Opinion
06-30081.
October 13, 2009.
RICHARD A. ENGELBERG, ESQ. Attorneys for the Plaintiff, Plainview, New York.
O'CONNOR, O'CONNOR, HINTZ DEVENEY, LLP, Attorneys for Defendants/Third Party Plaintiffs, Melville, New York.
WEG MYERS, PC, Attorneys for Dame Contracting Inc., New York, New York.
GOODMAN JACOBS, LLP, Attorneys for Everest National Insurance, New York, New York.
Upon the following papers numbered 1 to 125 read on these motions and cross-motions for summary judgment and other relief, Notice of Motion/Order to Show Cause and supporting papers 1-19; 67-84; Notice of Cross-Motion and supporting papers 25 — 49; 85 — 91; 100 — 121; Answering Affidavits and supporting papers 20 — 24; 92 — 93; Replying Affidavits and supporting papers 50 — 64; 65 — 66; 94 — 97; 98 — 99; 122-123; 124-125; Other___; (and after hearing counsel in support and opposed to the motion) it is,
ORDERED that this motion (#007) by the third-party defendant Dame Contracting, Inc. for summary judgment and this motion (#009) by the plaintiff for partial summary judgment are consolidated for the purposes of this determination; and it is further ORDERED that the portion of this motion (#007) by the third-party defendant Dame Contracting, Inc. for summary judgment on its cross-claims against the third-party defendant Everest National Insurance Company and related relief is denied and the portion for leave to amend its amended answer to add a cross-claim for reformation is granted; and it is further
ORDERED that this cross-motion (#008) by the third-party defendant Everest National Insurance Co. for summary judgment on its counterclaim declaring that it has no duty to defend or indemnify Dame Contracting, Inc., Schimenti Construction Corp. or Best Buy, Inc. in the underlying action is denied; and it is further
ORDERED that this motion (#009) by the plaintiff for an order pursuant to CPLR § 3212 granting him partial summary judgment on the issue of liability under Labor Law § 240 (1) and scheduling a trial on the issue of damages is determined herein; and it is further
ORDERED that this cross-motion (#010) by the defendants/third-party plaintiffs Schimenti Construction Corp. and Best Buy, Inc. for a declaration that the third-party defendant Everest National Insurance Company is required to defend them in the underlying action and to insure them on a primary basis as additional insureds on the commercial general liability policy issued to third-party defendant Dame Contracting, Inc. and for reformation, if necessary, of said policy to include Best Buy, Inc. as an additional insured is denied; and it is further
ORDERED that this cross-motion (#011) by the defendants/third-party plaintiffs Schimenti Construction Corp. and Best Buy, Inc. for an order pursuant to CPLR § 3212 granting summary judgment in their favor dismissing the plaintiffs Labor Law § 240 (1) cause of action is denied.
This is an action to recover damages for injuries allegedly sustained by Michael Lobosco (hereinafter plaintiff) on July 24, 2006. At that time he was a 44 year old spackler/taper employed by Dame Contracting, Inc. (hereinafter Dame), when he fell at the construction site (hereinafter subject site) of a Best Buy, Inc. store (hereinafter Best Buy) at the Green Acres Mall in Valley Stream, New York. The plaintiff had been instructed to apply a first coat on the bottom of the rear loading dock walls and the plaintiff stood on the cement floor working from the bottom of the walls up to seven feet, and moving left to right from the building entrance over to the loading dock garage doors. When the plaintiff came to the doorway of the first of two loading docks, he took a step to the right to finish his work (right wipe out) and fell into the three foot recessed entrance pit for the loading dock, right leg first. Said squared opening in the loading dock floor had allegedly been covered with plywood which had been removed for the installation of dock levelers. There were no witnesses to his fall. After his fall, the plaintiff was holding his right arm and told his foreman from Dame that he fell in the hole and complained of right wrist pain. After his foreman offered him an aspirin, the plaintiff drove himself to the hospital where his right wrist was placed in a splint and he was discharged. The plaintiff went to see a chiropractor the following day. He never returned to work.
Green Acres Mall, LLC was the owner of the premises and Best Buy was the contracting tenant. Dame had subcontracted in May 2006 with the general contractor Schimenti Construction Corp. (hereinafter Schimenti), to provide dry wall and metal framing at the site. Under the terms of said agreement, Dame was required to maintain a commercial general liability policy with specified coverage limits naming Schimenti and Best Buy as additional insureds. Dame purchased a policy for the period January 1, 2006 to January 2, 2007 with a personal injury limit of $1,000,000 from Everest National Insurance Co. (hereinafter Everest).
The plaintiff's attorney sent a letter, dated August 24, 2006, to Best Buy's Westbury Regional Office informing Best Buy that his firm was representing the plaintiff with regard to injuries sustained at the subject site. Said letter was forwarded, eventually reaching Best Buy's third-party claims administrator ESIS on October 4, 2006. ESIS conducted an investigation which resulted in Best Buy tendering its defense as an additional insured to Schimenti's non-party general liability carrier, Travelers Insurance Company (hereinafter Travelers). By letter, dated November 15, 2006, Travelers notified Everest of the subject accident and requested that Everest defend and indemnify Dame, Schimenti and Best Buy as named insured and additional insureds, respectively, under the subject policy issued by Everest. In response, by letter, dated November 20, 2006, Everest denied coverage based on the lack of timely notice of the accident and the resulting claim pursuant to the policy terms and the failure to add Schimenti and Best Buy as additional insureds.
The plaintiff commenced the underlying action on January 18, 2007 to recover damages for alleged negligence and Labor Law violations. Schimenti and Best Buy subsequently commenced a third-party action on April 27, 2007 against Dame and Everest for contribution and indemnification and breach of the duty to defend by Everest. Dame answered asserting cross-claims against Everest for declaratory judgment that Everest had a duty to defend Dame, Schimenti and Best Buy and to indemnify Dame. Everest answered arguing that Schimenti and Best Buy were not insureds and that even if they were, they breached their duties to provide notice of the occurrence and the claim under the policy terms. Everest asserted a counterclaim against Schimenti and Best Buy for a declaration that Everest is not obligated to defend or indemnify them. The Court's computer records indicate that no note of issue has been filed in this action
The plaintiff now moves (#009) for partial summary judgment on his Labor Law § 240 (1) claim as against the defendants because his injuries resulted from an elevation-related risk inasmuch he was required to work in close proximity to the open loading dock floor recesses that had been previously covered by sheets of plywood. Schimenti and Best Buy cross-move (#011) for summary judgment dismissing said cause of action on the ground that Labor Law § 240 (1) does not apply to the plaintiff's first floor or ground level work or his fall into an uncovered floor opening or to the short distance that he fell. The defendants' submissions include the April 20, 2009 affidavit of Schimenti's president indicating that the construction blue prints show the elevation as only 1 foot 7 ½ inches.
Here, the plaintiff has demonstrated that his injuries resulted from an elevation-related risk adjacent to the area where he was required to work and the plaintiff is granted summary judgment on the issue of liability pursuant to Labor Law § 240 (1) ( see, Aiello v Rockmor Electric Enterprises, Inc. , 255 AD2d 470, 680 NYS2d 631 [2nd Dept 1998], lv to appeal dismissed in part, denied in part 93 NY2d 952, 694 NYS2d 342; see also, Brandl v Ram Builders, Inc. , 7 AD3d 655, 777 NYS2d 511 [2nd Dept 2004]). Contrary to the defendants' contentions, the height was sufficient to present the type of elevation-related hazard protected by Labor Law § 240 (1) ( see, Amo v Little Rapids Corp. , 301 AD2d 698, 702, 754 NYS2d 685 [3rd Dept 2003], appeal dismissed 1 NY3d 556, 775 NYS2d 774; see also, Mann v Meridian Centre Assocs., LLC , 17 AD3d 1143, 794 NYS2d 272 [4th Dept 2005], lv to appeal dismissed 5 NY3d 824, 804 NYS2d 37). The cross-motion of Schimenti and Best Buy for dismissal of the plaintiff's Labor Law § 240 (1) claim is denied. Although the plaintiff has established the defendants' liability pursuant to Labor Law § 240 (1), the plaintiffs request for a trial on damages is denied as premature.
Dame moves (#007) for summary judgment on its cross-claims against Everest and Everest cross-moves (#008) for summary judgment on its counterclaim and for dismissal of Dame's cross-claims. Schimenti and Best Buy cross-move (#010) for a declaration that Everest is required to defend them in the underlying action and is required to insure them on a primary basis as additional insureds on the commercial general liability policy issued to Dame and for reformation, if necessary, of said policy to include Best Buy as an additional insured.
When determining whether a third party is an additional insured under an insurance policy, a court must ascertain the intention of the parties to the policy, as determined from within the four corners of the policy itself (see, Superior Ice Rink, Inc. v. Nescon Contracting Corp. , 52 AD3d 688, 861 NYS2d 362 [2nd Dept 2008], lv dismissed 12 NY3d 774, 879 NYS2d 31, lv denied ___ NE2d ___, 2009 WL 2779388, 2009 NY Slip Op 82271 [2009]). Dame has submitted the affidavit of Lara McNeil (hereinafter McNeil), its corporate secretary, dated November 18, 2008, stating that when Dame was retained on the subject project, it requested pursuant to its ordinary business procedures that its insurance broker, Brookhaven Agency, Inc. (hereinafter Brookhaven), add Schimenti and Best Buy to the subject policy as additional insureds and that upon receipt of the certificate of liability insurance from Brookhaven indicating said change, Dame forwarded it to Schimenti prior to beginning work at the site. Dame has also submitted said certificate, dated June 1, 2006, issued by Brookhaven indicating that Schimenti and Best Buy were included as additional insureds "per form cg2010 11/85" and has submitted the additional insured endorsement form "CG 20 10 10 01" of said policy from Everest indicating in the schedule box, "As on file, effective on the date filed with company". A certificate of insurance is evidence of a contract for insurance, but is not conclusive proof that the contract exists and is not, in and of itself, a contract to insure ( see, Penske Truck Leasing Co., L.P. v Home Ins. Co. , 251 AD2d 478, 674 NYS2d 400 [2nd Dept 1998]). It confers no rights upon Schimenti as the certificate holder ( see, Metropolitan Heat Power Co., Inc. v AIG Claims Services, Inc. , 47 AD3d 621, 850 NYS2d 142 [2nd Dept 2008]).
Everest has submitted the affidavit of Maria Thorpe (hereinafter Thorpe), its director of claims, dated December 22, 2008, denying receipt of said certificate or any other certificate or request from anyone for additional insured coverage on the subject site for Schimenti and/or Best Buy until November 17, 2006, nearly four months after said accident, when Everest was first notified of the plaintiff's accident. However, Everest has also submitted eight general change endorsements that it issued in 2006 for said policy. The fourth such endorsement issued on June 26, 2006 and effective June 19, 2006 coincides with the subject certificate's issuance date and indicates that form CG 25 03 03 97 Designated Construction Project(s)-General Aggregate Limit had been added to the policy, with no project designated in the schedule box. Notably, that same form was issued later in November 2006 when Schimenti and Best Buy were added as additional insureds for a different project. Neither Thorpe nor Patrick J. Conklin, the chief underwriting officer of Inter-Reco, Inc., Everest's program administrator, has addressed or explained in their respective affidavits said fourth endorsement and whether the project referred to is the subject site. Therefore, the proffered certificate of liability insurance (together with this fourth endorsement) raises issues of fact as to whether Everest received the subject certificate from Brookhaven and the request to add Schimenti and Best Buy as additional insureds on the subject project and whether Everest neglected to add the additional insured endorsement form to the fourth general change endorsement (see generally, Gotham Constr. Co., LLC v United Natl. Ins. Co. , 35 AD3d 289, 829 NYS2d 5 [1st Dept 2006). The various submitted affidavits also raise credibility issues as to whether the inclusion of locations in endorsements were for informational purposes only or to limit coverage to those sites (see, S.J. Capelin Assocs., Inc. v Globe Mfg. Corp. , 34 NY2d 338, 357 NYS2d 478).
In addition, Section IV of the Commercial General Liability Coverage Form (CG 00 01 10 01) submitted by Dame and Everest indicates that the insured and any additional insureds had the duty to notify Everest "as soon as practicable of an 'occurrence' or an offense which may result in a claim" and provide "written notice of the claim or 'suit' as soon as practicable." The policy defines "occurrence" as an accident. When a policy of liability insurance requires that notice of an occurrence be given "as soon as practicable," such notice must be provided within a reasonable period of time. Failure to give such notice relieves the insurer of its obligations under the contract, regardless of whether the insurer was prejudiced by the delay (see, Sorbara Constr. Corp. v AIU Ins. Co. , 11 NY3d 805, 806, 868 NYS2d 573). The issue is whether the insured had a reasonable basis for a belief that no claim would be asserted against it (see, Avery Avery, P.C. v American Ins. Co. , 51 AD3d 695, 858 NYS2d 319 [2nd Dept 2008]).
Here, there is no evidence that either Dame or Schimenti comprehended from what the plaintiff told his foreman after the fall that the plaintiffs fall or injuries were serious enough to be considered an "occurrence" that could result in a claim on the date of the accident ( see, Argentina v Otsego Mut. Fire Ins. Co. , 86 NY2d 748, 631 NYS2d 125). The accident reports filed by Dame and Schimenti on said date merely indicate that the plaintiff injured his wrist, was offered aspirin, that he worked an additional hour after his fall and that he drove himself to the hospital ( compare, First Baptist Church of Olean v Grey , 63 AD3d 1512, 881 NYS2d 339 [4th Dept 2009; Philadelphia Indemnity Ins. Co. v Genesee Valley Improvement Corp. , 41 AD3d 44, 834 NYS2d 802 [4th Dept 2007]). The plaintiff did not inform Dame or Schimenti of the results of his hospital visit on the day of his fall or shortly thereafter. The plaintiff contacted Dame's payroll administrator one week later to obtain information concerning payment for the date of the accident but did not discuss his injuries or work plans. Dame submitted a report concerning the plaintiff to the Workers' Compensation Board in early August 2006 indicating that the plaintiff had been diagnosed with a fractured right wrist, had not returned to work since the accident, and that the plaintiff had not provided any further information or doctor's notes when he called Dame. The plaintiff admitted that he first contemplated commencing an action in September 2006 when he received the results of MRI's of his neck ( see generally, Progressive Northern Ins. Co. v Sachs , 50 AD3d 803, 856 NYS2d 633 [2nd Dept 2008]). There is no evidence that Dame was aware of any injuries to the plaintiff other than to his wrist. In addition, McNeil, Dame's corporate secretary, pointed out in her affidavit, dated March 12, 2009, that in the past six years seven Dame employees sustained injuries on the job but only three commenced litigation and that in each of those three instances upon learning that a suit was being brought against it, Dame notified Brookhaven who notified the wholesale broker who notified Everest and a defense and indemnity was provided. McNeil, Dame's corporate secretary, indicated that Dame first learned of a possible suit by the plaintiff from a November 15, 2006 letter from Schimenti's carrier Travelers seeking defense and indemnification and immediately forwarded the letter to Brookhaven pursuant to prior practice. She added that based on the above there was no reason to believe that the plaintiff had sustained a serious injury. Thus, the submissions of Dame and Schimenti raise issues of fact as to whether, under the circumstances, their less than four month delay in providing Everest with notice of the occurrence was reasonable ( see generally, Winegrad v New York Univ. Med. Ctr. , 64 NY2d 851, 853, 487 NYS2d 316).
As a defense to the claim of lack of notice from Best Buy, the senior claims representative of ESIS states in her affidavit, dated March 18, 2009, that ESIS was never informed that Best Buy was an additional insured under any policies issued to any of Schimenti's subcontractors, including Dame. Where two or more insureds are defendants in the same action, notice of the occurrence or of the lawsuit provided by one insured will be deemed notice on behalf of both insureds only where the two parties are united in interest or where there is no adversity between them (see, 23-08-18 Jackson Realty Assocs. v Nationwide Mut. Ins. Co. , 53 AD3d 541, 863 NYS2d 35 [2nd Dept 2008]). Here, there remain questions of fact on the issue of whether Schimenti and Best Buy are united in interest such that Schimenti's notice to Everest can also be deemed notice on behalf of Best Buy.
Moreover, the subject motion and cross-motions in the third-party action are premature since discovery, in the form of depositions of Everest and Brookhaven as well as others, remain outstanding (see, CPLR § 3212 [f]; Ramos v DEGI Deutsche Gesellschaft Fuer Immobilienfonds MBH , 37 AD3d 802, 830 NYS2d 769 [2nd Dept 2007]). Therefore, the motion and cross-motions for summary judgment and a declaration in the third-party action are denied.
Finally, the request by Dame for leave to amend its amended answer to add a cross-claim for reformation of the subject policy in the event that it does not correctly identify Schimenti and Best Buy as additional insureds for the construction project at the subject site is granted ( see, Koven Steel Swimming Pools, Inc. v Horowitz , 4 AD2d 981, 167 NYS2d 830