Opinion
# 2019-053-507 Claim No. 120851 Motion No. M-92869
01-18-2019
ROBERT M. KNAB, JR. v. NEW YORK STATE THRUWAY AUTHORITY
LIPSITZ GREEN SCIME CAMBRIA, LLP BY: James T. Scime, Esq. HON. LETITIA JAMES New York State Attorney General BY: Wendy E. Morcio, Esq. Assistant Attorney General
Synopsis
The Third-Party Defendant, an excess insurance carrier, brought a motion to dismiss the third-party claim of the New York State Thruway Authority (NYSTA) following the Court's December 21, 2018 decision which dismissed the declaratory judgment action against the comprehensive general liability (CGL) carrier for the excess policy. The Court denied the excess carrier's contention that the Court of Claims lacked personal jurisdiction to render a declaratory judgment or that the excess carrier had a right to a jury trial or that the Court lacked subject matter jurisdiction. However, the Court granted the motion on the basis that that the CGL carrier for this excess policy had no duty to indemnify the NYSTA.
Case information
| UID: | 2019-053-507 |
| Claimant(s): | ROBERT M. KNAB, JR. |
| Claimant short name: | KNAB |
| Footnote (claimant name) : | |
| Defendant(s): | NEW YORK STATE THRUWAY AUTHORITY |
| Footnote (defendant name) : | |
| Third-party claimant(s): | NEW YORK STATE THRUWAY AUTHORITY |
| Third-party defendant(s): | TRAVELERS INDEMNITY COMPANY, TRAVELERS INSURANCE COMPANY, PHOENIX INSURANCE COMPANY, EVEREST NATIONAL INSURANCE COMPANY |
| Claim number(s): | 120851 |
| Motion number(s): | M-92869 |
| Cross-motion number(s): | |
| Judge: | J. DAVID SAMPSON |
| Claimant's attorney: | LIPSITZ GREEN SCIME CAMBRIA, LLP BY: James T. Scime, Esq. |
| Defendant's attorney: | HON. LETITIA JAMES New York State Attorney General BY: Wendy E. Morcio, Esq. Assistant Attorney General |
| Third-party defendant's attorney: | KENNEY SHELTON LIPTAK NOWAK, LLP Attorneys for Travelers Indemnity Company and Phoenix Insurance Company BY: Richard A. Galbo, Esq. No Appearance KENNEDYS CMK, LLP Attorneys for Everest National Insurance Company BY: Daniel T. Beatty, Esq. |
| Signature date: | January 18, 2019 |
| City: | Buffalo |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
Third-Party Defendant Everest National Insurance Co. (Everest) brings this motion seeking to dismiss the third-party claim in lieu of an answer pursuant to CPLR §§ 3211(a) (2), (5), (7) and (8) on the grounds that this Court lacks personal jurisdiction over Everest and subject matter jurisdiction over the third-party claim, that the third-party claim fails to state a cause of action for declaratory relief, and that documentary evidence provides a complete defense to the claims of Defendant/Third Party Claimant New York State Thruway Authority (NYSTA). The NYSTA opposes this motion and Third-Party Defendant Travelers Indemnity Company and Phoenix Insurance Company (collectively, "Travelers") takes no position. FACTS AND PROCEDURAL BACKGROUND
The underlying claim arises out of an incident that occurred on December 16, 2010 when
claimant Robert M. Knab, Jr. was working in the median of the New York State Thruway in the Town of Westfield, County of Chautauqua and was struck from behind by a vehicle operated by Drew Robertson (Robertson) that had left the highway and traveled into the median. On or about February 24, 2011, a notice of intention to file a claim was served upon the Office of the Attorney General of the State of New York. The claim was commenced on January 30, 2012 and the answer was filed on April 25, 2012. On February 27, 2013, the NYSTA commenced a third-party claim against Travelers and Everest seeking a declaration of coverage under certain policies issued to its insureds, Oakgrove Construction, Inc. (Oakgrove) and Foit-Allbert Associates Architecture, Engineering and Land Surveying, P.C. (Foit-Albert), in connection with a contract identified as TAB 10-15 (D213951), a pavement rehabilitation contract between Milepost 483.0 and 496.0 in the Buffalo Division of the New York State Thruway (Thruway).
A bifurcated trial of this claim on the issue of liability only was held before this Court and on December 13, 2018, the Court issued a Decision finding that the NYSTA violated Labor Law § 241 (6) and Industrial Code regulation 12 NYCRR § 23-1.29 (a) and that this violation was a proximate cause of claimant's accident and resulting injuries. In finding liability against the NYSTA, the Court determined that its liability was the result of the failure of Foit-Albert to install any protective or traffic control devices along that section of the Thruway where claimant was directed to work on the day of the accident. In addition, all claims against the remaining Third-Party Claimants, the State of New York, the Canal Corporation and the Department of Transportation were dismissed and the caption was so amended.
The Decision also dismissed claimant's causes of action for negligence and for a violation of Labor Law § 200. In addition, the Court determined that the NYSTA and the driver of the vehicle, Drew Robertson were both negligent and apportioned 50% liability against the NYSTA and 50% liability against Robertson.
On March 6, 2013, the Notice of Impleader and Third-Party Claim was filed in the Court of Claims. No answer was filed by any of the insurance carriers and in January 2014, Assistant Attorney General Wendy E. Morcio, (AAG Morcio) contacted Travelers' adjuster, Patrick Leathem, as a courtesy to advise that Travelers was in default and had failed to answer or appear. Travelers did not answer but agreed to provide a defense and retain counsel for the NYSTA in the subject claim. Travelers agreement to defend the NYSTA was based upon the existence of a comprehensive general liability policy issued to Oakgrove (Oakgrove CGL policy). In addition, as required by its contract with the NYSTA, Oakgrove obtained an umbrella excess liability policy with Everest (Exhibit G). As a result of Travelers agreement to provide a defense to NYSTA in the subject claim, AAG Morcio agreed to provide Travelers with a stipulation of discontinuance to the third-party claim without prejudice. However, this stipulation of discontinuance was never filed by Travelers in accordance with CPLR § 3217. There is no dispute that the claimant's accident occurred within the work area or zone defined by the contract between the NYSTA and Oakgrove, and that the accident arose on December 16, 2010, a date within the period of coverage provided by the aforementioned Travelers policy and for which Everest had issued an umbrella excess liability policy. ANALYSIS
Referenced to by AAG Morcio at paragraph 4 of her Affirmation and previously attached to Third-Party Claimants' motion papers in the declaratory judgment action as Exhibit H.
AAG Morcio's Affirmation as paragraph 6.
In support of its motion, Everest first asserts that this Court lacks personal jurisdiction as the Court of Claims may not render a declaratory judgment when Everest has a right to a jury trial. The Court finds that this contention is without basis and the case law cited by Everest is inapplicable to the facts of this claim. Court of Claims Act, Section 9 (9-a) provides that:
"To make a declaratory judgment as defined in section three thousand one of the civil practice law and rules with respect to any controversy involving the obligation of an insurer to indemnify or defend a defendant in any action pending in the court of claims, provided that the court shall have no jurisdiction to enter a judgment against an insurer to this subdivision either: (i) for money damages; or (ii) if the insurer would otherwise have a right to a jury trial of the controversy with respect to which the declaratory judgment is sought."
The controlling case on this issue is the Court of Appeals decision in Hartford Acc. & Indem. Co. v Wesolowski, 33 NY2d 169 (1973), which holds that "if there is any ambiguity in the terminology used and if the determination of the intent of the parties depends on the credibility of extrinsic evidence, then such determination is to be made by the jury" (Id. at 172, emphasis added). In the present action, Everest does not contend that an ambiguity exists in the policy issued by them that is applicable to Oakgrove or to the NYSTA and does not assert any specific factual issues that would entitle it to a jury. Accordingly, this Court finds that there is no right to a trial by jury of any issue in this declaratory judgment action and that this Court has personal jurisdiction to make a determination as to whether the NYSTA is entitled to indemnification under the Oakgrove CGL policy and the Everest umbrella excess liability policy.
Everest next asserts that this Court lacks subject matter jurisdiction, alleging that the State has no right to implead a third party who has no claim against the State. In this declaratory judgment action, the State has asserted that it is an additional insured on the Oakgrove CGL policy to which Everest issued an excess liability policy that is to provide coverage above the policy limits of the Oakgrove CGL policy. The NYSTA rightfully asserts that it is also an insured under the excess liability policy and that this policy could potentially be triggered if a damage award exceeds the policy limits of the Oakgrove CGL policy. Once again, the Court finds that the case law cited by Everest either does not stand for the proposition stated or is otherwise inapplicable to the facts. As such, it is the ruling of this Court that the State has a right to bring this declaratory judgment action in the Court of Claims to assert its right to indemnification in that there has been an adverse finding of liability against the State in the underlying claim that was set forth in this Court's Decision of December 13, 2018.
In addressing the substantive allegations in Everest's motion, this Court's Decision of December 13, 2018 held that the NYSTA violated Labor Law § 241 (6), which imposes a nondelegable duty upon owners to provide reasonable and adequate protection and safety to construction workers and that this violation was a proximate cause of claimant's accident and resulting injuries. By this holding, the Court also determined that Foit-Albert was responsible to provide traffic protection and was negligent and that its conduct violated 12 NYCRR § 23-1.29 (a), which resulted in liability upon the NYSTA pursuant to the nondelegable duty of Labor Law § 241 (6). Accordingly, the NYSTA is entitled to contractual indemnification from Foit-Albert in accordance with the terms of the Foit-Albert Agreement and this finding of liability triggers the Travelers and the Phoenix policy issued to Foit-Albert (Foit-Albert CGL policy).
Subsequent to that trial, the NYSTA brought a motion in support of its declaratory action claim seeking an order for conditional indemnification from Travelers and Everest pursuant to Court of Claims Act § 9 (9-a). Travelers opposed this motion and brought a cross motion seeking declaratory relief that it was not obligated to indemnify the NYSTA under the Special Protective and Highway Liability policy (Oakgrove Highway policy) or the Oackgrove CGL policy. This Court granted Travelers' cross motion, in part, holding that Travelers and Phoenix did not have a duty to indemnify the NYSTA under the Oakgrove Highway policy or the Oakgrove CGL policy. In addition, the Court held that as the third-party claim relative to Everest was based upon an excess liability policy issued to Oakgrove to provide excess coverage above that insurance provided in the Oakgrove CGL policy, I granted Travelers cross motion ruling that there was no duty to indemnify the NYSTA and denied the NYSTA's motion for declaratory relief with respect to Everest and held that Everest had no duty to indemnify the NYSTA under the terms of the excess liability policy.
The Court does not agree with the NYSTA's contention that the Court of Appeals decision in Regal Const. Corp. v National Union Fire Co. of Pittsburgh, P.A., 15 NY3d 34 (2010) mandates coverage by Everest in this action. In Regal, the Court of Appeals was asked to determine the obligation of an insurer to defend and indemnify an additional insured for potential liability arising out of the operations of the primary insured. The Fourth Department has already determined as a matter of law in Knab v Robertson, 155 AD3d 1565 (4th Dept 2017) that Oakgrove had suspended operations for the winter shutdown prior to claimant's accident and that they did not have control over the claimant or the work he was performing and did not have control over the work site at the time of claimant's injury and dismissed the Labor Law §§ 200 and 241 (6) and the common law negligence causes of action. In the present claim, it has been held by this Court following the liability trial that the accident arose out of the operations of Foit-Albert, not those of Oakgrove. As previously stated by the Court of Appeals, an insurer's duty to indemnify as opposed to providing a defense is distinctly different as "the duty to pay is determined by the actual basis for the insured's liability to a third person" and not by what us set forth in the allegations of the pleading (Servidone Constr. Corp. v Security Ins. Co. of Hartford, 64 NY2d 419, 424 [1985]). Accordingly, based upon this Court's prior Decision and Order, it is hereby
ORDERED, that Everest's motion to dismiss the third-party claim is granted as this Court's Decision and Order dated December 21, 2018 determined that Travelers had no duty to indemnify the NYSTA pursuant to the Oakgrove CGL policy and the excess liability policy issued by Everest was to provide excess coverage above and beyond the Oakgrove CGL policy and as such, it is hereby
ORDERED, that third-party claim no. 120851 is hereby dismissed against Everest.
All other contentions raised and alternative forms of relief sought in this motion not previously addressed are hereby denied.
January 18, 2019
Buffalo, New York
J. DAVID SAMPSON
Judge of the Court of Claims The following were read and considered by the Court: 1. Notice of Motion and Affirmation of Daniel T. Beatty, Esq., dated September 17, 2018, with annexed Exhibits A-J and Memorandum of Law; and 2. Affirmation in opposition of Assistant Attorney General Wendy E. Morcio, Esq., dated November 7, 2018.