`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`SUMMONS
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`Index No.:
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`SUPREME COURT OF THE STATE OF NEW YORK
`Date Purchased:
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`COUNTY OF WESTCHESTER
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`STETSON REAL ESTATE LLC,
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`Plaintiff,
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`Plaintiff designates
`Westchester County as the
`place of trial
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`-against-
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`HARTFORD FIRE INSURANCE COMPANY and
`SENTINEL INSURANCE COMPANY, LIMITED.
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` Defendants.
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`To the above named Defendants:
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`You are hereby summoned to answer the complaint in this action and to serve a copy of
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`your answer, or, if the complaint is not served with this summons, to serve a notice of
`appearance on the Plaintiff’s attorneys within twenty (20) days after the service of this summons,
`exclusive of the day of service, where service is made by delivery upon you personally within
`the state, or within 30 (30) days after completion of service where service is made in any other
`manner. In case of your failure to appear or answer, judgment will be taken against you by
`default for the relief demanded in the complaint.
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`Dated: New York, New York
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`August 19, 2020
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`Yours, etc.,
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` S/Steven Kent________
`STEVEN KENT
`ALAN W. BORST, JR.
`Attorneys for the Plaintiff
`STETSON REAL ESTATE LLP
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`MESSNER REEVES LLP
`733 Third Avenue, Suite 1619
`New York, NY 10017
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`1 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`
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`SUPREME COURT OF THE STATE OF NEW YORK
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`COUNTY OF WESTCHESTER
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`STETSON REAL ESTATE LLC,
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` Index No.:
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`VERIFIED COMPLAINT
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`Plaintiff,
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`-against-
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`HARTFORD FIRE INSURANCE COMPANY and
`SENTINEL INSURANCE COMPANY, LIMITED.
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`Defendants.
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`Plaintiff, STETSON REAL ESTATE LLC (“STETSON”), by its attorneys, Messner
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`Reeves, LLP, as and for its Verified Complaint against the Defendants, respectfully alleges as
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`follows:
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`PARTIES
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`1.
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`At all relevant times, STETSON is a limited liability company, duly authorized
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`and licensed to conduct the business of real estate in the State of New York, County of
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`Westchester. Plaintiff’s business office is located at 1214 Boston Post Road (“the Boston Post
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`Road office”) in the Village of Mamaroneck, Town of Rye, in the County of Westchester.
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`2.
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`Upon information and belief, at all times hereinafter mentioned, defendants
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`HARTFORD FIRE INSURANCE COMPANY, INC., (hereinafter “HARTFORD FIRE")and
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`SENTINEL INSURANCE COMPANY (“SENTINEL”) were and still are corporations duly
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`organized and existing under and by virtue of the laws of the State of Connecticut.
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`3.
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`At all relevant times, HARTFORD FIRE and SENTINEL (collectively
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`“HARTFORD DEFENDANTS”) are corporations doing business in the County of Westchester,
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`State of New York, and subscribing to Policy Number16 SBA II8723 (the “Policy”), issued to
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`2
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`2 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`STETSON for the period of July 6, 2019 through July 6, 2020.A copy of relevant and applicable
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`provisions of the Policy is annexed hereto as exhibit (“Ex”) “A.”
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`4.
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`Upon information and belief, at all times hereinafter mentioned, the principal
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`offices of HARTFORD DEFENDANTS are located at One Hartford Plaza, Hartford, CT 06155.
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` JURISDICTION AND VENUE
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`5.
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`For the time periods relevant to the allegations in the complaint, Plaintiffs and
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`Defendants all were domiciled, qualified to conduct the business of insurance, or residing in
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`Westchester County, New York.
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`6.
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`7.
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`STETSON is domiciled or resides in Westchester County, New York.
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`This Court has subject matter jurisdiction over the matters alleged herein. The
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`HARTFORD DEFENDANTS engage in regular and frequent business activities and are
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`transacting the business of insurance in the state of New York, and the basis of this suit arises out
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`of such activities.
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`Business Income, Extra Expense and Dependent Properties Coverage
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`8.
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`STETSON is an award-winning residential real estate agency owned and operated
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`by Mary Stetson in the Village of Mamaroneck, New York. STETSON maintains direct and co-
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`brokered listings for over 100 residential properties located in the Village and Town of
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`Mamaroneck, Town of Rye, City of Rye, and southern Westchester and Fairfield counties. The
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`office serves to promote the residential listings of its customers and STETSON employs full time
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`and part time employees throughout the year at the Boston Post Road office.
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`9.
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`On or about July 6, 2019, the HARTFORD DEFENDANTS entered into a
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`renewal contract of insurance with STETSON, whereby STETSON agreed to make premium
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`payments to the HARTFORD DEFENDANTS in exchange for the agreement of the
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`3
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`3 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`HARTFORD DEFENDANTS to insure and indemnify STETSON, among other things, for loss
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`including business income loss in the event of a suspension or interruption of business.
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`10.
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`The Policy provides, inter alia, aggregate limits of $2,000,000, additional
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`coverage limits for business income and for extra expense, and additionally provides for
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`“extended” business income coverage.
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`11.
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`The Policy is an “all-risk” policy and is written on a Special Property Coverage
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`Form, which provides coverage caused by or resulting from a Covered Cause of Loss unless the
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`loss is specifically excluded or limited in the Policy.
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`12.
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`The Policy contains no virus exclusion.
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`13.
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`The Policy extends coverage for direct physical loss and/or property damage
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`caused by virus unless excluded.
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`14.
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`The Policy specifically at page “10 of 25” of the Special Property Coverage Form
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`provides coverage for actual business losses sustained and extra expenses incurred during a 12
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`month period following direct physical loss and/or damage to Covered Property, as such term is
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`defined in the Policy. (See annexed Ex. "A").
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`15.
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`The definition of business income ("Business Income") contained in the Policy's
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`Business Income Additional Coverage is the same as the definition of business income in the
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`Business Income From Dependent Properties Additional Coverage.
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`16.
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`The Policy, at pages “11 of 25" and "12 of 25,”provides $25,000 in “Dependent
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`Properties” coverage for loss of business income and extra expense incurred by the insured
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`business due to direct physical loss and/or damage occurring at Dependent Properties, as such
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`4
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`4 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`term is defined in the Policy. (See annexed Ex."A"). Dependent Properties*are defined as
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`property owned by others within the coverage territory on which the insured depends for delivery
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`of services to others for the insured’s account. Dependent Properties also include property where
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`others accept the insured’s services or where customers are attracted to the insured’s business.
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`The residential listing properties of STETSON in and around New Rochelle, New York are
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`Dependent Properties within the meaning of the Policy.
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`Civil Authority Coverage
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`17.
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`The Policy provides at section “q” of Additional Coverages, at "page 11 of 25,"
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`Civil Authority Additional Coverage for:
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`the actual loss of business income sustained and the actual, necessary and reasonable extra
`expenses incurred when access to the scheduled premises is specifically prohibited by order of
`civil authority as the direct result of a Covered Cause of Loss to property in the immediate area
`of plaintiffs’ scheduled premises.
`See annexed Ex. "A."
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`18.
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`In correspondence dated April 1, 2020, the HARTFORD DEFENDANTS issued a
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`denial of coverage, but did not deny therein that access to the scheduled premises of STETSON
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`was specifically suspended and/or prohibited by an order of a civil authority during the period of
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`insurance coverage. A copy of the denial of coverage letter is annexed hereto as Ex. "B."
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`The State of Emergency Declared in Westchester Due to the Pandemic
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`19.
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`On March 7, 2020 New York Governor Andrew Cuomo announced a state of
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`emergency in the State of New York due to the coronavirus pandemic.
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`20.
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`On March 10, Governor Cuomo publicly announced the discovery of a virus
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`“cluster” in New Rochelle, New York and declared a "containment zone" within a one-mile
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` *
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` Initial capitalized policy terms are as set forth in the policy throughout
`this verified complaint
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`5
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`5 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`radius of the virus cluster, temporarily closing houses of worship and other large gathering
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`facilities until March 25. Governor Cuomo deployed National Guard troops to assist with
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`cleaning property and in operating a makeshift testing facility located at Glen Island in New
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`Rochelle.
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`21.
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`STETSON in the Village of Mamaroneck is located less than seven miles from
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`the New Rochelle containment zone.
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`22.
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`By March 10, in view of the officially announced state of emergency and
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`widespread shutdowns of business in Westchester County, the HARTFORD DEFENDANTS
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`knew or should have known of incidents of direct physical loss and/or property damage to
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`insured properties, including business and residential properties both within and in the vicinity of
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`the New Rochelle containment zone. Due to the nature of the STETSON residential real estate
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`business, certain of its residential listings were located within the containment zone Governor
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`Cuomo identified as containing a cluster of COVID-19 outbreak and, as such, were off limits to
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`STETSON’s employees, customers, potential customers and others seeking to do business with
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`STETSON's customers.
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`23. Westchester County Executive George Latimer made public comments
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`interpreting and implementing the March 10 containment zone order for county residents and
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`businesses within and in the vicinity of the New Rochelle containment zone. These public
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`comments and official actions by the County warned of the probability of dangerous physical
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`conditions impacting properties throughout Westchester County, such as the Boston Post Road
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`office of STETSON located only seven miles from the containment zone.
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`24.
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`On March 16, County Executive Latimer issued a Local State of Emergency
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`Declaration “to preserve and protect the public health and safety in response to the public health
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`6
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`6 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`threat.” It was further declared that all required and available assistance should be rendered to
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`address this public health threat.
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`25.
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` On or about March 16, STETSON completely suspended operations at the
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`Boston Post Road office.
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`The Damaging Impact of the Pandemic on Plaintiff's Property and Business
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`26.
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`As a residential real estate agency, STETSON maintains direct and co-brokered
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`listings for over 100 residential properties located in the Village and Town of Mamaroneck,
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`Town of Rye, City of Rye, and elsewhere in Westchester and Fairfield counties (referred to
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`herein as the “listings area").
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`27.
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`STETSON's employees travel to and from the STETSON office and to properties
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`located throughout the listings area. Historically, spring is the most active season of the year for
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`residential real estate sales in the listing area. Prospective customers frequently visit the real
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`estate office of STETSON located on Boston Post Road which is on the main thoroughfare from
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`Rye, New York near the Connecticut border running to New York City's Borough of The Bronx.
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`28.
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`STETSON real estate signs may be posted on the front lawns of these residential
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`listings throughout this region and prospective customers are attracted to STETSON's real estate
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`office location by reason of this signage.
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`29.
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`This activity and advertising have contributed substantially to STETSON’s annual
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`sales revenue for many years prior to the coronavirus pandemic.
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`30.
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`The immediate impact of the civil authority orders at the state and county level
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`was to halt property visits and sales activity, as well as eliminate the effectiveness of advertising,
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`in and around STETSON's listing area.
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`7
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`7 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`31.
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`During the period immediately before the COVID-19 shutdown, STETSON
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`incurred extra expenses, re-assigned employees to cleaning affected and damaged surface areas
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`and property within STETSON's office, and encouraged workers to avoid the office due to a
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`steep drop in foot traffic at the Boston Post Road office location.
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`32.
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`STETSON's office (including surface areas, door handles, furniture, computer and
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`business equipment) was made the subject to the physical presence of coronavirus and/or
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`COVID-19 causing agents attaching to fomite surfaces.
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`33.
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`Fomites are inanimate objects that, when contaminated with infectious or diseased
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`agents, or when exposed to such agents, are known to cause direct physical loss and/or damage
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`to property and/or individuals present in the immediate vicinity of such property. Fomite surfaces
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`located within the STETSON office were susceptible to hazardous coronavirus attachment and
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`release thereby potentially causing the spread of COVID-19.
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`34.
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`Coronavirus and/or COVID-19 causing fomites were present throughout the
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`STETSON office, due to the presence therein of symptomatic, asymptomatic and/or
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`presymptomatic individuals. Such individuals were observed touching surface areas, door
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`handles, furniture, and office, computer and other business equipment within the STETSON
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`office.
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`35. As a result of such spread by touching, coronavirus and/or COVID-19 causing
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`fomites were formed within and throughout the STETSON office, thereby causing direct
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`physical loss and/or damage to STETSON's property and/or individuals present in STETSON's
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`office.
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`8
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`8 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`36. Symptomatic, asymptomatic and/or presymptomatic individuals were observed
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`breathing and/or orally projecting aerosol mist into the air and atmosphere within the STETSON
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`office. As a result of such spread by aerosol mist, coronavirus and/or COVID-19 causing fomites
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`were formed, and spread within and throughout the STETSON office, thereby causing direct
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`physical loss and/or damage to STETSON's property and/or individuals present in STETSON's
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`office.
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`37. Symptomatic, asymptomatic and/or presymptomatic individuals were observed
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`coughing, sneezing and/or orally projecting droplets into the air and atmosphere within the
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`STETSON office. As a result of such spread of droplets, coronavirus and/or COVID-19 causing
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`fomites were formed and/or spread into, within and throughout the STETSON office, thereby
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`causing direct physical loss and/or damage to STETSON's property.
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`38. The aforementioned harm included direct physical loss and/or property damage to
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`surface areas, door handles, furniture, and office, computer and other business equipment located
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`within the STETSON office.
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`39. Coronavirus and/or COVID-19 was spread into, within and throughout the
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`STETSON office due to the presence and actions of employees, customers and/or invitees of
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`STETSON, who were observed touching, breathing and orally projecting aerosol mist, and
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`coughing, sneezing and orally projecting droplets into the air and atmosphere within STETSON's
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`office, including many fomite surfaces susceptible of spreading the virus.
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`40. The aforementioned spread of coronavirus and/or COVID-19 led to dangerous
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`fomite attachment which formed, adhered and attached to property within STETSON's office,
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`9
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`9 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`thereby causing direct physical loss and/or damage to the property of STETSON and/or
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`individuals present in STETSON's office.
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`41. Coronavirus and/or COVID-19 was physically present, and dangerous fomite
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`attachment formed, adhered and attached to property within STETSON's office, and caused
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`direct physical loss and/or property damage, prior to the local and State emergency orders and
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`shutdowns of non-essential businesses, which went into effect and were implemented on March
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`16, 2020.
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`42. Coronavirus and/or COVID-19 continued to be physically present within the
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`STETSON office, and fomite attachment continued to form, adhere and attach to property within
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`STETSON's office, and in so doing continued to cause direct physical loss and/or property
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`damage, after the emergency orders and shutdowns were announced and implemented by the
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`civil authorities.
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`43. During the time periods described in the two proceeding paragraphs, coronavirus
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`and/or COVID-19 causing agents, including but not limited to fomite attachment, was physically
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`present and continued to be physically present within properties located in the vicinity of the
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`New Rochelle contamination zone, as described in paragraphs 22, 23, 26 and 27, above.
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`44. In response to STETSON's first report of suffering a loss, the HARTFORD
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`DEFENDANTS denied coverage stating, “Since the corona virus did not cause property damage
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`at your place of business or in the immediate area, this loss is not covered.” See Letter of Keisha
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`Bower, dated April 1, 2020, annexed Ex. "B").
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`10
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`10 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
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`INDEX NO. 59808/2020
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`45. The HARTFORD DEFENDANTS maintained their denial position in a second
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`letter addressing the physical damage issue, stating:
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`In our discussion with the insured, she advised that someone coughed at her scheduled premise
`and therefore has concluded that the coronavirus has permeated the location. Our insured has
`given us no information that anyone who was at the scheduled premises tested positive for
`COVID-19. The insured’s suspected contamination of the premises with the virus is not direct
`physical loss. As outlined in our April 1, 2020 coverage letter, there is no coverage as there is no
`direct physical loss or physical damage to Covered Property at the scheduled premises.” See
`letter of Keisha Bower, dated April 29, 2020, annexed hereto as Ex."C".
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`46. Since March 16, 2020, STETSON has continued to incur expenses, including
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`but not limited to rent, payroll, health insurance and FICA for its employees.
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`47. A state of emergency continued to exist in Westchester for many months and
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`until June 7, 2020. As a result thereof STETSON was not able to resume normal operations at its
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`Boston Post Road location.
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`48. Despite the supposed absence of “property damage” (which is not defined in
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`the Policy) STETSON has incurred expenses and lost business income as a result of direct
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`physical loss and/or property damage sustained at the Boston Post Road office, which occurred
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`from at least as early as March 7, 2020, if not earlier.
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`49. The HARTFORD DEFENDANTS also denied STETSON’s claim for loss of
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`business income due to physical loss and/or property damage at Dependent Properties:
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`To the extent you are making a claim for loss of business income from a dependent property, no
`direct physical loss or damage caused by or resulting from a Covered Cause of Loss has occurred
`at a Dependent Property. Accordingly, there is no coverage for your claim under this coverage
`part.
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`(See annexed Ex. "B").
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`50. Despite direct findings and the observation of direct physical property loss
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`and/or property damage in and throughout Westchester County, and in particular the New
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`Rochelle containment zone, the HARTFORD DEFENDANTS concluded without conducting an
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`11
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`11 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
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`investigation that no physical loss and/or property damage existed at the properties listed for sale
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`by STETSON, or any others in the containment zone on which the STETSON real estate
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`business depends for real estate sales and advertising.
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`51. As alleged at paragraphs 35, 36 and 37, above, touching, aerosol mist, and
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`coughing and sneezing of droplets has spread the coronavirus and/or COVID-19 into, within and
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`throughout numerous properties in the listing area of STETSON, thereby causing direct physical
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`loss and/or property damage to such properties.
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`52. The presence of virus or disease can constitute direct physical loss and/or
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`property damage, as the insurance industry has recognized since at least 2006. When preparing
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`so-called “virus” exclusions to be placed in some policies—but not, as here, and in other
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`policies-- the insurance industry drafting arm, ISO, circulated a statement to state insurance
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`regulators that included the following:
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`Disease-causing agents may render a product impure (change its quality or substance), or enable
`the spread of disease by their presence on interior building surfaces or the surfaces of personal
`property. When disease-causing viral or bacterial contamination occurs, potential claims involve
`the cost of replacement of property (for example, the milk), cost of decontamination (for
`example, interior building surfaces), and business interruption (time element) losses. Although
`building and personal property could arguably become contaminated (often temporarily) by such
`viruses and bacteria, the nature of the property itself would have a bearing on whether there is
`actual property damage. An allegation of property damage may be a point of disagreement in a
`particular case.†
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`53. STETSON has incurred extra expenses and loss of business income as the
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`direct result of civil authority prohibitions and suspensions on access to and the use of residential
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`properties listed for sale by STETSON within and nearby the New Rochelle containment zone,
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`beginning on March 10, 2020 and continuing to June 7, 2020.
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` †
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` Forms Filing commentary CF-2006-OVBEF. Incidents at that time involving
`viral and bacterial contaminants like SARS and legionella warranted
`specifically addressing those causes of loss.
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`12
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`12 of 20
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
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`INDEX NO. 59808/2020
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`
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`54. STETSON has also incurred extra expenses and loss of business income as
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`the direct result of civil authority prohibitions and suspensions on access to and the use of the
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`Boston Post Road office of STETSON beginning on March 16, 2020 and continuing to June 7,
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`2020.
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`
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`55. The HARTFORD DEFENDANTS have denied coverage for losses described
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`in the preceding paragraphs, stating as follows:
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`Hartford is aware of the various state and local government mandated stay-at-home orders
`however these orders were issued to reduce the spread of the virus between individuals. The
`order [sic] were not due to damage to property in the insured’s immediate area.
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`(See annexed Ex."C")
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`56. Ignoring wide-spread news reports, the language of emergency orders, and
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`STETSON’s notification of damage as set forth in its claim, the HARTFORD DEFENDANTS
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`have wrongfully denied STETSON's claim without performing an inspection of the Boston Post
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`Road office or of the Dependent Properties, and as such, the HARTFORD DEFENDANTS are
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`estopped and can no longer deny the existence and presence of the coronavirus, COVID-19,
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`and/or infectious fomites which formed, adhered and/or attached to property, and the
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`HARTFORD DEFENDANTS can no longer deny that direct physical loss and/or property
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`damage occurred as a consequence thereof, as described above.
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`FIRST CAUSE OF ACTION AGAINST HARTFORD DEFENDANTS (BREACH OF
`CONTRACT - BUSINESS INCOME AND EXTRA EXPENSES, INCLUDING
`DEPENDENT PROPERTIES)
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`13
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`13 of 20
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`
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
`
`INDEX NO. 59808/2020
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`
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`57. STETSON repeats and realleges the facts and allegations set forth in
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`paragraphs 1 through 56, inclusive, as if fully set forth herein.
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`58. The Policy is a contract under which the HARTFORD DEFENDANTS were
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`paid premiums in exchange for their promise to pay STETSON losses for claims covered by the
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`Policy.
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`59. In the Special Property Coverage Form, the HARTFORD DEFENDANTS
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`agreed to pay for an insured's actual loss of Business Income sustained due to the necessary
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`suspension and/or interruption of STETSON's business operations.
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`60. A “slowdown or cessation” of business activities is a suspension under the
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`policy, for which the HARTFORD DEFENDANTS agreed to pay for the loss of Business
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`Income during a suspension and/or period of restoration, which commences within 72 hours after
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`the time of loss resulting from direct physical loss and/or damage.
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`61. The Policy defines Business Income as (a) net income that would have been
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`earned or incurred if no direct loss and/or physical damage had occurred, and (b) continuing
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`normal operating expenses incurred, including payroll. This definition applies to loss of Business
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`Income as well as for loss caused by direct physical loss and/or damage to Dependent Properties.
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`62. Additionally, the “Stretch” endorsement extends coverage for Business
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`Income an additional 60 days after the date such property or properties is repaired and/or
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`replaced and the insured’s “operations” resume.
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`63. The Policy also provides coverage for Extra Expense incurred “To avoid or
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`minimize the suspension of business and to continue ‘operations’”.
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`64. Coronavirus and/or COVID-19 caused direct physical loss and/or property
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`damage to STETSON’S Covered Properties and to Dependent Properties, thereby requiring the
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`14
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`14 of 20
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`
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
`
`INDEX NO. 59808/2020
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`suspension of operations at the Covered Properties. Losses caused by these events thus triggered
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`the coverage for the loss to Business Income provision of the Policy.
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`65. STETSON, by letter dated April 17,2020, notified the HARTFORD
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`DEFENDANTS of the ongoing presence of coronavirus and/or COVID-19 fomites and the
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`formation, adhering and affixing of fomites onto the surface areas of property within the
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`STETSON business premises, including the formation, adhering and affixing of fomites onto
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`furniture, door handles, office, computer and business equipment, together with an ongoing
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`presence of coronavirus and/or COVID-19 fomites onto the surface areas of property located
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`within 1,000 feet of STETSON's Boston Post Road office, and onto furniture, door handles,
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`office, computer and business equipment within properties located within 1,000 feet of
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`STETSON's office, all of which led STETSON to curtail business operations as early as March
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`7,and to eventually suspend operations on March 16, 2020.
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`66. On April 29, 2020, the HARTFORD DEFENDANTS issued a second letter
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`denying coverage, stating “[t]he insured’s suspected contamination of the premises with the virus
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`is not direct physical loss.” See annexed Ex. "C."
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`67. The HARTFORD DEFENDANTS were on notice that coronavirus and/or
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`COVID-19 fomites had attached to surface areas located within the STETSON business
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`premises, including upon furniture, door handles, office, computer and other business equipment,
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`and were also on notice of the ongoing presence of such fomites within Dependent Properties
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`located in the New Rochelle containment zone.
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`68. With respect to the Boston Post Road location, STETSON and others owning
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`and/or managing the Dependent Properties sought and/or attempted to eliminate and/or mitigate
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`15
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`15 of 20
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`
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
`
`INDEX NO. 59808/2020
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`the presence of the coronavirus and/or COVID-19, including infectious fomites present at such
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`locations.
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`
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`69. The direct physical loss and/or property damage caused by coronavirus
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`and/or COVID-19, including by fomites formed, adhering and/or affixed to the surface areas of
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`such properties, according to the present scientific literature, can be present and remain
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`infectious for 28 days or more, and thus were present from the outset and for a substantial
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`portion of the suspension of STETSON's business operations.
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`
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`70. The HARTFORD DEFENDANTS denied coverage on STETSON’S
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`Dependent Properties claim, stating there was no property damage sustained within the
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`Dependent Properties and to "the extent you are making a claim for loss of business income from
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`a dependent property, no direct physical loss or damage caused by or resulting from a Covered
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`Cause of Loss has occurred at a Dependent Property. Accordingly, there is no coverage for your
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`claim under this coverage part.” ( See Ex. "B," at "page 2 of 3").
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`71. The HARTFORD DEFENDANTS did not conduct a proper investigation of
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`property damage at the STETSON’s covered property or at any location within 1000 feet thereof.
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`The HARTFORD DEFENDANTS denied STETSON's claim before conducting a proper
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`investigation of property damage both at the Boston Post Road location and/or at the
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`aforementioned Dependent Properties.
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`72. By operation of law and otherwise, the HARTFORD DEFENDANTS, by
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`failing to conduct a proper investigation, are estopped and no longer can deny that coronavirus
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`and/or COVID-19, including by fomites forming, attaching and/or affixing to surface areas of
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`property within the STETSON business premises and the Dependent Properties, have caused
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`direct physical loss and/or property damage covered by the Policy.
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`16
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`16 of 20
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`
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`FILED: WESTCHESTER COUNTY CLERK 09/08/2020 05:51 PM
`NYSCEF DOC. NO. 1
`RECEIVED NYSCEF: 09/08/2020
`
`INDEX NO. 59808/2020
`
`
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`73. As a result of the foregoing, the STETSON has suffered economic injury in a
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`sum which exceeds the jurisdictional limitations of all lower Courts which would otherwise have
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`jurisdiction over this action.
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`SECOND CAUSE OF ACTIONAGAINST HARTFORD DEFENDANTS
`(BREACH OF CONTRACT -- BUSINESS INCOME AND EXTRA EXPENSES,
`INCLUDING CIVIL AUTHORITY)
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`
`
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`74. STETSON repeats and realleges the facts and allegations contained in
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`paragraphs1 through 73, inclusive, as if fully set forth herein.
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`
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`75. The Policy provides coverage for loss of income from a Civil Authority when
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`access to the insured’s premises is specifically prohibited or suspended by state or local order as
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`a direct result of a Covered Cause of Loss, including the risk of direct physical loss and/or
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`property damage in the immediate area of the scheduled premises.
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`
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`76. The coverage described in the preceding paragraph is not subject to any
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`applicable exclusion.
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`77. The aforementioned coverage is not limited to direct physical loss at or near
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`STETSON's business premises.
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`78. The aforementioned coverage is not limited to property damage at or near
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`STETSON’s business premises.
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`79. Dependent Properties located in th