Opinion
Index No.:155762/2012 Motion Sequence: 002
03-12-2014
ALLSTATE INDEMNITY COMPANY as subrogee of COREY WECLER, CARA OTTILIO-COOPER and SHERRI FRIED, Plaintiffs, v. VIRFRA HOLDINGS LLC and EVANS RELOCATION, INC. d/b/a EVANS REAL ESTATE, Defendants.
For Plaintiff: Feldman & Feldman LLP By Leonard B. Feldman, Esq. For Defendant Virfra Holdings LLC: Cinotti & Stone LLP By Scott Stone, Esq. For Defendant Evans Relocation: no appearance on this motion
DECISION AND ORDER
For Plaintiff:
Feldman & Feldman LLP
By Leonard B. Feldman, Esq.
For Defendant Virfra Holdings LLC:
Cinotti & Stone LLP
By Scott Stone, Esq.
For Defendant Evans Relocation:
no appearance on this motion
Papers considered in review of this motion to reargue:
| Papers | Numbered |
| Notice of Motion and Affidavits Annexed | 1 |
| Affirmation in Opposition | 2 |
| Affirmation in Reply | 3 |
ELLEN COIN, J.:
Plaintiff moves pursuant to CPLR 2221 to renew and reargue the Court's decision and order, dated July 3, 2013, dismissing the complaint as against defendant Virfra Holdings, LLC on the ground of the waiver of subrogation clause required by the condominium's by-laws to be present in all insurance policies carried by condominium unit owners. Plaintiff argues that the Court overlooked and misapprehended binding legal authority, citing Duane Reade v Reva Holding Corp. (30 AD3d 229 [1st Dept 2006]), Liberty Mutual Ins. Co. v Perfect Knowledge, Inc. (299 AD2d 524 [2nd Dept 2005]) and Am. Motorist Ins. Co. v Morris Goldman Real Estate Corp. (277 F Supp 2d 304, 308 [SDNY 2003]). Plaintiff argues that Virfra's failure to comply with the bylaws, by not obtaining requisite insurance coverage, relieves its subrogees from the requirement of maintaining an insurance policy with a waiver of subrogation clause and effectively rescinds nunc pro tunc the waiver of subrogation clause contained in plaintiff's policy.
Specifically, plaintiff relies on the risk allocation principle enunciated in the cited precedent as follows:
Waiver of subrogation provisions exist as part and parcel of a risk allocation agreement whereby liability is shifted to the insurance carriers of the parties to the agreement. Such an agreement is necessarily premised on the procurement of insurance by the parties. . . Without the procurement of insurance, the shifting envisioned under the agreement could not take place, and the agreement was frustrated.(Liberty Mutual Ins. Co., 299 AD2d at 526 [citation omitted). This principle, together with the case law plaintiff cites, developed in the context of commercial leasehold agreements and cannot be applied in the setting of a condominium association. A leasehold agreement concerns only the signatories, so that one party's failure to comply with the agreement may excuse compliance by all other parties. The same cannot be said of adherence to the by-laws of a residential condominium association.
The relationship between condominium owners, as well as between owners and the association itself, is governed by the relevant by-laws. One condo owner's failure to abide by the bylaws does not relieve the remaining owners of compliance. Otherwise, a condominium arrangement would be unfeasible. Thus, pursuant to Downtown Condominium's by-laws, it is a duly elected board of directors, not individual unit owners, that has legal authority to enforce provisions thereof. (By-Laws §§2.4(A)(xviii)and 2.6(A); cf. Levandusky v One Fifth Ave. Apt. Corp., 75 NY2d 530,539 [1990]).
By-Law §5.4(E)includes a mandate for members to obtain insurance and a requirement that all procured insurance policies contain a waiver of subrogation. While plaintiff's subrogor fully complied with this provision, defendant Virfra Holdings LLC ("Virfra")failed to procure requisite coverage. Nonetheless, Virfra's non-compliance with By-Law §5.4(E) does not render plaintiff's waiver of subrogation clause null and void, as its own compliance with the by-laws is independent of the actions of other unit owners. (Cf. Agostinelli v Stein, 17 AD3d 982, 984 [4th Dept], lv dismissed 5 NY3d 824 [2005]). The sole means of rectifying Virfra's non-compliance with the by-laws is petitioning the board of directors to take action.
Due to plaintiff's omission of a copy of its policy from the moving papers in the previous motion, the Court mistakenly asserted in its original ruling that plaintiff's policy did not contain a waiver of subrogation. In fact, a waiver of subrogation is contained in Paragraph 10 on page 17 of the policy. Plaintiff presents a copy of its insurance policy in support of the second branch of its motion seeking renewal. Because the Court accepts the copy of the insurance policy on the branch of the motion to reargue, the remainder of the motion to renew is deemed moot.
In accordance with the foregoing, it is hereby
ORDERED that plaintiff's motion to reargue pursuant to CPLR 2221 is granted, and on reargument, the Court adheres to its prior ruling; and it is further
ORDERED that plaintiff's motion to renew is denied as moot.
This constitutes the decision and order of the Court.
ENTER:
_________________
Ellen M. Coin, A.J.S.C.