Harleysville Preferred Insurance Company v. Glenn Van Dyke

Background

Harleysville issued a businessowners insurance policy for May 10, 2018 through May 10, 2019. The policy named Lexi Realty LLC, ISB Realty LLC, and Bert Real Estate LLC as named insureds, and listed Ira S. Bernstein as an additional named insured. It listed a property at 11 Broadway in the Village of Haverstraw, New York. MAE Realty Holdings, LLC owned that property during the relevant period, but MAE was not listed as an insured or otherwise identified in the policy.

On July 25, 2018, Glenn Van Dyke slipped and fell on a staircase at the property while conducting a housing inspection. He later sued MAE in New York state court for negligence. MAE did not appear, and the state court entered a default judgment that ultimately totaled approximately $2.8 million. Van Dyke later brought another state-court action against ISB Realty and Ira Bernstein. Harleysville agreed to defend ISB Realty and Bernstein in that later action, but it denied coverage for MAE’s judgment.

Harleysville filed this federal action seeking a declaration that it had no duty to defend or indemnify MAE, or to pay Van Dyke on MAE’s behalf. It moved for summary judgment against Van Dyke and also sought default judgment against MAE, which had not appeared. Van Dyke did not submit a response brief or a factual statement opposing summary judgment. A brief submitted by his former law firm was considered as an amicus brief, meaning a submission from a nonparty assisting the court.

Summary-Judgment Ruling

Summary judgment is a decision entered without a trial when the record shows no genuine dispute over an important fact and the moving party is entitled to judgment under the law. Applying New York law, the court interpreted the policy according to its clear terms.

The court held that MAE was not covered. The policy defined the insureds by reference to the entities named in the declarations and expressly stated that an organization is not insured for the conduct of a limited liability company that is not shown as a named insured. MAE was not listed as a named or additional insured. The court rejected the argument that the property’s inclusion in the location schedule extended coverage to MAE. It also rejected the argument that Bernstein’s status as MAE’s sole owner made MAE covered as his alter ego, finding that MAE was a separate legal entity and that nothing in the policy extended Bernstein’s personal listing to MAE.

Because MAE was not an insured, the court concluded that Harleysville had no obligation to defend or indemnify MAE for the judgment or to make any payment to Van Dyke on MAE’s behalf. The court did not reach Harleysville’s alternative argument that MAE failed to provide timely notice and that Harleysville was prejudiced by the lack of notice.

Default-Judgment Ruling and Disposition

The court found that Harleysville satisfied the requirements for seeking default judgment under Federal Rule of Civil Procedure 55 and the local rule. However, Harleysville did not follow the separate default-judgment procedures in Attachment A to Judge Roman’s Individual Rules. The court therefore denied the motion for default judgment against MAE without prejudice to renewal.

The court granted Harleysville’s motion for summary judgment concerning the declaratory judgment against Van Dyke and denied its motion for default judgment against MAE without prejudice. The clerk was directed to terminate the pending motion and terminate Van Dyke as a defendant. Harleysville was directed to submit materials complying with the default-judgment procedures by October 29, 2025. The court stated that it would schedule an order-to-show-cause conference after a proper submission.