Village Determination to Demolish After Fire Not Occurrence

Village of Springville v. Reynolds--- N.Y.S.2d ----, 2009 WL 1099695N.Y.A.D. 4 Dept.,2009.

In this interesting coverage decision, the plaintiff Village instituted a declaratory judgment action to obtain coverage under its general liabilty policy seeking defense and indemnity with respect to a suit against it for its decision to condemn property after a fire.

The Fourth Department sided with the insurance carrier that the Village failed to establish that the loss was caused by an occurrence. "Occurrence" being "an accident." The complaint alleged that the decision to demolish the building and the demolition itself were intentional. The court noted that “[a]ccidental results [and unintended damages] can flow from intentional acts ..., when the damages alleged in the [underlying] complaint ‘are the intended result which flows directly and immediately from [the insured's] intentional act, rather than arising out of a chain of unintended though foreseeable events that occurred after the intentional act’, there is no accident, and therefore, no coverage” ( Salimbene v. Merchants Mut. Ins. Co., 217 A.D.2d 991, 994; cf. Automobile Ins. Co. of Hartford, 7 NY3d at 137-138).

Thus, the court granted summary judgment to the carrier. The court also reversed the award of attorneys fees in favor of the village since it was the village that instituted the DJ. Mighty Midgets v. Centennial Ins. Co., 47 N.Y.2d 12, 21-22).