Plaintiff 137 Broadway Associates, LLC (Broadway) commenced this declaratory judgment action seeking a defense and indemnification from defendant Leading Insurance Group Company, Ltd. (Leading) in an underlying negligence action.

Leading moves to dismiss the present action pursuant CPLR §§ 3211(a) and 3212. Broadway cross-moves for summary judgment pursuant CPLR § 3212 on their Third and Fourth causes of action. Broadway seeks a declaratory judgment stating that the insurance policy between Leading and 602 West 137th Deli Corp. d/b/a Nadal One Deli (Nadal) was in full effect on the relevant dates in the underlying action and that Leading is obligated to defend, indemnify, and reimburse it in the underlying action pursuant to the terms of the insurance contract.

The material facts are as follows. Before renting from Broadway, Nadal was a commercial tenant at a different premises located at 3381 Broadway in Manhattan. This building was wholly owned by Cromwell Associates (Cromwell) until 2006 when they sold the premises to Extell 601 West 137th Street, LLC (Extell). While a tenant at 3381 Broadway, Nadal maintained an insurance policy with Leading.

Nadal moved to its current location at 3379 Broadway in Manhattan pursuant to an assignment of lease dated May 5, 2011. As part of the assignment, Nadal agreed to purchase insurance and "include Landlord [Broadway] and SDG Management Corp. as named insured." Nadal chose to maintain its insurance policy with Leading. The policy was renewed on June 26, [*2]2011. A change of address in the policy from 3381 Broadway to 3379 Broadway took effect on August 26, 2011.

The policy provided insurance coverage to Nadal for risks associated with property damage, general liability, crime, inland marine, auto, and garbage based on a premium of $1,343.00. Nadal paid a surcharge of $8.39 in order to list an additional insured on the Businessowners Coverage Form. As a line item, the additional insured was listed as "ADD'L INSD — MANAGERS OR LESSORS OF PREMISES," and the specific terms of the contract provided that the additional insured would be covered for liability arising from the "ownership, maintenance or use" of the property. However, Cromwell, Nadal's former landlord, and not Broadway, the current landlord, was listed as the additional insured on the June 26, 2011 policy (Policy).

On December 31, 2011, at approximately 11:30 AM Deborah Livermore, plaintiff in the underlying action, allegedly tripped and fell into the basement of Nadal and suffered injuries. Ms. Livermore sued both Nadal and Broadway for her injuries. Following the commencement of the underlying action, Broadway requested that Leading defend and indemnify it based on its insurance policy with Nadal. Leading declined to do so, citing that Cromwell, not Broadway, was listed as the additional insured on the Policy. Following the denial of coverage, Broadway commenced the present action seeking declaratory judgment for defense, indemnification, and reimbursement from Leading pursuant to the terms of the Policy.

At issue here is whether the mistake of listing Cromwell as the additional insured on the Policy precludes Broadway from obtaining a defense and indemnification from Leading in the underlying action.

Leading argues that the only mistake that occurred was a unilateral mistake on the part of Nadal, and that Nadal's unilateral mistake in listing Cromwell as the additional insured precludes Broadway from receiving coverage. The basis of Leading's argument is the well-established principle that an unambiguous, mutually agreed upon written instrument should be upheld by courts without deference to the unilateral mistake made by one party to the agreement (see e.g., Sixty Sutton Corp. v. Illinois Union Ins. Co., 34 AD3d 386 (1st Dept. 2006); see also NY First Ave. CVS, Inc. v. Wellington Tower Assocs., L.P., 299 AD2d 205, 205 (1st Dept. 2002) (holding that parties seeking to contest the presumptive validity of a contract may do so by showing "in no uncertain terms" that either fraud or a mutual mistake exists, as well as "what was really agreed upon between the parties"). Leading argues that because of the clarity of the law on the issue of unilateral mistake, the case should be disposed on this basis.

This argument, however, fails to recognize a long line of cases holding that "[t]he name of the insured stated in the policy is not the sole factor to be considered in determining who was the intended insured" (Laura Accessories, Inc. v. Travlers Ins. Co., 67 AD2d 638, 639 (1st Dept. 1979)). When the intent to cover a risk is clear and one party innocently, mistakenly, and unilaterally lists a nonentity as the additional insured, New York courts have held that it is appropriate to regard that mistake as a mutual mistake and to honor the intent of the contract rather than uphold the erroneous drafting (see Id. (overturning the trial court's dismissal for incorrectly naming the covered entity, and requiring discovery so that the parties could ascertain the risk the insurance contract intended to cover); Matter of Lipshitz v. Hotel Charles, 226 App. Div. 839, aff'd 252 NY 518 (insurance company was required to indemnify the owners of a hotel when the intent to insure those owners was clear, even though they were incorrectly named in the contract); see also New York Casualty [*3]Insurance Company v. Shaker Pine, Inc., 262 AD2d 735 (3d Dept. 1999) (insurer cannot disclaim coverage for the inadvertent misidentification of an insured party when there is an undisputed obligation to cover risk associated with construction on the identified property); Stanley Cheperuk v. Liberty Mutual Fire Insurance Company, 263 AD2d 748 (3d Dept. 1999) (insurer's undisputed obligation to cover the risk to a mortgage holder applies even when the mortgage holder is misidentified in the contract); Court Tobacco Stores, Inc. v. Great Eastern Insurance Company, 43 AD2d 561 (3d Dept. 1973) (insurer could not withhold insurance coverage due to an error listing "Court Tobacco Co." as the insured party rather than "Court Tobacco Stores, Inc.")).

Leading relies upon Tanchum Portnoy v. Allstate Indemnity Company, 82 AD3d 1196 (2d Dept. 2011) to argue that denial of coverage is appropriate even if there is a mutual mistake when the insurance company did not intent to cover the risk associated with that mistake. Tanchum is readily distinguishable. There, the insurer was not in the business of providing coverage to residential properties, rendering their inadvertent agreement to insure the plaintiff's residential property an error worthy of disclaiming coverage (Id. at 1197-98). Here, Leading expressly provides coverage for the risks associated with insuring owners, managers, and lessors of property.

Whether Broadway may obtain coverage from Leading ultimately depends on whether the parties intended to cover the risk, and whether Nadal's mistake in identifying Cromwell was an innocent mistake (see Laura Accessories, Inc., 67 AD2d at 639; Matter of Lipshitz, 226 App. Div. 839, aff'd 252 NY 518; Shaker Pine, Inc., 262 AD2d 735; Stanley Cheperuk, 263 AD2d 748; Court Tobacco Stores, Inc., 43 AD2d 561). The Policy expressly covers the risk to the manager and lessor arising from their ownership, maintenance or use of the property. The sole owner, manager, and lessor of the property is Broadway.

On this record, the clear intent of the policy was to insure risks associated with Broadway's ownership of 3379 Broadway. There was never a time when Cromwell could have benefitted from the Policy as they were not, and have never been, the owner, manager, or lessor of 3379 Broadway. Broadway offers undisputed evidence that the mistake in naming Cromwell was innocent, and was based on Nadal's prior landlord-tenant relationship with Cromwell at 3381 Broadway. Upon these undisputed facts, the mistake of listing Cromwell as the named additional insured should be regarded as mutual. Accordingly, Leading must be required to provide coverage to Broadway — the owner, manager, and lessor of 3379 Broadway — as it is agreed to in the Policy.

It is therefore

ORDERED that Leading's motion to dismiss is denied; it is further

ORDERED that Broadway's cross-motion for summary judgment is granted; it is further

ORDERED and ADJUDGED that the Policy was in full force and effect on December 31, 2011, and that Leading is obligated to indemnify and defend Broadway in the underlying action pursuant to the terms of said policy; and it is further

ORDERED that the portion of Broadway's motion seeking reimbursement by Leading for legal fees, expenses, and costs incurred in Broadway's defense in the underlying action is severed and denied so that additional discovery may be conducted regarding whether Broadway has additional applicable insurance coverage from other insurers; it is further

ORDERED that counsel are directed to appear for a preliminary conference in Room 320, 80 Centre Street, on ______________, 2013, at 9:30 AM.

The foregoing constitutes the decision and order of the court.

Date:July 26, 2013_________________________

New York, New YorkAnil C. Singh