333 Fifth Ave. Assoc., LLC v Utica First Ins. Co, SPN
Inc.
2012 NY Slip Op 31027(U)
April 13, 2012
Supreme Court, New York County
Docket Number: 116261/09
Judge: Manuel J. Mendez
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SCANNED ON411812012
[* 1]
SUPREME COURT OF THE STATE OF NEW YORK
MANUEL J. W IDEZ
E
Justice
PRESENT:
333 FIFTH AVENUE ASSOCIATES, LLC and
KHEDOURI ASSOCIATES, LLC,
Plaintitto,
-against-
Tho followinu . .
- papem, numbered I to 10
cross-motions for summary Judgment-
- NEW YORK COUNTY
PART
INDEX NO.
MOTION DATE
MOTION SEQ. NO.
MOTION CAL. NO.
I3
I16261109
02 -28-2012
001
were mad on this motlon to/for irrmmary ludnment and
PAPERS NUMBERED
1-4,5-6.8-9
7
IO
2
0
Cross-Motion:
XYes
No
Upon a readlng of the foregolng papers cited papers, it is ordered that TOWER
INSURANCE COMPANY OF NEW YORKâs motlon for summary judgment, Is granted.
UTICA FIRST INSURANCE COMPANYâS cross-motion for summary judgment is.
granted. Plaintiffsâ cross-motion for summary judgment, is denled.
An underlylng bodily Injury action was commenced by co-defendant Manuel
Mendleta in Supreme Court, Kings County, under Index #21904105. He sought to
recover damages for personal injuries sustalned on March 2,2005, as a result of a fall
down an elevator shaft while employed by SPN, Inc. (hereinafter referred to as âSPNâ).
An employee of Perfume Valley Gift Shop, Inc. (hereinafter referred to as âPerfume
Valleyâ) provided the elevator key to SPNâs employee. SPN dld not have the elevator
key although it was given one from the plaintiffs and borrowed Perfume Valleyâs key to
access Its storage area in the basement. The elevator key opened the doors on the
ground floor. Manuel Medleta started to enter through the opened doors, but failed to
notice the elevator was not there and fell to the basement of the building.
On September 15, 2009, the Appellate Dlvlslon, Second Department determined
that Indemnification Agreements between the Plaintiffs, SPN and Perfume Valley, for
the use of the elevator key vlolated General Obligations Law 95-321, and were
unenforceable (Mot. Exh. J). On November 18, 2009, plalntlffs brought this declaratory
judgment based on provisions In the leases (Mot. Exh. A).
On October 21 , 2010, a settlement agreement was reached In the personal injury
action for $600,000.00 (Mot. Exh. K). Tower Insurance Company of New York
(hereinafter referred to as âTowerâ) Is the carrier for SPN. Utica Flrst Insurance
[* 2]
Company (hereinafter referred to as âUtlca Firstâ), is the insurance carrier for Perfume
Valley. Utica Mutual Insurance Company (hereinafter referred to as âUtica Mutualâ), is
the Insurance carrier for the plaintiffs. Pursuant to the settlement agreement, each
carrier agreed to provisionally fund $200,000.00 to settle the underlying action. The
settlement agreement states that this declaratory judgment actlon will determlne each
insurance carrlerâs ultimate share of the total settlement amount, the respectlve duties
to defend and Indemnify the landlord, and the priority of available Insurance coverage
for the beneflt of the landlord.
The settlement agreement also states that the landlordâs clalms against SPN and
Perfume Valley and all cross-claims asserted by or against SPN and Perfume Valley in
this declaratory judgment action, wlII be discontinued with prejudice.
Tower seeks summary judgment because the plalntlffs do not qualify as an
addltlonal insured and there Is no duty to defend or Indemnify. Tower claims it tlmely
and properly dlsclaimed coverage.
I
Utlca First cross-moves for summary judgment clalmlng that the plalntlffs were
not insured as part of their primary policy, only the umbrella policy. Utlca Flrst also
claims that its umbrella or excess policy only applies to claims over the one million
dollar primary policy issued by Utica Mutual and there Is no coverage.
Plalntlffs oppose both Tower and Utica Firstâs motions and cross-move for
summary Judgment based on Tower and Utica Firstâs duty to defend and indemnify
pursuant to the lease.
In order to prevail on a motion for summary judgment pursuant to CPLR $3212,
the proponent must make a prima facie showing of entltlement to judgment as a matter
of law, through admissible evldence, eliminating all material Issues of fact (Klein v. City
of New York, 89 N.Y. 2d 833,675 N.E. 2d 548,652 N.Y.S. 2d 723 [1996] and Alvarez v.
Prospect Hospltal, 68 N.Y. 2d 320, 501 N.E. 2d 572, 508 N.Y.S. 2d 923 [1986]). Once the
moving party has satisfied these standards, the burden shifts to the opponent to
produce contrary evidence In admissible form, sufficient to require a trial of materlal
factual Issues (AmatuIII v. Delhi Constr. Corp., 77 N.Y. 2d 525, 571 N.E. 2d 645; 569
N.Y.S. 2d 337 [1999]).
An Insurerâs duty to defend additional Insureds and named Insureds, âarise
whenever the allegations within the four corners of the underlying complalnt glve rise
to a covered clalmâ(Worth Constr. Co., Inc. v. Admiral Ins. Co., 10 N.Y. 3d 411, 888 N.E.
2d 1043, 859 N.Y.S. 2d 101 [2008]). An Insurer is required to defend if there Is a
possibility of coverage, regardless of whether the claim Is, âgroundless, false or
baselessâ (Automobile Ins. Co. of Hartford v. Cook, 7 N.Y. 3d 131, 850 N.E. 2d 1152, 818
N.Y.S. 2d 176 [2006]). To be relieved of Its duty to defend, an Insurer has the burden of
establishing that the causes of actlon are completely wlthln an exclusion, there Is no
other reasonable Interpretation and there Is no factual or legal basis upon whlch the
Insurer may be obligated to Indemnify the insured (Frontier Insulation C0ntrs.v.
Merchants Mut. Ins. Co., 91 N.Y. 2d 169, 090 N.E. 2d 866,667 N.Y.S. 2d 982 [1997]). The
duty of an insurer to defend based on the posslblllty of liability is broader than the
duty to indemnify. Indemnification is based on the Insuredâs actual llablllty to a third
party (Argo Corp. v. Greater N.Y. Mut. Ins. Co., 4 N.Y. 3d 332. 827 N.E. 2d 762,794
N.Y.S. 2d 704 [2005]).
[* 3]
The complaint alleges that pursuant to the lease, both Perfume Valley and SPN
were required to obtain and maintain an Insurance policy naming the plaintiffs as
additional Insureds. Perfume Valley and SPN were to obtaln and maintain an insurance
policy providing general llablllty coverage applicable to all of the claims asserted by
Manuel Mendieta In the personal injury action. The complaint also alleges that Perfume
Valley and SPN âsprimary policy requlre Tower and Utica First to provide coverage,
defense and indemnification to the plaintiffs which was not provided (Mot. Exh. A).
The cornplaint relles on paragraph 8 of both Perfume Valley and SPNâs lease to
establish liability (Mot. Exhs. C & D). Pursuant to Paragraph 8 (b) of the leases the
tenant Is requlred to obtain Publlc Llablllty and Property Damage Insurance naming the
plalntlffs as additional insureds. Paragraph 8(a) states In relevant part,
âLandlord or its agents shall not be liable fo,r any damage to property
...nor for any injury or damage to persons or property resulting from any
cause of whatsoever nature, unless caused by or due to the negligence
of Landlord, Its agents, servants or employees . . . I â
Towerâs disclaimer relies on policy form CG 01 63 09 99, of Its Commercial
General Liablllty Coverage, which states in relevant part,
â..,I.
lnsurlng Agreement
a. We will pay those sums that the insured becomes legally obligated
to pay as damages because of âbodily Injuryâ ...to whlch this
Insurance applies. We will have the right and duty to defend the
Insured against any âsuitâ seeking those damages ...However, we
will have no duty to defend the Insured against any âsuitâ seeking
damages for âbodlly InJuryâ or âproperty damageâ to which thls
insurance does not apply ...â
Tower also relies on policy form CG 20 26 I 85, an endorsement which changes
I
the terms of the policy concerning addltlonal Insured designated persons, it
states in relevant part,
-
âWHO IS AN INSURED (Section II) Is amended to include as an
Insured the persons or organization shown In the Schedule as
an insured but only wlth respect to llablllty arising out of your
operatlons or premlses owned by or rented to you.â
(Aff. of Lowell Aptman, Exhs. A & B)
Tower claims that the addltlonal Insured endorsement is not triggered because
Perfume Valley was not named as a defendant in Manuel Mendietaâs personal Injury
action and there were no causes of action for negllgence brought against Perfume
Valley In the underlylng action. It also claims Manuel Mendieta was SPNâs employee,
the elevator doors were opened by an employee of SPN and the accident did not occur
on Perfume Valleyâs leased premises. The elevator and shaft were neither owned or
rented by Perfume Valley. Perfume Valley was only brought into the Kings County
action by the plaintiffs as third parties based on an indemnification agreement that was
[* 4]
found Invalid by the September 15, 2009 Decision of the Appellate Division, Second
Department (Mot. Exhs. H, I & J).
The Appellate Division Second Department found that the plalntlffs In this
actlon were negligent in maintaining what they knew to be an unsafe condition on the
premises and that Manuel Mendiettaâs accident was foreseeable. The decision also
found that as to SPNâs liability there remained an issue of fact as to whether Manuel
Mendietta, acted in a manner that severed the, â... causal connections between the
ownersâ alleged negligence and the plaintiff s (Manuel Mendiettaâs) injuryââ (Manuel
Mendietta v. 333 Fifth Ave. Assn., 65 A.D. 3d 1097, 885 N.Y.S. 2d 350 [N.Y.A.D. 2ndDept.
20091).
Plalntlffs state that the dlsclalmer was Improper based on the provisions of the
lease. They claim Perfume Valley was negligent and liable because It provlded the key
to SPNâs employee and the key was exclusively given to Perfume Valley. Plaintiffs also
state that Tower waived its claim of timely disclaimer based on lack of notice.
Upon review of the papers submitted this Court finds that no claims of
negligence were asserted against Perfume Valley In the underlying personal injury
action brought by Manuel Mendletta. Plaintiffs have not established Perfume Valley was
negligent. Plaintiffs have failed to establish that they were not negligent so that the
lease provision would require coverage. Towerâs policy does not cover the plaintiffs for
the causes of actlon asserted in the underlying action and disclaimer was timely.
Utlca Flrst claims that the plaintiffs are only covered under their umbrella pollcy
Issued to SPN under policy number ULC 1244082 00. The umbrella policy does not
apply to claims under one mllllon dollars and since the case settled for $600,000.00 It
has not been triggered. The Utlca Flrst primary policy Issued to SPN under policy
number BOP 1244081 00, does not contain an addltlonal Insured endorsement and
there Is no reference to the plaintiffs anywhere else on the pollcy, Including the
Declaration page (Utlca Firstâs Cross-Mot. Exh. A).
Plaintiffs state Utica Firstâs primary policy includes the plaintiffs as an additional
Insured pursuant to the Certificate of Insurance and two letters ldentlfylng them as
additional Insured sent by Jeffrey Mount; a claims adjuster (Plalntlff s Cross-Mot. Exhs.
0 &Q). Plaintiffs also claim that Indemnification under the lease agreement does not
fall under the primary policy exclusions and they should be covered.
A party claiming Insurance coverage has the burden of establishing entltlement.
A party that is not named as an additional Insured on the face of a policy is not entitled
to coverage. A certificate of insurance does not confer coverage, or establish as
conclusive proof that coverage exlsts. A carrier is not required to dlsclalm coverage
when there Is no coverage in existence (Tribeca Broadway Assoclates, LLC v. Mount
Vernon Flre Ins. Co., 5 A.D. 3d 198,744 N.Y.S. 2d 11 [ N.Y.A.D. 1lt Dept., 20041).
Plaintiffs cannot establish based on the Certificate of Insurance alone that the
primary policy Included the Plaintiffs as additional Insureds. The lack of a policy
exclusion does not establish that the plaintiffs were named as additional insureds
under Utica Firstâs primary policy. The claims adjuster did not bind the insurance
company and his letters did not alter the fact that the primary policy does not have a
provision naming plaintiffs as additional insureds.
[* 5]
Upon a review of all the papers submitted this Court finds that Utlca Flrst has
met its burden of proof and the plaintiffs were not additional Insureds under SPNâs
primary policy.
Accordingly, it is ORDERED that the TOWER INSURANCE COMPANYâS motion
for summary judgment, is granted, and it is further,
ADJUDGED and DECLARED that TOWER INSURANCE COMPANY was not
required to provide coverage, indemnify or provide a defense to the plaintiffs in the
Supreme Court, Klngs County actlon flled under Index #21904/05, and it is further,
ADJUDGED and DECLARED that TOWER INSURANCE COMPANY may enter
judgment agalnst the plalntlffs for $200,000.00 provlslonally paid towards settlement of
the Supreme Court, Kings County action flled under Index #21904/05, together wlth
costs and disbursements as taxed by the Clerk, and It Is further,
ORDERED that the UTICA FIRST INSURANCE COMPANYâS motion for summary
Judgment, is granted, and it is further
ADJUDGED and DECLARED that UTICA FIRST INSURANCE COMPANY may
enter Judgment against the plaintiffs for $200,000.00 provisionally pald towards
settlement of the Supreme Court, Kings County action filed under index #21904/05,
together wlth costs and disbursements as taxed by the Clerk, and It is further,
ORDERED that the plaintiffsâ cross- motion pursuant to CPLR $3212 for
summary judgment, Is denled, and it is further,
ORDERED that pursuant to stipulation the clalms and cross-claims against
SPN, INC. and PERFUME VALLEY GIFT SHOP have been discontinued with prejudice
and there are no causes of action asserted agalnst MANUEL MENDIETA, named a
necessary party to this action, and as to these parties, the complaint is dismissed .
This constitutes the declslon, order and judgment of this court.
Dated: April 13, 2012
ENTER:
Check one: X FINAL DISPOSITION
Check if appropriate:
NON-FINAL DISPOSITION
0 DO NOT POST
UNFILED JUDGMENT
Thls judgment has not been entered by the County Clerk
and notice of entry cannot be served based hereon. To
obtain entry, counsel or authorized representative must
appear in person at the Judgment Clerkâs Desk (Room
1418).
0 REFERENCE
