Paramount Ins. Co. v Federal Ins. Co.

Paramount Ins. Co. v Federal Ins. Co. 2019 NY Slip Op 01667 Decided on March 7, 2019 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on March 7, 2019
Friedman, J.P., Sweeny, Richter, Oing, Moulton, JJ.
8648 650576/16

[*1]Paramount Insurance Company, et al., Plaintiffs-Respondents,

v

Federal Insurance Company, Defendant-Appellant.

Connell Foley LLP, New York (Jeffrey W. Moryan of counsel), for appellant.

Havkins Rosenfeld Ritzert & Varriale, LLP, New York (Abraham E. Havkins of counsel), for respondents.

Order and judgment (one paper), Supreme Court, New York County (Andrea Masley, J.), entered February 8, 2018, which, to the extent appealed from, granted plaintiffs' motion for summary judgment on their claims seeking a declaration that defendant Federal Insurance Company has a duty to defend plaintiff David Ellis Real Estate, L.P., in an underlying personal injury action on a primary basis and so declared, ordered Federal to reimburse Paramount for defense costs and attorneys' fees incurred therein, unanimously modified, on the law, to deny the motion insofar as it sought a determination that the Federal policy is primary, and to vacate the portion of the declaration holding the Federal policy to be primary and the direction that Federal reimburse Paramount, and otherwise affirmed, without costs.

In an underlying personal injury action, the plaintiff alleges that she fell at or near premises owned by David Ellis and leased, managed and controlled by its tenant, nonparty Blue Water Grill. Plaintiff Paramount issued a policy to David Ellis, and defendant Federal issued a policy to Blue Water Grill, covering David Ellis as an additional insured. The court correctly concluded, upon review of the amended complaint in the underlying action, the lease between David Ellis and Blue Water Grill, and the Federal policy, that the allegations in the complaint triggered defendant's duty to defend since they "give[] rise to a reasonable possibility of recovery under the policy" (Atlantic Mut. Ins. Co. v Terk Tech. Corp., 309 AD2d 22, 29 [1st Dept 2003]; see Kassis v Ohio Cas. Ins. Co., 12 NY3d 595, 599-600 [2009]). Supreme Court properly declined to consider facts adduced in the underlying action, as "the courts of this State have refused to permit insurers to look beyond the complaint's allegations to avoid their obligation to defend" (Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 66 [1991]).

However, the determination that defendant's policy is primary to the policy that Paramount issued to David Ellis was premature, as discovery concerning policies issued to other parties to the underlying litigation, including Union Square Café, was still outstanding (CPLR 3212[f]), and such policies were not submitted for Supreme Court's consideration. To determine the priority of coverage among different policies, "a court must review and consider all of the relevant policies at issue" (BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 716 [2007]). For this reason, the order directing defendant to reimburse Paramount for all its defense costs and [*2]attorneys' fees was also premature.

We have considered the parties' remaining contentions and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MARCH 7, 2019

CLERK