Selected decisions by New York Courts posted on the Internet during the week ending June 17, 2022

New York Botanical Garden sues its insurance company for its "business interruption losses" resulting from an order by a government body closing its facilities in response to COVID-19

New York Botanical Garden v Allied World Assur. Co. (U.S.) Inc.

2022 NY Slip Op 03871

Decided on June 14, 2022

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided and Entered: June 14, 2022
Before: Webber, J.P., Gesmer, Oing, Singh, Kennedy, JJ.

Index No. 803872/21E Appeal No. 16127 Case No. 2021-04319

[*1]New York Botanical Garden, Plaintiff-Respondent,

v

Allied World Assurance Company (U.S.) Inc., Defendant-Appellant.

Clyde & Co US LLP, New York (Kevin M. Haas of counsel), for appellant.

Beveridge & Diamond P.C., New York (John H. Kazanjian of counsel), for respondent.

Order, Supreme Court, Bronx County (Eddie J. McShan, J.), entered October 22, 2021, which denied defendant's motion to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7), unanimously affirmed, with costs.

Plaintiff is a non-profit organization which conducts research and education about plant science, and maintains a 250 acre botanical garden in the Bronx open to the public. Defendant Allied World Assurance Company (U.S.) Inc. (AWA) issued a Pollution Legal Liability policy to plaintiff. Under the policy, "contingent business interruption" is defined as "the necessary suspension of your business operations at a location owned or leased to you as a result of an order by a government body or authority denying access to the location . . . provided that" the suspension and the order must be "caused solely and directly by a pollution incident on, at or under an independent location." "Independent location" is defined as "a location that is not and was not at any time a location owned, leased, managed, operated or used by an insured."

Plaintiff sought coverage under the policy for "contingent business interruption" loss which it claimed resulted from governmental orders shutting down its operations in response to COVID-19. Defendant denied the claim in full, although it acknowledged that "COVID-19 constitutes a 'pollution incident' as defined in the Policy." Plaintiff then sued, seeking a declaration that AWA was required to pay its business interruption losses. It also asserted a breach of contract claim, premised on AWA's denial of coverage, and a cause of action for breach of implied covenant of good faith and fair dealing. The motion court denied defendant's motion to dismiss pursuant to CPLR 3211(a)(1) and (7).

Defendant failed to establish that, under the terms of the insurance policy it issued to plaintiff, contingent business interruption coverage was available only if plaintiff was completely denied access to its property. The policy contemplates coverage for periods when plaintiff would have some temporary access to the property, including periods involving potential partial resumption of operations to mitigate damages, which for plaintiff included maintaining its extensive plantings (see generally Matter of Viking Pump., Inc., 27 NY3d 244, 257 [2016]; Westchester Fire Ins. Co. v Schorsch, 186 AD3d 132, 140 [1st Dept 2020], appeal withdrawn 37 NY3d 990 [2021]). The cases relied upon by defendant, which involve civil authority coverage in property liability policies and periods of complete denial of access due to physical damage are inapposite (see e.g. 54th St. Ltd. Partners v Fidelity & Guar. Ins. Co., 306 AD2d 67, 67 [1st Dept 2003]). Defendant also failed to establish that the executive orders denying access were not solely and directly the result of a pollutant at an "independent location," within the meaning of that term of the policy.

The complaint states a cause of action for breach of the implied covenant of good faith [*2]and fair dealing by alleging that defendant did not conduct a complete or fair investigation of its claim, had no meritorious basis for denying the claim, and simply denied it in accordance with a business policy of denying COVID-related business interruption claims (see Bi-Economy Mkt., Inc. v Harleysville Co. of N.Y., 10 NY3d 187, 195 [2008]; East Ramapo Cent. Sch. Dist. v New York Schs. Ins. Reciprocal, 199 AD3d 881, 885 [2d Dept 2021]; Prospect St. Ventures I, LLC v Eclipsys Solutions Corp., 23 AD3d 213, 213 [1st Dept 2005]). The breach of the implied covenant claim is not duplicative of the breach of contract claim, since, although there is some overlap in the facts alleged, it relies upon different facts and seeks different damages from the contract claim (see Bi-Economy, 10 NY3d at 191-192; D.K. Prop., Inc. v National Union Fire Ins. Co. of Pittsburgh, Pa., 168 AD3d 505, 507 [1st Dept 2019]; Bostany v Trump Org. LLC, 73 AD3d 479, 481 [1st Dept 2010]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: June 14, 2022

A firefighter injured on the job unable to work "regular 10-24 hours shifts" is entitled to General Municipal Law §207-a disability leave benefits absent being offered the full-time equivalent of shorter shifts or light-duty

Matter of Newman v City of Tonawanda

2022 NY Slip Op 03834

Decided on June 10, 2022

Appellate Division, Fourth Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on June 10, 2022 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Fourth Judicial Department
PRESENT: SMITH, J.P., CENTRA, LINDLEY, AND CURRAN, JJ.

402 CA 21-01479

[*1]IN THE MATTER OF AMY NEWMAN, PETITIONER-APPELLANT,

v

CITY OF TONAWANDA, RICK DAVIS, AS MAYOR OF CITY OF TONAWANDA, AND CHARLES STUART, FIRE CHIEF OF CITY OF TONAWANDA, RESPONDENTS-RESPONDENTS.

THOMAS J. JORDAN, ALBANY, FOR PETITIONER-APPELLANT.

WEBSTER SZANYI LLP, BUFFALO (CHARLES E. GRANEY OF COUNSEL), FOR RESPONDENTS-RESPONDENTS.

 

Appeal from a judgment (denominated order) of the Supreme Court, Erie County (Mark J. Grisanti, A.J.), entered May 25, 2021 in a proceeding pursuant to CPLR article 78. The judgment granted the motion of respondents to dismiss the petition and dismissed the petition.

It is hereby ORDERED that the judgment so appealed from is unanimously reversed on the law without costs, the motion is denied, the petition is reinstated, and the relief sought in paragraph (b) of the petition is granted.

Memorandum: Petitioner is a firefighter for respondent City of Tonawanda (City). In July 2018, petitioner injured her left shoulder while on the job when she fell down some stairs. After missing several months of work, she had surgery on her shoulder and then returned to light-duty work. In late May 2020, petitioner returned to work with no restrictions and worked the current firefighter schedule of 24-hour shifts. By the end of petitioner's second week of work, after four shifts, she experienced increased pain in her shoulder. She saw her treating orthopedist, who provided a note stating that petitioner "cannot return to work." Subsequently, by letter to respondent Charles Stuart, Fire Chief of the City (Fire Chief), petitioner applied for General Municipal Law § 207-a benefits. The Fire Chief, relying on medical opinions that petitioner was able to perform her duties on a "reduced schedule" of 8-hour shifts, up to 40 hours a week, concluded that petitioner was therefore not eligible for General Municipal Law § 207-a benefits and denied the application. The City thereafter scheduled petitioner for 8 hours of work per day when her crew was working its 24-hour shifts, resulting in petitioner being scheduled for fewer hours and thus receiving less pay than a firefighter working without those restrictions.

Petitioner commenced this CPLR article 78 proceeding and declaratory judgment action seeking, in effect, approval of her application for section 207-a benefits. Respondents moved to dismiss the petition, and Supreme Court granted the motion. We now reverse.

As a preliminary matter, we note that this is properly only a CPLR article 78 proceeding inasmuch as the relief sought by petitioner is available under CPLR article 78 without the necessity of a declaration (see generallyCPLR 7801).

In reviewing respondents' determination, which was made without a hearing, "the issue is whether the action taken had a 'rational basis' and was not 'arbitrary and capricious' " (Matter of Ward v City of Long Beach, 20 NY3d 1042, 1043 [2013]). " 'An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts' " (id.; see Matter of Erie County Sheriff's Police Benevolent Assn., Inc. v County of Erie, 159 AD3d 1561, 1562 [4th Dept 2018]). "If the determination has a rational basis, it will be sustained, even if a different result would not be unreasonable" (Ward, 20 NY3d at 1043; see Erie CountySheriff's Police Benevolent Assn., 159 AD3d at 1562).

A firefighter seeking section 207-a benefits must show "that his or her injury or illness results from the performance of his or her duties and that he or she is physically unable to perform his or her regular duties as a firefighter" (Matter of Miserendino v City of Mount Vernon, 96 AD3d 946, 948 [2d Dept 2012]). The regular duties of a firefighter for the City required shifts of between 10-24 hours, and the medical evidence is undisputed that petitioner could work only 8-hour shifts. Inasmuch as the evidence established that petitioner could not work the longer shifts, and she was not offered the full-time equivalent of the shorter shifts or light-duty work, the determination that she is not entitled to General Municipal Law § 207-a benefits is arbitrary and capricious. Petitioner is therefore entitled to the relief sought in paragraph (b) of the request for relief in her petition.

Entered: June 10, 2022

Ann Dillon Flynn

Clerk of the Court