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  • Mountain Valley Indemnity Company v. Menelik T. Eaddy, Essie L. Gaskin Other Matters - Contract - Other document preview
  • Mountain Valley Indemnity Company v. Menelik T. Eaddy, Essie L. Gaskin Other Matters - Contract - Other document preview
  • Mountain Valley Indemnity Company v. Menelik T. Eaddy, Essie L. Gaskin Other Matters - Contract - Other document preview
  • Mountain Valley Indemnity Company v. Menelik T. Eaddy, Essie L. Gaskin Other Matters - Contract - Other document preview
  • Mountain Valley Indemnity Company v. Menelik T. Eaddy, Essie L. Gaskin Other Matters - Contract - Other document preview
  • Mountain Valley Indemnity Company v. Menelik T. Eaddy, Essie L. Gaskin Other Matters - Contract - Other document preview
  • Mountain Valley Indemnity Company v. Menelik T. Eaddy, Essie L. Gaskin Other Matters - Contract - Other document preview
  • Mountain Valley Indemnity Company v. Menelik T. Eaddy, Essie L. Gaskin Other Matters - Contract - Other document preview
						
                                

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FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------------------------------- X MOUNTAIN VALLEY INDEMNITY Index No.: 151433/2020 COMPANY, Plaintiff, -against- MENELIK T. EADDY and ESSIE L. GASKIN, Defendants. ------------------------------------------------------------- X MOUNTAIN VALLEY INDEMNITY COMPANY’S MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR DEFAULT AND SUMMARY JUDGMENT Mound Cotton Wollan & Greengrass One New York Plaza New York, New York 10004-1901 (212) 804-4200 Of Counsel: Kevin F. Buckley, Esq. Tania A. Gondiosa, Esq. 1 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 PRELIMINARY STATEMENT Plaintiff, Mountain Valley Indemnity Company (“Mountain Valley”), respectfully submits this Memorandum of Law in support of its motion for an Order: (i) pursuant to CPLR 3215(a) granting Mountain Valley a default judgment against defendant Menelik T. Eaddy (Eaddy”); and (ii) pursuant to CPLR 3212, granting Mountain Valley summary judgment against defendants, Eaddy and Essie L. Gaskin (“Gaskin”), declaring that it has no duty to defend or indemnify Eaddy in the lawsuit entitled Essie L. Gaskin v. The City of New York, Damon I. Sheppard, Michelle Mansell-Shepard and Menelik T. Eaddy, pending in the Supreme Court of the State of New York, Kings County, under Index No.: 525012/2018 (the “Underlying Action”). The Underlying Action seeks damages for personal injuries allegedly sustained by Gaskin on February 27, 2018, when she tripped and fell while on the sidewalk in front of the premises known as 9 Somers Street, Brooklyn, New York (the “Premises”), which was owned by defendant, Eaddy. By virtue of this action, Mountain Valley requests that this Court confirm that it is not obligated to defend or indemnify Eaddy in the Underlying Action under a homeowners insurance policy Mountain Valley issued to Eaddy the ground that the Premises does not qualify as a “residence premises,” which is a prerequisite to coverage under the Mountain Valley policy. Residence Premises is defined, in relevant part, as “the one family dwelling…where you reside” or the “two, three, or four family dwelling where you reside in at least one of the family units…” As set forth below, the Premises was not an owner occupied dwelling as required by the Policy, but rather an investment property occupied exclusively by tenants. Thus, there is no coverage under the Mountain Valley Policy for the Underlying Action because the Premises does not qualify as a “residence premises.” 1 2 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 Mountain Valley also moves pursuant to Exclusion b. for liability rising out of “business” pursuits of an “insured” or the rental or holding for rental of any premises by an “insured” that is not an “insured location,” and Exclusion d. for bodily injury arising out a premises owned by an insured or rental to others by an insured that is not an “insured location.” The Mountain Valley Policy defines an “insured location” as the “residence premises.” As set forth below, the courts have held that the very exclusions at issue herein apply to bar coverage for an underlying action in instances where the insured did not reside at the insured premises at the time of the accident. Here, Eaddy admittedly did not reside at the Premises, but rather used it as a rental property. Therefore, not only is there no coverage under the Mountain Valley Policy for the Underlying Action in the first instance, the Mountain Valley policy exclusions likewise serve to bar coverage because the Premises does not qualify as an “insured location” since the insured admittedly did not reside there. Accordingly, there is no coverage for the Eaddy, or any other party, under the Mountain Valley Policy for the claims asserted in the Underlying Action. STATEMENT OF FACTS The Mountain Valley Policy Mountain Valley issued a renewal dwelling policy to Eaddy under policy number 2005245991, for the policy period from August 29, 2017 to August 29, 2018 (“Mountain Valley policy” or “the Policy”). The Mountain Valley Policy describes the “residence premises” covered by the policy as the “Premises”, a three-family owner occupied dwelling. A certified copy of the Policy is annexed to the Affidavit of Daniel Brownsey (hereinafter “Brownsey Aff.”) at Ex. A. 2 3 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 The Policy provides the following coverage grant at form DL 24 01 07 88, as amended in part by form DL 25 31 12 95, Section II - Liability Coverages: Liability Coverages Coverage L-Personal Liability If a claim is made or suit is brought against an “insured” for damages because of “bodily injury” or “property damage” caused by an “occurrence” to which this coverage applies, we will: 1. Pay up to our limit of liability for the damages for which the “insured” is legally liable. Damages include prejudgment interest awarded against the “insured”; Coverage M-Medical Payments To Others We will pay the necessary medical expenses that are incurred or medically ascertained within three years from the date of an accident causing “bodily injury.” Medical expenses mean reasonable charges for medical, surgical, x-ray, dental, ambulance, hospital, professional nursing, prosthetic devices and funeral services. This coverage does not apply to you or regular residents of your household except “residence employees.” * * * Policy form DL 24 01 07 88 also contains certain Exclusions to Coverage L and Coverage M. However, the Policy also contains form DL 25 31 12 95, Special Provisions – New York, which replaces some of these Exclusions, in relevant part, as follows: Under 1. Coverage L – Personal Liability Coverage and Coverage M – Medical Payments to Others: * * * B. Item b. is delted and replaced by the following: b. Arising out of “business” pursuits of an “insured” or the rental or holding for rental of any premises by an “insured.” This exclusion does not apply to: (1) Activities which are usual to non-”business” pursuits; (2) The rental or holding for rental or an “insured location:” (a) On an occasional basis if used only as a residence; 3 4 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 (b) in part for use only as a residence unless a single family unit is intended for use by the occupying family to lodge more than two roomers or boarders; or (c) in part, as an office, school, studio, or private garage. * * * Policy form DL 24 01 07 88 also contains the following relevant Exclusion: 1. Coverage L- Personal Liability and Coverage M-Medical Payments to Others do not apply to “bodily injury” or “property damage”: * * * d. Arising out of a premises: (1) owned by an “insured”; (2) rented to an “insured”; or (3) rented to others by an “insured”; that is not an “insured location” * * * “Insured location” and “residence premises” are defined in the Definitions section of Policy form DL 24 01 07 88, as follows: “Insured location” means: a. The “residence premises”; b. The part of other premises, other structures and grounds used by you as a residence and: (1) Which is shown in the Declarations; or (2) Which is acquired by you during the policy period for your use as a residence; c. Any premises used by you in connection with a premises in 4a or 4b above; d. Any part of a premises: (1) Not owned by an “insured;” and (2) Where an “insured” is temporarily residing; e. Vacant land, other than farm land, owned by or rented to an “insured;” f. Land owned by or rented to an “insured” on which a one or two family dwelling is being built as a residence for an “insured”; or g. Individual or family cemetery plots or burial vaults of an “insured”; 4 5 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 h. Any part of a premises occasionally rented to an “insured” for other than “business” use. * * * “Residence premises” means: a. The one family dwelling, other structures, and grounds; or b. That part of any other building; where you reside and which is shown as the “residence premises” in the Declarations. “Residence premises” also means a two, three or four family dwelling where you reside in at least one of the family units and which is shown as the “residence premises” in the Declarations. See Brownsey Aff. at Ex. A. Thus, there is no coverage under the Policy for bodily injury arising out of the Premises, which is owned by the Eaddy, unless Eaddy resides in one of the three family units. The Underlying Claim/Action Gaskin was allegedly injured on February 27, 2018 when she tripped and fell on the sidewalk abutting the Premises. On December 12, 2018, Gaskin commenced suit against Eaddy, the City of New York, and several other defendants, in the Supreme Court, Kings County seeking recovery for personal injuries allegedly sustained as the result of her fall at the Premises. The suit alleges that the Eaddy was negligent in the ownership, maintenance, management and repair of the Premises and, more specifically, in permitting the abutting sidewalk to remain in a raised, cracked, dangerous, defective, and trap-like condition. A copy of the Complaint in the Underlying Action is annexed to the Affirmation in Support of Tania A. Gondiosa (“Gondiosa Aff.”) at Ex. A. 5 6 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 Mountain Valley’s First Notice of Loss/Investigation On or about May 2, 2019, Mountain Valley received its first notice of the claim and suit, which was reported by Eaddy to Nya Services, Inc., presumably his insurance broker. (See Brownsey Aff. at ¶11.) Mountain Valley immediately initiated Bauer Trial Preparation (“Bauer”) to conduct an investigation of the claim. (See Brownsey Aff. at ¶11.) Statement of Manelik Eaddy On May 15, 2019, the Bauer investigator interviewed Eaddy and obtained his signed statement. A copy of Eaddy’s signed statement is annexed to the Affidavit of Scott Ricki (“Rickli Aff.”) at Ex. 1. Eaddy informed the investigator that he resides at 109-21 173rd Street, Jamaica, New York 11433. Eaddy has owned and managed the premises at 9 Somers Street, Brooklyn, New York 11238, a three-family home, since 2006. However, Eaddy admitted that he has never resided at the Premises. Rather, Eaddy rents all three units of the Premises to separate tenants. Eaddy visits the Premises at least once a week, as needed. Cecil Gilbert, who has been the superintendent of the Premises for over 10 years, also visits the Premises several times a week to handle the maintenance. (See Rickli Aff. at Ex. 1.) Statement of Cecil Gilbert On May 30, 2019, the Bauer investigator interviewed Cecil Gilbert and obtained his signed statement. A copy of Gilbert’s signed statement is annexed to Rickli Aff. at Ex. 2. Gilbert informed the investigator that he works for Eaddy as the super at the Premises, and had been the super for over 10 years. The property is owned by Eaddy. However, to the best of Gilbert’s knowledge, Eaddy does not reside at the Premises. (See Rickli Aff. at Ex. 2.) 6 7 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 Coverage Review/Disclaimer On June 12, 2019, Bauer’s final report was received and reviewed by Mountain Valley. (See Brownsey Aff. at ¶14.) That same day, a proposed disclaimer of coverage based on non-owner occupancy of the Premises was forwarded to management. The proposed disclaimer was then forwarded to the claims attorney for review and approval. On June 26, 2019, the disclaimer was approved by the claims attorney. (See Brownsey Aff. at ¶14.) On June 26, 2019, Mountain Valley issued a disclaimer of coverage to Eaddy on the ground that the Premises does not qualify as a “residence premises” or “insured location,” as defined by the Mountain Valley Policy because the Eaddy did not reside at the Premises, but rather used it as a rental property. A copy of Mountain Valley’s June 26, 2017 disclaimer is annexed to Brownsey Aff. at Ex. B. Mountain Valley also disclaimed coverage on the ground that coverage is excluded under the policy’s rental exclusion (Exclusion b.), which excludes coverage for the rental or holding for rental of any part of any premises by the insured on more than an occasional basis, if it is not an “insured location,” and Exclusion d., which excludes coverage for liability arising out of a premises owned by an insured or rented by an insured to others that is not an “insured location,” which is defined, in relevant part, as the “residence premises.” (See Brownsey Aff. at Ex. B.) Mountain Valley also disclaimed coverage on material misrepresentation grounds, since Eaddy represented in his Application that the Premises would be owner occupied. Mountain Valley assigned the law firm Silverman Shin & Byrne PLLC to defend Eaddy in the Underlying Action until such time as the court, in a declaratory judgment 7 8 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 action, confirms that Mountain Valley has no duty to defend or indemnify under the Policy. Counsel for Gaskin was copied on the disclaimer. (See Brownsey Aff. at Ex. B.) The Instant Litigation On February 7, 2020, Mountain Valley commenced this declaratory judgment action by filing a summons and declaratory judgment complaint. (See Gondiosa Aff. at Ex. B.) By virtue of the declaratory judgment complaint, Mountain Valley seeks to confirm the validity of its disclaimer. On March 10, 2020, an Answer was interposed on behalf of Gaskin. (See Gondiosa Aff. at Ex. C.) Eaddy was served with the summons and declaratory judgment complaint on February 15, 2020. (See Gondiosa Aff. at Ex. D.) By letters, dated November 11, 2020 and January 4, 2021, Eaddy was advised of his default and the need to respond to Mountain Valley’s complaint. (See Gondiosa Aff. at Ex. E and F, respectively.) An answer has not been interposed on behalf of Eaddy and his time to do so has expired. Via this motion, Mountain Valley seeks summary judgment on the ground that the Premises does not qualify as a “residence premises” or “insured location” because Eaddy did not reside at the Premises as required by the Policy. Mountain Valley also seeks a default judgment against Eaddy for failure to answer or otherwise respond to the declaratory judgment complaint. 8 9 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 ARGUMENT POINT I MOUNTAIN VALLEY IS ENTITLED TO A DEFAULT JUDGMENT AGAINST EADDY PURSUANT TO CPLR 3215(a) FOR HIS UNEXCUSED FAILURE TO ANSWER THE COMPLAINT The summons and declaratory judgment complaint were filed on February 7, 2020. Eaddy was served with Mountain Valley’s summons and declaratory judgment complaint on February 15, 2020. Accordingly, by letters dated November 11, 2020 and January 4, 2021, Eaddy was advised of his default and the need to respond to the complaint. Eaddy has not appeared in this action or obtained an extension of time to do so. CPLR 3012(a) states, in pertinent part: The complaint may be served with the summons…Service of an answer or reply shall be made within twenty days after service of the pleading to which it responds. (McKinney's 2009) CPLR 3215(a) states, in pertinent part: Default and entry. When a defendant has failed to appear, plead or proceed to trial of an action…the plaintiff may seek a default judgment against him. . . . (McKinney's 2009) The unexcused default of Eaddy has prejudiced and hampered Mountain Valley’s ability to litigate this action expeditiously. By defaulting in this action, Eaddy effectively admits the facts giving rise to Mountain Valley’s claims. As detailed below and in the annexed motion papers, Mountain Valley has meritorious causes of action and, if the action herein proceeded on the merits, it would be decided in Mountain Valley’s favor. Accordingly, Mountain Valley’s motion for a default judgment should be granted. 9 10 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 Accordingly, via this motion Mountain Valley seeks both a default judgment and summary judgment against Eaddy. POINT II EADDY IS NOT ENTITLED TO COVERAGE UNDER THE MOUNTAIN VALLEY POLICY BECAUSE THEY DID NOT RESIDE AT THE PREMISES As set forth above, the Mountain Valley Policy describes the “residence premises” covered by the policy as the Premises, a three-family owner occupied dwelling. The Mountain Valley Policy defines “Residence premises” as: a. The one family dwelling, other structures, and grounds; or b. That part of any other building; where you reside and which is shown as the “residence premises” in the Declarations. “Residence premises” also means a two, three or four family dwelling where you reside in at least one of the family units and which is shown as the “residence premises” in the Declarations. The policy’s coverage is dependent on these requirements being met. Indeed, it has been held that the “residence premises” definition is unambiguous and requires the insured to reside at the premises when the loss occurs. See, Marshall v. Tower Ins. Co. of New York, 44 A.D.3d 1014, 1015, 845 N.Y.S.2d 90 (2nd Dep't 2007). Numerous courts have held that this definition is clear and unambiguous. See Vela v. Tower Ins. Co. of N.Y., 83 A.D.3d 1050, 1051 (2d Dep’t 2011)(holding that the definition of “residence premises” is not ambiguous and must be accorded its plain and ordinary meaning); Megafu v. Tower Ins. Co. of N.Y., 73 A.D.3d 713 (2d Dep’t 2010); Marshall v. Tower Ins. Co. of N.Y., 44 A.D.3d 10 11 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 1014 (2d Dep’t 2007); Metropolitan Prop. & Cas. Ins. Co. v. Pulido, 271 A.D.2d 57, 61 (2d Dep’t 2000); Heniser v. Frankenmuth Mut. Ins. Co., 534 N.W.2d 502, 504-08 (Mich. 1995). Here, Eaddy admitted in his statement that he has never resided at the Premises. Rather, Eaddy rented all three of the family units to separate tenants. Eaddy further admitted that he owned and managed the Premises, with the assistance of the superintendent, Cecil Gilbert. According to the statements of both Eaddy and Gilbert, Gilbert has been employed by Eaddy as the superintendent of the Premises for over 10 years. (See Rickli Aff. at Ex. 1 and 2.) Since Eaddy admittedly did not reside at the Premises at the time of the accident, the Premises does not qualify as a “residence premises” as unambiguously defined by the Mountain Valley Policy. Therefore, Bedri Sela is not entitled to coverage under the Mountain Valley Policy for the Underlying Action, and a declaration should be issued, accordingly. POINT III EADDY IS LIKEWISE NOT ENTITLED TO COVERAGE UNDER THE MOUNTAIN VALLEY POLICY PURSUANT TO THE POLICY EXCLUSIONS BECAUSE HE DID NOT RESIDE AT THE PREMISES Although there is no coverage under the Mountain Valley Policy for the Underlying Action in the first instance because the Premises does not qualify as “residence premises” as defined by the Policy, coverage is also barred pursuant to the policy Exclusion d., which precludes coverage for bodily injury arising out of a premises that is “owned by an ‘insured’…or rented to others by an ‘insured’ that is not an ‘insured location.’” As set forth above, the Mountain Valley Policy defines an “insured location” as the “residence premises,” which, as set forth above, is defined as “the one family dwelling where you reside” or the “two, three or four family dwelling where you reside in at least one of the family units…” (See Brownsey Aff. at 11 12 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 Ex. A.) Thus, in order to qualify as an “insured location,” Eaddy must, likewise, reside at the Premises. New York Courts have routinely held that exclusions such as this, which preclude coverage for bodily injury arising out of a premises that is “owned by an ‘insured’…or rented to others by an ‘insured’ that is not an ‘insured location,’” applies to bar coverage for an underlying action in instances where the insured did not reside at the subject premises at the time of the accident. See, e.g., Marshall, supra, at 1015 (holding unambiguous language of policy requires insured to reside at insured location for coverage); Metro. Prop. & Cas. Ins. Co. v. Pulido, 271 A.D.2d 57, 61, 710 N.Y.S.2d 375 (2nd Dep’t 2000)(holding homeowners policy “only intended to afford coverage for places where the insured lives”); CastlePoint Ins. Co. v. Kum, 2018 N.Y. Slip Op. 32275U; 2018 WL 4407537 (N.Y. Cty. 2018)(policy definition of insured location requires insured to reside at premises as a condition to coverage); Tower Ins. Co. of N.Y. v. Monroy, 2008 N.Y. Slip Op. 33518U (N.Y. Cty. 2008) (holding clear language of policy requires insured to reside at insured location for coverage); see also, Tower Ins. Co. of New York v. Peralta, Index No. 153841/2012 (Sup. Ct. N.Y. County May 20, 2013);1 Tower Ins. Co. of New York v. Barry, No. 109818/07 (Sup. Ct. N.Y. County July 14, 2009);2 Tower Ins. Co. of New York v. Lawrence, 2009 NY Slip Op 30274U (Sup. Ct. N.Y. County February 4, 2009); Tower Ins. Co. of New York v. Said, 2007 NY Slip Op 30724U (Sup. Ct. N.Y. County April 11, 2007), Madera v. Allstate Ins. Co., 12 Misc. 3d 1162A, 819 N.Y.S.2d 210 (Sup. Ct. Kings County 2006). 1 A copy of the Decision and Order of Hon. Anil C. Singh, dated May 20, 2013, is annexed hereto as Exhibit 1. 2 A copy of the Decision, Order and Judgment of Hon. O. Peter Sherwood, dated July 14, 2019, is annexed hereto as Exhibit 2. 12 13 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 Since Eaddy admittedly never resided at the Premises, the Premises does not qualify as an “insured location” as defined by the Mountain Valley Policy. Therefore, Eaddy is not entitled to coverage under the Mountain Valley Policy for the Underlying Action, and a declaration should be issued, accordingly. Additionally, the Policy contains exclusion b., which precludes coverage for bodily injury “arising out of ‘business’ pursuits of an ‘insured’ or the rental or holding for rental of any premises by an ‘insured.’” There is an exception to the rental exclusion for the rental of an “insured location” on an occasional basis. As set forth above, Eaddy did not reside at the Premises, nor was it rented out on an occasional basis. Rather, all three units of the three-family premises were rented to tenants. Eaddy even hired a superintendent to assist in the management of the Premises, which was used solely as an investment property. Thus, the exception to the exclusion does not apply. Tower Ins. Co. of New York v. Parris, 2013 WL 577804 (N.Y.Sup.), 2013 N.Y. Slip Op. 30278(U)(Feb. 4, 2013) (finding that to the extent that insured did not reside in the four family premises, but rather used it solely as a rental, coverage would be excluded); Bleckner v. General Acc. Ins. Co. of Am., 713 F. Supp. 642 (S.D.N.Y. 1989) (holding rental exclusion is clear and unambiguous); Gardner v. Travelers Prop. Cas. Co. of Am., 2011 WL 2600604 (N.D.N.Y. 2011) (same). Since Eaddy has admitted that he did not reside at the Premises, but rather that it was used exclusively as a rental property, with tenants residing in all three living units, the Premises does not qualify as an “insured location” as defined by the Policy. Therefore, Eaddy is not entitled to coverage under the Mountain Valley Policy for the Underlying Action, and a declaration should be issued, accordingly. 13 14 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 POINT IV THE PROMPT DISCLAIMER REQUIREMENTS OF INSURANCE LAW 3420 DO NOT APPLY WHERE THERE IS NO COVERAGE UNDER THE POLICY IN THE FIRST INSTANCE Where a claim falls outside the policy’s coverage, the insurer is not required to disclaim. Zappone v. Home Ins. Co., 55 N.Y.2d 131, 447 N.Y.S.2d 911, 432 N.E.2d 783 (1982). Where a policy was not intended to provide liability coverage for incidents occurring in premises the insured owns but does not live in, the issue of a timely disclaimer is irrelevant. See, State Farm and Cas. Co. v. Guzman, 138 A.D.3d 503, 28 N.Y.S.3d 310 (1st Dep’t 2016), lv denied in part, dismissed in part 28 N.Y.3d 1101; Metropolitan Prop. & Cas. Ins. Co. v Pulido, 271 A.D.2d 57, 710 N.Y.S.2d 375 (2nd Dep’t 2000). As set forth above, the Mountain Valley policy describes the “residence premises” covered by the policy as the Premises. “Residence premises” is defined by the policy, in relevant part, as “the one family dwelling…where you reside” or the “two, three, or four family dwelling where you reside in at least one of the family units and which is shown as the ‘residence premises’ in the Declarations.’”3 By limiting coverage to losses sustained to the “residence premises,” and by defining that term to include a residency requirement, the policy’s coverage is dependent on that requirement being met. In State Farm, supra, the First Department, under similar policy language, concluded that the homeowner’s policy at issue was not intended to provide liability coverage for accidents occurring in premises the insured owns but does not live in. Specifically, the Court held: 3 A certified copy of the Mountain Valley policy is attached to Brownsey Aff. as Exhibit A. 14 15 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 It is undisputed that the named insured under the homeowner’s policy issued by plaintiff did not reside at the subject premises. Accordingly, under the terms of the policy, the subject premises was not covered….Since the policy never provided coverage for these circumstances in the first place, the timeliness of plaintiff’s disclaimer is irrelevant. State Farm and Cas. Co. v. Guzman, 138 A.D.3d 503, supra. Likewise, in Metropolitan Property & Cas. Ins. Co. v. Pulido, 271 A.D.2d 57, 710 N.Y.S.2d 375 (2nd Dep’t 2000), the Second Department held that there was no coverage in the first instance if the insured premises did not comply with the policy definition of “residence premises,” held that no disclaimer was necessary under the circumstances. Additionally, relying on Pulido, the court in Interboro Ins. Co. v. Fatmir, 89 A.D.3d 993, 933 N.Y.S.2d 343 (2nd Dep’t 2011), similarly held that a disclaimer pursuant to Insurance Law 3420(d) was not necessary because the policy only provided liability coverage to the insured for premises which he occupied for residential purposes and, “thus, the policy never provided coverage for the claim at issue.” Id. Furthermore, in CastlePoint Ins. Co. v. Cantos, 2016 WL 7462712 (N.Y.Sup. Dec. 21, 2016), under almost identical policy language to that at issue here, the court found that policy exclusion for claims “arising out premises… owned by an ‘insured’ …rented to others by and ‘insured’…that is not an ‘insured location,’” together with the definition of “insured location” to include the “residence premises,” or the “two, three or four family dwelling where you reside in at least one of the family units…” were unambiguous and operate to require that the insured reside at the premises as a condition of coverage. The court further found that, based on the policy language, any coverage of the insured is “contingent upon his residence at the Premises.” Id. Turning to the timelines of Castlepoint’s disclaimer, the 15 16 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 court found that the insured’s claim “falls outside the scope of the Policy’s coverage “the insured location by definition does not include premises not owned or used as a residence by Mr. Cantos), the timeliness of Castlepoint’s disclaimer is not an issue.” Id at 10. Thus, the prompt disclaimer requirements of Insurance Law 3420(d) do not apply where, like here, the insured admittedly did not reside at the Premises, and thus cannot satisfy the policy’s residency requirement. Since the Premises does not qualify as a “residence premises” as defined by the Mountain Valley Policy, there is no coverage for the Premises under the Mountain Valley Policy for the underlying action in the first instance, and no timely disclaimer is required. 16 17 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 CONCLUSION Mountain Valley has presented admissible evidence confirming its entitlement to default judgment against Defendant, Eaddy, and summary judgment against Defendants, Eaddy and Gaskin, declaring that Mountain Valley has no duty to defend or indemnify Eaddy, or any other party, with respect to the Underlying Action. Based on the foregoing, Mountain Valley respectfully requests that the Court grant its motion in its entirety, together with such other and further relief as this Court may deem just, proper, and equitable. Dated: New York, New York February 11, 2021 Respectfully submitted, MOUND COTTON WOLLAN & GREENGRASS LLP By: /s/ Tania A. Gondiosa___________ Kevin Buckley Tania A. Gondiosa Attorneys for Plaintiff Mountain Valley Indemnity Company One New York Plaza, 44th Fl. New York, New York 10004-1901 Tel No.: (212) 804-4200 Fax No.: (212) 344-8066 File No.: 3506.140 17 18 of 19 FILED: NEW YORK COUNTY CLERK 02/11/2021 04:32 PM INDEX NO. 151433/2020 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 02/11/2021 CERTIFICATION OF WORD COUNT This brief, excluding the caption, table of contents, table of authorities, and signature block, contains 4,440 words. /s/ Tania A. Gondiosa Tania A. Gondiosa 18 19 of 19