Michael A. Markowitz, Esq., Michael A. Markowitz, P.C., Hewlett, NY, Attorney for Plaintiff. Sara R. David, Esq., Cuomo LLC, New York, NY, Attorney for Defendant Chartis.
Michael A. Markowitz, Esq., Michael A. Markowitz, P.C., Hewlett, NY, Attorney for Plaintiff. Sara R. David, Esq., Cuomo LLC, New York, NY, Attorney for Defendant Chartis.
Kathleen Durante, Esq., Law Offices of Spina, Korshin & Welden, Woodbury, NY, Attorney for Defendant GEICO Indemnity Company.
Warren W. Sabloff New York, NY, Defendant Pro Se.
DANIEL PALMIERI, J.
The plaintiffs' motion pursuant to CPLR 3212 for summary judgment declaring that defendant Chartis Property Casualty Company (“defendant” or “Chartis”) has an obligation to defend and indemnify defendant Warren W. Sabloff (“Sabloff”) in an underlying personal injury action brought against him by the plaintiffs is denied.
The defendant's motion pursuant to CPLR 3212 for summary judgment declaring that defendant has no obligation to defend or indemnify defendant Sabloff in the underlying personal injury action brought against him by the plaintiffs is granted, and the Court declares that Chartis has no obligation to defendant or indemnify Sabloff for the accident in which he was involved on September 6, 2009.
This is a declaratory judgment action resulting from an insurance coverage dispute. In an underlying litigation, the plaintiffs sued defendant Sabloff for damages caused by an automobile accident, occurring in the Village of Freeport on September 6, 2009. They allege that a 2008 BMW operated by Sabloff, who was also the registered owner, struck plaintiff Robert Paulik, a pedestrian, causing what plaintiffs describe as severe and permanent injuries. Sabloff's primary insurance was a policy purchased from Geico Indemnity Company (“Geico”), with a limit of $250,000 for this accident. He also had an excess “umbrella” liability policy with defendant Chartis, with a limit of $5 million. Geico has offered full payment of its policy limits to plaintiffs as a result of the accident. However, by letter dated August 29, 2011 Chartis declined coverage. This action and dueling motions for summary judgment ensued.
In its August 2011 letter Chartis recited that the BMW involved in the accident was added to the Geico policy effective September 30, 2008, at or about the same day Sabloff took possession of the car. It is undisputed that the Chartis policy in favor of Sabloff was in effect at the time of the accident, having been issued on December 21, 2008 with a one year term, ending 12:01 a.m. on December 21, 2009. As stated above, the accident occurred in September, 2009. However, the Declarations page notes two automobiles, a 2006 BMW and a 2007 Mercedes. The 2008 BMW is not listed.
It is undisputed that, as stated in Chartis's letter, the 2008 BMW was added to the policy, but not until March 29, 2010, during the next policy period. The letter therefore informed Sabloff that as a result it would not provide coverage. In its letter Chartis cited a policy provision stating under “What is Covered”, subhead A(3) “Additional Coverage” (c.) “Newly Acquired Auto” that (1) “We cover damages an insured person is legally obligated to pay for bodily injury or property damage caused by an occurrence for newly acquired autos providing you give us notice within 365 days after you become the owner. We reserve our right not to continue to insure the auto once notified.”
The letter pointed out that absent the addition of such newly acquired auto to the policy, there would be no coverage. A second relevant policy provision reads, “What is Not Covered—Exclusions”, subhead A “... This insurance does not provide coverage for liability defense cost or any other cost or expense” with respect to (1) “Auto or Recreational Motor Vehicle arising out of the ownership, maintenance, use, loading or unloading of: (b) Any auto or recreational motor vehicle ... not listed on the Declarations page of this policy.” Thus, as the 2008 BMW was not added in time to be covered under the provisions stating what is covered, its status was governed by the exclusion for vehicles not listed on the Declarations page.
The letter also recited that Chartis reserved its right under the policy and law to cite other policy provisions and coverage defense “as may be appropriate.”
The basic law regarding the interpretation of insurance contracts is well-established and a long recitation is unnecessary. Such contracts are to be interpreted according to common speech and consistent with the reasonable expectation of the average insured. Cragg v. Allstate Indem. Corp., 17 NY3d 118 (2011). In so doing, a court must not leave any provision without force or effect. Consolidated Edison Co. of NY, Inc. v. Allstate Ins. Co., 98 N.Y.2d 208, 221–222 (2002). Ambiguities in an insurance policy are to be construed against the insurer. Breed v. Insurance Co. of N. Am ., 46 N.Y.2d 351 (1978). Courts should not, however, rewrite policies where no such ambiguities exist. New England Mut. Life Ins. Co. v. Doe, 93 N.Y.2d 122 (1999).
The law of summary judgment is also relevant, and also is clear. Generally speaking, to obtain summary judgment it is necessary that the movant establish its claim or defense by the tender of evidentiary proof in admissible form sufficient to warrant the court, as a matter of law, in directing judgment in its favor. CPLR 3212(b). Absent this initial showing, the court should deny the motion, without passing on the sufficiency of the opposing papers. Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851 (1985). Once it is made, however, the burden shifts to the non-moving party.
To defeat the motion for summary judgment the opposing party must come forward with evidence to demonstrate the existence of a material issue of fact requiring a trial. CPLR 3212(b); see also GTF Marketing, Inc. v. Colonial Aluminum Sales, Inc., 66 N.Y.2d 965 (1985); Zuckerman v. City of New York, 49 N.Y.2d 557 (1980). The non-moving party must lay bare all of the facts at its disposal regarding the issues raised in the motion. Mgrditchian v. Donato, 141 A.D.2d 513 (2d Dept.1988). Conclusory allegations are insufficient ( Zuckerman v. City of New York, supra ), and the defending party must do more than merely parrot the language of the complaint or bill of particulars. There must be evidentiary proof in support of the allegations. Fleet Credit Corp. v. Harvey Hutter & Co., Inc., 207 A.D.2d 380 (2d Dept.1994); Toth v. Carver Street Associates, 191 A.D.2d 631 (2d Dept.1993).
On such a motion the court must draw all reasonable inferences in favor of the nonmoving party. Nicklas v. Tedlen Realty Corp., 305 A.D.2d 385 (2d Dept.2003); Rizzo v. Lincoln Diner Corp., 215 A.D.2d 546 (2d Dept.1995). The role of the court in deciding a motion for summary judgment is not to resolve issues of fact or to determine matters of credibility, but simply to determine whether such issues of fact requiring a trial exist. Dyckman v. Barrett, 187 A.D.2d 553 (2d Dept.1992); Barr v. County of Albany, 50 N.Y.2d 247, 254 (1980); James v. Albank, 307 A.D.2d 1024 (2d Dept.2003); Heller v. Hicks Nurseries, Inc., 198 A.D.2d 330 (2d Dept.1993). The Court need not, however, ignore the fact that an allegation is patently false or that an issue sought to be raised is merely feigned. Sexstone v. Amato, 8 AD3d 1116 (4 th Dept.2004).
In support of their motion the plaintiffs have presented the affidavit of the insured, Sabloff, in which he avers, inter alia, that he had had a policy with Chartis from December 2007, expiring in December, 2008, and during that policy year had leased the 2008 BMW on September 21, 2008. He admits he did not inform Chartis (then AIG) about this new vehicle. In December, 2008 he purchased a renewal excess liability policy from Chartis, for another one-year period (“2008–2009 policy”). He states that Chartis did not request any information from him before the purchase of this new policy. As noted, the accident occurred during this policy period. In December, 2009 he obtained another excess policy (“2009–2010 policy”), and again had no requests for information before the policy was issued. During this period his insurance broker, through whom all policies had been procured, notified Chartis of the existence of the 2008 BMW on March 29, 2010, and it was added to the policy then in effect. Sabloff states that during this time he was involved in the illness and death of his wife. The 2009–2010 policy lapsed and was reinstated but ultimately lapsed again, and was not reinstated.
As to Chartis's denial based on the late notice of the 2008 BMW, he states that there is no requirement in the 2008–2009 policy that a motor vehicle be added if it were acquired before the policy period began (which was the case here), arguing that because he had the car in his possession for several months before the new policy period began, it was not a “newly acquired” vehicle under the policy. He also notes that Chartis had accepted his premium payment in 2010, after his broker notified the company about the 2008 BMW, and denied coverage based on the late notice only after it became aware of the personal injury law suit.
In further support, plaintiffs' counsel first avers in his affirmation that plaintiffs have the standing to bring the action notwithstanding the fact that Sabloff was the insured under the 2008–2009 policy, as there is a likelihood that a judgment against the insured will be more than the excess “floor” and/or that the potential liability might well reach the excess coverage. Citing, Cost v. Colonial Pen Ins. Co., 204 A.D.2d 591 (2d Dept.1994); see also Watson v. Aetna Cas. & Sur. Co., 246 A.D.2d57 (2d Dept.1998). The Court finds that in view of the facts and authority presented, a prima facie showing is made, and the defendant does not dispute this point. Accordingly, the Court concludes that standing by the plaintiffs to bring this action and to make their motion has been established.
However, based on the insurance contracts and the other proofs annexed to their papers the motion must be denied for plaintiffs' failure to make out a prima facie showing of entitlement to judgment as a matter of law.
The term “newly acquired vehicle” is not defined in the policy's “Definitions” section in effect at the time of the accident. Nor is there an express duty on the insured's part to inform Chartis of any additional property the policyholder wished to have insured in the section entitled “Your [insured's] Duties.” Nevertheless, there is no authority to which plaintiffs can point, and no policy provision, under which Chartis itself as the insurer had a contractual duty to investigate (as opposed to having the right to do so), by direct inquiry of the policy holder or otherwise, as to whether there has been any change in the policy holder's circumstances which would require a change to the terms of the insurance contract. Thus, any failure to inquire by Chartis is of no moment.
Rather, the clear terms of the policy provide that if a vehicle is not listed in the Declarations section it is excluded from coverage, unless Chartis is informed of such a vehicle within 365 days of its acquisition. Had he so informed Chartis, the language of the policy indicates that coverage would have existed; it provides that Chartis had a right to decline “ to continue to insure the auto once notified” (emphasis added), indicating that the insurer's right to decline coverage for the newly listed automobile applied prospectively only.
Although not material to the Court's analysis of plaintiffs' prima facie showings under summary judgment jurisprudence, it notes that in an opposing affidavit the defendant's Assistant Vice President and Regional Underwriting Manager acknowledged that if Chartis had been timely notified by Sabloff “even if he did so after the accident, Chartis would have had to cover the liability claim.” Cliszis Aff., at ¶ 4.
However, Chartis was not timely informed of the existence of the 2008 BMW. While it is understandable that Sabloff's personal circumstances may have had an impact on his failure to inform Chartis of the new car, that cannot influence the Court's interpretation of the insurance contract. Equitable considerations cannot serve to extend coverage where it does not exist under the clear terms of a policy. See Caporino v. Travelers Ins. Co., 62 N.Y.2d 234, 239 (1984).
The plaintiffs' contention that the vehicle was not “newly acquired” because Sabloff took possession of the 2008 BMW months before the policy period even began, and thus fell outside the requirement that Chartis be notified within 365 days of such acquisition, flies in the face of common sense and would lead to an absurd result. It would mean that an insured in Sabloff's position could acquire a car at any point in time, later accept the offer of a new or renewed policy without notifying the insurer that he or she wanted that car to be covered (and without paying additional premium therefor, if required), wait until the insurance was needed before notifying the insurer of its existence, and then be covered. Further, the unavoidable corollary that only those vehicles acquired during the policy period can be considered “newly acquired” would render the 365 day maximum period to report the new vehicle without force. The policy period is 365 days, and thus if plaintiffs are correct no car acquired beforehand but unlisted on the Declarations page at the policy's inception would be barred from coverage, no matter how long beforehand that acquisition might have occurred, because the 365 day maximum period for notice would not begin to run until the policy became effective, and thus could never expire during the policy period.
The plaintiffs' interpretation thus results in an open-ended liability on the part of the insurer for automobiles not listed on the Declarations page, which clearly is not contemplated in the insurance contract, and renders the relevant exclusion and coverage provisions set forth above without meaning. This the Court cannot endorse in construing the policy. Consolidated Edison Co. of NY, Inc. v. Allstate Ins. Co., 98 N.Y.2d 208, 221–222,supra. Rather, the much more reasonable interpretation of a “newly acquired auto” is simply one that was not listed on the Declarations page at the time the policy went into effect. In such a case, the insured must let the insurer know within 365 days of the day the unlisted vehicle was acquired if he or she wished the vehicle to be covered by such policy. As noted, this admittedly was not done.
Sabloff's statement that Chartis ratified coverage by accepting his premium payment for the 2008 BMW in 2010 also is insufficient to make out a prima facie case that coverage existed as a matter of law. As set forth above, coverage would have existed under the policy only if Chartis had been notified of the acquisition of the car within 365 days thereof. It is well-established law that ratification of an agreement that otherwise would not be binding on the party charged with the ratification requires full knowledge of the relevant facts by that party, and assent cannot be inferred from equivocal acts. Lipman v. Vebeliunas, 39 AD3d 488 (2d Dept.2007); see also United States Life Ins. Co. in the City of New York vBlumenfeld, 92 AD3d 487, 488 (1st Dept.2012). There is no evidence presented that at the time the premium was paid Chartis knew that the 2008 BMW had been acquired well over 365 days before the date Chartis was asked to add it to the policy, nor that it had been involved in an accident. Further, the addition of a vehicle that was not initially listed on the Declarations page is contemplated by the policy. Thus, the mere acceptance of premium for a previously unlisted vehicle, without a demonstration of full knowledge of the circumstances on the insurer's part, cannot be deemed an unequivocal act of ratification of coverage for an automobile acquired before the 365 day maximum period. Therefore, no ratification of coverage as a matter of law in the face of the late notice can be gleaned from the act of accepting the premium.
Moreover, there is no statement or other proof presented by plaintiff that at the time of the notification in March of 2010 he had requested, much less that Chartis expressly had agreed, that the coverage would be applied retroactively to the time of the accident. In fact, what plaintiffs present here indicates the reverse. They have annexed the affidavit of Mattheyw Cliszis, Chartis's Long Island Underwriting Manager, who testified that the defendant had received the request from Sabloff's broker to add the 2008 BMW to the policy on March 31, 2010, “to be effective March 29, 2010.”
Sabloff had paid for the coverage during the 2008–2009 policy for the two cars listed in the Declarations Page. As a general matter, Chartis was not liable, as “coverage cannot be afforded on liability for which insurance was not purchased.” Seneca Ins. Co. v. Cimran Co., 106 AD3d 166, 2013 N.Y. Slip Op 02360 (1st Dept 2013), quoting Holman v. Transamerica Ins. Co., 183 A.D.2d 589, 591 (1 st Dept.1992), affd81 N.Y.2d 1026 (1993). The only prima facie evidence is that in accepting the premium payment in 2010 coverage for the 2008 BMW existed for the policy then in effect, as there was no ratification with knowledge of the facts for coverage on the date of the accident. Rather, and as set forth above, only if the 2008 BMW had been acquired 365 days or fewer before Chartis was notified could coverage be found.
Accordingly, the plaintiffs' motion is denied, without regard to the strength of the opposing papers. Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851,supra.
In view of the foregoing analysis, the Chartis's motion must be granted. In addition to presenting the facts set forth above (including the fact that the subject car was not added as an insured vehicle until 554 days had passed from its acquisition), which constitute a prima facie showing of entitlement to judgment as a matter of law, Chartis has demonstrated that Sabloff did receive inquiries about the status of the property he wished to insure, and did not fully cooperate with Geico as it attempted to learn of any additional insurance.
Specifically, Chartis points out that shortly after the first renewal policy went into effect (the 2008–2009 period) the insurance broker, Rampart Brokerage (“Rampart”), sent Sabloff a form letter, followed by a second request, followed by a final request, seeking information about changes to his residence or automobiles. There is no evidence that Sabloff ever responded to these inquiries. It was not until March 2010, during the term of the second renewal policy, when the 2006 BMW and the 2007 Mercedes, listed on the first (2007–2008) and renewal (2008–2009) policies, were substituted by two 2008 BMWs, one of which was the car involved in the accident. This was the first and only time that such a substitution had been made to the policies.
Further, Geico, which had been informed by Sabloff about the accident, made efforts to determine whether he had excess coverage, sending four letters and a form affidavit to make such a determination. No response was received, and Geico thereafter attempted additional contacts in the form of telephone calls and mail. There was no response until June of 2011, when a Geico investigator visited Sabloff personally and obtained an affidavit regarding the excess policy. Chartis contends that it was then contacted by Geico employees and learned of the accident for the first time.
The foregoing history is not disputed by plaintiffs. It indicates that Sabloff was, in fact, given an opportunity by his broker to notify Chartis that he had leased the 2008 BMW later involved in the accident, but did not, and then did not timely notify Chartis of the accident itself notwithstanding significant attempts at contact by Geico regarding excess insurance. Although neither is essential as a basis for granting Chartis's motion and denying plaintiffs', each indicates that Sabloff had ample opportunity to notify Chartis of relevant developments affecting his insurance, but did not. Thus, and while the Court is not without sympathy for both the defendant and especially the plaintiffs in the underlying action, no blame for the absence of excess coverage can be fastened on the insurance companies involved.
In any event, under the well-established authority cited above the failure to comply with the insurance contract regarding the timely notification and listing of the automobile involved in the accident requires that the Court endorse the position of the movant insurer, and declare that it has no obligation to defend or indemnify Sabloff for any liability found against him in the underlying law suit brought by the plaintiffs. See also, St. Paul Fire & Marine Ins. Co. v. Nocca, 207 A.D.2d 457 (2d Dept.1994) [coverage for newly acquired vehicle expires by the terms of the policy after the period for notice to insurer passes without such notification].
This shall constitute the Decision, Order and Judgment of this Court.