Henderson v. Aetna Casualty & Surety Co. , 81 A.D.2d 702 ( 1981 )

— Appeal from an order of the Supreme Court at Special Term, entered March 27, 1980 in Albany County, which (1) granted defendant’s motion to renew and reargue its prior motion which sought an order dismissing plaintiff’s complaint, and (2) adhered to its original decision denying the motion to dismiss. Plaintiff operated a tavern on premises he leased from Peter Rezey. Defendant had issued a fire insurance policy to plaintiff. A fire occurred and defendant, pursuant to the terms of the policy, paid plaintiff some $12,500 in full satisfaction of the claim. Plaintiff then executed a subrogation receipt in favor of defendant. Thereafter, defendant, as subrogee of plaintiff, sued Rezey to recover the money paid plaintiff. The action was brought in plaintiff’s name as is permitted by CPLR 1004. Rezey counterclaimed against plaintiff alleging negligence and breach of the lease. The instant action was commenced seeking a declaration that defendant must defend and indemnify plaintiff against any liability which may result from the counterclaim. Special Term denied defendant’s motion to dismiss the complaint and this appeal ensued. It is well established that defendant, as subrogee, had an absolute right to bring the action against Rezey (Coniglio v State of New York, 35 AD2d 1021) and, furthermore, to bring it in plaintiff’s name (CPLR 1004). An examination of the clear and unambiguous language of the policy demonstrates that no coverage is afforded for damage to property that is owned, used, occupied or rented by the insured. Since plaintiff leased the business premises, the policy does not cover him for any liability that he may incur as a result of the counterclaim interposed by Rezey. There must, therefore, be a reversal and a declaration in favor of defendant (see Gill v Logan, 62 AD2d 1029). We have examined all the arguments advanced by plaintiff urging affirmance and find them unpersuasive. Order reversed, on the law, and judgment directed to be entered declaring that defendant is not required to defend and indemnify plaintiff on the counterclaim interposed by Rezey. Mahoney, P. J., Sweeney and Weiss, JJ., concur; Kane and Casey, JJ., dissent and vote to affirm in separate memoranda.