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A pizzeria owner whose restaurant was damaged by a fire just hours after he received a notice stating that his insurance had been canceled cannot rely on a typo in the notice, which apparently gave him another week of coverage, to “resurrect” his coverage, a New York appeals panel has ruled. The Appellate Division, 1st Department, decision reversed Bronx Supreme Court Justice Kenneth L. Thompson’s ruling and granted Associated Mutual Insurance’s motion for summary judgment. Defendant Associated Mutual contracted to insure the plaintiff, the Bronx’s Mariano’s Pizzeria, in April 2000. In mid-May 2002, Associated Mutual sent Mariano’s a notice of cancellation, which stated that payment had to be received by June 2 to avoid termination of its policy. The insurance company alleges this was the seventh such notice. Mariano’s mailed the overdue payment on May 22. Its check bounced. On June 7, Mariano’s received another letter from the insurance company, which stated that the insurance policy “was cancelled effective June 9.” Associated Mutual claims that the referenced date — June 9, as opposed to June 2 — was a typographical error. That same afternoon — June 7 — a fire damaged the pizzeria. The next day, the plaintiff purchased a money order and sent it to the insurance company via overnight express, seeking to avoid cancellation. The insurance company returned the payment. It also disclaimed coverage, on the basis that the policy had been canceled on June 2. Mariano’s thereafter brought the present case, claiming breach of insurance contract. “Ambiguities in an insurance contract are to be construed favorably to the insured and strictly against the insurer,” the unanimous panel held in its unsigned decision, Mariano’s Pizzeria v. Associated Mutual, 17825/03. The panel also noted that “public policy mandates that a cancellation notice is ineffectual where it is equivocal or indefinite” and that a “notice that arrives too late to be acted upon is a nullity.” Nonetheless, the panel found for the defense, and dismissed the case. “The terms of the [May 16] cancellation notice unequivocally stated that payment of the premium had to be received before the ‘cancellation effective date,’ which was June 2,” the panel held. “Pursuant to article 3 of the Commercial Code, a check given in payment of an underlying obligation constitutes conditional payment and the obligation of the payee is discharged if the check is dishonored,” the panel added. “Thus, plaintiff’s insurance coverage lapsed on June 2, 2002, by operation of law, and so could not be resurrected by a simple typographical error.” Justices David Friedman, George D. Marlow, Luis A. Gonzalez and James M. Catterson sat on the panel. Michael J. Lonergan of Allen Johnson & Lonergan represented Associated Mutual. He did not return a call seeking comment. White Plains-based solo-practitioner Brian R. Hoch represented Mariano’s Pizzeria. He said he is “inclined” to appeal. “My argument at this point would be, when you sent out that second letter, you triggered my client’s reliance on that,” he said. “You had no business sending out a letter at all. And then you sent her a bill, for the next installment payment, the next day.”

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