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Zuohao Ling v Wu 2009 NY Slip Op 32853(U) December 4, 2009 Supreme Court, Queens County Docket Number: 18116/07 Judge: James J. Golia Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication.

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Short Form Order NEW YORK SUPREME COURT - QUEENS COUNTY Present: HONORABLE JAMES J. GOLIA Justice IA Part 33

x ZUOHAO LING

Index Number

18116

2007

- against -

Motion Date September 24, Motion Cal. Numbers 23 & 24 x Motion Seq. Nos. 3 & 4

2009

HENRY N. WU, et al.

The following papers numbered 1 to 8 read on this motion by third-party defendant Paramount Insurance Company (Paramount) for summary judgment dismissing the third-party complaint against it and for summary judgment on its counterclaim, on this motion by third-party defendant C&M First Services, Inc. (C&M) for summary judgment dismissing the third-party complaint against it, and on this cross motion by defendants/third-party plaintiffs Henry N. Wu (Wu) and Flora P. Han Wu for summary judgment against the third-party defendants. Papers Numbered Notice of Motion - Affidavits - Exhibits........................................ Notice of Cross Motion - Affidavits - Exhibits.............................. Answering Affidavits - Exhibits..................................................... Memoranda of Law ........................................................................ 1-2 3 4 5-8

Upon the foregoing papers it is ordered that: That branch of the motion by third-party defendant Paramount for summary judgment dismissing the third party complaint against it is granted. That branch of the motion by third-party defendant Paramount for summary judgment on its counterclaim is granted. The motion by C&M
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for summary judgment dismissing the third-party complaint against it is granted. The cross motion by the defendants/third-party plaintiffs for summary judgment on their third-party complaint is denied. The court declares that Paramount has no duty to defend and indemnify in Zuo Hao Ling v Wu, Index No. 18116/07. The court also declares that C&M has no duty of contribution or indemnification in regard to Zuo Hao Ling v Wu, Index No. 18116/07. (See the accompanying memorandum.)

Dated: December 4, 2009 J.S.C.

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MEMORANDUM

SUPREME COURT : QUEENS COUNTY IA PART 33 X ZUOHAO LING MOTION SEQ. NOS. 3 & 4 - against BY: GOLIA, J. HENRY N. WU, et al. X DATED: December 4, 2009 INDEX NO. 18116/07

Third-party defendant Paramount Insurance Company ( Paramount) has moved for summary judgment dismissing the third-party complaint against it and for summary judgment on its counterclaim. Third-party defendant C&M First Services, Inc. (C&M) has moved for summary judgment dismissing the third-party complaint against it. Defendants/third-party plaintiffs Henry N. Wu (Wu) and Flora P. Han Wu (collectively the owners) have cross-moved for summary judgment against the third-party defendants. In November, 2002, Paramount entered into a brokerage agreement with C&M whereby the former appointed the latter to represent it in the State of New York. However, Section VI of the agreement expressly stated in relevant part: "The Broker shall be an independent contractor and nothing herein shall be construed to create the relation of employer and employee ***." Section II of the agreement also provided in relevant part: "1. The Broker shall have no authority to bind the Company on any risk without the approval of the Company."
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In August, 2005, Wu called Eric Cheng, the President of C&M, an insurance brokerage, about procuring an insurance policy covering premises known as 42-25 Haight Street, Flushing, New York that he and his wife were buying. Cheng asked Wu a number of questions about the property and the coverage needed, including whether Wu would reside at the property. Wu confirmed that the property would be owner-occupied. Wu admitted at his deposition: " I told him I bought a house, I was going to renew and remodel it and move in myself ***." (Tr. 198.) After the telephone conversation, Cheng sent to Wu an insurance application and two related documents. On or about August 19, 2005, Wu signed a homeowner's insurance application for 42-25 Haight Street. He also signed a one page "fraud statement" in which he represented that "this dwelling is NOT under ANY renovations and the insured will be occupying the above property location as of the requested binding date. This property location is Owner-Occupied." (Emphasis in original.) Wu also signed a one page document captioned "General Fraud Statement" which read in relevant part: "I shall bear all responsibility for the information given on the application that states that the said property location is Owner-Occupied ***. Any claims made will be denied if the information on the application was made falsely." After executing the documents, Wu returned them to the broker without any objections. C&M forwarded the documents executed by Wu to Paramount, and the insurer, in reliance upon the documents, issued a policy covering 42-25 Haight Street, Flushing, New York with an effective period of August 24, 2005 to August 24, 2006. C&M

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sent Wu a copy of the policy after the broker received a copy of it from the insurer, and he accepted it without notifying the broker of any objections to it. Paramount subsequently renewed the policy for an effective period from August 24, 2006 to August 24, 2007. Wu did not notify the broker prior to or after the renewal of the policy that he did not reside at the property. Louis Masucci, the Vice-President of Underwriting for Paramount, swears that the representations made by Wu that (1) the premises were not under renovation, and (2) were owner-occupied were material to the issuance of the policy. Contrary to the representations made by Wu, 42-25 Haight Street, a two-family home, was occupied by a tenant in one apartment and Wu's sister-in-law in another. The premises were also undergoing renovations. Wu had no intention of moving into 42-25 Haight Street until the renovations were complete, and to this day he and his wife do not live there, but rather at another property they own located at 142-16 Cherry Street, Flushing, New York. On November 22, 2006, Zuo Hao Ling, a tenant at the premises, allegedly sustained injury when a fire broke out. On November 27, 2006, Paramount received notice about the fire, but, after investigation, the insurer sent the owners a letter dated June 13, 2007, rescinding the policy on the ground that the insurance application contained material misrepresentations about the premises being owner-occupied and not undergoing renovations. The letter went on to note that even if the insurer did not rescind the policy, it would not by its terms cover the occurrence because the owners never lived at 42-25 Haight Street, and, thus, the dwelling did not qualify as a "residence premises" within the scope of

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the policy. On or about July 20, 2007, Ling brought an action for personal injury against the owners in the New York State Supreme Court, County of Queens (Zuo Hao Ling v Wu, Index No. 18116/07.) On or about August 17, 2007, the owners brought a third-party action against C&M and Paramount for a judgment, inter alia, declaring that the third-party defendants are obligated to indemnify them for any damages recovered by Ling. C&M and Paramount answered the third-party complaint, and the latter asserted a counterclaim for declaratory relief. By letter dated September 21, 2007, the insurer again disclaimed coverage on the additional ground that Ling's injury did not arise at an "insured location" within the meaning of the policy (essentially because the owners did not reside at 42-25 Haight Street). The court turns first to Paramount's motion. "[T]he proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact ***." (Alvarez v Prospect Hospital, 68 NY2d 320, 324.) Paramount successfully carried this burden. First, an insurer may rescind an insurance policy if the insured made a false statement of fact as an inducement to the issuance of the policy and the misrepresentation was material. (See, Insurance Law

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