Fireman's Fund Ins. Co. v Laruccia Constr. Inc.

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Fireman's Fund Ins. Co. v Laruccia Constr. Inc. 2011 NY Slip Op 33208(U) November 30, 2011 Supreme Court, Nassau County Docket Number: 8357/09 Judge: Karen V. Murphy Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] Short Form Order SUPREME COURT - STATE OF NEW YORK TRIAL TERM. PART 15 NASSAU COUNTY PRESENT: Murphv Justice of the Supreme Court Honorable Karen FIRMA' FUN INSURCE COMPANY own behalf and as subrogee ofDA VI ROSEN, Index No. 8357/09 its ' Motion Submitted: 8/8/11 Plaintiff(s), Motion Sequence: 001 -againstLARUCCIA CONSTRUCTION INC., Defendant(s). LARUCCIA CONSTRUCTION INC., Third- Party Plaintiff(s), -against- RICHA H. MORRLL and RICHA MORRLL PLUMBING & HEATING, INC., Third-Party Defendant(s). The following papers read on this motion: Notice of Motion/Order to Show Cause..o...........o.oo..o..o Answering Papers. 0 0 00"'" 0"'0'0000" 0 0.000..0.. 0 0..0.. 0...0.0000..00.0 o Reply 0.. 0.0.0.0., 0 0 0 O' 0.0000. 00 0 0.00...0.000000.000.00..00.0...00. 0 0 0... 0 0.00..00. o Briefs: Plaintiff slPetitioner ' s. 0 0 0.000.00..0' 0 0'0' 0.. 0 Defendant' s/Respondent' s...... Third par 0...0.. 0..... 0.......0... 000 Plumbing & 3212 dismissing the third- defendants Richard H. Morrell and Richard Ho Morrell Heating, Inc. move this Court for an Order pursuant to CPLR par complaint. 0.'0"00"""0 [* 2] Prior to February of 2007 , Fireman the plaintiff, Fireman s Fund Insurance Company ), issued a homeowner s policy to its insured , David Rosen , who resides in Plandome, New York. While the policy was in effect Rosen entered into a home improvement contract with the defendant Larccia Construction , Inc. ("Laruccia ), pursuant to which Larccia perfonned certain renovations at Rosen s home. Thereafter , in 2005 , Laruccia hired third-part defendant Richard H. Morrell Plumbing & Heating, Inc. ("Morrell Plumbing ), to perform certain plumbing work and/or heating renovations at Rosen s home. Neither the main contract nor any written subcontract however , has been attached to the parties ' respective moving papers. The relevant work , as evidenced by certain change orders , included modifying the inter alia installng a new system and removing heating system in Rosen s sunroom by, existing radiators. However , some two years after the work was completed i. e. on or about 2007 , there was a flood at the premises, which occurred when an uninsulated existing ceilng supply pipe froze and burst , causing damage in the sunroom. The freezing Februar 2 condition apparently occurred because supply line pipes leading to the sunroom were allegedly capped in an improper location. Rosen s previously existing sunroom heating system was a " gravity fed" system , as opposed to " forced fed. Insofar as relevant , the record indicates that in the case of gravity fed" system , capping the pipes in the crawl space area would have trapped standing water in the supply line , as opposed to a " forced fed" tye system , where this problem would not likely exist. At the time when Morrell originally capped the pipes , both Laruccia and Richard Morrell apparently believed (mistakenly) that the heating system in the sunroom was forced fed. Larucccia was also unaware that there was an existing supply line pipe in the ceiling. Had Larccia known that the system was gravity fed , and/or that the ceilng supply line existed , he would have directed Morrell to cap the pipes in a different location and insulated the ceilng pipe. Morrell claims , however, that after discussing his concerns about the capping process Paul Larccia affirmatively directed him to cap the pipes without opening the walls for further inspection , which inspection would allegedly have clarified whether the system was actually " gravity fed" or " force fed. " Significantly, at Paul Larccia s deposition , a change order was introduced as an exhibit which inter alia required that Laruccia " disconnect existing. . . radiators. " Larrcia testified that as he understood it, the foregoing work order did not require him to open up walls , which would have increased the scope and cost ofthe work. [* 3] Fireman s instituted an arbitration proceeding as against the carriers for both Morrell and Laruccci seeking recovery of some $83 884. 96. By decision In Februar of 2008 , 2009 , the arbitrator ruled that Larccia was 90% responsible for the damage while Morrell was 10% responsible. The arbitrator also rejected an affirmative dated February 5 , defense interposed by Laruccia s carrier , by which it alleged that it had properly disclaimed coverage in the matter. On arbitration appeal , however , another arbitrator reversed the original decision to the extent that it now upheld the disclaimer defense asserted by Laruccia ' s carrier. The arbitrator did , however , sustain the division ofliabilty as between Laruccia and Morrell and awarded Fireman s the sum of$8, 388. 50 as against Morrell' s carrier , State Far (decision dated April 13, 2009). Thereafter , in mid- July of 2009 Fireman s entered into a settlement with Morrell Plumbing and State Farm releasing them from any liabilty in connection with the subject claim upon the payment of $20 971. 24. Upon paying Rosen s insurance claim , Fireman s then became subrogated to Rosen rights as against third parties and later commenced the within action , as against Laruccia. Laruccia then instituted a third-part action against Morrell Plumbing and Richard H. Morrell , individually. inter alia that Richard Morrell (individually) and pursuant to the trade name ' Richard H. Morrell was and stil is doing business under Plumbing & Heating. ", The complaint further alleges that Laruccia entered into a contract with both Morrell and Morrell Plumbing to perform work at Rosen s home. According to the third- par complaint, both defendants Morrell individually and Morrell Plumbing, inter alia improperly "disconnect(ing) the heating system in the sunroom . . . . In sum , the third- part complaint avers thereafter collectively failed to perform the agreed-upon work in a proper fashion by, Based upon these averments and others , the third- par complaint interposes two causes of action , the first sounding in breach of contract and a second alleging negligence for which indemnity and/or contribution have been demanded. Morrell and Morrell Plumbing have answered , denied the material allegations of the third-part complaint and interposed various affirmative defenses , including a defense based upon the release issued previously by Fireman s to Morrell Plumbing. Discovery has been conducted and Morrell now moves for summar judgment dismissing the third-part complaint. In support of its application , Morrell contends inter [* 4] alia that: (1) based on the prior settlement with Fireman , GOL ~ 15- 108(b) mandates dismissal ofLarrcia s third-part claims; and (2) that , in any event , since the subject work was performed by Morrell Plumbing, a corporate entity, there is no basis on which to impose personal liability upon Richard H. Morrell individually. inter alia that a release given by the to one of several tortfeasors relieves the settling tortfeasor " from liabilty to any 15- 108 General Obligations Law injured par provides of the civil practice law and see, Giglio v. NTIMP, Inc. 86 A. DJd 301 other person for contribution as provided in aricle fourteen rules (General Obligations Law 815-1081bj Boeke v. Our Lady of Pompei School 73 A. DJd 2d 546 (2d Dept. 311 926 N. Hooglandv. Transport Expressway, Inc. , 72 2d 336 (2dDept. 825 827 901 N. 2010);McNallyv. Corwin 30A. DJd482 DJd 1026 , 1027 898 N. Cover v. Cohen 113 A. 2d 502 , 510 497 N. 2d 271 (2d Dept. 819 N. , 20 II); , 2010); , 1985). S.2d 892 (2dDept., , 2006); 382 (2d Dept. In light of the foregoing, the Court agrees that the prior release given by Fireman Fund to Morrell Plumbing now precludes any affirmative recovery as against Morrell Plumbing. Notably, Laruccia has not opposed that branch of Morrell' s motion which is to dismiss the third-part complaint based on the release insofar as interposed against Morrell 2d 528 , 2011 N. Y. Slip Op (ef, Kermanshachi v Kermanshachi 931 N. Plumbing 07612 (2d Dept. , 2011)). In any event , the release is plain in its import and meaning relative to the settlement of all claims arising out ofthe incident as to Morrell Plumbing. Notably, " (a) release which is clear and unambiguous wil be fully enforced. . . and the court may not look to extrinsic 85 A. D.3d 872 , 973 , 925 evidence to determine the paries 2d 204 (2d Dept. , 2011). ' intent" (Koufakis v. Siglag, Nevertheless , the release does not make any reference to individual officers or directors of Morrell Plumbing. Rather , and without mentioning Richard H. Morrell , as an individual , the release merely refers generically to the "heirs executors , administrator successor or assigns. Significantly, although a broad general release wil be given effect a release may not be read to cover matters regardless ofthe parties ' unexpressed intentions (Cahill v. Regan 5 N. Y . 2d 292 , 299 see, Kaprall v. WE: Women s Entertainment, 157 N. 2d 505 , 184 N. Perritano v. Town of 2d 721 (2d Dept. LLC 74 A. 3d 1151 , 904 N. 2d 60 (2d Dept. 1987)). Mamaroneek 126 A. 2d 623 624 511 N. which the paries did not desire or intend to dispose of' 2d 348 (1959) , 2010); However , that branch ofthe motion which is to dismiss the complaint against Richard H. Morrell in his individual capacity is granted upon the alternative grounds asserted [* 5] that Larccia s contract was with Morrell Plumbing not Morrell individually. More specifically, the record indicates that " Richard H. Morrell Plumbing & Heating, Inc. " exists as a corporate entity; that its function and purpose at the time in question was to perform plumbing and heating work; and that , according to Richard Morrell (see 2d 479 (2d generally, Village Auto Ctr., Inc. v. Haimson 72 A. DJd 805 806 , 898 N. Dept. , 2010)). the subject work was in fact performed by Morrell Plumbing in its corporate capacity The opposing allegation that Morrell entered into the contract in his individual capacity, despite the undisputed existence of the corporate entity, " Richard H. Morrell Plumbing & Heating, Inc " fails to generate an issue of fact with respect to the claim that Morrell himself directly contracted with Larccia. Laruccia s claims to the contrary are unpersuasive , namely, its claims that inter alia that Morrell never told Paul Laruccia he was operating as a corporation; that certain written proposals utilzed by Morrell for other jobs (and his plumbing license as well), contain the heading "Richard H. Morrell Plumbing and Heating, " but omit reference to the corporate form; that most ofthe contracts Larccia entered into with Morrell were oral; that the written proposals utilzed by Morrell did not have a signature line for his (Morrell' s) signature; and that Larccia did not know where the checks he gave Morrell were being deposited. With respect to the latter claim Morrell testified that the checks he received from Laruccia irrespective of how drafted by Laruccia , were deposited into Momell Plumbing s corporate (Retropolis, Inc. v. 14th Street Development LLC 17 A. D.3d 209 210- 211 , 797 S.2d 1 (1 Dept. , 2005)). account. Nor is there anything in either the complaint , or in the Larcccia s opposing submissions , which alternatively supports a piercing of the corporate veil - a theory not pleaded or raised in the third(ef, Sigal v. Brokaw 71 A. DJd 865 866 895 2d 862 (2d Dept. , 2010)). More particularly, Larccia has not sustained its " heavy burden " of establishing that Morrell " abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice " against Larccia " such that a cour in equity wil intervene (see TNS Holdings v. MKI Sec. Corp. 92 N. 2d 335 338- 339 , 703 N. E.2d 749 Fin. 680 N. Matter of Morris v. 82 N. Y.2d 135 , 141 , 623 N. 2d 1157 603 N. Superior Transeribing Service, LLCv. Paul 72 A. D.3d 675 676 898 N. 2d 234 (2dDept. Gateway I 62 A. DJd 141 , 145- 146 877 N. 2d 95 (2d Group, Inc. v. Park Ave. Physicians, P. Dept. see also , Sigal v. Brokaw, supra. part complaint 2d 891 (1998); New York State Dept. of Taxation 2d 807 (1993); , 2010); , 2009) ," [* 6] It is settled "that a business can be incorporated for the very purpose of enabling its proprietor to escape personal liabilty" and that the corporate " form is not lightly to be 2d407 (2d 21 A. DJd 1028, 1029, 801 N. (TreelineMineola, 2d 734 (3d Dept. , 1990) Bowles v. Errico 163 A. 2d 771 , 773 , 558 N. Dept. 2d 126 (2d Dept. see, Matter of Goldman v. Chapman 44 A. DJd 938 , 939 , 844 N. 2007)). Moreover precedent is clear that courts wil pierce the corporate veil only to disregarded" LLCv. Berg, , 2005); prevent fraud , ilegality or to achieve equity" and this is so even where the involved (New York Assn. for corporation is controlled or dominated by only a single shareholder Retarded Children, Montgomery County Ch. v. Keator 199 A. D . 2d 921 , 922 , 606 N. Y. S. 784 (3d Dept. , 1993) see, Sigalv. Brokaw, supra; Matter of Goldman v. Chapman , supra. Laruccia s assertion that its third- par complaint does not plead or rely on the , but rather, advances only a " direct" cause of action as against Morrell , does not preclude Morrell from relying on the doctrine in an attempt to corporate veil doctrine Richard defeat any claims of individual liabilty 2d243 (3d Dept. (2d Dept. , 2009)). 2010);Aliziov. Perpignano, (Lockwood v. Layton 79 A. D.3d 1342 , 1344 , 916 67 A. DJd 833 , 835 , 889N. 2d 100 The Cour has considered Laruccia s remaining contentions and concludes that they are insufficient to defeat the movants ' application for summar judgment dismissing the third-part complaint. Accordingly, it is ORDERED that the motion pursuant to CPLR ~3212 by the third- par defendants Richard H. Morrell and Richard H. Morrell Plumbing & Heating, Inc. for an order dismissing the third- par complaint , is granted. The foregoing constitutes the Order of this Court. Dated: November 30 , 2011 Mineola , N. ENTERED DEC 08 2011 ""I&AU COUNTY COWTY CLIR" OFFtGE

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