Opinion
23262/06.
Decided August 28, 2007.
Litchfield, Cavo, LLLC, New York, for plaintiffs.
Law Office of Eric N. Wolpin, New York, for defendants.
The following motion and cross motion are consolidated for the purposes of this decision:
a) motion by plaintiffs John Sanginito (Sanginito) and Ace Towing Recovery (Ace) [cumulatively, the plaintiffs] made pursuant to CPLR 3212 for declaratory judgment stating to the effect that the plaintiffs are entitled, as a matter of law, to defense and indemnification from defendant-insurer National Grange Mutual Insurance Co. (Grange) in a separate, but related, suit arising out of a pedestrian knock-down automobile accident which took place sometime between 3:00 to 4:30 P.M. on May 31, 2005 in the vicinity of 23rd Street and Ditmar's Place in Astoria, Queens (the accident). Plaintiffs further demand an order for the reimbursement for the cost of plaintiffs' defense expended by Ace's Insurer Lincoln General Insurance Company (Lincoln).
b) cross-motion by Grange and Spectrum Contracting Company (Spectrum) seeking:
i — an order of the Court consolidating for trial the pending action [Index No. 23262/2006] with the subsequent action brought by Spectrum under Index # 6153/2007. Evidence indicates that it was a Spectrum vehicle that was involved in the accident and allegedly struck the pedestrian; and,
It is parenthetically noted that a third related action, under Index # 8888/2006 is also pending in Bronx Supreme Court which was commenced by accident victims Said and Anna Eldilemi for recovery for their personal injuries.
ii — an order, made pursuant to CPLR 3212, for a declaratory judgment stating to the effect that the Spectrum, plaintiff in the second action, was entitled to defense and indemnification in the accident from defendant-insurer Lincoln; and,
iii — for a finding by the Court that Spectrum is entitled, as a matter of law, to common law indemnification from Ace for any losses sustained as a result of the accident.
It is apparently uncontested for the purposes of the pending motion and cross-motion that, on the day in question, Sanginito drove a tow-truck owned by Ace to Astoria, Queens and there, while operating a white Chevy Suburban (the car) owned by Spectrum, struck a child named Said Eldilemi (the child) with said car. It is also uncontested that, at the time of the accident, the car was covered under a liability insurance policy taken out by Spectrum from Grange.(See Pls.' Ex. C — copy of the Grange insurance contract issued to Spectrum.) Likewise, it is uncontested that Ace had procured liability insurance covering the period at issue from Lincoln. (See Pls.' Ex. D — copy of Lincoln insurance contract issued to Ace.).
Plaintiff Sanginito testified at a deposition conducted for another tort action commenced by the Eldilemis that, as of the date of the accident, while he was an employee of Fed-Ex, he was also working various "odds jobs". More specifically, Sanginito stated that, the night before the accident, he was contacted by Ace president Dominic Cipollone (Cipollone), whom he describes as his friend. Cipollone asked him to "help out" at Ace the next day ". . .because I need a hand. . ." (see Pl.s Ex. F — Sanginito EBT in Eldilemi action; p. 13; ll.15-17.). Sanginito said he reported to the Ace facility at 465 Boston Road, Bronx County. While Sanginito testified that he had gone out on three or four calls (p. 15) on the day at issue, he could not give any details or locations of these assignments, saying only that they were" . . . all in the Bronx" (p. 16, l.13.). While Sanginito testified that logs were kept of all of Ace's jobs in an appointment book kept by a dispatcher named "Tim", no records have been presented to the Court. Sanginito testified that he did not possess a commercial drivers' license (CDL) and that he had no formal training in operating a tow truck (p. 67.). Sanginito testified that this was the first and only day that he worked an "odd job" for Ace. Sanginito said he was paid $100.00 in cash for his work for Ace; no financial records of this payment are presented before the Court. (p. 54-55.)
It is parenthetically noted by the Court that, while Sanginito's testimony gives Ace's address as 465 Boston Road, the Lincoln insurance policy procured by Ace gives the address as 4065 Boston Road. (See Pl.s' Ex. D — copy of the Lincoln policy.). The Cipollone affidavit does not give the address of the Ace facility. (See infra.).
Sanginito testified that sometime that day, the dispatcher called him on "his Nextel" (p. 15.) phone and directed him:
"You got to go to 29th Street and Ditmars Boulevard in Astoria and you got to pick up a vehicle and you got to bring it to their mechanic's shop. . .". (See p. 17, quote, ll. 18-21.).
Sanginito testified that after driving in the Ace tow truck to the given location, he parked the truck on the left-side of the roadway. After reviewing certain plaintiff's exhibits, including photos and a copy of the police report presented to him by the examining counsel, Sanginito testified that he was approached at 23rd Street by an un-named man who was driving the car. Sanginito said this un-named man stopped the car in the middle of the street and exited the car. He said that the un-named man turned the car's engine off but left the keys in the ignition. Sanginito testified that he then got into the car, turned over the engine and drove the car, moving it backward and then forward, positioning it so he could hook it up to the tow truck. Santiginto said he could recall nothing in particular about the car other than it was white, with power steering and power brakes.(p. 47.) After backing up several car lengths and re-positioning the tow truck nearer to the car, Sanginito testified that he re-entered the car, which had been left in park, to drive it to a point where he could properly do the hook-up. Less than a minute into this procedure, Sanginito testified that a "little kid ran from the sidewalk". Sanginito testified that he became aware of the accident ". . .[w]hen the brother screamed that, You hit my brother. . .'." . While Sanginito testified that he had seen several children in the immediate area prior to the accident, he did not recall that the area was a school zone. Sanginito testified that the rear left bumper of the car he was operating struck the child. After the impact, Sanginito stated that he exited the car and saw the child laying on the ground. Soon after the accident, the boy's mother, the police and an ambulance arrived. There is no testimony or other evidence that Sanginito personally called anyone for help after the accident or called Ace to notify them of the accident (p. 48-52; quote at p. 51; ll. 15-16.).
While there is no testimony from Sanginito identifying the initial driver of the car or its ownership, it is apparently conceded by the parties that the white car was the property of Spectrum.(See generally, Pl.s Ex. F — Sanginito EBT in Eldilemi action.). No sworn deposition testimony is offered beyond than that of Sanginito. Sanginito testified that he later told Cipollone about the accident but that he never filled out a accident report for Ace. Sanginito denied ever having any conversation with the initial driver of the car after the accident. He testified that he did not know if the un-named man even saw the accident event. Sanginito said he noticed no damage to the car after the accident. (p. 66-69.).
There is no testimony, or other evidence, from Sanginito as to what address or location he would have taken the car had the accident not occurred other than his testimony about the original call from the Ace dispatcher which directed Sanginito ". . .to bring it to their mechanic's shop. . .". (see, supra .). No notes or testimony from "Tim", the Ace dispatcher, are presented in evidence. No testimony or other evidence is presented from the unnamed man who originally drove the car to the place where he met Sanginito. Indeed, Sanginito testified that he did not recall if the man was at the location when the accident occurred.
Annexed to the plaintiffs' reply papers is a two page, five item, affidavit, dated May 7, 2007, signed by Cipollone wherein he factually attests in pertinent part that:
"3. Ace is a small towing company located in the Bronx New York. Our main business is towing vehicles.
4. Ace does have a small lot for storing vehicles, most of which are for the New York City Police Department pursuant to an agreement with them when we tow in stolen or abandoned vehicles upon request by the police department.
5. On the date of the underlying accident, John Sargenito was going to be towing the vehicle owned by Spectrum Contracting Corp. to a garage/service station in the Bronx, not back to our facility."
On or about May 22, 2006, almost a year after the accident, legal counsel for the plaintiffs tendered a demand to Grange contending that, based upon the liability insurance contract issued to Spectrum covering the car driven by Sanginito which struck the child, Grange had ". . .an absolute obligation to provide defense and indemnity to both Mr. Sanginito and Ace Towing in this action. . .". Plaintiffs contend that they are entitled to this defense and indemnification because there is no issue that Sanginito was an authorized "user" of Spectrum's car at the time of the accident. (See Pls.' Ex F — copy of tender letter.). Arguing that there is no unresolved issue of fact, the plaintiffs now move pursuant to CPLR 3212 for a declaration by the Court that Sanginito was a qualified "user" of the Spectrum car at the time of the accident thus entitling plaintiffs to the full benefit and coverage of the Grange liability contract.
It is unrefuted that Grange rejected plaintiffs' demand and continues to do so. Opposing the present motion by the plaintiffs, Grange argues that there is no issue that plaintiffs are not entitled to the demanded coverage as both Sanginito and Ace are subject to a specific exclusion clause in Grange's insurance contract which precludes their being declared a qualified "user" of the vehicle. Both sides rely on the language as written in the Grange contract which defines a "user".(See Grange Ex. C or Pl.s' Ex. C — copy of the Grange contract to Spectrum.).
In Section II, subdivision A-1 of the Grange insurance contract is entitled "Who is an Insured". Therein, in sub-b, this contract defines an "insured" as "[a]nyone else while using with your permission a covered auto' you own, hire or borrow. . . .". The language then directly states "except" and goes on to enumerate five instances where "user" status is excluded. As pertinent to these facts, exclusion five (5) includes ". . .[s]omone using a covered auto' while he or she is working in a business of selling, servicing, repairing, parking or storing autos' unless that business is yours. . .".
Plaintiffs contend that there is no issue that Sanginito, who drove the car owned by Spectrum after an unnamed man left it in the middle of a Queens street with the key in the ignition, was a permissive "user" of the vehicle, as that term is used in the Grange insurance contract, as he moved and positioned the car to hook it up to the Ace tow truck.
Grange counters arguing that Sanginito is unqualified to be viewed as a "user" under the terms of the contract as the evidence adduced establishes that, at the time of the accident, Sanginito was working in a business capacity specifically exclude from coverage; i.e. in a business of servicing, repairing, parking or storing autos. Grange seeks to rebut Ace's claims that it worked only as a towing service, thus, outside the exclusion and entitled to coverage by presenting evidence, including a print out of Ace's official web site, to show that the plaintiffs were directly involved on a auto servicing, storage and repair business when it sent Sanginito to "pick up" the car in Queens County. Grange presents a transcript of Sanginito's deposition in the underlying suit brought by the injured child to evidence the fact that he was there, representing Ace, to bring in the car for service — not merely to tow it.
Procedurally, Ace has stated in its reply papers that it does not oppose that portion of the cross-motion by Spectrum/Grange seeking the consolidation for trial of the pending action and that brought under Index #
6153/2007. It is also clear that the subsequent action, i.e., Index #
6153/2007, is presently before another justice of the Bronx Supreme Court.
APPLICABLE LAW
Summary Judgment Generally:
The proponent of a motion for summary judgment carries the initial burden to tender sufficient evidence to demonstrate as a matter of law the absence of a material issue of fact. (Alvarez v. Prospect Hospital, 68 NY2d 320, 508 NYS2d 923, 501 NE2d 320.) Once that initial burden has been satisfied, the burden shifts to the opponent, who must go forward and produce sufficient evidence in admissible form to establish the existence of a triable issue of fact. The burden, however, always remains where it began, i.e., with the proponent of the issue. Thus "if the evidence on the issue is evenly balanced, the party that bears the burden must lose." (Director, Office of Workers Compensation Programs v. Greenwich Collieries, 512 U.S. 267, 114 S.Ct. 2251, 129 L.Ed.2d 221 (1994); 300 East 34th Street Co. v. Habeeb, 248 AD2d 50, 683 NYS2d 175 [1st Dept. 1997].)The role of the court is to determine if bona fide issues of fact exist, and not to resolve issues of credibility. As the Court stated in Knepka v. Talman, 278 AD2d 811, 718 NYS2d 541 [4th Dept. 2000]):
Supreme Court erred in resolving issues of credibility in granting defendants' motion for summary judgment dismissing the complaint (see, Mickelson v. Babcock, 190 AD2d 1037, 593 NYS2d 657; see generally, Black v. Chittenden, 69 NY2d 665, 669, 511 NYS2d 833, 503 NE2d 1370; Capelin Assocs. v. Globe Mfg. Corp., 34 NY2d 338, 341, 357 NYS2d 478, 313 NE2d 776). Any inconsistencies between the deposition testimony of plaintiffs and their affidavits submitted in opposition to the motion present credibility issues for trial (see, Schoen v. Rochester Gas Elec., 242 AD2d 928, 665 NYS2d 372; Mickelson v. Babcock , supra).
(See also, Perez v. Bronx Park South Assoc., 285 AD2d 402 [1st Dept. 2001]; Singh v. Kolcaj Realty Corp, 283 AD2d 350 [1st Dept. 2001].)
The court's function in determining a motion for summary judgment is issue finding rather than issue determination. (Sillman v. Twentieth Century Fox Film Corp., 3 NY2d 395, 144 NE2d 387, 165 NYS2d 49). Since summary judgment is a drastic remedy, it should not be granted where there is any doubt as to the existence of a triable issue. (Rotuba Extruders v. Ceppos, 46 NY2d 223, 385 NE2d 1068, 413 NYS2d 141; Stone v. Goodson, 8 NY2d 8, 167 NE2d 328, 200 NYS2d 627; Sillman v. Twentieth Century Fox Film Corp. , supra).
Conversely, it is axiomatic that mere speculation, conjecture, surmise, and hopes — unsupported by admissible evidence — are insufficient to overcome a sufficient prima facie case for summary judgment relief. (see, Zuckermann v. City of New York. 49 NY2d 557.).
Interpretation of Contract of Insurance and the Duty of An Insurer:
It has long been established that insurance policies are interpreted according to accepted principles of contract interpretation.(See, Matter of Estates of Covert, 97 NY2d 68, 75 (2001).". "[C]ontracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and if they are clear and unambiguous the terms are to be taken and understood in their plain, ordinary and proper sense." (quoting Hartol Products Corporation v Prudential Insurance Company of America, 290 NY 44, 47 (1943).). It is equally well settled, however, that where provisions of an insurance policy are ambiguous, "those ambiguities must be construed against the insurer since policies of insurance, drawn as they ordinarily are by the insurer, are to liberally construed in favor of the insured." (See also, Atlantic Cement Company, Inc. v Fidelity Casualty Company of New York, 91 AD2d 412, 418 (1st Dept 1983), affd 63 NY2d 798 (1984); Breed v Insurance Company of North America, 46 NY2d 351, 353 (1978) [recognizing "general rule that ambiguities in an insurance policy are to be construed against the insurer"]; State of New York v Home Indemnity Company, 66 NY2d 669 (1985)[same holding].).
In interpreting the scope of the obligations undertaken by an insurer vis-a-vis its insured, it is thoroughly established that an insurer's duty to defend is "'broader than the duty to indemnify"' and that "'an insurer's duty to defend its insured arises whenever the allegations in a complaint state a cause of action that gives rise to the reasonable possibility of a recovery under the policy'." Generally speaking, the court has been instructed to look at the allegations of the complaint, and, if they are "even potentially within the language of the insurance policy", coverage is triggered, and the insurer must provide a defense to its insured, regardless of the merits of the complaint, even if "'debatable theories are alleged in the pleading."'.
See Town of Massena v Healthcare Underwriters Mutual Insurance Co., 98 NY2d 435, 443 [2002]), quoting Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 65 [1991].
See Town of Massena v Healthcare Underwriters Mutual Insurance Co., supra, at 443..
quoting International Paper Co. v Continental Casualty Co., 35 NY2d 322, 325 (1974).
In this area of law, the First Department, Appellate Division, instructed us in Tortoso v. MetLife Auto Home Insurance, 21 AD3d 276 (2005) stating:
A liability insurer is obligated to defend its insured in a pending lawsuit if the pleadings allege a covered occurrence, even though facts outside the pleadings indicate that the claim is not covered (Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 63). This duty to defend is broader than an insurer's duty to indemnify and should be "liberally construed . . . regardless of the insured's ultimate likelihood of success on the merits" (General Motors Acceptance Corp. v Nationwide Ins. Co., 4 NY3d 451, 456). "[A]n insurer can be relieved of its duty to defend if it establishes as a matter of law that there is no possible factual or legal basis on which it might eventually be obligated to indemnify its insured under any policy provision" (Allstate Ins. Co. v Zuk, 78 NY2d 41, 45).However, where an insurer is able to establish, by admissible evidence, that it is within its contractual right and authority to exclude or deny coverage to a party, our appellate courts have clearly recognized and honored such a right. Finding that the defendant-insurer had met its burden to relieve it is its duty to both indemnify and defend, the Court of Appeals in Maroney v. New York Central Mutual Fire Insurance, 5 NY3d 467 (2005), affirmed an appellate court's reversal of a lower court's grant of summary judgment to a plaintiff which had declared the plaintiff was entitled to insurance and indemnification. Based on the evidence adduced, the Court in Maroney, supra, also reversed the lower court's consequent denial of the insurer's summary judgment demand for declaratory relief to the effect that it had no obligation to the plaintiff under the policy. Maroney, deals with the an "uninsured premises" exclusion clause contained in an insurance policy.
Affirming opinion of Third Department, Appellate Division at 10 AD3d 778 (2004).
Concluding that there was no issue that the insurer was within its rights to deny insurance and defense to the plaintiff, the Court of Appeals specifically recognized and reasoned ". . .[a]n insurer does not wish to be liable for losses arising from risks associated with a premises for which the insurer has not evaluated the risk and received a premium. . .". In determining the scope of the insurer's contractual obligation to the insured, the high Court further looked to whether or not the insurer "contemplated the risk" of the actual pending accident event when the policy was negotiated and written. (See at Maroney, supra p. 472; see also, Monteleone v. Crow Construction Co, 242 AD2d 106 [1st Dept., 1998].).
DISCUSSION AND CONCLUSIONS
At the outset, and as there is no opposition from the plaintiffs, the Court grants that portion of the cross-motion which seeks the joinder of the pending actions for trial and directs that Grange settle an order to the effect that the actions are to be joined for trial before this Court.
Clearly, the second pending action, Index #
6153/2007, is not presently
before this Court. As the balance of the affirmative relief sought by the cross-motion deals with issues covered in the second action, now pending before another Justice of this Court, this Court denies, without prejudice, the balance of the cross-motion as premature at this juncture.
With respect to the motion, made pursuant to CPLR 3212, brought by the plaintiffs for declaratory judgment stating that the plaintiffs are entitled to defense and indemnification from defendant-insurer Grange, the Court finds that the plaintiffs have failed to sustain their heavy burden of proof to establish that they are entitled to the relief demanded as a matter of law. The Court so rules as it finds, under the admissible evidence adduced, that at least a material question of fact remains unresolved as to whether or not the business purpose and work performed by Sanginito/Ace at the time of the accident specifically excluded them from qualifying as a "user" of the car so to entitle them to the insurance benefits sought. It is uncontested that the explicit language of the Grange insurance contract with Spectrum would exclude from coverage any person operating the car at issue if the conduct was performed by a person who was ". . .working in a business of selling, servicing, repairing, parking or storing autos' . .". (see, supra, excerpt of Grange insurance contract.)
While plaintiffs' moving papers attempt to describe Ace's business as virtually exclusively involving the towing of automobiles, the evidence adduced leaves at least unresolved material questions of fact in this critical area. The only testimonial evidence from Ace president Cipollone, his May 7, 2007 affidavit submitted in reply papers, states merely: "Ace is a small towing company located in the Bronx New York. Our main business is towing vehicles." (See, supra). Such a statement clearly leaves open the possibility that Ace also dealt in the business of selling, servicing, repairing, parking or storing autos'. Nor does Cipollone's statement that on ". . the date of the underlying accident, John Sanginito was going to be towing the vehicle owned by Spectrum Contracting Corp. to a garage/service station in the Bronx, not back to our facility. . ." resolve the issue as a matter of law.
The Court finds that an issue of fact is framed based upon Sanginito's own sworn testimony as to the orders he received from "Tim", the dispatcher for Ace, on the day at issue. Sanginito testified at the underlying deposition in the accident case that "Tim" directed him: ". . .you got to pick up a vehicle and you got to bring it to their mechanic's shop. . .".
The Court notes that no explanation or clarification of what was meant by the directive from the Ace dispatcher ". . . bring it back to their mechanic's shop. . ." is offered in the deposition transcript. No where in the evidence presented is the Ace-dispatcher's order either explained or limited so to resolve the question of fact framed as to the nature of the business being conducted by Ace at the time of the accident relative to the exclusionary language of the Grange insurance contract. It is notable that no testimony from "Tim" dispatcher, or any other Ace personnel, or documentary evidence, as to the nature of the scope of the assignment given to Sanginito is presented to conclusively resolve this critical question of fact.
Such a material unresolved question of fact remaining, no grant of summary judgment to the plaintiffs is appropriate or warranted in this matter. The plaintiffs' motion for a declaratory judgment is therefore denied.
Settle order consistent with the foregoing decision of the Court.