Opinion
103751/11
10-13-2015
Leon D. Dematteis Construction Corporation and QBE INSURANCE COMPANY, Plaintiffs, v. Utica National Assurance Company, Defendant.
Marcia K. Raicus, Esq. Smith Mazure Director Wilkins Young & Yagerman, P.C. Attorneys for Plaintiffs 111 John Street New York, NY 10038 Sherri N. Pavloff, Esq. Farber Brocks & Zane L.L.P. Attorneys for Defendant 400 Garden City Plaza, Suite 100 Garden City, NY 11530
Marcia K. Raicus, Esq.
Smith Mazure Director Wilkins Young & Yagerman, P.C.
Attorneys for Plaintiffs
111 John Street
New York, NY 10038
Sherri N. Pavloff, Esq.
Farber Brocks & Zane L.L.P.
Attorneys for Defendant
400 Garden City Plaza, Suite 100
Garden City, NY 11530
Kathryn E. Freed, J.
RECITATION, AS REQUIRED BY CPLR 2219 (a), OF THE PAPERS CONSIDERED IN THE REVIEW OF THIS MOTION:
PAPERSNUMBERED
NOTICE OF MOTION AND AFFIDAVITS ANNEXED....................1, 2 (Exs. A-E) MOVANT'S MEMORANDUM OF LAW...........................................3 AFFIRMATION IN OPPOSITION TO MOTION...............................4 (Exs. A-N) REPLY AFFIRMATION.......................................................................5 MEMORANDUM OF LAW IN OPPOSITION TO MOTION.............6 NOTICE OF CROSS MOTION AND AFFIDAVITS ANNEXED......7, 8 (Exs. A-N) CROSS MOVANT'S MEMORANDUM OF LAW..............................9 AFFIRMATION IN OPPOSITION TO CROSS MOTION..................10
UPON THE FOREGOING CITED PAPERS, THIS DECISION/ORDER ON THE MOTION IS AS FOLLOWS:
In this declaratory judgment action, defendant Utica National Assurance Company ("Utica") moves, pursuant to CPLR 2221, to reargue its prior motion for summary judgment, and upon reargument, moves, pursuant to CPLR 3212, for an order granting summary judgment in its favor and declaring, pursuant to CPLR 3001, that Utica has no duty to defend or indemnify plaintiff Leon D. DeMatteis Construction Corporation ("DeMatteis") in connection with the underlying action of Brown v 1765 First Associates, LLC, et al., currently pending in Supreme Court, Nassau County under index number 7085/11 ("the Brown action"), along with such other and further relief as this Court deems proper.
DeMatteis and QBE Insurance Company ("QBE") cross-move for an order, pursuant to CPLR 2221, clarifying this Court's prior order dated June 9, 2015 and entered June 24, 2015, to specifically state that the additional insured coverage that DeMatteis is entitled to under the commercial general liability insurance policy issued by Utica to Spieler & Ricca Electrical Co. Inc. ("Spieler"), Policy No. CPP400334, is primary and non-contributory to the insurance policy that QBE issued to DeMatteis, Policy No. HB0049605, along with such other and further relief as this Court deems proper.
After oral argument, a review of the papers presented, and all relevant statutes and case law, this Court denies Utica's motion and denies DeMatteis' and QBE's cross motion.
FACTUAL AND PROCEDURAL BACKGROUND:
In the Brown action, plaintiff, an employee of Spieler, alleges that he was injured on October 23, 2008 while working as an electrician at a construction project at 333 East 91st Street, in the County, City and State of New York ("the premises"). The premises were allegedly owned by 1765 First Associates, LLC ("First Associates"). Ex. A to Ex. B. First Associates retained DeMatteis as the construction manager for the project and DeMatteis hired Spieler as the electrical subcontractor. See id. Brown was allegedly injured when he slipped and fell on sand, gravel, and other debris on an interior stairwell at the cellar level of the premises. The Brown action was commenced against DeMatteis and First Associates by the filing of a summons and verified complaint on or about January 4, 2011. Id. The underlying action was originally brought in this Court under index number 100086/11, DeMatteis moved for a change of venue, and venue was transferred to Supreme Court, Nassau County. DeMatteis brought a third-party action against Spieler for contractual indemnification and breach of contract by filing a third- party summons and complaint on or about February 11, 201l. Ex. C to Ex. B.
Unless otherwise noted, all references are to the exhibits annexed to Utica's motion.
Article 17 of the contract between DeMatteis and Spieler required Spieler to indemnify and hold DeMatteis harmless from any liability for personal injury or property damage in connection with construction work performed at the premises. Ex. E to Ex. B. Article 22 of the contract, as well as the Insurance Requirements addendum (Exhibit H thereto), required Spieler to obtain a commercial general liability ("CGL") policy with minimum bodily injury coverage per occurrence in the amount of $10,000,000, naming DeMatteis and First Associates as additional insureds. Ex. E to Ex. B. The Insurance Requirements addendum also provided that "insurance of [Spieler] is primary insurance to [DeMatteis'] insurance which is excess." Id. (Ex. H thereto).
DeMatteis had a primary insurance policy with QBE under policy number HB0049605. Ex. F to Ex. B. QBE provided defense and indemnity for DeMatteis in the underlying action. See id. Spieler procured the required coverage, pursuant to its contract with DeMatteis, from Utica under policy number CPP400334. Ex. G to Ex. B. A certificate of insurance listed DeMatteis and First Associates as additional insureds on Spieler's CGL policy. Ex. H to Ex. B.
Brown, a journeyman electrician who was the shop steward, was injured at the premises on October 23, 2008 and left the premises unassisted, without any emergency medical response services. Ex. A to Ex. B; Ex. Z to Ex. B, at 36-38, 41-43; Ex. BB to Ex. B, at 12-13, 50. Brown never discussed his injury with anyone other than his foreman, Robert Newberry, who did not personally witness the alleged accident. Ex. Z to Ex. B, at 185; Ex. BB to Ex. B, at 55-57. Newberry completed a Foreman's 24-Hour Accident Report and C-2 Report (Ex. S to Ex. B) on October 24, 2008, and sent the reports only to Spieler and his union, Local 3. Ex. BB to Ex. B, at 81, 88. Newberry had no knowledge of whether Spieler supplied the accident report (Ex. S to Ex. B) to anyone. Ex. BB to Ex. B, at 82. Newberry only gave a statement to Brown's attorney regarding the underlying injury. Id., at 94.
Anthony Corrado, DeMatteis' Project Superintendent at the premises, testified at a deposition on July 18, 2014, on behalf of that entity. Ex. CC to Ex. B, at 11. He stated that DeMatteis was the Construction Manager at the premises, not the general contractor. Id., at 22. One of Corrado's responsibilities was to report the occurrence of any accidents on the premises to DeMatteis, but it was not his responsibility to question the foremen of different subcontractors to determine whether one of the subcontractors' employees had been involved in an accident. Id., at 23-24. Instead, it was the responsibility of the subcontractors' foremen to report, at the weekly meetings of the foremen, any accidents that occurred on the premises. Id., at 24. A subcontractor's foreman was supposed to notify DeMatteis of an accident within 24 hours and issue a written accident report. Id., at 63-64. Corrado first learned about Brown's October 23, 2008 injury when he was "notified to appear for deposition" and Corrado first saw the Spieler Foreman's 24-Hour Accident Report (Ex. S to Ex. B) when it was shown to him at his deposition, which was after Brown's deposition of July 25, 2012. Ex. CC to Ex. B, at 37-38; Ex. U to Ex. B. Additionally, John Marino, DeMatteis' Labor Foreman, testified that he had never seen the Spieler Foreman's 24-Hour Accident Report (Ex. S to Ex. B) prior to his deposition held on September 24, 2014. Ex. DD to Ex. B, at 20.
DeMatteis maintained that it first received notice of the underlying injury on November 23, 2010, more than two years after the underlying injury occurred. Exs. R, S to Ex. B. That day, DeMatteis received a letter from Brown's counsel in the underlying action, dated November 18, 2010, which alerted DeMatteis as to Brown's injury. Ex. R to Ex. B. On that same date, DeMatteis sent a letter to its insurance broker, Serres, Visone & Rice, to notify its insurance carrier of Brown's injury, which included the letter received from Brown's counsel (Ex. R to Ex. B), a copy of Spieler's certificate of insurance, an accident report from Spieler dated October 23, 2008, and Spieler's Foreman's 24-Hour Accident Report dated October 24, 2008. Ex. S to Ex. B. The fax imprint on Spieler's C-2 Accident Report and Foreman's 24-Hour Accident Report indicate that they were sent to DeMatteis on November 23, 2010. Ex. T to Ex. B. DeMatteis tendered to Utica on December 3, 2010 regarding Brown's injuries. Ex. U to Ex. B.
Fran Gorecki, Utica's Senior Claims Specialist, was deposed on behalf of that entity in this action on August 12, 2014. Ex. EE to Ex. B, at 16. Gorecki's role as Senior Claims Specialist entailed reviewing claims conducted by the Claims Specialists on her team, Terry Sprung and Deborah Hickson. Id., at 16. Gorecki was notified of DeMatteis' claim for coverage as an additional insured under the policy issued to Spieler when the December 3, 2010 tender letter (Ex. U to Ex. B) was received. Ex. EE to Ex. B, at 17, 23. The December 3, 2010 tender letter (Ex. U to Ex. B) was then forwarded to Utica's counsel. Ex. EE to Ex. B, at 23. Gorecki recalled that Utica concluded DeMatteis did not qualify as an additional insured and that an issue of late notice existed. Id., at 25. Spieler did not tender to Utica for coverage for Brown's October 23, 2008 injury. Id., at 30. As a result, Utica concluded that coverage was denied to DeMatteis as an additional insured based upon the date of the C-2 Employer's Accident Report (Ex. S to Ex. B), October 24, 2008. Ex. EE to Ex. B, at 36-38.
In a December 30, 2010 letter to DeMatteis, Utica disclaimed coverage on the grounds that DeMatteis failed to timely comply with the notice condition precedent to receive coverage and, further, that even if DeMatteis qualified as an additional insured under Utica's policy, Brown's injury did not arise out of Spieler's acts on the premises. Ex. V to Ex. B. In regard to the notice condition, Utica's letter highlighted paragraph 15 of Endorsement 8-E-2737, edition 11-2000, page 7 of 9, entitled "DUTIES IN THE EVENT OF OCCURRENCE, OFFENSE, CLAIM OR SUIT" that states in pertinent part: Paragraph 2. under SECTION IV - COMMERCIAL LIABILITY CONDITIONS is replaced by the following: a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include:
(1) How, when and where the "occurrence" or offense took place;
(2) The names and addresses of any injured persons and witnesses;and (3) The nature and location of any injury or damage arising out ofthe "occurrence" or offense.
This paragraph a. applies only if one of the following knows of the"occurrence" or offense:
(1) You;
(2) A partner or member, if you are a partnership or joint venture;
(3) A member or manager, if you are a limited liability company;or (4) An "executive officer" or insurance manager, if you are an organization other than a partnership, joint venture or limited liability company. b. If a claim is made or "suit" is brought against any insured, you must: (1) Immediately record the specifics of the claim or "suit" and thedate received; and
(2) Notify us as soon as practicable. This paragraph b. will be considered to have been violated only if the violation occurs after the claim or "suit" is known to:
(1) You;
(2) A partner or member, if you are a partnership or joint venture;
(3) A member or manager, if you are a limited liability company;or
(4) An "executive officer" or insurance manager, if you are an organization other than a partnership, joint venture or limitedliability company. c. You and any other involved insured must:
(1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit";
(2) Authorize us to obtain records and other information;
(3) Cooperate with us in the investigation, or settlement of the claim or defense against the "suit"; and
(4) Assist us, upon our request, in the enforcement of any right against any person or organization that may be liable to the insured because of injury or damage to which this insurance may also apply. Ex. V to Ex. B, at 6-7; Ex. G to Ex. B.
With respect to Utica's possible coverage of DeMatteis as an additional insured, Utica quoted paragraph 11 of Endorsement 8-E-2737, edition 11-2000, pages 5 through 7 of 9, entitled "ADDITIONAL INSUREDS - BY CONTRACT, AGREEMENT OR PERMIT - INCLUDING LESSOR OF LEASED EQUIPMENT, OWNER OF LEASED LAND, MANAGERS OR LESSORS OF PREMISES, ENGINEERS, ARCHITECTS AND SURVEYORS AND VENDORS" that states, in relevant part, that:
The following is added to SECTION II - WHO IS AN INSURED:
a. Additional Insureds - By Contract, Agreement or Permit
(1) Any person or organization with whom you have entered into awritten contract, agreement or permit requiring you to provide insurance such as is afforded by this Commercial General Liability Coverage Form will be an additional insured, but only:
(a) To the extent that such additional insured is held liable for your acts or omissions arising out of and in the course of ongoing operations performed by you or your subcontractors for such additional insured; or
(b) With respect to property owned or used by, or rented or leased to, you.
The insurance afforded any additional insured under this paragraph 11.a.(1) will be subject to all applicable exclusions or limitations described in paragraphs 11.b.(1), (2), (3) and (4) and in 11.c.(1), (2), (3), (4), (5) and (6) below.
(2) Such insurance as is provided by paragraph 11.a.(1) for any additional insured will be primary, if so required by the written contract, agreement or permit.
Any other insurance available to such person or organization shall be excess over this insurance. . . .
This insurance does not apply to:
(1) The independent acts or omissions of such additional insured.
(2) Any liability arising from injury or damage in connection with acontract or agreement executed or permit issued subsequent to:
(a) The occurrence of any "bodily injury" or "property damage"; or
(b) The commission of any offense which caused "personal injury" or "advertising injury." Ex. V to Ex. B, at 2-4; Ex. G to Ex. B.
DeMatteis' daily construction reports from October through December, 2008 reflected that it was responsible for cleaning up the premises on a daily basis and listed the specific work of each different subcontractor working at the premises. Exs. W, X, Y to Ex. B. Spieler's employees, such as Brown, performed work in the stairway from the basement to the first floor, which included the installation of streamers and temporary lighting in the stairway at issue. Ex. Z to Ex. B, at 15, 22, 26; Ex. BB to Ex. B, at 29, 33-34, 76. Brown worked in the basement on the date of the accident and intended to go up the stairway to obtain materials used for temporary lighting. Ex. AA to Ex. B, at 19-22. During the ten months that he worked at the premises, Brown made multiple trips throughout the day from the basement to the first floor, areas in which Spieler performed work. Ex. AA to Ex. B, at 21-22, 105; Ex. BB to Ex. B, at 76. Brown was unsure whether Spieler performed any concrete work in the basement during that time. Ex. Z to Ex. B, at 183.
Plaintiffs commenced the within declaratory judgment action by filing the summons and verified complaint on or about March 17, 2011. Ex. I to Ex. B. Issue was joined by Utica when it interposed its verified answer on June 2, 2011. Ex. J to Ex. B. An amended summons and verified complaint was filed on July 22, 2011. Ex. L to Ex. B. On August 31, 2011, Utica filed a verified answer to the amended complaint, which asserted affirmative defenses including, inter alia, that plaintiffs failed to comply with the notice requirements in Utica's insurance policy and that plaintiffs did not fall within the provisions of the additional insured endorsement contained in Utica's policy. Ex. M to Ex. B. Utica's amended verified answer also contained counterclaims against DeMatteis and sought a judgment, pursuant to CPLR 3001, declaring that it had no coverage obligations with respect to the Brown action because (1) DeMatteis was not an insured or an additional insured of Utica at the time of the alleged accident; and (2) DeMatteis failed to comply with the notice provision requiring timely notice to Utica of an occurrence or claim, as a condition precedent to coverage. Ex. M to Ex. B. Utica also raised a counterclaim against QBE and requested a declaratory judgment, pursuant to CPLR 3001, that (1) QBE issued one or more insurance policies that listed DeMatteis as an insured or additional insured; (2) Utica's policy was in excess of the policy issued by QBE; or alternatively, (3) QBE and Utica were co-insurers subject to the insurance clauses of each other's policies. Ex. M to Ex. B.
On November 13, 2014, plaintiffs filed a note of issue and certificate of readiness. Ex. Q to Ex. B.
On or about December 17, 2014, DeMatteis and QBE moved for an order granting summary judgment and dismissing all claims against them, maintaining that DeMatteis complied with the notice provisions of Utica's insurance policy and that DeMatteis qualified as an additional insured under Utica's policy. Ex. B. Plaintiffs also sought judgment declaring that Utica owed plaintiffs defense and indemnification in the Brown action. Id. On or about January 9, 2015, Utica cross-moved for an order granting summary judgment declaring that Utica had no duty to defend or indemnify DeMatteis in connection with the Brown action, denying plaintiffs' motion for summary judgment, and, in effect, sought dismissal of the complaint. Ex. C.
By order dated June 9, 2015 and entered June 24, 2015, this Court granted plaintiffs' motion for summary judgment and a declaratory judgment in its entirety and denied Utica's cross motion, holding, inter alia, that:
[T]he application of the "additional insured" endorsement in the Utica policy applies to DeMatteis. The additional insured endorsement at issue here provides that DeMatteis is an additional insured under the CGL policy issued by Utica to Spieler "only [t]o the extent that [DeMatteis] is held liable for [Spieler's] acts or omissions arising out of and in the course of ongoing operations performed by [Spieler]." Ex. G. The interpretation of this phrase is dependent upon the interpretation of the words "arising out of" as stated in the policy. New York courts have consistently applied a broad interpretation of these words in the context of contractors claiming additional insured coverage under their subcontractor's policies, construing them to mean " originating from, incident to, or having connection with.'" Regal Constr. Corp. v Nat'l Union Fire Ins. Co. Of Pittsburgh, PA, 15 NY3d 34, 38 (2010), quoting Maroney v NY Cent. Mut. Fire Ins. Co., 5 NY3d 467, 472 (2005). "It requires only that there be some causal relationship between the injury and the risk for which coverage is provided.'" Id., quoting Maroney, supra.
Ex. A, at 16 (alterations in original). This Court went on to conclude that DeMatteis was an additional insured under the Utica policy, stating that:
Here, similar to the facts in Regal, Spieler's employee, Brown, was walking up a set of stairs on the premises to obtain materials required to perform his job when he slipped and fell on debris in the stairway. Although Utica contends that Brown's injury did not arise from Spieler's electrical work, but rather that it was DeMatteis' employees who failed to clear the debris on the stairway on which Brown slipped, the focus of the inquiry in determining whether Utica is required to provide coverage is, as noted above, on the general nature of the operation in which plaintiff was engaged at the time of the alleged incident. See Regal Constr. Corp., 15 NY3d supra at 38. Given the foregoing, DeMatteis need only show that Brown's October 23, 2008 injury originated, was incident to, or connected with Spieler's operations for DeMatteis. Because Spieler had a contractual obligation to clear debris from its work area (Raicus Reply Aff. Ex. J, ¶ 19), and DeMatteis also had a duty to clean up any debris left on the premises, DeMatteis could therefore be held liable for Spieler's omission of its contractual duty to clean up any such debris in its work area. Accordingly, the injury "arose out of" Spieler's operations and fell within the scope of the additional insured endorsement of Utica's policy. Even if, as Utica claims, Brown's injury may have been caused by a subcontractor other than Spieler, and Spieler was not liable, this is irrelevant in considering whether DeMatteis is an additional insured under Utica's policy given that Brown, a Spieler employee, was injured in furtherance of Spieler's work at the site. Id., at 17. POSITIONS OF THE PARTIES :
Utica now moves, pursuant to CPLR 2221, for reargument of its prior motion for summary judgment on the ground that this Court overlooked and misapprehended both the facts and the law as related to the language of the additional insured endorsement contained within its policy. Upon reargument, Utica seeks an order, pursuant to CPLR 3212, for summary judgment and a declaration, pursuant to 3001, that Utica has no duty to defend or indemnify DeMateis in connection with the Brown action. Specifically, Utica asserts that this Court misread the language of the additional insured endorsement, ignoring some of the key language therein and mistakenly finding that the endorsement was identical to other, broader additional insured endorsements, and that this Court held only one part of the endorsement was important and ignored the rest. Utica first maintains that this Court ignored the language in the endorsement that "[t]his insurance does not apply to: (1) [t]he independent acts or omissions of such additional insured," and because Brown was injured due to DeMatteis' independent omission of failing to clean up the sand or gravel on which he fell, it is not an additional insured under the Utica policy. Second, Utica argues that this Court must first conclude that DeMatteis is liable for Spieler's acts or omissions before it can construe the phrase "arising out of" to determine whether DeMatteis is an additional insured under the Utica policy. Utica asserts that this Court's conclusion that the injury must merely be related to the insured's work misreads the policy because it ignores the fact that liability must be first be imposed and that the named insured must be engaged in ongoing operations for the additional insured. Third, Utica argues that the phrase "arising out of" applies to the insured's acts or omissions and not to the injury itself.
In opposition to Utica's motion, plaintiffs argue that the instant motion does not meet the criteria for a motion to reargue, pursuant to CPLR 2221, because this Court did not overlook or misapprehend any issue of fact or law relevant to the determination of the prior motion. Plaintiffs also assert that Utica's motion for leave to reargue only addresses one of its coverage defenses, and ignores its "late notice" defense. Additionally, plaintiffs note that Utica does not seek reargument of this Court's grant of summary judgment to plaintiffs and only seeks reargument in regard to this Court's denial of Utica's motion for summary judgment, such that this Court's grant of summary judgment to plaintiffs should not be disturbed. Plaintiffs further argue that this Court's determination of whether DeMatteis is an additional insured does not require a finding of liability or negligence by the primary insured based on the controlling law. Next, plaintiffs assert that, despite Utica's assertion that Brown's injuries did not arise from Spieler's ongoing operations performed for DeMatteis pursuant to the trade contract, the determination that a claim arose from a contractor's ongoing operations instead does not require that the claim arose contemporaneously and within the same exact location of where the contractor was performing its work. Last, plaintiffs argue that Utica cannot establish its prima facie entitlement to judgment as a matter of law on the basis of its speculative argument that coverage might be excluded due to a finding of liability of DeMatteis for its independent acts or omissions since speculation cannot serve as the basis for summary judgment. The remainder of plaintiffs' arguments in opposition are substantially identical to those raised in their underlying motion papers.
In their cross motion, plaintiffs move, pursuant to CPLR 2221, seeking clarification of this Court's prior order in the within action, to specifically clarify that Utica's policy is primary insurance to DeMatteis' insurance policy with QBE, which is excess. Plaintiffs rely on the language in "Section II - Who Is An Insured" of Utica's policy, which states that "[s]uch insurance as is provided . . . for any additional insured will be primary, if so required by the written contract, agreement or permit. Any other insurance available to such person or organization shall be excess over this insurance." Ex. G to Ex. B, at II.a.2. Plaintiffs argue that the unambiguous terms of the trade contract and the additional insured endorsement establish that the Utica policy coverage is primary and non-contributory and that the controlling law requires the literal interpretation of the contractual terms.
In opposition to plaintiffs' cross motion, Utica argues that plaintiffs have not established in their motion that reargument or modification of this Court's prior order is warranted for several reasons. First, plaintiffs do not demonstrate that the absence of any discussion of the issue of primacy of coverage from this Court's decision was a mistake or something overlooked by this Court. Second, plaintiffs never asked for relief in the form of a declaration that the Utica policy was primary insurance over the QBE policy and never discussed the same in their underlying motion papers. Utica urges that plaintiffs now seek this as new relief in their instant cross motion, after the prior motion has already been decided, and thus their cross motion must be denied, pursuant to CPLR 2221. Utica then reiterates its position in its instant motion that plaintiffs are not entitled to the relief they seek because DeMatteis is not an additional insured under the Utica policy. LEGAL CONSIDERATIONS :
A motion for leave to reargue, pursuant to CPLR 2221(d), "shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion." Such motion "is addressed to the sound discretion of the court." William P. Pahl Equip. Corp. v Kassis, 182 AD2d 22 (1st Dept 1992), lv dismissed, 80 NY2d 1005 (1992), rearg denied, 81 NY2d 782 (1993). Reargument is not designed or intended to afford the unsuccessful party successive opportunities to reargue issues previously decided (see Pro Brokerage v Home Ins. Co., 99 AD2d 971 [1st Dept 1984]), or to present arguments different from those originally asserted. See William P. Pahl Equip. Corp., 182 AD2d at 27; Foley v Roche, 68 AD2d 558 (1st Dept 1979); Amato v Lord & Taylor, Inc., 10 AD3d 374 (2d Dept 2004). On reargument, the court's attention must be drawn to any controlling fact or applicable principle of law which was misconstrued or overlooked. See Macklowe v Browning School, 80 AD2d 790 (1st Dept 1981). Professor David Siegel succinctly instructed that a motion to reargue "is based on no new proof; it seeks to convince the court that it was wrong and ought to change its mind." Siegel, NY Prac § 254, at 449 (5th ed 2011).
Utica's Motion For Reargument
Utica's motion for reargument of its prior motion for summary judgment is denied in its entirety.
Despite Utica's insistence that this Court must find liability on the part of the additional insured premised upon acts or omissions of the named insured before its coverage obligation can be triggered, that is not the position taken by the Appellate Division, First Department. The First Department, in Burlington Insurance Co. v NYC Transit Authority, 2015 NY App Div LEXIS 6349 (1st Dept 2015), recently construed an additional insured endorsement that states, in pertinent part, that an additional insured is entitled to coverage "only with respect to liability for bodily injury, ... caused, in whole or in part, by [the named insured's] acts or omissions ... [i]n the performance of [the named insured's] ongoing operations[.]" Id., at *2 (alterations in original) (internal quotation marks omitted). The First Department stated:
This Court's most recent precedents have construed additional insured endorsements containing substantially the same "acts and omissions" language as do the endorsements at issue here as providing additional insured coverage where there is a causal link between the named insured's conduct and the injury, regardless of whether the named insured was negligent or otherwise at fault for causing the accident. Adhering to these precedents, we hold that [appellants] were entitled to coverage as additional insureds in the underlying action under the subject insurance policy. Id., at *2-3.
In its reasoning, the First Department explained the following:
In at least three decisions issued within the three years before this appeal was argued (although not cited by the parties), this Court has held that, where a policy endorsement (like the ones here at issue) extends coverage to additional insureds for losses "caused by" the named insured's "acts or omissions" or "operations," the existence of coverage does not depend upon a showing that the named insured's causal conduct was negligent or otherwise at fault. In W & W Glass Sys., Inc. v Admiral Ins. Co. (91 AD3d 530, 937 N.Y.S.2d 28 [1st Dept 2012]), for example, where the relevant endorsement provided that a general contractor was covered under its subcontractor's policy " only with respect to liability caused by [the subcontractor's] ongoing operations performed for that [additional] insured'" (id. at 530 [emphasis added]), we held that " [t]he language in the additional insured endorsement granting coverage does not require a negligence trigger" (id. at 531 [emphasis added]). Similarly, in National Union Fire Ins. Co. of Pittsburgh, PA v Greenwich Ins. Co. (103 AD3d 473, 962 N.Y.S.2d 9 [1st Dept 2013]), where the additional insured endorsement applied to "bodily injury caused, in whole or in part, by [the named insured's] acts or omissions or the acts or omissions of those acting on the [named insured's] behalf" (id. at 474), in holding the additional insured coverage for the loss in question, we expressed the view that the phrase "caused by" "does not materially differ" from the phrase, arising out of'" (id. [internal quotation marks omitted]), necessarily excluding any requirement of a negligence trigger for coverage. Finally, in Strauss Painting, Inc. v Mt. Hawley Ins. Co. (105 AD3d 512, 963 N.Y.S.2d 197 [1st Dept 2013], mod on other grounds 24 NY3d 578, 2 N.Y.S.3d 390, 26 N.E.3d 218 [2014]), we expressly held that a finding of negligence against the named insured was not required to support additional insured coverage where "[t]he additional insured endorsement speaks in terms of acts or omissions,' not negligence. Thus, in the unlikely event that it would be found that some nonnegligent act by plaintiff [the named insured] caused the accident, the Met [the additional insured] would still be entitled to coverage under the additional insured endorsement" (id. at 513).
Id., at *15-16 (alterations in original) (footnote 6 omitted). Footnote 6 provides in pertinent part: "Notably, . . . the endorsement at issue in W & W Glass "further provided that it does not apply to liability caused by the sole negligence of the person or organization [named as an additional insured]'" (91 AD3d at 530)." Id., at *16 n.6.
Although the Court, in the underlying decision in Burlington, reached a different result relying on, and as cited by Utica in the instant case, Crespo v City of New York, 303 AD2d 166 (1st Dept 2003), where the First Department held "that the additional insured's right to indemnification could not be determined without first determining whether the loss was caused by negligence by S & P [the named insured]'" (Burlington Insurance Co., 2015 NY App Div LEXIS 6349, at *19 [alterations in original] [quoting Crespo, supra]), the First Department ultimately reversed this conclusion. The First Department concluded that:
In our view, Crespo, even without regard to the subsequent countervailing authority, is distinguishable. The additional insured endorsement in Crespo provided coverage "only to the extent that [the additional insured] is held liable for [S & P's] acts or omissions", language suggesting that the wrongful conduct of the named insured must provide the basis for the imposition of liability on the additional insured. In any event, to the extent Crespo conflicts with this Court's more recent authority, we are obliged to follow the latter.
Burlington Insurance Co., 2015 NY App Div LEXIS 6349, at *19-20 (alterations in original) (quoting Crespo, supra, at 167).
"If a question of fact exists as to whether the insured's work or negligence caused the injury, or even if a jury ultimately determines that the insured was not negligent, the insurer nevertheless has a duty to defend." Int'l Bus. Machs. v U.S. Fire Ins. Co., 17 Misc 3d 1108(A), 2007 NY Misc LEXIS 6375, at ***18 (Sup Ct, NY County 2007) (Stallman, J.) (citing BP A.C. Corp. v One Beacon Ins. Grp., 33 AD3d 116, 120-121 [1st Dept 2006]). Here, although an issue of fact exists with respect to liability, as will be decided in the Brown action, this does not preclude a determination that Utica is required to defend DeMatteis in the Brown action. " An insurer may be relieved of its duty to defend only if it can establish, as a matter of law, that there is no possible factual or legal basis upon which it might eventually be obligated to indemnify its insured, or by proving that the allegations fall wholly within a policy exclusion.'" Id., at ***16-17 (quoting City of New York v Ins. Corp. of NY, 305 AD2d 443, 443-444 [2d Dept 2003]). Accordingly, a finding of liability is not required to determine whether DeMatteis is an additional insured under the Utica policy because the duty to defend is broader than the duty to indemnify, and a possible factual basis does exist for indemnification as discussed below. See Worth Constr. Co. v Admiral Ins. Co., 10 NY3d 411, 415 (2008) ("An insurer's duty to defend arises whenever the allegations within the four corners of the underlying complaint potentially give rise to a covered claim.' This standard applies equally to additional insureds and named insureds." [quoting Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169, 175 [1997]]).
Furthermore, the cases that Utica cites in its motion to reargue do not merit a different result from the determinations made in this Court's prior order. Utica argues that the additional insured endorsement is more akin to cases such as Plaza Construction Corp. v American Home Assurance Co., 2009 Misc LEXIS 6700, *19-20 (Sup Ct, NY County 2009) (Edmead, J.), and International Business Machines v United States Fire Insurance Co., 17 Misc 3d 1008(A), 2007 NY Misc LEXIS 6735 (Sup Ct, NY County 2007) (Stallman, J.); however, these cases are distinguishable.
In Plaza Construction Corp. v American Home Assurance Co., supra, the Court adopted the same interpretation of the phrase "arising out of" as it is construed in this Court's prior order in the within action. Id., at *15. Justice Edmead notes, however, that "[t]he term negligent acts or omissions' [i]s narrower, requiring more than a showing that the underlying action arose out of the subcontractor's negligent acts or omissions.'" Id., at *16. In construing the "acts or omissions" language, the Court stated that:
[p]laintiffs failed to demonstrate that the underlying plaintiff's injuries were caused by an act or omission of [the named insured]. There is no showing of any acts undertaken, by [the named insured's] employees or of someone on behalf of [the named insured] caused the underlying plaintiffs injuries. The underlying plaintiff's injuries may have had, in a gneral sense, some connection with the work [the named insured] was performing at the site to the extent that the injured plaintiff was working for [the named insured] at the time of his accident, but the [insurance policy at issue] requires more than such a showing; there must be a showing that [the named insured] (or its employees or someone on its behalf) performed an act or omission that caused the underlying injuries.
Id., at *19-20. Plaza Construction Corp., however, is distinguishable from the instant case because Spieler, the named insured herein, owed a duty pursuant to paragraph 19 of the trade contract with DeMatteis to "remove any dirt or debris which is caused by the execution of the Work," (Ex. J to Ex. D, at ¶ 19) with DeMatteis having an overall duty to do the same, should Spieler fail to remove said debris, as discussed in this Court's prior order dated June 9, 2015. Additionally, Plaza Construction Corp. is distinguishable from the within action because "the court in the underlying action had already determined that another party, not the named insured, was responsible for the accident." Hotels AB, LLC v Permasteelisa, CS, 2013 NY Misc LEXIS 4154, at *8 (Sup Ct, NY County 2013) (Wooten, J.).
The decision in International Business Machines v United States Fire Insurance Co. ("IBM"), supra, can also readily be distinguished because had the additional insured endorsement, similar to the one at issue in the within action, been considered as part of the policy at issue, that court specifically stated that plaintiffs "would be considered additional insureds under the US Fire policy, because Dynamic [the named insured] was required to add Whiting-Turner and IBM as additional insureds pursuant to its written contract with Whiting-Turner." Id., at ***15. In the within action, the additional insured endorsement is clearly part of the Utica policy, thus, it follows that DeMatteis would be considered an additional insured under the Utica policy. Additionally, IBM is distinguishable because in that case, the court "determined that the named insured did not perform any work in the basement area of the building where the named insured's employee had his accident" (Hotels AB, LLC v Permasteelisa, CS, 2013 NY Misc LEXIS 4154, at *9), which is contrary to this Court's findings regarding Brown's injury in its June 9, 2015 order. Contrary to the evidence in IBM, evidence in this action indicated that the named insured's employee was working in the area where the accident happened and the named insured, Spieler, had a duty to prevent the unsafe condition that caused Brown's accident. See id.
This Court finds Utica's argument concerning the application of Wilson Central School District v Utica Mutual Insurance Co., 123 AD3d 920 (2d Dept 2014), to be unavailing for the reasons discussed in its prior order. Briefly, despite the fact that the Appellate Division, Second Department narrowly construed Utica's additional insured endorsement in Wilson to exclude the party at issue from being considered as an additional insured under the policy, this Court found Utica's reliance on Wilson to be unavailing because in that case the plaintiff attempted to hold the additional insured liable for its own acts or omissions where the named insured under the policy was not sued in the underlying action.
DeMatteis' And QBE's Cross Motion For Reargument
DeMatteis' and QBE's cross motion for reargument to clarify this Court's prior decision dated June 9, 2015 is denied in its entirety. Although Utica argues that, pursuant to CPLR 2221, a movant may only move to reargue, renew, stay, vacate, or modify an order, or for leave to appeal, but may not seek clarification as an available remedy; the Appellate Division, First Department has construed a motion for clarification of a court's prior order to be tantamount to a motion to reargue, pursuant to CPLR 2221(d)(2). Arbor Realty Funding LLC v E. 51st St. Dev. Co., LLC, 67 AD3d 559, 559 (1st Dept 2009); Gillingham v Robinson, 45 AD3d 467, 468 (1st Dept 2007). However, CPLR 2221(d)(2) states that a motion for reargument "shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion" and is not an opportunity to present arguments different from those originally asserted. See William P. Pahl Equip. Corp., 182 AD2d at 27; Foley v Roche, 68 AD2d 558; Amato v Lord & Taylor, Inc., 10 AD3d 374. Here, plaintiffs seek new relief in their cross motion, specifically a declaration that the Utica policy was primary insurance over the QBE policy, but did not ask for such relief in their underlying motion papers. Accordingly, plaintiffs' cross motion is procedurally improper.
Additionally, plaintiffs are estopped from seeking the relief requested based upon the doctrine of estoppel against inconsistent positions. "In general, judicial estoppel or estoppel against inconsistent positions applies when a party takes inconsistent positions in the same action or proceeding." World City Found., Inc. v Sacchetti, 2008 NY Misc LEXIS 10458, at *12 (Sup Ct, NY County 2008) (citing Nestor v Britt, 270 AD2d 192 [1st Dept 2000]); see also Maas v Cornell Univ., 253 AD2d 1, 5 (3d Dept 2009), lv. granted 93 NY2d 806 (1999), aff'd., 94 NY2d 87. In plaintiffs' memorandum of law in opposition to Utica's motion, they take the position that "[c]ontractual interpretation is a matter of law to be determined by the Court. As such, there is no basis to vacate, modify or otherwise disturb this Court's decision and order, dated June 9, 201[5] (Exhibit A')." Raicus Mem. Law (9/3/15), at 3. However in both plaintiffs' notice of cross motion, dated July 30, 2015, and amended notice of cross motion, dated August 24, 2015, they move for an order:
Plaintiffs' failure to paginate their memorandum of law in opposition is noted, as such the quoted language appears on what this Court deems as page 3 of said memorandum.
A.Pursuant to CPLR §2221, clarifying the order of Hon. Kathryn E. Freed, J.S.C., dated June 9, 2015 and entered with the Office of the New York County Clerk on June, 24, 2015 to clarify that (the additional insured coverage that Leon D. DeMatteis Construction Corporation is entitled to under the commercial general liability policy issued by Utica National Assurance Company to Spieler Ricca, Policy No. . CPP400334 is primary and noncontributory as to the insurance policy that QBE Insurance Company issued to Leon D. DeMatteis Construction Corporation, Policy No. HB0049605; and
B.Granting such other, further, and different relief as to this Court may deem just, proper, and equitable.
Raicus Notice of Cross Mot. & Amended Notice of Cross Mot. (as quoted in plaintiffs' original papers). Having first defended this Court's June 9, 2015 order, plaintiffs cannot now seek to have the order clarified or modified.
Regardless of plaintiffs' improper motion, this Court, in its June 9, 2015 order, noted multiple times that Utica's policy was primary to QBE's policy. As stated in the recitation of the facts, both article 22 of the trade contract and the Insurance Requirements addendum "provided that insurance of [Spieler] is primary insurance to [DeMatteis'] insurance which is excess.'" Ex. A, at 3 (alterations in original). Also, in Utica's policy "Section II - Who Is An Insured," under the heading "a. Additional Insureds - By Contract, Agreement or Permit," the policy states that "[s]uch insurance as is provided by paragraph 11.a.(1) for any additional insured will be primary, if so required by the written contract, agreement or permit." Ex. G to Ex. B, at II.a.2; Ex. A, at 7-8. According to the trade contract, the insurance is agreed to be primary as stated above. The following decretal paragraphs of this Court's June 9, 2015 order in fact decree that Utica's policy is primary to QBE's:
ORDERED that plaintiffs Leon D. DeMatteis Construction Corporation and QBE Insurance Company's motion for summary judgment seeking a declaration that it is owed coverage, including defense and indemnification, on a primary basis as an additional insured under defendant Utica National Assurance Company's policy in the action entitled Brown v 1765 First Associates, LLC, et al., Nassau County index number 7085/11, is granted; and it is further,
ADJUDGED AND DECLARED that plaintiff Leon D. DeMatteis Construction Corporation is owed coverage, including defense and indemnification, on a primary basis as an additional insured under defendant Utica National Assurance Company's policy in the Brown action pending in Nassau County; . . . Ex. A, at 19.
Therefore, in light of the foregoing, it is hereby:
ORDERED that the motion by defendant Utica National Assurance Company for reargument of its prior motion for summary judgment is denied in all respects; and it is further,
ORDERED that the cross motion by plaintiffs Leon D. DeMatteis Construction Corp. and QBE Insurance Company for clarification of this Court's June 9, 2015 order is denied in all respects; and it is further,
ORDERED that defendant Utica National Assurance Company is to serve a copy of this order with notice of entry upon all parties and the County Clerk's Office (Room 141B) and the Clerk of the Trial Support Office (Room 158) within 30 days of the date hereof; and it is further,
ORDERED that this constitutes the decision and order of this Court.
Dated: October 13, 2015
_________________________
KATHRYN E. FREED, J.S.C.