Federal Ins. Co. v Milestone Constr. Mgt. Serv., Inc.

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Federal Ins. Co. v Milestone Constr. Mgt. Serv., Inc. 2012 NY Slip Op 31876(U) July 3, 2012 Sup Ct, Nassau County Docket Number: 008054/11 Judge: Michele M. Woodard 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] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU FEDERAL INSURANCE COMPANY as subrogee of CENTRE MANHASSET , LLC , MIRACLE GATE LLC And MIRACLE MILE LLC Michele M. Woodard TRIAL/IAS Par 8 Index No. 008054/11 Plaintiffs Motion Seq. No. : 02 DECISION AND ORDER -against- MILESTONE CONSTRUCTION MANAGEMENT SERVICE , INC. Defendant. MILESTONE CONSTRUCTION MANAGEMENT SERVICE , INC. Third- Par Plaintiff Third- Party Index -against- No. : 008054/11 , INC. , RESCO ELECTRIC , and LIBERTY MUTUAL INSURANCE COMPANY STATEWIDE ELECTRIC & COMMMUNICATIONS , INC. Third- Par Defendants. Papers Read on this Decision: Third- Par Defendant Liberty Mutual' s Notice of Motion to Sever Defendant/Third- Party Plaintiffs Affirmation in Opposition Third- Party Defendant Libert Mutual' s Reply Memorandum of Law Third- Pary Defendant Resco Electric Affrmation in Support of Liberty Mutual' Motion to Sever Defendant/Third- Party Plaintiffs Affirmation in Opposition to Resco Electric s Affirmation in Support [* 2] In motion sequence number two , the third- pary defendant , Libert Mutual Insurance Company (hereinafter " Liberty ) moves by Notice of Motion for an order , pursuant to NY CPLR 9 603, to sever the third- part insurance coverage claim against it asserted by the defendant/third-par plaintiff, Milestone Construction Management Service , Inc. (hereinafter Milestone ) from the underlying, first- par causes of action (negligence and breach of implied waranty). Milestone opposes the motion. Third-pary codefendant , Resco Electric (hereinafter Resco ), supports Milestone s motion to sever. Milestone objects to the court s consideration of Resco s affrmation in support. FACTS The plaintiff, Federal Insurance Company, as subrogee of Centre Manhasset, LLC Miracle Gate LLC , and Miracle Mile LLC , claims that on April 26 , 2010 , an electrical fire started in the decorative canopy above an entrance to a store called Daffy' s. Milestone , the sole defendant , is the contractor that was performing the construction work at Daffy' s. On Januar 6 2012 , Milestone commenced a third-par action against electrical subcontractors JF , Inc. , Resco and Resco s general liabilty insurance carrier Liberty. On March 8 , 2012 , Milestone amended its third-par complaint to add Statewide Electric & Communications , Inc. as an additional third-par defendant. On March 30 , 2012 , Liberty moved to sever , pursuant to CPLR 603 , the third- par action against it on ground that trying the issues of insurance coverage and the underlying liability before the same jury would prejudice Liberty. Milestone opposes the motion , arguing that: the insurance claim is entirely derivative of and related to the underlying claims; the thirdpary and first- par claims involve identical issues of law and fact; tort and insurance coverage Page 2 of 7 [* 3] causes of action can be tried together; and judicial economy would be compromised. Resco supports the motion , arguing: a lack of prejudice; that no common issues of law or fact with the underlying claim e)(ist; and that juror confusion would result from trying the two actions together. v. See Haber Cohen 74 AD3d 1281 (2d Dept 2010) (holding that severing the third- par indemnification and contribution action from the main negligence and trespass actions was proper based on the absence of common factual and legal issues). Milestone requests that the Cour not consider Resco s affirmation in support because it was fied after the time allotted by CPLR 9 2214(b) e)(pired. In the alternative , Milestone opposes Resco s affirmation in support onthe merits. Resco Affirmation in Support Milestone requests that the Court disregard Resco ' s affirmation in support of Liberty motion to sever for being untimely under NY CPLR 9 2214(b). The Cour has al interest in considering the paries ' submitted affrmations in order to rule on the merits. Second , the Cour may accept and consider untimely opposition papers when doing so would not be prejudicial. Furhermore , Milestone s opposition to Resco s affirmation in support fails to show prejudice. v. See Dinnocenzo Stone Corp. v. Jordache Enters. 213 AD2d 219 219- 20 (1st Dept 1995) (citing Pallette Guyer Bldrs. 194 AD2d 1019 , 1020 (3d Dept 1993)). Finally, a finding of prejudice is belied by the facts that (1) Milestone had the opportunity to and did oppose Resco affirmation in support , and (2) Libert' s grounds to support its motion are stronger than the additional grounds that Resco provided in support. Therefore , the Court has considered Resco ' s Affirmation in Support. Page 3 of 7 ); [* 4] Liberty' s Motion to Sever the First- and Third- Party Causes of Action See The cour has discretion in ruling on motions to sever. furtherance of convenience or to avoid prejudice the cour may NY CPLR 9 603 (" order a severance of claims , or may order a separate trial of any claim , or of any separate issue. The court any claim or issue prior to the trial of the others. Dane order the trial of may see also Rosenbaum ) (emphasis added); Murphy, Inc. 189 AD2d 760 761 (2d Dept 1993) (" (IJt is in the discretion of the cour to grant a severance. . . . v. Raiport Gowanda Electronics Corp. 190 Misc. 2d 353 (Sup. Ct. Cattaraugus County, 2001) (" Severance is subject to the sound discretion of the trial judge and should be used to facilitate the speedy and unprejudiced disposition of cases. ) (citing Cross Cross 112 AD2d 62 , 64 (1 st Dept 1985)). This discretion also pertains to severing third- par claims: separate In e)(ercising its discretion , the court shall consider whether the issue thereof. . .. (third-pary J controversy. . . w( ouldJ unduly delay the determination of the main action or prejudice the substantial rights of any pary. The cour may. . . order a separate trial of the third-part NY CPLR 9 1010; v. accord Kelly claim or of any Yannotti 4 NY2d 603 (NY 1958). The general rule is that severance is proper if it would not injure any part. Enright 46 Misc. 2d 913 (Sup. Ct. , Special Term , Ulster County, 1965); Chenango Indus. Dev. Agency v. Lockwood Greene Eng Bonavita accord County of 111 AD2d 508 , 509 (3d Dept 1985). Prejudice is particularly noted in third- party actions against insurers regarding insurance coverage for an underlying negligence action. See Kelly, court abused its discretion by denying third- par insurer 4 NY2d 603 (finding that the lower s motion to sever the claim against it see also DeLuca regarding insurance coverage from the underlying liability claim); Page 4 of 7 ); [* 5] Schlesinger 39 AD2d 566 , 566 (2d Dept 1972) (finding that trying the first- pary negligence and third-pary insurance coverage claims together " before the same jury would subject the third- par defendant to some prejudice. Krieger v. Ins. Co. ofN Am. 66 AD2d 1025 1026 (4th Dept 1978) (" The injection of the issue of insurance in the negligence case. . . is inherently prejudicial and should be avoided. ). Milestone attempts to distinguish these cases by arguing that the holdings pertain to trying, not litigating, a lawsuit; however , Milestone fails to e)(plain why the Cour should allow the cases to be litigated together until trial. Libert contends that it would be prejudiced by having to paricipate in an e)(pensive fact- intensive discovery for the underlying negligence claim which has no bearing on the issue of whether Liberty is liable to indemnify. The Court agrees. Since the negligence issue must be tried before the insurance coverage issue , anyway, see Chunn v. New York City Hous. Auth. , 55 AD3d 437 438 (1st Dept 2008) (" (IJssues of fact as to liability in the underlying personal injury action render premature the conclusion that the insurers have a duty to indemnify. . . . ), no added convenience would result from consolidating the first- and third-part claims because , any convenience that could be realized from maintaining the conjoined action would be dwarfed by the prejudice claimed by Libert insurers. See Eugene J. Busher Co. and v. established in case law pertaining to third- pary defendant Galbreath-Ruffn Realty Co. 16 AD2d 750 , 750 (1st Dept 1962) (" A severance. . . wil not be granted where the convenience of disposing of all issues in one trial clearly outweighs any possible prejudice to the plaintiff. ). Furhermore , Miracle denies that prejudice would result from denying severance but offers no substantiating facts. Therefore Liberty s motion to sever avoids prejudice. Additionally, the insurance coverage action is independent and distinct from the Page 5 of 7 [* 6] underlying cause of action because the former could arise even in the absence of a viable personal injury action. In this sense , the third- pary cause of action is not derivative of the first and " claims should be severed where they are so unrelated that a single trial would result in undue prejudice to a par. Krieger 66 AD2d at 1026 (unanimously reversing an order denying third- pary insurer s motion to sever). Besides , Milestone argues that the insurance coverage issue is derivative of the liability issue but fails to e)(plain why. Milestone s contention that the " comple)( issues are intertwined v. Shanley Callanan Industries, Inc. 54 NY2d 52 57 (NY 1981), thereby warranting a denial of the severance motion , is inapplicable here. Similarly, Milestone s argument that the same issues of fact and law pertain to both causes of action is also incorrect. The underlying liability issue is factintensive and based on the elements of negligence whereas the insurance coverage issue involves judicial construction of an insurance policy. (CJommon principles of negligence law permeate(dJ both (negligence and but only because " the third- par suit involver dJ an not an insurance company, and at issue is not the construction insurance agency, of an insurance policy or the extent of its coverage as is true in so many instances , but simply whether the agency negligently failed to procure liability insurance for defendants. insurance coverage Jactions " Harris v. Manos 181 AD2d 967 967- 68 (3d Dept 1992) (affirming the order that denied third- par insurer s motion to sever) (emphasis added). The very reasons that the Harris cour noted that would support a motion to sever are present here. Based on the foregoing, Third- pary cause of action is hereby granted. Defendant Liberty s motion to sever the third- party It is hereby ORDERED that all parties are directed to appear for a compliance conference on July Page 6 of 7 [* 7] 2012 at 9:30 anl. This constitutes the DECISION and ORDER of the Cour. DATED: July 3 , 2012 Mineola , N. Y. 11501 ENTE . RON. MICHELE M. WOODARD F:\DECISION - SEVERANCE\Federal Insurance Company. wpd ENTERED JUL 09 2012 NASSAU COUNTY COUNTY CLERK' S OFFICE Page 7 of 7

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