Opinion
No. 650833/14.
07-15-2015
FORTY SECOND ASSOCIATES, INC., Plaintiff, v. NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, CNA Insurance Companies, Moti (N.Y.), Inc. and Yaffa Wigs, Inc., Defendants.
Forty Second Associates LLC v. National Fire Insurance, for plaintiff. Churbuck Calabria Jones & Materazo, P.C., Hicksville, By: Nicholas P. Calabria, Esq., for defendant National Fire Insurance. Colliau Carluccio Keener Morrow Peterson & Parsons, New York, By: Dean j. Vigliano, Esq.
Forty Second Associates LLC v. National Fire Insurance, for plaintiff.
Churbuck Calabria Jones & Materazo, P.C., Hicksville, By: Nicholas P. Calabria, Esq., for defendant National Fire Insurance.
Colliau Carluccio Keener Morrow Peterson & Parsons, New York, By: Dean j. Vigliano, Esq.
Opinion
ROBERT R. REED, J.
Plaintiff Forty Second Associates, Inc. brings this action for a declaration that defendant National Fire Insurance Company of Hartford (National) must afford it a defense and indemnification in an underlying personal injury action entitled Klein v. Forty Second Associates, LLC, Index No. 23495/11, pending in Supreme Court, Kings County (underlying action). Plaintiff also moves for default judgments against defendants Moti (N.Y.), Inc. (Moti) and Yaffa Wigs, Inc. (Yaffa) (together, Yaffa Wigs).
Plaintiff is the owner of premises located at 4110–4124 13th Avenue and 1279 42nd Street, Brooklyn, New York (premises). According to the complaint herein, Moti and Yaffa were tenants in the premises. An employee of Moti has testified that Moti and Yaffa are actually the same company, owned by a husband and wife, who together run a shop called Yaffa Wigs on the premises. The lease appears to indicate that Moti, Inc. is the lessor.
Under the lease (Lease) between plaintiff and Yaffa Wigs, Yaffa Wigs was obligated to “procure and maintain public liability insurance in limits of $500,000 or more at its own cost and expense....” Lease, ¶ 46. Yaffa Wigs thereafter obtained a general liability policy from National, effective August 15, 2010 to August 15, 2011 (National Policy).
The National Policy contained a “NON–CONTRACTORS BLANKET ADDITIONAL INSURED” endorsement, which states, in pertinent part, that “WHO IS AN ADDITIONAL INSURED is amended to include as an insured any person or organization (called additional insured) described in paragraphs 2.(a) through 2.(h) below who you are required to add as an additional insured on this policy under a written contract or agreement....” Importantly, National does not dispute that plaintiff is an additional insured under the National Policy.
The National Policy, as here relevant, contained an “other Insurance” provision in the “NON–CONTRACTORS BLANKET ADDITIONAL INSURED” endorsement, which states that “[t]his insurance is excess over any other [v]alid and collectible insurance naming the additional insured as an insured whether primary, excess, contingent or any other basis unless a written contract or written agreement specifically requires that this insurance be either primary or primary and noncontributing.”
Plaintiff also obtained general liability Insurance from Hartford Fire Insurance Company (Hartford Policy), which allegedly also contained an “other insurance” provision, which allegedly reads:
“4. [i]f valid and collectible insurance is available for loss we cover under this coverage part, our obligations are limited as follows:
(b) Excess Insurance
This insurance is excess over any of the other insurance, whether primary, excess, contingent or on any other basis:
(6) When You Are Added As An Additional Insured To Other Insurance:
Any other insurance available to you covering liability for damages arising out of the premises or operations, or products and completed operations for which you have been added as an additional insured by that insurance.”
The court has been presented with a one-inch pile of paper constituting the Hartford Policy. Presumably, the other insurance provision is buried somewhere therein.
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On July 25, 2011, Irene Klein was allegedly injured in a fall on the rental premises. She commenced the underlying action to recover damages against all defendants herein for her personal injuries.
Upon receipt of the summons and complaint in the underlying action, plaintiff forwarded the papers to Hartford. Hartford wrote to Yaffa Wigs, in a letter dated February 6, 2012, tendering to them the defense and indemnification of plaintiff, and requesting that the papers be forwarded to their insurance carrier. A tender letter was then sent to National by Yaffa Wigs, on May 4, 2012.
In a letter dated November 16, 2012, National denied the claim, based on a lack of information concerning the accident site. In a letter dated December 12, 2012, National again declined coverage, on the basis that National was independently negligent for the accident. Exhibit R.
Plaintiff now moves for summary judgment for a judicial declaration that National is obligated to defend and indemnify it in the underlying accident. As stated, National does not attempt to deny that plaintiff is an additional insured. Rather, it argues that (1) it does not owe plaintiff all of its defense costs because, as plaintiff has its own insurance with Hartford, Hartford is obligated to pay 50% of the costs (that is, National only has to pay plaintiff one-half of its defense costs); (2) National is only obligated to pay defense costs “incurred subsequent to the date of tender” (affirmation of Vigliano, ¶ 6); (3) plaintiff has no standing to recover defense costs if Hartford has been paying those costs, because plaintiff has not been “aggrieved,” and Hartford is not in the action (id. ); and (4) the motion is defective due to the failure to provide legal bills in order to prove “which amounts were incurred at which point and the reasonableness thereof.” Id.
Summary judgment is a “drastic remedy.” Vega v. Restani Constr. Corp., 18 N.Y.3d 499, 503, 942 N.Y.S.2d 13, 965 N.E.2d 240 (2012). “[T]he ‘proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case.’ ” Meridian Mgt. Corp. v. Cristi Cleaning Serv. Corp., 70 A.D.3d 508, 510, 894 N.Y.S.2d 422 (1st Dept 2010), quoting Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 (1985). Once the proponent of the motion meets this requirement, “the burden then shifts to the opposing party to produce evidentiary proof in admissible form sufficient to establish the existence of a material issue of fact that precludes summary judgment and requires a trial.” Ostrov v. Rozbruch, 91 A.D.3d 147, 152, 936 N.Y.S.2d 31 (1st Dept 2012), citing Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 (1986). If there is any doubt as to the existence of a triable issue of fact, summary judgment must be denied. Rotuba Extruders v. Ceppos, 46 N.Y.2d 223, 413 N.Y.S.2d 141, 385 N.E.2d 1068 (1978) ; Grossman v. Amalgamated Hous. Corp., 298 A.D.2d 224, 750 N.Y.S.2d 1 (1st Dept 2002).
“In resolving insurance disputes, we first look to the language of the applicable policies.” Fieldston Prop. Owners Assn., Inc. v. Hermitage Ins. Co., Inc., 16 N.Y.3d 257, 264, 920 N.Y.S.2d 763, 945 N.E.2d 1013 (2011). It is the duty of the court to determine “the rights or obligations of parties under insurance contracts based on the specific language of the policies.” State of New York v. Home Indem. Co., 66 N.Y.2d 669, 671, 495 N.Y.S.2d 969, 486 N.E.2d 827 (1985).
The National Policy clearly covers plaintiff completely as an additional insured. The issues here are resolved indisputably by Pecker Iron Works of N.Y. v. Traveler's Ins. Co. (99 N.Y.2d 391 [2003] ). In Pecker, the Court held that “ ‘[a]dditionl insured’ is a recognized term in insurance contracts, with an understanding crucial to our conclusion in this case. As cases have recognized, the well-understood meaning of the term is an entity enjoying the same protection as the named insured [internal quotation marks and citation omitted].” Id. at 393, 756 N.Y.S.2d 822, 786 N.E.2d 863 ; see also Kassis v. Ohio Cas. Ins. Co., 12 N.Y.3d 595, 599–560 (2009).
National responds that Pecker “has been severely limited by subsequent cases and its holding—which did not address the language in the insurance policies-has been restricted by those cases.” Vigliano affirmation, ¶ 33. National turns the court's attention to cases such as BP A.C. Corp. v. One Beacon Ins. Group (8 N.Y.3d 708 [2007] ) for the unremarkable proposition that “[i]n order to determine the priority of coverage among different policies, a court must review and consider all of the relevant policies at issue” (id. at 716, 840 N.Y.S.2d 302, 871 N.E.2d 1128 ), and insists that this language “clarified” the Court's holding in Pecker. Vigliano affirmation, ¶ 38.
In thus reasoning, National evinces a fundamental misunderstanding of insurance law, and a misreading of BP A.C. Corp. The Court in BP A.C. Corp., in making the above statement, is discussing the priority of coverage of insurance policies between and among insurers, not as between the insured and the insurer. BP A.C. Corp. actually agrees word for word with Pecker that “additional insured” “ ‘is a recognized term in insurance contracts,’ ”; and that “ ‘the well understood meaning of the term is an entity enjoying the same protection as the named insured.’ ” Id. at 714–715, 840 N.Y.S.2d 302, 871 N.E.2d 1128, quoting Pecker, 99 N.Y.2d at 393, 756 N.Y.S.2d 822, 786 N.E.2d 863. BP A.C. Corp. does not limit or “clarify” that rule; see also Mack–Cali Realty Corp. v. NGM Ins. Co., 119 A.D.3d 905, 908, 990 N.Y.S.2d 253 (2d Dept 2014).
National and Hartford will have to battle the matter of priority between themselves, which cannot happen here, as Hartford has not been brought into the suit. See BP A.C. Corp., 8 N.Y.3d at 716, 840 N.Y.S.2d 302, 871 N.E.2d 1128 (“because none of the other insurance carriers are parties to this declaratory judgment action ... the priority of coverage cannot be determined”). Meanwhile, plaintiff is entitled to the same primary coverage as Yaffa Wigs under the National Policy, and will be throughout the process of this suit. Nothing serves to cut plaintiff's recovery from National in half.
As a result of the foregoing, National is obligated to take over the defense of plaintiff in the underlying action, and to recompense plaintiff for all costs and expenses it outlaid in the defending the underlying action, but only as to those costs and expenses which arose after the date upon which National refused to defend plaintiff, that is, November 16, 2012. See National Union Fire Ins. Co. of Pittsburgh, PA v. Greenwich Ins. Co., 103 A.D.3d 473, 474, 962 N.Y.S.2d 9 (1st Dept 2013) (“[i]n the event of a breach of the insurer's duty to defend, the insured's damages are the expenses reasonably incurred by it in defending the action after the carrier's refusal to do so,” quoting Sucrest Corp. v. Fisher Governor Co., 83 Misc.2d 394, 407, 371 N.Y.S.2d 927 [Sup Ct, N.Y. County 1975], aff'd 56 A.D.2d 564 [1st Dept 1977] ). The costs and expenses expended by plaintiff in defending the underlying action before that date are its own obligation. Id.
Plaintiff was not obligated to provide proof of legal bills and of other expenses on this motion. This is an action for a judicial declaration of plaintiff's rights, not an action for damages.
Plaintiff's motion for a default judgment against Moti and Yaffa is denied. A prima facie case for a default judgment is evidenced by “proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of those defendants' failure to answer or appear ....” Citimortgage, Inc. v. Chow Ming Tung, 126 A.D.3d 841, 843 (2d Dept 2015). Here, assuming the existence of affidavits of service, which are not here to hand, plaintiff has not proven prima facie that it has stated a claim against these parties, because it has been determined here that these parties did obtain the insurance called for under the Lease.
Accordingly, it is
ORDERED that the motion brought by plaintiff Forty Second Associates, Inc. is granted in part and denied in part; and it is further
ADJUDGED and DECLARED that defendant National Fire Insurance Company of Hartford is obligated to defend and indemnify plaintiff Forty Second Associates, Inc. in the underlying action entitled Klein v. Forty Second Associates, LLC, Index No. 23495/11, pending in Supreme Court, Kings County; and it is further
ORDERED that the part of plaintiff's motion which seeks a default judgment against defendants Moti (N.Y.), Inc. and Yaffa Wigs, Inc. is denied.
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