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U.S. Underwriters Insurance Co. v. 14-33/35 Astoria Boulevard

United States District Court, E.D. New York

April 23, 2014

U.S. UNDERWRITERS INSURANCE COMPANY, Plaintiff,
v.
14-33/35 ASTORIA BOULEVARD; PARMA TILE MOSAIC & MARBLE CO., INC.; JAMES VISSAS; HERMITAGE INS. CO.; POLIS, INC; GEORGE'S HOME IMPROVEMENT CORP.; GEORGE SIFOUNIOS; CISCO GENERAL CONSTRUCTION, INC.; ALPHA ENGINEERING & INSPECTION, P.C.; ANTHONY HATZIIOANNOU ARCHITECT, AIA; ANTHONY HATZIIOANNOU; MOUAD MOQRANE; and HASSAN LAZGANI, Defendants.

OPINION & ORDER

ALLYNE R. ROSS, District Judge.

U.S. Underwriters Insurance Company ("plaintiff") moves for reconsideration of this court's prior order denying summary judgment as to its claim for rescission of an insurance policy (the "Policy") that it issued to defendant 14-33/35 Astoria Boulevard ("14-33/35 Astoria"). Plaintiff argues that new evidence in the form of deposition testimony from defendant James Vissas, principal of 14-33/35 Astoria, merits reconsideration of the earlier ruling. Specifically, plaintiff argues that, in light of the new evidence, there is no longer a genuine issue of material fact as to whether material misrepresentations were made in connection with 14-33/35 Astoria's insurance application, and that accordingly the Policy should be treated as void ab initio. For the reasons stated below, the court agrees with plaintiff and, upon reconsideration of its prior decision, grants plaintiff's motion for summary judgment.

BACKGROUND

The court assumes familiarity with the underlying facts as described in its opinion of December 27, 2011. See Order of Dec. 27, 2011 ("2011 Order"), DE #61. A summary of the procedural history and subsequent factual developments follows to supplement the facts in the 2011 Order.

I. Plaintiff's Prior Summary Judgment Motion

In 2011, plaintiff moved for summary judgment on the grounds that defendant 14-33/35 Astoria made material misrepresentations in its application for an Owner's Protective Insurance Policy. DE #40. Of relevance here, plaintiff argued in its motion that 14-33/35 Astoria misrepresented on its insurance application that Parma Tile Mosaic & Marble Co. ("Parma Tile, " an entity wholly owned by defendant James Vissas, who is also the sole owner and principal for 14-33/35 Astoria) would be the general contractor for the proposed project, and that this misrepresentation was material and warranted rescission of the Policy.

As part of its application process, plaintiff required 14-33/35 Astoria to provide it with a signed copy of the contract between 14-33/35 Astoria and the general contractor for the proposed project as well as proof of insurance from the general contractor naming 14-33/35 Astoria as an additional insured. 2011 Order, at 3. On the application form, 14-33/35 Astoria answered "yes" to questions about whether it was hiring a general contractor to handle the entire project and whether the general contractor had a minimum level of insurance naming 14-33/35 Astoria as an additional insured. Id. at 4. In connection with its insurance application, 14-33/35 Astoria submitted (1) a copy of a contract between Parma Tile and 14-33/35 Astoria signed by Vissas and listing work "to be completed by Parma Tile Mosaic & Marble Co. on behalf of 14-33/35 Astoria Blvd. LLC"[1] and (2) an ACORD Certificate of Liability insurance on behalf of Parma Title, held by 14-33/35 Astoria. Id .; Decl. of Steven Verveniotis in Supp. of Pl.'s Mot. for Recons. of Summ. J. ("Verveniotis Decl."), DE #109, Ex. B.

During the deposition of Vissas in connection with this case, plaintiff's counsel asked him about the contract between 14-33/35 Astoria and Parma Tile submitted with the insurance application:

Q. Did Parma Tile do that work for 14-33/35?
A. Of course not.
Q. No? So you signed this document?
A. Yes.
Q. Why did you sign it?
A. I don't remember if it was anything - first of all, this is not my stationery, Parma Tile.
Q. Sir, my question is: Why did you sign it?
A. My answer is, I don't know.

2011 Order at 6. At another point in the deposition, Vissas stated that George's Home Improvement ("GHI") was the general contractor for the 14-33/35 Astoria project but that they had an oral rather than written agreement for GHI's services.[2] Id. at 6-7. He also stated that Parma Tile never bought insurance as a general contractor. Id. at 7.

In an affidavit accompanying 14-33/35 Astoria's opposition to plaintiff's original summary judgment motion, Vissas stated that he was "seriously considering" having Parma Tile serve as the general contractor for the project. Aff. of James Vissas ("Vissas Aff."), DE #44, Ex. 2, at 2. According to Vissas's affidavit, he intended to have Parma Tile pay the bills and approve the trades working on the construction project. Id . He further stated:

I duly submitted a contract and I requested from my insurance broker to have 14-33/35 Astoria Blvd LLC as an additional insured [on Parma Tile's insurance].
Therefore, all the documents, annexed hereto as EXHIBIT A, were true to the best of my knowledge and belief and not [sic] material misrepresentations were made at the time of the application. However, subsequently, I was not able to have
[Parma Tile] as a general contractor for the construction that is why I hired [GHI] to act as a General contractor.

Id. Vissas went on to state that Parma Tile ended up serving only a financing function for the project and paying the contractors who worked at the construction site. Id. at 3. It never supervised any contractor or subcontractor for the site. Id.

Relying on Vissas's affidavit stating that, at the time of the insurance application, he intended to use Parma Tile as the general contractor, this court denied summary judgment because it found that there was a genuine issue of material fact as to whether the representation that Parma Tile was the general contractor was false at the time it was made. 2011 Order at 15. This court found that, although there was evidence that Parma Tile did not actually serve as the general contractor, there was evidence indicating that Vissas had intended hire Parma Tile as the general contractor when he filled out the application. Id. at 16. The court concluded that the Vissas affidavit created a genuine issue as to whether, at the time of the ...


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