Opinion
654253/2019
05-29-2020
SENECA INSURANCE COMPANY, INC. and Seven Up Realty, LLC, Plaintiffs, v. MT. HAWLEY INSURANCE COMPANY and AJ Greenwich Contracting, Inc., Defendants.
Rivkin Radler LLP, Uniondale, NY (Joanne M. Engeldrum of counsel), for plaintiffs. Kenney Shelton Liptak Nowak LLP, Buffalo, NY (Timothy E. Delahunt and Christoph A. Starostik of counsel), for defendant Mt. Hawley Insurance Company. French & Casey, LLP, New York, NY (Joseph A. French of counsel), for defendant AJ Greenwich Contracting, Inc.
Rivkin Radler LLP, Uniondale, NY (Joanne M. Engeldrum of counsel), for plaintiffs.
Kenney Shelton Liptak Nowak LLP, Buffalo, NY (Timothy E. Delahunt and Christoph A. Starostik of counsel), for defendant Mt. Hawley Insurance Company.
French & Casey, LLP, New York, NY (Joseph A. French of counsel), for defendant AJ Greenwich Contracting, Inc.
Gerald Lebovits, J.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 4, 5, 6, 7, 8, 9, 10, 11, 21, 22, 23, 24, 25, 26, 27, 28, 38, 39, 40, 41 were read on this motion to DISMISS.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 13, 14, 15, 16, 17, 18, 19, 20, 29, 30, 31, 32, 33, 34, 35, 36, 37 were read on this motion to DISMISS.
Motions designated Sequence Numbers 001 and 002 are consolidated for disposition.
Defendants AJ Greenwich Contracting, Inc. (Motion Sequence Number 001) and Mt. Hawley Insurance Company (Motion Sequence Number 002) move, pursuant to CPLR 3211(a)(1) and (7), to dismiss the Complaint, and for a declaration that defendants are not obligated to defend plaintiff Seven Up Realty, LLC in an underlying personal injury action, Saeteros v. Seven Up Realty LLC , Index No. 23759/2014E, Sup Ct, Bronx County (the "underlying action").
BACKGROUND
Plaintiffs, Seneca Insurance Company, Inc. and Seven Up, commenced this declaratory judgment action seeking, among other things, a declaration that Mt. Hawley must defend and indemnify Seven Up in the underlying action as an additional insured under a commercial general liability policy (Policy No. MGL0171773) (the "Mt. Hawley Policy") (NYSCEF Doc. No. 18) that Mt. Hawley issued to AJ Greenwich (Complaint, NYSCEF Doc. No. 1). Plaintiffs also seek reimbursement for the defense costs already incurred by Seven Up (id .).
The Complaint includes the following factual allegations. By Agreement dated August 13, 2013, Seven Up, as Owner of the premises, contracted with AJ Greenwich, as Contractor, to perform work on a construction project located at 656 East 133rd Street, Bronx, New York (the "premises") (Agreement, NYSCEF Doc. No. 8). Article 9.12 of the Agreement requires AJ Greenwich to:
"[I]ndemnify and hold harmless [Seven Up]... against claims, damages, losses and expenses, including but not limited to attorneys' fees, arising out of or resulting from performance of the Work, provided that such claim, damage, loss or expense is attributable to bodily injury, sickness disease or death ...but only to the extent caused in whole or in part by negligent acts or omissions of [AJ Greenwich], a Subcontractor, or anyone directly or indirectly employed by them or anyone for whose acts they may be liable ...."
(id. ).
Article 17.1 requires AJ Greenwich to purchase and maintain "insurance for protection from ... claims for damages because of bodily injury, including death, and from claims for damages ..." (id .). Article 17.2 requires Seven Up to "purchase and maintain the Owner's usual liability insurance" (id .). Seneca issued to Seven Up a commercial general liability insurance policy (Policy No. FTZ 1000952), for the period June 21, 2013 to June 21, 2014, covering bodily injury that takes place during the policy period and is caused by an accident (see Complaint, supra ).
AJ Greenwich procured the Mt. Hawley Policy, which provided coverage to AJ Greenwich, for bodily injury cause by an accident that occurred during the policy period, June 1, 2013 to June 1, 2014 (Mt. Hawley Policy, supra ). The Additional Insured endorsement states, in part:
"SECTION II - WHO IS AN INSURED is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy"
(id .).
A Certificate of Liability Insurance, dated August 29, 2013, lists Seven Up as an additional insured under the Mt. Hawley Policy (Certificate, NYSCEF Doc. No. 30). However, the certificate states:
"THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE BELOW DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND, OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW"
(id .)
In the underlying action, Santeros seeks to recover damages from Seven Up for personal injuries he allegedly sustained on May 26, 2014, when he fell from an elevated scaffold while performing work as a painter for AJ Greenwich at the premises (Saeteros Complaint, NYSCEF Doc. No. 15). Saeteros essentially claims that Seven Up did not provide proper safety equipment or take adequate safety measures to ensure that workers could perform their work in a safe manner (id .). The Complaint alleges causes of action for violation of Labor Law § 200 (first cause of action), § 241(1) (second cause of action), § 241(6) (third cause of action), and negligence (fourth cause of action) (id. ).
Seven Up commenced a third-party action against AJ Greenwich seeking contribution or indemnification (Third-Party Complaint, NYSCEF Doc. No. 9). AJ Greenwich answered, generally denying the allegations in the Third-Party Complaint, and asserting multiple affirmative defenses (Answer to Third Party Complaint, NYSCEF Doc. No. 10). AJ Greenwich's answer also includes counterclaims against Seven Up for full indemnity (first counterclaim), contribution (second counterclaim), and contractual indemnification (third counterclaim) (id .).
By letter dated December 17, 2014, Seneca notified Mt. Hawley that it had received the Complaint in the underlying action, and that it was tendering the defense and indemnification of the claim to Mt. Hawley (Tender Letter, NYSCEF Doc. No. 25). Mt. Hawley reportedly declined to defend or indemnify Seven Up in the underlying action, and this action ensued.
The Complaint in this action alleges causes of action for a judgment declaring that Mt. Hawley is obligated to defend and indemnify Seven Up in the underlying action (first cause of action), breach of contract (second cause of action), restitution (third cause of action), equitable contribution (fourth cause of action), and indemnification (fifth cause of action).
Defendants now seek to dismiss the Complaint and a declaration that they are not obligated to defend Seven Up on the underlying action.
DISCUSSION
"On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction" ( Leon v. Martinez , 84 NY2d 83, 87 [1994] ). "The Court must accept the facts alleged in the complaint as true, accord the plaintiff the benefit of every favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" ( id . at 87-88 ).
Under CPLR 3211(a)(1), dismissal is warranted "where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establish a defense as a matter of law" ( Goshen v. Mutual Life Ins.Co. of NY , 98 NY2d 314, 326 [2002] ). In assessing a motion under CPLR 3211(a)(7), however, the court may freely consider affidavits submitted by plaintiff to remedy any defects in the complaint (see Rovello v. Orofino Realty Co ., 40 NY2d 633, 634 [1976] ). The criteria is whether the plaintiff has a cause of action, not whether it has stated one (see Guggenheimer v. Ginsburg , 43 NY2d 268, 275 [1977] ).
Here, as pleaded, the Complaint alleges causes of action for a judgment declaring that Mt. Hawley is obligated to defend and indemnify Seven Up as an additional insured in the underlying action, breach of contract, restitution, equitable contribution, and indemnification.
On a motion to dismiss the Complaint based on documentary evidence, the party claiming insurance coverage has the burden of showing entitlement (see Moleon v. Kreisler Borg Florman Gen. Constr. Co. , 304 AD2d 337, 339 [1st Dept 2003] ).
Here, plaintiffs rely on the Agreement, the Mt. Hawley Policy, the Certificate of Insurance, and the deposition testimony of two of AJ Greenwich's principals to support their position that Seven Up is entitled to coverage as an additional insured under the Mt. Hawley Policy. Plaintiffs also argue that they are entitled to additional discovery to demonstrate that AJ Greenwich agreed in writing to add Seven Up as an additional insured under the Mt. Hawley Policy.
"It is well settled that whether a third party is an additional insured under a policy is determined "from the intentions of the parties to the policy, as determined from the four corners of the policy itself" ( I.S.A. In N.J. v. Effective Sec. Sys ., 138 AD2d 681, 682 [2d Dept 1988] ). "[A] party that is not named as an insured or an additional insured is not entitled to coverage" ( Tribeca Broadway Assoc., LLC v. Mount Vernon Fire Ins. Co ., 5 AD3d 198, 200 [1st Dept 2004] ).
Section II of the Mt. Hawley Policy extends additional insurance coverage to any person or organization for whom AJ Greenwich is performing operations, when AJ Greenwich and that person or organization "have agreed in writing in a contract or agreement that such person or organization be added as an additional insured."
Although the Agreement requires AJ Greenwich to indemnify Seven Up and to purchase insurance coverage, it does not expressly state that AJ Greenwich is required to name Seven Up as an additional insured on its general liability coverage. In fact, Article 17.2 of the Agreement requires Seven Up to purchase and maintain liability insurance. Consequently, the plain language of the Agreement cannot be read to require Mt. Hawley to defend and indemnify Seven Up as an additional insured under the general liability issued to AJ Greenwich (see 140 Broadway Props. v. Schindler El. Co. , 73 AD3d 717, 718-719 [2d Dept 2010] ).
Nor does the Certificate of Insurance confer additional insured coverage on Seven Up under the Mt. Hawley Policy, especially since the certificate expressly states that it is issued for information only, confers no rights upon the certificate holder, and does not amend, extend, or alter the coverage afforded by the policy. "A certificate of insurance is only evidence of a carrier's intent to provide coverage but is not a contract to insure the designated party (see Tribeca Broadway Assoc., LLC v. Mount Vernon Fire Ins. Co ., supra ). The certificate in this case does not establish that Seven Up is an additional insured under the Mt. Hawley Policy since the policy itself makes no provision for coverage (see Moleon v. Kreisler Borg Florian Gen. Construction. Co. , supra ).
Furthermore, the deposition testimony of AJ Greenwich's principals in the underlying action falls outside the four corners of the policy and, as such, does not provide any basis to determine that Seven Up is an additional insured under the Mt. Hawley Policy (see I.S.A. In N.J. v. Effective Sec. Sys ., supra ). In addition, plaintiffs' assertion that they are entitled to additional discovery is unavailing since Seven Up, as one of the contracting parties, would have knowledge of any written agreement requiring AJ Greenwich to procure insurance naming it as an additional insured. Furthermore, discovery is complete in the underlying action, the Note of Issue was filed in November 2018, and both parties filed summary judgment motions (see NYSCEF Doc. No. 40).
Plaintiffs fail to meet their burden of showing that Seven Up is entitled to coverage in the underlying action as an additional insured under the Mt. Hawley Policy. Thus, the causes of action in the Complaint, based on additional insured coverage, must be dismissed, and Mt. Hawley is entitled to a declaration that it is not obligated to defend or indemnify Seven Up in the underlying action as an additional insured under the Mt. Hawley Policy.
Accordingly, it is
ORDERED that the motions are granted and the Complaint is dismissed, with costs and disbursements to defendants upon the appropriate submissions; and it is further
ORDERED and ADJUDGED that defendant Mt. Hawley Insurance Company has no obligation to defend or indemnify plaintiff Seven Up Realty, LLC in the action, Saeteros v. Seven Up Realty, LLC , Index No. 23759/2014E, Sup Ct, Bronx County; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.