Lawley Service, Inc. v. Progressive Weatherproofing, Inc.

Appeal from an order of the Supreme Court, Erie County (Joseph G. Makowski, J.), entered June 30, 2005. The order denied plaintiffs motion for summary judgment dismissing the counterclaim. It is hereby ordered that the order so appealed from be and the same hereby is affirmed without costs. Memorandum: Plaintiff, an insurance agency, commenced this action seeking premiums allegedly due for insurance and defendant, a corporation specializing in building restoration, asserted a counterclaim for tortious interference with contract. Supreme Court properly denied plaintiffs motion for summary judgment dismissing the counterclaim. Defendant had obtained its insurance through plaintiff for a period of approximately 16 years, but in 2002 defendant obtained its insurance through a [978] different insurance agency. That agency had obtained a quote from an insurer that was considerably less than the quote from plaintiff for the same policy. The insurer issued a policy for defendant but, after a loss control inspection, the insurer cancelled the policy effective three months from the date of its issuance. We reject plaintiffs contention that the court erred in refusing to dismiss the counterclaim on the ground that there was no valid contract of insurance between defendant and its insurer and thus that there is no basis for a counterclaim against plaintiff for interference with contract. The record establishes that defendant’s insurer did not rescind the policy based upon any alleged material misrepresentations (see generally Zilkha v Mutual Life Ins. Co. of N.Y., 287 AD2d 713 [2001]) but, rather, the insurer cancelled the policy after conducting a loss control inspection (see Portofino Ristorante & Catering v Michigan Millers Mut. Ins. Co., 198 AD2d 869 [1993], lv denied 83 NY2d 753 [1994]). Thus, contrary to plaintiff’s contention, it cannot be said as a matter of law that there was no valid contract between defendant and its insurer. Contrary to plaintiffs further contention, the record establishes that there is a triable issue of fact with respect to plaintiffs alleged tortious interference with the contract, resulting in the insurer’s breach thereof (see generally NBT Bancorp v Fleet/Norstar Fin. Group, 87 NY2d 614, 621 [1996]). There is evidence in the record that, after the insurer issued the policy to defendant, plaintiff’s agent discussed defendant’s account with an underwriter for defendant’s insurer. That underwriter in turn expressed his concerns with the account to the underwriter who approved the policy. Thereafter, the insurer conducted a loss control inspection and cancelled the policy. Based on that evidence, a trier of fact could reasonably infer that a loss control inspection would not have been conducted, nor would the policy have been cancelled, had plaintiff’s agent not discussed defendant’s contract with an underwriter for defendant’s insurer (see generally Krampen v Foster, 242 AD2d 913, 914-915 [1997]). All concur except Pigott, Jr., EJ., and Kehoe, J., who dissent and vote to reverse in accordance with the following memorandum.