THE DEFENDANTS SOUGHT REFORMATION OF AN INSURANCE POLICY ALLEGING THE FAILURE TO NAME THEM INDIVIDUALLY AS INSUREDS WAS DUE TO A MUTUAL MISTAKE; THE 3RD DEPARTMENT, OVER A TWO-JUSTICE DISSENT, REVERSED SUPREME COURT AND HELD THE COMPLAINT FAILED TO STATE A CAUSE OF ACTION (THIRD DEPT).

The Third Department, reversing Supreme Court, over a two-justice dissent, determined defendant property owners (Pollards) did not state a cause of action for reformation of an insurance policy based upon mutual mistake. Defendants’ tenant slipped and fell on a staircase outside his apartment at 192-198 Main Street and made a claim against defendants. Defendants’ business, Pollard Excavating, was insured. The insurer disclaimed coverage of the slip and fall at defendants’ apartment because the policy covered only defendants’ business:

The Pollards … allege that they believed that they were covered in their individual capacities and that the failure of [the insurer] to name them as such was the product of a mutual mistake. “It is well established that when interpreting an insurance contract, as with any written contract, the court must afford the unambiguous provisions of the policy their plain and ordinary meaning” … .

… [T]he … third-party complaint asserts that the Pollards own the buildings located at 192-198 Main Street and that they are shareholders of Pollard Excavating and Pollard Disposal. The coverage form contained in the policy issued to Pollard Excavating specifically identifies the insured under the policy as a “corporation in the business of excavating” and further identifies, as relevant here, that “your stockholders are also insureds, but only with respect to their liability as stockholders.” Inasmuch as the express provisions of the insurance policy contract do not include individual coverage for the Pollards, it was incumbent upon the Pollards to allege sufficient facts showing mutual mistake. To that end, the second amended third-party complaint fails to contain any factual allegations that [the insurer] agreed to provide coverage to the Pollards in their individual capacities or that any oral agreement was reached by which [the insurer]  was obligated to do so. We therefore find that the … third-party complaint fails to allege with sufficient particularity that the parties “reached an oral agreement and, unknown to either [party], the signed writing does not express that agreement” … . Hilgreen v Pollard Excavating, Inc., 2021 NY Slip Op 02031, Third Dept 4-1-21