What did the court decide?

The appellate court upheld the denial of the insurer's motion to dismiss, meaning the lawsuit will proceed because factual disputes prevent applying the vacancy exclusion at this stage.

Who is affected by this decision?

The decision affects 120 Main Hotel LLC and Sompo America Insurance Company, and it preserves the hotel's claim for insurance coverage for fire loss pending further proceedings.

What happens next in the case?

The case returns to the trial court for further proceedings (discovery and/or trial) to resolve factual issues about the property's state and operations before the fire.

Can the insurer raise new arguments later?

The court struck new arguments made for the first time in the insurer's reply; the insurer can raise appropriate arguments in the trial court or on appeal if timely and properly presented.

120 Main Hotel LLC v. Sompo Am. Ins. Co.

Docket Index No. 651775/24|Appeal No. 6419, M-6938|Case No. 2024-07896|

Court of record · Indexed in NoticeRegistry archive · AI-enriched for research

CivilAffirmed

Filed: Apr 21, 2026 · 1 week ago
Jurisdiction: New York
Court: Appellate Division of the Supreme Court of the State of New York
Type: Opinion
Case type: Civil
Disposition: Affirmed
Citation: 2026 NY Slip Op 02367
Docket numbers: Index No651775/24Appeal No6419, M-6938Case No2024-07896

Appeal from denial of defendant's motion to dismiss the complaint in an insurance coverage action

Summary

The Appellate Division, First Department affirmed a Supreme Court order denying Sompo America Insurance Company's motion to dismiss a fire-damage complaint brought by 120 Main Hotel LLC. The insurer argued an exclusion for damage to vacant or unoccupied premises barred coverage. The appellate court held Sompo failed to prove the exclusion applied because factual disputes remain about the property's condition, whether covered hotel property adequate for operation was present, and whether the plaintiff was conducting customary business operations shortly before the fire. The court also struck new arguments raised for the first time in reply.

Issues Decided

Whether the insurer established that the policy's vacancy/unoccupied exclusion applied to bar coverage for the fire loss
Whether factual questions exist about the state of the property and whether customary business operations occurred shortly before the fire
Whether the insurer may raise new arguments for the first time in its reply papers

Court's Reasoning

The court applied the principle that the insurer bears the burden to show an exclusion defeats coverage. Because the record contained factual disputes about the condition of the premises, presence of covered hotel property, and ongoing business operations shortly before the fire, the vacancy/unoccupied exclusion could not be resolved on a dismissal motion. The court also refused to consider new arguments raised for the first time in the insurer's reply and therefore struck them.

Authorities Cited

J.P. Morgan Sec. Inc. v Vigilant Ins. Co.37 NY3d 552 (2021)

Parties

Respondent: 120 Main Hotel LLC
Appellant: Sompo America Insurance Company
Judge: Lyle E. Frank
Judge: Renwick
Judge: Friedman
Judge: Gesmer
Judge: Pitt-Burke
Judge: Hagler

Key Dates

Decision date: 2026-04-21
Lower court order entered: 2024-11-26

What You Should Do Next

1
Proceed with discovery on coverage facts
Parties should gather and exchange evidence about the property's condition, presence of hotel property, and business activity shortly before the fire to resolve the factual disputes identified by the court.
2
Prepare for trial or summary judgment after discovery
Depending on what discovery shows, either party may move for summary judgment or prepare for trial to establish whether the vacancy/unoccupied exclusion applies.
3
Avoid raising new arguments in reply
Counsel should present all arguments in principal briefs because the court struck those first raised in reply; preserve arguments for proper briefing schedules.

Frequently Asked Questions

What did the court decide?: The appellate court upheld the denial of the insurer's motion to dismiss, meaning the lawsuit will proceed because factual disputes prevent applying the vacancy exclusion at this stage.
Who is affected by this decision?: The decision affects 120 Main Hotel LLC and Sompo America Insurance Company, and it preserves the hotel's claim for insurance coverage for fire loss pending further proceedings.
What happens next in the case?: The case returns to the trial court for further proceedings (discovery and/or trial) to resolve factual issues about the property's state and operations before the fire.
Can the insurer raise new arguments later?: The court struck new arguments made for the first time in the insurer's reply; the insurer can raise appropriate arguments in the trial court or on appeal if timely and properly presented.

The above suggestions and answers are AI-generated for informational purposes only. They may contain errors. NoticeRegistry assumes no responsibility for their accuracy. Consult a qualified attorney before relying on them.

Full Filing Text

120 Main Hotel LLC v Sompo Am. Ins. Co. - 2026 NY Slip Op 02367

120 Main Hotel LLC v Sompo Am. Ins. Co.

2026 NY Slip Op 02367

April 21, 2026

Appellate Division, First Department

120 Main Hotel LLC, Respondent,

Sompo America Insurance Company, Appellant.

Decided and Entered: April 21, 2026

Index No. 651775/24|Appeal No. 6419, M-6938|Case No. 2024-07896|

Before: Renwick, P.J., Friedman, Gesmer, Pitt-Burke, Hagler, JJ.

Clyde & Co US LLP, New York (William M. Cooney of counsel), for appellant.

Blank Rome LLP, New York (David A. Thomas of the bar of the State of California, admitted pro hac vice, of counsel), for respondent.

Order, Supreme Court, New York County (Lyle E. Frank, J.), entered November 26, 2024, which, to the extent appealed as limited by the briefs, denied defendant's motion to dismiss the complaint, unanimously affirmed, without costs.

Supreme Court correctly denied defendant's motion to dismiss the complaint, as it failed to sustain its burden of establishing that an exclusion in its insurance policy applied to defeat coverage for a fire that occurred on plaintiff's premises (
see

J.P. Morgan Sec. Inc. v Vigilant Ins. Co.
, 37 NY3d 552, 562 [2021]). The record presents issues of fact regarding the state of the property at the time of the fire, whether the premises contained covered property adequate to conduct business operations as a hotel, and whether plaintiff engaged in customary business operations on site shortly before the fire loss. These issues, in turn, bear on whether the hotel was "vacant or unoccupied" within the meaning of the exclusion foreclosing coverage for loss caused by vandalism and malicious mischief, which is the basis on which defendant declined coverage.

We have considered defendants' remaining contentions and find them unavailing.

M-2025-06938 — 120 Main Hotel LLC v Sompo America Insurance Company

Motion by plaintiff to strike or disregard portions of defendant's reply, granted to the extent it seeks to strike new arguments raised for the first time in reply.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: April 21, 2026