Summary
rejecting effort by primary carrier to recover settlement payment in excess of its policy limits from excess carrier, concluding that payment was voluntary
Summary of this case from Vigilant Ins. Co. v. Travelers Prop. Cas. Co. of Am.Opinion
2014-00857
11-25-2015
GOVERNMENT EMPLOYEES INSURANCE COMPANY, appellant, v. RLI INSURANCE COMPANY, et al., respondents.
Jones Morrison, LLP, Scarsdale, N.Y. (Daniel W. Morrison of counsel), for appellant. Kenney Shelton Liptak Nowak LLP, Buffalo, N.Y. (Timothy E. Delahunt of counsel), for respondent RLI Insurance Company.
Jones Morrison, LLP, Scarsdale, N.Y. (Daniel W. Morrison of counsel), for appellant.
Kenney Shelton Liptak Nowak LLP, Buffalo, N.Y. (Timothy E. Delahunt of counsel), for respondent RLI Insurance Company.
Opinion
In an action for a judgment declaring, inter alia, that the defendant RLI Insurance Company is obligated to indemnify the defendants Rachel E. Freier and Tzvi Freier in an underlying action entitled Bi Bo Chiu v. Malik, commenced in the Supreme Court, Kings County, under Index No. 36894/07, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (J. Murphy, J.), dated September 5, 2013, as granted the motion of the defendant RLI Insurance Company pursuant to CPLR 3211(a) to dismiss the complaint, and denied its cross motion for summary judgment declaring, inter alia, that the defendant RLI Insurance Company is obligated to reimburse it for a certain sum paid in excess of its policy limits to settle the underlying action.
ORDERED that the order is affirmed insofar as appealed from, with costs.
In 2007, the defendant Rachel E. Freier was involved in an automobile accident, in which Bi Bo Chiu, a passenger in one of the vehicles involved in the accident, was injured. Bi Bo Chiu subsequently commenced an action (hereinafter the underlying action) against Rachel E. Freier and the defendant Tzvi Freier, the owner of the car Rachel E. Freier was operating, to recover damages for personal injuries. The Freiers had primary insurance coverage from the plaintiff, Government Employees Insurance Company (hereinafter GEICO), and an umbrella policy from the defendant RLI Insurance Company (hereinafter RLI). GEICO undertook to defend the Freiers in the underlying action, and after RLI disclaimed coverage based upon late notice, GEICO commenced this action for a judgment declaring that RLI was required to indemnify the Freiers in the underlying action.
As the Supreme Court properly concluded, GEICO did not have standing to seek that relief. A party has standing where it has “ ‘an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant's request’ ” (Wells Fargo Bank Minn. N.A., v. Mastropaolo, 42 A.D.3d 239, 242, 837 N.Y.S.2d 247, quoting Caprer v. Nussbaum, 36 A.D.3d 176, 182, 825 N.Y.S.2d 55). Here, it is undisputed that the coverage provided by the RLI policy was excess to GEICO's policy and, thus, RLI's duty to indemnify the Freiers was not triggered until coverage under GEICO's policy was exhausted (see Great N. Ins. Co. v. Mount Vernon Fire Ins. Co., 92 N.Y.2d 682, 687, 685 N.Y.S.2d 411, 708 N.E.2d 167; L & B Estates, LLC v. Allstate Ins., 71 A.D.3d 834, 837, 897 N.Y.S.2d 188). Therefore, GEICO did not stand to benefit from the RLI policy, depriving it of standing to seek a declaration of RLI's duty to indemnify under that policy (cf. RLI Ins. Co. v. Steely, 65 A.D.3d 539, 540, 884 N.Y.S.2d 120; Rael Automatic Sprinkler Co., Inc. v. Schaefer Agency, 52 A.D.3d 670, 673, 861 N.Y.S.2d 100). Accordingly, the court properly granted RLI's motion to dismiss the complaint for lack of standing.
The Supreme Court also properly denied GEICO's cross motion for summary judgment on an unpleaded cause of action for a judgment declaring, inter alia, that RLI was required to reimburse it for $200,000 it paid above its policy limits to settle the underlying action, because GEICO's proof did not support such a cause of action (cf. Town of Putnam Valley v. Sacramone, 16 A.D.3d 669, 669–670, 792 N.Y.S.2d 191; Scalia v. Glielmi, 200 A.D.2d 615, 615–616, 606 N.Y.S.2d 724; Deborah Intl. Beauty v. Quality King Distribs., 175 A.D.2d 791, 793, 573 N.Y.S.2d 189). Specifically, GEICO failed to demonstrate the existence of any duty running from RLI, the excess carrier, to GEICO, the primary insurer, with respect to RLI's coverage determination (cf. Pavia v. State Farm Mut. Auto. Ins. Co., 82 N.Y.2d 445, 452, 605 N.Y.S.2d 208, 626 N.E.2d 24; St. Paul Fire & Mar. Ins. Co. v. United States Fid. & Guar. Co., 43 N.Y.2d 977, 978, 404 N.Y.S.2d 552, 375 N.E.2d 733; Federal Ins. Co. v. North Am. Specialty Ins. Co., 83 A.D.3d 401, 402, 921 N.Y.S.2d 28). Moreover, contrary to GEICO's contention, the doctrine of equitable subrogation cannot be invoked where, as here, “the payments sought to be recovered [we]re voluntary” (Broadway Houston Mack Dev., LLC v. Kohl, 71 A.D.3d 937, 937, 897 N.Y.S.2d 505; see Markel Ins. Co. v. American Guar. & Liab. Ins. Co., 111 A.D.3d 678, 681, 974 N.Y.S.2d 569; Bermuda Trust Co. v. Ameropan Oil Corp., 266 A.D.2d 251, 698 N.Y.S.2d 691; Cohn v. Rothman–Goodman Mgt. Corp., 155 A.D.2d 579, 580, 547 N.Y.S.2d 881; see also Dillon v. U–A Cablevision of Westchester, 100 N.Y.2d 525, 526, 760 N.Y.S.2d 726, 790 N.E.2d 1155).
GEICO's remaining contentions are without merit.