Physician who was sole shareholder both of radiological practice and of corporation which owned building in which he practiced brought suit against business owner's insurer seeking to recover property loss resulting from burglaries. The Supreme Court, Nassau County, Robbins, J., entered summary judgment in favor of insurer, and denied physician's motion to amend point to add causes of action to reform policy. Physician appealed. The Supreme Court, Appellate Division, held that: (1) court improvidently exercised its discretion in denying physician leave to amend complaint to seek reformation of policy to include name of proper entity as named insured, and (2) material issues of fact as to whether issuance of business owner's policy to corporation that owned building rather than professional corporation was result of mutual mistake and as to whether notice of burglaries was provided within reasonable time precluded summary judgment in insurer's favor.

Affirmed as modified.

[1] Pleading k246(2)
302k246(2)

Refusal to allow physician to amend complaint to allege that issuance of business owner's policy in name of wrong insured was result of mutual mistake was error.

[2] Insurance k1887(1)
217k1887(1)

When identity of owner of policy is misdescribed due to innocent mistake of applicant for insurance, error is mutual for purposes of reformation, notwithstanding that insurer was unaware of error.

[3] Judgment k181(23)
228k181(23)

Material issues of fact as to whether misidentification of insured on business owner's insurance policy was result of mutual mistake and as to whether notice of burglaries was provided within reasonable time, due to highly complicated and technical nature of parts stolen from magnetic resonance imaging (MRI) machine, precluded summary judgment in favor of insurer in suit brought to recover under policy for property loss. Weg & Myers, P.C., New York City (Dennis T. D'Antonio, Joshua L. Mallin, and Howard S. Kronberg, of counsel), for appellants.

Mound, Cotton & Wollan, New York City (Arthur N. Brook and Mark S. Katz, of counsel), for respondent.

Before ROSENBLATT, J.P., and MILLER, PIZZUTO and GOLDSTEIN, JJ.

MEMORANDUM BY THE COURT.

In an action, inter alia, to recover proceeds allegedly due pursuant to a policy of insurance issued by the defendant to the plaintiff Rego Junction, Inc., the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Robbins, J.), entered January 20, 1995, as granted the defendant's motion for summary judgment dismissing the complaint, and denied their cross motion for leave to amend the complaint to add causes of action to reform the policy of insurance and for summary judgment on the amended complaint.

ORDERED that the order is modified, on the law, by deleting the provisions thereof granting the motion and denying the cross motion, and substituting therefor provisions denying the motion and granting that branch of the cross motion which was to add causes of action to reform the policy of insurance; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements, the amended complaint is deemed to have been duly served, and the defendant is directed to serve an answer thereto within 20 days of service of this decision and order upon it with notice of entry.

The plaintiff Azad Anand is a physician who is the sole shareholder of a radiological medical practice known as Rego Park Radiology, P.C. (hereinafter the P.C.). He is also the sole shareholder of Rego Junction, Inc. (hereinafter Rego Junction), which owns the condominium in which the business of the P.C. is conducted. For the period February 24, 1992, to February 24, 1993, Rego Junction was insured by a special business owners policy of insurance issued by the defendant. The only business conducted by Rego Junction was its ownership of the premises in which the P.C. conducted its radiological business.

In March and April 1992, the premises owned by Rego Junction, which had yet to open for business, was burglarized. These burglaries occurred during the construction of the office and the only items taken were parts of a magnetic resonance imaging machine (hereinafter MRI) that the P.C. had purchased from Siemens Medical Systems, Inc. (hereinafter Siemens). Because the March burglary reportedly occurred during the installation of the MRI, it was reported only to Siemens as there was a possibility that replacement parts would be furnished by Siemens at no charge to the P.C. Following the April burglary, the insurance broker who sold the special business owners policy to Rego Junction was promptly notified. However, it appears that due to the highly complicated and technical nature of the MRI machine, a Siemens technician had to identify and value each of the missing parts before an itemized claim could be made. A property loss notice was submitted on or about April 24, 1992.

[1][2][3] Under the circumstances of this case, the court improvidently exercised its discretion in denying that branch of the cross motion which was to add causes of action to reform the policy of insurance. As this court has previously held, when it is established that as a result of an innocent mistake of an applicant for insurance the identity of the owner is misdescribed, the error is mutual for purposes of reformation, notwithstanding that the insurer is unaware of the error (see, Crivella v. Transit Cas. Co., 116 A.D.2d 1007, 498 N.Y.S.2d 627; Court Tobacco Stores, Inc., v. Great Eastern Ins. Co., 43 A.D.2d 561, 349 N.Y.S.2d 8). Indeed, "[t]he name of *663 the insured in the policy is not always important if the intent to cover the risk is clear" (Crivella v. Transit Cas. Co., supra, at 1008, 498 N.Y.S.2d 627, quoting Matter of Lipshitz v. Hotel Charles, 226 App.Div. 839, 840, 234 N.Y.S. 513, aff'd 252 N.Y. 518, 170 N.E. 127; see also, Testa v. Utica Fire Ins. Co., 203 A.D.2d 357, 610 N.Y.S.2d 85; Abulaynain v. New York Merchant Bankers Mut. Fire Ins. Co., 128 A.D.2d 575, 513 N.Y.S.2d 5).

There are issues of fact as to whether the issuance of the business owners policy to Rego Junction rather than to the P.C. was the result of a mutual mistake as to the identity of the actual insured. We also find that issues of fact exist as to whether notice of the burglaries was provided to the defendant within a reasonable time in light of all of the attendant circumstances (see, Argentina v. Otsego Mut. Fire Ins. Co., 86 N.Y.2d 748, 631 N.Y.S.2d 125, 655 N.E.2d 166). Therefore, the defendant's motion for summary judgment dismissing the complaint should be denied, and further proceedings are warranted on the amended complaint.