The opinion of the court was delivered by: Saxe, J., J.
Seneca Ins. Co., Inc. v Cimran Co., Inc.
Appellate Division, First Department
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.
John W. Sweeny, Jr.,J.P. David B. Saxe Leland G. DeGrasse Sheila Abdus-Salaam Paul G. Feinman, JJ. 601087/10
Cross appeals from the order of the Supreme Court, New York County (Charles E. Ramos, J.), entered June 21, 2012, which denied defendants' motion for summary judgment dismissing the complaint and denied plaintiff's cross motion for summary judgment declaring that the insurance policy it issued to defendants was void ab initio and that it had no duty to defend and indemnify defendants in the underlying personal injury action. Tese & Milner, New York (Michael M. Milner and Alexander Statsky of counsel), for appellant-respondent. Keidel, Weldon & Cunningham, LLP, White Plains (Darren P. Renner and Zachary A. Mengel of counsel), for respondents-appellants. SAXE, J.
This appeal provides us, once again, with the opportunity to reiterate and reaffirm an ancient principle of insurance law: that insurance coverage cannot be imposed based on liability for which insurance was not purchased or provided.
While summary judgment was properly denied to plaintiff, Seneca Insurance Company, on its cause of action seeking a declaration that the insurance policy it issued to defendants is void ab initio, we modify to grant Seneca's motion for summary judgment declaring, upon its second cause of action, that it has no duty to defend and indemnify defendants in the underlying personal injury action because the commercial general liability insurance policy it issued to them did not cover the portion of their property on which the accident occurred.
On or about October 12, 2009, while construction was under way to add three additional stories onto defendants' one-story building at 34-45 Francis Lewis Boulevard, in Flushing, Queens, an employee of the subcontractor handling the framing for the additional floors fell and sustained injuries. While the complaint in the personal injury action states merely that the plaintiff fell at "the construction site," the bill of particulars adds that the incident took place while "the plaintiff was working on the fourth floor on top of the steel framing of the fourth floor side and/or edge."
By a Notice of Occurrence/Claim dated February 19, 2010, defendants provided notice of the occurrence to Seneca. In a letter dated March 3, 2010, Seneca advised defendants that it had received the summons and complaint, stating that this constituted its first notice of the claim. By follow-up letter dated March 15, 2010, Seneca reserved its rights to disclaim coverage and/or rescind the policy, stating that further investigation of the claim was needed, including whether defendants had misrepresented on their insurance application that they had no intention of conducting demolition or construction at the premises.
Meanwhile, by notice of cancellation dated March 11, 2010, Seneca had cancelled defendants' policy effective April 1, 2010, for the reason that "[t]he building is currently under construction."
Seneca then commenced this action, seeking a declaration that it had no duty to defend the defendants in the underlying action because the accident did not take place at the "Designated Premises" covered by the policy; specifically, the insured premises was a 10,000-square-foot, one-story building, but the accident occurred on the three story addition, which materially altered the "Designated Premises." Seneca also sought a declaration that the policy was void ab initio based on defendants' material misrepresentations in their original insurance application, as well as in their yearly policy renewal applications, that no demolition or construction at the premises was contemplated.
Both sides moved for summary judgment. Defendants contended that Seneca's cancellation of the policy effective April 1, 2010 effectuated a waiver of the rescission claim or constituted grounds to estop it from seeking rescission of the policy. Seneca cross-moved for summary judgment declaring that the policy was void ab initio for material misrepresentations made in the insurance application, that it had no duty to defend or indemnify, and further, that the construction site from which the injured plaintiff fell ...