Resource Financing, Inc. v. National Casualty Co.

In an action, inter alia, for reformation of a policy of insurance and to recover damages for negligence, the plaintiffs appeal from an order and judgment (one paper) of the Supreme Court, Dutchess County (Beisner, J.), entered March 11, 1994, which upon granting the motion of the defendant Ann M. Vogel d/b/a Ann M. Vogel Insurance Agency made at the close of the plaintiffs’ case to dismiss the complaint insofar as it is asserted against her, is in favor of her and against them dismissing the complaint. Ordered that the order and judgment is affirmed, with costs. The plaintiff Resource Financing, Inc., was the mortgagee of certain premises and assigned the mortgage to the plaintiff Robert Hankin. The defendant Ann M. Vogel d/b/a Ann M. Vogel Insurance Agency (hereinafter Vogel) procured a policy of insurance covering the premises issued by the defendant National Casualty Company (hereinafter National Casualty). [628] However, the policy failed to list Resource Financing, Inc. (hereinafter Resource Financing), as a named mortgagee and also failed to list assignees of the mortgagee as beneficiaries thereunder. The mortgaged premises were subsequently destroyed by fire, and the plaintiffs made claims under the policy. Robert Hankin’s claim was predicated on the ground that the mortgage had been assigned to him. When National Casualty rejected the plaintiffs’ claims they commenced this action to recover damages of $120,000. National Casualty thereafter agreed to entertain the claim of Resource Financing, as the mortgagee, but nevertheless moved for summary judgment dismissing the complaint insofar as it asserted on behalf of Robert Hankin on the ground that he was not a named mortgagee in the policy. The plaintiffs did not cross-move for summary judgment against National Casualty. In an order dated October 6, 1992, the Supreme Court, inter alia, denied National Casualty’s motion to dismiss the plaintiffs’ cause of action for reformation of the insurance policy, expressly observing that "[s]ince National does not recognize plaintiff Hankin’s interest absent the language 'its assigns and/or successors’, it is, in effect, rewriting the policy to eliminate entirely the interest of a mortgagee, and this was not mutually intended” (emphasis supplied). National Casualty did not appeal from the order. Moreover, notwithstanding the foregoing language in the order, the plaintiffs did not move for summary judgment against National Casualty. Rather, the plaintiffs settled their claim against National Casualty for $45,000 and proceeded to a nonjury trial against Vogel. At the close of the plaintiffs’ evidence, the Supreme Court granted Vogel’s motion to dismiss the complaint insofar as it is asserted against her. We now affirm. It is axiomatic that liability for negligence will not attach absent proof that the negligence was the proximate cause of the harm sued upon (see, Dunn v State of New York, 29 NY2d 313; Rochlin v Alamo, 209 AD2d 499). The Supreme Court properly granted Vogel’s motion to dismiss, since the plaintiffs failed to demonstrate that their damages were proximately caused by any negligence on the part of Vogel in procuring a policy of insurance which allegedly failed to protect their interests in the mortgaged premises. Rather, the record demonstrates that the plaintiffs’ loss was proximately caused by their settlement of their claim against National Casualty for $45,000 after the court had determined that the insurance policy included the mortgagee and its assignees as beneficiaries thereunder. Indeed, contrary to the position of the plaintiffs [629] and the dissent, the Supreme Court’s order dated October 6, 1992, did not merely deny National Casualty’s motion for summary judgment. The clear and unequivocal import of the order was that, in accordance with the mutual intent of the parties to the insurance policy, the policy should be construed to protect the interests of Robert Hankin as the assignee of Resource Financing, Inc. Furthermore, the court specifically found that the contrary interpretation advanced by National Casualty was an impermissible attempt to rewrite the policy, and National Casualty did not appeal from the order. Accordingly, the plaintiffs were entitled to recover the full amount of their loss from National Casualty pursuant to the insurance policy as construed in the order. The dissent accurately observes that the Supreme Court had the authority to search the record and award judgment in favor of the nonmoving plaintiffs in its October 6, 1992, order (see, CPLR 3212 [b]). However, the court was under no obligation to do so, and it was instead incumbent upon the plaintiffs to seek summary judgment against National Casualty for the full amount of the loss. They failed to do so, and their settlement of the claim against National Casualty for a lesser amount was the proximate cause of their damages and superseded any purported negligence on the part of Vogel. Sullivan, J. P., Miller, Joy and Friedmann, JJ., concur.