Travelers Casualty and Surety Company v. Dormitory Authority State of New York et al, No. 1:2007cv06915 - Document 626 (S.D.N.Y. 2011)

Court Description: MEMORANDUM OPINION AND ORDER: Travelers and Trataros's January 31, 2011 motion is granted. DASNY shall be substituted for Travelers and Trataros with respect to these parties' outstanding claims and defenses against the Terrazzo Defendants. 604 MOTION to Substitute Party. Old Party: Travelers Casualty and Surety Company; Trataros Construction, Inc., New Party: Dormitory Authority of the State of New York Motion on Shortened Notice filed by Trataros Construction, Inc., Travelers Casualty and Surety Company. (Signed by Judge Denise L. Cote on 2/14/11) (db)

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Travelers Casualty and Surety Company v. Dormitory Authority State of New York et al Doc. 626 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ____ ----- ---- - ---- - --- - -----X TRAVELERS CASUALTY AND SURETY COMPANY as Administrator for RELIANCE INSURANCE COMPANY, Plaintiff, I '­­,:", ::.===1'" I USDC SDI'fI' DOCUMENT i ELECTRONICALLY FILED r-·or' -: ­­ ... i IL,._.. _.. ""'_1:::::: _ _'___ '" I -v- 1-..,.,,,...._. DORMITORY AUTHORITY ­ STATE OF NEW YORK, Defendant. MASTER FILJ 07 Civ. 6915 (DLC) MEMORANDUM AND ORDE DORMITORY AUTHORITY OF THE STATE OF NEW YORK and TDX CONSTRUCTION CORP., Third­Party Plaintif I ­v­ TRATAROS CONSTRUCTION, INC., Third­Party Defendant. TRATAROS CONSTRUCTION, INC. and TRAVELERS CASUALTY AND SURETY COMPANY, Fourth­Party Plaintiffs, -v- CAROLINA CASUALTY INSURANCE COMPANY; BARTEC INDUSTRIES, INC.; DAYTON SUPERIOR SPECIALTY CHEMICAL CORP. a/k/a DAYTON SUPERIOR CORPORATION; HARLEYSVILLE MUTUAL INSURANCE COMPANY (a/k/a HARLEYSVILLE INSURANCE COMPANY) i JOHN DOES 1 20 and XYZ CORPS. 1­20, Fourth­Party Defendants. ----- X DENISE COTE, District Judge: On January 31, 2011, Travelers Casualty and Surety COlpany ("Travelers") and Trataros Construction, Inc. ("Trataros") filed a motion pursuant to Federal Rule Civil Procedure 25(c), Dockets.Justia.com requesting an Order substituting the Dormitory Authority ­State New York ("DASNY") for Travelers and Trataros with respect to the latter's various claims and defenses against Carolina Casualty Insurance Company ("Carolina"), G.M. Crocbtti, Inc. ("Crocetti"), Dayton Superior Specialty Chemical Corporation, a/k/a Dayton Superior Corp. ("Dayton Superior" , and Bartec Industries, Inc. ("Bartec") (collectively, the "Terrazzo Defendants"). For the following reasons, the motlion is granted and DASNY is substituted for Travelers and Trat1ros with respect to those parties' claims and defenses against the Terrazzo Defendants. BACKGROUND The above­captioned case at Baruch College. ses from a construction It raises the same claims as an action commenced on June 28, 2004 that was dismissed to permit mediation. I Thus, the claims in this case have been for approximately six and a half years. After extensive motion i practice concluding in August 2010, this case was placed OQ the trial ready calendar for February 14, 2011. I I By letter dated January 21, 2011, Travelers, Trataros,l TDX Construction Corp., Kohn Pedersen Fox Associates, P.C., and DASNY notified the Court that they had reached an in principle to settle all claims asserted against each otheri I the above­captioned cases. This settlement agreement was 2 finalized on January 30 (the "Settlement Agreement"). At same time, DASNY, Travelers, and Trataros entered into a liquidating agreement (the "Liquidating Agreement"), under which Trataros concede[dJ liability the Terrazzo De Claims alleged against by DASNY . [and] DASNY . agree[d] to accept in full satisfaction and discharge of its Terrazzo Defect Claims the full amount (if any) that may be collected upon Trataros' claims against I 1 I the Terrazzo Defendants. I· Upon concluding the Settlement and Liquidating Agreemerts, Travelers and Trataros filed a motion on shortened notice i pursuant to Federal Rule of Civil Procedure 25(c), requestibg permission to substitute DASNY in place of Travelers and Trataros as fourth­party plaintiff in the action titled I Travele:J::"s Casualty and Surety Company v. Do!'mitory Authoritly I State of NE;:w York, 07 Civ. 6915 (DLC) (S.D.N.Y.), and as defendant/third­party plaintiff in the action titled G.M. Crocetti Inc. v. . . .Trataros (DLC) (S.D.N.Y.). fil ion Inc., 08 Civ. 623d On February 4, Dayton, Carol I and opposition papers.2 The motion became fully submitter on I February 7, 2011. I A separate provision of the settlement agreement providesl that DASNY will pay Travelers thirty­three percent of the net amount that it recovers from the Terrazzo Defendants or no less than $1,000,000.00. 1 Carolina and Crocetti have s notified the Court that have settled their claims with DASNY. As a result, their objections, which were not adopted by Dayton, need not be addressed. 2 I 3 DISCUSSION Rule 25(c), Fed. R. Civ. P., provides, in relevant parr that In case of any transfer of interest, the action may be continued by. . the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted the . with the original party. action . The decision whether to permit the " [slubstitution of a successor in interest. . is generally within the sound discretion of the trial court." Taberna CaEital LLC i v. Jaggi, 08 Civ. 11355 (DLC) , 2010 WL 1424002, at *2 (S.D.iN.Y. LLC v. Ctr. for Apr. 9, 2010) (quoting Dairy Compact Research, 335 F.3d 66, 71 (2d Cir. 2003)). "primary consideration . . is whether substitution will expedite and simplify the action. II Id. (citation omitted) .1 Permitting DASNY to be substituted for Trataros and Travelers will expedite this protracted litigation and the motion will be granted. The Settlement and Liquidation Agreements establish that DASNY now owns Travelers and Trataros's aims against the Terrazzo Defendants and that Trataros's liability to DASNY is liquidated in the amount DASNY's recovery from the Terrazzo Defendants. se ! I i Agreements, which will resolve a large number of pending cfaims in this case, are contingent upon this Court entering an Order 4 of Substitution. Granting the request for substitution prorotes the interests of efficiency. Dayton has submitted a "partial opposition" to the , to substitute. Dayton principally contends that DASNY cannrt assert a common law indemnification claim against Dayton onl behalf of Trataros, since Trataros's indemnification claim rill I not accrue until Trataros makes a payment to DASNY, and the, Set tlement Agreement does not require such a payment. Daytlon' s argument concerning the validity of Trataros's indemnification I claim is inapposite to the issue currently before this couJt: whether to grant the application by Travelers and Trataros Ito permit DASNY to raise their claims and defenses against I Dayton itself acknowledges that it will raise its Objectio1s concerning the indemnification claim as a motion for at the conclusion of the forthcoming trial. Indeed, TrataJos's claim for indemnification is only one of the numerous for , which Trataros seeks leave to substitute DASNY. Thus, even if , DASNY (on behalf of Trataros) could not state a valid clait for common law indemnification against Dayton, it may succeed in its I prosecution of Trataros's claims for negligence, breach ofl contract, and breach of warranty. i I Should the Court grant the motion to substitute, Dayton I i requests: 1) that all admissions made by Trataros and Travtlers remain admissible; 2) that the Court permit Dayton to refet to 5 I I Travelers and Trataros as plaintiffs in the fourth­party action; and, 3) that 1 defenses asserted on behalf of Dayton as against Travelers and Trataros remain applicable against The first request is granted. . DAfNY. As the Court ruled in tpe final pre­trial conference convened on February 3, 2011, deposition statements by Travelers and Trataros would be trbated as admissions and "be received as admissions against a partv I ! opponent." As for the last two requests, they are largely consistent with the motion to substitute. Rule 25(c) is "designed to facilitate the continuation of an action when interest in a lawsuit is transferred and [it] does not affelct the substantive rights of the parties." Greystone Bank v. Peral , 10 Civ. 0695 (BMC) , 2010 WL 3767619, at Sept. 20 1 2010) (citation omitted). * 1 I i i Thus, this Court/s deqision to grant the motion to substitute does not alter Dayton's ability to refer to Trataros or to raise the defenses that it has against Trataros. Whether there is any need at trial to refer to Travelers is a matter which will be addressed separately. 6 CONCLUSION Travelers and Trataros's January 31, 2011 motion is granted. DASNY shall be substituted for Travelers and with respect to these parties' outstanding claims and defen.es against the Terrazzo Defendants. SO ORDERED: Dated: New York, New York February 14, 2011 United St 7 I

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