MEMORANDUM DECISION and ORDER I INTRODUCTION This action was first set in motion on October 14, 2010, when plaintiff Cristal Vazquez (“Vazquez” or “plaintiff”) suffered an injury during her time working for Mother Nurture Daycare, LLC (“Mother Nurture” or “the daycare”). Mother Nurture operated out of the marital home of its owner, Mercedes Sidor, and her husband, David Sidor (“David”) (together, “the Sidors”). Although plaintiff sued both Sidors for her injury, her claims against Mercedes were dismissed as foreclosed by New York’s Workers’ Compensation Law, §29(6) (“§29(6)”). Eventually, Vazquez attained a settlement with David: he would not contest liability, but she could only recover against his insurer, defendant Markel Insurance Company (“Markel” or “defendant”). However, defendant had already notified David and Mercedes — but not plaintiff — that it would not provide coverage. Plaintiff alleges that this violates New York Insurance Law §3420(d)(2) (“§3420(d)(2)”), which requires an insurer to notify both the insured and the injured party if an exclusion prohibits recovery. As a result, plaintiff argues that defendant is now estopped from arguing that David was not an insured. On October 22, 2018, Vazquez filed a complaint in New York State’s Supreme Court, Ulster County, as an Assignee of David’s rights to insurance coverage. Plaintiff alleged four defects in Markel’s refusal to provide coverage: (1) David is not subject to the insurance policy’s Employer Liability exclusion; (2) defendant failed to notify plaintiff, the injured party, that she would not be covered under the policy; (3) defendant’s denial of coverage was not timely submitted; and (4) defendant cannot subsequently disclaim coverage to cure its initial, invalid waiver. On December 4, 2019, defendant moved for summary judgment arguing that each of those positions lacked merit, and on January 8, 2020, plaintiff moved for summary judgment as well. II BACKGROUND On December 10, 2008, Mercedes formed Mother Nurture as a limited liability company (“LLC”). Dkt. 20-4, p. 4.1 Mercedes appears to have been the daycare’s only member. See id. (providing only Mercedes’ signature to account for the “written consent of a majority in interest of the members” of the limited liability company).2 Mercedes operated the daycare out of her and David’s home. Dkt. 20-7, p. 3. The Sidors had homeowners’ insurance through Allstate Insurance Company (“Allstate”) — who is not a party to this action — and commercial insurance through Markel (“the policy”). Dkt. 20-8, p. 3. David helped Mother Nurture in sundry ways: he handled the finances for the daycare; he collected payments; and he conducted maintenance and repairs where necessary. Dkt. 20-7, p. 3. If the daycare had excess funds, he would draw from its coffers. Id. One day, upon Mercedes’ request, he installed a rack to store the cots on which the children of the daycare would sleep. Id. Vazquez was an employee of Mother Nurture in October of 2010. Dkt. 20-7, p. 3. On October 14, 2010, plaintiff was taking cots down from the rack that David had installed, when two or three cots, each weighing three pounds, fell off the rack and onto her, knocking her backwards into a water heater. Id.; Dkt. 30-2, p. 25. Plaintiff suffered a cervical disc herniation, which required physical therapy, a steroid injection, and ultimately surgery. Dkt. 1-4,
4-8. Plaintiff retains scars in her hip and neck from the surgery, and still suffers from pain and reduced mobility in her neck. Id.
