Jane Street Holding, LLC v. Aspen American Insurance Company

Filing 24

OPINION re: 6 MOTION for Summary Judgment / Plaintiff's Motion for Partial Summary Judgment Against Defendant Aspen American Insurance Company, filed by Jane Street Holding, LLC, 12 CROSS MOTION for Summary Judgment, filed by Aspen Am erican Insurance Company. Given the reasoning above, Defendant's motion for summary judgment regarding Plaintiff's claim for bad faith is granted and the claim is dismissed. Based on the reasoning above, Plaintiff's motion for summary judgment is denied, and Defendant's motion for summary judgment and dismissal is granted. It is so ordered. (Signed by Judge Robert W. Sweet on 12/31/2013) (ja)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

----------------------------------------x
JANE STREET HOLDING, LLC,
Plaintiff,

13 Civ. 2291

- against ­
OPINION

ASPEN AMERICAN INSURANCE COMPANY,
Defendant.
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APPEARANCES:

KASOWITZ, BENSON, TORRES
1633 Broadway
New York, NY 10019
By: Burt M. Garson, Esq.
Robin L. Cohen, Esq.

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Attorneys for the Defendant
MOUND COTTON WOLLAN & GREENGRASS (NYC)
One Battery Park P za
9th Floor
New York, NY 10004
By: Wayne R. Glaubinger, Esq.
Hilary M. Henkind, Esq.

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Sweet, D.J.

Plaintiff
"Jane

Street")

Rules

for Civil

Defendant
"Aspen").

Jane

has

Street

moved

pursuant
r

Procedure

Aspen

American

Jane Street

Holding,

Rule

("Plaintiff"

56

of

the

or

Federal

partial summary judgment against

Insurance

("Defendant"

Company

or

s that Aspen breached its insurance

1

policy obligation to pay up

to

$2.5 million

Jane Street

incurred to

its

ct

cross-moved

pursuant

Rule

56(b}

to

to

LLC

c

for

generator.
of

the

flood damage
Defendant has

Federal

Rules

for

Civil Procedure for summary judgment and to dismiss Plaintiff's
complaint

("Complaint").

Based

upon

the

facts

and

conclusions

set forth below,

Plaintiff's motion

partial summary judgment

is

Defendant's

r

denied,

and

motion

summary

judgment

and

dismissal is granted.

I. Prior Proceedings

This action was initiated by the Pl

iff on April 8,

2013 arising out of an insurance policy Jane Street purchased
from Aspen and subsequent refusal from Aspen to pay for the loss
of Jane Street s generator due to flooding

by Hurricane

I

Sandy

on

October

29,

2012.

Aspen

2

led

its

answer

to

Jane

Street's complaint on April 26, 2013.

Plaintiff filed the instant motion for partial summary
judgment

on

May

9,

2013.

scheduling

conference.

conducted.

Aspen

2013.

Oral

The

No

depositions

cross-moved

arguments

were

motion

for

held

was
or

summary
on

filed

prior

discovery
judgment

October

9,

to

have
on

any
been
28,

and

2013,

May

the

matter was marked fully submitted on the same day.

II.

The Facts

The facts have been set forth in the Plaintiff's Local
Civil Rule

56.1 Statement,

Plaintiff's
Local

Local

Civil

The

Rule

56.1

Rule

Counterstatement
Statement.

Civil

to
facts

the Defendant's Counterstatement to

the

56.1

Statement,

Statement
Defendant's

described below

and
Local
are

the

Defendant's

the

Pl

Civil

nti

Rule

's

56.1

undisputed except

as

noted.

Jane
proprietary
company's

Street

trading,

internal

is
and

assets.

in

the

conducts
The

business
global

company's

of

quantitative

trades

office

is

with

located on

the 33rd floor of One New York Plaza in lower Manhattan.

3

the

In
broker,

July

Hallahan,

2011,

Jane

McGuiness

Street,

&

through

y's,

Ltd.,

its

insurance

approached

Aspen

seeking to place a property and inland marine insurance policy
with Aspen. In seeking out insurance,
provided an Accord Commercial

Jane Street filled out and

Insurance Application

rm dated

July 5, 2011 (the "Application Form").

According

to

Jane

Aspen,

Street

premises for which it sought coverage as
33rd Floor,

New York,

identified

the

"One New York Plaza,

New York 10004" in the Appl

ion Form.

The premises for which Jane Street sought coverage was described
on the insurance application as

"40,000 sq

Improv." According to Jane Street,
"One New York Plaza,

33rd Floor,

the field labeled "Street,

the Application Form listed
New York,

County,

contends

New York 10004" in

State,

Moreover,

Jane

identi

"40,000 sq ft Office Property,

es

Street

City,

office Property,

that

the

Zip

&

4 [sic] ."

Application

Improv"

Form

in the field

labeled "Part Occupied," and identifies the potential carrier as
"One Beacon America Insurance," not Aspen.

The Application Form

was neither completed nor signed by Jane Street.

The
identi
but

had

ed
no

the

"Property

Section"

construction of

number

listed

in

of

the

"#

4

of

the

Application

building as
basm' ts."

"50+"
For

the

Form,

stories,
section

listed

as

"other

occupancies"

in

the

Application

Form,

Jane

Street listed "offices."

Subsequent
the Aspen
2,

to

Policy No.

its

IMA8P2711 for

2011 to September 2, 2012

2011-2012

Aspen

application,

Jane

the policy period September

coverage

for:

limit for Electronic Data Processing Equipment
million limit for the Commercial Out Program
for

purchased

(the "2011-2012 Aspen Policy"). The

Policy provided

$15 million limit

Street

Equipment Breakdown

(i)

("EDPIt);
("COP");

("EB").

was covered under all three coverage parts,

$10

million
(ii)

and

$15

(iii)

Flood damage

but was capped at a

$2.5 million sublimit.

The three

coverage parts

partially overlapping

areas

of

covers

damages.

three different,

The

COP

Coverage

but
Part

states the following:

1.

Covered Business Personal Property ­

Covered business personal property means "your" business
personal property in buildings or structures at a "covered
location" or in the open (or in vehicles) on or wi thin
1,000 feet of a "covered location."

(Partenza Aff., Ex. 2, at A023.)

The

COP

Coverage

Part

5

defines

"covered

location"

to

mean

"any

location

structures,

or

coverage."

(Id.,

or

premises

business

where

personal

at A052.)

'you'

property

However,

have

buildings,

covered

under

under the 2011-2012 Aspen

Policy if a Scheduled Locations Endorsement was added,
I

covered

location I

Location

means

a

Id. )

Schedule."

location
The

this

that

Policy

is

"the term

described

contains

a

on

Scheduled

Locations Endorsement and a Location Schedule which lists
New York Plaza,

33rd

oor,

New York,

Location" for the COP Coverage Part.

The

EDP

Coverage

Part

t

"One

NY 10004" as the "Covered
Id., at A048.)

insures

damage

to

"protection

and control systems" which are located "at a premises described
on

the

A023. )

'scheduled
Under

the

of
EDP

coverages. ,II
Coverage

(Partenza

Part,

Aff.,

"Protection

Ex.
and

2,

at

control

systems" are defined to include an "uninterruptible power supply
system,
A022.)

line

conditioner,

and

voltage

regulator."

Id.

at

It further contains a "schedule of coverages" which lists

the described premises as

aintiff's mailing address:

"One New

York Plaza, 33rd Floor, New York, NY 10004." (Id., at A013.)

The

EB

Coverage

Part

insures

property that results from an "accident'
at

"covered

"Accident"

is

locations."
defined

in

(Partenza
the

Policy

6

damages

covered

to "covered equipment"

Aff. ,
to

to

Ex.

include

2,
a

at

A082.)

"mechanical

breakdown."
include

(Id.,

at

"equipment

energy. "

(Id.,

kdown"

at

the

transmits,
states

Policy

"malfunction

component

or

failure,

or

that

failure

faulty

fined

is

The

A052.)

parts,

"Covered equipment"
generates,

that

includes

electronic

A051.)

to

utilizes

"Mechanical

of

moving

installation,

or
or

blowout." (Id., at A021.)

aintiff,

According to

the EB Coverage Part provides

coverage that is subject to the terms and conditions of the COP
Coverage Part.
Part

(Partenza Aff.,

insures damage

results

from

an

Id.

including

"a

def

at A082.)

A052.)

mechanical

is caused by or

"Covered equipment"

"Accident"

is

direct

id.,

breakdown"

at

transmits,

is

breakdown",

"Mechanical

The EB Coverage

"covered equipment"

that generates,

at

tion

to

at A082.)

include "equipment
energy."

2,

to covered property which

"accident"

Id.,

locations."

Ex.

is

at

"cove

defined

to

or utilizes

physical
A051),

loss

and

the

contained in the

EDP

Coverage Part and includes the "malfunction or failure of moving
or electronic parts,
blowout."

(Id.

component failure,

at A021.)

the COP Coverage Part.

faulty installation,

"Covered locations"

According to Defendant,

or

is defined under
the EB Coverage

Part is "subject to the 'terms' and conditions of the Commercial
Output

Program

ti tIed Agreement,

Property

Coverage

Definitions,

Part

Property Not

7

under

the

Covered,

Sections
What Must

Done In Case of Loss,

Loss

Payment,

and Other Conditions."

(Id., at A082.)

After September 2,
Jane

Street

basement

purchased

of One

a

2011 but before September 2,

generator

Manhattan

insurance broker

za.

advised Aspen

and

installed

Neither

that

Jane

Jane

2012,

it

in

Street

nor

Street

its

had purchased

the generator or that the generator was located in the basement
level of One New York Plaza.

Approximately

a

year

after

Jane

Street

was

first

issued the 2011-2012 Aspen Policy, Jane Street and Aspen renewed
the 2011-2012 Aspen Policy with Policy No.
from September 2,
or

"Aspen

IMA8 P2712 ,

2012 through September 2,

Policy").

The

Policy

was

2013

renewed

effective

(the "Policy"

"as

expiring."

Defendant contends that the Policy was renewed on the ident

1

terms as the 2011-2012 policy.

On
Manhattan

October

area.

As

a
One

2012

result

Hurricane

of

Manhattan

level

Street s

generator suffered damages.

generator was a total loss.

8

Sandy

Sandy's

basement
I

of

29,

Plaza

was

hit

storm
flooded,

the
surge,
and

lower
the
Jane

According to Jane Street,

On
notice

of

Aspen,

or

the

Jane

about
loss

November

of

Street

the

~

5 and Ex.

flood,

1.)

a

Street's

Aspen's

premises

on

Services

purchased the
Aspen

Group

2012,

further

learned that

the

the

provided

According
of

loss"

to
as

(0' Hara

contacted Jane

and was granted access to

November

("York")

before

Aspen.

"description

29,

2012.

During

this

Aspen's outside adjuster York

learned

generator after the

Policy but

to

Street

outside adjuster

inspection of One New York Plaza,
Risk

Jane

due to Hurricane Sandy."

Street on or about November 5,
Jane

2012,

generator

provided

"Equipment under water,
Aff.,

1,

that

Jane

start-date

inception

of

2012-2013

Street

the

had

2011-2012

Policy.

33rd Floor of One New York

Aspen

Plaza is

approximately 40,000 square feet.

On

November

29,

2012,

York

sent

a

letter

to

Jane

Street advising that the generator was located in the basement
of

One

such,

New

York

aza

rather

than

an

"insured

location."

As

York wrote that coverage was limited to $50,000 under the

sublimit
Policy.

r

"locations

You

Elect

Not

to

Describe"

in

the

(O'Hara Aff., Ex. 2.)

Following York's visit to One New York Plaza,

various

letters were sent between parties regarding the coverage of Jane
Street's generator.

On or around January 24,

9

2013,

Aspen sent

Jane

Street

a

under the
loss.

letter
icy was

(Garson

Declo,

stating

that

the

undisputed

$50,000 and included a
Ex.

2.)

On

or

amount

owed

proposed proof of

around

February

26,

2013,

Jane Street's counsel sent Aspen a sworn statement and enclosed
a "revised proof of loss for the damage to t
speci

Aspen generator,

cally providing that the actual cash value of the cla

for damage to Aspen's generator is $2.2 mill
Ex.

."

(Garson Decl.,

3.) Aspen rejected Jane Street's Proof of Loss via letter on

March 4,2013.

(Glaubinger Declo, Ex. 7.)

On or around March 14, 2013, Aspen sent Jane
$50,000.

check
limi t

of

Street's
Street,

coverage

This

is

under

the

rson

generator.
Plaintiff

reserved

the

amount

Aspen

Pol

Decl.,

Ex.

Aspen

its

rights

for

contends

is

the

to

Jane

According

4.)

damage

to

Jane

when

it

accepted

not paid any additional mon

check. To date, Aspen

reet a

the

to Jane

Street for the generator.

The

Complaint

of contract;
h.
breach

(2)

alleges

three

contract

of

breach of fiduciary duty;

Plaintiff has moved for part
of

causes

claim;

10

(1)

and

bad

(3)

1 summary judgment on the

Defendant

judgment and dismissal on all claims.

action:

has

moved

r

summary

III.

Plaintiff's Motion For Partial Summary Judgment

Is Denied And Defendant's Motion for

Summary Judgment And Dismissal Is Granted

a. The Applicable Standard

Summa

judgment is granted only if there is no

genuine issue of material fact and the moving party is entitl
to judgment as a matter of law.

Fed. R. Civ. P. 56(c); see

Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548,
91 L. Ed. 2d 265 (1986); SCS Commc'ns, Inc. v. Herrick Co., 360
F.3d 329, 338 (2d Cir. 2004). In

rmining whether a genuine

issue of material fact does exist, a court must resolve all
ambiguit

s and draw all reasonable in

rences against the

moving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d
538 (1986); Gibbs-Alfano v. Burton, 281 F.3d 12, 18 (2d

r.

2002) .

In addition, courts do not try issues of
motion

on a

summary judgment, but rather, determine "whether the

evidence presents a sufficient disagreement to require
submission to a jury or whet

it is so one-sided that one

party must prevail as a matter of law." Anderson v. Liberty
477 U.S. 242, 251 52, 106 S. Ct. 2505, 91 L. Ed. 2d

11

202 (1986).

The moving party has the initial burden of showing
that there are no material facts in dispute, Adic
Kress

&

s v. S.H.

Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 26 L. Ed. 2d 142

(1970), and can discharge this burden by demonstrating that
there is an absence of evidence to support the nonmoving party's
case.

Celotex, 477 U.S. at 325. The nonmoving party then must

come forward with "specific facts showing that there is a
genuine issue for trial," Fed. R. Civ. P. 56(e), as to every
element "essential to that party's case, and on which that party
will bear the burden of proof at trial." Celotex, 477 U.S. at
322. "[TJhe non-moving party may not rely simply on conclusory
allegations or speculation to avoid summary judgment, but
instead must offer evidence to show that its version of the
events is not wholly fanciful." Morris v. Lindau, 196 F.3d 102,
109 (2d Cir. 1999)

(internal quotations omitted).

b. Defendant's Motion for Summary Judgment on the Contract
Claim Is Granted And Plaintiff's Motion Is Denied

1. The COP Coverage Part Does Not

Provide Coverage To The Generator

Under New York law,

"a policyholder bears the initial

12

burden of showing that the insurance contract covers the loss."
Roundabout Theatre Co. v Continental Cas. Co.,

751 N.Y.S.2d 4, 7

(N.Y. App. Div. 2002). In interpreting an insurance policy:

The New York approach to the
interpretation of
contracts of insurance is to give effect to the intent
of the parties as expressed in the clear language of
the contract. Unambiguous terms are to be given their
plain and ordinary meaning, and ambiguous language
should be construed in accordance with the reasonable
expectations of the insured when he entered into the
contract.

Southern New Jersey Rail Group, LLC v. Lumbermens Mut.
Cas.

Co.,

(S.D.N.Y.

No.
Aug.

Assurance Co.,
June

06

19,

13,

4946(LAK) (AJP),

2007)

94 Civ.

2003);

N.Y.3d 118,

Civ.

see

122,

(quoting

7621,
also

United

Cragg

v.

contracts

relating

insured

the

vor

premises

to
is

2296506,

States

Allstate

(N.Y.

ambiguity in an exclusionary clause,
in

WL

v.

2003 WL 21436219 at *2-3

950 N.E.2d 500

provision

2007

ambiguous,

" [i] f
that

Similarly,
the

Am.

*8

Home

(S.D.N.Y.
Corp.,

17

(if there "is any

[courts will]

insured").

property,

2011)

Indem.

at

construe the
in

insurance

description

meaning

should

be

of

the

given

which is the most favorable to the insured." Bronxville Props.,
Inc. v.

Friedlander Grp"

Inc"

No. 2001-07276, 2001 WL 34687620

(N.Y. App. Div. Jan. 31, 2002).

13

"Insurance contracts must be
common

"

speech . .

Id.

If

an

insurance

covers a disputed location or object,
from

policy

coverage . . . are

interpretation or implication,
and

narrow

construction .

interpreted according to
policy's

coverage

"exclusions or exceptions

not

to

be

but are to be accorded a
. before

permitted to avoid policy coverage,

an

insurance

it must

by

extended

strict

company is

satisfy the burden

which it bears of establishing that the exclusions or exemptions
apply in the particular case,
other

reasonable

State Farm Fire
(N.Y. 2009)

and that they are subject to no

interpretation."
&

Cas.

Co.,

Pioneer Tower Owners Assn.

12 N.Y.3d 302,

307,

(quoting Seaboard Sur. Co. v Gil

304,311,476 N.E.2d 272

v

908 N.E.2d 875

tte Co.,

64 N.Y.2d

(N.Y. 1984)).

New York courts have held that if the description of
the premises is not restricted to a particular office suite or
floor,

the policy covers

location.

the entire premises

In Zoha Creations,

at Lloyd's, 575 N.Y.S.2d 51
policy at
Street,

issue

insured

New York,

Ltd.

V.

(N.Y. App.

at

the described

Those Certain Underwr

rs

Div. 1991), the insurance

"Zohar Creations,

Ltd.,

2-4

West

47th

New York 10036." The definition of "premises"

was not otherwise restricted in the policy, and the insured only
occupied

Room

204A

coverage

extended

to

of

that

the

location.

insured's

14

The

property

court
that

held
was

that
stolen

while

in

the

hallway

outside

Room

204A

and

to

"the

entire

property described as 204 West 47th Street" since if the insurer
had intended to restrict the defin

ion of "premises",

required to do so in clear and unambiguous language.

"it was

Id. at 51­

52.

In

insurance

contrast,
oor

particular

or

office

contracts

space

limits

particular area in a multi-story building.
Inc.

v.

Home Ins.

the

insured,

T&G

548 N.Y.S.2d 29

Knitwear,

purchased

describe

coverage
In T&G

to

locations

added

by

the

premises of one of its contractors,

that

twear Co.,

(N.Y.

App.

insurance

insured

a

------------------~

Div.
from

to

the

policy

1989),
insurer

the insured's goods at various locations.

which
the

Co.,

that

One of
was

the

Lynch Knitting Mills, which

occupied the second and third floors of a building in Brooklyn.
this

Shortly a
damaged

the

Brooklyn

submi tted a
Lynch,
that

but
was

location

claim
also

in

the

for

for

was

added

building.

As

loss

not

f

loss

to

of

a

policy,

a

the

only at

sustained to

possession

the

party

the

the

on

fire

insured

premises

insured's

not

a

of

property

the

insurance

the

"Personal

policy on the sixth floor of the same building.

The

policy

in

T&G

Property of the Named Insured

Knitwear

insured

. . all while at the location(s)

15

described in the Declarations or within 500 feet thereof if in
the

open,

on

land,

or

in

or

on

land

vehicles."

The

insured

contended that, pursuant to this provision, the entire amount of
loss at ACD was covered inasmuch as that property on the sixth
floor was within 500 feet of the scheduled Lynch premises.

The

court rejected the argument:

The additional coverage provided is for property at
insured locations "or wi thin 500
thereof if in
open, on land, or in or on land vehicles." The
property at ACD was not in an insured location and,
while
may have been within a radius of 500 feet,
was stored in an enclosed floor in a building, not
the open, or on land, or in a land vehicle. The
language of the policy,
therefore,
is clear and
unambiguous
and
the
lAS
court
properly
granted
defendant's motion for summary judgment . . . . .

Id.

at 30;

Inc.,

see also Evergreen Nat.

111

S.W.3d

(Tex.

669

App.

Indem.

Co.

v.

Tan It All,

(where

2003)

the

policy

provision covered "Your business personal property located in or
on the building described in the Declarations or within 100 feet
of

the described premises"

declarations

specified

insured I s suite,

a

and

the

suite

in

premises
a

described

shopping

in

complex,

the
the

and not the entire complex, was the "described

premise" within the meaning of the insurance policy); Streamline
Capital,
8123(NRB),

L.L.C.

v.

Hartford

2003 WL 22004888,

Cas.
at

*7-8

16

Ins.

Co. ,

(S.D.N.Y.

No.
Aug.

02

Ci v.

25,

2003)

(finding the phrase "property at the described premises" used in
a commercial property policy meant the "plaintiff's own personal
property

in

its

office

suite"

as

opposed

elsewhere in One World Trade Center);
Cimran Co.,

Inc.,

963 N.Y.S.2d 182,

to

property

Seneca Ins.
185

(N.Y.

located

Co.,

App.

Inc.

Div.

v.

2013)

(where the insured represented on its insurance application that
the insured property was a one-story building, the fourth floor,
from

where

a

construction

worker

fell,

was

not

"designated premises" insured by a commerci

part

of

the

general liability

policy; "[iJf a policy insures a portion of a building,

it does

not

of

cover

an

injury

occurring

in

another

building");

Axelrod v.

Maryland Cas.

(N. Y.

Di v.

(where the demised premises was

App.

1994)

Co.,

portion

619 N.Y.S.2d 10,

and unambiguously listed in the policy as being
Street,

4th

Floor,"

an

accident

that

the

clearly

"29 East

took place

10

on the

19th
first

floor was not covered).

The
Personal

COP

Property"

which

was

buildings or structures at a
(or

vehicles)

loca tion. "'

Part

Coverage

on

or

(Partenza AfL,

covers

"business

"Covered

personal

'covered location'

within
Ex.

2,

1,000

feet

at AO 57.)

Business

property

in

or in the open
of

a

'covered

The Aspen

Policy

specified that the "covered location" that was insured was "One
New York

aza, 33rd

oor, New York NY 10004." Further, the COP

17

Coverage

Part

defined

premises

where

"covered locations"

'you'

have

means a
(Id.,

location that

at

A052.)

Endorsement"

that

personal

[the Aspen Policy],

Policy

states:

or

property

if the Schedule Locations

is described on the

The

"any location

business

covered under this coverage. However,
Endorsement is added to

as

included

'covered location'
Schedule.

"Schedule

a

Locations

Location

"Coverage provided by the Commercial

Output Program coverages applies only to the 'covered locations'
described

on

the

Locations

"Locations

Schedule"

New York

aza,

Given

inclusion

the

Locations

Schedule."

identified the

Schedule

the

and

NY 10004.

Schedule

language

at

AO 9 6-98.)

"Covered Location"

33rd Floor, New York,
of

(Id.,

Location

therein,

Id.,

as

"One

at A048.)

Endorsement

the

The

Aspen

and

Policy

clearly limited its coverage to the 33rd floor of One New York
Plaza.

Plaintiff
coverage
with

the

'covered

contends

for

damage

flood

inclusion
location'"

of

the

that

to

the

Jane

"in

Aspen

Street's

Policy

provided

downtown

location

bui

~~~~~~~~~~~~~~~~~--~--~

language,

that

this

language

extends

coverage to the entire building at One New York Plaza,
the

basement.

contends

that

(PI.

this

Br.,

is

the

at

8

only

Policy.

18

(emphasis
viable

added).J

COP

including
Plaintiff

interpretation

of

the

Plaintiff's reading would vitiate the inclusion of the
33rd Floor
Schedule
language

in

the

Location

Locations

Schedule and the

Endorsement.

The

property

distinguishes

"buildings

inside

property in the open. The phrase "
a

'covered location'

or

the

structure"

building

from

buildings or structures at
coverage

extends to property (a) that is at a "covered location"

within a

or

the

or

that

building or structure;

in

language of the

(b)

open"

clari

es

in the open on or within

1, 000

of the "covered location." See, e.g., T&G Knitwear Co., 548
N.Y.S.2d at 30; velvet Ice C

Inc. v. Wausau Ins. Cos.

698

------------------~-----------------------------

F.

Supp.

128,

130

(S.D.

Oh

1988)

(the phrase

"in or on the

building or in the open (including within vehicles) on or within
100

feet

of

the

designed

premises"

unambiguously

insures

property inside the building or in the open on or wi thin 100
feet of the building). This interpretation of the Policy is the
only reading that does not destroy the language of the Schedule
Location Endorsement and Locations Schedule.

Reading
Locations

Schedule

the
as

Schedule

Locations

identifying

only

Endorsement
the

33rd

and

floor

the
as

a

"covered location" is consistent with Jane Street's application
for

insurance,

which

identified

the

premises

information,

an

entry separate from the applicant's mailing address, as "One New

19

York

Plaza

33rd

Floor

New

York

application lists "40, 000 sq.

NY

10004."

In

addition,

the

ft Office Property" as the "Part

Occupied" with respect to the premises information, and the 33rd
Floor of One New York Plaza is approximate 40, 000 square feet.
(0

I

Hara

Aff.,

7.)

<J1

covering only the
Aspen

The

Policy

is

thus

33rd Floor of One

Policy did not

cover Jane

initial

burden

of

showing

York

Street I s

the basement of One New York Plaza,
its

appropriately
Plaza.

As

read

such,

as
the

generator located in

and Plaintiff has failed to

that

its

loss

took

place

at

a

"covered location." Roundabout Theatre Co., 751 N.Y.S.2d at 4.

Plaintiff cites to Japour v.
625 N.Y.S.2d 750
an

insurer I s

also be the

Ed Ryan & Songs Agency,

(N.Y. App. Div. 1995), for the proposition that

interpretation must
only fair

not

only

interpretation.

The

be

reasonable,

but

insurance policy at

issue in Japour defined covered property with reference to the
building described

in the declarations but

addi tions"

752.

three-car

Id.

at

garage

declarations

was

The

Court

located behind
a

"completed

concluded

the

thus

makes

the

addition"

si tuat ion

that

"completed

the

building described

coverage was available for the garage.
language

included

and

to

policy

in

the

bui lding,

the

The di

detached

and

rence

policy

contemplat

Japour not similar to those in the instant action.

in

Importantly,

it is difficult to read the "Scheduled Locations Endorsement" as

20

anything other than a limit of coverage to the 33rd floor.

Jane

Street

also

tes

L.L.C. v. Farmers Mut.
Co.,
------------------------------------the

proposition

that

the

basement of a building.

to

247 P.3d 236

"covered

(Mont.

location"

incl udes

The insurance agreement

described

buildings

the

in

Fixtures,

(2 )

Permanently

personal

furnished

by

property
you

as

structures

at

the

uding:

(1)

Buildings
premises
Completed

including

outdoor

fixtures;

(3 )

(al

installed:

Your

and

Declarations,

additions:

the

in Park Place

defined "Covered Property" as "include [ing]
the

for

This case is also sufficiently distinct

from the instant action.

meaning

2010)

Machinery;

and

Equipment;

(4)

in

apartments,

landlord;

. . .

"

(bl

rooms
rd.

at

or

common

239.

The

areas
Court

concluded that a carport was covered under the agreement partly
due

to the

fact

that

the

carport I s

value

total value of the apartment building.

was

included in the

Significantly,

the Court

noted that the insured "premises" could not be limited to only
the buildings described in the declarations since "coverage very
clearly extends beyond the buildings specifically listed in this
section," such as for completed additions,
and outdoor fixtures.

rd. at 241. However,

mach

ry,

equipment

the court declined to

accept the insured's argument that "premises" was defined to be
"as per [the] location address" in the policy. rd. at 241.

21

Given
Aspen

installed

elects]

the

terms

the

and

generator

not to describe,"

"covered location."
generator

and

language
in

a

in

is

limited

[the

insured

2.),

Ex.

COP coverage does

coverage

Policy,

"location"

(O'Hara Aff.,

Thus,

Aspen

to

and not at a

not extend to

the

$50,000

the

sublimit

previously paid by Aspen to Jane Street.

2. The EB Coverage Part Does Not Provide

As
that

previously
covers

noted,

"direct

the

physical

EB

Coverage

loss

to

Part

provides

covered

property

caused by or resulting from an 'accident' to 'covered equipment'
at 'covered locations'."

(Partenza Aff., Ex. 2, at A082.)

Coverage Part "is also subject to the 'terms'

EB

and conditions in

the Commercial Output Program - Property Coverage Part under the
sections

Definitions

titled

"Covered Location"

and

II

"Scheduled Locations

Accordingly,
Endorsement"

the
terms

from the COP Coverage Part applies to the EB Coverage Part.

The

EB Coverage

Part

goes

on

to

state:

"[ t] he

term

covered property as used in this coverage part means the types
property described under the Property Covered section of the

22

Commercial Output
the

property

covered

Supplemental
above,

the

Program -

Marine
COP

Property Coverage

described

Coverages.!!

Coverage

Part

in

the

(Id. )

does

as

well

Supplemental

Given

not

Part

that,

cover

Jane

as

as
and

noted

Street's

generator located in the basement of One New York Plaza and the
"Covered Location"

and

"Scheduled Locations

Endorsement 11

terms

of the Policy limits coverage of the COP Coverage Part to the
33rd floor,

the EB Coverage

Part

similarly does not cover the

generator. l

3. The EDP Coverage Part Does Not Cover The Generator

The EDP Coverage

Part extends

systems

at

control

and

described
at

A023.)

located

the "schedule
The

"schedule

Jane

coverages."
of

coverages!!

coverage

to protection

Street's

"premises"

(Partenza Aff., Ex. 2,
attached

to

the

EDP

Coverage Part states that the "described premises" is "One New
York

1

Plaza,

33rd

Floor,

New

York,

NY

10004."

(Id.,

at AOI3.)

Under the COP and EB Coverage Parts, "Accident" means "direct physical loss
[from, but not limited to] a. mechanical breakdown; . . . . " (Id., at A051.)
The only definition of "mechanical breakdown" in the Aspen Policy is in the
EDP Coverage Part, and it defines the term as "the malfunction or failure of
moving or electronic parts, component failure, faulty installation, or
blowout." (Id., at A021.) Aspen argues that a mechanical breakdown did not
occur, since a "mechanical breakdown must be the cause of loss, rather than
an effect of loss." (Def. Op., at 16 n.5.) Given that none of the cases
cited by Defendant is an opinion from a New York court or a court in this
jurisdiction and the EB Coverage Part does not extend to the generator
because of the reasons noted above, analysis of what is a "mechanical
breakdown" in the policy is not required at this time.

23

Gi ven the
EDP

clear unequivocal

Coverage

Part

only

covers

located on the 33rd floor,
Street's

generator

language in the Aspen

located

protection

and

Policy,

control

the

systems

and coverage does not extend to Jane
in

the

basement

of

One

New

York

Plaza.

Given

the

reasoning

above,

the

COP,

EDP

and

EB

Coverage Parts do not extend insurance coverage under the Aspen
Policy to Jane Street's damaged generator in the basement of One
New York Plaza. Plaintiff's motion for summary judgment on these
issues is denied, and Defendant's motion is granted.

c.

Defendant's Motion For Summary Judgment On The
Breach of Fiduciary Duty Cla~ Is Granted

The Complaint has made an additional
of

fiduciary

Street

due
loss

for

Plaintiff

duty

has

to

Aspen's

of

its

requested

for

s for this claim.

attorneys'

Generally,

refusal

to

generator.
punitive
(Id.

':l[

aim for breach
compensate

(Compl.

damages

':l[':l[

as

Jane

42-49.)

well

as

(b).)

"[ a] n insurance contract does not give rise

to a special relationship of trust or confidences unless special
circumstances

exist

that

might

24

give

rise

to

a

fiduciary

relationship."

Trustees

of

Princeton

Union Fire Ins. Co. of Pittsburgh,
(N.Y.

Sup.

America,
the

which

(citing

may

be

render

506,

Meagher v.

imbued

the

(S.D.N.Y.

v.

Prudential

Div.

elements

2001).

of

more

Metropolitan Life

than

a

Co.,

463

(Table)
Co.

However,

trust

(analyzing

Ins.

National

Ins.

between

Ins.

Estate

of

"under

insurer

and

mere

Metropolitan Life
1997)

v.

839 N.Y.S.2d 437

relationship

relationship

Dornberger v .

546

App.

the

with

Pa.,

Bates

(N.Y.

circumstances,

association."
Supp.

2007)

724 N.Y.S.2d 3

right

insured

Ct.

University

and

confidence

arm's-length
961

Co.,

of

N.Y.S.2d

F.

Wheaton,
727

(N.Y.

Sup. Ct. 1983)).

Unlike
Plaintiff has

the

situations

in

not pled any elements

Dornberger

and

Meagher,

of trust or confidence in

its relationship with Aspen that showed a more than arm's-length
association.

That

the

Policy

insures

"protection

and

control

systems," including "uninterruptible power supply systems," does
not place Aspen into a position of special trust and fiduciary
responsibility.

Indeed, the fact that Jane Street did not report

the purchase and installation of the generator into the basement
of One New York Plaza to Aspen prior to the renewal of the 2011­
2012

Aspen

Policy

belies

any

such

relationship

of

trust

or

confidence. Thus, despite the Dornberger Court's dicta that "New
York

courts

do

not

follow

a

per

25

se

rule

prohibiting

the

recognition of a fiduciary relationship in the insurance context
rather,

New

York

courts

will

permit

a

jury

to

assess

the

circumstances of the relationship to determine if it is one of
trust and confidence," 961 F. Supp.
Plaintiff

has

relationship

not

pled

any

existed between

506,

546-47

allegations
Aspen

and

that
Jane

(S.D.N.Y.
suggests

Street

1997),
such

that

a

would

justify dismissal of Defendant's motion for summary judgment on
this claim.

Given
summary

the

judgment

reasoning

regarding

above,

Plaintiff's

Defendant's
claim

motion

for

for

breach

of

fiduciary duty is granted and the claim is dismissed.

d. Defendant's Motion For Summary Judgment

On The Bad Faith Claim Is Granted

Plaintiff has also made a claim for bad faith based on
Aspen's denial of Jane Street's insurance claim.
54.)

As with the breach of fiduciary duty claim,

requested

for

this claim.

punitive

is

as

well

as

'l1'l1 50­

Plaintiff has

attorneys'

fees

for

contracts

of

(Id. 'l1 (c).)

in

"As
insurance

damages

(Compl.

a

all

covenant

contracts,
of

good

26

implicit
faith

and

in
fair

dealing,

such

that

I

a

reasonable

insured

would

understand

promises to investigate in good
Bi-Economy Market,
N.Y.3d 187,
v.

Con t' 1

1995) ).

194,
Ins.

that

the

insurer

and pay covered claims.'"

Inc. v. Harleysville Ins. Co. of New York, 10
886 N.E.2d 127
87

Co.

However,

"an

N.Y.2d

insurer

(N.Y.

2008);

308,
is

318,

not

662

liable

(citing N.Y.
N.E.2d
in

Univ.

763

excess

(N.Y.
of

the

policy limits for the breach of an insurance contract absent bad
fai th."
No.

In

re AXIS

Reinsurance

07-CV-07924-JSR,

2010)

(quot i ng

2010 WL

Co.

1375712,

to

faith is t
an

ying

*5

(S.D.N.Y.

Li tig. ,
Mar.

7,

punitive

(N.Y.

App.

and

att

damages

1996)). With
fees,

"bad

applicable standard by which to determine whether

insurer will

policy

at

Ins.

_S_T_V_ _
G_r_o_u---"p-','---_I_n_c_.__v_.__Am e_r_i_c_a_n _
__
_ C_o_n_t_i_n_e_n_t_a_1
650 N.Y.S.2d 204

regards

REFCO Related

limits.

be made
Absent

to

the

pay

for

damages

in

excess

requisite

showing

of

bad

of

faith,

its
an

insurer's monetary exposure is restricted to the policy limits."
Id. at *7.

Plaintiff's

claim

for

bad

faith

rests

solely

on

Aspen's refusal to pay for the loss of the generator under the
Policy.

(Compl.

'3l 51.)

"When the alleged breach of t

covenant of good faith and

implied

r dealing is intrinsically tied to

the damages allegedly resulting from the breach of the insurance
contract,

those

c

ims

are

redundant."

27

Trustees

of

Pr

v.

Univ.

Nat'l

N.Y.S.2d

437

insurer IS

Union

(Table)

Fire

Ins.

(N.Y.

Co.

Sup.

interpretation

of

Ct.
an

of

Pittsburgh,

2007).

Moreover,

insurance

unreasonable no bad faith can be found.

Pa.,

Id.

839

where an

policy

not

is

Mere difference of

opinion between an insurer and an insured over the availabil
of coverage does not constitute bad faith; to show bad faith the
insured

must

demonstrate

that

"no

reasonable

carrier

would,

under the given facts" deny coverage. Sukup v State of New York,
19

N.Y.2d

Bartlett

519,

v.

522,

227

Nationwide

2013 WL 623497,

at

does

a

recognize

contractual

842

(N.Y.

Fire

Ins.

Co.,

Mut.

*3

(W.D.N.Y.

cause
i th

bad

N.E.2d

of

upon

Feb.

action

19,

insurer denied coverage as a

and

(2)

for

an

coverage under the standards of a

see

also

12-CV-4 35-A.,
("New York law

insurer's

legations

result of

the insurer lacked even an

No.

2013)

well-pleaded

the

1967);

extra-

that:

(1)

'gross negligence';

'arguable'

basis for denying

reasonable insurer.")

(citing

Sukup, 19 N.Y.2d at 281).

Plaintiff
sufficiently

pled

has

not

allegations

shown
to

suf

support

cient
an

evidence

inference

of

or
bad

faith.

Plaintiff made mere conclusory allegations that Defendant

denied

coverage

"where the

in

bad

th,

but

insurance carrier has

coverage." Estee Lauder Inc.

v.

an

bad

faith

arguable

cannot
case

for

be

found

denying
2012

28

Op 30474 (U)

NY Sl

Meats v Ins.
aff'd

62

Co.

(N. Y.

Sup.

of N. Am.,

N.Y.2d

895

Ct.

2012)

(quoting _D_aw_n _ __
_

470 N.Y.S.2d 624

(1984)).

Plaintiff

(N.Y. App.

and

Div.),

Defendant

had

a

legitimate dispute as to the interpretation of the Aspen Policy.
Aspen also promptly conducted its investigation into the damage
at One New York Plaza and paid the sum owed to P
the undisputed portion of the Policy.

intiff as per

s conduct by Defendant

se to the level of bad faith.

does not

Jane
Estates,

Inc.

Street

cites

to

v Hudson Ins.

and

Co.,

10 N.Y.3d 200,

Panasia

886 N.E.2d 135

(N.Y. 2008), contending that New York law recognizes a claim for
consequential

damages

for

the

breach

of

the

covenant

fai th and fair dealing in an insurance contract.
13.)

Jane

cost

in

Street

claims

bringing

the

consequential

instant

"[C]onsequential damages re

context,

so

good

(Compl.

Reply,

solely

damages

(Pl.

for

~~

(b);

at
the

(c).)

ing from a breach of the covenant
ing may be asserted in an insurance

of good faith and fair
contract

action.

of

long

as

the

damages

were

within

the

contemplation of the parties as the probable result of a breach
at

the

time

N.Y.3d at 203
10

N.Y.3d

"designed

at
to

of

or

or to

contracting."

ernal quotations omitted);
193 94

(noting

compensate

a

that

party

29

Panasia Estates,

Bi-Economy Market,

consequential
for

10

reasonably

damages

are

foreseeable

damages,

must be proximately caused by the breach and must be

proven by the party seeking them").

Plaintiff has not pled that they suffered any damages
as a consequence of the alleged bad faith refusal to pay their
claim

other

than

action to en
on dama

the

costs

associated

rce their claim.

with

Plaintiff's

a

legal

aim is predicated

s to a generator that Plaintiff bought after it entered

into the initial 2011-2012 Aspen Policy,
notify

bringing

Defendant

generator

about

the

after

until

purchase

the

loss

or
of

and Plaintiff did not
installation
the

of

the

generator.

Any

consequential damages that arose as a result of the loss
generator and Aspen I s

refusal

the

to pay for the entire loss were

not contemplated by both parties at the time of the execution of
the 2011-2012 Aspen Policy or the Policy. Thus,
by

Plaintiff

are

Economy Market,
insurance

inapposite

to

the

10 N.Y.3d at 195

contract

is

receive it promptly a

not

instant

the cases cited
action.

See

Bi­

(noting that the purpose of an

just

to

receive

money

but

also

to

er calamitous event and that the insurer

breached this implicit portion of the policy as a result of its
delay

to evaluate and pay

N.Y.3d

at

issues

existed

damages

203

sought

(denying
regarding
by

for

the

motion

to

whether

Plaintiff

loss);
dismiss

the
at

30

Panasia
because

parties
the

time

Estates,
more

contemplated
or

prior

10
fact
the
to

contracting)
Sup. Ct.
an

i

Feb.

insurer's

Estee Lauder Inc.,
23,

2012)

No.

602379-05,

slip.

op.

(N . Y.

(upholding a claim of bad faith against

successor-in-interest

where

an

Appellate

Division

ruling required the insurer to pay the insured's defense costs).

Given
summary

judgment

the

reasoning

regarding

above,

Plaintiff's

granted and the claim is dismissed.

31

Defendant's
claim

for

motion
bad

faith

for
is

rv .

CQnc~us.ion

Based on

the

reasoni.ng above,

sununary judgment is denied,

Plaintiff I s

and Defendant I s

motion

motion for

judgment and dismissal is granted.

It is so ordered.

New York, NY

ROBERT W. SWEET

U.S.D.J.

for

summary