Upon the foregoing papers, defendant East Coat Preservation Co., L.L.C. (East Coast) moves for an order, pursuant to CPLR 3212, granting it summary judgment dismissing the complaint as against it.

The action arises out of an insurance contract (the Contract) between plaintiff Aspen Insurance UK Limited (Aspen) and defendant East Coast as it relates to a claim made by defendant Shawn Gilpatrick (Gilpatrick). Pursuant to the Contract, Aspen issued a commercial general liability policy under Policy Number XXXXXXXXXXXXXXX which named East Coast as the insured (the Policy) for the policy period of February 9, 2008 to February 9, 2009. The Policy limits were $1 Million per occurrence and $2 Million in the aggregate and subject to a $5,000 per claimant deductible. The Policy reads, in pertinent part, as follows:

SECTION I - COVERAGES

COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreement [*2]

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will defend the insured against any "suit" seeking those damages. However, 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. We may, at our discretion, investigate any "occurrence" and settle any claim or "suit" that may result.

As relevant herein, Section IV - COMMERCIAL GENERAL LIABILITY CONDITIONS of the policy provides that:

2. Duties in the Event Of Occurrence, Offense, Claim or Suit

a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include:

(1) How, when and where the "occurrence" or offense took place;

(2) The names and addresses of any injured persons and witnesses; and

(3) The nature and location of any injury or damage arising out of the

"occurrence" or offense.

b. If a claim is made or "suit" is brought against any insured, you must:

(1) Immediately record the specifics of the claim or "suit" and

the date received; and

(2) Notify us as soon as practicable.

You must see to it that we receive written notice of the claim or "suit" as soon as practicable.

c. You and any other involved insured must:

(1) Immediately send up copies of any demands, notices, summonses,

or legal papers received in connection with the claim or "suit;"

Furthermore, the Policy contains the following exclusion:

[*3]INDEPENDENT CONTRACTORS CONDITIONAL EXCLUSION

This Endorsement modified insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART

PRODUCT/COMPLETED OPERATIONS LIABILITY COVERAGE PART

This insurance does not apply to "bodily injury" . . . arising out of any liability for the acts of contractors or sub-contractors performing work on your behalf unless the following conditions are met:

a. work or operations regarding the real property on which the new or existing structure is located;

b. materials, parts or equipment furnished in connection with the work

or operations; and

c. warranties or representations made, and warnings and instructions

provided or not provided, regarding the work or operations. "Residential property": 1. means structures intended for use or used, in whole or in part, as human dwellings, including but not limited to multi-family housing, condominiums, town homes, townhouses, villas, co-operative housing, dormitories, master-planned housing, tract homes, mass-produced single-family homes, custom-built single family-homes, and "mixed use structures; and

2. includes structures initially intended for another kind of use, but subsequently converted by anyone for use, in whole or in part, as a human dwelling.

"Mixed Use Structure" means structures intended for use or used both as a human dwelling and for one or more other purposes.

"Repair or remodeling work" means work or operation limited to the maintenance, repair, renovation, restoration, improvement, betterment, alteration or modification of an existing structure, including partial demolition of that structure is required for such maintenance, repair, renovation, restoration, improvement, betterment, alteration or modification. [*5]"Repair or remodeling work" does not include such work or operations where 50% or more of the existing structure on which such work or operations are performed has, or during the course of the work or operations is, demolished.

ALL OTHER TERMS AND CONDITIONS OF THE POLICY REMAIN UNCHANGED.

On or about December 29, 2009, Gilpatrick commenced an action in the Pennsylvania Court of Common Pleas of Philadelphia County, to recover for personal injuries allegedly sustained from physical contact with electrical power lines in Pennsylvania on July 15, 2008 (the Gilpatrick Action). Gilpatrick named East Coast as a party defendant on the ground that East Coast was the general contractor for the renovation project that Gilpatrick was working on at the time of his accident.

Procedural Background

Aspen filed the present action for declaratory judgment against East Coast and Gilpatrick, seeking an order that it has no duty to defend or indemnify East Coast in the Gilpatrick action, based primarily on an alleged breach of the notice provisions in the Contract. Specifically, Aspen contends that it was not made aware that the underlying accident had taken place until January 5, 2010. Aspen relies on its February 5, 2010 letter (the disclaimer letter) disclaiming coverage based on the alleged late notice of occurrence because East Coast delayed 549 days in placing Aspen on notice. The disclaimer letter also reserved Aspen's right to disclaim based on the two exclusions previously set forth above: the Independent Contractor Conditional Exclusion (the Independent Contractor Exclusion) and the Exclusion-Designated Residential Construction Work (the Residential Construction Exclusion) (collectively, the Exclusions).

Aspen subsequently commenced this action seeking a declaration that it has no duty to defend or indemnify East Coast for the Gilpatrick Action for the reasons stated in its disclaimer letter.

East Coast previously moved to dismiss this action based upon forum non conveniens, and attached a copy of East Coast's application for the Policy. The Policy application states that the insurance broker, Fairmont Insurance Brokers, Ltd., is located in Brooklyn, New York. Additionally, the Policy was issued in New York. On the Policy application, East Coast supplied a Brooklyn, New York address and a New York telephone number. The Policy provided that East Coast performs work in "all states." By order dated October 12, 2010, the Court denied East Coast's motion on the grounds that "defendant has failed to meet its burden that this action has no substantial nexus to New York."

The Parties' Contentions

In moving for summary judgment, East Coast states that Aspen failed to establish a showing of prejudice as a result of the alleged late notice. Concerning the applicable choice of law, East Coast argues that either New Jersey law or Pennsylvania law applies [*6]to this action instead of New York law. According to East Coast, New Jersey law applies because the contract was entered into in New Jersey, and at the time the policy was issued, East Coast was a New Jersey corporation doing business in New Jersey. As a result, East Coast argues that it was a foreign business entity doing business only in New Jersey at both the time of the contract and the time of the underlying incident. In support, East Coast provides the affidavit of Jack Shelby, President and CEO of East Coast, which indicates that East Coast first became authorized to do business in New York on March 31, 2009. According to East Coast, the Policy was delivered to a New York address out of convenience, and is not a sufficient contact to with the State of New York. Finally, as East Coast argues that New Jersey law is applicable to the instant dispute, said law only allows for a company's disclaimer of insurance coverage on the basis of late notice when an insurer shows actual prejudice as a result of late notice. Accordingly, East Coast argues that Aspen's disclaimer of coverage is inappropriate because East Coast failed to show any prejudice resulting from the alleged late notice.

Shelby also states that, East Coast handled 1,237 work orders for the period of February 2008 through February 2009, 32 orders were performed in New York, representing approximately 2.5% of East Coast's total work orders. Shelby indicates that, during the same time period, 912 orders were performed in New Jersey, constituting approximately 74% of East Coast's total work orders. In addition, East Coast attaches New Jersey bank account statements used to pay the premium to the broker and a copy of the check used for the insurance policy. East Coast also attaches it's certificate for practice, as a contractor, in New Jersey, issued by the Office of the Attorney General, Division of Consumer Affairs, for the contract period.

In the alternative, East Coast notes that there may be a basis for applying Pennsylvania law because the accident took place in Pennsylvania. According to East Coast, Pennsylvania, like New Jersey, only allows disclaimer of insurance coverage based upon late notice if the insurer can make a showing of actual prejudice. East Coast argues that Aspen's disclaimer of coverage is inappropriate because Aspen failed to show said prejudice as a result of late notice. Next, East Coast argues that Aspen cannot disclaim coverage on the basis of the Independent Contractor Exclusion, which precludes coverage for bodily injury:

"arising out of any liability for the acts of contractors or sub-contractors performing work on your behalf unless . . . You . . . obtain Certificates of Insurance from all contractors or subcontractors providing evidence of General Liability Insurance at limits and coverages at least equal to that afforded by this policy, and such Certificates of Insurance shall also specify that you are named as an additional insured under their policy."

East Coast attaches a Certificate of Liability Insurance from U.S. Unique Services, LLP, its subcontractor on the project, which covers the policy period of May 1, 2008 to May 1, 2009, and lists East Coast as an additional insured under the policy. [*7]

Finally, East Coast maintains that Aspen cannot disclaim coverage by relying on the Residential Construction Exclusion. Said exclusion precludes coverage for bodily injury which "arises out of or is related to any past, present, continuing or future residential construction work' performed by or on behalf of an 'insured or by or on behalf of any person or entity, on residential property.'" "Residential property" is further defined as "structures intended for use or used, in whole or in part, as human dwellings, including but not limited to . . . "mixed use structures." East Coast maintains that the premises is not considered a "residential property." In support, East Coast attaches various provisions of the 2009 International Building Code (the Code) to establish that the exclusion does not apply, as the Ivy Hill Nursing Home is specifically classified in the institutional, rather than residential, category of the Code. Moreover, East Coast alleges that the property records for the State of Pennsylvania classify the location of the accident as commercial property, and the land use as a Nursing Home.

In opposition to East Coast's motion, Aspen argues that New York law applies because New York has the most contacts with this action. According to Aspen, (1) the declarations page of the Policy indicates that the Policy was issued to East Coast in Brooklyn, New York, and lists the Brooklyn address as "all premises you own, rent or occupy;" (2) the policy provides that the insurance broker, Fairmont Insurance Brokers, Ltd., is located in Brooklyn, New York; and (3) East Coast is located in Brooklyn, New York and has a Brooklyn, New York contact phone number. Aspen also points to the fact that East Coast's application for insurance states that it does business "in all states." Aspen maintains that New Jersey and Pennsylvania have merely a tenuous connection to this action, as the underlying accident occurred in Pennsylvania, and as East Coast was a New Jersey company at the time of the incident.

In support of it's belief that it was underwriting a policy for a New York company, Aspen attaches the affidavit of Jeanne Delatorre (Delatorre), Vice President for Aspen Specialty Insurance Management, Inc. Delatorre, who has worked as a Senior Underwriter at Aspen since October 2004, maintains that, based upon her review of the underwriting file, various documents establish that the Aspen Policy was underwritten for a New York company, and there was no indication that East Coast was only a New Jersey company. In addition, Aspen attaches (1) a copy of a site survey conducted of East Coast pursuant to the issuance of the Policy, which shows that the site was Rockaway Park, New York, and East Coast was acting as the general contractor of the site; (2) a copy of the surplus lines producer information, which states that the principal exposure state for East Coast is New York; (3) a copy of the "Casualty Account Summary & Underwriting Referral Form," which lists East Coast as a "remodel repair contractor located in Brooklyn, New York; (4) a copy of a "Notice of Financed Premium," which shows that the premium finance agreement was submitted by Fairmont, located in New York, and that East Coast is located in Brooklyn. Aspen also disputes East Coast's contention that the New York address was merely a mailing address, and attaches a copy of an email [*8]from AmWins Brokerage, the wholesale agent, which requested that a New Jersey address be added to the policy as a "second office for the insured."

In the alternative, Aspen argues that there remains an issue of fact which must be investigated through discovery. Aspen notes that no discovery has been conducted since the motion to dismiss was denied. Specifically, Aspen argues that it is owed responses to its discovery demands which included demands for copies of East Coast's Articles of Organization, Articles of Incorporation, Operating Agreement, and proof of state registration.

With respect to the applicability of the Independent Contractor Exclusion, Aspen contends that East Coast has failed to establish its prima facie entitlement to summary judgment based on the Policy because said Exclusion is inapplicable. It argues that the Certificate of Insurance from U.S. Unique Services, LLP, the subcontractor on the project, does not, by itself, render the exclusion inapplicable. Moreover, Aspen argues that it is entitled to discovery as to whether U.S. Unique Services, LLP was the only subcontractor on the job site.

Lastly, Aspen argues that East Coast has failed to meet its burden to prove that there are no issues of fact as to the applicability of the Residential Construction Exclusion. According to Aspen, the Ivy Hill Nursing Home is used in whole or in part as a human dwelling, since, according to the Ivy Hill Nursing Home website, residents live there. Further, Aspen maintains that the fact that Ivy Hill Nursing Home may be a "mixed-use structure," intended for use "both as a human dwelling and for one or more other purposes" under the applicable exclusion. It notes that the Code that purportedly classifies a nursing home as an institutional classification has no bearing on the applicability of the policy exclusion in light of the fact that the policy specifically contains its own definition of a "mixed-use structure."

Discussion

The proponent of a summary judgment motion is required to make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence in admissible form to demonstrate the absence of any material issues of fact (Alvarez v Prospect Hosp., 68 NY2d 320 [1986]). If the movant succeeds in making this showing, the burden subsequently shifts to the party opposing the motion" (Ferluckaj v Goldman Sachs & Co., 12 NY3d 316 [2009], quoting Alvarez, 68 NY2d at 324). Mere conclusory allegations and speculation may not defeat a motion for summary judgment (see e.g. DePodwin & Murphy v Fonvil, 38 AD3d 827 [2007]; Carleton Studio v MONY Life Ins. Co., 18 AD3d 491 [2005]). On a summary judgment motion, the court is to solely determine whether a factual issue exists (see Paulin v Needham, 28 AD3d 531 [2006][citations omitted]).

In the absence of a choice of law provision in an insurance policy that covers multi-state risks, New York State employs a "grouping of contacts analysis" to determine the [*9]coverage obligation of insurers. Specifically, when determining the law governing said policy New York courts look to the insured's domicile, as well as the domiciles of the insurer and claimant, and the state of the insured's and insurer's respective principal places of business. In addition, New York Courts look to whether that state "had a greater concern with issues of policy construction and application bearing on the amount of coverage than did the states where contracting, negotiation, or payment of the premium occurred" (Graboski v Specialty Nat. Ins. Co., 29 Misc 3d 1207(A)[2010][citations omitted]).

When a policy of liability insurance requires that notice of an occurrence be given as soon as practicable,' "such notice must be provided within a reasonable period of time; failure to give such notice relieves the insurer of its obligations under the contract, regardless of whether the insurer was prejudiced by the delay" (Sorbara Constr. Corp. v AIU Ins. Co., 11 NY3d 805 [2008][citations omitted]; see also Donovan v Empire Ins. Group, 49 AD3d 589 [2008]). The duty to timely notify an insurer of an occurrence and/or suit is applicable to additional insureds as well(23-08-18 Jackson Realty Assoc. v Nationwide Mut. Ins. Co., 53 AD3d 541 [2008]; City of New York v St. Paul Fire & Mar. Ins. Co., 21 AD3d 978, 981 [2008]; Ambrosio v Newburgh Enlarged City Sch. Dist., 5 AD3d 410 [2004]).

New York allows for the disclaimer of insurance coverage on the basis of late notice, and requires timely notice to the insurer of a claim. The insurance law was amended in July 23, 2008, to prohibit an insurance company from denying coverage based on late notice if the insurer can establish material prejudice in connection with the late notice. Here, the amended insurance law does not apply, as the Gilpatrick accident occurred prior to the amendment.

New Jersey law allows for the disclaimer of insurance coverage on the basis of late notice only if the insurer can demonstrate actual prejudice as a result of late notice (see Polarome Mfg. Co. v Commerce & Industry Ins. Co., 310 N.J.Super. 168 [1998], cert. denied, 155 N.J. 590 [1998]). Pennsylvania law is similar to New Jersey law in this respect (see Vanderhoff v Harleysville Ins. Co., 606 Pa. 272 [2010] [citing Brakeman v Potomac Ins. Co., 472 Pa. 66 [1977]]).

In moving for summary judgment, East Coast maintains that New Jersey law applies here, as the Contract was entered into in New Jersey, and East Coast was a New Jersey corporation doing business only in New Jersey at both the time of the Contract and at the time of the underlying accident. Specifically, East Coast refers to the affidavit of Jack Shelby wherein he indicates that East Coast first became authorized to do business in New York on March 31, 2009. According to East Coast, under these circumstances, New Jersey law applies. It argues that the mere fact that the policy was delivered to a Utica Avenue address in Brooklyn is not a sufficient contact with the State of New York to warrant the application of New York law.

In opposition, Aspen argues that East Coast is attempting to argue that this action does not have enough connections to New York State and thus, that New Jersey or Pennsylvania law should apply. Further, Aspen notes that East Coast presumes that because New York law [*10]does not apply, Aspen may not rely on its disclaimer based on, inter alia, late notice, because Aspen would not be able to establish prejudice. According to Aspen, these arguments have not been proven, or even investigated; no discovery has been conducted since the Court's Order denying East Coast's motion to dismiss. East Coast also notes that Aspen disclaimed coverage on two other grounds; the Independent Contractors Exclusion and the Residential Construction Exclusion, because residents live at Ivy Hill Nursing and Rehabilitation Center. Aspen argues that, merely by attaching copies of building codes and a Certificate of Insurance provided to East Coast, East Coast has not established that there are no triable issues of fact as to the application of these Exclusions.

Based on the foregoing, the Court denies East Coast's motion for summary judgment dismissing Aspen's complaint against it. At the outset, East Coast has failed to meet its prima facie burden demonstrating that Aspen may not rely on its disclaimer based on late notice. East Coast argues that Aspen cannot rely on its disclaimer for late notice because New Jersey or Pennsylvania law requires that Aspen show prejudice in receiving late notice. However, East Coast has failed to show that the action lacks substantial connections to New York and thus, New Jersey or Pennsylvania law should apply. In this regard, the Court refers to several documents from Aspen's underwriting documents that indicate Aspen was issuing a policy for a New York company, rather than a New Jersey company, at the time of the Policy. Said documents list a New York address and telephone number for East Coast. These documents also indicate that New York is the "principal exposure state" for East Coast. In addition, the insurance broker involved in issuing the Policy is located in New York. Based upon the Delatore affidavit and annexed documents, the Court is persuaded that Aspen believed that it was issuing a policy to a New York company.

Further, East Coast has failed to establish its entitlement to summary judgment based upon issues of fact regarding the validity of its remaining coverage defenses. With respect to Aspen's disclaimer based upon the applicability of the Independent Contractor Exclusion, further discovery is needed to determine whether there were additional subcontractors on the site, and whether East Coast obtained Certificates of Insurance so that the Independent Contractor Exclusion is inapplicable. With respect to Aspen's disclaimer based upon the Residential Construction Exclusion, there is a factual issue as to whether Ivy Hill Nursing

Home constitutes a "residential property." Accordingly, East Coast's motion for summary judgment is denied.

The foregoing constitutes the decision, order, and judgment of the court.

E N T E R,

J. S. C.