Plaintiff appeals from an order of the Supreme Court, New York County (Helen E. Freedman, J.), entered February 5, 2008, which granted summary judgment to defendant American International Specialty Lines Insurance and declared that the insurer does not have to reimburse plaintiff Castle Village Owners Corp. for the reconstruction of the wall, and an order, same court and Justice, entered July 8, 2008, which denied plaintiff's motion to renew.
The opinion of the court was delivered by: Nardelli, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
David B. Saxe, J.P., David Friedman, John W. Sweeny, Jr., Eugene Nardelli, Leland G. DeGrasse, JJ.
604415/05, 590264/07, 6604371/06, 590605/08
The threshold issue in this declaratory judgment action is whether an exclusion in a commercial umbrella liability policy from coverage for the insured's own property can be circumvented by a claim that ameliorative measures had to be effected to the insured's property so as to prevent or cure damage to adjoining property. We conclude, in the factual scenario presented, that the policy provision is unambiguous, and that the policy does not provide coverage for the claim.
Plaintiff, Castle Village Owners Corp., is a cooperative corporation which owns land bounded on three sides by a retaining wall. On May 12, 2005, a large section of the wall on the western perimeter of the parcel collapsed, causing a large quantity of debris, including dirt, benches, boulders and other objects, to fall onto an adjacent sidewalk and roadway. The debris caused damage to passing automobiles and surrounding property, and blocked the sidewalk and a portion of the northbound Henry Hudson Parkway.
Plaintiff's primary liability insurer was Greater New York Mutual Insurance Co. (GNY), which provided coverage up to $1,000,000 per occurrence. Plaintiff also had purchased a commercial umbrella liability policy from American International Specialty Lines Insurance Co. (AISLIC), in the amount of $50,000,000 per occurrence. In pertinent part, however, the AISLIC policy excluded coverage for:
"property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property;"
After the collapse, the City of New York issued an emergency declaration, which required certain immediate remediation steps, including the removal of debris, stabilization of the wall, protection against rainwater, and the installation of a temporary means of protection for vehicular traffic. By letter dated May 16, 2005, the City advised Castle Village:
"The referenced [section of retaining wall] has been declared unsafe and in imminent peril. It must be repaired or demolished immediately. The responsibility to take such action is yours and, because of the severity of the condition, the work must begin immediately . . . If you fail to do so, the City will perform the necessary work and seek to recover its expenses from you."
In the days following the collapse, the City retained contractors and engineers to clear the site and the surrounding area of debris, and to perform structural work to prevent further collapse and additional debris from falling on the surrounding sidewalks and roadways.
By letter dated July 5, 2005, the City informed Castle Village that its emergency remediation work had been completed, and it made formal demand upon Castle Village for reimbursement of its alleged costs in the amount of $2,163,067. The letter included a payment certification of approximately $1 million to Trocom Construction Co., the general contractor, for the performance of the "emergency work."
In a letter dated August 5, 2005, Christopher Santulli, then Deputy Borough Commissioner of the City's Department of Buildings, requested plaintiff to provide a work plan for future project tasks, including a solution to remedy permanently the slope and conditions that led to the wall's failure. In April 2006 Castle Village solicited bids for the performance of the work required by the City. After receiving a request for clarification as to the work needed to be done, the City advised, by letter dated June 5, 2006, that it required plaintiff, inter alia, to repair and stabilize the collapsed wall, which work was to include ...