[*1]
Historical Design, Inc. v AXA Art
2010 NY Slip Op 50363(U) [26 Misc 3d 1233(A)]
Decided on February 8, 2010
Supreme Court, New York County
Bransten, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on February 8, 2010
Supreme Court, New York County


Historical Design, Inc., Plaintiff,

against

AXA Art a/k/a AXA Art Insurance Corporation, Defendant.




102742/09



The attorneys on the matter are Philip A. Nemecek, Esq., of Katten Muchin Rosenman LLP (for the defendant) and Stuart Serota, Esq., of Kaufman and Serota, Esqs. (for the plaintiff).

Eileen Bransten, J.



Defendant AXA Art, a/k/a AXA Art Insurance Corporation ("AXA") seeks dismissal of Historical Design, Inc's ("HDI") complaint pursuant to CPLR 3211 (a) (1) and (7).

BACKGROUND

Plaintiff HDI is a New York corporation that buys and sells fine artwork. Compl.¶¶ 1-2. HDI owns the sculpture by artist Fabio Novembre entitled "S.O.S. Chaise Longue" [sic] (the "Novembre Sculpture"). Affidavit [of Daniel Morris] in Opposition to Defendant's Motion to Dismiss ("Morris Aff.") at ¶ 2.

Defendant AXA is a New York corporation that sells insurance, including insurance covering loss or damage to artworks. Compl. ¶¶ 3, 4, 6. AXA is a subsidiary company of AXA Art Versicherung AG of Cologne, Germany and a member of the AXA Group of Paris, France. Reply Affidavit of Barbara Madrigal in Further Support of Motion to Dismiss ("Madrigal Reply Aff.") Ex. 2 at ¶ 7.

In February of 2008 HDI agreed to loan the Novembre Sculpture to Change Performing Arts ("CPA") for CPA to display the work at the Rotondo della Besana in Milan, Italy. Compl. ¶ 11. HDI conditioned the loan on CPA insuring the Novembre Sculpture with "exhibition coverage wall-to-wall." Id. "Exhibition coverage wall-to-wall" insurance monetarily covers a piece of art against loss or damage, beginning at the artwork's original location, continuing during transit to and from the exhibition and while the work is on display. Id. at ¶¶ 8, 11. HDI requested that CPA provide the Novembre Sculpture with exhibition coverage wall-to-wall for $75,000 to cover the work during transit to and from its original location in New York City to its place of exhibition in Milan, Italy and while on display in Milan. Id.; Morris Aff. at ¶¶ 5-6. On March 26, 2008, HDI received a letter from Giovanni Marchetti, an insurance broker, stating that "Change Performing Arts has provided [*2]the insurance coverage, as you requested, for the total value of usd 75.000,00' with the following insurance company Axa Art." Affirmation [of Stuart Serota] in Opposition to Defendant's Motion to Dismiss ("Serota Aff.") Ex. L. Nothing in the record shows that HDI either requested or obtained a copy of the insurance policy purchased by CPA at that time.

The Novembre Sculpture was returned to HDI damaged. Compl. ¶ 16; Serota Aff. Ex. L. HDI alleges that the damage devalued the work from $125,000.00 to $5,000.00. Compl. ¶¶ 15-16.

HDI states that from October 13, 2008 through February 10, 2009 it made oral and written demands to AXA for a copy of the insurance policy purchased by CPA that covered the Novembre Sculpture (the "Policy"). Compl. ¶ 17. HDI contends that AXA"caused" a copy of the Policy to be sent to HDI during the return period of the instant motion. Serota Aff. at ¶ 21, n.1, Ex. F.

HDI contends that AXA confirmed coverage of the Novembre Sculpture by letter dated March 26, 2008. Compl. ¶ 56, Ex. A . HDI further contends that CPA made a claim to AXA under the Policy for payment to HDI and that AXA responded by stating that the Novembre Sculpture was insured under AXA Art Policy No. 603/407914 and by issuing AXA Art Claim No. 2008/00137. Compl. ¶¶ 56, 59-60. HDI claims that AXA has violated the Policy by not paying to HDI the claim for $75,000.00 made by CPA.

HDI commenced this action in February of 2009, asserting, however inartfully, eight causes of action. The first and second causes of action allege a combination of fraudulent misrepresentation and fraudulent inducement. The third cause of action alleges negligent misrepresentation. The fourth and fifth causes of action allege deceptive business practices under New York General Business Law §§ 349 and 350-e, respectively. The sixth and seventh causes of action allege, respectively and together, breach of the terms of the Policy and failure to provide to HDI a copy of the Policy and claim form(s). The eighth cause of action seeks the Court to compel AXA to produce to HDI a copy of the Policy.

Defendant AXA moves pursuant to 3211(a) (1) and (7) to dismiss all of HDI's causes of actions.[FN1]

ANALYSIS


On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction. We accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory. Under CPLR 3211 (a) (1), a dismissal is warranted only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law. In assessing a motion under CPLR 3211 (a) (7), however, a court [*3]may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint and "the criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one."

Leon v. Martinez, 84 NY2d 83, 87-88 (1994) (citations omitted); see also Goshen v. Mutual Life Ins. Co. of New York, 98 NY2d 314, 326 (2002). "It is well settled that bare legal conclusions and factual claims, which are either inherently incredible or flatly contradicted by documentary evidence . . . are not presumed to be true on a motion to dismiss for legal insufficiency." O'Donnell, Fox & Gartner v. R-2000 Corp., 198 AD2d 154, 154 (1st Dep't 1993). The court is not required to accept factual allegations that are contradicted by documentary evidence or legal conclusions that are unsupported in the face of undisputed facts. Zanett Lombardier, Ltd. v. Maslow, 29 AD3d 495, 496 (1st Dep't 2006) (citing Robinson v. Robinson, 303 AD2d 235, 235 (1st Dep't 2003)).



HDI is Not an Insured or an Additional Insured Under the Policy

Plaintiff HDI bases its complaint upon AXA's alleged provision to CPA of insurance coverage for the Novembre Sculpture. Coverage was allegedly pursuant to the Policy, of which HDI has provided a copy. Serota Aff. at n.1, Ex. F. The Policy states that the policy holder is Change SRL. Serota Aff. Ex. F at 3. It is a basic tenet of insurance law that a party claiming insurance coverage has the burden of proving entitlement to that coverage. Moleon v. Kreisler Bork Florman Gen Constr Co, Inc, 304 AD2d 337, 339 (1st Dep't 2003). "A party that is not named an insured or additional insured on the face of the policy is not entitled to coverage." Id.

Accepting HDI's contention that Exhibit F to the Serota Affirmation is the Policy in question, Serota Aff. at n.1, it is evident that the Policy does not name HDI as an insured, as an additional insured or as a beneficiary.[FN2] The Policy does not mention HDI on its face. Neither does HDI plead that it is an insured, an additional insured or a beneficiary under the Policy. At best, Daniel Morris, an executive officer of HDI, alleges that he requested HDI be a designated beneficiary to the Policy. Morris Aff. at ¶¶ 8, 10. HDI did not receive a copy of the policy until the return period of the instant motion, Serota Aff. at n.1, and thus HDI did not confirm its beneficial designation upon placement of the policy. Morris' conclusory allegations are contradicted by the documentary evidence. O'Donnell, Fox & Gartner, 198 AD2d at 154; Serota Aff. Ex. F. Should CPA have failed to designate HDI as a beneficiary to the Policy, then HDI's claim may lie against CPA. HDI has not provided or pleaded a [*4]basis for this court to find that any contractual or beneficiary relationship exists between plaintiff and defendant, and the documentary evidence shows to the contrary.

AXA is Not a Proper Defendant

Documentary evidence further supports AXA's contention that it is not a proper party to this action. In addition to the facts and reasoning stated above, HDI alleges that it requested CPA to purchase exhibition coverage wall to wall for the Novembre Sculpture from the AXA Art insurance company. Compl. ¶ 11. CPA complied, as evidenced by the March 26, 2008 letter from insurance broker Giovanni Marchetti to HDI confirming the placement of coverage for $75,000 with AXA Art. Compl. Ex. A. The face of the Policy shows that Change SRL held the Policy, number 603/407914, Serota Aff. Ex. F at 3, and that the Policy was placed with AXA Art Versicherung Aktiengesellschaft ("AXA Art Versicherung AG"). Serota Aff. Ex. F; Madrigal Reply Aff. at ¶ 6.

Defendant AXA is a subsidiary of the Policy's named insurer, AXA Art Versicherung AG. Madrigal Reply Aff. Ex. 2; Morris Aff. Ex. C. HDI has not pleaded any relationship between AXA and AXA Art Versicherung AG giving rise to a responsibility of AXA for a policy written by AXA Art Versicherung AG. While HDI has alleged that AXA's (unspecified) advertisements state that it "maintains local, national and global presence with offices in New York (headquarters), Atlanta . . . and Los Angeles, and with offices in Amsterdam . . . Milan, Paris . . . and Zurich," Compl. ¶ 41, HDI's allegedly quoted statements omits that AXA actually claims to maintain "sister offices in Amsterdam . . . Milan, Paris . . . and Zurich." Madrigal Reply Aff. Ex. 2; Morris Aff. Ex. C. AXA does not purport to have any offices itself in Milan, or anywhere else outside of the U.S.

"In the absence of a clear indication of dominion and control, parent, subsidiary or affiliated corporations are treated separately and independently for purposes of assigning legal responsibility." Meshel v. Resorts Int'l of NY, Inc., 160 AD2d 211, 213 (1st Dep't 1990) (citing Alexander & Alexander of NY v. Fritzen, 114 AD2d 814, 815 (1st Dep't 1985), aff'd 68 NY2d 968 (1986)). Documentary evidence shows that AXA Art Versicherung AG issued the policy in Italy. Plaintiff HDI has pleaded no relationship between AXA and AXA Art Versicherung AG, and no basis is shown that gives rise to a duty by AXA to service a contract between CPA and AXA Art Versicherung AG. The AXA and AXA Art Versicherung AG entities must thus be treated separately. Meshel, 160 AD2d at 213. HDI's allegations that defendant AXA issued and/or bears responsibility for the Policy are here without basis and are contradicted by the documentary evidence. Serota Aff. Ex. F; Madrigal Reply Aff. at ¶¶ 5, 8, Ex. 3.

Defendant AXA Has Not Violated New York General Business Law §§ 349 or 350-e

Plaintiff HDI alleges, in its fourth and fifth causes of action, that AXA has violated New York General Business Law §§ 349 and/or 350-e. HDI claims, in summary, that AXA "baits" the consuming public in New York by holding itself out as a global insurance [*5]provider, offering global insurance coverage, including exhibition coverage wall to wall, and then, upon a claim by an insured, "switches" its statements to represent that AXA is a local New York insurance company. HDI claims that it has been injured as a result of AXA's actions. HDI's claims are without basis.

HDI requested CPA, an entity located in Milan, to place insurance coverage for the Novembre Sculpture. The evidence shows that CPA, logically, reached out to an insurance broker located in Milan to place the policy. Compl. Ex. A. In turn, the insurance broker placed the policy, as stated to have been requested by HDI, with AXA Art, albeit AXA Art Versicherung AG. Id. Plaintiff HDI now claims that it requested coverage be placed with the defendant. Thus, in essence, HDI's claims for its fourth and fifth causes of action are better stated against CPA and the broker for placing coverage with the alleged wrong entity. Such a mistake is not the fault of the defendant and certainly does not give rise to claims under New York General Business Law §§ 349 or 350-e.

HDI does not plead that it requested a copy of the Policy upon its purchase by CPA. Indeed, HDI claims that it did not possess a copy of the policy until well after it instituted this action. See Serota Aff. at n.1. HDI therefore did not confirm the issuer of the Policy until, apparently, during the return date of this motion. Though HDI claims that it "would not have accepted and [it] did not knowingly accept any AXA ART insurance company that is not this instant defendant," Morris Aff. at ¶ 7, HDI did, by its actions, accept the brokers' placement of the policy with AXA Art Versicherung AG. HDI simply neglected to confirm placement of the Policy with the entity it allegedly requested.

HDI has made no showing of any deceptive acts or practices by defendant AXA. AXA advertised insurance products for sale and is licensed to sell insurance products in New York. Madrigal Reply Aff. at ¶ 8, Exs. 2, 3. Had HDI purchased insurance from AXA, and AXA later violated that policy in some manner, then a cause may lie, provided the cause was greater than, as alleged here, a contract dispute over coverage. See New York University v. Continental Cas. Ins. Co., 87 NY2d 308, 320-21 (1995). As discussed supra, HDI has not shown any relationship with AXA. HDI has further pleaded no actual deception by defendant AXA. HDI has therefore failed to allege a claim for injury by AXA under New York General Business Law § 349, let alone § 350-e.[FN3]

Conclusion

For the reasons stated above, the court finds that no evidence has here been presented that supports the possible imposition of liability upon defendant AXA. The court further [*6]finds that no evidence has been presented that supports plaintiff HDI's claims against AXA based on the Policy; to the contrary, the documentary evidence of the Policy and documents relating thereto hold against any connection of the instant defendant to the Policy. Plaintiff's claims against AXA based upon or pertaining to the Policy, causes of action 1-3 and 6-8, are therefore dismissed. Further, plaintiff's allegations of a "bait and switch" by defendant AXA resulting in violations of New York General Business Law §§ 349 and 350-e, causes of action 4 and 5, fail to state a claim and are therefore dismissed. Defendant AXA's motion to dismiss the complaint in full is granted.

Accordingly, it is

ORDERED, that defendant AXA ART a/k/a AXA ART INSURANCE CORPORATION's motion to dismiss the complaint is granted, without costs and without prejudice.

This constitutes the Decision and Order of the court.

Dated: New York, New York

February 8, 2010

ENTER:

/s/

Hon. Eileen Bransten, J.S.C.

Footnotes


Footnote 1: AXA Art has further invited this Court to consider its motion to dismiss under CPLR 3211 (c). For the reasons contained within, the Court need not do so.

Footnote 2: The court notes that while the Policy is in Italian, the fact that HDI is not named on the face of the Policy is clear.

Footnote 3: Further, the court agrees with defendant's argument that New York General Business Law § 350-e does not, by itself, prohibit any conduct. Section 350-e merely provides a right of action for a violation of General Business Law §§ 350 and/or 350-a. HDI has alleged no violations under these sections. HDI's claim under Section 350-e is therefore also dismissed on this ground.