Contracts, Policies, and Stipulations

Silber v New York Life Ins. Co., 2012 NY Slip Op 00816 (1st Dept., 2012)

For the reasons set forth below, we agree with the motion court that there was no "meeting of the minds" constituting the formation of a contract between the parties. It is axiomatic that a party seeking to recover under a breach of contract theory must prove that a binding agreement was made as to all essential terms (Paz v Singer Co., 151 AD2d 234, 235 [1989]). Courts look to the basic elements of the offer and the acceptance to determine whether there is an objective meeting of the minds sufficient to give rise to a binding and enforceable contract (Matter of Express Indus. & Term. Corp. v New York State Dept. of Transp., 93 NY2d 584, 589 [1999]). An agreement must have sufficiently definite terms and the parties must express their assent to those terms (id.).

In this case, plaintiff claims that the parties entered into an oral agreement, which was then confirmed in the May 29 letter from defendant. This contention is directly refuted by plaintiff's June 16 letter, in which he attempts to negotiate terms related to his employment and reinstatement. Plaintiff's claim that there would be no point in "moving forward" without resolving one of these terms indicates that it is a material term. Thus, plaintiff's own correspondence clearly indicates that material terms had not been agreed upon. Plaintiff's failure to show that the parties agreed to definite terms is fatal to his claim of a prior oral agreement.

Thus, as defendant asserts, the May 29 letter was merely an offer that plaintiff did not accept, and indeed rejected. " It is a fundamental principle of contract law that a valid acceptance must comply with the terms of the offer'" (Lamanna v Wing Yuen Realty, 283 AD2d 165, 166 [2001], lv denied 96 NY2d 719 [2001], quoting Roer v Cross County Med. Ctr. Corp., 83 AD2d 861 [1981]). Where "the offer specifies the … mode of acceptance, an acceptance … in any other manner[ ] is wholly nugatory and ineffectual" (Rochester Home Equity v Guenette, 6 AD3d 1119, 1120 [2004] [internal quotation marks and citation omitted]). Furthermore, a purported acceptance that is "qualified with conditions" is a rejection of the offer (Lamanna, 283 AD2d at 166 [2001] [internal quotation marks omitted]; see Homayouni v Banque Paribas, 241 [*4]AD2d 375, 376 [1997] ["whenever a purported acceptance is even slightly at variance with the terms of an offer, the qualified response operates as a rejection and termination of … the initially offered terms"]).

Defendant's May 29 letter specified the manner of acceptance by providing, "If you are in agreement with the terms set forth in this letter, please sign below and return a copy of this letter to me." Plaintiff concedes that he did not return a signed copy of the May 29 letter as required in order to accept defendant's offer. Nor did he indicate his acceptance by complying with any of the terms set forth in the letter. Plaintiff did not resign, and his June 16 letter indicates that he had not closed on the sale of his life settlement business.

Not only did plaintiff fail to accept defendant's offer, his June 16 letter specifically rejected the May 29 offer. As discussed above, plaintiff's letter is an attempt to further negotiate the terms of his employment or reinstatement. The letter specifically conditions his agreement on the resolution of certain outstanding employment/reinstatement issues. As such, the June 16 letter was a rejection of defendant's May 29 offer.

Even were we to deem plaintiff's June 16 letter an acceptance, plaintiff received defendant's revocation of the May 29 offer prior to acceptance. Revocation is effective at the moment that the offeree receives it, so long as the offer has not yet been accepted (see Morton's of Chicago/Great Neck v Crab House, 297 AD2d 335, 337 [2002]; Buchbinder Tunick & Co. v Manhattan Natl. Life Ins. Co., 219 AD2d 463, 466 [1995]). Here, the June 12 letter notifying plaintiff of his impending termination, which was sent to plaintiff by overnight mail and received on June 13, constituted a revocation of the offer.

Since plaintiff's promissory estoppel claim was not pleaded as a cause of action in the complaint, the motion court correctly declined to address it (see Moscato v City of New York [Parks Dept.], 183 AD2d 599 [1992]). We have considered plaintiff's remaining contentions and find them unavailing.

Atlantic Aviation Invs. LLC v MatlinPatterson Global Advisers LLC, 2012 NY Slip Op 00840 (1st Dept., 2012)

Under the plain language of the parties' Memorandum of Understanding (MOU) and the embedded Make-Whole Agreement, nonparty VarigLog was an "affiliate" of Volo, an indirect wholly-owned subsidiary of the MP Funds. The sale of the shares at issue was an "Exit," as expressly defined in the MOU. Under the Make-Whole Agreement, Volo and the MP Funds are obligated to ratably share with plaintiff the funds received by VarigLog, Volo's affiliate, in connection with the sale of shares.

We find that the parties' agreements are unambiguous. Thus, there is no need to resort to extrinsic evidence to discern their meaning (see South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272, 278 [2005]; W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162-163 [1990]). This is so regardless of whether the Make-Whole Agreement is carved out from the MOU's merger clause. Although the parties clearly intended for the Make-Whole Agreement to be an interim arrangement, to be supplanted by a "definitive final agreement" upon the Second Closing, it is nonetheless facially complete and contains all of the essential terms of an enforceable contract.

Randall's Is. Aquatic Leisure, LLC v City of New York, 2012 NY Slip Op 00843 (1st Dept., 2012)

Defendant New York City Economic Development Corporation (EDC) and plaintiffs Aquatic Development Group, Inc. (ADG) and Recreation Development, Inc. (RDI) are not signatories to the "Waterpark Concession Agreement" between plaintiff Randall's Island Aquatic Leisure, LLC (RIAL) and the City (through the Department of Parks and Recreation), which governs this dispute. Thus, ADG and RDI are not proper plaintiffs, and EDC is not a proper defendant, which alone is a sufficient ground on which to dismiss the complaint as against it. There can be no breach of contract claim against a non-signatory to the contract (Nuevo El Barrio Rehabilitación de Vivienda y Economía, Inc. v Moreight Realty Corp., 87 AD3d 465, 467 [2011]). There can be no claim of breach of the implied covenant of good faith and fair dealing without a contract (American-European Art Assoc. v Trend Galleries, 227 AD2d 170, 171 [1996]). And there can be no quasi-contract claim against a third-party non-signatory to a contract that covers the subject matter of the claim (Bellino Schwartz Padob Adv. v Solaris Mktg. Group, 222 AD2d 313, 313 [1995]).

Flusserova v Schnabel, 2012 NY Slip Op 00844 (1st Dept., 2012)

In opposition to defendants' prima facie showing that plaintiff released her claims against them, plaintiff failed to present any evidence that the release she signed was not "fairly and knowingly made" (see Johnson v Lebanese Am. Univ., 84 AD3d 427, 430 [2011] [internal quotation marks and citations omitted]). Plaintiff's claims that as a Czech immigrant with limited English she was taken advantage of by defendants lack merit in any event. According to her own testimony, taken in English in the absence of an interpreter, English is only one of several languages plaintiff speaks; she has written college-level papers in English, translated English for Czech speakers, and communicated with her coworkers and her boyfriend in English. In addition, plaintiff testified that she read the release and did not understand it, but she made no [*2]effort to have someone read and explain it to her before signing it (see Shklovskiy v Khan, 273 AD2d 371 [2000]). Accordingly, her claim that she believed she was signing a receipt for the money she was paid does not avail her.

McFarland v Opera Owners, Inc., 2012 NY Slip Op 00729 (1st Dept., 2012)

The court properly dismissed the fraud claim as barred by the merger clause, "as is" clause, and other disclaimers (see Rivietz v Wolohojian, 38 AD3d 301 [2007]). Moreover, plaintiffs' allegations of defendant's intent to breach the contract are insufficient to state a cause of action for fraud (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995]; Board of Mgrs. of the Chelsea 19 Condominium v Chelsea 19 Assoc., 73 AD3d 581, 582 [2010]).

Movado Group, Inc. v Mozaffarian, 2012 NY Slip Op 00732 (1st Dept., 2012)

Defendants signed a credit agreement in which they expressly acknowledged receipt of, and agreed to be bound by, terms and conditions contained in an extrinsic document, which defendants neither read nor requested a copy to read. After the credit application was approved, defendants saw, for the first time, the terms and conditions, which contained a New York forum selection clause.

Plaintiff proved by a preponderance of the evidence (see Matter of Pickman Brokerage [Bevona], 184 AD2d 226, 226-227 [1992]), that the terms and conditions of the extrinsic document were incorporated into the credit agreement, and that defendants' acknowledged receipt and agreed to be bound by the same. The credit agreement, which identified the terms and conditions as those contained on each invoice, was sufficient to put defendants on notice that there was an additional document of legal import to the contract they were executing (see Shark Information Servs. Corp. v Crum & Forster Commercial Ins., 222 AD2d 251, 252 [1995]; see also American Dredging Co. v Plaza Petroleum, 799 F Supp 1335, 1338 [ED NY 1992], vacated in part on other grounds, 845 F Supp 91 [ED NY 1993]). Defendants' decision not to inquire as to the terms and conditions is one by which they are bound (see Sorenson v Bridge Capital Corp., 52 AD3d 265, 266 [2008], lv dismissed 12 NY3d 748 [2009]; see also Hotel 71 Mezz Lender LLC v Falor, 64 AD3d 430, 430 [2009] [a signer's duty to read and understand that which he signs is not "diminished merely because []he was provided with only a [portion of that document]").

The parties' dispute is not, as found by the lower court, governed by UCC 2-207(1)-(2)(b), which provides that, between merchants, where there is an "expression of acceptance or a written confirmation . . . [even if it] states terms additional to or different from those offered or agreed upon . . . [the additional or different terms] become part of the contract unless . . . they materially alter it" (id.). Here, the forum selection clause was not an "additional [*2]or different term" added to the contract, nor was it a confirmatory writing; rather, it was one of the terms and conditions incorporated by reference into the contract at its inception (see Guerra v Astoria Generating Co., L.P., 8 AD3d 617, 618 [2004]). Neither of the issues generally decided pursuant to UCC 2-207 are at issue here (see e.g. K.I.C. Chems., Inc. v ADCO Chem. Co., 1996 US Dist LEXIS 3244, at *10 [SD NY 1996] ["a classic battle of the forms'"]; Hugo Boss Fashions v Sam's Eur. Tailoring, 293 AD2d 296, 297 [2002] [a written alteration to an oral agreement]).

Cari, LLC v 415 Greenwich Fee Owner, LLC, 2012 NY Slip Op 00652 (1st Dept., 2012)

The contracts' termination provision provided that plaintiff could cancel the agreement for any reason and obtain the return of its deposit with interest, so long as it provided written notice to defendant sponsor no later than 10 days before closing. The court correctly determined that the termination provision rendered the contracts unenforceable for lack of mutual consideration (see Dorman v Cohen, 66 AD2d 411, 415, 418 [1979]). The obligation to provide written notice of termination does not constitute consideration where, as here, termination occurs immediately upon notice, and not after some specified period of time (see Allen v WestPoint-Pepperell, Inc., 1996 WL 2004, *3 n 5, 1996 US Dist LEXIS 6, *8 n 5 [SD NY 1996]; cf. Dorman, 66 AD2d at 419, citing McCall Co. v Wright, 133 App Div 62, 68 [1909], affd 198 NY 143 [1910]). The termination provision is enforceable and cannot be severed, even though it renders the contracts void (see Ying-Qi Yang v Shew-Foo Chin, 42 AD3d 320 [2007], lv denied 9 NY3d 812 [2007]). Plaintiff's promissory estoppel claim fails because it does not allege "a duty independent of the [contracts]" (Celle v Barclays Bank P.L.C., 48 AD3d 301, 303 [2008]).

The court properly denied leave to file a second amended complaint, where the proposed amendment "suffers from the same fatal deficiency as the original claims" — namely, the lack of [*2]mutual consideration ("J. Doe No. 1" v CBS Broadcasting Inc., 24 AD3d 215, 216 [2005]).

Matter of Matter of Rivera v Amica Mut. Ins. Co., 2012 NY Slip Op 00472 (1st Dept., 2012)

In Butler v New York Cent. Mut. Fire Ins. Co. (274 AD2d 924 [2000]), the Third Department held that whether the term "insured," as used in an identical Condition 6 of the SUM Endorsement, "refers to each independent insured" or "a cumulative grouping of all who qualify as insureds" was ambiguous, and should be construed against the insurer (id. at 925-26). However, in this case, Condition 6 cannot be viewed as ambiguous because such provision refers to "[t]he SUM limit shown on the Declarations," and the Declarations clearly set forth a "per accident" limit (see Matter of Automobile Ins. Co. Of Hartford v Ray, 51 AD3d 788, 790 [2008]; Matter of Government Empls. Ins. Co. v Young, 39 AD3d 751, 752-53 [2007]; Matter of Graphic Arts Mut. Ins. Co. [Dunham], 303 AD2d 1038, 1038-39 [2003]). Petitioners' piecemeal view of Condition 6 runs afoul of the principle that "[w]hen interpreting a contract, we must consider the entire writing and not view particular words in isolation" (Wachter v Kim, 82 AD3d 658, 661 [2011]).

Matter of Matter of Allstate Ins. Co. v LeGrand, 2012 NY Slip Op 00242 (1st Dept., 2012)

The failure to move to stay arbitration within the 20-day period specified in CPLR 7503(c) generally "constitutes a bar to judicial intrusion into arbitration proceedings" (Aetna Life & Cas. Co. v Stekardis, 34 NY2d 182, 184 [1974]; see Matter of Spychalski [Continental Ins. Cos.], 45 NY2d 847 [1978]). However, a motion to stay arbitration may be entertained outside the 20-day period when "its basis is that the parties never agreed to arbitrate, as distinct from situations in which there is an arbitration agreement which is nevertheless claimed to be invalid or unenforceable because its conditions have not been complied with" (Matter of Matarasso [Continental Cas. Co.], 56 NY2d 264, 266 [1982]).

It is undisputed that the subject accident occurred while the insured was driving a rental car in Mexico. The insured's automobile insurance policy provided benefits for accidents that occurred within the State of New York, "the United States, its territories or possessions, or Canada." Since the policy did not provide for coverage in the geographic area where the accident occurred, it cannot be said that the parties ever agreed to arbitrate this claim (see Matter of Allstate Ins. Co. (Richards), 178 AD2d 142 [1991], lv denied 79 NY2d 756 [1992]; cf. Matter of Fiveco, Inc. v Haber, 11 NY3d 140 [2008]).

Thor Props., LLC v Chetrit Group LLC, 2012 NY Slip Op 00112 (1st Dept., 2012)

In this lawsuit, plaintiff claims that it is entitled to the third payment of $6.25 million, because Komar willfully failed to close thereby causing the failure of the condition precedent and consequently depriving plaintiff of its right to the final payment. Plaintiff cites the "prevention" or "hindrance" doctrine whereby a "defendant cannot rely on the condition precedent to prevent recovery where the non-performance of the condition was caused or consented to by itself" (O'Neil Supply Co. v Petroleum Heat & Power Co., 280 NY 50, 56 [1939]; see also Arc Elec. Constr. Co. v Fuller Co., 24 NY2d 99, 103-04 [1969]). However, the prevention doctrine, a variant of the implied covenant of good faith and fair dealing, is only applicable when it is consistent with the intent of the parties to the agreement (see HGCD Retail Servs., LLC v 44-45 Broadway Realty Co., 37 AD3d 43, 53 [2006]). Here, the parties' settlement agreement clearly provided that the first payment was completely nonrefundable, the second payment was refundable if title failed to close through no fault of Komar, and plaintiff only became entitled to the third payment if title closed or an assignment occurred. Neither happened. Accordingly, plaintiff never became entitled to the third payment.

Plaintiff's argument that the parties incorporated the language concerning Komar's purposeful default from section B(i) into section B(ii) governing the third payment is contrary to the terms of the agreement. The parties clearly were capable of expressing the circumstances under which the right to payment vested. Had the parties meant to entitle plaintiff to the funds discussed in section B(ii) upon Komar's default, they certainly were capable of crafting language to that effect.

In addition, plaintiff argues that, regardless of the language in the settlement agreement, under the prevention doctrine, defendant cannot rely on the failure to close as an excuse not to [*3]pay plaintiff, because defendant is responsible for that failure. This argument misses the mark. By leaving out the words "except if title fails to close for any reason other than Komar's default" from section B(ii), the parties in essence contracted around the prevention doctrine. Thus, the parties considered the possibility of default and accorded liability (to defendants) for only one half of the $12.5 million. Imposition of the prevention doctrine to award the full $12.5 million to plaintiff would be inconsistent with a plain reading of the agreement.

The motion court also properly dismissed defendants' counterclaim for rescission of contract based on mutual mistake. To void a contract for mistake, the mistake must be mutual, substantial and must exist at the time the parties enter into the contract (see 260/261 Madison Equities Corp. v 260 Operating, 281 AD2d 237 [2001]). This Court previously found that there was neither a prior agreement with the relevant municipality limiting development, nor any guarantee that development would be permitted (Diplomat Props., 72 AD3d 596). Because it was always uncertain whether the City would permit or deny further development of the property, any assumption about the ability to develop property could not have existed at the time the parties entered into the agreement.

A party will not be relieved of its contractual obligations on the basis of an intervening contingency when it would have been reasonable to provide for such contingency in the contract (see Kel Kim Corp. v Central Mkts., 70 NY2d 900 [1987]; P.K. Dev. v Elvem Dev. Corp., 226 AD2d 200 [1996]). The ability to secure favorable zoning rulings is a well known risk in any property development project, and if expansion of the property was the key to profitability, as defendants claim, they should have explicitly handled that contingency in the settlement agreement.

Options Group, Inc. v Vyas, 2012 NY Slip Op 00038 (1st Dept., 2012)

The record evidence establishes definitively that the June 8, 2009 e-mail that plaintiff contends was defendant's acceptance of its settlement offer did not result in a preliminary agreement that embodied all the essential terms of the agreement between the parties (see Williamson v Delsener, 59 AD3d 291 [2009]). In any event, this alleged settlement agreement was superseded by a formal settlement agreement drafted by plaintiff and signed by defendant, which contained additional terms and specifically provided that it cancelled all preceding agreements (see e.g. Olivo v The City of New York, 2010 WL 3200073, 2010 US Dist LEXIS 81951 [SD NY 2010]). Even if plaintiff never formally executed the settlement agreement it [*2]proffered to defendant, the record demonstrates that both parties intended to be bound by the agreement, and it is therefore enforceable (see Flores v Lower E. Side Serv. Ctr., Inc., 4 NY3d 363, 369 [2005]; Kowalchuk v Stroup, 61 AD3d 118, 125 [2009]).

Ayers v Ayers, 2012 NY Slip Op 00920 (2nd Dept, 2012)

A stipulation of settlement entered into by parties to a divorce proceeding constitutes a contract between them subject to the principles of contract interpretation (see Rainbow v Swisher, 72 NY2d 106; De Luca v De Luca, 300 AD2d 342; Girardin v Girardin, 281 AD2d 457). Where the intention of the parties is clearly and unambiguously set forth, effect must be given to the intent as indicated by the language used (see Slatt v Slatt, 64 NY2d 966; see also De Luca v De Luca, 300 AD2d at 342). A court may not write into a contract conditions the parties did not insert or, under the guise of construction, add or excise terms, and it may not construe the language in such a way as would distort the apparent meaning (see Cohen-Davidson v Davidson, 291 AD2d 474, 475). Whether a writing is ambiguous is a matter of law for the court, and the proper inquiry is " whether the agreement on its face is reasonably susceptible of more than one interpretation'" (Clark v Clark, 33 AD3d 836, 837, quoting Chimart Assoc. v Paul, 66 NY2d 570, 573). In making this determination, the court also should examine the entire contract and consider the relation of the parties and the circumstances under which the contract was executed (see Clark v Clark, 33 AD3d at 837-838). Applying these principles herein, it is clear that the parties did not intend for child support payments to be included as part of "income and assets." Indeed, there is no language in the Stipulation which supports the defendant's determination that child support payments should be added to the plaintiff's income and deducted from his income. Nor can the plaintiff's alleged overpayments be deemed voluntary (cf. Matter of Hang Kwok v Xiao Yan Zhang, 35 AD3d 467).

Maser Consulting, P.A. v Viola Park Realty, LLC, 2012 NY Slip Op 00498 (2nd Dept., 2012)

"The fundamental, neutral precept of contract interpretation is that agreements are construed in accord with the parties' intent" (Greenfield v Philles Records, 98 NY2d 562, 569). "Where . . . the contract is clear and unambiguous on its face, the intent of the parties must be gleaned from within the four corners of the instrument, and not from extrinsic evidence" (Rainbow v Swisher, 72 NY2d 106, 109; see Beal Sav. Bank v Sommer, 8 NY3d 318, 324; Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475; Etzion v Etzion, 84 AD3d 1015, 1017). "The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court" (Franklin Apt. Assoc., Inc. v Westbrook Tenants Corp., 43 AD3d 860, 861). "The court's role is limited to interpretation and enforcement of the terms agreed to by the parties, and the court may not rewrite the contract or impose additional terms which the parties failed to insert" (131 Heartland Blvd. Corp. v C.J. Jon Corp., 82 AD3d 1188, 1189; see Matter of Salvano v Merrill Lynch, Pierce, Fenner & Smith, 85 NY2d 173, 182). Extrinsic evidence will be considered [*2]only if the contract is deemed ambiguous (see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 163; Quality King Distrib., Inc. v E & M ESR, Inc., 36 AD3d 780, 782).

Signature can be anywhere

Pludeman v Northern Leasing Sys., Inc., 2011 NY Slip Op 06450 (1st Dept., 2011)

Plaintiffs are small business owners who, as lessees, entered into form leases for certain business equipment with defendant Northern Leasing Systems, Inc. (NLS), as lessor. Each plaintiff signed the form lease on page 1. Paragraph 9 ("Insurance") of the form lease, on page 3 thereof, provides in pertinent part: "If Lessee does not provide evidence of insurance [on the leased equipment], Lessee is deemed to have chosen to buy [a] Loss and Destruction waiver [from NLS] at the price in effect, price which Lessor reserves the right to change from time-to-time." Plaintiffs' cause of action for breach of contract is based on NLS's charging them the aforementioned "Loss and Destruction waiver" (LDW) fee for the privilege of not purchasing insurance. Plaintiffs allege that, when they signed the form leases on page 1, they were unaware of the last three pages of the form. On that basis, plaintiffs contend that they are not bound by the LDW fee provision of paragraph 9 (again, on page 3) and that NLS's charging of the LDW fee (in the amount of $4.95) therefore constituted an overcharge and a breach of contract.

In the order appealed from, Supreme Court granted plaintiffs' motion for summary judgment as to liability on their cause of action for breach of contract. We reverse and deny the motion. On this record, questions of fact exist that preclude granting plaintiffs summary judgment on the breach of contract claim. Specifically, a factfinder must determine (1) whether plaintiffs received only the first page of the form lease or all four pages, and (2) whether, if plaintiffs received all four pages, they could reasonably have believed that all terms were contained on page 1. The latter question cannot be answered as a matter of law in plaintiffs' favor, given that page 1 of the form lease, which each plaintiff signed, states that it is "Page 1 of 4" and contains a reference, above the lessee's signature, to paragraph 11, which appears on page 3 of the form. Moreover, the record contains evidence that the form lease each plaintiff signed was printed on one sheet of paper, 11 inches wide by 17 inches long, folded in half to create a four-page booklet. We note that there is no legal requirement that a party's signature appear at the end of a written agreement (see Uniform Commercial Code § 1-201, Official Comment 39 [signature or other authentication of a written agreement "may be on any part of the document"]; cf. Riverside S. Planning Corp. v CRP/Extell Riverside, L.P., 60 AD3d 61, 67 [2008], affd 13 NY3d 398 [2009] ["there is no legal requirement that contractual provisions fixing the term of a contract must appear at the end of . . . the document"]). Finally, that the form lease did not specify the amount of the LDW fee did not render the lease or its provision for the LDW fee void (see Uniform Commercial Code § 2A-204[3] {"Although one or more terms are left open, a lease contract does not fail for indefiniteness if the parties have intended to make a lease contract and there is a reasonably certain basis for giving an appropriate remedy"]). Thus, if the LDW fee provision is found to be part of the agreement, NLS is entitled to set the fee, provided the fee is reasonable.

Policy terms and orther language related nuances

Cragg v Allstate Indem. Corp., 2011 NY Slip Op 04767 (Ct. App. 2011)

Insurance contracts must be interpreted according to common speech and consistent with the reasonable expectations of the average insured (see Matter of Mostow v State Farm Ins. Cos., 88 NY2d 321, 326-327 [1996]). To the extent that there is any ambiguity in an exclusionary clause, we construe the provision in favor of the insured. Moreover, "'exclusions or exceptions from policy coverage . . . are not to be extended by interpretation or implication, but are to be accorded a strict and narrow construction. Indeed, before an insurance company is permitted to avoid policy coverage, it must satisfy the burden which it bears of establishing that the exclusions or exemptions apply in the particular case, and that they are subject to no other reasonable interpretation'" (Pioneer Towner Owners Assn. v State Farm Fire & Cas. Co., 12 NY3d 302, 307 [2009], quoting Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [1984]). Allstate has not met that burden here.

The language of the policy exclusion — excluding coverage "whenever any benefit of this coverage would accrue directly or indirectly to an insured" — is ambiguous. It could be interpreted, as Allstate urges, to mean that bodily injury to an insured is not covered whenever any benefit — including coverage itself in the form of defense and indemnification — would accrue to an insured. However, as plaintiff points out, this interpretation ascribes meaning only to the first clause of the exclusion — "[w]e do not cover bodily injury to an insured person." Since the right to defense and indemnification universally accrues to an insured, under Allstate's interpretation the condition of the second clause of the exclusion would always be met. However, the second part of the exclusion must somehow modify the first part of the clause in order to have any meaning. In this context, a benefit must mean something other than coverage itself and is more naturally read to mean proceeds paid under the policy. In light of our obligation to interpret the exclusion in a manner that gives full force and effect to the policy language and does not render a portion of the provision meaningless (see County of Columbia v Continental Ins. Co., 83 NY2d 618, 628 [1994]), we find plaintiff's interpretation of the clause to be more in keeping with these well-settled principles of contract interpretation.

The current version of the exclusion at issue was brought about in response to the decision in Allstate Ins. Co. v Pestar (168 AD2d 931 [4th Dept 1990]). The prior version of the exclusion had excluded coverage for bodily injury to an insured. In Pestar, a child was injured when she dove into a State-owned lake. Her parents filed a negligence action against the State and the State counterclaimed seeking contribution. Despite the policy exclusion, the Appellate Division determined that Allstate had a duty to defend and indemnify the parents on the State's counterclaim, finding that "the liability at issue . . . is not the parents' liability to [the insured child] but rather the parents' potential liability to the State on a claim of equitable apportionment" (Pestar, 168 AD2d at 931-932). The insurer subsequently added language to the exclusion stating that bodily injury to an insured is not covered "whenever any benefit of this coverage would accrue directly or indirectly to an insured person" (see 9A Couch on Insurance 3d § 128:4).

Assuming the insurer intended this language to exclude coverage under the policy entirely for bodily injury to insureds, it did not accomplish the desired result. Instead of making the exclusion broader, the additional language can be read as limiting the application of the exclusion to situations where an insured would receive a benefit (i.e. payment) under the policy. The amendment, then, can be seen as the insurer's attempt to cut off indirect claims, such as claims for contribution. As relevant to this appeal, however, the exclusion fails to bar unambiguously payment to a noninsured plaintiff, that is to say it does not clearly cut off the nonresident distributee's wrongful death claims arising from the fatal injury to an insured.

Other jurisdictions have observed that there are valid policy reasons for excluding coverage in cases such as this one. They have noted that homeowner's insurance is generally meant to cover bodily injury to noninsureds (see Cincinnati Indem. Co. v Martin, 85 Ohio St 3d 604, 608; 710 NE2d 677, 680 [1999]) and that coverage is excluded in these types of situations in order to avoid imposing liability on the insurer in a case where the insured, due to a close relationship with the injured party, might be unmotivated to assist the insurer in defending against the claim (see Whirlpool Corp. v Ziebert, 197 Wis 2d 144, 149; 539 NW2d 883, 885 [1995])[FN1]. However, faced with a very similar case addressing the identical exclusion, the Wisconsin Supreme Court recently held that "Allstate has failed to meet its burden to demonstrate that the policy term 'benefit' unambiguously includes the contractual right to receive a defense or the contractual right to indemnification" (Day v Allstate Indem. Co., 2011 WI 24, ¶57 [decided April 29, 2011]). We agree with this analysis.

We therefore find that judgment should have been granted in plaintiff's favor, as the exclusion did not operate to bar coverage for the noninsured plaintiff's wrongful death claim for the death of the insured decedent.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the matter remitted to Supreme Court for further proceedings in accordance with this opinion.

Brennan Beer Gorman/ Architects, LLP v Cappelli Enters., Inc., 2011 NY Slip Op 04825 (App. Div., 1st 2011)

On May 19, 2008, plaintiff submitted a proposal for architectural and engineering services to defendants relating to a proposed casino resort project (the project). Four days later, plaintiff informed defendants that it was still "working on a formal agreement," but nonetheless asked defendants to provide authorization to proceed. Defendants authorized plaintiff to start working, but expressly noted that plaintiff's "proposal and associated pricing" were "still under review and . . . subject to a formal agreement." Although plaintiff proceeded to work on the project, the parties continued to exchange contract drafts and comments for several months, never coming to an express agreement on price and other terms. It is thus evident on this record that the parties' minds never met on the material terms of their agreement, including price (see Yenom Corp. v 155 Wooster St. Inc., 23 AD3d 259, 259-260 [2005], lv denied 6 NY3d 708 [2006]). Accordingly, defendants are entitled to summary judgment dismissing plaintiff's first and third causes of action for breach of an express contract.

Defendants are also entitled to summary judgment dismissing plaintiff's fourth cause of action for breach of an implied contract. As noted, the record establishes that the parties never reached an express agreement on the material term of price. Moreover, defendants' statement that they would be bound only by a formal agreement and their repeated rejection of plaintiff's proposal for lump-sum pricing overrides their act of paying plaintiff's August 2008 invoice, which billed for work performed in June 2008 on a lump-sum basis (see Jordan Panel Sys. Corp. v Turner Constr. Co., 45 AD3d 165, 179 [2007]).

Defendants' consistent objections to plaintiff's invoices requires dismissal of the fifth cause of action for an account stated (cf. Herrick, Feinstein LLP v Stamm, 297 AD2d 477, 478-479 [2002]).

Because plaintiff's express and implied contract claims should be dismissed, plaintiff's second cause of action for attorneys' fees should also be dismissed, as that claim is premised exclusively on the attorneys' fees provision contained in plaintiff's May 2008 proposal.

Supreme Court properly declined to dismiss plaintiff's sixth cause of action for quantum meruit, since triable issues of fact exist as to whether plaintiff could have reasonably expected to be compensated for its services and the reasonable value of those services (see generally Fulbright & Jaworski, LLP v Carucci, 63 AD3d 487, 488-489 [2009]). Although the parties never reached an agreement on price, the record indicates that defendants acknowledged the need to pay plaintiff at least some amount for its services. Indeed, on July 3, 2008, defendants directed plaintiff to bill "for now on a [time and materials] basis until we have reached conclusion on the contract," and, on August 18, 2008, defendants asked plaintiff to prepare a summary of spending and payment status, noting that they wanted "to make sure we are staying current."

We reject defendants' contention that plaintiff cannot establish that defendants benefitted from plaintiff's services. The plaintiff asserting a valid claim in quantum meruit "recovers the reasonable value of his performance whether or not the defendant in any economic sense benefitted from the performance" (Martin H. Bauman Assoc. v H & M Intl. Transp., 171 AD2d 479, 484 [1991] [internal quotation marks and citation omitted]).

We also reject defendants' contention that plaintiff cannot establish the reasonable value of its services because it did not maintain itemized billing records detailing how it spent the asserted 5,800 man-hours of work. There are other means of establishing the reasonable value of services rendered, including the plaintiff's invoices and evidence of the number of hours of service rendered (see Paul F. Vitale, Inc. v Parker's Grille, Inc., 23 AD3d 1147, 1147 [2005], lv denied 6 NY3d 707 [2006]; Clark v Torian, 214 AD2d 938, 938 [1995]), both of which are available in the record. Moreover, plaintiff has submitted the affidavit of a licensed architect who, based on his review of the record, opined that plaintiff's schematic design work had a fair market value of at least $1.3 million.

We note that, on appeal, plaintiff does not seek summary judgment on its quantum meruit claim. In any event, we find that plaintiff is not entitled to such relief due to unresolved issues of material fact. We further note that defendant makes no argument with respect to plaintiff's seventh cause of action for a declaratory judgment.

Goldman Sachs Group, Inc. v Almah LLC, 2011 NY Slip Op 04725 (App. Div. 1st 2011)

Before any discovery was conducted, GS moved to dismiss the counterclaims pursuant to CPLR 3211(a)(1) and (7)(21)[FN1]. GS argued that it was entitled to dismissal of the first counterclaim (breach of contract) because all the transaction documents submitted established that it "received" no "payment" of any kind as a result of the assignment and sublease. Preliminarily, the motion court acknowledged that, because Art. 12.6(a) of the lease speaks in terms of actual payment, GS's interpretation limiting the profit-sharing obligation to money received was reasonable. Nevertheless, the court denied the motion to dismiss as to the first counterclaim, finding that the term "other consideration" was ambiguous and should be interpreted with the aid of extrinsic evidence, reasoning that, since "sum" means money, if "other consideration" is to have any non-redundant meaning, it must mean more than just money, in accordance with the broad legal concept that consideration may be many forms of value.

Whether a contract is ambiguous is a question of law for the court and is to be determined by looking "within the four corners of the document" (Kass v Kass, 91 NY2d 554, 566 [1998], citing W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162-163 [1990]). A contract is unambiguous if "on its face [it] is reasonably susceptible of only one meaning" (Greenfield v Philles Records, 98 NY2d 562, 570 [2002]; see also Breed v Insurance Co. of N. Am., 46 NY2d 351, 355 [1978]). Conversely, "[a] contract is ambiguous if the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings" (Feldman v National Westminster Bank, 303 AD2d 271, 271 [2003], lv denied 100 NY2d 505 [2003] [internal quotation marks and citations omitted]).

The existence of ambiguity is determined by examining the "entire contract and consider[ing] the relation of the parties and the circumstances under which it was executed," with the wording to be considered "in the light of the obligation as a whole and the intention of the parties as manifested thereby" (Kass at 566 [internal quotations marks and citation omitted]). The " intent of the parties must be found within the four corners of the contract, giving a practical interpretation to the language employed and the parties' reasonable expectations'" (Del Vecchio v Cohen, 288 AD2d 426, 427 [2001], quoting Slamow v Del Col, 174 AD2d 725, 726 [1991], affd 79 NY2d 1016 [1992]).

Applying these principles, we find that the language of Article 12.6, when considered as an integrated whole and not in isolation, conveys the parties' intent that only actual "payment" made by the assignee and "receipt" by the assignor as consideration would trigger the profit-sharing clause. Indeed, Article 12.6 lists several types of "consideration" and all of the examples consist of amounts payable, for one reason or another, to the Tenant. The examples of "other consideration" include "sums paid for the sale or rental of Tenant's fixtures, leasehold improvements, equipment, furnishings or other personal property . . . " Additionally, Article 12.6 indicates that any "consideration" would consist of "sums" that a Tenant "receives" and against which the Tenant's expenses can be netted. This language in Article 12.6 conveys the parties' clear intent that only tangible consideration such as cash or notes payable to the tenant could trigger the profit-sharing clause, and that any intangible benefits inuring to the tenant from the assignment and sublease, as the owner posits, in the form of inherent "value" does not suffice. Even though the word "consideration" might seem to suggest a broader meaning in general, the word should be limited to the particular object that the parties intended here. Accordingly, because it is undisputed that no "payment" was "received" as consideration for the assignment of the lease, tenant GS was entitled to a dismissal of the counterclaim in its entirety.

Ellington v Sony/ATV Music Publ. LLC, 2011 NY Slip Op 04733 (App. Div., 1st 2011)

Plaintiff failed to set forth a basis for terminating the parties' copyright royalties agreement. Viacom's sale of defendant Famous Music, a party to the agreement, to defendant Sony/ATV did not repudiate the agreement by assigning plaintiff's rights and rendering Famous incapable of performing its obligations. In any event, an assignment is permissible in the absence of an express prohibition (see Eisner Computer Solutions v Gluckstern, 293 AD2d 289 [2002]; Matter of Stralem, 303 AD2d 120, 122 [2003]). Plaintiff's conclusory characterization of the agreement as an unassignable personal services contract (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 482 [2006], cert dismissed 548 US 940 [2006]) was contradicted by the overall tenor of the agreement, which was cast as a sale of "assets" and did not provide for the management of plaintiff's artistic career or talents. The extraordinary remedy of rescission was unwarranted since, among other reasons, there was an adequate remedy at law (see Rudman v Cowles Communications, 30 NY2d 1, 13 [1972]).

The fiduciary breach claim was duplicative of the contract claims (see William Kaufman Org. v Graham & James, 269 AD2d 171, 173 [2000]), plaintiff's artificial separation of the royalty mis-routing allegation from the "negative adjustment" contract claims notwithstanding. The unjust enrichment claim was not viable in light of the undisputedly valid contract claims (see EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 23 [2005]).

Malekan v Sakai, 2011 NY Slip Op 04751 (App. Div., 1st 2011)

Supreme Court correctly determined that Sakai is the rightful owner of the antique. Plaintiff Malekan's contention that the agreement in Farsi was an agreement to forbear, akin to a covenant not to sue, lacks support in the record. Furthermore, there is no dispute that Malekan also signed a bill of sale written in English concerning the antique, and under the circumstances, Malekan is bound by what he signed (see Shklovskiy v Khan, 273 AD2d 371, 372 [2000]).

Suazo v Maple Ridge Assoc., L.L.C., 2011 NY Slip Op 04762 (App. Div., 1st 2011)

The right of a party to recover indemnification on the basis of a contractual provision depends on the intent of the parties and the manner in which that intent is expressed in the contract (see Kurek v Port Chester Hous. Auth., 18 NY2d 450 [1966]). The promise to indemnify should not be found unless it can be clearly implied from the language and purpose of the entire agreement and the surrounding facts and circumstances (see Hooper Assoc., Ltd., v AGS Computers, 74 NY2d 487 [1989]). A contract that provides for indemnification will be enforced so long as the intent to assume such role is sufficiently clear and unambiguous (see Bradley v Earl B. Feiden, Inc., 8 NY3d 265 [2007]).


Construed against the drafter

Gould Invs., L.P. v Travelers Cas. & Sur. Co. of Am., 2011 NY Slip Op 02844 (App. Div., 2nd 2011)

Here, the provision of the policy addressing the parties' obligations regarding subrogation provided that, "you must transfer to us all your rights of recovery against any person or organization for any loss you sustained and for which we have paid or settled. You must also do everything necessary to secure those rights and do nothing after loss to impair them." The Supreme Court properly determined that the plain and ordinary meaning of the first sentence of that provision obligated the plaintiff to transfer rights of recovery only upon payment of the claim and that, accordingly, no subrogation rights had accrued to the defendant upon which it could base its motion. As any ambiguity introduced by the second sentence of that provision must be construed against the insurer as drafter of the policy (see Essex Ins. Co. v Laruccia Constr., Inc., 71 AD3d at 818; United States Fire Ins. Co. v Knoller Companies, Inc., 80 AD3d 692), the Supreme Court's determination was proper.

1701 Rest. on Second, Inc. v Armato Props., Inc., 2011 NY Slip Op 03106 (App. Div., 1st 2011)

The parties agree that this Court need look no further than the "clear language" contained in the "four corners" of the agreement, but differ on their interpretation of the asserted clear language. Under the "clear language" rule of contract interpretation, we disregard extrinsic evidence if there is, as the parties agree, no ambiguity, and look only to the language of the agreement (see R/S Assoc. v New York Job Dev. Auth., 98 NY2d 29, 33 [2002]). Tenant correctly points to language in the 2001 Lease Extension and Modification Agreement stating that, other than as modified by such document, the terms of the 1994 lease "remain in full force and effect." Thus, the clear language of the rider to the 1994 lease directly supports tenant's contention that the renewal option was still in effect and had not been "subsumed" as defendant landlord argues. Landlord fails to direct the court to any clear language in support of its position.

"Ordinarily, a party cannot be compelled to litigate and, absent special circumstances, leave to discontinue a cause of action should be granted [unless] the party opposing the motion can demonstrate prejudice if the discontinuance is granted" (see St. James Plaza v Notey, 166 AD2d 439, 439 [1990]). Under the circumstances of this case, Supreme Court correctly denied landlord's motion. Landlord sought to discontinue its counterclaim for declaratory judgment in Supreme Court and then pursue similar relief in Civil Court, notwithstanding that tenant had cross-moved for leave to amend its complaint, which should be freely granted (CPLR 3025[b]), seeking to add a cause of action for declaratory relief related to the same subject matter. Moreover considerable discovery had already occurred in relation to landlord's counterclaim. Thus, it would have been inequitable to allow landlord to discontinue its counterclaim at this point in the litigation (see St James Plaza v Notey at 440).

The bold is mine.

Construction in the first department

Bajraktari Mgt. Corp. v American Intl. Group, Inc., 2011 NY Slip Op 00621 (App. Div., 1st 2011)

The insurance policy clearly and unambiguously defines "Continuity Date" as December 29, 2004. The motion court correctly declined to consider parol evidence to ascertain the parties' intention as to that date (see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]). "[A] contract is not rendered ambiguous just because one of the parties attaches a different, subjective meaning to one of its terms" (Moore v Kopel, 237 AD2d 124, 125 [1997]).

Plaintiffs' remaining arguments based upon their contention that the policy is ambiguous are unavailing. Their argument that the policy should be construed in a manner that would be consistent with "the reasonable expectations of a New York City property owner" is also unavailing (see Slayko v Security Mut. Ins. Co., 98 NY2d 289, 296-297 [2002]).

The bold is mine.

Contract terms

MHR Capital Partners LP v Presstek, Inc., 2009 NY Slip Op 05200 (Ct. App., 2009)

It is well settled that a contract is to be construed in accordance
with the parties' intent, which is generally discerned from the four
corners of the document itself. Consequently, "a written agreement that
is complete, clear and unambiguous on its face must be enforced [*4]according to the plain meaning of its terms"
(Greenfield v Philles Records,
98 NY2d 562, 569 [2002]). Furthermore, a condition precedent is "an act
or event, other than a lapse of time, which, unless the condition is
excused, must occur before a duty to perform a promise in the agreement
arises" (Oppenheimer & Co. v Oppenheim, Appel, Dixon & Co.,
86 NY2d 685, 690 [1995] [internal quotation marks and citations
omitted]). We have recognized that the use of terms such as "if,"
"unless" and "until" constitute "unmistakable language of condition" (id. at 691). Express conditions must be literally performed; substantial performance will not suffice.

Rahman v Park, 2009 NY Slip Op 04882 (App. Div., 2nd, 2009)

The operating agreement and the side agreement clearly conflict as
to the manner in which disputes under the respective agreements are to
be determined. The operating agreement requires arbitration of
disputes, while the side agreement contemplates judicial resolution of
disputes by the court, with certain provisions of confidentiality.

"The construction and interpretation of an unambiguous written contract is an issue of law within the province of the court" (Franklin Apt. Assoc., Inc. v Westbrook Tenants Corp., 43 AD3d 860, 861; see Jackson & Wheeler, Inc. v Village of Pleasantville, 56 AD3d 723, 724; Yu Han Young v Chiu, 49
AD3d 535, 535-536). "[A] written agreement that is . . . clear and
unambiguous [as a matter of law] must be enforced according to the
plain meaning of its terms"
(Greenfield v Philles Records, 98 NY2d 562, 569; Maroney v Hawkins, 50 AD3d 862, 863; see Ross v Sherman, 57 AD3d 758).

The parties clearly agreed that in case of conflict the
provision of the side agreement controlled. Rahman did not agree to
arbitrate issues arising under the side agreement as opposed to the
operating agreement. A party cannot be required to submit to
arbitration issues it did not agree to arbitrate
(see Credit Suisse First Boston Corp. v Cooke, 284 AD2d 365; Matter of American Centennial Ins. Co. v Williams, 233 AD2d 320; see also Brach v Fried, 16 AD3d 533; Matter of Miriam Osborn Mem. Home Assn. v Kreisler Borg Florman Gen. Constr. Co., 306
AD2d 533). To the extent the present action seeks to enforce Rahman's
rights under the side agreement, it is not subject to the mandatory
arbitration provision of the operating agreement.

P.J.P. Mech. Corp. v Commerce & Indus. Ins. Co., 2009 NY Slip Op 04984 (App. Div., 1st, 2009)

Well established principles governing the interpretation of insurance
contracts provide that the unambiguous provisions of the policy must be
given their plain and ordinary meaning (Greater N.Y. Mut. Ins. Co. v United States Underwriters Ins. Co., 36 AD3d 441, 442 [2007]). This is a question of law for the court to determine (Titlebaum Holdings v Gold, 48 NY2d 51, 56 [1979]; Seaport Park Condominium v Greater N.Y. Mut. Ins. Co., 39 AD3d 51,
54 [2007]). However, a court is not at liberty to "make or vary the
contract of insurance to accomplish its notions of abstract justice or
moral obligation"
(Breed v Insurance Co. of N. Am., 46 NY2d 351, 355 [1978]).

Significantly, if plaintiff believed that Cauldwell's defense was
truly a counterclaim, the prudent action was to immediately move to
strike the defense and force Cauldwell to
replead the claim as a counterclaim. This would have triggered the
insurer's duty to defend. Had these steps been taken in the instant
action, defendant would have been forced to defend plaintiff at the
beginning of the case, rather than when the counterclaim was
voluntarily asserted by Cauldwell several months later.

There do not appear to be any New York cases addressing the
issue of whether the assertion of a claim such as Cauldwell's offset
claim, when pleaded as an affirmative defense, triggered the insurer's
duty to defend
. Plaintiff relies on Construction Protective Servs. v TIG Specialty Ins. Co. (29
Cal 4th 189, 57 P3d 372 [2002]) and argues that we should adopt the
rationale therein.
In that case, a security firm sued the insurance
company that provided its comprehensive general liability policy,
claiming the insurer breached its duty to defend and indemnify against
a setoff claim. The setoff was asserted as an affirmative defense in a
lawsuit for unpaid services. The customer alleged that the security
firm was legally responsible for fire damage at its construction site
and thus was entitled to set those damages off against the amounts owed
for security services. The trial court sustained the insurance
company's demurrer without leave to amend, based on its conclusion that
a liability insurer's duty to defend does not extend to affirmative
defenses raised in response to a lawsuit initiated by the insured.
Based solely on its Code of Civil Procedure, the California Supreme
Court held that the trial court had erroneously sustained the demurrer,
but it declined to address the question on the facts where the precise
terms of the insurance policy were not before the court. In an action
on a written contract, a [*6]plaintiff
could, under California procedure, plead "the legal effect of the
contract rather than its precise language," thus enabling the court to
determine whether "a prima facie right to relief" had adequately been
stated, notwithstanding the specific language of the contract
(29 Cal
4th at 198-199, 57 P3d at 377).

Despite the omission of a copy of the insurance policy as an
exhibit to the complaint, the court concluded that the allegations in
the complaint were sufficient to allege that the setoff claim fell
within the scope of the contractual obligation to defend against suits
seeking damages, and left open the question whether the duty would
extend to the setoff claim once the precise language of the policy was

We decline to follow this holding. Were we to adopt the reasoning of Construction,
it would represent a dramatic change in long-established New York law,
which mandates that unambiguous contract language controls.
It would
essentially eliminate our pleading distinctions between affirmative
defenses and counterclaims by holding that how the setoff is pleaded
does not control. While Construction recognized that a setoff
is limited to defeating a plaintiff's claim in the same manner that an
affirmative defense is so limited, it then went on to hold the effect
of pleading a setoff defense is the same as if it were pleaded as a
counterclaim, and thus, at least for the purposes of whether utilized
defensively (as in an affirmative defense) or offensively (as in a
counterclaim), there is no distinction between the two. In either case,
an insurer would be mandated to assign counsel to defend the insured.
This would impact the long-established business practices of insurers,
and lead to uncertainty in the drafting of insurance contracts.

To ignore the clear language of an insurance policy and order a
carrier to litigate an affirmative action chosen by the policyholder
based on a mere claim in a defendant's answer that the affirmative
action somehow relates, however tenuously, to an occurrence or
allegation of negligence on the part of the insured would run afoul of
the rule enunciated in Breed (46 NY2d at 355). We see no reason to set aside long-standing precedent on this issue.

The bold is mine.