NEW YORK MARINE AND GENERAL INSURANCE COMPANY v. KOOKMIN BEST INSURANCE COMPANY LIMITED (2024)

Order, Supreme Court, New York County (Dakota D. Ramseur, J.), entered on or about March 19, 2024, which granted plaintiffs’ motion to reargue the motion for summary judgment of defendant Kookmin Best Insurance Company, Limited (KBIC) and plaintiff's motion for summary judgment, and, upon reargument, adhered to its prior determination dismissing the complaint, unanimously modified, on the law, solely to declare that KBIC was not obligated to provide plaintiff 3105 Decatur Associates LLC (Decatur) a defense and indemnification in the underlying personal injury action, and otherwise affirmed, without costs.

The court properly granted KBIC's motion for summary judgment dismissing the complaint and denied plaintiffs’ motion for summary judgment.  It is undisputed that KBIC and its insured did not have notice of the accident forming the basis of the underlying action's negligence claim at the time that they agreed to retroactively cancel KBIC's insurance policy.  The risk assumed by KBIC therefore never “fully matured into a responsibility” before KBIC and its insured retroactively cancelled their policy, so that cancellation was an effective ground to disclaim coverage to Decatur (Cosmopolitan Mut. Ins. Co. v. Lumbermen's Mut. Cas. Co., 20 N.Y.2d 145, 152, 281 N.Y.S.2d 993, 228 N.E.2d 893 [1967];  see also 2–10 Jerusalem Ave. Realty, LLC v. Utica First Ins. Co., 62 A.D.3d 481, 878 N.Y.S.2d 358 [1st Dept. 2009]).

In Cosmopolitan Mut. Ins. Co., the Court of Appeals noted that “[a]n insured and an insurer are, of course, free to agree upon the ‘cancellation flat’ of a binder before matured risk and, so long as the rights of no third party are affected ․, there is no reason why an insured may not effectively cancel ‘flat’ even after the occurrence of an insurable accident” (20 N.Y.2d at 152, 281 N.Y.S.2d 993, 228 N.E.2d 893).  Contrary to plaintiffs’ contention, the Court did not view the point at which a risk “matures” as being the same as the occurrence of an insurable accident.  Indeed, in 2–10 Jerusalem Ave. Realty, LLC, this Court determined that the retroactive cancellation of an insurance policy was effective where neither the tenant nor the insurer's agent were aware of an accident that occurred the same day the cancellation was initiated (62 A.D.3d at 482, 878 N.Y.S.2d 358).

We modify solely to declare that KBIC was not obligated to provide Decatur a defense and indemnification in the underlying personal injury action (see Lanza v. Wagner, 11 N.Y.2d 317, 334, 229 N.Y.S.2d 380, 183 N.E.2d 670 [1962], cert denied 371 U.S. 901, 83 S.Ct. 205, 9 L.Ed.2d 164 [1962]).

We have considered plaintiffs’ remaining contentions and find them unavailing.