Opinion
Index No. 101710/2016 Motion Seq. No. 002
09-03-2024
PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Plaintiff, v. GUARDIAN SERVICE INDUSTRIES, INC, MORETRENCH AMERICAN, NICHOLSON/E.E. CRUZ, LLC,PHOENIX CONSTRUCTORS, JOINT VENTURE, FLUOR ENTERPRISES, INC.SLATTERY SKANSKA, INC. D/B/A SKANSKA USA CIVIL NORTHEAST, INC.,BOVIS LEND LEASE LMB, INC. D/B/A LEND LEASE (US) CONSTRUCTION LMB INC.GRANITE CONSTRUCTION NORTHEAST INC. Defendant. GUARDIAN SERVICE INDUSTRIES, INC. Third-Party Plaintiff v. MORETRENCH AMERICAN, CORPORATION Third-Party Defendant
Unpublished Opinion
PART 33M
MOTION DATE 08/24/2024
DECISION + ORDER ON MOTION
HON. MARY V. ROSADO, JUDGE
The following e-filed documents, listed by NYSCEF document number (Motion 002) 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154,155,156,157,158 were read on this motion to/for JUDGMENT - SUMMARY.
Upon the foregoing documents submitted by Stacey Malinow, Esq. on behalf of Moretrench American Corporation's ("Moretrench") and Andrew J. Marcus, Esq. on behalf of Guardian Service Industries, Inc. ("Guardian"), Moretrench's motion seeking (a) to amend their Answer pursuant to CPLR to assert an affirmative defense of collateral estoppel, and (b) for summary judgment dismissing Guardian's claims for contractual indemnification and breach of contract is granted.
I. Background
This case has a storied procedural history related to an underlying lawsuit by plaintiff Robert Chamberlin ("Mr. Chamberlin"), for personal injuries sustained when he fell off a steel beam at the World Trade Center on June 22nd, 2007 (NYSCEF Doc. 81 and 82). Port Authority of New York and New Jersey ("Port Authority") settled that action and now seeks indemnification from Defendant/Third-Party Plaintiff Guardian. In turn, Guardian is seeking common law indemnification/contribution, contractual indemnification, and breach of contract from Moretrench.
The basis of Moretrench's argument is that in parallel litigation the Court dismissed Guardian's contractual indemnification and breach of contract claims asserted by Guardian against Moretrench and they seek to apply collateral estoppel to achieve the same result here (see NYSCEF Doc. 105; Peter Faranda v Port Auth. of NY &NJ, Index No. 11609/2010 [Sup. Ct. NY Co. April 1, 2016]) (the "Faranda Decision").
Guardian opposes on the basis that Moretrench has waited years to amend its answer while providing no justification for the delay. Guardian also argues that the Faranda decision does not warrant preclusive effect because the Faranda Court found there was a meeting of the minds as to Moretrench's contractual obligation to insure Guardian, and thus the breach of contract claim should survive to the extent it alleges failure to procure insurance.
In reply, Moretench argues that it should be granted leave to amend as delay alone is insufficient. Moretrench argues Guardian has not and cannot show prejudice or surprise since they have faced this very same argument years ago in Faranda. Moretrench further argues that Guardian has failed to oppose adequately its collateral estoppel arguments and simply makes a plea for equity to avoid application of the doctrine. Moretrench has provided evidence that at the time Mr. Chamberlin was injured, which is the underlying suit in which Guardian seeks indemnity from Moretrench, there was no valid and binding contract requiring indemnification between Moretrench and Guardian.
IL Discussion
A. Leave to Amend
Leave to amend pleadings is freely granted in the absence of prejudice if the proposed amendment is not palpably insufficient as a matter of law (Mashinksy v Drescher, 188 A.D.3d 465 [1st Dept 2020]). A party opposing a motion to amend must demonstrate that it would be substantially prejudiced by the amendment, or the amendments are patently devoid of merit (Greenburgh Eleven Union Free School Dist. v National Union Fire Ins. Co., 298 A.D.2d 180, 181 [1st Dept 2002]). Delay alone is not sufficient to deny leave to amend (Johnson v Montefiore Medical Center, 203 A.D.3d 462 [1st Dept 2022]).
Here, Guardian fails to show that the proposed pleadings are patently devoid of merit or that they would face substantial prejudice from amendment. Although there has been a lengthy delay, this action has been twice dismissed for failure to provide discovery, through no fault of the movant Moretrench, and thus there is a reasonable excuse for the delay. Nor can Guardian claim to be surprised by this argument as they have already faced an identical fact pattern in Faranda, which was another personal injury case arising at the same time as the underlying action giving rise to this case. Therefore, the portion of Moretrench's motion seeking leave to amend is granted.
B. Summary Judgment and Collateral Estoppel
i. Standard
Collateral estoppel applies when "(1) the issues in both proceedings are identical, (2) the issue in the prior proceeding was actually litigated and decided, (3) there was a full and fair opportunity to litigate in the prior proceeding, and (4) the issue previously litigated was necessary to support a valid and final judgment on the merits" (Conason v Megan Holding, LLC, 25 N.Y.3d [2015] [internal quotation marks and citation omitted], rearg denied 25 N.Y.3d 1193 [2015]; Ryan v New York Tel. Co., 62 N.Y.2d 494, 500 [1985])
Collateral estoppel is an equitable doctrine, grounded in the facts and realities of a particular litigation, and is not to be applied rigidly. Buechel v Bain, 97 N.Y.2d 295, 303 [2001]; Tydings v Greenfield, Stein &Senior, LLP, 43 A.D.3d 680, 684 [1st Dept 2007]; Pustilnikv Battery Park City Authority, 71 Mise.3d 1058, 1069 [Sup Ct, New York County 2021]). "The fundamental inquiry is whether re-litigation should be permitted in a particular case in light of fairness to the parties, conservation of the resources of the courts and the litigants, and the societal interests in consistent and accurate results." Buechel at 304. The litigant seeking the benefit of collateral estoppel must show that the decisive issue was necessarily decided in the prior action against a party, or one in privity with a party, while the party to be precluded bears the burden of demonstrating the absence of a full and fair opportunity to contest the prior determination (id.).
ii. Identical Parties and Issues Exist
Here, the Court finds the doctrine of collateral estoppel precludes Guardian's claims for contractual indemnification and breach of contract against Moretrench. The parties are identical -to the Faranda case, namely Moretrench and Guardian. The claims Guardian is asserting against Moretrench are identical to those already dismissed by Justice Joan Madden in Faranda. Moreover, Justice Madden found in Faranda that the purported agreement to indemnify was dated July 22, 2010, which post-dated the Faranda Plaintiff and Mr. Chamberlin's accidents. Justice Madden found there was no meeting of the minds as to the indemnification agreement at the time of the Faranda Plaintiffs accident and therefore dismissed Guardian's contractual indemnification and breach of contract claims. The Faranda Plaintiffs accident post-dated Mr. Chamberlin's accident by approximately three years, and thus Justice Madden's findings apply to the instant case.
iii. Decision on the Merits
Nor can Guardian argue it did not have a full and fair opportunity to litigate its contractual indemnification and breach of contract claims in Faranda as there was extensive deposition testimony taken and Justice Madden's ruling was based on a fully developed evidentiary record. Justice Madden's decision on a summary judgment motion, ultimately dismissing Guardian's contractual indemnification and breach of contract claims against Moretrench constitute a valid and final judgment on the merits as to that issue. Although Guardian argues it would be inequitable to apply collateral estoppel based on a delay in asserting the defense, the Court finds it would be more inequitable to force all the parties to continue litigating an issue which has already been determined to be without merit by this Court. Therefore, Moretrench's motion is granted and the contractual indemnification and breach of contract claims are dismissed.
However, as Moretrench only moves for summary judgment on the grounds of collateral estoppel, and Justice Madden found Guardian's breach of contract based on failure to procure insurance should survive in Faranda, the Court refuses to dismiss Guardian's failure to procure insurance claim at this juncture. Accordingly, it is hereby, ORDERED that Moretrench's motion seeking leave to amend is granted, and the amended answer in the proposed form annexed to the moving papers (NYSCEF Doc. 106) shall be deemed served upon service of a copy of this order with notice of entry thereof; and it is further
ORDERED that Moretrench's motion seeking summary judgment dismissing the Guardian's claims against Moretrench for contractual indemnification and breach of contract are granted, and those claims are dismissed except as provided below; and it is further
ORDERED that to the extent Guardian's breach of contract claim alleges breach of contract based on failure to procure insurance, those claims survive; and it is further
ORDERED that within ten days of entry, counsel for Moretrench shall serve a copy of this Decision and Order, with notice of entry, on all parties via NYSCEF; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.
This constitutes the Decision and Order of the Court.