`NYSCEF DOC. NO. 1
`
`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`20-107
`OF THE STATE
`COURT
`SUPREME
`OF NEW YORK
`COUNTY
`----------------------------------------------------------------------------X
`HERALD
`TOWERS
`
`LLC.,
`
`OF NEW YORK
`
`Plamtiff,
`
`Defendant.
`
`-against-
`
`AFFILIATED
`
`FM INSURANCE
`
`COMPANY.,
`
`----------------------------------------------------------------------------X
`
`To the
`
`above-named
`
`Defendant(s)
`
`Index
`
`No.:
`
`SUMMONS
`
`Plaintiffs
`The
`New York
`of
`place
`
`County
`trial.
`
`designate
`as the
`
`basis
`The
`Plaintiff's
`business:
`50 West
`
`of venue
`principal
`
`is
`place
`
`of
`
`34th
`
`Street,
`
`NY, NY
`
`SUMMONED
`the
`complaint
`
`a copy
`appearance,
`of
`exclusive
`not personally
`or answer,
`
`will
`
`YOU ARE HEREBY
`action
`to answer
`the complaint
`with
`of
`your
`if
`to serve
`this
`is not
`served
`summons,
`answer,
`or,
`of
`after
`within
`on
`this
`the
`service
`days
`20
`the
`Plaintiff's
`summons,
`Attorney(s)
`if
`after
`(or within
`of
`summons
`this
`is complete
`the
`service
`30 days
`the
`service
`day
`of New York);
`to appear
`to you within
`and in case of your
`delivered
`the State
`failure
`be taken
`for
`the relief
`in the complaint.
`judgment
`against
`you
`by default
`demanded
`
`in this
`
`and to serve
`of
`a notice
`
`is
`
`Dated:
`
`New York,
`September
`
`New York
`2, 2020
`
`Defendant's
`
`address:
`
`270 Central
`
`Johnston,
`
`Avenue
`RI 02919
`
`.
`
`P.C.
`
`WEG AND MYERS,
`for
`Attorneys
`Plaintiff
`Federal
`Plaza
`2nd FlOOT
`52 Duane
`Street,
`New York
`New York,
`10007
`227-4210
`(212)
`
`1 of 12
`
`
`
`FILED: NEW YORK COUNTY CLERK 09/02/2020 10:34 AM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`20-107
`OF THE STATE
`COURT
`SUPREME
`OF NEW YORK
`COUNTY
`----------------------------------------------------------------------------X
`HERALD
`TOWERS
`
`LLC.,
`
`OF NEW YORK
`
`-against-
`
`AFFILIATED
`
`FM INSURANCE
`
`COMPANY.,
`
`----------------------------------------------------------------------------X
`
`Plaintiff,
`
`Defendant.
`
`Index
`
`No.
`
`COMPLAINT
`
`Plaintiff,
`
`HERALD
`
`TOWERS
`
`LLC.
`
`(hereinafter
`
`referred
`
`to as
`
`"Plaintiff"
`
`or
`
`"Herald"),
`
`by
`
`its
`
`attorneys
`
`WEG AND MYERS,
`
`P.C.,
`
`as for
`
`its Complaint
`
`herein
`
`alleges
`
`as follows:
`
`INTRODUCTION
`
`1.
`
`Plaintiff
`
`Herald
`
`Towers
`
`LLC is a retail
`
`shopping
`
`and
`
`apartment
`
`complex
`
`located
`
`in the
`
`middle
`
`of Midtown
`
`Manhattan.
`
`2.
`
`when
`
`Formerly
`
`known
`
`as Hotel
`
`McAlpin,
`
`Herald
`
`Towers
`
`was
`
`the
`
`largest
`
`hotel
`
`in the world
`
`in 1912
`
`known
`
`Robinson
`
`it was
`
`constructed
`
`and is famously
`
`as the residence
`
`where
`
`Jackie
`
`received
`
`the
`
`call
`
`to join
`
`the Brooklyn
`
`Dodgers
`
`in
`
`1947.
`
`3.
`
`Herald
`
`Towers
`
`is 25
`
`stories
`
`high,
`
`with
`
`102,912
`
`square
`
`feet
`
`of
`
`retail
`
`space
`
`and
`
`over
`
`a
`
`millions
`
`square
`
`feet
`
`of apartment
`
`space,
`
`the latter
`
`of which
`
`is subdivided
`
`into
`
`690
`
`luxury
`
`rental
`
`homes.
`
`4.
`
`Like
`
`most
`
`property
`
`owners,
`
`out
`
`of concern
`
`for
`
`the
`
`general
`
`possibility
`
`of unforeseen
`
`loss,
`
`Plaintiff
`
`procured
`
`insurance
`
`in order
`
`to protect
`
`its assets
`
`against
`
`fortuitous
`
`losses.
`
`2 of 12
`
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`NYSCEF DOC. NO. 1
`
`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`5.
`
`Specifically, Plaintiff procured an “all risk” insurance policy sold by Affiliated FM
`
`Insurance Company that was in full force and effect when the Covid-19 pandemic swept
`
`through the nation.
`
`6.
`
`The Covid-19 pandemic has caused physical loss or damage to high volume commercial
`
`residential and retail businesses.
`
`7.
`
`In particular, in response to the damage being inflicted and to protect the public from
`
`further exposure to infected areas, New York State and New York City both issued “stay at
`
`home” orders which prohibited the Plaintiff’s tenants from continuing their retail business
`
`operations.
`
`8.
`
`When the retail tenants were forced to close their doors, they stopped paying rent
`
`causing a substantial loss to the Plaintiff.
`
`9.
`
`Plaintiff fully expected that, in light of the all-encompassing all-risk policy of insurance,
`
`Defendant would be responsive to their insurance claim.
`
`10.
`
` Defendant’s failure to provide Plaintiff with coverages for losses sustained due to the
`
`outbreak of Covid-19 has forced Plaintiff to bring this litigation.
`
`PARTIES
`
`11.
`
`At all times hereinafter mentioned, Herald was and is a domestic corporation duly
`
`organized and existing under and by virtue of the laws of New York, having its principal place
`
`of business at 50 West 34th Street, New York, New York.
`
`12.
`
`At all times hereinafter mentioned, Defendant AFFILIATED FM INSURANCE
`
`COMPANY (hereinafter referred to as “Defendant” or “Affiliated”) was and is a foreign
`
`corporation organized and existing under and by virtue of the laws of Rhode Island, having its
`
`principal place of business at 270 Central Avenue, Johnston, Rhode Island.
`
`
`
`2
`
`3 of 12
`
`
`
`FILED: NEW YORK COUNTY CLERK 09/02/2020 10:34 AM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`FACTS RELEVANT TO ALL CAUSES OF ACTION
`
`13.
`
`This is an action for breach of insurance contract arising from the failure of Affiliated
`
`to provide payment to Plaintiff for its losses resulting from the global pandemic commonly
`
`referred to as coronavirus or Covid-19 beginning in or about March 20, 2020.
`
`14.
`
`On or about March 1, 2020, for good and valuable consideration, Plaintiff procured a
`
`policy of insurance from Affiliated (the “Subject Policy”) bearing policy number 1062700.
`
`15.
`
`The Subject Policy provides coverage for, inter alia, physical loss or damage, as well as
`
`losses of income due to business interruption.
`
`16.
`
`17.
`
`The Subject Policy bears effective dates from March 1, 2020 to March 1, 2021.
`
`The Subject Policy was in full force and effect as of March 20, 2020, and remains in full
`
`force and effect through the filing date of this Complaint.
`
`18.
`
`The insuring clause of the Subject Policy provides in relevant part:
`
`This Policy covers property, as described in this
`Policy, against ALL RISKS OF PHYSICAL LOSS
`OR DAMAGE, except as hereinafter excluded, while
`located as described in this Policy.
`
`19.
`
`
`The Subject Policy further provides coverage for losses resulting from interruption to
`
`Plaintiff’s business, specifically:
`
`This Policy includes Business Interruption coverage including:
`
`
`
`(a) Gross Earnings
`
`
`The recoverable Gross Earnings loss is the actual
`
`loss sustained by the Insured of Gross Earnings, less
`
`all charges and expenses that do not necessarily
`
`continue, plus all other earnings derived from the
`
`operations of the business, excluding loss covered
`
`under Rental Income, during the Period of Liability.
`
`
`(b) Gross Profits
`
`
`
`3
`
`4 of 12
`
`
`
`FILED: NEW YORK COUNTY CLERK 09/02/2020 10:34 AM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`
`
`The recoverable Gross Profits loss is the actual loss
`sustained by the insured of the reduction in sales;
`and the increased cost of doing business, resulting
`from the necessary interruption of business during
`the period of liability.
`
`(c) Rental Income
`
`The recoverable Rental Income loss is the actual
`loss sustained by the Insured during the Period of
`Liability, including the fair rental value of any
`portion of the property occupied by the Insured,
`income reasonably expected from the rentals of
`unoccupied or unrented portions of such property,
`and the rental income from the rented portions of
`such property, according to bona fide leases,
`contracts or agreements in force at the time of loss.
`
`
`The Subject Policy also includes coverage extensions losses suffered as a result of
`
`20.
`
`orders issued by civil or military authority, specifically:
`
`(d) Civil or Military Authority:
`
`
`the Business Interruption
`This Policy covers
`Coverage loss incurred by the Insured during the
`Period of Liability if an order of civil or military
`authority prohibits access to a location provided
`such order is the direct result of physical damage of
`the type insured at a location or within five (5)
`statute miles of it.
`
`
`21.
`
`The Subject Policy further provides coverage extensions in the event that the property
`
`covered by the Subject Policy is exposed to a communicable disease and subject to
`
`governmental restrictions as a result thereof, specifically:
`
`(e) Communicable Disease
`
`
`
`
`
`If a described location owned, leased or rented by
`the Insured has the actual not suspected presence of
`communicable disease and access to such described
`location is limited, restricted or prohibited by an
`
`4
`
`5 of 12
`
`
`
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`NYSCEF DOC. NO. 1
`
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`
`RECEIVED NYSCEF: 09/02/2020
`
`order of an authorized governmental agency
`regulating such presence of communicable disease;
`or a decision of an Officer of the Insured as a result
`of such presence of communicable disease. This
`Policy covers the Business Interruption Coverage
`loss incurred by the Insured during the Period of
`Liability at such described location with such
`presence of communicable disease.
`
`The Subject Policy provides coverage for an extended business interruption
`
`
`22.
`
`specifically:
`
`
`(f) Extended Period of Liability
`
`
`The Gross Earnings and Rental Income coverage is
`extended to cover the reduction in sales resulting
`from:
`
`a) The interruption of business as covered by Gross
`Earnings or Rental Income;
`
`b) For such additional length of time as would be
`required with the exercise of due diligence and
`dispatch to restore the Insured’s business to the
`condition that would have existed had no loss
`happened; and
`
`c) Commencing with the date on which the liability
`of the Company for loss resulting from interruption
`of business would terminate if this Business
`Interruption Coverage Extension had not been
`included in this Policy.
`
`The Subject Policy further provides coverage extensions in the event that entrance to
`
`23.
`
`or exit from the locations covered under the Subject Policy is restricted, specifically:
`
`(f) Ingress/Egress:
`
`the Business Interruption
`This Policy covers
`Coverage loss incurred by the Insured due to the
`necessary interruption of the Insured’s business
`when ingress to or egress from a described
`location(s) is physically prevented, either partially
`or totally, as a direct result of physical loss or
`
`
`
`5
`
`6 of 12
`
`
`
`FILED: NEW YORK COUNTY CLERK 09/02/2020 10:34 AM
`NYSCEF DOC. NO. 1
`
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`
`RECEIVED NYSCEF: 09/02/2020
`
`damage of the type insured to property of the type
`insured whether or not at a described location.
`
`
`24.
`
` No exclusion in the Policy applies to preclude or coverage for the actual presence of
`
`COVID-19 at or away from Plaintiff’s property, the physical loss and damage to the property/or
`
`the business interruption losses that has and will continue to result from the physical loss and
`
`damage to property.
`
`25.
`
`It is beyond cavil that the world is currently experiencing a global pandemic from a
`
`disease caused by a novel coronavirus (specifically, SARS-COV-2) and commonly referred to
`
`as Covid-19.
`
`26.
`
`From at least as early as December 2019, Covid-19 began spreading, first in China and
`
`then, because the disease is highly contagious, rapidly around the globe.
`
`27.
`
`The first confirmed case of the virus outside China was diagnosed on January 13, 2020
`
`in Bangkok, Thailand with the number of cases exceedingly increasing worldwide.
`
`28.
`
`On January 30, 2020, the World Health Organization (WHO) declared the Covid-19
`
`outbreak constituted a public health emergency of international concern.
`
`29.
`
`Not only is SARS-COV-2 transmitted via human-to-human, but the WHO and scientific
`
`studies have confirmed that the virus can remain infectious on objects or surfaces.
`
`30. According to a study documented in The New England Journal of Medicine, COVID-
`
`19 was detectable in aerosols for up to three hours, up to four hours on copper, up to 24 hours,
`
`on cardboard, and up to three days on plastic and stainless steel.
`
`31.
`
`Indeed, scientific studies suggest that individuals could get Covid-19 through indirect
`
`contact with surfaces or objects used by an infected person, regardless of whether the infected
`
`person was symptomatic.
`
`32. All of these materials are used and found throughout Herald Towers property.
`
`
`
`6
`
`7 of 12
`
`
`
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`NYSCEF DOC. NO. 1
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`
`RECEIVED NYSCEF: 09/02/2020
`
`33. By February 25, 2020, the Center for Disease Control (“CDC”) warned Americans that
`
`the world was on the brink of a global pandemic, effectively dismantling any notion that SARS-
`
`COV-2 would not affect American’s lives.
`
`34. The Insurance Policy at question was agreed to and went into effect less than a week
`
`after the announcement from the Center for Disease Control.
`
`35. From that point forward, COVID-19 and its damaging consequences received wide
`
`spread media attention.
`
`36.
`
`The CDC has recommended that individuals stay at home and those who are not sick
`
`engage in preventive measures such as constant hand washing and avoiding activities that would
`
`bring them into close proximity of people with the virus or surfaces where the virus may reside.
`
`37.
`
`As a result of the Covid-19 pandemic, Plaintiff experienced a loss in revenue, among
`
`other losses
`
`38.
`
`In particular, beginning on or about March 20, 2020, Plaintiff’s business was interrupted
`
`by various civil orders.
`
`39. As of the date hereof, this loss remains ongoing.
`
`40. On or about April 17, 2020, Affiliated, issued a request for information consisting of a
`
`questionnaire to be filled out by the Plaintiff, asking for specific verified cases of Corona virus
`
`on their property.
`
`41. On or about May 27, 2020, Plaintiff submitted a sworn statement in partial proof of loss,
`
`making claim for $227,565.50 for damages incurred between April 1, 2020 through May 31,
`
`2020.
`
`42. Pursuant to Insurance Law § 216.6, Affiliated had 15 business days to accept or reject
`
`Plaintiff’s claim.
`
`
`
`7
`
`8 of 12
`
`
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`NYSCEF DOC. NO. 1
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`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`43. Notwithstanding the foregoing, Affiliated failed to accept or reject the claim submitted
`
`by Plaintiff in a timely manner.
`
`44. On June 18, 2020, Defendant sent Plaintiff a letter wherein it confirmed receipt of the
`
`Proof of Loss, however it would not accept or reject the proof of loss until it received more
`
`information.
`
`45. This letter is misleading regarding the type of coverage available under the policy.
`
`46. For example, the letter states that there is no coverage for contamination and states that
`
`Covid-19 is a contaminant, however there is coverage for Covid 19 under the communicable
`
`disease portion of the policy.
`
`47.
`
`The position taken in this letter is in direct contradiction to a letter sent to policy holders
`
`on May 5, 2020 by Tom Lawson, the Chairman and CEO of Affiliated, in which he stated:
`
`Unlike other carriers, we included Communicable
`Disease as a coverage extension, subject to specific
`triggers and limits, in our all-risk policies, ensuring
`contract certainty. Accordingly, we expect to pay
`COVID-19 claims to a number of our policyholders.
`
`
`48.
`
`
`In the same June 18, 2020 letter, the Defendant also wrote:
`
`The presence of COVID-19 at an insured location of
`within 5 statute miles of an insured location does not
`constitute “physical damage of the type insured” as
`required under
`the Policy’s Civil or Military
`Authority provision.
`
`49.
`
`
`This statement is in direct contradiction to a March 17, 2020 Emergency Executive order
`
`issued by New York City Mayor Bill DeBlasio where he stated in part:
`
`This order is given because of the propensity of the
`virus to spread person to- person and also because
`the virus physically is causing property loss and
`damage;
`
`Defendant’s prior statement about the nature of the civil authority order is without merit.
`
`8
`
`9 of 12
`
`
`50.
`
`
`
`
`
`FILED: NEW YORK COUNTY CLERK 09/02/2020 10:34 AM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`51.
`
`Plaintiff responded to Affiliated on July 6, 2020, wherein Plaintiff by and through their
`
`attorney agreed to fully cooperate with the claims process.
`
`To date, Plaintiff has not received a response to their letter from July 6, 2020.
`
`52.
`
`
`
`AS AND FOR A FIRST CAUSE OF ACTION AGAINST ALL DEFENDANTS
`(Breach of Contract)
`
`53. Plaintiff repeats and re-alleges paragraphs “1” through “52”, with the same force and
`
`effect as if set forth at length herein.
`
`54. The Subject Policy constituted a binding contract between Plaintiff and Affiliated.
`
`55. Plaintiff complied with all of its obligations under the Subject Policy, including through
`
`timely notification of a loss and the filing of a Sworn Statement in Partial Proof of Loss.
`
`56. To date, Affiliated has failed to compensate Plaintiff for any of its losses which will
`
`exceed $500,000.00.
`
`57. Affiliated’s failure to compensate Plaintiff for its loss constitutes a breach of the Subject
`
`Policy.
`
`58.
`
` As a result of Affiliated’s breach of the Subject Policy, Plaintiff has suffered damages
`
`that will likely exceed $500,000.00 together with such additional and subsequent damages as
`
`may be incurred and proven at trial.
`
`WHEREFORE, Plaintiff demands judgment against Affiliated as follows:
`
`(a)
`
`(b)
`
`(c)
`
`
`
`On the First Cause of Action, a money judgment against Affiliated in an amount
`
`in excess of $500,000.00, together with such additional and subsequent damages
`
`as may be proven at trial;
`
`Reasonable fees and costs of this action; and
`
`For such other and further relief as to which this Court deems just and proper.
`
`9
`
`10 of 12
`
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`FILED: NEW YORK COUNTY CLERK 09/02/2020 10:34 AM
`NYSCEF DOC. NO. 1
`
`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`
`Dated: New York, New York
`
`September 2, 2020
`
`
`
`
`
`
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`
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`
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`
`Yours, etc.,
`
`WEG AND MYERS, P.C.
`Attorneys for Plaintiff
`
`By:
`
`
`
`
`
`
` /s/ Joshua L. Mallin, Esq.
` Joshua Mallin, Esq.
` Federal Plaza
` 52 Duane Street, 2nd Floor
` New York, New York 10007
` (212) 227-4210
`
`10
`
`11 of 12
`
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`FILED: NEW YORK COUNTY CLERK 09/02/2020 10:34 AM
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`
`INDEX NO. 654188/2020
`
`RECEIVED NYSCEF: 09/02/2020
`
`Year 20
`
`Index No.
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF NEW YORK
`
`HERALD TOWERS LLC.,
`
`Plaintiff(s),
`
`- against -
`
`AFFILIATED FM INSURANCE COMPANY.,
`
`Defendant(s).
`
`SUMMONS AND COMPLAINT
`
`Weg and Myers, P.C.
`Attorneys for Plaintiff(s)
`Federal Plaza
`52 Duane Street
`New York, N.Y. 10007
`(212) 227-4210
`
`Pursuant to 22 NYCRR 130-1.1, the undersigned, an attorney admitted to practice in the courts of New York State, certifies that, upon
`information and belief and reasonable inquiry, the contentions contained in the annexed document are not frivolous.
`
`Dated: September 2, 2020
`
` Signature s/Joshua L. Mallin, Esq.
`
`Service of a copy of the within
`
`Dated:`
`
`PLEASE TAKE NOTICE
`
`Print Signer’s Name
`
` Joshua L. Mallin, Esq.
`
`Attorney(s) for
`
` Notice of
` Entry
`
`
`that the within is a (certified true copy of a
`entered in the office of the clerk of the within named Court on
`
` Notice of
` Settlement
`
`Dated:
`
`that an Order of which the within is a true copy will be presented for
`settlement to the Hon.
`one of the judges
`of the within named Court, at
`on
`
`, at
`
`M.
`
`Weg and Myers, P.C.
`Attorneys for Plaintiff(s)
`Federal Plaza
`52 Duane Street
`New York, NY 10007
`
`12 of 12
`
`