Georgitsi Realty, LLC v. Penn-Star Insurance Company, 702 F.3d 152

Georgitsi Realty, LLC owns a Brooklyn apartment building and obtained a broad-form homeowner’s policy from Penn-Star insuring the building for vandalism among other perils.
Damage to Georgitsi’s building began in 2007 from excavation work on the adjacent Armory Plaza parcel for an underground parking garage.
Georgitsi notified Armory Plaza, the excavators, engineers, and architect of the damage and obtained stop-work orders and a temporary restraining order, but construction continued and fines were paid for violations.
Georgitsi filed a vandalism claim under the policy for damage caused by the adjacent-excavation activities; Penn-Star denied coverage, arguing the acts were not vandalism.
The district court granted summary judgment for Penn-Star, relying on Fanberg Realty Corp. v. Travelers Cos.; this appeal centers on whether malice may be found from acts not directed at the insured property.
Because the New York Court of Appeals has not resolved the malice standard in this context, the Second Circuit certified the question to that court as determinative.

Issue	Plaintiff's Argument	Defendant's Argument	Held
May malice be found from acts not directed at the insured property?	Georgitsi argues yes, malice can be proven from acts directed at adjacent property that damage the insured building.	Penn-Star contends malice requires directed acts on the insured property, citing Fanberg and lack of explicit authority for non-directed acts.	Unsettled; court certifies question to NY Court of Appeals.
Should the NY Court of Appeals determine the malice standard in vandalism policies?	Georgitsi asserts the state-law question is important and unsettled, requiring NYCourt of Appeals guidance.	Penn-Star argues for a controlling NY precedent; certification unnecessary or duplicative.	Certification approved; state-law question certified for answer.

Cresthill Indus., Inc. v. Providence Wash. Ins. Co., 53 A.D.2d 488 (2d Dep’t 1976) (malice can be inferred from wrongful acts causing damage)
Fanberg Realty Corp. v. Travelers Cos., 117 A.D.2d 582 (2d Dep’t 1986) (adjacent-property acts not clearly malicious in that decision)
Louisville & Jefferson County Metropolitan Sewer Dist. v. Travelers Ins. Co., 753 F.2d 533 (6th Cir. 1985) (reckless or willful acts may suffice for proximate causation in vandalism context)
King v. North River Ins. Co., 297 S.E.2d 637 (S.C. 1982) (efficient cause rule for vandalism coverage)
Halsey Drug Co. v. Am. Mfrs. Mut. Ins. Co., 30 A.D.2d 946 (1st Dep’t 1968) (vandalism defined as wilful malicious injury to insured property)
Windsor v. United States, 699 F.3d 169 (2d Cir. 2012) (predictive approach when NY law unsettled; certifiable questions permitted)
Amerex Grp., Inc. v. Lexington Ins. Co., 678 F.3d 193 (2d Cir. 2012) (use of certification where NY law unsettled and important)