Opinion
# 2021-028-517 Claim No. 135210 Motion No. M-96384 Cross-Motion No. CM-96493
04-29-2021
HOME DEPOT U.S.A., INC, as Assignee v. THE STATE OF NEW YORK
L'ABBATE, BALKAN, COLAVITA & CONTINI, L.L.P BY: John D. McKenna, Esq. HERZFELD & RUBIN P.C. BY: Howard S. Edinburgh, Esq.
Synopsis
Case information
| UID: | 2021-028-517 |
| Claimant(s): | HOME DEPOT U.S.A., INC, as Assignee |
| Claimant short name: | HOME DEPOT |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | The caption of this action has been amended to reflect the only proper defendant. |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 135210 |
| Motion number(s): | M-96384 |
| Cross-motion number(s): | CM-96493 |
| Judge: | RICHARD E. SISE |
| Claimant's attorney: | L'ABBATE, BALKAN, COLAVITA & CONTINI, L.L.P BY: John D. McKenna, Esq. |
| Defendant's attorney: | HERZFELD & RUBIN P.C. BY: Howard S. Edinburgh, Esq. |
| Third-party defendant's attorney: | |
| Signature date: | April 29, 2021 |
| City: | Albany |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
The following papers were read on Claimant's motion, and Defendant's cross-motion, for summary judgment:
1. Notice of Motion filed February 24, 2021;
2. Affirmation of Ronan P. Doherty filed February 24, 2021 with Exhibits A-AB annexed;
3. Affidavit of Paul J. Kaplan filed February 24, 2021 with Exhibits A-B annexed;
4. Memorandum of Law filed February 24, 2021;
5. Affirmation of Howard S. Edinburgh filed February 24, 2021 with Exhibits A-N annexed;
6. Memorandum of Law filed February 24, 2021;
7. Notice of Cross-Motion filed February 24, 2021;
8. Affirmation of Howard S. Edinburgh filed February 24, 2021 with Exhibits A-N annexed;
9. Memorandum of Law filed February 24, 2021;
10. Letter of Ronan P. Doherty filed March 16, 2021 with Exhibit A annexed;
11. Affirmation of Ronan P. Doherty filed March 16, 2021 with Exhibits AC-AE annexed;
12. Memorandum of Law filed March 16, 2021;
13. Memorandum of Law filed March 23, 2021;
14. Affirmation of Howard S. Edinburgh filed March 23, 2021 with Exhibits O-P annexed.
Filed papers: Claim, Answer, Amended Claim, Amended Answer
In 2016 Daniel Rivera (Rivera) was injured while working as an employee of Bryan's Home Improvement Corp. (BHIC) on a roofing construction project in Yonkers, Westchester County. As a result of the injuries he suffered Rivera brought an action in federal court against Home Depot U.S.A., Inc. (Home Depot), the project's general contractor. In turn Home Depot commenced a third-party action against BHIC seeking contractual and common law indemnification. Rivera was awarded summary judgment against Home Depot and Home Depot was awarded summary judgment on its claims for contractual and common law indemnification against BHIC. On appeal by BHIC, the Second Circuit affirmed the finding of the District Court that BHIC was liable to Home Depot on the cause of action for contractual indemnification. The appellate court, however, declined to address the District Court's finding that Rivera had, as a matter of law, suffered a grave injury; the determination which opened the door to the award of common law indemnification (see Fleming v Graham, 10 NY3d 296 [2008] [injured party's employer may be liable to primary defendant for common law indemnification where injured employee suffers grave injury]). Thereafter, Home Depot satisfied Rivera's judgment. When the State Insurance Fund (SIF), who had issued an Employer's Liability insurance policy to BHIC, refused to satisfy Home Depot's judgment against BHIC, Home Depot took an assignment from BHIC of any possible claims against SIF. The assignment forms the basis for the claim in this court and Home Depot has now moved for summary judgment on causes of action for breach of contract and specific performance. SIF has cross-moved for summary judgment dismissing those causes of action.
"A party moving for summary judgment must demonstrate that the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in the moving party's favor (CPLR 3212 [b]). Thus, the 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 demonstrate the absence of any material issues of fact. This burden is a heavy one and on a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party. If the moving party meets this burden, the burden then shifts to the non-moving party to establish the existence of material issues of fact which require a trial of the action" (Jacobsen v NY City Health & Hosps. Corp., 22 NY3d 824, 833 [2014] [citations and internal quotation marks omitted]).
Home Depot has submitted a copy of defendant's amended answer in which SIF admits that it "issued an Employer's Liability insurance policy to [BHIC] in effect at the time of the Rivera accident." The relevant policy provision provides that:
"[SIF] will pay all sums [BHIC] legally must pay as damages because of injury to your employees, provided the bodily injury is covered by this Employer's Liability Insurance.
The damages we will pay, where recovery is permitted by law, include damages:
1. for which you are liable to a third party by reason of a claim or suit against you by that third party to recover the damages claimed against such third party as a result of bodily injury to your employee;"
Home Depot has also submitted orders of the District Court establishing that Home Depot had violated New York Labor Law §§ 240 (1) and 241 (6), that Rivera had suffered an injury and granting Home Depot's motion for indemnification against BHIC. In addition, Home Depot has established that the Second Circuit Court of Appeals affirmed the judgments of the District Court. Those judgments establish that BHIC, the insured under the Employer's Liability policy issued by SIF, is liable to Home Depot, a third party, by reason of a claim against the third party for damages for bodily injury suffered by an employee of BHIC. Inasmuch as BHIC is liable, under the federal court judgment, to pay damages to Home Depot for bodily injury suffered by an employee of BHIC, the polcy provision relied on by Home Depot applies. Furthermore, insofar as SIF has refused to pay the judgment, it is in breach of the provision.
In opposing Home Depot's motion for summary judgment, and in support of its own motion, SIF relies on an exclusion provision in the policy. The provision relied on by SIF reads:
"C. Exclusions
This insurance does not cover:
1. liability assumed under a contract."
"In an insurance coverage case, the insurer bears the burden of establishing that the claimed policy exclusion defeats the insured's claim to coverage by demonstrating that the exclusion relied upon is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case" (Valley Forge Ins. Co. v ACE American Ins. Co., 160 AD3d 905, 907 [2d Dept 2018] [citations and quotation marks omitted]). Neither party argues that the provision is unclear or in any way ambiguous. However, the parties disagree as to whether, given the rulings in the underlying federal litigation, the exclusion applies. SIF takes the position that because the Second Circuit failed to affirm the ruling of the District Court, with respect to the question of whether Rivera suffered a grave injury, there is no collateral estoppel effect to the District Court determination on that issue.
Under New York law "collateral estoppel does not prevent relitigation of a ruling that was an alternative basis for a trial-level decision, where an appellate court affirmed the decision without addressing that ruling" (Tydings v Greenfield, Stein & Senior, LLP, 11 NY3d 195, 197 [2008]; Franklin Dev. Co., Inc. v Atlantic Mut. Ins. Co., 60 AD3d 897, 899 [2d Dept 2009]). The rule in the federal courts is the same (Niagara Mohawk Power Corp. v Tonawanda Band of Seneca Indians, 94 F3d 747, 754 [2d Cir 1996] ["It is a well-established principle of federal law that if an appellate court considers only one of a lower court's alternative bases for its holding, affirming the judgment without reaching the alternative bases, only the basis that is actually considered can have any preclusive effect in subsequent litigation"). Inasmuch as the District Court's finding that BHIC was liable to Home Depot under principles of common law indemnity was an alternate basis for finding indemnity and was not addressed by the appellate court, collateral estoppel does not bar relitigation of that question in this action. Claimant's argument that the District Court finding of a grave injury is binding under the law of the case doctrine is without merit as that doctrine "applies only to legal determinations that were necessarily resolved on the merits in [a] prior decision, and to the same questions presented in the same case" (Foley v Foley, 190 AD3d 953, 954-955 [2d Dept 2021] [citations and internal quotations omitted][emphasis supplied]). However, to the extent that SIF offers the further argument that as a result, the exclusion does apply, and SIF is relieved of any obligation to indemnify BHIC, the conclusion is without merit.
Merchants Mut. Ins. Co. v New York State Ins. Fund (85 AD3d 1686 [4th Dept 2011]) involved circumstances not unlike those involved here. In Merchants the underlying action was based on a claim for wrongful death brought under the Labor Law against the general contractor and property owner. Ultimately, a settlement was reached but not before the third-party plaintiff/general contractor had been awarded summary judgment on its claim for contractual indemnification against the subcontractor who employed plaintiff's decedent. In the subsequent action by Merchants against SIF, Merchants sought to recover funds paid in the underlying action under an employer's liability policy issued by SIF to the subcontractor. That policy, like the one here, contained an exclusion for liability assumed under a contract. On appeal from a decision of the trial court awarding Merchants summary judgment, the Appellate Division affirmed. The court found that although the general contractor was granted summary judgment on its contractual indemnification cause of action against the subcontractor, the general contractor's common-law indemnification cause of action in that action was still viable at the time of the settlement. The court then concluded that "[t]he fact that [the general contractor's] recovery against [the subcontractor] could have been based upon a contract of indemnity does not preclude the existence also of a common-law right to indemnity" (Merchants at 1687 [citation and quotation marks omitted]).
That the question of whether a right to common law indemnification can be litigated in a separate action is further illustrated by American Home Assur. Co. v D.P. Consulting Corp. (115 AD3d 778 [2d Dept 2014]). There, in a declaratory judgment action brought by an insurer, the court found that a question of fact existed as to whether there was any possible factual or legal basis on which the insurer might eventually be obligated to indemnify the respondent in an underlying third-party action for common law indemnification. Other declaratory judgment actions further illustrate that litigation apart from the underlying personal injury action is available to determine whether an insured may be liable under principles of common law indemnification (National Union Fire Ins. Co. of Pittsburgh, PA v 221-223 W. 82 Owners Corp., 120 AD3d 1140, 1140-1141 [1st Dept 2014] [summary judgment granted to insurer]; Liberty Mut. Ins. Co. v Insurance Co. of the State of Pa., 43 AD3d 666, 667-668 [1st Dept 2007] [summary judgment to insurer denied]). Thus, the fact that there is no collateral estoppel effect to the District Court finding does not preclude the possibility that common law indemnity may be established here. However, neither party has offered evidentiary proof on the question of whether Rivera suffered a grave injury and therefore, summary judgment on the breach of contract cause of action is not appropriate.
SIF, is however, entitled to summary judgment on the cause of action for specific performance. Where, as here, there is an adequate remedy at law (i.e. money damages), specific performance is not available as a remedy for breach of contract (Alpha Auto Brokers v Continental Ins. Co., 286 AD2d 309 [2d Dept 2001]).
Accordingly, it is
ORDERED, that the motion by claimant for summary judgment is denied and it is further
ORDERED, that the motion by defendant for summary judgment is granted with respect to the cause of action for specific performance and is in all other respects denied.
April 29, 2021
Albany, New York
RICHARD E. SISE
Judge of the Court of Claims