[FILED; NEW YORK COUNTY CLERK 08/10/20111 NYSCEF DOC. NO. 1 INDEX NO. 652232/2011 RECEIVED NYSCEF: 08/10/2011 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK AMERICAN GUARANTEE & LIABILITY COMPANY, Plaintiff, ILLINOIS UNION INSURANCE COMPANY, NY A TO Z CONSTRUCTION GROUP INC, Defendants. Index No.: SUMMONS Date Purchased: Plaintiff Designates New York County as the place of trial The basis of venue is the residence of Plaintiff T o: Illinois Union Insurance Company 525 W. Monroe Street, Suite 400 Chicago, IL 60661 c/o New York Secretary of State Office of the Department of State One Commerce Plaza, 99 Washington Avenue Albany, NY 12231 YOU ARE SUMMONED to answer the Complaint in this action and to serve a copy of your Answer, or, if the Com plaint is not served with this Sum mons, to serve a Notice of Appearance, on the plaintiffs attorneys within twenty (20) days after the service of this Summons, exclusive of the day of service (or within thirty (30) days after the service is complete if this Summons is not personally delivered to you within the State of New York); and in case of your failure to appear or answer, judgment will be taken against you by default for the relief demanded in the Complaint. Plaintiff designates New York County as the place of trial. The basis of venue is the residence of Plaintiff American Guarantee & Liability Company.
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AMERICAN GUARANTEE & LIABILITY COMPANY v. ILLINOIS UNION INSURANCE COMPANY et al Complaint
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8/3/2019 AMERICAN GUARANTEE & LIABILITY COMPANY v. ILLINOIS UNION INSURANCE COMPANY et al Complaint
October 1, 2010, with limits of $5 million per occurrence and $5 million in the aggregate, in
excess of a $1 million primary policy (the "American Guarantee Policy.")
18. NY A to Z was a "Participant/Named Insured" for the period October 2, 2008 to
Ma rch 7, 2009 on the American Guarantee Policy
19. Illinois Union issued commercial general liability policy number G224010946001
to NY A to Z effective March 7, 2008 to M arch 7, 2009 w ith limits of $1 million per occurrence,
and $2 million in the aggregate (the "Illinois Union Policy").
20. The Illinois Union Policy is primary and underlies the American Guarantee
policy.
21. The Illinois Union Policy includes the following policy language:
SECTION I. COVERAGES
COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE
LIABILITY1. Insuring Agreement
a. We will pay those sums that the insured becom es
legally obligated to pay as damages because of
"bodily injury" or "property damage" to which this
insurance app lies. We will have the right and duty
to defend the insured against any "suit" seekingthose damag es. How ever, we will have no duty to
defend the insured against any "suit" seeking
damages for "bodily injury" or "property damage"
to which this insurance does not apply.
22. The Illinois Union Policy further provides:
SECTION IV - CO MM ERCIA L GENERAL LIABILITY
CONDITIONS
Duties in the event of Occurrence, Offense, Claim or SuitYou must see to it that we are notified as soon as practicable of an"occ urre nce " or an offense which m ay result in a claim. . . .
You and any other involved insured must:Immediately send us copies of any deman ds, notices, sum monses
or legal papers received in connection with the claim or "suit";
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23. Upon information and belief, MJRB, through a letter by Ace Westchester
Specialty Group, dated February 27, 2009, tendered a claim for the alleged accident to Illinois
Union and NY A to Z.
24. Illinois Union received that February 27, 2009 tender letter from MJRB no later
than on March 10,2009.
25 . On March 11, 2009, Handwerger and Sons ("H&S"), NY A to Z's broker, faxed a
letter to American Guarantee stating that they are putting the umbrella insurer on notice because
the insured has been brought into a lawsuit involving injury to an employee of a subcontractor.
26 . By letter dated March 27, 2009, Illinois Union disclaimed coverage to NY A to Z
for the accident on the grounds of late notice of occurrence.
27. Illinois Union's March 27 letter to NY A to Z provided, in relevant part, as
follows:
We call your attention to the fact that the alleged occurrence took place onor about Janua ry 20 [sic] 2009. Our first notice of this injury claim was on
or about March 10, 2009 via a tender letter from MJRB Kings Highway
Realty, LLC . Acco rdingly, it is evident that NY A to Z Con struction
Group, Inc. has violated the above stated conditions of the ILU policy
regarding notice of an occurrence; ILU hereby declines coverage to NY A
to Z for this matter.
28. On or about August 20, 2009, NY A to Z, through its broker, provided Illinois
Union with a copy of the Summons and Complaint in the Rapalo Action.
29. On or about September 18, 2009, Illinois Union again disclaimed coverage, this
time based upon late notice of claim in violation of the terms and conditions of the Illinois Union
Policy.
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30. On November 13, 2009 , American G uarantee wrote to Illinois Union to demand
that it immediately withdraw its denial of coverage in this matter and undertake the defense of
NY A to Z.
31. The November 13, 2009 letter from American Guarantee stated that Illinois Union
erred in its refusal to defend NY A to Z in the matter. The letter stated in relevant part:
[I]t is [American Guarantee's] understanding that NY A to Zalleges it became aware of the occurrence at the same time asIllinois Un ion. If this is accurate, and we have seen nothing yet toindicate otherwise, NY A to Z did not violate its obligation underthe Illinois Union policy. Accordingly, we believe there wasinsufficient information on which to base Illinois Union's
disclaimer.
32. In addition, the letter stated that if American Guarantee is required to defend NY
A to Z, it will seek reimbursement of all fees and costs incurred with respect to the defense of
NY A to Z due to Illinois Union's denial.
33. Throughout the commencement of the Rapalo Action, and despite the explicit
request from American Guarantee, Illinois Union has not undertaken a defense of NY A to Z as
required under their policy.
34. On November 13, 2009, in light of the failure of Illinois Union to undertake a
defense of NY A to Z, American Guarantee agreed to defend NY A to Z in regards to the Rapalo
Action, subject to a full and complete reservation of rights.
35. American Guarantee has retained counsel to defend NY A to Z in the Rapalo
Action subject to a full and complete reservation of rights.
AS AND FOR A FIRST CAUSE OF ACTION
FOR DECLARATORY JUDGMENT AGAINST ILLINOIS UNION
36. American Guarantee repeats and realleges each and every allegation in the
foregoing paragraphs as if fully set forth herein.
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