Burt M. Garson, Esq., Robin L. Cohen, Esq., KASOWITZ, BENSON, TORRES & FRIEDMAN New York, NY, Attorneys for the Plaintiff.
Wayne R. Glaubinger, Esq., Hilary M. Henkind, Esq., MOUND COTTON WOLLAN & GREENGRASS (NYC), New York, NY, Attorneys for the Defendant.
ROBERT W. SWEET, District Judge.
Plaintiff Jane Street Holding, LLC ("Plaintiff" or "Jane Street") has moved pursuant to Rule 56 of the Federal Rules for Civil Procedure for partial summary judgment against Defendant Aspen American Insurance Company ("Defendant" or "Aspen"). Jane Street alleges that Aspen breached its insurance policy obligation to pay up to $2.5 million for flood damage Jane Street incurred to its electric generator. Defendant has cross-moved pursuant to Rule 56(b) of the Federal Rules for Civil Procedure for summary judgment and to dismiss Plaintiff's complaint ("Complaint"). Based upon the facts and conclusions set forth below, Plaintiff's motion for partial summary judgment is denied, and Defendant's motion for summary judgment and dismissal is granted.
I. Prior Proceedings
This action was initiated by the Plaintiff on April 8, 2013 arising out of an insurance policy Jane Street purchased from Aspen and subsequent refusal from Aspen to pay for the loss of Jane Street's generator due to flooding caused by Hurricane Sandy on October 29, 2012. Aspen filed its answer to Jane Street's complaint on April 26, 2013.
Plaintiff filed the instant motion for partial summary judgment on May 9, 2013. The motion was filed prior to any scheduling conference. No depositions or discovery have been conducted. Aspen cross-moved for summary judgment on May 28, 2013. Oral arguments were held on October 9, 2013, and the matter was marked fully submitted on the same day.
II. The Facts
The facts have been set forth in the Plaintiff's Local Civil Rule 56.1 Statement, the Defendant's Counterstatement to Plaintiff's Local Civil Rule 56.1 Statement, the Defendant's Local Civil Rule 56.1 Statement and the Plaintiff's Counterstatement to the Defendant's Local Civil Rule 56.1 Statement. The facts described below are undisputed except as noted.
Jane Street is in the business of quantitative proprietary trading, and conducts global trades with the company's internal assets. The company's office is located on the 33rd floor of One New York Plaza in lower Manhattan.
In July 2011, Jane Street, through its insurance broker, Hallahan, McGuiness & Lory's, Ltd., approached Aspen seeking to place a property and inland marine insurance policy with Aspen. In seeking out insurance, Jane Street filled out and provided an Accord Commercial Insurance Application form dated July 5, 2011 (the "Application Form").
According to Aspen, Jane Street identified the premises for which it sought coverage as "One New York Plaza, 33rd Floor, New York, New York 10004" in the Application Form. The premises for which Jane Street sought coverage was described on the insurance application as "40, 000 sq ft office Property, Improv." According to Jane Street, the Application Form listed "One New York Plaza, 33rd Floor, New York, New York 10004" in the field labeled "Street, City, County, State, Zip & 4 [sic]." Moreover, Jane Street contends that the Application Form identifies "40, 000 sq ft Office Property, Improv" in the field labeled "Part Occupied, " and identifies the potential carrier as "One Beacon America Insurance, " not Aspen. The Application Form was neither completed nor signed by Jane Street.
The "Property Section" of the Application Form, identified the construction of the building as "50" stories, but had no number listed in "# of basm'ts." For the section listed as "other occupancies" in the Application Form, Jane Street listed "offices."
Subsequent to its application, Jane Street purchased the Aspen Policy No. IMA8P2711 for the policy period September 2, 2011 to September 2, 2012 (the "2011-2012 Aspen Policy"). The 2011-2012 Aspen Policy provided coverage for; (i) $10 million limit for Electronic Data Processing Equipment ("EDP"); (ii) $15 million limit for the Commercial Out Program ("COP"); and (iii) $15 million limit for Equipment Breakdown ("EB"). Flood damage was covered under all three coverage parts, but was capped at a $2.5 million sublimit.
The three coverage parts covers three different, but partially overlapping areas of damages. The COP Coverage Part states the following:
1. Covered Business Personal Property -
Covered business personal property means "your" business personal property in buildings or structures at a "covered location" or in the open (or in vehicles) on or within 1, 000 feet of a "covered location."
(Partenza Aff., Ex. 2, at A023.)
The COP Coverage Part defines "covered location" to mean "any location or premises where you' have buildings, structures, or business personal property covered under this coverage." ( Id., at A052.) However, under the 2011-2012 Aspen Policy if a Scheduled Locations Endorsement was added, "the term 'covered location' means a location that is described on the Location Schedule." (Id.) The Policy contains a Scheduled Locations Endorsement and a Location Schedule which lists "One New York Plaza, 33rd Floor, New York, NY 10004" as the "Covered Location" for the COP Coverage Part. ( Id., at A048.)
The EDP Coverage Part insures damage to "protection and control systems" which are located "at a premises described on the scheduled of coverages.'" (Partenza Aff., Ex. 2, at A023.) Under the EDP Coverage Part, "Protection and control systems" are defined to include an "uninterruptible power supply system, line conditioner, and voltage regulator." ( Id., at A022.) It further contains a "schedule of coverages" which lists the described premises as Plaintiff's mailing address: "One New York Plaza, 33rd Floor, New York, NY 10004." ( Id., at A013.)
The EB Coverage Part insures damages to covered property that results from an "accident' to "covered equipment" at "covered locations." (Partenza Aff., Ex. 2, at A082.) "Accident" is defined in the Policy to include a "mechanical breakdown." ( Id., at A051.) "Covered equipment" is defined to include "equipment that generates, transmits, or utilizes energy." ( Id., at A052.) The Policy states that "Mechanical Breakdown" includes the "malfunction or failure of moving or electronic parts, component failure, faulty installation, or blowout." ( Id., at A021.)
According to Plaintiff, the EB Coverage Part provides coverage that is subject to the terms and conditions of the COP Coverage Part. (Partenza Aff., Ex. 2, at A082.) The EB Coverage Part insures damage to covered property which is caused by or results from an "accident" to "covered equipment" at "covered locations." ( Id., at A082.) "Covered equipment" is defined to include "equipment... that generates, transmits, or utilizes energy." ( Id., at A052.) "Accident" is direct physical loss including "a mechanical breakdown", (id., at A051), and the definition for "Mechanical breakdown" is contained in the EDP Coverage Part and includes the "malfunction or failure of moving or electronic parts, component failure, faulty installation, or blowout." ( Id., at A021.) "Covered locations" is defined under the COP Coverage Part. According to Defendant, the EB Coverage Part is "subject to the terms' and ...