The Firm Obtains Summary Judgment for Great American Ins. Co. based on a Material Misrepresentation in the Application for Insurance

In East 115th Street Realty v. Focus & Struga Building Developers LLC, Great American Ins. Co. of N.Y. et al., the Supreme Court, New York County, Commercial Part 3, awarded Great American Insurance Company of New York summary judgment on March 9, 2010 based on the insured's material misrepresentation in its application for insurance.  The case involved the collapse of a five-story brick building in Manhattan, New York, during renovations.  Prior to the loss, the insured, East 115th Street Realty, had provided Great American with an application for builder's risk insurance for the renovation of the building.  In the application, the "No" box was checked next to the question "any structural alterations contemplated?"  In a subsequent email, the insured's broker informed the underwriter at Great American that "there will be no structural changes."  Thereafter a policy was issued.  Despite the representations to the contrary, the insured had always planned to remove all structural elements of the building within the four perimeter walls, from the basement through the roof.  At his Examination Under Oath, the insured's principal admitted that the "No" response in the application was not accurate.  Based on these facts the court found as a matter of law that there was a misrepresentation in the application.  The court also concluded that the misrepresentation was material to Great American based on Great American's underwriting guidelines that advise against issuing policies that involve structural changes and the underwriter's affidavit that she would not have issued the insurance policy if provided with the true answers to the application questions.  Accordingly, the court found the insurance policy to be void from its inception and dismissed all claims against Great American.  

The decision was reported on page 26 of the New York Law Journal Decisions of Interest, 3/19/2010; 2010 NY Slip Op 30504(U); 2010 NY Slip Op 50572U; 27 Misc. 3d 1206A; 910 N.Y.S.2d 404; 2010 N.Y. Misc. LEXIS 700; 243 N.Y.L.J. 52; and The Commercial Division Law Report, Vol 13, No. 1 May 2010.
 
Great American Insurance Company of New York was represented by Philip C. Silverberg and Kevin F. Buckley of Mound Cotton Wollan & Greengrass.