MEMORANDUM OPINION AND ORDER The plaintiffs, Lee Godfrey and Yun Jae Chung, brought this insurance coverage action against the defendant, Executive Risk Indemnity Inc., seeking a declaratory judgment that the defendant has a duty to indemnify the plaintiffs for any damages that may be assessed against the plaintiffs in Zale Contracting Inc. v. Lee Godfrey and Yun Jae Chung, Index No. 652584/2019 (N.Y. Sup. Ct.) (the “Underlying Action”).1 The plaintiffs also assert a breach of contract claim against the defendant with respect to the homeowner insurance policy at issue, Executive Risk Policy 13298330-06, ECF No. 26-3 (the “Policy”). The plaintiffs claim that the defendant violated its duty to defend and indemnify the plaintiffs in the Underlying Action.2 The defendant has moved for summary judgment, and the plaintiffs have brought a cross-motion for summary judgment. For the reasons explained below, the defendant’s motion is granted and the plaintiffs’ motion is denied. I. A. The plaintiffs filed this action in New York State Supreme Court, New York County on July 6, 2020. See ECF No. 2-1 (Complaint). The defendant removed this action to this Court on September 3, 2020. See ECF No. 2 (Notice of Removal). This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §1332 because the plaintiffs are citizens of New York, the defendant is a citizen of Delaware and New Jersey, and the amount in controversy exceeds $75,000, exclusive of interest and costs. See id. at 3-4. B. This action and the Underlying Action arise out of the renovation of the plaintiffs’ Manhattan apartment. In April 2016, the plaintiffs contracted with Zale Contracting Inc. (“Zale”) to renovate their apartment. Plaintiffs’ Rule 56.1 Statement, ECF No. 29-1 9. In the Underlying Action, Zale alleges that, on March 5, 2017, the sprinkler system in the plaintiffs’ apartment failed, causing extensive damage to the plaintiffs’ apartment. Defendant’s Rule 56.1 Statement, ECF No. 27 3. Zale further alleges that, at the time of the alleged sprinkler failure, “a majority of the work that [Zale] had been hired to perform had been completed. The failure of the sprinkler system set the job back by a considerable margin and caused [Zale] to engage in additional work to perform under all terms of the contract with [the plaintiffs].” Id. 4. Zale alleges that, with the plaintiffs’ “knowledge and approval,” Zale repaired the damage caused by the sprinkler failure in order to complete its own work. Id.
