RECEIVED NYSCEF: 06/21/2012
Charles Edward Ramos, J.S.C.
In this action for declaratory judgment, defendants Cimran Co., Inc. (Cimran) and Darshan S. Bagga a/k/a D.S. Bagga (together, defendants) move for summary judgment dismissing the complaint on the ground of waiver and/or estoppel.
Plaintiff Seneca Insurance Company, Inc. (Seneca) cross-moves for summary judgment and seeks a declaration that a Seneca insurance policy issued to defendants is void ab initio and that it has no duty to defend or indemnify defendants in an underlying action.
Cimran, a domestic corporation located in Old Brookville, New York, submitted a written application to obtain liability insurance from Seneca, a domestic insurance company, on January 18, 2007. Defendant Darshan S. Bagga is Cimran's principal and owner.
Defendants sought insurance coverage for a one-story building located in Flushing, Queens, that Cimran owns (the Premises).
The application for insurance coverage contained the following questions and answers by Cimran: Question 12: "Any structural alterations contemplated?" "No." Question 13: "Any demolition exposure contemplated?" "No."
Based on defendants' representations in the application for insurance, Seneca issued to defendants Policy No. ESR 0004764 (policy) for commercial general liability coverage for the period February 5, 2007 through February 5, 2008. The policy was subsequently renewed annually to February 5, 2011.
On February 9, 2010, Cimran was served with a summons and complaint in a personal injury action entitled Villarreyna v Bagga, Singh Contracting Company of New York, LLC, Cimran Co. Inc., et al., Supreme Court, Bronx County, Index No. 300832/2010 (Underlying Action). The Underlying Action arose from an accident that occurred on a construction site at the Premises, on October 12, 2009.
Defendants provided notice of the Underlying Action to Seneca in February 2010. Seneca acknowledged the claim, retained defense counsel for defendants in connection with the Underlying Action, but reserved its rights to disclaim coverage. Thereafter, Seneca commenced an investigation regarding the nature of the claim.
During the course of its investigation, Seneca purportedly learned that during the insurance application process, defendants sought to erect several additional floors to the existing structure located on the Premises as early as 2006, which was in direct contravention to their representations contained in their application that they were not contemplating structural alterations. Seneca represents that it has a strict policy against writing insurance policies for construction work.
Following its investigation, Seneca issued a notice of cancellation of the policy to defendants, which was to become effective on April 1, 2010. Subsequent to the issuance of the notice of cancellation, Seneca commenced this action seeking a declaration that the policy be declared void ab initio from its inception on ...