Opinion
Index No. 652891/2019
09-24-2021
MERCHANTS MUTUAL INSURANCE COMPANY, Plaintiff v. DUNHAM PIPING & HEATING CORP., Dunham Plumbing & Heating Corp., Eddie Coryat, Peachreann Coryat, Pine Builders Corp., and Caton Realty Holdings, LLC, Defendants.
For Plaintiff, Brian D. Barnas Esq., Hurwitz & Fine, P.C., 1300 Liberty Building, Buffalo, NY 14202 For Defendants Eddie Coryat and Peachreann Coryat, Steven Bournazos Esq., Bournazos & Matarangos, PLLC, 3119 Newtown Avenue, Long Island City, NY 11102 For Defendants Pine Builders Corp. and Caton Realty Holdings, LLC, Andrew Showers Esq., McMahon Martine & Gallagher, LLP, 55 Washington Street, Brooklyn, NY 11201
For Plaintiff, Brian D. Barnas Esq., Hurwitz & Fine, P.C., 1300 Liberty Building, Buffalo, NY 14202
For Defendants Eddie Coryat and Peachreann Coryat, Steven Bournazos Esq., Bournazos & Matarangos, PLLC, 3119 Newtown Avenue, Long Island City, NY 11102
For Defendants Pine Builders Corp. and Caton Realty Holdings, LLC, Andrew Showers Esq., McMahon Martine & Gallagher, LLP, 55 Washington Street, Brooklyn, NY 11201
Lucy Billings, J.
Plaintiff moves for a default judgment against defendants Dunham Piping & Heating Corp. and Dunham Plumbing & Heating Corp., C.P.L.R. § 3215, and for summary judgment against the remaining defendants, C.P.L.R. § 3212(b), declaring that plaintiff owes no duty to defend or indemnify Dunham Piping in an underlying action and related third party action in Supreme Court, Kings County. C.P.L.R. § 3001. Plaintiff's motion is based on Dunham Piping's noncooperation with plaintiff's investigation and defense of that action as required under the insurance policy plaintiff issued to Dunham Piping.
I. PROCEDURAL GROUNDS FOR DENYING PLAINTIFF'S MOTION
Plaintiff previously moved for the same relief, which the court (Crane, J.) denied in an order entered January 5, 2021, "without prejudice to Merchant's [sic] interposing a motion based on ... defendants, in the first instance, not being insureds under Merchant's [sic] policy." Aff. of Brian D. Barnas Ex. M, at 1. According to plaintiff, the denial was without prejudice to a future motion for summary judgment only.
Now, plaintiff's current motion for a default judgment is late. C.P.L.R. § 3215(c) ; Citimortgage, Inc. V. Sahai , 172 AD3d 552, 552 (1st Dep't 2019) ; Utak v. Commerce Bank Inc. , 88 AD3d 522, 522 (1st Dep't 2011). Plaintiff served Dunham Piping and Dunham Plumbing via the State Secretary of State May 16, 2019, and filed the affidavits of service May 23, 2019, so these defendants’ time to answer expired July 2, 2019. C.P.L.R. §§ 308(2), 3012(c). Thus, when plaintiff served its first motion for a default judgment May 26, 2020, only 37 days remained before its deadline July 2, 2020, to move for a default judgment. C.P.L.R. § 3215(c). Even if the time was tolled between July 2, 2020, and Justice Crane's order entered January 5, 2021, and even if that order permitted a second motion for a default judgment, plaintiff waited over six more months to serve its second motion for a default judgment. Plaintiff does not even attempt to provide an explanation for exceeding the time limit. Utak v. Commerce Bank Inc. , 88 AD3d at 522-23. See Citimortgage, Inc. v. Sahai , 172 AD3d at 552 ; Smith v. Arce , 78 AD3d 612, 612 (1st Dep't 2010).
Moreover, both plaintiff's second motion for a default judgment and its second motion for summary judgment extend well beyond the grounds that Justice Crane permitted. Although plaintiff mentions that Dunham Piping was not an insured under plaintiff's policy, as set forth above that uninsured status is not a basis for its current motion. In any event, plaintiff does not authenticate any signature on its insurance policy, which as on any contract must be authenticated for the policy to be admissible, Clarke v. American Truck & Trailer, Inc. , 171 AD3d 405, 406 (1st Dep't 2019) ; B & H Florida Notes LLC v. Ashkenasi , 149 AD3d 401, 403 n.2 (1st Dep't 2017), and on which plaintiff relies to establish that Dunham Plumbing was not an insured under the policy and that Dunham Piping owed a duty to cooperate. See B.P. AC Corp. v. One Beacon Ins. Group , 8 NY3d 708, 716 (2007) ; Shanmugam v. SCI Eng'g, P.C. , 122 AD3d 437, 438 (1st Dep't 2014).
Nor has plaintiff justified its second motion for summary judgment. Landis v. 383 Realty Corp. , 175 AD3d 1207, 1207 (1st Dep't 2019) ; Maggio v. 24 W. 57 APF, LLC , 134 AD3d 621, 625 (1st Dep't 2015) ; Amill v. Lawrence Ruben Co., Inc. , 117 AD3d 433, 433 (1st Dep't 2014) ; Ferolito v. Vultaggio , 99 AD3d 19, 29 (1st Dep't 2012). Plaintiff concedes that it does not rely on any disclosure conducted since its first motion for summary judgment. See Maggio v. 24 W. 57 APF, LLC , 134 AD3d at 625 ; Fleming & Assoc., CPA, PC v. Murray & Josephson, CPAs, LLC , 127 AD3d 428, 428 (1st Dep't 2015) ; Amill v. Lawrence Ruben Co., Inc. , 117 AD3d at 433 ; Brown Harris Stevens Westhampton LLC v. Gerber , 107 AD3d 526, 527 (1st Dep't 2013).
II. FURTHER EVIDENTIARY GROUNDS FOR DENYING PLAINTIFF'S MOTION
Plaintiff's current notion for a default judgment and for summary judgment also fails on the merits. Were the court to consider plaintiff's insurance policy, it requires that the insured, Dunham Piping: "Cooperate with us in the investigation ... of the claim or defense against the ‘suit’ " brought against the insured. Aff. of Thomas Kirkpatrick, Jr., Ex. A ¶ 2(c)(3). To show that Dunham Piping breached this requirement, plaintiff relies primarily on the affidavit by Thomas Kirkpatrick, Jr., which is largely hearsay. Paring his affidavit down to its allegations that are not obviously hearsay, where he does not admit that he derived the information from other persons or from inadmissible documents, he attests as follows.
On February 19, 2015, plaintiff telephoned Dunham Piping and spoke with Eileen Hernandez, its office manager. On February 24, 2015, plaintiff telephoned Hernandez and left a message. Plaintiff then retained an investigator, Accurate InfoServices Inc., and advised Dunham Piping via written correspondence that (1) plaintiff required Dunham Piping's immediate attention to the underlying action and required relevant documents from Dunham Piping, and (2) its noncooperation would risk the loss of insurance coverage. Plaintiff provided Accurate InfoServices’ contact information to Dunham Piping and asked it to arrange to meet with the investigator. Two months later, plaintiff retained a law firm to represent Dunham Piping in the underlying action.
At that point, Kirkpatrick admits that most of his further allegations regarding Dunham Piping's conduct are based on information he learned from the investigator or the law firm. See Residential Credit Solutions, Inc. v. Gould , 171 AD3d 638, 642 (1st Dep't 2019) ; Clarke v. American Truck & Trailer, Inc. , 171 AD3d at 406 ; Rubin v. Rubin , 134 AD3d 572, 572 (1st Dep't 2015) ; Shanmugam v. SCI Eng'g, P.C. , 122 AD3d at 438. Kirkpatrick attests that via written correspondence dated August 13, 2018, plaintiff further advised Doug Dunham, Dunham Piping's owner, that his deposition was needed and asked him to contact the retained attorney. Plaintiff also retained another investigator, Advanced Technology Investigations (ATI) to ensure Dunham's appearance at a deposition. All further communications with Dunham were between the attorney or ATI, not Kirkpatrick, and Dunham. Kirkpatrick does not mention anyone's further attempts to contact Hernandez or any other Dunham Piping employee with knowledge of the facts relevant to the underlying action.
Finally, Kirkpatrick presents an order dated December 12, 2018, in the underlying action requiring Dunham Piping, not Dunham, to appear for its deposition by January 30, 2019, and precluding its testimony at trial if the corporation failed to appear for the deposition. Kirkpatrick attests that plaintiff via written correspondence dated December 17 and 26, 2018, again advised Dunham that a court order required his deposition by January 30, 2019, and asked him to contact the retained attorney for the corporation.
From then on, plaintiff presents no evidence on personal knowledge or otherwise admissible regarding what transpired between the attorney and Dunham or between either of the investigators or plaintiff itself and Dunham, let alone between the attorney, either investigator, or plaintiff and any Dunham Piping employee who might have appeared for its deposition. See Residential Credit Solutions, Inc. v. Gould , 171 AD3d at 642 ; Clarke v. American Truck & Trailer, Inc. , 171 AD3d at 406. The attorney, Matthew Kelly, attests to an "inability to have any meaningful contact" with Dunham Piping, but fails to specify any efforts he made to make contact. Aff. of Matthew Kelly ¶ 14. Neither investigator attests to any such efforts. Plaintiff presents investigative records, but no witness lays the foundation for the records’ admissibility as business records or another exception to the rule against hearsay. E.g. , C.P.L.R. § 4518(a) ; People v. Ramos , 13 NY3d 914, 915 (2010) ; People v. Bell , 153 AD3d 401, 412 (1st Dep't 2017) ; Wells Fargo Bank, N.A. v. Jones , 139 AD3d 520, 521 (1st Dep't 2016) ; Matter of Ramel Anthony S. , 124 AD3d 445, 445 (1st Dep't 2015).
As set forth above, the December 2018 order in the underlying action required Dunham Piping, not Dunham personally, to appear for a deposition. While plaintiff may not rely on the inadmissible investigative records, once it presents them, defendants may rely on them in opposition. E.g. , Cortez v. Bray , 192 AD3d 451, 451 (1st Dep't 2021) ; Macdelinne F. v. Jimenez , 126 AD3d 549, 550 (1st Dep't 2015) ; Pantojas v. Lajara Auto Corp. , 117 AD3d 577, 577-78 (1st Dep't 2014) ; Mitchell v. Calle , 90 AD3d 584, 585 (1st Dep't 2011). See Joseph v. Board of Educ. of the City of NY , 91 AD3d 528, 529 (1st Dep't 2012). These records show that at least three other Dunham Piping employees likely were more knowledgeable than the owner Dunham concerning the facts relevant to the underlying action: Hernandez; Earl Ingram, Dunham Piping's foreman on the construction project where Eddie Coryat, the principal plaintiff in the underlying action, was injured; and James Pepe, Dunham Piping's plumber on the project. No evidence shows they were uncooperative regarding their appearance at a deposition or otherwise in supplying evidence relevant to Dunham Piping's defense of the action.
In fact, an investigator's report dated March 2, 2015, reveals that during the investigator's interview of Ingram, he offered viable defenses for Dunham Piping. (1) Coryat was not on a ladder, as he claimed, when a pipe fell on him. See NY Labor Law § 240(1). (2) The pipe fell because Coryat had drilled holes that were too large for the hanging pipe supports, so the supports gave way, causing the pipe to fall. Plaintiff utterly fails to explain why it did not produce Ingram for Dunham Piping's deposition. The investigative records also demonstrate that Dunham Piping produced documents plaintiff requested.
Plaintiff insists that Dunham's testimony was necessary because he signed the subcontract between defendant Pine Builders and Dunham Piping, which obligated it to indemnify and procure insurance for Pine Builders as claimed in the underling third party action. Yet plaintiff fails to explain why the subcontract was essential to Dunham Piping's defenses , as opposed to Pine Builders’ claim, or, if the subcontract was essential, why Hernandez, another Dunham Piping employee, or a Pine Builders witness could not authenticate the subcontract, the terms of which would speak for themselves. Universal Am. Corp. v. National Union Fire Ins. Co. of Pittsburgh, PA , 25 NY3d 675, 680 (2015) ; Beardslee v. Inflection Energy, LLC , 25 NY3d 150, 157 (2015) ; Gilbane Bldg. Co./TDX Constr. Corp. v. St. Paul Fire & Mar. Ins. Co. , 143 AD3d 146, 156 (1st Dep't 2016) ; Bank of NY Mellon v. WMC Mtge., LLC , 136 AD3d 1, 6 (1st Dep't 2015).
III. APPLYING THE LEGAL STANDARD
Plaintiff may disclaim its insurance coverage of its insured based on the insured's noncooperation if plaintiff shows (1) it diligently sought to obtain the insured's cooperation; (2) its efforts were reasonably calculated to obtain the insured's cooperation; and (3) the insured's attitude, after its cooperation was sought, constituted "willful and avowed obstruction." Country-Wide Ins. Co. v. Preferred Trucking Servs. Corp. , 22 NY3d 571, 576 (2014) ; Hunter Roberts constr, Group, LLC v. Arch Ins. Co. , 75 AD3d 404, 410 (1st Dep't 2010) ; State Farm Indem. Co. , 58 AD3d 429, 430 (1st Dep't 2009) ; Liberty Mut. Ins. Co. v. Roland-Stine , 21 AD3d 771, 773 (1st Dep't 2005) (quoting Thrasher v. U.S. Liab. Ins. Co. , 19 NY2d 159, 168 (1967) ). See Continental Cas. Co. v. Stradford , 11 NY3d 443, 450 (2008). Failure to appear for a deposition may constitute such deliberate noncooperation, Country-Wide Ins. Co. v. Preferred Trucking Servs. Corp. , 22 NY3d at 577, or may not, depending on the circumstances. New York Cent. Mut. Fire Ins. Co. v. Salomon , 11 AD3d 315, 316 (1st Dep't 2004) ; Allcity Ins. Co. v. 601 Crown St. Realty Corp. , 264 AD2d 315, 316-17 (1st Dep't 1999).
Here, plaintiff fails to show diligent efforts reasonably calculated to obtain the insured's cooperation, because plaintiff delegated the majority of those efforts to investigators and an attorney, yet presents no evidence from those delegees on their personal knowledge. Even Kirkpatrick's allegations regarding correspondence the attorney sent to Dunham are not based on any copy of the correspondence that Kirkpatrick received, but are based on the attorney's communication to Kirkpatrick regarding the attorney's actions. Kenneth J. v. Lesley B. , 165 AD3d 439, 441 (1st Dep't 2018) ; AQ Asset Mgt. LLC v. Levine , 128 AD3d 620, 621 (1st Dep't 2015) ; Shanmugam v. SCI Eng'g, P.C. , 122 AD3d at 438.
Thus the admissible evidence leaves open the question whether plaintiff's delegees actually pursued diligent efforts reasonably calculated to obtain Dunham Piping's cooperation or in fact discouraged its cooperation. Plaintiff presents no admissible evidence of Dunham Piping Corp.’s response to the delegees’ outreach, other than attorney Kelly's conclusory complaint of "inability to have meaningful contact" with the insured. Kelly Aff. ¶ 14. Due to Kelly's failure to specify his or his law firm's efforts to make contact at all, Kelly leaves wide open the question whether his "inability" was due to his or his firm's own lack of effort.
IV. CONCLUSION
In sum, even were plaintiff's motion timely and justified, and even were the court to consider all the evidence plaintiff presents, whether admissible or inadmissible, it raises more factual questions than it answers. For all these reasons, as explained above, the court denies plaintiff's motion for a default judgment against defendants Dunham Piping & Heating Corp. and Dunham Plumbing & Heating Corp. and for summary judgment against the remaining defendants. C.P.L.R. §§ 3212(b), 3215.