Jannie Nesmith,, et al., Appellants,v.Allstate Insurance Company, Respondent.BriefN.Y.October 15, 2014To be Argued by: MARK G. RICHTER (Time Requested: 30 Minutes) APL 2013-00266 Monroe County Clerk’s Index No. 2010-10533 Court of Appeals of the State of New York JANNIE NESMITH, in her representative capacity only as Parent and Natural Guardian of JANNIE PATTERSON, an Infant and LORENZO PATTERSON, JR., Plaintiffs-Appellants, – against – ALLSTATE INSURANCE COMPANY, Defendant-Respondent. BRIEF FOR PLAINTIFFS-APPELLANTS JAMES E. NIXON, ESQ. MARK G. RICHTER, ESQ. Of Counsel NIXON & RICHTER, PLLC Attorneys for Plaintiffs-Appellants 105 Main Street Whitesboro, New York 13492 Tel.: (315) 736-6787 Fax: (315) 736-5835 Dated: December 16, 2013 i TABLE OF CONTENTS Page TABLE OF AUTHORITIES .................................................................................... iv PRELIMINARY STATEMENT ............................................................................... 1 JURISDICTIONAL STATEMENT .......................................................................... 3 QUESTIONS PRESENTED ...................................................................................... 4 STATEMENT OF FACTS ........................................................................................ 6 ARGUMENT ........................................................................................................... 19 POINT I THE FOURTH DEPARTMENT ERRONEOUSLY APPLIED THIS COURT’S RULING IN HIRALDO GIVEN THAT THE CASE AT BAR DOES NOT INVOLVE A CONTINUOUS EXPOSURE TO THE “SAME GENERAL CONDITIONS” .................................................................................... 19 POINT II THE “CONDITION” WHICH CAUSED THE LEAD POISONING INJURY TO THE SUAREZ CHILDREN IS NOT THE “SAME GENERAL CONDITION” WHICH CAUSED THE LEAD POISONING INJURY TO THE NESMITH CHILDREN AND, AS SUCH, THERE IS A NEW, SEPARATE AND DISTINCT OCCURRENCE ARISING IN A SUBSEQUENT POLICY PERIOD ......................................................................... 31 A. The Court Below Erroneously Applied A Grouping Standard From An Asbestos Litigation Case To This Lead Poisoning Case ..... 33 B. The “Condition” Which Caused Injury To The Suarez Children Was The Presence Of A “Condition Conducive To Lead Poisoning” -- It Was Not The Presence Of Lead ................................ 37 C. The Nesmith Children Were Not Exposed To And Injured By The “Same General Conditions” As The Suarez Children And The Fourth Department Erroneously Found To The Contrary By Misstating The Facts ........................................................................... 43 ii POINT III ALLSTATE SHOULD NOT BE PERMITTED TO AVOID ITS CONTRACTUAL OBLIGATIONS TO PAY THE LIMITS OF SUCCESSIVE INSURANCE POLICIES BASED UPON ITS ERRONEOUS, SELF- SERVING AND STRAINED INTERPRETATION OF ITS OWN AMBIGUOUS POLICY PROVISIONS AND GIVEN THE REASONABLE EXPECTATION OF COVERAGE ......................................................................... 50 A. Because Hiraldo Was A Continuous Exposure Case, The Plaintiff In That Case Did Not Assert, And This Court Did Not Have Occasion To Decide, Whether The Phrase “Same General Conditions” Was Ambiguous .............................................................. 55 B. Allstate’s Failure To Draft Key Policy Language With Sufficient Specificity Should Not Prejudice Unrelated Children Injured By Different Lead Paint Hazards In Unrelated Incidents ......................... 57 1. Under New York Law, A Very Stringent Standard Is Applied To Whether “Occurrence” Is Unambiguous ............... 57 2. Allstate’s Failure To Use Clear Language To Exclude Coverage Is Fatal To Allstate’s Present Position ..................... 58 3. Implied Continuous Loss Exclusions Lead To Absurd Results And Must Be Limited, Just As New York Courts Have Carefully Limited The Scope Of Other Exclusions ........ 59 4. Allstate Could Have Unambiguously Established That Losses Resulting From Unsafe Conditions Separated By A Remediation Were Subject To One Policy Limit, But It Chose Not To Do So ................................................................. 62 C. The Reasonable Expectation Of Mr. Wilson In Renewing The Insurance Policies On An Annual Basis And Paying Additional Premiums Was That He Would Have Coverage For Injuries Resulting From Exposure To Lead Hazards After The Remediation Was Complete And Approved By The County ............. 64 iii POINT IV PUBLIC POLICY DICTATES COVERAGE, ESPECIALLY WHERE INTERPRETATION OF THE CONTRACT RENDERS COVERAGE ILLUSORY AND UNJUSTLY ENRICHES ALLSTATE TO THE DETRIMENT OF POLICYHOLDERS AND INJURED VICTIMS ..................... 67 CONCLUSION ........................................................................................................ 70 iv TABLE OF AUTHORITIES Cases: Page(s): Appalachian Ins. Co. v. General Elec. Co., 8 N.Y.3d 162 (2007) ...................................................................................... 37 Bahar v. Allstate Ins. Co., 2004 WL 1782552, 2004 U.S. Dist. LEXIS 15612 (S.D.N.Y. 2004) ....passim Belt Painting Corp. v. TIG Ins. Co., 100 N.Y.2d 377 (2003) ...................................................................... 57, 60, 61 Cragg v. Allstate Indemnity Corp., 17 N.Y.3d 118 (2011) .................................................................. 50, 51, 52, 64 Dean v. Tower Ins. Co. of N.Y., 19 N.Y.3d 704 (2012) .................................................................. 50, 52, 53, 64 ExxonMobil Corp. v. Certain Underwriters at Lloyd’s, 15 Misc. 3d 1144 (2007), aff’d, 50 A.D.3d 434 (1st Dep’t 2008) ................ 36 Greene v. Allstate Ins. Co., 2004 WL 1335927, 2004 U.S. Dist. LEXIS 10860 (S.D.N.Y. 2004) ....passim Greenidge v. Allstate Ins. Co., 312 F. Supp. 2d 430 (S.D.N.Y. 2004) ....................................................passim Guardian Life Insurance Company, Inc. v. Schaefer, 70 N.Y.2d 888 (1987) .................................................................................... 64 Hiraldo v. Allstate Ins. Co., 5 N.Y.3d 508 (2005) ...............................................................................passim Hiraldo v. Allstate Ins. Co., 8 A.D.3d 230 (2d Dep’t 2004) ....................................................................... 22 Home Insurance Co. v. American Home Products Corp., 75 N.Y.2d 196 (1990) .................................................................................... 64 International Flavors & Fragrances, Inc. v. Royal Ins. Co. of America, 46 A.D.3d 224 (1st Dep’t 2007) .................................................................... 37 Juarez v. Wavecrest Mgmt. Team Ltd., 88 N.Y.2d 628 (1996) .................................................................................... 67 v Lavanant v. General Accident Ins. Co., 79 N.Y.2d 623 (1992) .................................................................................... 63 Loftin v. Allstate Ins. Co., 2005 WL 6761113 (N.D.N.Y. 2005) ........................................... 19, 29, 55, 69 Metropolitan Life Ins. Co. v. Aetna Casualty and Surety Co., 255 Conn. 295, 765 A.2d 891 (2001) ............................................................ 37 Mostow v. State Farm Insurance Company, 88 N.Y.2d 321 (1996) .................................................................................... 64 Mt. McKinley Ins. Co. v. Corning Inc., 96 A.D.3d 451 (1st Dep’t 2012) ........................................................ 33, 35, 36 Mt. McKinley Ins. Co. v. Corning Inc., 28 Misc. 3d 893 (N.Y. Sup. Ct. 2010) ........................................................... 34 National Union Fire Ins. Co. of Pittsburgh, PA v. Farmington Cas. Co., 1 Misc. 3d 671 (N.Y. Sup. Ct. 2003) ................................................. 22, 65, 66 New York City Coalition to End Lead Poisoning v. Vallone, 100 N.Y.2d 337 (2003) .................................................................................. 67 Parks Real Estate Purchasing Group v. St. Paul Fire and Marine Ins. Co., 472 F.3d 33 (2d Cir. 2006) ............................................................................ 64 Ramirez v. Allstate Ins. Co., 26 A.D.3d 266 (1st Dep’t 2006) .............................................................passim Riley v. United Servs. Auto. Assn., 161 Md. App. 573, 871 A.2d 599 (Ct. Spec. App. 2005).............................. 22 SR Int’l. Business Ins. Co., LTD v. World Trade Center Props, LLC, 467 F.3d 107 (2d Cir. 2006) .............................................................. 57, 58, 59 Stoney Run Corp. v. Prudential-LMI Commercial Ins. Co., 47 F.3d 34 (2d Cir. 1995) .............................................................................. 60 Vigilant Ins. Co. v. Sibbio, 2011 N.Y. Misc. LEXIS 4237 (N.Y. Sup. Ct. Aug. 19, 2011) ..................... 38 vi Statutes and Other Authorities: C.P.L.R. § 5602(a)(1)(i) ............................................................................................. 3 10 N.Y.C.R.R. § 67-2.2(a) ....................................................................................... 40 N.Y. Public Health Law § 1370(3)(i) ...................................................................... 40 N.Y. Public Health Law § 1373 ............................................................................... 39 N.Y. Public Health Law § 1373(5) .......................................................................... 46 Title 10, Article 13, N.Y. Public Health Law §§ 1370-1376............................. 38, 39 1 PRELIMINARY STATEMENT This brief is respectfully submitted on behalf of the Plaintiffs- Appellants Jannie Nesmith, in her representative capacity only as parent and natural guardian of Jannie Patterson, an Infant, and Lorenzo Patterson, Jr. (hereinafter “Plaintiffs” or “Nesmiths”). On this appeal, the Plaintiffs seek a Decision and Order: (1) reversing the February 1, 2013, Opinion and Order of the Appellate Division Fourth Department (R. 844-848), and (2) directing judgment in favor of the Plaintiffs declaring that the Defendant-Respondent Allstate Insurance Company (hereinafter “Defendant” or “Allstate”) is obligated to pay the limits of the successive policy at issue. In the court below, the Defendant Allstate argued, and the Fourth Department erroneously concluded, that this Court’s holding in Hiraldo v. Allstate Ins. Co, 5 N.Y.3d 508 (2005) controls the outcome of this action. The Plaintiffs respectfully submit that Allstate’s reliance upon Hiraldo (and the Federal District Court decisions cited therein) is misplaced and would require an interpretation and expansion of this Court’s holding in Hiraldo beyond its intended effect, given the materially divergent facts presented in the case at bar. 2 Although the Allstate policy in Hiraldo was similar in form to the one in this declaratory judgment action, Hiraldo involved a claim of “continuous exposure” of one child to the same set of lead hazards overlapping consecutive policy periods during the same tenancy. Under those facts, this Court merely held that the noncumulation clause precluded the child from recovering from three successive policies. This Court did not have occasion to consider or determine what would happen if there was not a “continuous exposure” to the “same general conditions” because, as is the case here, there are claims made by different children from different families, during different tenancies, who were exposed to new and different lead hazards during different policy periods. Moreover, this Court was not presented with the question of what would happen if there was, as in this case, a change in the “general conditions” due to an intervening event – such as an abatement or remediation of lead hazards during a prior policy period. The Plaintiffs respectfully submit that given: (1) the significantly and materially divergent facts between Hiraldo and the case at bar, (2) the reasonable interpretation of the Allstate policy language, and (3) the reasonable expectation of coverage of the insured, Allstate cannot satisfy its burden of establishing that its limitation clause bars coverage. 3 JURISDICTIONAL STATEMENT According to C.P.L.R. § 5602(a)(1)(i), “[a]n appeal may be taken to the court of appeals … by permission of the court of appeals … in an action originating in the supreme court … from an order of the appellate division which finally determines the action and which is not appealable as of right…” The Appellate Division Fourth Department’s February 1, 2013, Opinion and Order (R. 844-848), which Plaintiffs seek to appeal from: (1) pertains to an action originating in the supreme court, (2) finally determined the rights of the parties, and (3) is not appealable as of right as the decision was unanimous and does not raise a constitutional claim. A motion for leave to appeal was filed with this Court and, by Order dated September 17, 2013 (R. 842-843), the Court of Appeals granted leave to appeal. By reason of the foregoing, this Court has jurisdiction to entertain this appeal and review the questions presented, which were preserved below. 4 QUESTIONS PRESENTED 1. Does a noncumulation clause similar to the one in the Allstate policy which was at the center of this Court’s Decision in Hiraldo v. Allstate Ins. Co., 5 N.Y.3d 508 (2005) limit the amount of insurance coverage to only one policy when, unlike in Hiraldo, there is not a “continuous exposure” to the “same general conditions” because there are claims made by different children from different families, during different tenancies, who were exposed to new and different lead hazards during different policy periods? ANSWER: No. The Plaintiffs respectfully submit that the Fourth Department erroneously held that “the only reasonable interpretation of that clause requires that the two claims be classified as a single accidental loss within the meaning of the policy.” (R. 846). 2. In a lead poisoning action do the “same general conditions” exist triggering the limitation of liability clause in Allstate’s insurance policy if there is a change in the “conditions” resulting from an intervening event – such as an abatement or remediation by the landlord? 5 ANSWER: No. The Plaintiffs respectfully submit that it was erroneous for the Fourth Department to conclude that “the evidence establishes that the same general conditions, the preexisting lead paint, caused the injury to both sets of children.” (R. 847). The “condition” which actually caused injury to the Plaintiffs and constituted an occurrence under the Allstate policy was not the presence of “the preexisting lead paint”, but it was the Plaintiffs’ exposure to a new and different set of lead-based paint hazards in a subsequent policy. 6 STATEMENT OF FACTS This declaratory judgment action (hereinafter “DJ action”) was commenced by the filing of a Verified Complaint in the Monroe County Supreme Court on August 13, 2010 (R. 14-23). This DJ action arises from, and is authorized by, the settlement of a lead poisoning lawsuit (hereinafter the “underlying action”) which was commenced by the Plaintiffs Lorenzo Patterson, Jr. and Jannie Patterson in the Monroe County Supreme Court on April 27, 2004, bearing Index Number 2004-4817 (R. 199-211, 687-691). Underlying Action The Plaintiff Lorenzo Patterson, Jr. and his sister Plaintiff Jannie Patterson were born normal and healthy babies on June 30, 1992 and August 22, 1993, respectively (R. 488-505). Their grandmother and legal guardian is Jannie Nesmith (R. 716-719). From in or around 1994 through 1995, when the Plaintiffs were only a year or two old, they lived with their mother in the first floor apartment at 37 Weaver Street, Rochester, New York (hereinafter referred to as the “premises”)(R. 716). The premises was owned by Tony Clyde Wilson (hereinafter “Wilson”)(R. 153-156) who was insured through Allstate Insurance Company (hereinafter “Allstate”)(R. 35-79). Mr. Wilson testified that before the family moved into the apartment, he 7 completely cleaned the house and painted “every place that needed it.” (R. 37). However, after the Plaintiffs moved into the premises, and when the Plaintiffs were undergoing their most critical stages of growth and development, they were exposed to deteriorating lead-based paint conditions at the premises (R. 31, 488-505). The Plaintiffs’ blood lead levels were tested and they were both elevated (R. 488-505). As a result of these elevated test results, an environmental referral was made which prompted an inspection of the premises on December 16, 1994, by the Monroe County Department of Health. The inspection performed by the Department of Health (R. 169-171, 174-175), revealed the presence of lead hazards throughout the premises including, without limitation, in the following areas: (1) Pantry wall (2) Back bedroom wall (3) Child side bedroom wall (4) Delead, replace or remove all window wells and frames (5) Front door jamb (6) Front porch railing and lower board of railing (7) Exterior trim (especially the westside) where chipping or peeling As a result of the Plaintiffs’ exposure to, and injury from, these hazardous conditions (R. 488-505), the Plaintiffs commenced the underlying action (R. 199-211). Mr. Wilson appeared in the underlying action through 8 legal counsel retained by Allstate – the Defendant in this DJ action (R. 229- 232). Over the course of three years of litigation, extensive discovery was completed, a Note of Issue was filed and a trial scheduled to commence on May 4, 2007 (R. 109, 628-629). Throughout almost the entire course of the underlying action, Allstate represented that Mr. Wilson “possessed coverage for the incident…with Allstate Insurance Company in the amount of $500,000.00…” (R. 272-273). It was not until the “eve of trial” that counsel informed the Plaintiffs that Allstate intended to change its position with respect to coverage by reducing the insurance coverage available to satisfy the Plaintiffs’ claims from $500,000.00 to $150,000.00 as the result of a $350,000.00 payment made by Allstate to another child, Angelique Suarez, in an unrelated action (hereinafter the “Suarez child”)(R. 112, 628-631). Allstate based its untimely and self-serving disclaimer upon what it claims is a noncumulation/anti-stacking clause contained in the Allstate policy (R. 74, 628-631, 661). Even though Allstate was aware of the pendency of both claims, and even settled the claim of the Suarez child in October 2005 (R. 723), it failed to provide counsel for the Nesmith Plaintiffs with any notice of the Suarez action, the settlement of the Suarez action, or Allstate’s 9 position with respect to its unilateral reduction of the amount of insurance available until over one year later (R. 112, 628-631, 718). As a result of Allstate’s position, the parties in the underlying action entered a Stipulation in which Allstate agreed to pay the Plaintiffs the uncontested amount of $150,000.00, and consented to the commencement by the Plaintiffs of this DJ action against Allstate for the purpose of determining whether the amount of available insurance coverage was $500,000.00 instead of $150,000.00 (R. 687-691, 718). Stipulation According to the “Stipulation for Dismissal and Settlement Agreement Between Plaintiffs, Defendants and Allstate Insurance Company” dated November 21, 2008 (R. 687-691), the parties stipulated, consented and agreed, among other things, as follows: (1) The infant Plaintiffs resided at the premises from in or around 1994 through in or around 1995 (“period of occupancy”) (R. 687, Paragraph “2”); (2) Allstate is the insurer for Tony Wilson with regard to the rental premises located at 37 Weaver Street under a deluxe homeowners 10 policy with policy limits of $500,000.00 (R. 687-688, Paragraph “3”); (3) The infant Plaintiffs “sustained lead poisoning and other injuries as a result of their exposure to lead during their period of occupancy at the premises while Allstate provided liability insurance coverage to [Mr. Wilson].” (R. 688, Paragraph “5”); (4) Allstate, on behalf of Mr. Wilson, paid $350,000.00 to infant Plaintiffs Angelique Suarez and Fabian Young for injuries sustained from “lead ingestion” while tenants at the premises (R. 688, Paragraph “6”); (5) The sole issue to be resolved in the DJ action is the amount of coverage available to the infant Plaintiffs under policy number 003964062 (R. 688, Paragraph “7”); (6) The parties have agreed to settle the underlying action for $150,000.00 and for Plaintiffs to commence a DJ action (R. 688, Paragraph “8”); (7) Mr. Wilson and Allstate agree not to contest liability and damages in connection with the infant Plaintiffs’ claims and no proof of damages will be required in the DJ action (R. 688, Paragraph “9”); 11 (8) In the event that it is finally determined by a Court, after any and all appeals are resolved, that the insurance coverage in the underlying action is not reduced by Allstate’s payment in the Suarez action, Allstate agrees to pay the infant Plaintiffs the full amount of liability limits shown on the declarations pages of $500,000.00 less the $150,000.00 settlement payment (R. 689, Paragraph “12”). Suarez Action Nearly one year before the Nesmith family moved into the premises, the first floor apartment was occupied by a different family with small children. Felicia Young and her children Angelique Suarez (born February 13, 1991) and Fabien Young (born April 13, 1993) lived in the apartment from approximately November 1992 through September 1993 (R. 213-214). The Nesmith/Patterson and Young/Suarez families were unrelated, they did not know each other and their tenancies did not overlap (R. 716-719). During their tenancy, the Suarez children allegedly “ingested and/or inhaled lead from flaking, peeling, chipping paint and/or lead dust” at the premises and, as a result, suffered “injurious and harmful levels of lead in their bloodstream” (R. 216). The premises was inspected by the Monroe 12 County Department of Health on July 2, 1993 (R. 160-164). That inspection revealed the presence of conditions conducive to lead poisoning (“lead hazards”) in the following areas (R. 163): (1) All interior window stools and sashes where chipped (2) All window sills, frames, exterior sashes where chipped (3) Front door threshold (4) Front porch railing and spindles (5) Front porch ceiling trim (white) where chipped (6) All exterior trim where chipped or peeling (7) Exterior basement window trim According to the County inspector’s field notes, all of the aforementioned areas contained paint that was in a deteriorating condition (R. 161). In response to the County Health Department’s findings, the landlord, Tony Wilson, received a “Notice and Demand to Abate Lead Poisoning Condition Pursuant to Article 13, Title X, Section 1373 of Public Health Law” (R. 163). The Notice and Demand letter “require[d]” that Mr. Wilson “take immediate action to correct the violations(s).” (R. 163). Upon his receipt of this Notice, Mr. Wilson responded to the Notice and Demand by educating himself on how to properly repair the deteriorating paint conditions and by performing extensive repair work to eradicate the lead paint hazards. In doing so, he removed all conditions conducive to lead poisoning to the satisfaction of the County Health 13 Department (R. 160, 162, 166). The County Health Department reinspected the property on several occasions during the repair process (R. 162) and found all repairs complete by August 13, 1993 (R. 160, 162, 166). The County confirmed this in writing. By letter dated August 13, 1993, Katherine M. Wylie, Coordinator of the Lead Program, informed the property owner that: “The lead paint violations that were cited…on July 2, 1993 have been corrected as per requirements. The City of Rochester’s Department of Community Development will be notified of this abatement. Thank you for your cooperation.” (R. 166). As a result of Mr. Wilson’s removal of the lead hazards during the Suarez’s tenancy, they were permitted to continue to reside in the premises and did not move out until around September 1993. (R. 213-214, 607-608). The Suarez children commenced an action against Mr. Wilson in the Monroe County Supreme Court by filing a Complaint on May 25, 2004, bearing Index Number 2004-6080 (R. 212-228). The claims asserted by the Suarez children were different from the claims asserted by the Nesmith children in that they involved a different family, different tenancy, and exposure to a different set of lead hazards during a prior policy period. 14 During the course of the Suarez action, the Suarez’s attorney was informed of the pending Nesmith action, but she was told by a representative from Allstate’s Staff Counsel’s Office on March 31, 2005 that: Allstate had fixed the date of loss for Angelique Suarez to be July 1, 1993, and had fixed the date of loss as September 5, 1994, for the Nesmith/Patterson v. Wilson case, and were treating these unrelated infants’ exposures as two separate accidental losses that occurred in different policy periods (R. 722, Paragraph “10”). Plaintiffs’ counsel was never told that Allstate intended to reduce the amount of insurance available to her clients given the claims made by the Nesmith children (R. 723, Paragraph “15”). In October, 2005, Allstate settled the Suarez claim by agreeing to pay Angelique $350,000.00 (R. 723, Paragraph “16”, 780-781). Insurance Policy The insurance policy which is at the center of this dispute is Allstate’s Deluxe Homeowner’s Policy (AU2069) bearing Policy Number 003964062 (R. 44-79). Allstate issued three successive one-year policies of insurance to the insured Tony Clyde Wilson (R. 35). Mr. Wilson renewed his policy on an annual basis and paid premiums for the same (R. 35-43). The first policy commenced on September 29, 1991 and expired on September 29, 1992. (R. 15 36-38). The second policy, which was in effect when the Suarez children were exposed to lead hazards, commenced on September 29, 1992 and expired on September 29, 1993 (R. 39-41). The third policy, which was in effect when the Nesmith children were exposed to lead hazards, commenced on September 29, 1993 and expired on September 29, 1994 (R. 42-43). Each policy contained the following language under Section II Conditions, Paragraph 4 entitled “Our Limits of Liability” (R. 74): Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability under the Family Liability Protection coverage for damages resulting from one accidental loss will not exceed the limit shown on the declarations page. All bodily injury and property damage resulting from one accidental loss or from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss. The Suarez children were injured as a result of their exposure to lead hazards during the first renewal period between September 29, 1992 and September 29, 1993 (R. 35-43 and 213-218). This fact is not in dispute. During that same policy period, Mr. Wilson was notified of the lead hazards and remediated those lead hazards to the satisfaction of the County Health Department (R. 160-166). The Nesmith children did not move into the premises until the following year which was during the second renewal period between September 29, 1993 and September 29, 1994 (R. 35-43, 201- 16 203 and 206-209). This fact is also not in dispute. The Nesmith children were injured as a result of their exposure to a different set of lead hazards during the second renewal period. It should be noted in this regard that Allstate has stipulated that the infant Plaintiffs “sustained lead poisoning and other injuries as a result of their exposure to lead during their period of occupancy at the premises while Allstate provided liability insurance coverage to [Mr. Wilson].” (R. 688, Paragraph “5”). Notwithstanding the foregoing, Allstate is seeking to stretch the exclusionary policy language beyond its plain meaning by asserting that the Nesmith and Suarez claims arise from the continuous or repeated exposure to the “same” general conditions and, consequently, constitute one occurrence and one loss. Allstate asserts this position even though the policy it drafted fails to define the phrase “same general conditions” and even though the Nesmith and Suarez children were not injured by a repeated or continuous exposure to the same lead hazards. Many of the hazards were in different areas and, perhaps most importantly, the hazards discovered during the Suarez tenancy in 1993 were removed well before the Nesmith family occupied the premises (R. 163-164, 166, 174-175). 17 Procedural History and Prior Court Proceedings Pursuant to the parties’ November 21, 2008 Stipulation (R. 687-691), Plaintiffs commenced this Declaratory Judgment action against Allstate on August 13, 2010 in Monroe County Supreme Court (R. 14-23). Upon serving their Answer (R. 24-29), and without the benefit of any discovery, Allstate moved for summary judgment seeking to dismiss the Plaintiffs’ Complaint (R. 8-23). By Order dated September 28, 2011, and entered October 27, 2011, the Monroe County Supreme Court (Hon. Matthew A. Rosenbaum) denied Allstate’s summary judgment motion and granted that part of the Plaintiffs’ cross-motion seeking a declaration. (R. 3.2-7). According to the Supreme Court, the amount of available insurance coverage available to the Plaintiffs should not have been reduced by Allstate’s $350,000.00 payment to the Suarez child because “there were two different families involved in the lawsuits…, the lead paint condition responsible for lead poisoning in the [other] matter had been remediated, … the chipping paint was in a different location in the Nesmith case, and … those children lived at 35-37 Weaver during a different time frame.” (R. 6). 18 On or about December 2, 2011, Allstate filed and served its Notice of Appeal dated November 16, 2011 (R. 3). Plaintiffs filed a Notice of Cross- Motion on February 28, 2011. (R. 102-103). Thereafter, the appeal was perfected and fully briefed by the parties and amicus curiae, United Policyholders. On October 24, 2012, the Fourth Department heard oral arguments on the appeal. On February 1, 2013, the Fourth Department issued an Opinion and Order in this matter which reversed the Lower Court’s October 27, 2011 Order by denying the Plaintiffs’ cross-motion in its entirety and granting judgment in favor of Allstate adjudging and declaring “that plaintiffs’ losses are encompassed by the $500,000.00 per occurrence limit in the insurance policy at issue.” (R. 847). On March 11, 2013, Plaintiffs filed and served a Notice of Motion with the Fourth Department requesting that the Court grant reargument and/or leave to appeal to the Court of Appeals. On April 26, 2013, the Appellate Division Fourth Department issued an Order denying Plaintiffs’ motion for reargument and/or leave to appeal. Plaintiffs subsequently moved for leave to appeal to the Court of Appeals and, by Order dated September 17, 2013 (R. 842-843), the Court of Appeals granted leave to appeal. 19 ARGUMENT POINT I THE FOURTH DEPARTMENT ERRONEOUSLY APPLIED THIS COURT’S RULING IN HIRALDO GIVEN THAT THE CASE AT BAR DOES NOT INVOLVE A CONTINUOUS EXPOSURE TO THE “SAME GENERAL CONDITIONS” The Defendant-Respondent Allstate argued, and the Fourth Department erroneously concluded, that this Court’s holding in Hiraldo and the Federal District Court decisions cited therein, control the outcome of this action. Hiraldo v. Allstate Ins. Co, 5 N.Y.3d 508 (2005); Bahar v. Allstate Ins. Co., 2004 WL 1782552, 2004 U.S. Dist. LEXIS 15612 (S.D.N.Y. 2004); Greene v. Allstate Ins. Co, 2004 WL 1335927, 2004 U.S. Dist. LEXIS 10860 (S.D.N.Y. 2004); Greenidge v. Allstate Ins. Co., 312 F.Supp.2d 430 (S.D.N.Y. 2004). See also Ramirez v. Allstate Ins. Co., 26 A.D.3d 266 (1st Dep’t 2006); Loftin v. Allstate Ins. Co., 2005 WL 6761113 (N.D.N.Y. 2005)(hereinafter collectively referred to as the “Hiraldo cases”). The Plaintiffs-Appellants respectfully submit that Allstate’s reliance upon the Hiraldo cases is misplaced and would require an interpretation and expansion of this Court’s holding in Hiraldo beyond its intended effect, given the materially divergent facts presented in the case at bar. The Hiraldo cases are all continuous lead exposure cases which, at 20 best, involved claims brought by multiple family members during the same tenancies alleging that they were continuously exposed to the same lead hazards overlapping several consecutive policy periods. None of those cases involved what is present in this case – claims made by unrelated individuals during different tenancies who were subjected to a different set of lead hazards given the landlord’s remediation of the first set of hazards. In other words, none of those cases involved a new injury sustained by a new tenant in a subsequent policy period arising after a change in the general condition of the rental unit. Hiraldo v. Allstate, 5 N.Y.3d 508 (2005) One child, One Tenancy, Continuous Exposure As a preliminary matter, the Plaintiffs-Appellants concede that the policy language at the center of this Court’s Decision in Hiraldo is similar to the policy language involved in the case at bar. What is not similar, and what is germane to this appeal, are the relevant underlying facts of both cases. Hiraldo is a “continuous exposure case”. In Hiraldo, the Plaintiff Christopher Hiraldo alleged that he was continuously exposed to lead paint throughout his family’s tenancy at 156 Norwood Avenue from August, 1990 21 through November, 1993. Allstate provided the property owners with liability coverage. The first policy at issue took effect on February 15, 1991, and it was renewed annually on February 15, 1992 and February 15, 1993. Each policy provided $300,000.00 in coverage. The Plaintiff and his mother sued the landlords for Christopher’s lead poisoning injuries and obtained judgments totaling approximately $700,000.00. Allstate took the position that by virtue of a “noncumulation clause” contained within the policy, it was only required to pay the policy limit of one of the policies – to wit, $300,000.00. The Plaintiffs argued that since the loss occurred during each of the three policies, there was $900,000.00 of available coverage. The “noncumulation clause” at issue stated that: Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability under Business Liability Protection coverage for damages resulting from one loss will not exceed the limit of liability for Coverage X shown on the declarations page. All bodily injury, personal injury and property damage resulting from one accident or from continuous or repeated exposure to the same general conditions is considered the result of one loss. The Plaintiffs brought an action against Allstate to recover the entirety of their unsatisfied judgment. Allstate asserted that the terms of its policy limited the Plaintiffs’ recovery to one policy period. The Plaintiffs moved for summary judgment and Allstate cross-moved for summary judgment. 22 The Lower Court denied the Plaintiffs’ motion and granted Allstate’s cross- motion for summary judgment dismissing the complaint. The Second Department affirmed holding that “the infant plaintiff’s injuries from exposure to lead paint while residing at the insured premises arose out of a single occurrence, and constituted one loss, and Allstate clearly intended to limit the number of policies that would be available to satisfy a judgment in a continuous exposure case.” Hiraldo v. Allstate Ins. Co., 8 A.D.3d 230, 231-232 (2d Dep’t 2004)(emphasis supplied). Leave to appeal to the Court of Appeals was granted. Although this Court recognized that some courts have held that successive policy limits may be cumulatively applied to a single loss where the policies do not clearly provide otherwise (citing National Union Fire Ins. Co. of Pittsburgh, PA v. Farmington Cas. Co., 1 Misc.3d 671 (N.Y. Sup. Ct. 2003); Riley v. United Servs. Auto. Assn., 161 Md.App.573, 871 A.2d 599 (Ct. Spec. App. 2005)), this Court went on to conclude that the foregoing noncumulation clause limited Allstate’s liability to the coverage limit of only one policy. As is clear from this Court’s Decision in Hiraldo, it was only dealing with a situation involving a “single loss” during a single tenancy. Hiraldo, 5 N.Y.3d at 511. There was only one child, one tenancy and one loss. In 23 addition, and of critical importance, the Plaintiff in Hiraldo further alleged (and, hence, admitted) that he was exposed to lead “continuously during the terms of all three policies.” Id. (emphasis supplied). These are very important and critical distinctions. Moreover, there was no intervening event or cause, such as an abatement or remediation, which materially altered the conditions present in and around the premises. Given these very specific and limited facts, this Court simply held that the noncumulation clause in the landlords’ liability policy precluded the one child, who claimed a continuous exposure to the “same” condition, from recovering from three successive Allstate liability policies. This Court did not have occasion to consider or determine what would happen if there was not a “continuous exposure” because of the existence of separate families or tenancies, separate injured parties, separate hazards during separate time periods, separate hazards in different locations or dwelling units in the building, or, perhaps most importantly, a change in the “general conditions” resulting from an intervening event – such as an abatement or remediation by the landlord. In other words, what should happen when the facts reveal that the loss is not from a continuous or repeated exposure to the same general condition? This is truly the 24 unanswered question the Plaintiffs seek to present and have decided by this Court. The other cases relied upon by Allstate, and cited by the Fourth Department, do not answer this novel question because they are all continuous exposure cases or involve the exposure of multiple family members to the same set of hazards. Bahar v. Allstate, 2004 WL 1782552 (S.D.N.Y. 2004) One child, One Tenancy, Continuous Exposure For instance, Bahar v. Allstate, 2004 WL 1782552 (2004) involved a lead poisoning claim brought by one child, during one tenancy claiming a continuous exposure which spanned three policy periods. The parties settled the infant’s lead poisoning action for $300,000.00, but Plaintiffs reserved the right to litigate the extent of insurance coverage in a separate action. As in Hiraldo, Allstate issued three consecutive insurance policies to the landlords and those policies contained the same limiting language. The Plaintiffs argued that the infant “sustained injuries and exposures during each of the three…policy periods.” Bahar, 2004 WL 1782552 at *1. The Plaintiffs did not argue that there was: (1) a remediation or discontinuance of the lead hazards in the first policy period, (2) the addition 25 of new and separate hazards in subsequent policy periods, or (3) a break in the Plaintiff’s lead exposure during the Plaintiff’s tenancy. Rather, the Plaintiffs merely argued that the portions of the policy which limited coverage to accidents or occurrences sustained in “this period” was ambiguous and, as such, there should be a finding of one occurrence in each policy period. The Southern District of New York, however, disagreed and held that the “plain reading of the policy necessitates the conclusion that Plaintiff’s continuous exposure to and ingestion of lead was one occurrence sustained over the period of several years.” Id. at *4 (emphasis supplied). Greenidge v. Allstate, 312 F.Supp.2d 430 (S.D.N.Y 2004) One Child, One Tenancy, Continuous Exposure Greenidge v. Allstate, 312 F.Supp.2d 430 (S.D.N.Y 2004) also involved a claim brought by one child, during one tenancy claiming a continuous exposure which spanned two policy periods. The main issue in Greenidge, however, was whether an insurer acts in bad faith when it rejects a demand that would make its contribution to a settlement contingent upon the outcome of a subsequent declaratory judgment action in which the limits of liability under the relevant policy would be established. In deciding that issue, the court simply stated that “we would read Allstate’s policy provision 26 to limit a claimant who suffered bodily injury as the result of continuous exposure to lead paint to be entitled to the proceeds of a single policy.” Greenidge, 312 F.Supp.2d at 434 (emphasis supplied). Greene v. Allstate, 2004 WL 1335927 (S.D.N.Y. 2004) Related Family Members, One Tenancy, Continuous Exposure In Greene v. Allstate, 2004 WL 1335927 (S.D.N.Y. 2004), the Plaintiffs alleged that they were continuously exposed to lead while residing in the landlord’s premises from June 1993 through September 1994 during the same tenancy. The landlord was insured during the tenancy through Allstate under a homeowner insurance policy renewed annually in December of 1993. The policy limit was $300,000.00 per covered occurrence per policy period. The policy contained similar limiting language. The parties reached a settlement and entered a stipulation permitting the Plaintiff to file a separate declaratory judgment action “to resolve the sole point of dispute, i.e., whether, under the policy, plaintiff is entitled to $600,000 ($300,000 from each of the two policies overlapping with the period in which plaintiffs were injured) or to $300,000.” Greene, 2004 WL 1335927 at *1 (emphasis supplied). 27 The Plaintiffs’ sole argument in support of coverage was that, due to an ambiguity, the limiting provision should be read to prevent stacking of claims arising from multiple concurrent policies but not from consecutive policies. The Southern District of New York disagreed and found “that nothing in the Limiting Clause…suggests the distinction plaintiffs urge us to make. To the contrary, the specification that any injury resulting from continuous exposure to certain conditions is deemed a single injury appears to contemplate just such a situation as the one here, in which the harm occurs over a period of time that may span more than one policy.” Id at *1. In other words, the Plaintiffs were claiming a continuous exposure which spanned more than one policy. The Plaintiffs did not allege, and the court did not have to consider, what the result would be if there was a separate and distinct exposure to a different set of hazards during a subsequent policy period with a different family. Ramirez v. Allstate, 26 A.D.3d 266 (1st Dep’t 2006) Related Family Members, One Tenancy, Continuous Exposure, One Policy Period Although not grouped together with the other cases, the case of Ramirez v. Allstate, 26 A.D.3d 266 (1st Dep’t 2006) has also been cited by Allstate in support of its argument. Ramirez involved a claim brought by the 28 same family, during one tenancy, claiming exposure during the same policy period to the same lead hazards. In that case, two infant siblings commenced a lead poisoning action against a building owner who was insured through Allstate under a homeowner’s liability policy with a coverage limit of $200,000.00 per occurrence. The Allstate policy contained the same limiting language set forth in the other cases discussed. The issue in that case was whether Allstate was liable for $200,000.00, or in the aggregate for $400,000.00, for exposure and injuries occurring to two family members during the same tenancy and same policy period. Unlike in the other cases, the issue was not whether Allstate was responsible for paying the limits of successive insurance policies. The court held that although each plaintiff may have ingested lead at different times (during the same policy period), “both plaintiffs’ exposure to the same lead hazard in the same apartment constituted only one occurrence subject to the $200,000.00 policy limit.” Ramirez, 26 A.D.3d at 266. (emphasis supplied). The court in Ramirez was not asked to decide what would happen if there was a separate exposure and injury suffered by different claimants to a different set of lead hazards. As such, the holding in Ramirez does not support Allstate’s position on this appeal. 29 Loftin v. Allstate., 2005 WL 6761113 (N.D.N.Y. 2005)(R. 794-797) Related Family Members, One Tenancy, Continuous Exposure Like the other Hiraldo cases cited above, Loftin involved only one tenancy and one continuous exposure. The two injured siblings claimed a continuous exposure to the same lead hazards in the same apartment during the same tenancy which spanned two consecutive policy periods (R. 794- 801). Given the similarities between the facts of Loftin and Hiraldo, the Northern District of New York dismissed the Plaintiffs’ declaratory judgment action. As is clear from the preceding discussion, none of the cases cited to or relied upon by Allstate or the Fourth Department address the issue presented to the Court on this appeal because they all involve claims of continued exposure during the same tenancy to the same lead hazards. That factual scenario is not present in this case where there is no continuous (or even repeated) exposure to the “same” general conditions. Not only does this case involve claims made by unrelated Plaintiffs during different tenancies and different policy periods, but, as discussed in greater detail in Point II, supra, there is also overwhelming proof within the record that the actual conditions which caused injury to the Suarez children were, in fact, 30 remediated prior to the Nesmith’s tenancy. In addition, the landlord, Mr. Wilson, testified that between the Suarez’s tenancy and the Nesmith’s tenancy, he completely cleaned the house and painted “every place that needed it.” (R. 37). It was not until after the Nesmith family moved in, that a new, separate and distinct hazardous condition arose. (R. 167-175). This break in the chain of exposure, and change in the “general conditions” giving rise to the Nesmith claims and injuries, warrants a conclusion that the Allstate provision does not serve to limit Allstate’s liability to only one policy thereby forsaking all future victims who may have had the misfortune of residing in that building structure at some point in the near or distant future. 31 POINT II THE “CONDITION” WHICH CAUSED THE LEAD POISONING INJURY TO THE SUAREZ CHILDREN IS NOT THE “SAME GENERAL CONDITION” WHICH CAUSED THE LEAD POISONING INJURY TO THE NESMITH CHILDREN AND, AS SUCH, THERE IS A NEW, SEPARATE AND DISTINCT OCCURRENCE ARISING IN A SUBSEQUENT POLICY PERIOD. In light of the Fourth Department’s misapplication of Hiraldo, that court went on to state that its determination “turn[ed] on the resolution of the discrete issue whether the exposure of children to lead paint in an apartment during different tenancies is encompassed by the phrase ‘resulting from…continuous or repeated exposure to the same general conditions’ in the noncumulation clause.” (R. 846). The court went on to “conclude that the only reasonable interpretation of that clause requires that the two claims be classified as a single accidental loss within the meaning of the policy.” (R. 846). In reaching this conclusion the court focused on the fact that “nothing in the record establish[ed] that [the landlord] removed all of the lead paint from the subject apartment” and “there is no evidence that the owner added other lead paint to the apartment in the interim….” (R. 846). According to the Fourth Department, “the lead paint that injured the second set of children [Nesmith children] is the same lead paint that was present in the apartment 32 when the first set of children [Suarez children] lived there.” (R. 846). Because the lead paint is the “same”, the Fourth Department, in applying a rule used in asbestos-related litigation, concluded that the claims in the separate actions arose from the same conditions and must be viewed as a single occurrence. (R. 846-847). This conclusion is erroneous on several grounds. First, it is predicated upon a misapprehended legal principle that has neither been addressed nor decided by the Court of Appeals in the context of lead poisoning litigation. Second, the “condition” which actually caused injury to the Suarez children was not the presence of lead – it was the presence of conditions conducive to lead poisoning (a/k/a “lead hazards”). Third, this conclusion overlooks the fact that there was, contrary to the Fourth Department’s misstatement on page 4 of its Order (R. 847), overwhelming proof within the record that the lead hazards which caused injury to the Suarez children were, in fact, completely removed and remediated. Moreover, those conditions were significantly and materially different from the conditions which caused injury to the Plaintiffs in the case at bar. 33 A. The Court Below Erroneously Applied A Grouping Standard From An Asbestos Litigation Case To This Lead Poisoning Case. The Fourth Department cited to a First Department asbestos case (Mt. McKinley Ins. Co. v. Corning Inc., 96 A.D.3d 451 (1st Dep’t 2012)) in support of its conclusion that the Suarez and Nesmith claims should be grouped together. However, its reliance upon Mt. McKinley is misplaced given: (1) that the court in Mt. McKinley did not actually conclude that the asbestos-related claims should be grouped – finding instead that a more fully developed evidentiary record was necessary to determine if the incidents arose out of exposure to the same harmful conditions, (2) the fact that the principle espoused by the Appellate Division in Mt. McKinley has not been applied by this Court in the context of lead poisoning litigation, and (3) the divergent facts and circumstances contained therein. In Mt. McKinley, the Plaintiff first insurers and Defendant insurer sought a judgment declaring that each of the many thousands of asbestos- related claims against the Defendant insured constituted a separate occurrence under the applicable insurance policies for which the insured would be obligated to pay a per occurrence deductible under the policies for each policy period. They moved for partial summary judgment which was opposed by the insured. The insurance policies contained a grouping 34 provision which provided that for “purposes of determining the limit of the company’s liability, all bodily injury and property damage arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence.” Mt. McKinley Ins. Co. v. Corning Inc., 28 Misc.3d 893, 897 (N.Y. Sup. Ct. 2010). The lower court, in denying the summary judgment motions, held that contrary to the insurers’ assertions: the presence of grouping language alone does not require the grouping of claims into a single occurrence. Determining whether multiple incidents may be construed to constitute one incident depends on whether the incidents arose out of exposure to the same or substantially the same harmful condition. Id., 28 Misc.3d at 893. The Court went on to state that “[a] court must exercise care in construing a continuous exposure clause in the context of the facts of its case to avoid the danger of grouping claims without a basis to do so.” Id. at 910. Because an “issue of fact exist[ed] as to whether the continuous exposure clause reflects an intent to group the claims at issue in the underlying actions”, the court denied the motions. Id. 35 The First Department unanimously affirmed the Lower Court’s Order. Mt. McKinley Ins. Co. v. Corning Inc., 96 A.D.3d 451 (1st Dep’t 2012). In so doing, it stated that: while all of the thousands of claims apparently cannot be said to have arisen from a single occurrence, any group of claims arising from exposure to an asbestos condition at a common location, at approximately the same time (for example, at the same steel mill or factory), may be found to have arisen from the same occurrence (cf. Bausch & Lomb, Inc. v. Lexington Ins. Co., 414 Fed.Appx 366, 369 [2d Cir. 2011][holding that a grouping provision using substantially similar language did not apply to claims arising from consumer use of a defective product, which claims “involve(d) differing times, locations, and circumstances.”]). Id., 96 A.D.3d at 452-453. Thus, the court merely held that claims involving an exposure to an asbestos condition at approximately the same time “may” be found to have arisen from the same occurrence. What is interesting is that the court did not conclude that all of the claims should be grouped together. Instead, it found that further discovery was necessary to determine the number of “occurrences” into which the underlying claims can be grouped. Moreover, the court held that “parties may also pursue discovery concerning the intended meaning of the relevant policy language and the insurers’ underwriting guidelines and procedures insofar as there is any ambiguity 36 concerning the application of the grouping provision to the circumstances of the underlying claims.” Id., 96 A.D.3d at 453. See also ExxonMobil Corp. v. Certain Underwriters at Lloyd’s, 15 Misc.3d 1144 (2007), aff’d 50 A.D.3d 434 (1st Dep’t 2008)(where the insurers failed to show that the underlying claims arose out of the “same general conditions.”) The foregoing clearly shows that the decision of the First Department in Mt. McKinley does not support the Fourth Department’s conclusion that the Suarez and Nesmith claims should be grouped together. The Fourth Department’s reliance is further misplaced because Mt. McKinley did not involve a question about whether there should be coverage for the insured in successive policy periods after a change in the “general conditions” as the result of a remediation or abatement. Although the claims presented in this case may involve the same building, as discussed below, they do not arise from an exposure to the same condition at the same time. Consequently, the Appellate Division decision in Mt. McKinley has no bearing and is of no consequence to the issues presented on this appeal. 37 B. The “Condition” Which Caused Injury To The Suarez Children Was The Presence Of A “Condition Conducive To Lead Poisoning” -- It Was Not The Presence Of Lead This Court has recognized that a hazardous substance, in and of itself, merely poses the potential for injury – it is the subsequent exposure to that hazardous substance which results in actual injury and constitutes an occurrence. Appalachian Ins. Co. v. General Elec. Co., 8 N.Y.3d 162, 173- 174 (2007); see also International Flavors & Fragrances, Inc. v. Royal Ins. Co. of America, 46 A.D.3d 224, 232 (1st Dep’t 2007)(where in declaratory judgment action involving exposure to toxic substances, the Appellate Division stated “it is now clear that, under New York law, the injury imposing liability on the insured does not result until exposure occurs.”); Metropolitan Life Ins. Co. v. Aetna Casualty and Surety Co., 255 Conn. 295, 322, 765 A.2d 891 (2001)(“if the claimants had never been exposed to the asbestos, there would have been no occurrence at all for which Metropolitan could have been liable.”). The Plaintiffs submit that the same rationale should apply in the context of lead paint. The presence of lead paint in an apartment, in and of itself, does not cause injury – it merely poses the potential for injury. Rather, it is a child’s subsequent exposure to the presence of deteriorating 38 lead paint conditions (“conditions conducive to lead poisoning”) which results in actual injury and constitutes an occurrence. See also Vigilant Ins. Co. v. Sibbio, 2011 N.Y.Misc.LEXIS 4237 at *7 (N.Y. Sup. Ct. Aug. 19, 2011)(where court in denying an insurance carrier’s summary judgment motion in a declaratory judgment action stated that the evidence was insufficient to determine when the child “first ingested the lead, or how long the lead paint hazard existed in the relevant apartment. Under these circumstances, it cannot be determined as a matter of law when the injury occurred and therefore whether the ‘occurrence’ was within the policy period.”). During the Suarez’s tenancy in July of 1993, the landlord Tony Wilson received a “Notice and Demand to Abate Lead Poisoning Condition” because a child residing at his 37 Weaver Street property was found to have an elevated blood lead level (R. 163). That Notice and Demand letter was served upon Mr. Wilson pursuant to and in accordance with New York law including, without limitation, the Lead Poisoning Prevention Act (Title 10, Article 13, N.Y. Public Health Law §§1370-1376). The New York State Legislature in 1970 enacted the Lead Poisoning Prevention Act to protect young children from lead poisoning. Title 10, 39 Article 13, N.Y. Public Health Law §§ 1370-1376 (Governor’s Statement; also see the Memorandum of State Executive Department). Due to the severity of the problem afflicting these young children, the Legislature made several findings regarding the effects of lead on young children and placed the responsibility squarely on local health departments to enforce its mandates: The occurrence of the disease of lead poisoning in children has become a major public health concern. Severe lead poisoning cases result in death or mental retardation. ... The disease of lead poisoning is most prevalent in areas of old and deteriorating housing where leaded paint and plaster in a peeling condition is accessible for ingestion by young children ... (Legislative findings - Section 2 of L.1970, pursuant to L.1970, c. 338 § 5)(emphasis supplied). According to Public Health Law § 1373 (Abatement of lead poisoning conditions): 1. Whenever the commissioner or his representative shall designate an area of high risk, he may give written notice and demand, served as provided herein, for the discontinuance of a paint condition conducive to lead poisoning in any designated dwelling in such area within a specified period of time. 2. Such notice and demand shall prescribe the method of discontinuance of a condition conducive to lead poisoning which may include the removal of paint containing more than one-half of one per centum of metallic lead based on the total weight of the contained solids or dried film of the paint or other similar surface-coating material from surfaces specified by the commissioner or his representative under such safety conditions 40 as may be indicated and the refinishing of such surfaces with a suitable finish which is not in violation of section one thousand three hundred seventy-two of this title or the covering of such surfaces with such material …. 3. In the event of failure to comply with a notice and demand, the commissioner or his representative may conduct a formal hearing upon due notice in accordance with the provisions of section twelve-a of this chapter and on proof of violation of such notice and demand may order abatement of a paint condition conducive to lead poisoning upon such terms as may be appropriate and may assess a penalty not to exceed two thousand five hundred dollars for such violation….. 5. The removal of a tenant from or the surrender by the tenant of a dwelling with respect to which the commissioner or his representative, pursuant to subdivision one of this section, has given written notice and demand for the discontinuance of a paint condition conducive to lead poisoning shall not absolve, relieve or discharge any persons chargeable therewith from the obligation and responsibility to discontinue such paint condition conducive to lead poisoning in accordance with the method of discontinuance prescribed therefor in such notice and demand. A “condition conducive to lead poisoning” is defined by § 1370(3)(i) as: paint or other similar surface-coating material containing lead in a condition accessible for ingestion or inhalation or where peeling or chipping of the paint or other similar surface-coating material occurs or is likely to occur. 10 N.Y.C.R.R. § 67-2.2(a) defines an “abatement” as: all actions necessary to discontinue a condition conducive to lead poisoning and may include encapsulation, replacement, enclosure, or removal. 41 The “conditions conducive to lead poisoning” that Mr. Wilson was cited for in July, 1993, included the following areas (R. 163): (1) All interior window stools and sashes where chipped (2) All window sills, frames, exterior sashes where chipped (3) Front door threshold (4) Front porch railing and spindles (5) Front porch ceiling trim (white) where chipped (6) All exterior trim where chipped or peeling (7) Exterior basement window trim According to the County inspector’s field notes, all of the aforementioned areas contained paint that was in a deteriorating condition (R. 161). This is reflected by the “No” entries set forth in the last column with the heading entitled “Intact?” The Notice and Demand letter “require[d]” that Mr. Wilson “take immediate action to correct the violations(s).” (R. 163). He was further informed that his “failure to maintain this property in a clean and sanitary condition by allowing a lead paint hazard or paint condition conducive to lead poisoning to exist is also a violation of Article IV Section 1(b) of the Monroe County Sanitary Code.” As discussed in greater detail in Point II(C), infra, Mr. Wilson responded to the Notice and Demand by educating himself on how to properly repair the deteriorating paint conditions and by performing 42 extensive repair work to eradicate the lead paint hazards. In doing so, he removed all conditions conducive to lead poisoning to the satisfaction of the County Health Department (R. 166). The County Health Department reinspected the property on several occasions during the repair process (R. 160, 162) and found all repairs complete by August 13, 1993 (R. 160, 162). The County confirmed this in writing. By letter dated August 13, 1993, Katherine M. Wylie, Coordinator of the Lead Program, informed the property owner that: “The lead paint violations that were cited…on July 2, 1993 have been corrected as per requirements. The City of Rochester’s Department of Community Development will be notified of this abatement. Thank you for your cooperation.” (R. 166)(emphasis supplied). As the foregoing evidence establishes, the “condition” which caused injury to the Suarez family during their tenancy was not simply lead in the paint. If the lead paint was intact, there would have been no exposure, no injury, no occurrence and no claim. What caused the Suarez children injury, and what Mr. Wilson was required to repair, were lead hazards – lead paint that was in a deteriorating condition or in a condition accessible to the children.1 He removed those hazards during the Suarez tenancy and, as 1 In fact, this is what was specifically alleged in the Suarez Complaint. In Paragraph “20” of the Verified Complaint, the Plaintiffs stated that “from about November 1992 43 such, they were permitted to continue to reside in the premises. As discussed in Point II(C), infra, the Nesmith children were subjected to, and injured by, a different set of lead hazards – in other words, a different “condition” during a different tenancy and during a different policy period. C. The Nesmith Children Were Not Exposed To And Injured By The “Same General Conditions” As The Suarez Children And The Fourth Department Erroneously Found To The Contrary By Misstating The Facts The Plaintiffs submit that evidence within the record establishes that the conditions conducive to lead poisoning which caused exposure and injury to the Suarez children were remediated prior to the Nesmith’s tenancy. The Fourth Department, however, erroneously states on page 4 of its Order that “there is no evidence establishing the remediation that was performed.” (R. 847). This is not true. On pages 449-451, 454, 583-585, 591-592, 600-607 and 610 of the Record, Mr. Wilson testifies in great detail and length about the remediation process he utilized to address the 1993 hazards. This included detailed precautionary measures and the steps he followed to change the condition of the premises to render it safe. This is, of course, in addition to the County’s until on or about September 1993 the infant plaintiffs ingested and/or inhaled lead from flaking, peeling, chipping paint and/or lead dust at 37 Weaver Street, Rochester, New York causing them to suffer acute lead poisoning between the period of November 1992 and September 1993.” (R. 216). 44 records which evidence that the “lead paint violations…[had] been corrected as per requirements.” (R. 166). For example, according to the Record: a) Only 17 locations were tested during the Suarez’s tenancy in July of 1993 (R. 161); b) Mr. Wilson acknowledged he received the County’s notice letter which attached and enclosed several detailed precaution and other instructional materials on how to safely and properly abate the conditions (R. 449); c) Mr. Wilson testified that, after receiving notice of the lead hazards, not only did he perform all of the work required of him, he had also performed independent research and spoke with various experts on how to properly remediate those hazards (R. 449, 583-585); d) Mr. Wilson recalled speaking with County employees on the proper steps to take to address the issues and he acknowledged that he “remembered thoroughly doing it” in accordance with the materials and instructions he received (R. 450); 45 e) In this regard, he testified that he utilized the abatement method of encapsulation (R. 451, 603), utilized plastic covering (R. 454) and a special filter vacuum (R. 604), and he even wore protective clothing (R. 604); f) He also testified that he was trained in this type of work being a member of NEAD (Northeast Area Development), 14621 and the 19th Ward (all rental property management organizations)(R. 543); g) Finally, he performed the work “along side [sic] a female housing inspector” (R. 610), and during the remediation process, the County inspectors inspected his work on several occasions (R. 162); h) Based upon all of the information and instruction he received, the County records document that each and every one of the hazards which had existed in July of 1993 had been properly abated and no longer constituted conditions conducive to lead poisoning prior to the Plaintiffs’ tenancy (R. 160-166). Specifically, the County records show that as of August 9, 1993, many of the “surfaces in violation” had been fully abated and, as of August 13, 1993, all of the remaining “surfaces in violation” had been fully abated (R. 162); 46 i) Based upon the County’s inspections of Mr. Wilson’s remediation, the County certified that the conditions had been corrected as per the law’s requirements and issued a formal resolution notice on August 13, 1993 (R. 166); j) Because the hazardous conditions had been removed and repaired, the Nesmith family was permitted to move into the premises in 1994 (Public Health Law §1373(5)); k) Mr. Wilson also testified that before the Nesmith family moved into the apartment he completely cleaned the house and painted “every place that needed it.” (R. 37); l) Approximately 15 months after the 1993 remediation was complete, and during the Plaintiffs’ tenancy in November, 1994, both of the infant Plaintiffs were tested and found to have elevated blood lead levels (R. 167-168, 488, 497). This prompted an inspection of 37 Weaver Street on December 16, 1994 (R. 167-171); m) During that December 16, 1994 inspection, 58 locations were tested (R. 169-171). This occurred during a different tenancy and a different policy period than the July 1993 inspection; 47 n) The overwhelming majority of the December 1994 hazards were new and distinct from the July 1993 hazards, and many of the July 1993 hazards which had been remediated were still in full compliance (R. 169-171). The following is a list of, and comparison between, the July, 1993 hazards and the December, 1994 hazards: July 1993 Hazards All interior window stools and sashes where chipped All window sills, frames, exterior sashes where chipped Front door threshold Front porch railing and spindles Front porch ceiling trim (white) where chipped All exterior trim where chipped or peeling Exterior basement window trim December 1994 Hazards Pantry wall* Back bedroom wall Child side bedroom wall Delead, replace or remove all window wells and frames Front door jamb Front porch railing and lower board of railing Exterior trim (especially the westside) where chipping or peeling *bolded areas were not cited in the July 1993 violation notice as lead hazards and did not constitute a condition conducive to lead poisoning until over 16 months later in December 1994 during the Nesmith’s tenancy 48 Allstate would like this Court to conclude that because lead was present in the building during the respective tenancies (and had not been completely removed), that the same “general conditions” existed throughout the successive policy periods, warranting a conclusion that there was only a single occurrence. While it may be true that the lead paint which poisoned the Nesmith Plaintiffs was also present during the Suarez’s tenancy, that does not mean that the same injury-causing conditions existed during the two separate tenancies and policy periods and must, therefore, be viewed as a single occurrence. As stated above, the presence of lead in the home, in and of itself, does not render the home unsafe or create a condition conducive to lead poisoning. In order for the lead to have constituted a lead hazard during the respective tenancies, the lead must have been in some form of a deteriorated condition or a condition accessible to a child.2 As the foregoing illustrates, the evidence in the record clearly established that the conditions conducive to lead poisoning which existed during the Suarez’s tenancy were removed to the satisfaction of the Monroe 2 A review of the Plaintiffs’ Complaint in Nesmith illustrates that the Plaintiffs’ claim was based upon Mr. Wilson’s failure to “maintain, repair, paint and keep the premises free from conditions conducive to lead poisoning, chipping, flaking and peeling paint which contained amounts of lead sufficient to cause exposure to lead” (Paragraph “49”) and the Plaintiffs’ ingestion of “chipping, flaking and peeling pieces of lead based paint and lead dust at the premises.” (R. 207, Paragraph “51”). 49 County Health Department during the Suarez’s tenancy. The conditions conducive to lead poisoning to which the Nesmith children were exposed and injured were new, separate and distinct. There was no continuity of an injury-causing condition and there was no continuous or repeated exposure to the “same” general condition overlapping tenancies or policy periods. Under these circumstances, the limiting language contained within the Allstate policy should not operate to limit the amount of available coverage to only one policy period. 50 POINT III ALLSTATE SHOULD NOT BE PERMITTED TO AVOID ITS CONTRACTUAL OBLIGATIONS TO PAY THE LIMITS OF SUCCESSIVE INSURANCE POLICIES BASED UPON ITS ERRONEOUS, SELF-SERVING AND STRAINED INTERPRETATION OF ITS OWN AMBIGUOUS POLICY PROVISIONS AND GIVEN THE REASONABLE EXPECTATION OF COVERAGE Insurance contracts “must be interpreted according to common speech and consistent with the reasonable expectations of the average insured.” Cragg v. Allstate Indemnity Corp., 17 N.Y.3d 118, 122 (2011). To the extent that there is any ambiguity in an exclusionary clause, this Court has held on numerous occasions that the ambiguous provision is to be construed against the insurer and in favor of the insured. Id., Dean v. Tower Ins. Co. of N.Y., 19 N.Y.3d 704, 708 (2012). Moreover, exclusions or exceptions from policy coverage…are not to be extended by interpretation or implication, but are to be accorded a strict and narrow construction. Indeed, before an insurance company is permitted to avoid policy coverage, it must satisfy the burden which it bears of establishing that the exclusions or exemptions apply in the particular case, and that they are subject to no other reasonable interpretation. (internal cites omitted) Cragg, 17 N.Y.3d at 122. For example, in Cragg v. Allstate Indemnity Corp., 17 N.Y.3d 118 51 (2011), Kayla Cragg accidentally drowned in a swimming pool at her grandparents’ house where she and her mom, Marina Ward, lived. The Plaintiff, Kayla’s father, sued Kayla’s mother and grandparents for wrongful death and conscious pain and suffering. Kayla’s mother defaulted and judgment was entered against her in the amount of $300,000.00. Plaintiff subsequently commenced a declaratory judgment action against Allstate for a declaration that Allstate was required to defend and indemnify its insureds. The Supreme Court and the Appellate Division declared that Allstate had no such obligation based upon exclusionary language in the policy. The Court of Appeals granted Plaintiff leave to appeal and reversed. Allstate disclaimed coverage under the grandparents’ homeowner’s insurance policy based upon an exclusion which stated that they “do not cover bodily injury to an insured person…whenever any benefit of this coverage would accrue directly or indirectly to an insured person.” Cragg, 17 N.Y.3d at 122. Allstate took the position that bodily injury to an insured is not covered whenever any benefit – including coverage itself in the form of defense or indemnification – would accrue to an insured. The policy did not define the term “benefit”. Because the court recognized that “a benefit must mean something other than coverage itself and is more naturally read 52 to mean proceeds paid under the policy”, the court held that Allstate failed to meet its burden of establishing that the exclusion barred coverage. Cragg, 17 N.Y.3d at 122. Another example of an insurer’s failure to satisfy its burden of establishing the applicability of an exclusion is found in Dean v. Tower Ins. Co. of N.Y., 19 N.Y.3d 704 (2012). In that case, the insureds purchased a new home, but before they could move in, they had to make certain repairs. Approximately one year after the closing, and while the repairs were substantially complete, a fire destroyed the house. The insurer disclaimed coverage claiming that the dwelling did not qualify as a “residence premises” under the policy because they did not “reside” there at the time of the fire. The lower court held that the term “reside” is clear and unambiguous and that the Plaintiffs never established residency at the premises. The Appellate Division modified finding that the carrier failed to satisfy its prima facie burden and concluded that the “residence premises” requirement in the policy failed to define what qualifies “as ‘resides’ for the purpose of attaching coverage” and that the “policy [was] ambiguous in the circumstances of this case”. Dean, 19 N.Y.3d at 708. The Appellate Division granted the insurer leave to appeal to the Court of Appeals. 53 This Court, in reviewing the facts, found that there were issues of fact as to whether the insured’s daily presence in the house, coupled with his intent to eventually move in with his family, was sufficient to satisfy the insurance policy’s requirements. Dean, 19 N.Y.3d at 708-709. Moreover, “because the term ‘reside’ [was] not defined in the contract making the term ‘residence premises’ ambiguous, it is arguable that the reasonable expectation of an average insured…is that occupancy of the premises would satisfy the policy’s requirements.” Id. at 709. As such, summary judgment was improperly granted to the carrier. The same holding is warranted in this case. According to the policy drafted by Allstate, [a]ll bodily injury and property damage resulting from one accidental loss or from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss. (R. 74) (emphasis supplied). The phrase “same general conditions” is not defined in the Allstate policy and, as discussed below, is ambiguous. Notwithstanding this, Allstate has argued, and the Fourth Department concluded, that “the evidence establishes that the same general conditions, the preexisting lead paint, caused the injury to both sets of children.” (R. 847). As a preliminary matter, and as discussed in Point II(B), supra, the condition which caused 54 injury to the Nesmith Plaintiffs was not the “preexisting lead paint”, but, rather, it was the presence of new, separate and distinct lead hazards. For this reason alone, Allstate’s arguments, and the Fourth Department’s ruling, are erroneous. However, Allstate’s argument is also unavailing as it constitutes an attempt to stretch a limit on liability clause beyond the reasonable expectations of any policyholder and beyond what any New York court has contemplated to date. What this Court held in Hiraldo, based upon the facts of that case, makes sense. One child was continuously exposed to the same lead hazards without any alleged interruption or change in the conditions giving rise to his exposure. Under those facts, it is reasonable to conclude that Allstate’s limitation language should apply. But, what if another child was poisoned by his exposure to a different set of lead hazards in a different apartment? What if that exposure did not occur until several years after the first child’s exposure? Now, what should happen if there had been a remediation of the first set of hazards between the exposures of those two unrelated children? At what point does the limitation clause no longer make sense or no longer apply? If Allstate’s position is followed, and the Fourth Department’s 55 Decision is affirmed, it would mean that so long as lead paint remains in the premises, the “same general conditions” will continue to exist in perpetuity – regardless of whether or not the lead paint is even in a deteriorating condition or in a condition conducive to lead poisoning. Under that interpretation, Allstate would only be required to pay the limits of one policy for losses sustained in year 1 and, for example, in year 100 – even if the lead hazards were removed back in year 1 and a completely new and unrelated set of hazards did not arise until 100 years later! That interpretation strains credibility and clearly goes beyond the reasonable expectation of any policyholder paying annual premiums. As such, Allstate cannot meet its burden of establishing that the exclusion bars coverage. A. Because Hiraldo Was A Continuous Exposure Case, The Plaintiff In That Case Did Not Assert, And This Court Did Not Have Occasion To Decide, Whether The Phrase “Same General Conditions” Was Ambiguous Although the Plaintiffs in the Hiraldo cases have argued unsuccessfully that Allstate’s limitation language contained ambiguities, none of those arguments centered on the “same general conditions” language. This is because none of those cases involved a claim by the injured Plaintiff that they were subjected to different lead hazards or that there was a change in the general conditions between different policy 56 periods. For example, in Hiraldo the Plaintiffs claimed that the infant’s injuries resulted from a “continuous…exposure to the same general condition.” Hiraldo, 5 N.Y.3d at 564. Although the Plaintiffs did argue that the Allstate provision was ambiguous, they argued that the ambiguity centered on the phrase “one loss”. In particular, the Plaintiffs contended that since the loss occurred during each of the three policy periods, and each policy applies “to losses which occur during the policy period”, Allstate was liable up to its policy limit under each policy. Id. This Court disagreed holding that, under the facts presented, the policies did clearly provide that the Plaintiffs’ claim of continuous exposure to the same general condition should constitute only one loss. Because the Plaintiffs did not claim that they were subjected to a different set of hazards or that there was a change in the general conditions which caused a new injury, Allstate’s policy language as it pertained to the “same” general conditions was neither relevant to, nor discussed by, this Court in its Decision. The Plaintiffs respectfully submit that, under the facts presented in the case at bar, this is a novel and relevant issue for the Court’s consideration. 57 B. Allstate’s Failure To Draft Key Policy Language With Sufficient Specificity Should Not Prejudice Unrelated Children Injured By Different Lead Paint Hazards In Unrelated Incidents 1. Under New York Law, A Very Stringent Standard Is Applied To Whether “Occurrence” Is Unambiguous In the Fourth Department, Allstate rested its argument on the idea that the word “occurrence” and the policy’s limitation on liability for injuries stemming from the “same general conditions” unambiguously provide a reasonable policyholder with notice of Allstate’s position. Allstate, however, only asserted its position on the eve of trial – after three years of litigation. Allstate ignores that under New York law, the term “’occurrence’ is not sufficiently unambiguous” because it is “susceptible to more than one reasonable interpretation.” SR Int’l. Business Ins. Co., LTD v. World Trade Center Props, LLC, 467 F.3d 107, 138 (2d Cir. 2006)(“WTC”); see also Belt Painting Corp. v. TIG Ins. Co., 100 N.Y.2d 377, 383 (2003)(holding certain exclusionary language ambiguous as applied). Allstate further ignores the burden that New York Law places on an insurance company attempting to exclude coverage by arguing that multiple losses all constitute one loss. The WTC holding expresses the general hostility of New York courts toward construing “occurrence” based policies to exclude coverage in the insurance company’s favor. 58 2. Allstate’s Failure To Use Clear Language To Exclude Coverage Is Fatal To Allstate’s Present Position The actual policy language at issue in WTC – which itself was found “insufficiently unambiguous” by the Second Circuit – was significantly more specific than the language in the Allstate policy at issue here. In WTC, the relevant policy explained how related losses would be treated: When the word [“occurrence”] applies to loss or losses from the perils of tornado, cyclone, hurricane, windstorm, hail, flood, earthquake, volcanic eruption, riot, riot attending a strike, civil commotion and vandalism and malicious mischief one event shall be construed to be all losses arising during a continuous period of seventy-two (72) hours. WTC, 467 F.3d at 138. By contrast, Allstate’s explanation for how related losses are treated is significantly less detailed than the explanation deemed ambiguous in WTC: All bodily injury and property damage resulting from one accidental loss or from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss. (R. 74, §II.4)(emphasis supplied)(although the limit of liability section above does not use the word “occurrence” explicitly, it is construing the declarations page which uses “occurrence”). In WTC, the insurance company included a discrete list of the particularized events that would be subject to its limitation of liability for 59 continuous losses. WTC, 467 F.3d at 138. Despite the insurance company’s concerted effort to delineate all possible circumstances, the provision was nonetheless held ambiguous because the insurance company could not identify a general practice within the insurance industry for applying the policy’s phrasing to specific conduct. Id. at 139. Allstate’s implied continuous loss exclusion was invoked on the eve of trial and applied by the company to Plaintiffs’ injuries, which Allstate suddenly asserted were derived from “the same general conditions” as the previous tenants’ injuries. This could mean almost anything. Allstate’s underwriters made no effort to delineate or define with any degree of specificity what constituted the “same general conditions” and what did not. Unlike in WTC, Allstate did not even attempt to interpret its vague policy using an industry norm for interpretation of the relevant language. Based on WTC alone, the Allstate policy language is ambiguous on its face, independent of how Allstate is now attempting to apply it subjectively to further its own economic interests. 3. Implied Continuous Loss Exclusions Lead To Absurd Results And Must Be Limited, Just As New York Courts Have Carefully Limited The Scope Of Other Exclusions Exclusions involving pollution may be considered analogous to the 60 implied continuous loss exclusion at issue here, in that insurance companies regularly attempt to broaden application of such exclusions beyond their original intent and the policyholders’ reasonable expectations. Therefore, New York courts’ careful efforts to limit the reach of the absolute pollution exclusion are instructive on how to interpret Allstate’s implied continuous loss exclusion. In Stoney Run Corp. v. Prudential-LMI Commercial Ins. Co., 47 F.3d 34 (2d Cir. 1995), two apartment owners sought coverage and defense costs for civil actions alleging injury based on carbon monoxide released in the owners’ apartments. The insurance company claimed that the release was barred by the pollution exclusion. Id. at 36. The court stated that “it is appropriate to construe the standard pollution exclusion in light of its general purpose, which is to exclude coverage for environmental pollution.” Id at 37. Looking to “common speech” and the policyholder’s “reasonable expectations”, the court determined that release of carbon monoxide within an apartment is not “environmental pollution”. Id. at 39. In Belt Painting Corp. v. TIG Ins. Co., 100 N.Y.2d 377 (2003), a painting company was sued for injuries sustained by individuals who ingested paint fumes in a building the company painted. Belt, 100 N.Y.2d at 61 382. The insurance company denied its duty to defend based upon the pollution exclusion. Id. According to the Court of Appeals, “[r]easonable minds can disagree as to whether the [pollution] exclusion applies here” and that alone was enough to deem the exclusion ambiguous and interpret it in the policyholder’s favor. Id. at 387. Where the insurance company’s reading “strains the plain meaning, and obvious intent” of the policy language, exclusionary language will not be applied. Id. at 388. Just as the insurance companies in the above cases attempted unsuccessfully to stretch the exclusionary policy language to yield absurd results, Allstate is using vague language to exclude coverage by straining the plain meaning of the policy and ignoring the parties’ obvious intent. Just as the pollution exclusion in Belt could not reasonably be read to include paint fumes from use of a product for its intended purpose, common sense dictates that the Nesmiths’ injuries were not caused by the “same” general conditions which injured the Suarez children given the separation of time, tenancy and, most importantly, the difference in conditions after the removal and remediation of the prior hazardous conditions. Allstate disingenuously argues that injuries suffered by separate children, from different families, living at the subject property at different 62 times, after a full remediation of the prior lead hazard conditions are a “continuous” exposure to the “same general conditions”. In order to exclude coverage in this manner, Allstate must spell out how its newfound exclusion works and put policyholders and state insurance regulators on notice, not simply adopt an interpretation on the eve of trial that suits Allstate’s economic interests. 4. Allstate Could Have Unambiguously Established That Losses Resulting From Unsafe Conditions Separated By A Remediation Were Subject To One Policy Limit, But It Chose Not To Do So Allstate is one of the country’s largest providers of homeowner’s insurance. When assessing Allstate’s arguments, it is important to remember that the language at issue is drawn from the “Family Protection” module of a homeowner’s insurance policy. Allstate’s underwriters are experienced with homeowner’s insurance policies, and the underwriters in question knew or should have known that the homeowner’s policy held by landlord Tony Wilson would apply to multiple dwellings inhabited by separate families. Unsafe lead paint conditions, which can exist in different parts of one residential structure and may be caused by different circumstances discovered at different times, are the type of condition for which homeowner’s insurance is intended to provide protection. 63 Allstate’s experienced homeowner’s policy underwriters could easily have explained whether substantively similar losses that occur at different times, to different tenants following intervening remediation procedures could limit Allstate’s duty to provide coverage to both. If Allstate wished to include lead paint exposure in its implied continuous loss exclusion, it certainly knew how to do so. Instead, Allstate simply stated that multiple losses would be considered one occurrence if they stemmed from continuous or repeated exposure to the “same general conditions.” It is difficult to imagine a less helpful phrase (“same general condition”) for a policyholder trying to understand which types of situations are subject to a single policy limit and which are not. Allstate failed to be specific where it had the information and experience necessary to do so. Allstate – not the Nesmith children or the unsuspecting policyholder – should bear the consequences of that failure. See, e.g., Lavanant v. General Accident Ins. Co., 79 N.Y.2d 623, 630 (1992)(where court declined the insurance company’s “invitation to rewrite the contract” especially when the carrier “could itself have specified such limitations in drafting its policy, but it did not do so.”) 64 C. The Reasonable Expectation Of Mr. Wilson In Renewing The Insurance Policies On An Annual Basis And Paying Additional Premiums Was That He Would Have Coverage For Injuries Resulting From Exposure To Lead Hazards After The Remediation Was Complete And Approved By The County According to New York law, ambiguities in insurance policies must be construed against the drafter – to wit, the insurance carrier. Cragg v. Allstate Indemnity Corp., 17 N.Y.3d 118 (2011); Dean v. Tower Ins. Co. of N.Y., 19 N.Y.3d 704 (2012); Guardian Life Insurance Company, Inc. v. Schaefer, 70 N.Y.2d 888 (1987); Home Insurance Co. v. American Home Products Corp., 75 N.Y.2d 196 (1990). The “test to determine whether an insurance contract is ambiguous focuses on the reasonable expectations of the average insured upon reading the policy.” Mostow v. State Farm Insurance Company, 88 N.Y.2d 321 (1996). To most effectively identify the policyholder’s reasonable expectations and avoid confusion over arcane insurance terminology, courts in New York define terms within a policy according to “common speech.” Cragg, supra; Parks Real Estate Purchasing Group v. St. Paul Fire and Marine Ins. Co., 472 F.3d 33, 42 (2d Cir. 2006). In this case, the Nesmith family moved into Mr. Wilson’s property at 37 Weaver Street having had no knowledge that a previous family living in the same apartment had been injured by exposure to lead paint hazards. Mr. 65 Wilson maintained homeowner’s insurance with Allstate, which he renewed on an annual basis, and which he assumed would apply fully to injuries suffered by different tenants during different policy periods who were subjected to different hazardous conditions. After all, Allstate’s policy language only purported to limit coverage for injuries resulting from exposure to the “same” conditions. Given the plain meaning of the word “same”, it is ludicrous to argue that Mr. Wilson’s reasonable expectation was that an injury suffered during the Suarez tenancy would exhaust coverage for exposure during the Nesmith tenancy to a different condition – especially after he had spent time, effort and money repairing the first set of hazards. Yet, this is precisely what Allstate argues. Allstate cannot argue with a straight face that its interpretation of the “same general conditions” language comports with Mr. Wilson’s reasonable expectations as a policyholder. To hold to the contrary and uphold Allstate’s position would mean that when Mr. Wilson renewed his policy and paid his premium, he procured no additional protection regarding lead-based paint claims above the first policy’s liability limit. See National Union Fire Ins. Co. of Pittsburgh, PA v. Farmington Cas. Co., 1 Misc.3d 671 (N.Y. Sup. Ct. 2003). If Mr. Wilson had understood the limitations Allstate would seek to 66 apply to the policy it drafted, he would never have renewed his policy year after year and paid premiums for the same. After all, why would he pay for limited or no lead poisoning coverage when he could have changed carriers after the Suarez incident and received full coverage and protection? Id. Mr. Wilson was a loyal, premium-paying Allstate customer for years. He thought he, and those living in his apartments, were in good hands. He thought there would be coverage, and for nearly three years during the pendency of the underlying action, was told by Allstate that there was. That was a fair, reasonable and common sense expectation. Sadly, based upon Allstate’s eve-of-trial disclaimer, that reasonable expectation was thwarted by the self-interests of one of America’s largest providers of homeowner’s insurance. 67 POINT IV PUBLIC POLICY DICTATES COVERAGE, ESPECIALLY WHERE INTERPRETATION OF THE CONTRACT RENDERS COVERAGE ILLUSORY AND UNJUSTLY ENRICHES ALLSTATE TO THE DETRIMENT OF POLICYHOLDERS AND INJURED VICTIMS This Court has recognized the special hazards of exposure to lead- based paint to young children in Juarez v. Wavecrest Mgmt. Team Ltd., 88 N.Y.2d 628, 640-641 (1996) and, more recently, in New York City Coalition to End Lead Poisoning v. Vallone, 100 N.Y.2d 337, 342-343 (2003), where it was stated that: The dangers of exposure to lead-based paint, especially to young children, are well documented and pose a serious public health problem. "Lead is a poison that affects virtually every system in the body" and is particularly harmful to brain and nervous system development (Statement by the Centers for Disease Control and Prevention, Preventing Lead Poisoning in Young Children, at 7 [Oct. 1991]). Even low levels of blood lead have been linked to diminished intelligence, decreased stature or growth and loss of hearing acuity (see id. at 9). Unfortunately, there are tens of thousands of children who have been injured from exposure to lead hazards in old housing throughout New York State. Some of those children have lived in apartments where the landlords thought they were doing the “right thing” by purchasing liability insurance. These property owners bought insurance for the peace of mind it provided them in knowing that, if they were responsible for causing injury to children, 68 there would be funds available to compensate them for those injuries. That was a fair and reasonable expectation. It was also reasonable for them to expect that if they had removed the injury-causing conditions after a child had been injured, the carrier would continue to provide coverage in the event different tenants were injured by a different injury-causing condition in a subsequent policy period. That was a reasonable interpretation, especially in light of the carrier’s continued receipt of premiums and the language set forth in the policy which limited liability only for exposures to the “same” general conditions. In sharp contrast, the position advanced by Allstate, which was adopted by the Fourth Department, is that if Mr. Wilson cannot show that he removed all of the lead from the entire premises (regardless of the number of different apartments), then any future lead poisoning claim must necessarily relate back to the same general condition regardless of where or when it arises, or who it injures. Taking this one step further, this would mean that Mr. Wilson would only be entitled to coverage if he could prove he did not need coverage because he had removed all of the lead from the premises! This renders the policy absolutely meaningless. Notwithstanding this fact, Allstate is seeking to have this Court redraft 69 its own contract to accomplish this result and, in so doing, to advance its own economic self-interest to the detriment of premium-paying policyholders and innocent injured children throughout the State. Unfortunately, Allstate is not the only insurance company seeking to avoid its contractual obligations when neither the policy language, nor the facts of the underlying case, support it. Although these other companies are “jumping on the Allstate bandwagon” by arguing that this Court’s Decision in Hiraldo should in some way restrict their liability, their limitation of liability clauses are even less specific than the ones at the center of the Hiraldo cases. This has caused a countless number of lead poisoning cases to sit idle on court dockets and has left scores of innocent children without coverage for their severe injuries. Ultimately, if these carriers are permitted to avoid their contractual obligations, this will result in lower recoveries to injured victims and increased personal liability to policyholders. There would also be an increased strain on our public assistance system as more injured victims will be forced to seek public aid as their recoveries are used up. The only one who will benefit will be the insurance company that gets to hold onto policyholders’ premiums without proper indemnification for the victims. ADDENDUM Switch Client | Preferences | Help | Sign Out FOCUS™ Terms Go Advanced... Get a Document Go View Tutorial Service: Get by LEXSEE® Citation: 2004 U.S. Dist. LEXIS 15612 2004 U.S. Dist. LEXIS 15612, * ABDUR BAHAR, an infant by his mother and natural guardian DENISE JOHNSON, Plaintiffs, -against- ALLSTATE INSURANCE COMPANY, Defendant. 01 Civ. 8129 (RCC) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK 2004 U.S. Dist. LEXIS 15612 August 9, 2004, Decided August 9, 2004, Filed SUBSEQUENT HISTORY: Affirmed by Bahar v. Allstate Ins. Co., 2005 U.S. App. LEXIS 27964 (2d Cir. N.Y., Dec. 16, 2005) DISPOSITION: [*1] Defendant's motion for summary judgment granted. Plaintiff's motion for summary judgment denied. CASE SUMMARY PROCEDURAL POSTURE: In a suit regarding exposure to lead paint, plaintiff infant and his mother brought a declaratory judgment action following a settlement agreement that they entered into with defendant landlords and the landlords' insurance provider (company). The mother reserved the right to litigate the extent of the insurance coverage. The parties cross-moved for summary judgment in the United States District Court for the Southern District of New York. OVERVIEW: The parties disputed whether the infant's injuries were covered by all three of the policies or only one. The company submitted the injuries were continuing in nature from the onset of the mother's tenancy to its conclusion and that the policies' anti-stacking language prevented a payout from more than one policy. The mother put much weight in the definition of "occurrence," that appeared in the 1995 and 1996 policies. It was defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions, during the policy period, resulting in bodily injury or property damage. The specification that any injury resulting from continuous exposure to certain conditions was deemed a single injury appeared to contemplate such a situation as the instant one, in which the harm occurred over a period of time that could have spanned more than one policy. The court held that the plain reading of the policy necessitated the conclusion that the infant's continuous exposure to and ingestion of lead was one occurrence sustained over the period of several years. Accordingly, the company fulfilled its obligation when it paid one policy limit of liability. OUTCOME: The company's motion for summary judgment was granted in its entirety. The mother's motion was denied. CORE TERMS: occurrence, settlement agreement, accidental loss, continuous, policy periods, anti-stacking, exposure, infant, policy language, bodily injury, damages resulting, summary judgment, repeated exposure, coverage, declarations page, insured, obligated to pay, apartment, homeowner, tenancy, matter of law, injury resulting, policy limit, limit of liability, persons injured, moving party, extrinsic, ingestion, claimants, stacking LEXISNEXIS® HEADNOTES Hide Insurance Law > Claims & Contracts > Policy Interpretation > General Overview Insurance Law > Motor Vehicle Insurance > Stacking Provisions > Antistacking Clauses > General Overview HN1 In an insurance policy, the words "accident" and "occurrence" are deemed synonymous under New York law. More Like This Headnote | Shepardize: Restrict By Headnote Civil Procedure > Discovery > Methods > General Overview Civil Procedure > Summary Judgment > Standards > Genuine Disputes Civil Procedure > Summary Judgment > Standards > Materiality HN2 Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c). More Like This Headnote Civil Procedure > Summary Judgment > Burdens of Production & Proof > General Overview Civil Procedure > Summary Judgment > Standards > Genuine Disputes HN3 in a motion for summary judgment, the moving party bears the burden of showing that no genuine factual dispute exists. More Like This Headnote Civil Procedure > Summary Judgment > Evidence My Lexis™ Search Get a Document Shepard's® More History Alerts Get a Document - by Citation - 2004 U.S. Dist. LEXIS 15612 https://www.lexis.com/research/retrieve?_m=8a7c16390601dc0d41942c... 1 of 4 12/16/2013 4:27 PM Contracts Law > Contract Interpretation > Ambiguities & Contra Proferentem > General Overview Contracts Law > Defenses > Ambiguity & Mistake > General Overview HN4 The construction of an insurance contract is ordinarily a matter of law to be determined by the court. The contract should be interpreted so as to give reasonable and effective meaning to all terms of the contract. If the court finds ambiguous policy language, it need not empanel a jury to resolve the ambiguity if the matter can be resolved by contract alone, without resorting to extrinsic evidence. If it becomes necessary to turn to extrinsic evidence, then summary judgment is inappropriate. More Like This Headnote Insurance Law > Claims & Contracts > Policy Interpretation > General Overview Insurance Law > Motor Vehicle Insurance > Stacking Provisions > Antistacking Clauses > General Overview HN5 An interpretation of an insurance policy that gives a reasonable and effective meaning to all terms of a contract is preferable to one that leaves a portion of the writing useless or inexplicable. More Like This Headnote Insurance Law > Claims & Contracts > Policy Interpretation > General Overview Insurance Law > General Liability Insurance > Coverage > Accidents Insurance Law > General Liability Insurance > Coverage > Bodily Injuries HN6 All bodily injury and property damages resulting from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss or occurrence. More Like This Headnote COUNSEL: For Abdur Bahar, Plaintiff: Philip Monier, III, LEAD ATTORNEY, Levy, Phillips & Konigsberg, L.L.P., New York, NY. For Allstate Insurance Company, Defendant: Barry I. Levy, LEAD ATTORNEY, Shapiro, Beilly, Rosenberg, Aronowitz, Levy & Fox, L.L.P., New York, NY. JUDGES: Richard Conway Casey, U.S.D.J. OPINION BY: Richard Conway Casey MEMORANDUM AND ORDER Richard Conway Casey, U.S.D.J.: Plaintiffs, infant Abdur Bahar and his mother Denise Johnson, bring this declaratory judgment action following a June 26, 2001 settlement agreement they entered into with their former landlords, Vincent and Bertnell Nicholas, and the Nicholas' insurance provider, Defendant Allstate Insurance Company. The parties cross-move for summary judgment. For the reasons explained below, Defendant's motion is granted and Plaintiffs' motion is denied. I. Background A. Settlement Agreement From October 1994 until October 1996, the infant Plaintiff and his mother resided in an apartment jointly owned by Vincent and Bertnell Nicholas at 145-10 106th Avenue in Jamaica, New York. June 26, 2001 Settlement [*2] Agreement PP1, 2, at Dec. 10, 2001 Levy Decl. Ex. B (hereinafter "Settlement Agreement"). The infant Plaintiff was exposed to and actually ingested lead paint within the apartment during the period in which he resided there. Settlement Agreement P 5. Plaintiffs sued the Nicholases in state court for the infant's injuries. The parties settled that case for $ 300,000, but Plaintiffs reserved the right to litigate the extent of insurance coverage in a separate action. Settlement Agreement PP 9-11, 13. Defendant Allstate Insurance Company issued three consecutive homeowner insurance policies to the Nicholases for 145-10 106th Avenue for the periods June 21, 1994 through June 21, 1995 ("1994 policy"), June 21, 1995 through June 21, 1996 ("1995 policy"), and June 21, 1996 through June 21, 1997 ("1996 policy"). Settlement Agreement P 3. Each of the policies contained bodily and personal injury limits in the amount of $ 300,000. Id. The parties dispute whether the infant Plaintiff's injuries are covered by all three of the policies or only one. Settlement Agreement P 6. Plaintiffs argue that the infant "sustained injuries and exposures during each of the three … policy periods" and [*3] is therefore due a total of $ 900,000. Settlement Agreement P 7. While Defendant submits the injuries were "continuing in nature from the onset of the plaintiff's tenancy to the conclusion of the plaintiff's tenancy" and that the policies' "anti-stacking" language prevent a payout from more than one policy. Settlement Agreement P 8. The parties agree that the "sole issue" before this Court is whether Allstate "is obligated to pay upon the three successive policies of insurance." Settlement Agreement P 9. B. Policy Language Although there are slight differences between the 1994 policy and those issued in 1995 and 1996, the three policies Allstate issued during Plaintiff's tenancy of the apartment utilize essentially the same language. The language the parties believe is relevant is found in three locations throughout the policy. First, the "General" section, provides definitions and explains: "The policy applies only to losses which occur during the policy period, as shown on the declarations page …." 1994 Allstate Standard Homeowners Policy, p. 5, Dec. 10, 2001 Levy Decl. at Ex. C (hereinafter "1994 Policy"). Both the 1995 and 1996 policies contain similar language: "The [*4] policy applies only to losses or occurrences that take place during the policy period." 1995 and 1996 Allstate Standard Homeowners Policy, p. 4-5, Dec. 10, 2001 Levy Decl. at Ex. D (hereinafter "1995 and 1996 Policies"). Plaintiffs put much weight in the definition of "occurrence," that appears in the 1995 and 1996 policies. It is defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions, during the policy period, resulting in bodily injury or property damage." 1995 and 1996 Policies, p. 4. The basis for Allstate's liability is found in Section II -- Family Liability and Guest Medical Protection: OPINION Get a Document - by Citation - 2004 U.S. Dist. LEXIS 15612 https://www.lexis.com/research/retrieve?_m=8a7c16390601dc0d41942c... 2 of 4 12/16/2013 4:27 PM Losses We Cover: Subject to the terms, conditions and limitations of this policy, Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an accident to which this policy applies, and is covered by this part of the policy …. We are not obligated to pay any claim or judgment after we have exhausted our limit of liability. 1994 Policy, p.20; see also 1995 and 1996 Policies, p. 21 (using the same language, except substituting "occurrence" [*5] for "accident"). 1 FOOTNOTES 1 Michaels v. Mutual Marine Office, Inc., 472 F. Supp. 26, 30 n.10 (S.D.N.Y. 1979) (explaining HN1 the words "accident" and "occurrence" are deemed synonymous under New York law). Finally, the "Conditions" portion of Section II -- Family Liability and Guest Medical Protection, which Defendant refers to as the "anti-stacking" provision, states: Our Limits of Liability. Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability under the Family Liability Protection coverage for damages resulting from one accidental loss will not exceed the limit shown on the declarations page. All bodily injury and property damages resulting from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss. 1994 Policy, p. 26; see also 1995 and 1996 Policies, p. 26 (using same language except substituting "occurrence" in place of "accidental loss"). II. Discussion [*6] A. Standard HN2 Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, 477 U.S. 242, 247, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). HN3 The moving party bears the burden of showing that no genuine factual dispute exists. Celotex v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). HN4 "The construction of an insurance contract is ordinarily a matter of law to be determined by the court." United States Underwriters Ins. Co. v. Affordable Housing Found., Inc., 256 F. Supp.2d 176, 180 (S.D.N.Y. 2003) (citing Town of Harrison v. National Union Fire Ins. Co., 89 N.Y.2d 308, 675 N.E.2d 829, 653 N.Y.S.2d 75 (1996)). The contract should be interpreted so as to give reasonable and effective meaning to all terms of the contract. Hartford Fire Ins. Co v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549 (2d Cir. 2000). If the court finds ambiguous [*7] policy language, "it need not empanel a jury to resolve the ambiguity if the matter can be resolved by contract alone, without resorting to extrinsic evidence." United States Underwriters Ins. Co. v. Affordable Housing Found., Inc., 256 F. Supp.2d at 180 (citing Hartford Accident & Indem. Co. v. Wesolowski, 33 N.Y.2d 169, 305 N.E.2d 907, 350 N.Y.S.2d 895 (1973)). If it becomes necessary to turn to extrinsic evidence, then summary judgment is inappropriate. Id. B. Policy Interpretation The Court must resolve whether the Plaintiffs may combine or "stack" the limits of the three policies involved. See Greene v. Allstate Ins. Co., 2004 U.S. Dist. LEXIS 10860, 2004 WL 1335927, at *1 (S.D.N.Y. June 15, 2004) (confronting same issue in same procedural and factual circumstances). In support of its argument that it does not owe Plaintiffs anything more than the $ 300,000 it has already paid, Defendant submits that the infant Plaintiff's repeated and continuous exposure to lead was one "occurrence," thus only one policy is available for indemnification since the policies specifically prohibit cumulating or "stacking" insurance limits when there has been injury resulting from one occurrence. [*8] See 1994, 1995 and 1996 Policies, p. 26. Plaintiffs contend that the policy language, specifically the portions that limit coverage to accidents or occurrences sustained in "this period," provide for an unambiguous result--there was one occurrence of lead ingestion in each of the three policy periods, triggering three pay-outs. See 1994 Policy, p.4, 1995 and 1996 Policies, p. 4-5. In interpreting and enforcing the same "anti-stacking" clause in Greene v. Allstate Ins. Co., 2 this court explained that the "specification that any injury resulting from continuous exposure to certain conditions is deemed a single injury appears to contemplate just such a situation as the one here, in which the harm occurs over a period of time that may span more than one policy. Likewise, while the policy language makes explicit the obvious fact that 'the policy only applies to losses which occur during the policy period,' it does not follow that the policy cannot be affected by losses and resulting pay-outs that occur outside the period." Greene v. Allstate Ins. Co, 2004 U.S. Dist. LEXIS 10860, 2004 WL 1335927, *1 (June 15, 2004) (granting defendant Allstate's motion for summary judgment). FOOTNOTES 2 The "anti-stacking" language in Greene read: Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability under the Family Liability Protection coverage for damages resulting from one accidental loss will not exceed the limit shown on the declaration page. All bodily injury and property damage resulting from one accidental loss or from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss. Greene v. Allstate Ins. Co, 2004 U.S. Dist. LEXIS 10860, 2004 WL 1335927, *1 (June 15, 2004). [*9] Plaintiffs argue that Greene is not persuasive because its policy language was not identical to that here. Greene's policy did not define the operative term "accidental loss," whereas the policies in this case do define the operative term -- "occurrence" -- and limit it to an accident or dangerous conditions "during the policy period." See Philip Monier, III June 23, 2004 letter to the Court; see also 1995 and 1996 Policies, p. 4. Plaintiffs seem to forget that the same operative term in Greene ("accidental loss") was in effect, and undefined, in the 1994 policy here. Besides the fact that the language inGreene is precisely identical to the language of the 1994 policy herein, Plaintiff's reading of the "anti-stacking" language to prevent stacking of claims from concurrent policies simply doesn't make sense. See Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d at 558 HN5 ("An interpretation that gives a reasonable and effective meaning to all terms of a contract is preferable to one that leaves a portion of the writing useless or inexplicable."). Get a Document - by Citation - 2004 U.S. Dist. LEXIS 15612 https://www.lexis.com/research/retrieve?_m=8a7c16390601dc0d41942c... 3 of 4 12/16/2013 4:27 PM The Court agrees with Defendant that the plain reading of the policy necessitates [*10] the conclusion that Plaintiff's continuous exposure to and ingestion of lead was one occurrence sustained over the period of several years. See 1994, 1995 & 1996 Policies, p.26 HN6 ("All bodily injury and property damages resulting from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss [or occurrence]."). Accordingly, Allstate fulfilled its obligation when it paid one policy limit of liability. As the court in Greene explained, New York courts have upheld and enforced similar "anti-stacking" language with the same result. Greene, 2004 U.S. Dist. LEXIS 10860, 2004 WL 1335927, *2 (citing Greenidge v. Allstate Ins. Co., 312 F. Supp.2d 430 (S.D.N.Y. 2004) (finding, in light of anti-stacking provision, continuous exposure to lead paint over several policy periods was only one loss); Hiraldo v. Allstate Ins. Co., 8 A.D.3d 230, 778 N.Y.S.2d 50, 2004 WL 1203880 (2d Dep't June 1, 2004) (holding "Allstate clearly intended to limit the number of policies that would be available to satisfy a judgment in a continuous exposure case"); Liquidation of Midland Ins. Co, 269 A.D.2d 50, 709 N.Y.S.2d 24 (1st Dep't 2000) (explaining [*11] "our reading of the policy at issue indicates that the purpose of defining all exposure as one occurrence is to make clear that … the limit of liability, where an insurer has issued renewal policies, shall be the policy limits for one policy, rather than the aggregate for all policies issued")). III. Conclusion For the reasons explained, Defendant's motion for summary judgment is granted in its entirety. Plaintiff's motion is denied. The Clerk of the Court is directed to close the case. So Ordered. Richard Conway Casey, U.S.D.J. Dated: August 9, 2004 New York, New York Service: Get by LEXSEE® Citation: 2004 U.S. Dist. LEXIS 15612 View: Full Date/Time: Monday, December 16, 2013 - 4:27 PM EST * Signal Legend: - Warning: Negative treatment is indicated - Questioned: Validity questioned by citing refs - Caution: Possible negative treatment - Positive treatment is indicated - Citing Refs. With Analysis Available - Citation information available * Click on any Shepard's signal to Shepardize® that case. About LexisNexis | Privacy Policy | Terms & Conditions | Contact Us Copyright © 2013 LexisNexis, a division of Reed Elsevier Inc. All rights reserved. Get a Document - by Citation - 2004 U.S. Dist. LEXIS 15612 https://www.lexis.com/research/retrieve?_m=8a7c16390601dc0d41942c... 4 of 4 12/16/2013 4:27 PM Switch Client | Preferences | Help | Sign Out FOCUS™ Terms Go Advanced... Get a Document Go View Tutorial Service: Get by LEXSEE® Citation: 2004 U.S. Dist. LEXIS 10860 2004 U.S. Dist. LEXIS 10860, * KENISHA GREENE, KRISTINA GREENE BRAXTON, and CHARISMA GREENE, by Their Mother and Natural Guardian KATRINA GREENE; and LEROY MCKENZIE, An Infant by His Mother and Natural Guardian, BRENDA LEWIS, Plaintiffs, - against - ALLSTATE INSURANCE COMPANY, Defendant. 03 Civ. 5974 (NRB) UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK 2004 U.S. Dist. LEXIS 10860 June 14, 2004, Decided June 15, 2004, Filed DISPOSITION: [*1] Plaintiffs' motion for summary judgment denied and defendant's cross-motion for summary judgment granted. CASE SUMMARY PROCEDURAL POSTURE: Plaintiffs brought a declaratory action against defendant insurer, seeking a determination of whether plaintiffs were entitled to stack the policy limits of two policies involved in an underlying dispute. Plaintiffs moved for summary judgment, and the insurer filed a cross-motion for summary judgment. OVERVIEW: Plaintiff brought suit against the insurer, alleging that the insurer was liable to plaintiffs for injuries caused by exposure to lead paint, under insurance policies issued by the insurer to the owner of a building in which plaintiffs resided. The insurer acknowledged liability, but disputed the amount to which plaintiffs were entitled. Thus, the issue was whether or not the insurer's policy permitted plaintiffs to stack the policy limits of the two policies. Plaintiffs' position was that the policies were ambiguous, and permitted stacking. The insurer's position was that the limitation clause clearly barred stacking of the policies. The court agreed with the insurer, finding that the policy specification that any injury resulting from continuous exposure to certain conditions was deemed a single injury appeared to contemplate plaintiffs' liability claim that the harm occurred over a period of time that spanned more than one policy. Thus, the limiting clause applied to consecutive policies as well as concurrent policies and prevented plaintiffs from aggregating the pay-outs available through the two renewal policies covering the period in which plaintiffs' injuries occurred. OUTCOME: Plaintiffs' motion for summary judgment was denied. The insurer's cross-motion for summary judgment was granted. The insurer's liability for plaintiffs' injuries was limited to $ 300,000. CORE TERMS: consecutive, exposure, policy limits, damages resulting, occurrence, continuous, stacking, policy period, policies issued, policy language, insured person, coverage, insured, summary judgment, accidental loss, bodily injury, injured persons, limit of liability, declaration page, repeated exposure, personal injury, interpreting, concurrent, claimants, renewed, insurer, renewal, ambiguous, guardian, pay-outs LEXISNEXIS® HEADNOTES Hide Insurance Law > Claims & Contracts > Deductibles Insurance Law > General Liability Insurance > Coverage > General Overview Insurance Law > Motor Vehicle Insurance > Stacking Provisions > Antistacking Clauses > General Overview HN1 The purpose of defining all exposure to environmental substances as one occurrence is to make clear that only one deductible will apply, and that the limit of liability, where an insurer has issued renewal policies, shall be the policy limits for one policy, rather than the aggregate for all policies issued. Otherwise, an insurer that issues a $ 1 million liability policy renewed 20 times could find itself liable for $ 20 million in damage claims for the same injury. More Like This Headnote | Shepardize: Restrict By Headnote COUNSEL: For Plaintiffs: Alan J. Konigsberg, Esq., Levy, Phillips & Konigsberg, LLP, New York, NY. For Defendants: Barry I. Levy, Esq., Shapiro Beilly Rosenberg, Aronowitz Levy & Fox, LLP, New York, NY. JUDGES: NAOMI REICE BUCHWALD, UNITED STATES DISTRICT JUDGE. OPINION BY: NAOMI REICE BUCHWALD MEMORANDUM AND ORDER NAOMI REICE BUCHWALD OPINION My Lexis™ Search Get a Document Shepard's® More History Alerts Get a Document - by Citation - 2004 U.S. Dist. LEXIS 10860 https://www.lexis.com/research/retrieve?_m=cdcc94e3ec744b80b22f53... 1 of 3 12/16/2013 4:29 PM UNITED STATES DISTRICT JUDGE Plaintiffs Kenisha Greene, Kristina Greene Braxton, and Charisma Greene, by their mother and natural guardian Katrina Greene; and Leroy McKenzie, an infant by his mother and natural guardian, Brenda Lewis have brought this action against defendant Allstate Insurance Company, alleging that defendant is liable to plaintiffs for injuries caused by exposure to lead paint, under insurance policies issued by defendant to the owner of a building in which plaintiffs resided. Defendant acknowledges liability, but disputes the amount to which plaintiffs are entitled. Now pending are plaintiffs' motion, and defendant's cross motion, for summary judgment. For the reasons set forth below, plaintiffs' motion is denied and [*2] defendants' motion is granted. BACKGROUND From June 1993 through September 1994, plaintiffs resided in an apartment owned by Julian O'Connor. During this time, Mr. O'Connor was insured by defendant under a homeowner insurance policy, renewed annually in December, under which defendant agreed to indemnify Mr. O'Connor for injury claims of up to $ 300,000 per covered occurrence. Specifically, the policies provided that subject to the terms, conditions, and limitations of this policy, Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury … arising from an accident covered by this part of the policy. The policy also contained the following limiting language ("Limitation Clause"): Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability under the Family Liability Protection coverage for damages resulting from one accidental loss will not exceed the limit shown on the declaration page. All bodily injury and property damage resulting from one accidental loss or from continuous or repeated exposure to the same general conditions is considered [*3] the result of one accidental loss. Under a settlement reached after plaintiffs brought a state action against defendant, the parties stipulated to the pertinent facts of the case and agreed that plaintiff would file a separate declaratory judgment action to resolve the sole point of dispute, i.e., whether, under the policy, plaintiff is entitled to $ 600,000 ($ 300,000 from each of the two policies overlapping with the period in which plaintiffs were injured) or to $ 300,000. This action followed. DISCUSSION The sole issue before us is whether or not defendant's policy permits plaintiffs to "stack" the policy limits of the two policies involved. Plaintiffs' position is that the policies are ambiguous, and therefore should be construed to permit stacking. Defendant's position is that the Limitation Clause clearly bars such an interpretation. Plaintiffs argue that the Limiting Clause should be read to prevent stacking of claims arising from multiple concurrent policies but not from consecutive policies--first, because the Clause makes no explicit reference to the timing of the injury, and second, because each policy provides that "the policy only applies to losses [*4] which occur during the policy period." We find that nothing in the Limiting Clause, read either alone or together with the language just quoted, suggests the distinction plaintiffs urge us to make. To the contrary, the specification that any injury resulting from continuous exposure to certain conditions is deemed a single injury appears to contemplate just such as situation as the one here, in which the harm occurs over a period of time that may span more than one policy. Likewise, while the policy language makes explicit the obvious fact that "the policy only applies to losses which occur during the policy period" (emphasis added), it does not follow that the policy cannot be affected by losses (and resulting pay-outs) that occur outside the period. While plaintiffs are correct that the policy could have more explicitly precluded consecutive stacking, this fact does not, in itself, dictate a finding that the provision is "ambiguous" in a legally significant sense. 1 FOOTNOTES 1 Because we find that the Limitation Clause is unambiguous, plaintiffs' argument that language used in policies issued subsequent to plaintiffs' injury clarifies the Clause in their favor, see Rep. at 5-6, is legally irrelevant. Moreover, this argument is wholly unpersuasive in substance. [*5] Although few courts interpreting New York law have addressed this specific issue, those that have done so have found that language such as the Limiting Clause here applies to consecutive policies as well as concurrent policies. Indeed, a recent opinion of the Appellate Division, Hiraldo v. Allstate Ins. Co., 8 A.D.3d 230, 778 N.Y.S.2d 50, 2004 N.Y. App. Div. LEXIS 7531, 2004 WL 1203880 (2d Dep't June 1, 2004) is directly on point. In that case, interpreting virtually identical policy language, 2 the court found that a claim based on lead poisoning that occurred over three consecutive policy periods was limited to the single policy limit of $ 300,000. Plaintiffs' letter dated June 9, 2004, responding to a letter from defendant informing the Court of the recent Hiraldo decision, merely recites plaintiffs' existing arguments without providing any reason to distinguish Hiraldo. FOOTNOTES 2 The relevant provision was as follows: This insurance applies separately to each insured person. Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability under Business Liability Protection coverage for damages resulting from one loss will not exceed the limit of liability for Coverage X shown on the declarations page. All bodily injury, personal injury and property damage resulting from one accident or from continuous or repeated exposure to the same general conditions is considered the result of one loss. Id. 2004 N.Y. App. Div. LEXIS 7531, [WL] at *1. [*6] Similarly, in Liquidation of Midland Ins. Co., 269 A.D.2d 50, 59, 709 N.Y.S.2d 24, 31 (1st Dep't 2000), the Appellate Division interpreted a policy that defined "occurrence" as "'an event, including continuous or repeated exposure to conditions, which result in Personal Injury … neither expected nor intended from the standpoint of the insured. All such exposure to substantially the same general conditions shall be deemed one occurrence.'" Id. at 27. The court found that HN1 the purpose of defining all exposure as one occurrence is to make clear that only one deductible will apply, and that the limit of Get a Document - by Citation - 2004 U.S. Dist. LEXIS 10860 https://www.lexis.com/research/retrieve?_m=cdcc94e3ec744b80b22f53... 2 of 3 12/16/2013 4:29 PM liability, where an insurer has issued renewal policies, shall be the policy limits for one policy, rather than the aggregate for all policies issued. Otherwise, an insurer that issues a $ 1 million liability policy renewed 20 times could find itself liable for $ 20 million in damage claims for the same injury. Id. at 31. See alsoGreenidge v. Allstate Ins. Co., 312 F. Supp. 2d 430, 2004 WL 307265 (S.D.N.Y. 2004) (finding that policy language identical to that here precluded stacking of consecutive policy limits). Thus, the existing [*7] precedent supports our plain reading of the Limitation Clause as preventing plaintiffs from aggregating the pay-outs available through the two renewal policies covering the period in which plaintiffs' injuries occurred. Accordingly, defendant's liability for plaintiffs' injuries is limited to $ 300,000. CONCLUSION For the reasons stated above, plaintiffs' motion for summary judgment is denied and defendant's cross-motion for summary judgment is granted. The Clerk of the Court is respectfully requested to close the case on the Court's docket. IT IS SO ORDERED. DATED: June 14, 2004 NAOMI REICE BUCHWALD UNITED STATES DISTRICT JUDGE Service: Get by LEXSEE® Citation: 2004 U.S. Dist. LEXIS 10860 View: Full Date/Time: Monday, December 16, 2013 - 4:29 PM EST * Signal Legend: - Warning: Negative treatment is indicated - Questioned: Validity questioned by citing refs - Caution: Possible negative treatment - Positive treatment is indicated - Citing Refs. With Analysis Available - Citation information available * Click on any Shepard's signal to Shepardize® that case. About LexisNexis | Privacy Policy | Terms & Conditions | Contact Us Copyright © 2013 LexisNexis, a division of Reed Elsevier Inc. All rights reserved. Get a Document - by Citation - 2004 U.S. Dist. LEXIS 10860 https://www.lexis.com/research/retrieve?_m=cdcc94e3ec744b80b22f53... 3 of 3 12/16/2013 4:29 PM Page 1 Not Reported in F.Supp.2d, 2005 WL 6761113 (N.D.N.Y.) (Cite as: 2005 WL 6761113 (N.D.N.Y.)) © 2013 Thomson Reuters. No Claim to Orig. US Gov. Works. Only the Westlaw citation is currently available. United States District Court, N.D. New York. Leona LOFTIN, as Parent and Natural Guardian on behalf of Elijah THOMPSON and Eljahar Thompson, Infants, Plaintiffs, v. ALLSTATE INSURANCE COMPANY, Defendant. No. 1:04–CV–954. Nov. 28, 2005. O'Connell & Aronowitz, Mark G. Richter, Esq., Peter Danziger, Esq ., of Counsel, Albany, NY, for Plain- tiffs. Shapiro, Beilly, Rosenberg, Aronowitz, Levy & Fox, Barry I. Levy, Esq., of Counsel, New York, NY, for Defendant. ORDER DAVID N. HURD, District Judge. *1 This is an action for a declaratory judgment that presents a question under New York State law as to whether non-cumulation language contained within successive insurance policies that were issued by the defendant, Allstate Insurance Company (“Allstate”) for the period of April 17, 1991 to April 17, 1993, prohibit the aggregation of insurance limits for claims alleging personal injuries sustained as a result of con- tinuous exposure to lead paint within an insured's premises during the periods of coverage. Plaintiff, Leona Loftin, is the mother of the two (2) infant plaintiffs, Elijah Thompson and Eljahar Thompson (the “infant plaintiffs”). Ms. Loftin initi- ated this action on behalf of the infant plaintiffs, both of whom claim to have sustained injuries as a result of being exposed to lead paint while residing within premises that were owned by Larry and Jewel Cook (the “Cooks”). According to the complaint, plaintiffs contend that Allstate is required to afford $1,000,000.00 in coverage for the personal injuries that were claimed to have been sustained by the chil- dren as a result of their continuous and repeated ex- posure to lead paint during their residence at the in- sured premises in 1991 and 1992. According to the Answer filed by Allstate, it contends that the total available insurance coverage for the injuries that the plaintiffs are claimed to have sustained as a result of the continuous lead is the limit of coverage for one policy period (i.e.$500,000.00), and that this limit applies regardless of the number of policies issued and the period of exposure because of the non-cumulation clauses contained within the policies. Prior to the commencement of this action, Allstate paid the plain- tiffs the sum of $500,000.00 on the basis that the payment represented Allstate's total coverage for the injuries sustained. Plaintiffs accepted the tender without a waiver of their rights to seek additional coverage through this action. This action has been stayed since February 4, 2005, in order to permit the New York Court of Ap- peals to rule in the matter of Hiraldo v. Allstate In- surance Company (“Hiraldo”), which involved the identical policy language presented in this case.FN1 On October 25, 2005, the New York Court of Appeals issued its decision in Hiraldo, concluding that the non-cumulation clause in the Allstate insurance poli- cies limited its coverage obligation to one policy limit (in that case $300,000.00) even though the claim al- leged injuries resulting from lead exposure spanning multiple policy periods: FN1. The non-cumulation clause applicable in the present case and analyzed in Hiraldo both read, as follows: Page 2 Not Reported in F.Supp.2d, 2005 WL 6761113 (N.D.N.Y.) (Cite as: 2005 WL 6761113 (N.D.N.Y.)) © 2013 Thomson Reuters. No Claim to Orig. US Gov. Works. Regardless of the number of insured per- sons, injured persons, claims, claimants or policies involved, our total liability under Business Liability Protection coverage for damages resulting from one loss will not exceed the limit of liability for Coverage X shown on the declarations page. All bodily injury, personal injury and property dam- age resulting from one accident or from continuous or repeated exposure to the same general conditions is considered the result of one loss. But here, the policies do clearly provide otherwise. The non-cumulation clause says that ‘[r]egardless of the number of ... policies involved, [Allstate's] total liability under Business Liability Protection cover- age for damages resulting from one loss will not exceed the limit of liability ... shown on the decla- rations page.’ That limit is $300,000, and thus All- state is liable for no more. We agree with the recent decisions of three Federal District Court judges, applying New York law and interpreting identical policy language, that the non-cumulation clause is fatal to plaintiffs' claim. *2 See Mem. Op. at page 5 By letter from Allstate's counsel, dated October 28, 2005, the decision in Hiraldo was brought to the attention of the Court and plaintiffs' counsel. On No- vember 14, 2005, a telephone conference was held with the Court, during which the plaintiffs' counsel and Allstate's counsel discussed the impact of the Hiraldo decision on this action. The Court has re- viewed and considered the positions of counsel and the decision in Hiraldo. and concludes that the Hi- raldo decision controls the outcome of this case. Therefore, because Allstate has already tendered the coverage limit for one policy period to the plaintiffs' counsel (i.e.$500,000.00), it has no further liability in relation to the injuries that were claimed to have been sustained by the plaintiffs. Therefore, it is ORDERED that 1. The complaint is dismissed, with prejudice; and 2. The plaintiffs and the defendant shall each bear their own costs, disbursements, and attorneys fees associated with the defense of this action. The Clerk of the court is directed to enter judg- ment accordingly. IT IS SO ORDERED. N.D.N.Y.,2005. Loftin ex rel. Thompson v. Allstate Ins. Co. Not Reported in F.Supp.2d, 2005 WL 6761113 (N.D.N.Y.) END OF DOCUMENT Switch Client | Preferences | Help | Sign Out FOCUS™ Terms Go Advanced... Get a Document Go View Tutorial Service: Get by LEXSEE® Citation: 2011 N.Y.Misc.LEXIS 4237 2011 N.Y. Misc. LEXIS 4237, *; 2011 NY Slip Op 32310(U), ** [**2] VIGILANT INSURANCE COMPANY, Plaintiff, -against- RALPH SIBBIO, Defendant. INDEX NO. 102316/11 102316/11 SUPREME COURT OF NEW YORK, NEW YORK COUNTY 2011 N.Y. Misc. LEXIS 4237; 2011 NY Slip Op 32310(U) August 19, 2011, Decided August 30, 2011, Filed NOTICE: THIS OPINION IS UNCORRECTED AND WILL NOT BE PUBLISHED IN THE PRINTED OFFICIAL REPORTS. SUBSEQUENT HISTORY: Summary judgment denied by Vigilant Ins. Co. v. Sibbio, 2012 N.Y. Misc. LEXIS 4868 (N.Y. Sup. Ct., Oct. 9, 2012) PRIOR HISTORY: Seye v. Sibbio, 61 A.D.3d 842, 878 N.Y.S.2d 87, 2009 N.Y. App. Div. LEXIS 3083 (N.Y. App. Div. 2d Dep't, 2009) CORE TERMS: coverage, occurrence, apartment, infant, summary judgment, issues of fact, exposure, paint, disclaim, policy period, renewal, matter of law, insurance broker, personal injuries, denial of coverage, sufficient evidence, bill of particulars, proponent, notified, triable, opposes, notice JUDGES: [*1] Joan A. Madden , J.S.C. OPINION BY: Joan A. Madden JOAN A. MADDEN , J.: Plaintiff Vigilant Insurance Company ("Vigilant") moves for summary judgment on its complaint, and defendant Ralph Sibbio ("Sibbio") opposes the motion. For the reasons below, the motion is denied without prejudice to renewal. Vigilant issued a Commercial General Liability Policy to Sibbio covering the period December 5, 2003 through December 4, 2004 (Policy No. 12654140-01) ("the Policy"). Sibbio purchased a house located at 16-18 York Avenue, Staten Island, New York ("the property") from Robert Demperio on or about March 9, 2004. By endorsement effective on February 19, 2004, liability coverage for the property was added to the Vigilant Policy. In this action, Vigilant seeks a declaration that it is not required to defend or indemnify Sibbio in connection with a personal injury action commenced in the Supreme Court, Kings County entitled Ashelie Seye, an infant by her mother and natural guardian, Jamiylah Abdurrahman Seye and Jamiylah Abdurrahman Seye, individually v. Ralph Sibbio and Robert Demperio; Index No. 39948/04, 2006 N.Y. Misc. LEXIS 3996 (the "Underlying Action"). The Underlying Action, which was commenced on December 8, 2004, seeks damages for [*2] personal injuries caused by exposure to lead during the period of plaintiffs' tenancy between July 2003 and July 2004. On January 10, 2005, Sibbio's insurance broker sent a copy of the complaint in the Underlying Action to [**3] Vigilant. On February 11, 2005, Vigilant notified Sibbio that there was no coverage under the Policy. In support of its position, Vigilant relied on the following provisions in the Policy: Personal Liability Coverage We cover damages a covered person is legally obligated to pay for personal injury or property damages which takes place anytime during the policy period and are caused by an occurrence, unless stated otherwise or an exclusion applies. Exclusions to this coverage are described in Exclusions. In lieu of the definition for 'occurrence" in the Introduction, the following definition of "occurrence" applies to Personal Liability Coverage: "Occurrence means an accident to which this insurance applies and which begins within the policy period. Continuous or repeated exposure to substantially the same general conditions unless excluded is considered to be one occurrence (emphasis supplied).... "Damages" means the sum that is paid or is payable to satisfy a claim settled [*3] by us or resolved by judicial procedure or a compromise we agree to in writing. "Personal injury" means the following injuries, and resulting death • bodily injury.... "Bodily injury" means physical or bodily harm, including sickness or disease that results from it, and required care, loss of OPINION My Lexis™ Search Get a Document Shepard's® More History Alerts Get a Document - by Citation - 2011 NY Slip Op 32310(U) https://www.lexis.com/research/retrieve?_m=d5d21ee1fd7b07ce9650fbb... 1 of 3 12/16/2013 4:30 PM services and resulting death. On February 24, 2011, Vigilant commenced this declaratory judgment action seeking to deny coverage based on these provisions and now moves for summary judgment. Sibbio opposes the motion, arguing that Vigilant did not timely disclaim coverage, and in support of his position submits an affidavit from his wife, Lori Sibbio, who states that on October 4, 2004, when she received notice of the claim from counsel for plaintiffs in the Underlying Action, she informed her insurance broker, who assured her that Vigilant had been [**4] notified. In addition, Sibbio argues that there are triable issues of fact as to when the occurrence began, noting that the lead in the infant plaintiff's blood was first discovered on July 14, 2004, during Sibbio's ownership of the property.1 Sibbio also notes that Robert Demperio, his co-defendant in the Underlying Action, filed an answer denying the [*4] allegations in the complaint, including that the infant was poisoned by lead paint. FOOTNOTES 1 Sibbio also argues that there is evidence that the infant plaintiff resided at the another apartment located a 116 Grove Street, Brooklyn, New York. Notably, however, the record shows that the plaintiffs in the Underlying Action were relocated to this apartment as a result of the lead condition in the apartment at the property. Sibbio's argument that Vigilant did not timely disclaim coverage is unavailing. First, it is well established that when, as here, a claim fails outside the scope of coverage (as opposed to within an exclusion), an insurer is not required to disclaim. Government Employees Ins. Co. v. Pagano, 251 AD2d 452, 674 N.Y.S.2d 719 (2d Dept 1998). This rule is based on the concept that "[e]stoppel may not be used to create coverage where no insurance policy existed, regardless of whether or not the insurance company was timely in issuing its disclaimer." Wausau Insurance Cos. v. Feldman. M.D., 213 AD2d 179, 623 N.Y.S.2d 242 (1st Dept 1995). In any event, as the denial of coverage here was based on the allegations in the complaint regarding the dates of exposure, it cannot be said that such denial of coverage was untimely since [*5] it was made about a month after the complaint was provided to Vigilant. The next issue is whether there is an issue of fact as to the date of the occurrence. On a motion for summary judgment, the proponent "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case..." Winegrad v. New York Univ. Med. Center, 64 N.Y.2d 851, 852, 476 N.E.2d 642, 487 N.Y.S.2d 316 (1985). Once the proponent has made this showing, the burden of proof shifts to the party opposing the motion to produce evidentiary proof in admissible form to establish that material issues of fact [**5] exist which require a trial. Alvarez v. Prospect Hospital, 68 N.Y.2d 320, 324, 501 N.E.2d 572, 508 N.Y.S.2d 923 (1986). Here, Vigilant has not come forth with sufficient evidence to meet its burden of eliminating triable issues of fact. Vigilant's motion for summary judgment is supported by evidence submitted in the Underlying Action, including a lease showing that Jamilyah Abdurrahman ("Abdurrahman"), a plaintiff in the Underlying Action and the mother of the infant plaintiff was a tenant of an apartment at the property from June 1, 2003 and May 31, 2005. Vigilant also relies on paragraph 22 of [*6] the complaint in the Underlying Action and paragraph 3 of the bill of particulars which alleges that the infant plaintiff was exposed to lead paint commencing with the infant plaintiff's occupancy of the property. However, these assertions in the complaint and bill of particulars are verified by the attorney and not the mother, and are without probative value, See Marinelli v. Shifrin, 260 AD2d 227, 228, 688 N.Y.S.2d 72 (1st Dept 1999); Younger v. Spartan Chem. Co., 252 A.D.2d 265, 268, 686 N.Y.S.2d 152 (3d Dept 1999). In [*7] addition, Vigilant points to a sworn affidavit submitted by Sibbio in which he acknowledges he purchased the property in March 2004, and admits that at the time of the closing Abdurrahman resided in an apartment at the property, although he denies he was aware that a child under seven resided there. He also states that prior to the closing he was unable to gain access to the apartment and did not have an opportunity to observe its condition, including whether it had any dangerous condition involving lead paint. Vigilant also submits a notice to abate the nuisance from the Commissioner of the City Department of Health to Sibbio dated July 24, 2004, notifying Sibbio of the lead condition at the property. The above evidence, however, is insufficient to establish when the infant plaintiff who was tested positive for lead in July, 2004 and was born in April 2002, first ingested the lead, or how long the lead paint hazard existed in the relevant apartment. Under these circumstances, it cannot be determined as a matter of law when the injury occurred and therefore whether the [**6] "occurrence" was within the policy period. Accordingly, summary judgment must be denied, without prejudice to renewal [*8] upon additional proof which may include the deposition testimony, if any, in the Underlying Action relevant and material to the issue of the commencement of exposure. In view of the above, it is ORDERED that motion for summary judgment is denied without prejudice to renewal; and it is further ORDERED that the parties shall appear for a preliminary conference in Part 11, room 351, 60 Centre Street, on September 22, 2011, at 9:30 am. DATED: August 19, 2011 /s/ Joan A. Madden J.S.C. 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