Opinion
13169 Index No. 111090/09 Case No. 2020-02910
02-18-2021
Josh MARGULIES, Plaintiff–Appellant–Respondent, v. USAA CASUALTY INSURANCE CO., Defendant–Respondent–Appellant.
Barket Epstein Kearon Aldea & LoTurco, LLP, Garden City ( Alexander Klein of counsel), for appellant-respondent. Marshall, Dennehey, Warner, Coleman & Goggin, New York ( Richard C. Imbrogno of counsel), for respondent-appellant.
Barket Epstein Kearon Aldea & LoTurco, LLP, Garden City ( Alexander Klein of counsel), for appellant-respondent.
Marshall, Dennehey, Warner, Coleman & Goggin, New York ( Richard C. Imbrogno of counsel), for respondent-appellant.
Renwick, J.P., Kern, Singh, Shulman, JJ.
Order, Supreme Court, New York County (Debra A. James, J.), entered on or about December 10, 2019, which granted defendant's (USAA) motion pursuant to CPLR 3211(a)(5) to dismiss the claim for payment of a judgment entered against plaintiff (Margulies) upon his default in an underlying action and denied the motion as to the claim for defense costs and fees incurred by Margulies in that action, unanimously affirmed, without costs.
This action stems from an incident in which Margulies intentionally struck nonparty Dennis Hough with his vehicle. Hough sued Margulies. Neither Margulies nor USAA defended against the action, and a default judgment was entered against Margulies.
The claim for payment of the judgment is precluded by collateral estoppel ( see Paramount Pictures Corp. v. Allianz Risk Transfer AG, 31 N.Y.3d 64, 72, 73 N.Y.S.3d 472, 96 N.E.3d 737 [2018] ). The Second Circuit has determined that "because Margulies acted intentionally, the incident is not an occurrence within the meaning of the USAA policies, and no coverage is available" ( In re Margulies, 721 Fed. Appx. 98, 100 [2d Cir.2018] ).
USAA is also collaterally estopped from arguing that Supreme Court should have dismissed the claim for costs and fees incurred by Margulies in defending against the underlying action. In an earlier action to recover on the judgment brought by Hough against USAA, Supreme Court held that the claims of negligence and criminal negligence in the underlying complaint "establish[ed] as a matter of law that [USAA] had a duty to defend Margulies despite the evidence that Margulies intentionally struck [Hough] with his motor vehicle" ( Hough v. USAA Cas. Ins. Co., 2011 WL 10959583, *3 [Sup. Ct., N.Y. County 2011], affd 93 A.D.3d 405, 940 N.Y.S.2d 41 [1st Dept. 2012] ). The duty to defend, having arisen out of the allegations of the complaint, "remains even though facts outside the four corners of [the] pleadings indicate that the claim may be meritless or not covered" ( Automobile Ins. Co. of Hartford v. Cook, 7 N.Y.3d 131, 137, 818 N.Y.S.2d 176, 850 N.E.2d 1152 [2006] [internal quotation marks omitted]).
We have considered the remaining arguments and find them unavailing.