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Stedman Energy, Inc. v. Lenape Res. Corp.

Appellate Division of the Supreme Court of New York, Fourth Department
Jul 12, 1991
175 A.D.2d 646 (N.Y. App. Div. 1991)

Summary

rejecting veil-piercing premised on fact that parent and subsidiary were co-insured under same policy

Summary of this case from In re Silicone Gel Breast Implants Products Liability Litigation

Opinion

July 12, 1991

Appeal from the Supreme Court, Chautauqua County, Ricotta, J.

Present — Dillon, P.J., Callahan, Denman, Green and Lowery, JJ.


Order unanimously modified on the law and as modified affirmed with costs to defendant NUI Corporation, in accordance with the following Memorandum: In this action by plaintiff for breach of contract and negligence arising out of a gas well-tending agreement between plaintiff and Lenape, defendants Lenape and NUI appeal from an order that denied their motions for summary judgment. NUI is entitled to summary judgment. NUI was not a party to the well-tending contract, nor did it provide well-tending services to plaintiff. There is no proof in the record that Lenape was a mere department, division, or alter ego of NUI, that Lenape was undercapitalized, or that there is any other basis for allowing plaintiff to pierce Lenape's corporate veil in order to impose liability on NUI. Contrary to plaintiff's argument, liability cannot be imposed against NUI merely because NUI and Lenape were coinsured under a liability policy.

Lenape's motion for summary judgment was properly denied. The contractual exculpatory clause relied upon by Lenape must be considered in light of other provisions of the contract, particularly paragraph II, which sets forth Lenape's obligation to perform its services with due diligence and care. The contract is ambiguous insofar as it obligates Lenape to use due care but purports to exculpate it from the consequences of failure to do so. That ambiguity must be construed against the drafter, Lenape. The juxtaposition of those two provisions of the contract renders the exculpatory provision insufficiently clear and unambiguous to be enforced against plaintiff (see, Gross v Sweet, 49 N.Y.2d 102, 106-107; Ciofalo v Tanney Gyms, 10 N.Y.2d 294, 297).

We have considered Lenape's remaining arguments and conclude that they are without merit.


Summaries of

Stedman Energy, Inc. v. Lenape Res. Corp.

Appellate Division of the Supreme Court of New York, Fourth Department
Jul 12, 1991
175 A.D.2d 646 (N.Y. App. Div. 1991)

rejecting veil-piercing premised on fact that parent and subsidiary were co-insured under same policy

Summary of this case from In re Silicone Gel Breast Implants Products Liability Litigation
Case details for

Stedman Energy, Inc. v. Lenape Res. Corp.

Case Details

Full title:STEDMAN ENERGY, INC., Respondent, v. LENAPE RESOURCES CORPORATION et al.…

Court:Appellate Division of the Supreme Court of New York, Fourth Department

Date published: Jul 12, 1991

Citations

175 A.D.2d 646 (N.Y. App. Div. 1991)
572 N.Y.S.2d 576

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