New York Insurance Coverage Law Update

Court Rejects Additional Insured Coverage For Live Nation

Claimant was allegedly injured while assembling an advertising structure for Best Buy at Long Island’s Jones Beach Theatre when a Live Nation employee negligently drove a fork-lift into the metal trussing on which the claimant was standing.  Claimant sued Live Nation, which sought additional insured coverage under an insurance policy issued to Best Buy, with whom Live Nation had a sponsorship agreement. The court held that Live Nation was not covered as an additional insured because the policy limited such coverage to where Best Buy or those acting “on [its] behalf” caused, in whole or in part, the injury. The court reasoned that the trial court in the underlying action found that Best Buy was not negligent and, therefore, those acting on its behalf (claimant) were also not negligent. [Live Nation Marketing, Inc. v. Greenwich Ins. Co., 2019 N.Y. Slip Op. 31776(U) (Sup. Ct. N.Y. Co. June 12, 2019).]

Fourth Department Affirms Judgment Against Homeowner Who Did Not Repair Or Replace Roof Within Two Years From Date Of Loss

After a homeowner’s roof was damaged by a storm, her insurer paid her the actual cash value of the damage.  She subsequently sued the insurer for breach of contract, seeking payment of the cost to replace the roof. The trial court granted summary judgment in favor of the insurer, and the Appellate Division, Fourth Department, affirmed. The Fourth Department explained that the policy required the insurer to pay the homeowner the actual cash value of damage to her home (which the insurer paid) and to pay additional repair or replacement costs only if the homeowner made the repairs or replaced the damaged property within two years from the date of loss. Because the homeowner did not repair or replace the roof within two years from the date of loss, the insurer properly denied coverage. [Cushing v. Allstate Fire and Cas. Ins. Co., 2019 N.Y. Slip Op. 05275 (4th Dep’t June 28, 2019).]

Insurer Estopped From Denying Coverage After Accepting Coverage Without Reservation, First Department Rules

A temple sought additional insured coverage under a subcontractor’s insurance policy for a lawsuit brought by an employee of the subcontractor.  The insurer defended the temple without reservation, but later sought to deny coverage.  The Appellate Division, First Department, held that the insurer was estopped from denying coverage. The First Department reasoned that the temple relied to its detriment on the defense provided by the insurer, which was in conflict with the defense the insurer provided to the general contractor.   [Temple Beth Sholom, Inc. v. Commerce & Indus. Ins. Co., 2019 N.Y. Slip Op. 05215 (1st Dep’t June 27, 2019).]

Second Department Reverses Judgment Against Insurer, Finding Prejudice From Late Notice

A tenant sued the owner of her apartment building for property damage she suffered from a fire. After the tenant obtained a default judgment against the owner, the owner notified its insurer.  The insurer denied coverage based on late notice and resulting prejudice. In turn, the tenant was awarded judgment for $116,876.99 and sued the insurer to recover the unsatisfied judgment. The trial court granted the tenant’s motion for summary judgment and the insurer appealed. The Appellate Division, Second Department, reversed, finding that the default judgment against the owner – which had not been vacated – entitled the insurer to an “irrebuttable presumption of prejudice” pursuant to Insurance Law § 3420(c)(2)(B). [Villavicencio v. Erie Ins. Co., 2019 N.Y. Slip Op. 04023 (2d Dep’t May 22, 2019).]

No Coverage For Claims Relating To Facebook Posts Occurring After Policy Was Canceled, Eastern District Of New York Concludes

Five plaintiffs sued a club known as the Scene and its owner, alleging that they used their images without their consent to promote the club in advertisements on social media. The club sought coverage under the “personal and advertising injury” coverage in its liability policy, which covered certain enumerated offenses if committed during the policy period.  The insurer main-tained that coverage was barred for the claims of four underlying plaintiffs because the date of publication of the ads fell outside the policy period. The United States District Court for the Eastern District of New York agreed, finding that the underlying claims related to Facebook posts occurring after the policy was canceled. [Bullseye Rest., Inc. v. James River Ins. Co., No. 17-CV-2996 (DRH)(GRB) (E.D.N.Y. May 8, 2019).]