Opinion
98 Civ. 8167 (MBM)
July 31, 2001
HOWARD ROSENBERG, ESQ., Kreinces Rosenberg, Westbury, NY, Attorney for Plaintiff.
AIDAN M. McCORMACK, ESQ., ELIZABETH DAILEY MCMANUS, ESQ., Hodgson, Russ, Andrews, Woods Goodyear, New York, NY, Attorneys for Defendant.
OPINION ORDER
Alfred Lombardi was injured on the property of plaintiff Hunts Point Terminal Produce Cooperative Association. He sued Hunts Point for negligence in New York state court. Hunts Point seeks a declaratory judgment that defendant Indemnity Insurance Company of North America ("INA") must defend and indemnify it against Lombardi's suit. Hunts Point now moves for summary judgment on that claim, and INA cross-moves for summary judgment. For the reasons stated below, Hunts Point's motion for summary judgment is denied, and INA's is granted.
I.
The following facts are not disputed: Lombardi was injured on Hunts Point's property on July 17, 1997. (Pl. Mem. at p. 2) Hunts Point's Department of Public Safety prepared an accident report the same day. (Id. at p. 3) Hunts Point notified INA of the accident on February 17, 1998 when Myra Gordon, Hunts Point's Executive Administrative Director, and the person responsible for the company's "insurance matters", received Lombardi's summons and complaint. (Id.) INA refused to cover the claim on the ground that it had not received timely notice of occurrence. (Id.) Hunts Point then brought this action for a declaratory judgment.
II.
Hunts Point's contract with INA contains a provision labeled "Duties in the Event of Occurrence, Offense, Claim, or Suit, which requires that Hunts Point notify INA:
as soon as practicable of an `occurrence' or an offense which may result in a claim. To the extent possible, notice should include (1) How, when and where the `occurrence' or offense took place; (2) The names and addresses of any injured persons or witnesses; and (3) The nature and location of any injury or damage arising out of the occurrence or offense.
(Myrtetus Aff., Ex. B) The contract defines an occurrence as an accident. (Id.) The contract also includes a rider, added at Hunts Point's "insistence," (Gordon Aff. at ¶ 5), which states that "knowledge of an occurrence by the agent, servant or employee of the Insured shall not in itself constitute knowledge to the Insured unless the individual(s) designated by the Insured's corporation shall have received such notice from its agent, servant, or employee." (Myrtetus Aff., Ex. B)
INA argues that Hunts Point's Department of Public Safety are the "individual(s) designated" by Hunts Point to receive notice of an occurrence because according to Myra Gordon's deposition testimony, whenever an accident occurs at Hunts Point, the Department of Public Safety prepares an accident report which is filed until Gordon requests a copy in response to a notice of claim or suit. (Def. Reply at p. 6) Hunts Point argues that the designated individual is Myra Gordon. (Pl. Mem. at p. 7)
"The initial interpretation of a contract is a matter of law for the court to decide." Morgan Stanley Group Inc. v. New England Insur. Co., 225 F.3d 270, 275 (2d Cir. 2000) The court must decide whether the contested terms are ambiguous, see id., which they are not merely because the parties suggest different interpretations. see Seiden Assoc. v. ANC Holdings, 959 F.2d 425, 428 (2d Cir. 1992). Instead, the court must decide whether the terms suggest "more than one meaning when viewed objectively by a reasonably intelligent person . . . ." Morgan Stanley Group Inc., 225 F.3d at 275.
INA's interpretation is reasonable, but Hunts Point's is not. Hunts Point's interpretation violates a "cardinal principle of contract construction" — that a contract should be read so that every provision is given effect. Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 63 (1995) (citing, inter alia, New York law); see also Sayers v. Rochester Tel. Corp., 7 F.3d 1091, 1095 (2d Cir. 1993) ("By examining the entire contract, we safeguard against adopting an interpretation that would render any individual provision superfluous."); Weil v. Murray, 2001 WL 345222, at *4 (S.D.N.Y. 2001) (MBM) (rejecting interpretation that would render contract provision meaningless). Hunts Point's interpretation of the knowledge of occurrence rider would mean that Hunts Point was not required to notify INA of an accident until after Myra Gordon received notice. However, she does not receive notice of an accident until she receives a notice of claim or suit from an injured party. (McManus Aff., Ex. D) The contract already requires Hunts Point to notify INA as soon as practicable after receiving notice of a claim or suit. (Myrtetus Aff., Ex. A) Thus, Hunt Point's suggested interpretation would render the notice of occurrence provision superfluous. Hunts Point contends that notifying INA every time the Public Safety Department responds to an accident would be "too great a burden." (Gordon Aff. at ¶ 7) However, Hunts Point could have rid itself of that burden by deleting the notice of occurrence provision instead of adding the knowledge of occurrence rider. The knowledge of occurrence rider is not ambiguous and should be read according to INA's interpretation. Because I find the contract unambiguous, I will not consider the extrinsic evidence both parties submitted. See Morgan Stanley Group Inc., 225 F.3d at 275-76.
Hunts Point relies largely on the affidavits of Myra Gordon and Nathan Unger, Hunts Point's insurance consultant, both of whom aver that they had explained to INA the process used by Hunts Point for handling accidents and claims. Hunts Point also submits evidence purporting to show that INA covered prior Hunts P(oint claims even though they were handled in the same way as Lombardi's. Rosenberg Aff., Ex. J) However, when the contract is unambiguous, the court may not consider such evidence. See Morgan Stanley Group Inc., 225 F.3d at 275-76.
Hunts Point did not notify INA of Lombardi's accident until seven months after Hunts Point's Public Safety personnel prepared a report. Hunts Point fails to make any argument that that a seven month delay in providing notice was reasonable or should be excused. Accordingly, Hunts Point's motion for summary judgment must be denied, and INA's granted.
* * *
For the reasons stated, Hunts Point's motion is denied, and INA's cross-motion is granted.
SO ORDERED.