NIACC LLC v. GREENWICH INSURANCE COMPANY (2008)

In an action to recover damages for breach of an insurance contract, the defendant appeals from an order of the Supreme Court, Nassau County (Galasso, J.), entered April 9, 2007, which denied its motion for summary judgment dismissing the complaint and granted the plaintiffs' cross motion for summary judgment on the complaint.

ORDERED that the order is affirmed, with costs.

 The unambiguous terms of an insurance contract must be accorded their plain and ordinary meaning (see Teichman v. Community Hosp. of W. Suffolk, 87 N.Y.2d 514, 520, 640 N.Y.S.2d 472, 663 N.E.2d 628;  Breed v. Insurance Co. of N. Am., 46 N.Y.2d 351, 355, 413 N.Y.S.2d 352, 385 N.E.2d 1280;  Toyota Motor Credit Corp. v. Felton, 305 A.D.2d 582, 583, 760 N.Y.S.2d 510).   Any ambiguity, however, must be construed against the insurer as the drafter of the policy (see Guardian Life Ins. Co. of Am. v. Schaefer, 70 N.Y.2d 888, 890, 524 N.Y.S.2d 377, 519 N.E.2d 288;  Commercial Union Ins. Co. v. Liberty Mut. Ins. Co., 36 A.D.3d 645, 645, 828 N.Y.S.2d 479;  Matter of Eveready Ins. Co. v. Farrell, 304 A.D.2d 830, 831, 757 N.Y.S.2d 859).   Whether or not a provision in an insurance policy is ambiguous is a question of law for the court to determine (see General Elec. Capital Corp. v. Volchyok, 2 A.D.3d 777, 778, 770 N.Y.S.2d 419;  Atlantic Mut. Ins. Co. v. Terk Tech. Corp., 309 A.D.2d 22, 28, 763 N.Y.S.2d 56).  “The test for ambiguity is whether the language in the insurance contract is ‘susceptible of two reasonable interpretations' ” (MDW Enters. v. CNA Ins. Co., 4 A.D.3d 338, 340-341, 772 N.Y.S.2d 79, quoting State of New York v. Home Indem. Co., 66 N.Y.2d 669, 671, 495 N.Y.S.2d 969, 486 N.E.2d 827).   The focus of the test is on “the reasonable expectations of the average insured upon reading the policy” (Penna v. Federal Ins. Co., 28 A.D.3d 731, 732, 814 N.Y.S.2d 226, quoting Matter of Mostow v. State Farm Ins. Co., 88 N.Y.2d 321, 326-327, 645 N.Y.S.2d 421, 668 N.E.2d 392;  see Butler v. New York Cent. Mut. Fire Ins. Co., 274 A.D.2d 924, 925-926, 711 N.Y.S.2d 607).

 The Supreme Court correctly determined that certain provisions in a commercial liability policy issued by the defendant to the plaintiffs which pertained to “Loss Conditions” were ambiguous and that, construed against the defendant, the provisions required the defendant to reimburse the plaintiffs for guard services retained to protect the subject property after a fire that was the covered cause of loss.   Contrary to the defendant's contention, the record does not establish that, after the fire, the property was valueless as a matter of law and that there was, therefore, nothing on the site to protect from further damage (cf. Deni v. General Acc. Ins. Co., 175 A.D.2d 605, 572 N.Y.S.2d 549).   Accordingly, the Supreme Court did not err in denying the defendant's motion for summary judgment dismissing the complaint and in granting the plaintiffs' cross motion for summary judgment on the complaint.