Sunday, December 14, 2008

Certificate of Insurance Is Informational Only and Conveys No Additional Insurance by Itself to Coop Owners

Weintraub v. Utica First Ins. Co.

(Sup. Ct., NY Co., decided 12/9/2008)

In September 2005, Richard and Liane Weintraub contracted with My Home, LLC, an affiliate of My Home, Inc., to renovate their cooperative apartment located at 969 Park Avenue in New York City. The renovations began in January 2006.

My Home, Inc. was insured by Utica First in 2005 and 2006, and procured certificates of insurance for those years from its independent insurance agent, Robert C. Mangi Agency, naming the Weintraubs as additional insureds. 

Plastic surgeon Dr. Pamela Lipkin owned the cooperative unit below the Weintraubs' unit, where she operated a cosmetic surgery medical office.  Lipkin and her corporation sued the Weintraubs, My Home and others for damages to her coop and business allegedly due to the renovation of the Weintraubs' apartment.

Ini February 2008, after extensive motion practice and a trip to the First Department in the underlying action, the Weintraubs and their insurer, AIG, commenced this declaratory judgment action against Utica First, seeking defense and indemnification coverage for the Weintraubs with respect to the Lipkin suit as additional insureds under My Home's CGL policy with Utica First.   Utica moved to dismiss the complaint or for summary judgment, and plaintiffs cross-moved for summary judgment.

In granting Utica First's motion and denying the plaintiffs' cross motion, New York County Supreme Court Justice Walter Tolub held that since the Weintraubs were not actually listed as additional insureds on the Utica First policy, and My Home's contract with the Weintraubs did not required My Home to procure additional insured coverage for the Weintraubs in connection with the renovation project, the blanket additional insured endorsement's coverage was not triggered.  Justice Tolub rejected the plaintiffs' argument that an implied-in-fact contract was formed between My Home and the Weintraubs regarding My Home’s obligation to procure insurance coverage for the Weintraubs with respect to the renovation project.

With respect to the Weintraubs' claim that they were entitled to additional insured coverage from Utica First because the certificates of insurance (COIs) My Home's agent issued listed them as additional insureds, Justice Tolub rejected the plaintiffs' reliance of Third Department case law and instead cited to decisions from the First and Second Departments in ruling that the COIs were informational only and did not themselves afford coverage to the Weintraubs:
Moreover, with respect to the Certificates of Insurance issued by Mangi wherein the Weintraubs were named as additional insureds, each of these Certificates contain therein bold capital letters the following statements:  "THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RlGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW." A virtually identical statement of disclaimer has been held by the Appellate Department, First Department, to be insufficient to establish that the named certificate holder was an additional insured under an insurance policy, where the policy itself made no provision for coverage. Moleon [v Kreisler Borg Flormari General Construction Co., Inc., 304 AD2d 337, 339 (1st Dept 2003)], supra, at 339. See also Alib, Inc. v Atlantice Casualty Insurance Company, 52 AD3d 419 (1st Dept 2008); Glynn v United House of Prayer for All People, 292 AD7d 319, 322 (1st Dept 2002) ; Herbert St. George v W. J. Barney Corp., 270 AD2d 171, 172 (1st Dept 2000). Therefore, the law is well-settled in the First Department that a certificate of insurance issued only for informational purposes confers no rights on the holder, even if it purports to name such holder as an additional insured, when the underlying insurance policy made no provision for coverage.

The handful of cases cited by plaintiffs for a contrary proposition do not bind this Court, as such cases originated from the Appellate Division, Third Department. See e.g., Lenox Realty Inc. v Excelsior Ins. Co., 255 AD2d 644 (3d Dept 1998) (insurer equitably estopped from denying coverage where party for whose benefit the insurance was procured relied on the certificate of insurance to that party‘s detriment); Bucon, Inc. v Pennsylvania Manufacturing Association Ins. Co., 151 AD2d 207, 210 (3d Dept 1989) (”by issuing the certificate of insurance in which plaintiff was named as an additional insured, [insurer] was estopped from denying coverage for plaintiff“).

In accord with the First Department, but in disagreement with the Third Department, the Second Department has ruled that: (1) a certificate of insurance issued only for information purposes and conferred no rights on the holder was insufficient to establish that the plaintiff was insured by the insure; and ( 2 ) even if the insurer might be held liable for the acts of its agent, “the doctrine of [equitable] estoppel may not be invoked to create coverage where none exists under t h e policy,” despite the fact that the agent issued the certificate of insurance that named the plaintiff as an additional insured. American Ref-Fuel Company v Resource Recycling, Inc., 248 AD2d 420, 423-24 (2d Dept 1998).  In so ruling, the Second Department also held that the defendant insurer was “not obligated to defend and indemnify the plaintiff in the underlying action.” Id. at 424.
Judgment for Utica First dismissing this DJ action.

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