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Bovis Lend Lease LMB12/15/2005
not "within the zone of interest which the statutory requirement of notice to the injured parties seeks to protect" (Batchie v Travelers Ins. Co., 130 AD2d 536, 537 ), and thus we hold that, insofar as plaintiff National Union is concerned, ยง 3420(d) has no application, and Royal's disclaimer is not untimely.
Upon our finding that Royal's written disclaimer is timely vis-a-vis National Union, the issue of the validity of the disclaimer becomes relevant with respect to any claims National Union may have.
Royal's disclaimer is predicated upon the "New Residential Work or Products Exclusion" endorsement, which provides:
"Designated Work/Products(s): Your work' or your products' in any way associated with new residential property. For the purpose of this endorsement, new residential property' shall include the original construction of apartments, single family and multi-family dwellings, condominiums and townhouses, regardless of when the construction operations take place.
"This insurance does not apply to bodily injury ,' property damage,' advertising injury' or personal injury ' arising out of any of your work' or your products' shown in the SCHEDULE above."
Royal argues that this exclusion is applicable to the third-party claims against Millennium, because they "clearly arise from the construction of a new faculty residence."
"To be relieved of its duty to defend on the basis of a policy exclusion, the insurer bears the heavy burden of demonstrating that the allegations of the complaint cast the pleadings wholly within that exclusion, that the exclusion is subject to no other reasonable interpretation, and that there is no possible factual or legal basis upon which the insurer may eventually be held obligated to indemnify the insured under any policy provision" (Frontier Insulation Contrs., Inc. v Merchants Mut. Ins. Co., 91 NY2d 169, 175 ). Millennium's policy excludes " Your work' or your products' in any way associated with new residential property [, which] shall include the original construction of apartments, single family and multi-family dwellings, condominiums and townhouses . . . ."
The Bovis-Millennium contract makes it clear that the construction project is a mixed-use building. The cover page of the contract identifies it as "Columbia University School & Faculty Residence," and the individual contract documents refer to the project as either "Columbia University Faculty Residence and School" or "Columbia University School and Faculty Housing." Royal argues that the exclusion does not require that the new construction be exclusively residential. However, "mixed-use buildings" are not included in the exclusion's list of the types of buildings that constitute residential property. Indeed, only specific single-use dwellings are included in the list, and it certainly is reasonable to interpret the exclusion as inapplicable to mixed-use buildings. Thus, Royal has failed to meet its burden of establishing that the exclusion is subject to no reasonable interpretation other than the one it offers (see Frontier, 91 NY2d at 175), and we therefore find that the exclusion is inapplicable to Millennium's work on the Columbia project.
Finally, with respect to defense costs, we find that the motion court improperly held that Royal must reimburse National Union for all its defense costs, rather than for those incurred from the date on which Royal received National Union's tender of the underlying lawsuit (see Smart Style Indus. v Pennsylvania Gen. Ins. Co., 947 F Supp 102, 103 [SD NY 1996]). Royal's Claims Specialist acknowledged receipt of National Union's tender by letter dated March 3, 2003. Thus, Royal is obl
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