Atl. Cas. Ins. Co. v. Value Waterproofing, Inc.

Atl. Cas. Ins. Co. v. Value Waterproofing, Inc.

Opinion

 [*247]  OPINION & ORDER

DENISE COTE, District Judge:

This insurance coverage dispute arises out of a breach of contract and negligence lawsuit pending in the New York Supreme Court. The plaintiff Atlantic Casualty Insurance Company ("Atlantic Casualty") seeks a declaratory judgment that it has no duty to defend Value Waterproofing, Inc. ("Value") or to indemnify Value in the underlying action. Value asserts a mirror counterclaim requesting a declaration that Atlantic Casualty is required to defend Value in the underlying action and to indemnify Value for any damages it may incur therein. Value also asserts a counterclaim for breach of the insurance contract. Because Atlantic Casualty  [**2] has been prejudiced by its failure to receive timely notice of the claim and because Value's work was not covered by its insurance policy, the plaintiff's request for a declaratory judgment is granted.

 [*248]  PROCEDURAL HISTORY

Atlantic Casualty filed this declaratory judgment action on October 26, 2011, against defendants Value, Greenwich Insurance Company ("Greenwich"), Bullard Purchasing and Sales, Inc. and Kansas Fried Chicken, Inc. ("KFC").¹ Atlantic Casualty is the insurer of Value, a company that performs construction work. KFC is the owner of the property at which the claimed loss was sustained and Greenwich is KFC's insurer. On January 10, 2012, defendant KFC asserted cross-claims against its insurer Greenwich. The Court has declined to exercise supplemental jurisdiction over KFC's cross-claims against Greenwich.

Fact discovery concluded in October 2012. Expert discovery was conducted thereafter. The parties submitted a Joint Pretrial Order and proposed findings of fact and conclusions of law in December 2012. The trial in this case was conducted without objection in accordance with the Court's customary practices for the conduct  [**3] of non-jury proceedings, which includes the submission with the pretrial order of the direct testimony of a party's witnesses by affidavit where those witnesses are available to counsel. The parties also served copies of all the exhibits and deposition testimony that they intended to offer as evidence in chief at trial.

At trial, the plaintiff presented affidavits constituting the direct testimony of Luis Reyes ("Reyes"), a claims investigator who performed work for Atlantic Casualty; Kim Lawrence ("Lawrence"), an agent of the plaintiff's general managing agency Green Mountain Agency, Inc. ("Green Mountain"); and construction expert Herbert Cannon ("Cannon"). The plaintiff also subpoenaed Lakhwinder Kaur ("Kaur"), an insurance broker with Value's brokerage firm NYC Guardian Brokerage Inc. ("NYC Guardian"); and Jimmy Sadiq ("Sadiq"), an employee of Value, to testify at trial. Each of these witnesses appeared at trial and was cross-examined. The plaintiff also offered excerpts from the deposition of Horace Bullard ("Bullard"), the President and owner of KFC. The defendants offered counter-designations.

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