Read Your Policy or Be Deemed to Have Presumptive Knowledge of Its Terms

COMMERCIAL PROPERTY – COVERED LOCATION – PRESUMPTIVE KNOWLEDGE OF POLICY TERMS
Gui's Lumber & Home Ctr., Inc. v. Pennsylvania Lumbermens Mut. Ins. Co.
(4th Dept., decided 10/3/2008)

With the assistance of its agent, Gui's Lumber & Home Center procured a commercial insurance policy from Pennsylvania Lumbermens Mutual for what it thought covered its several buildings. One of those buildings collapsed during a snowstorm, and PLM denied covered based on that building not being listed on the policy as a covered location. Gui's sued PLM and its agent.

In AFFIRMING Niagara Supreme grant of summary judgment to both defendants, the Fourth Department held:

[T]he action against Ulrich is barred by plaintiff's receipt of the PLM policy, which was procured for plaintiff by Ulrich from PLM prior to the collapse of the building. The express terms of that policy provide that PLM did not insure the collapsed building at the time of the loss, and "[p]laintiff is charged with conclusive presumptive knowledge of the terms and limits of [the policy], thus defeating [its action for negligence against Ulrich] as a matter of law" (Hoffend & Sons, Inc. v Rose & Kiernan, Inc., 19 AD3d 1056, 1057-1058, affd on other grounds 7 NY3d 152 [internal quotation marks omitted]).

We likewise conclude that plaintiff's receipt of the PLM policy bars the action against PLM, inasmuch as "[p]laintiff had conclusive presumptive knowledge of the terms of the policy prior to the loss and took no action to close the gap in coverage" (Nicholas J. Masterpol, Inc. v Travelers Ins. Cos., 273 AD2d 817, 818). Plaintiff's contention that the PLM policy should be reformed to provide coverage for the collapsed building is raised for the first time on appeal and is therefore not properly before us (see Ciesinski v Town of Aurora, 202 AD2d 984, 985).

Reformation is often used to correct bilateral mistakes in writing coverage, but in this case it appears the insured did not raise that issue in the motion court.