TRUSTEES OF PRINCETON UNIVERSITY v. American International Group, Inc., Defendant. (2008)

Judgment, Supreme Court, New York County (Helen E. Freedman, J.), entered September 10, 2007, awarding plaintiff recovery from defendant National Union Fire Insurance Co. of Pittsburgh, Pa. in the amount of $9,607,021.93, and bringing up for review orders, same court and Justice, entered April 23, 2007 and August 20, 2007, to the extent they denied defendants' motion to dismiss the causes of action for breach of contract and declaratory judgment, granted plaintiff's cross motion for summary judgment on said causes of action, and directed entry of judgment accordingly, and order, same court and Justice, entered February 20, 2008, which denied National Union's motion to vacate the judgment, unanimously affirmed, with costs.

 We reject National Union's contention that the subject insurance policy's $5 million sublimit for claims that seek equitable relief applies also to claims arising from the same underlying occurrence that seek legal relief based on tort and contract law principles, as it relies on a strained construction of the terms of the policy (see Seaboard Sur. Co. v. Gillette Co., 64 N.Y.2d 304, 311, 486 N.Y.S.2d 873, 476 N.E.2d 272 [1984];  242-44 E. 77th St., LLC v. Greater N.Y. Mut. Ins. Co., 31 A.D.3d 100, 103, 815 N.Y.S.2d 507 [2006] ).   Similarly, we reject the contention that the policy's “insured versus insured” exclusion applies to claims brought against the insured entities by individual insureds acting in their individual capacities.

As the policy obligates National Union to advance all defense costs as they are incurred, subject to a right of recoupment of payment for noncovered costs after the underlying litigation is completed, the court had no obligation at this juncture to rule on the allocation of defense expenses.

We have considered defendant's remaining arguments and find them unavailing.