        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

903
CA 16-00317
PRESENT: CENTRA, J.P., PERADOTTO, DEJOSEPH, NEMOYER, AND CURRAN, JJ.


ALBERT FRASSETTO ENTERPRISES,
PLAINTIFF-RESPONDENT,

                    V                             MEMORANDUM AND ORDER

HARTFORD FIRE INSURANCE COMPANY,
DEFENDANT-APPELLANT.


GOLDBERG SEGALLA LLP, BUFFALO (BRIAN R. BIGGIE OF COUNSEL), FOR
DEFENDANT-APPELLANT.

DUKE, HOLZMAN, PHOTIADIS & GRESENS LLP, BUFFALO (JOHN D. CELANI OF
COUNSEL), FOR PLAINTIFF-RESPONDENT.


     Appeal from an order of the Supreme Court, Erie County (John L.
Michalski, A.J.), entered July 16, 2015. The order denied defendant’s
motion for summary judgment dismissing plaintiff’s complaint.

     It is hereby ORDERED that the order so appealed from is
unanimously reversed on the law without costs, the motion is granted,
the complaint is dismissed, the counterclaim is granted and judgment
is granted in favor of defendant as follows:

          It is ADJUDGED and DECLARED that plaintiff’s claim for
     special business income losses under the subject policy is
     time-barred by the contractual limitation period.

     Memorandum: Plaintiff commenced this action seeking to recover
lost rents from defendant under an insurance policy providing coverage
for, among other things, special business income (SBI) losses due to
the interruption of plaintiff’s business operations arising from a
covered occurrence of direct physical loss of or damage to plaintiff’s
property. In the complaint, plaintiff sought a declaration with
respect to its requested relief in the first cause of action and
asserted a cause of action for breach of contract in the second cause
of action.

     We agree with defendant that Supreme Court erred in denying its
motion for summary judgment dismissing the complaint. Defendant met
its burden on the motion by establishing that the only fair
construction of the policy is that the two-year limitation period
contained in the “Property Choice Coverage Part” (coverage part) is a
condition that unambiguously applies to the entire coverage part,
which includes the SBI coverage form under which plaintiff seeks to
                                 -2-                           903
                                                         CA 16-00317

recover (see Travelers Ins. Co. v Benderson Dev. Co., LLC, 133 AD3d
1361, 1362; Blanar v State Farm Ins. Cos., 34 AD3d 1333, 1333-1334).
It is undisputed that plaintiff failed to commence this action within
two years of the covered occurrence of property loss or damage.

     Plaintiff nonetheless contends that the two-year limitation
period is inapplicable to its claim because the policy period
provision restricts the scope of the coverage part such that the SBI
coverage form provides separate and distinct coverage not subject to
the conditions of the coverage part. Contrary to plaintiff’s
contention, we conclude that the policy period provision, which
provides that “[i]n this [c]overage [p]art, [defendant] only cover[s]
direct physical loss or direct physical damage which occurs during the
policy period,” is entirely consistent with the coverage afforded
under the SBI coverage form, which provides that plaintiff’s claim
would be paid for SBI losses “incur[red] due to the necessary
interruption of [its] business operations during the [applicable
period] due to direct physical loss of or direct physical damage
caused by or resulting from” a covered occurrence. Indeed, “ ‘[t]he
purpose of business interruption insurance is to indemnify the insured
against losses arising from inability to continue normal business
operation and functions due to the damage sustained as a result of the
hazard insured against’ ” (Cytopath Biopsy Lab. v United States Fid. &
Guar. Co., 6 AD3d 300, 301). Here, the only fair construction of the
policy language is that the SBI coverage form provides coverage for
losses incident to the direct physical property damage or loss, i.e.,
“expense[s] ancillary to and resulting from the covered casualty,” not
separate and distinct coverage falling outside of the coverage part to
which the two-year limitation period condition applies (815 Park Ave.
Owners v Fireman’s Ins. Co. of Washington, D.C., 225 AD2d 350, 352, lv
denied 88 NY2d 808). Finally, we reject plaintiff’s contention that
the language of the policy is ambiguous inasmuch as the interpretation
urged by plaintiff “would strain the contract language beyond its
reasonable and ordinary meaning” (Consolidated Edison Co. of N.Y. v
United Coastal Ins. Co., 216 AD2d 137, 137, lv denied 87 NY2d 808
[internal quotation marks omitted]; see generally Universal Am. Corp.
v National Union Fire Ins. Co. of Pittsburgh, Pa., 25 NY3d 675, 680;
Loblaw, Inc. v Employers’ Liab. Assur. Corp., Ltd., 57 NY2d 872, 877).




Entered:   November 10, 2016                    Frances E. Cafarell
                                                Clerk of the Court
