american guarantee & liability company v. illinois union insurance company et al complaint
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8/3/2019 AMERICAN GUARANTEE & LIABILITY COMPANY v. ILLINOIS UNION INSURANCE COMPANY et al Complaint
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L E D ; N EW Y O RK C O U N T Y C L E R K 0 8 / 1 0 / 2 0 1 1 1INDEX NO. 652232/2
RECEIVED NYSCEF: 08/10/2
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
AMERICAN GUARANTEE & LIABILITY
C O M P A N Y ,
Plaintiff,
ILLINOIS UNION INSURANCE
COMPANY, NY A TO Z CONSTRUCTION
G RO U P I N C,
Defendants.
Index No.:
S U M M O N S
Date Purchased:
Plaintiff Designates New York County as the
place of trial
The basis of venue is the residence of Plaintiff
T o : Illinois Union Insurance Company
525 W. Monroe Street, Suite 400
Chicago, IL 60661
c/o New York Secretary of State
Office of the Departmen t of State
One Commerce Plaza, 99 Washington Avenue
Albany, NY 12231
YOU ARE SUMMONED to answer the Complaint in this action and to serve a copy of
your A nsw er, or, if the Com plaint is not served with this Sum mo ns, to serve a Notic e of
Appearance, on the plaintiffs attorneys within twenty (20) days after the service of this
Summons, exclusive of the day of service (or within thirty (30) days after the service is complete
if this Summons is not personally delivered to you within the State of New York); and in case of
your failure to appear or answer, judgment will be taken against you by default for the relief
demanded in the Complaint.
Plaintiff design ates New York Coun ty as the place of trial. The ba sis of venue is the
residence of Plaintiff American Guarantee & Liability Company.
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Dated: New York, NY C O U G H L I N D U FFY L L P
August 10,2011
By:Adam M. Smith, Esq.Wall Street Plaza
88 Pine Street, 5 th Floor
New York, New York 10005
(212)483-0105
Attorneys for Plaintiff,
American Guarantee &
Liability Insurance Comp any
8/3/2019 AMERICAN GUARANTEE & LIABILITY COMPANY v. ILLINOIS UNION INSURANCE COMPANY et al Complaint
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SUPREME COURT OF THE STATE OF NEW YORK
COUN TY OF NEW YORK
AMERICAN GUARANTEE & LIABILITY
C O M P A N Y ,
Plaintiff,
v.
ILLINOIS UNION INSURANCE
COM PANY, NY A TO Z CONSTRUCTION
GROUP INC,
Defendants.
S U M M O N S
Index No.:
Date Purchased:
Plaintiff Designates New York County as the
place of trial
The basis of venue is the residence of Plaintiff
T o : NY A to Z Construction G roup, Inc.216-04 Jamaica Ave.
Queens Village, NY 11428
Y O U A R E S U M M O N E D to answer the Complaint in this action and to serve a copy of
your Answer, or, if the Complaint is not served with this Summons, to serve a Notice of
Appearance, on the plaintiffs attorneys within twenty (20) days after the service of this
Summons, exclusive of the day of service (or within thirty (30) days after the service is complete
if this Summons is not personally delivered to you within the State of New York); and in case of
your failure to appear or answer, judgment will be taken against you by default for the relief
demanded in the Complaint.
Plaintiff designates N ew York Cou nty as the place of trial. The basis of venue is the
residence of Plaintiff American Guarantee & Liability Company.
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Dated: New York, NY COUGHLIN DUFFY LLP
August 10,2011By:
Adam M. Smith, Esq.
Wall Street Plaza
88 Pine Street, 5 th Floor
New York, New York 10005(212)483-0105
Attorneys for Plaintiff,
American Guarantee &
Liability Insurance Company
8/3/2019 AMERICAN GUARANTEE & LIABILITY COMPANY v. ILLINOIS UNION INSURANCE COMPANY et al Complaint
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SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NEW YORK
AMERICAN GUARANTEE & LIABILITY
C O M P A N Y ,
Plaintiff,
ILLINOIS UNION INSURANCE
C O M P A N Y , NY A TO Z CONSTRUCTION
GROUP INC,
Defendants.
Index No.
C O M P L A IN T
Plaintiff, American Guarantee & Liability Insurance Company (hereinafter "American
Guarantee"), by way of Complaint for Declaratory Judgment and for Damages against
Defendant, Illinois Union Insurance Company (hereinafter "Illinois Union") alleges as follows:
NATURE OF THE ACTION
1. This action arises from a tort claim filed and pending in the Supreme Court of the
State of New York, County of Kings, entitled Rapalo v. MJRB Kings Highway Realty LLC, NY A
to Z Construction Group, Inc., Index No. 7314/09 ("Rapalo Action").
2. In this action, American Guarantee seeks a declaration that Illinois Union, under
its primary policy, (1) improperly denied a defense for the Rapalo Action to American
Guarantee's and Il l inois Union's mutual insured, NY A To Z Construction Group, Inc. ("NY A
to Z"); and (2) mus t defend and indemnify NY A To Z for the Rapalo Action. In addition,
American Guarantee seeks damages caused by Illinois Union's breach of contract, which
necessitated American Guarantee incurring costs associated with the defense of NY A to Z in the
Rapalo Action.
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THE PARTIES
3. Plaintiff American Guarantee is a New York Corporation engaged in the
insurance business with a statutory home office located at One Liberty Plaza, 165 Broadway,
53rd Floor, New York, New York 10006, and a main administrative office or principal place of
business located at 1400 American Lane, Schaumbcrg, Illinois 60196. It is authorized to transact
business and has transacted business in the State of New York.
4. Upon information and belief, Illinois Union is a Pennsylvania Corporation with its
principal place of business located at 525 W. Monroe Street, Suite 400, Chicago, IL 60661 that is
authorized to, and does, engage in the business of insurance in New York.
5. Upon information and belief, NY A To Z is a New York Corporation with its
principal place of business located at 216-04 Jamaica Ave, Queens Village, NY 11428 that is
authorized to, and does, engage in the business of construction in New York.
6. NY A to Z is nam ed in this action as an interested party becau se it is an insured
under the Illinois Union primary policy.
JURISDICTION AND VENUE
7. This Court has jurisdiction un der CPL R § 30 01 , which p rovides for exclusive
jurisdiction over declaratory judgm ent proceedings. An actual controversy exists among the
parties to this action pertaining to the interpretation of the terms and conditions of insurance
policies issued by American Guarantee and Illinois Union to NY A to Z.
8. This Court has personal jurisdictio n over defendants pursuant to CPLR Sections
301 and 302.
9. Venue lies in the Suprem e Court of Ne w York, County of Ne w York, under
CPLR Section 503(a) as at least one of the parties resides in the County of New York.
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THE RAPALO ACTION
10. This action arises from a lawsuit that was filed by Luis Rapalo ("Rapalo") in the
Supreme Court of the Stale of New York, County of Kings, entitled Rapalo V. MJRB Kings
Highway Realty LLC, NY A To Z Construction Group, Inc., Index No. 7314/09 (the "Rapalo
Action").
11. In the Rapalo Action, plaintiff asserted personal injury claims against MJRB
Kings Highway Realty LLC (hereinafter "MJRB"), and NY A To Z arising from an alleged
accident that occurred on January 30, 2009, at a construction project located at 1623 Kings
Highway, Brooklyn, New York (the "Project").
12. MJRB was the owner of the property at 1623 Kings Highway at the time of the
accident.
13. In connection with the Project, MJRB hired NY A to Z to serve as general
contractor on the construction site.
14. In connection with the project, MJRB and/or NY A to Z hired an unknown entity,
of which Mr. Rapalo was an employee, to perform construction services.
15. According to the complaint filed in the Rapalo Action, Mr. Rapalo was working
on an outside wooden scaffold when the scaffold broke causing him to fall approximately two
stories.
16. Mr. Rapalo claimed that he has sustained serious and severe injuries as a result of
the accident including, but not limited to, a fractured skull.
THE INSURANCE POLICIES
17. American Guarantee issued umbrella policy AUC 5327456-05 to IRF
Construction Group, a risk purchasing group, covering the period from October 1, 2008, to
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October 1, 2010, with limits of $5 million per occurrence and $5 million in the aggregate, in
excess of a $1 million primary policy (the "American Guarantee Policy.")
18. NY A to Z was a "Participant/Named Insured" for the period October 2, 2008 to
Ma rch 7, 2009 on the American Guarantee Policy
19. Illinois Union issued commercial general liability policy number G224010946001
to NY A to Z effective March 7, 2008 to M arch 7, 2009 w ith limits of $1 million per occurrence,
and $2 million in the aggregate (the "Illinois Union Policy").
20. The Illinois Union Policy is primary and underlies the American Guarantee
policy.
21. The Illinois Union Policy includes the following policy language:
SECTION I. COVERAGES
COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE
LIABILITY1. Insuring Agreement
a. We will pay those sums that the insured becom es
legally obligated to pay as damages because of
"bodily injury" or "property damage" to which this
insurance app lies. We will have the right and duty
to defend the insured against any "suit" seekingthose damag es. How ever, we will have no duty to
defend the insured against any "suit" seeking
damages for "bodily injury" or "property damage"
to which this insurance does not apply.
22. The Illinois Union Policy further provides:
SECTION IV - CO MM ERCIA L GENERAL LIABILITY
CONDITIONS
Duties in the event of Occurrence, Offense, Claim or SuitYou must see to it that we are notified as soon as practicable of an"occ urre nce " or an offense which m ay result in a claim. . . .
You and any other involved insured must:Immediately send us copies of any deman ds, notices, sum monses
or legal papers received in connection with the claim or "suit";
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CLAIM CORRESPONDENCE RELATED TO THE RAPALO ACTION
23. Upon information and belief, MJRB, through a letter by Ace Westchester
Specialty Group, dated February 27, 2009, tendered a claim for the alleged accident to Illinois
Union and NY A to Z.
24. Illinois Union received that February 27, 2009 tender letter from MJRB no later
than on March 10,2009.
25 . On March 11, 2009, Handwerger and Sons ("H&S"), NY A to Z's broker, faxed a
letter to American Guarantee stating that they are putting the umbrella insurer on notice because
the insured has been brought into a lawsuit involving injury to an employee of a subcontractor.
26 . By letter dated March 27, 2009, Illinois Union disclaimed coverage to NY A to Z
for the accident on the grounds of late notice of occurrence.
27. Illinois Union's March 27 letter to NY A to Z provided, in relevant part, as
follows:
We call your attention to the fact that the alleged occurrence took place onor about Janua ry 20 [sic] 2009. Our first notice of this injury claim was on
or about March 10, 2009 via a tender letter from MJRB Kings Highway
Realty, LLC . Acco rdingly, it is evident that NY A to Z Con struction
Group, Inc. has violated the above stated conditions of the ILU policy
regarding notice of an occurrence; ILU hereby declines coverage to NY A
to Z for this matter.
28. On or about August 20, 2009, NY A to Z, through its broker, provided Illinois
Union with a copy of the Summons and Complaint in the Rapalo Action.
29. On or about September 18, 2009, Illinois Union again disclaimed coverage, this
time based upon late notice of claim in violation of the terms and conditions of the Illinois Union
Policy.
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30. On November 13, 2009 , American G uarantee wrote to Illinois Union to demand
that it immediately withdraw its denial of coverage in this matter and undertake the defense of
NY A to Z.
31. The November 13, 2009 letter from American Guarantee stated that Illinois Union
erred in its refusal to defend NY A to Z in the matter. The letter stated in relevant part:
[I]t is [American Guarantee's] understanding that NY A to Zalleges it became aware of the occurrence at the same time asIllinois Un ion. If this is accurate, and we have seen nothing yet toindicate otherwise, NY A to Z did not violate its obligation underthe Illinois Union policy. Accordingly, we believe there wasinsufficient information on which to base Illinois Union's
disclaimer.
32. In addition, the letter stated that if American Guarantee is required to defend NY
A to Z, it will seek reimbursement of all fees and costs incurred with respect to the defense of
NY A to Z due to Illinois Union's denial.
33. Throughout the commencement of the Rapalo Action, and despite the explicit
request from American Guarantee, Illinois Union has not undertaken a defense of NY A to Z as
required under their policy.
34. On November 13, 2009, in light of the failure of Illinois Union to undertake a
defense of NY A to Z, American Guarantee agreed to defend NY A to Z in regards to the Rapalo
Action, subject to a full and complete reservation of rights.
35. American Guarantee has retained counsel to defend NY A to Z in the Rapalo
Action subject to a full and complete reservation of rights.
AS AND FOR A FIRST CAUSE OF ACTION
FOR DECLARATORY JUDGMENT AGAINST ILLINOIS UNION
36. American Guarantee repeats and realleges each and every allegation in the
foregoing paragraphs as if fully set forth herein.
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37. The Illinois Union Policy obligates Illinois Union to defend and indemnify NY A
to Z in the Rapalo Action.
38 . Illinois Union has improperly denied coverage to NY A to Z.
39 . An actual and justiciable controversy exists between NY A to Z, American
Guarantee and Illinois Union regarding Illinois Union's obligation to defend and indemnify NY
A to Z, up to and including the policy limits, for any settlement or judgment in the Rapalo
Act ion.
40 . As a result of Illinois Union's wrongful disclaimer, American Guarantee has
incurred and will continue to incur costs and fees in connection with the Rapalo Action.
AS AND FOR A SECOND CAUSE OF ACTION
F O R D A M A G E S AGAINST ILLINOIS UNION
41. Plaintiff repeats and realleges each and every allegation in the foregoing
paragraphs as if fully set forth herein.
42. Illinois Union, as the primary insurer of NY A to Z, has a duty to defend NY A to
Z to the extent of their policy limits in regards to the Rapalo Action.
43. Illinois Union breached its obligations under its policy by refusing to defend NY
A to Z in the Rapalo Action.
44. American Guarantee has suffered damages as a result of Illinois Union's denial in
an amount to be proven at trial but not less than the amount that American Guarantee paid for the
defense of NY A to Z when Illinois Union improperly denied coverage.
45. An actual and justiciable controversy exists between American Guarantee and
Illinois Union regarding Illinois Union's failure to defend NY A to Z in the Rapalo Action.
WH E R E F O R E , Plaintiff American Guarantee respectfully requests that the Court enter
a judgm ent:
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Declaring that: (a) Illinois Union improperly denied a defense for the Rapalo
Action to American Guarantee's and Illinois Union's mutual insured, NY A to Z;
and (b) Illinois Union must defend and indemnify NY A to Z for the Rapalo
Action;
Awarding money damages to American Guarantee from Illinois Union for all
defense costs incurred by American Guarantee in the defense of NY A to Z in the
Rapalo Action, as well as all attorneys' fees, costs, and expenses that it has
incurred in prosecuting this action; and
For such other and further relief as the Court deems just and p roper.
Dated; New York, New YorkAugust 10, 2011
COUGHLIN D U F F Y
By:Adam M. Smith, Esq,
Wall Street Plaza88 Pine S treet, 28 th FloorNew York, New York 10005(212)483-0105Attorneys for Plaintiff,
American Guarantee &Liability Insurance Company
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