v. Morton, 380 F.3d 57, 67 (2d Cir. 2004) (citation omitted).

This dispute turns on the interpretation of certain provisions in the insurance policies, which are to be construed according to general principles of contract law.*fn2 "When a dispute arises involving the terms of an insurance contract, New York insurance law provides that an insurance contract is interpreted to give effect to the intent of the parties as expressed in the clear language of the contract." Parks Real Estate Purchasing Group v. St. Paul Fire and Marine Ins., 472 F.3d 33, 42 (2d Cir. 2006) (citation omitted). "Under New York law, the meaning of a contract that is unambiguous is a question of law for the court to decide." Revson v. Cinque & Cinque, P.C., 221 F.3d 59, 66 (2d Cir. 2000). In interpreting a contract under New York law, "words and phrases . . . should be given their plain meaning," and the contract "should be construed so as to give full meaning and effect to all of its provisions." Shaw Group, Inc. v. Triplefine Int'l Corp., 322 F.3d 115, 121 (2d Cir. 2003) (citation omitted). The New York Court of Appeals has described the "fundamentals" of construing insurance policies as follows:

We read an insurance policy in light of common speech and the reasonable expectations of a businessperson. As we have repeatedly held, an insurer has a duty to defend if the allegations state a cause of action that gives rise to the reasonable possibility of recovery under the policy. Moreover, to negate coverage by virtue of an exclusion, an insurer must establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular ...


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