NEW SOWER CHRISTIAN CHURCH INC v. Cabrera Realty Corp. et al., Defendants. (2024)

Order, Supreme Court, New York County (Arthur F. Engoron, J.), entered on or about October 13, 2023, which granted defendant Wesco Insurance Company's (Wesco) motion for leave to reargue, and upon reargument, granted Wesco's motion for summary judgment dismissing the action against it, and declaring that Wesco had no duty to defend or indemnify plaintiff in the underlying actions, unanimously affirmed, without costs.

A party that is not named an insured or additional insured on the face of the policy is not entitled to coverage (see Moleon v. Kreisler Borg Florman Gen. Constr. Co., 304 A.D.2d 337, 339, 758 N.Y.S.2d 621 [1st Dept. 2003]).  While plaintiff argues that Wesco should be estopped from rescinding the Wesco policy on the basis of reformation, “[a] claim for reformation of a written agreement must be grounded upon either mutual mistake or fraudulently induced unilateral mistake” (313–315 W. 125th Street L.L.C. v. Arch Specialty Ins. Co., 138 A.D.3d 601, 602, 30 N.Y.S.3d 74 [1st Dept. 2016] [internal quotation marks omitted]).  Based on the undertaking agreement between the parties, defendant Cabrera Realty Corp.’s identification as the sole insured on the Wesco policies after the sale was no mistake, but rather, the parties’ conscious choice.

Even where the nature of the risk the insurer intended to cover remains unchanged by the conveyance, courts have found that a third party is not entitled to coverage, unless the insurer, before the loss, consented to the policy's assignment (see Truglio v. Zurich Gen. Acc. & Liability Ins. Co., 247 N.Y. 423, 426–427, 160 N.E. 774 [1928];  GreenHomes Am., LLC v. Farm Family Cas. Ins. Co., 91 A.D.3d 1352, 1352–1353, 936 N.Y.S.2d 829 [4th Dept. 2012]).  In this case, there was never an agreed-to transfer pursuant to the no-transfer clause of the Wesco policy.  The fact that plaintiff has an insurable interest in the premises does not entitle it to coverage under the Wesco policies but rather merely entitled it to procure its own coverage (see Stainless, Inc. v. Employers Fire Ins. Co., 69 A.D.2d 27, 31, 418 N.Y.S.2d 76 [1st Dept. 1979], affd 49 N.Y.2d 924, 428 N.Y.S.2d 675, 406 N.E.2d 490 [1980]).

Since plaintiff is not the named insured on the subject policy, the arguments made as to rescission, unjust enrichment, and estoppel are unavailing.  Furthermore, inasmuch as the theories of estoppel and unjust enrichment were sua sponte raised in the court's prior order, Wesco's motion for reargument was proper (CPLR 2221[d][2];  Neo Universe Inc. v. Ito, 190 A.D.3d 426, 135 N.Y.S.3d 637 [1st Dept. 2021]).