MORGAN CHASE CO v. Certain Underwriters at Lloyds of London, et al., Defendants. (2004)

Order, Supreme Court, New York County (Karla Moskowitz, J.), entered February 18, 2004, which, to the extent appealed from, denied the motion by defendants National Union Fire Insurance, AIU Insurance and Lexington Insurance to dismiss the complaint as against them based on documentary evidence, unanimously affirmed, with costs.

Plaintiffs sought insurance recovery for their $125 million settlement of an underlying lawsuit, as well as the costs and expenses of defending that action.   The IAS court found questions of fact concerning plaintiffs' right to claim recovery under the Directors and Officers Liability and Corporation Reimbursement policy issued by National Union, and the excess catastrophic coverage provided by AIU and Lexington.   The primary policy does cover corporate indemnification of directors and officers for their own incurred liability, as opposed to purely corporate liability.   However, this litigation is still in the pleading stage.   Accepting the truth of the allegations and affording plaintiffs the benefit of every possible favorable inference for the purpose of the dismissal motion (see Leon v. Martinez, 84 N.Y.2d 83, 87-88, 614 N.Y.S.2d 972, 638 N.E.2d 511), it cannot be concluded at this point, as a matter of law, that plaintiffs are merely endeavoring to misapply the Directors and Officers policy to cover their own corporate liability.