Integon Natl. Ins. Co. v New York Cent. Mut. Fire Ins. Co.

[*1] Integon Natl. Ins. Co. v New York Cent. Mut. Fire Ins. Co. 2008 NY Slip Op 52122(U) [21 Misc 3d 1121(A)] Decided on October 23, 2008 Supreme Court, Oneida County Shaheen, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 23, 2008
Supreme Court, Oneida County

Integon National Insurance Co., Plaintiff

against

New York Central Mutual Fire Insurance Company, et al., Defendants.



32-06-1025



Jennifer Richardson, Esq.

The Law Firm of Janice M. Iati, P.C.

Suite 1900, One Chase Square

Rochester, New York 14604

Keith D. Miller, Esq.

1000 7th North Street, Suite 120

Liverpool, New York 13088

Michael E. Getnick, Esq.

Getnick Livingston Atkinson

Gigliotti & Priore, LLP

258 Genesee Street

Utica, New York 13502

Anthony F. Shaheen, J.

The above captioned matter was on my October 22, 2008 Motion Term, at which time Ms. Richardson acknowledged she had just received the check from Mr. Miller that morning, in the amount of $16,307.90 as payment in full for New York Central's share of Integon's attorney's fees as previously ordered by this Court (Julian, J.). At Motion Term, the Court also awarded Integon $1,341.08 for attorney's fees and disbursements on the motion, and the Court reserved Decision on Mr. Getnick's request for attorney's fees from either or both insurers, for his services representing defendants Thomas and Jane Watkins and 234 Mohawk Corporation. After listening very carefully to oral argument and engaging in lively colloquy with counsel, the Court has again reviewed the papers submitted on this motion as well as the relevant case law, and [*2]issues the following Decision:

The Court of Appeals has held that "an insured who is cast in a defensive posture by the legal steps an insurer takes in an effort to free itself from its policy obligations, and who prevails on the merits, may recover attorneys' fees incurred in defending against the insurer's action ... including a defense against an insurer's declaratory judgment action" (U.S. Underwriters Ins. Co. v. City Club Hotel, LLC, 3 NY3d 592 [12-16-04]). The Fourth Department has also held that "an insurer's responsibility to defend reaches the defense of any actions arising out of the occurrence, and defense expenses are recoverable by the insured, including those incurred in defending against an insurer seeking to avoid coverage for a particular claim. ... An insurer's obligation to pay attorney's fees and costs in connection with a declaratory judgment action is incidental to the insurer's contractual duty to defend" (National Grange Mutual Insurance Company v. T.C. Concrete Construction, 43 AD3d 1321 [9-28-07]). It is this Court's belief that New York Central Mutual's reliance on the Court of Appeals holding in Mighty Midgets, Inc. v. Centennial Insurance Company (47 NY2d 12 [4-5-79]) to support its claim that defendants Mr. and Mrs. Watkins and 234 Mohawk Corporation are not entitled to attorney's fees, is not well placed since that Decision only supports defendant's claim. In fact, the Court of Appeals relied on Mighty Midgets, Inc. to support its more recent 2004 Decision in U.S. Underwriters Ins. Co. (id.). Moreover, there is nothing whatsoever in the facts before this Court to support New York Central's claim that Mr. and Mrs. Watkins and 234 Mohawk Corporation brought any affirmative action or declaratory judgment action to settle their rights. Rather, the record is clear that they were placed in a defensive posture by being named defendants in a declaratory judgment action taken by Integon National Insurance Company to settle its rights in relation to them and to New York Central Mutual Fire Insurance Company. Additionally, counsel for New York Central argues that these defendants are not entitled to attorney's fees because a defense was in fact provided for them. However, the record demonstrates that the defendants hired private counsel only after being advised several times to obtain their own attorney in the underlying personal injury action. The Court specifically notes that even after an Answer had been entered in the personal injury action on October 12, 2005, Integon sent a letter to these defendants dated December 22, 2005, advising them to retain their own counsel. There is also evidence that Mr. Getnick was specifically asked to attend some of the Court conferences.

For the reasons stated and based on the relevant case law, Mr. Getnick's request for attorney's fees and disbursements for defending Mr. and Mrs. Watkins and 234 Mohawk Corporation in both the personal injury action and the declaratory judgment action is granted. The Court has reviewed Mr. Getnick's itemized billing statements which indicate that he rendered 58.8 hours of legal services. New York Central challenged two (2) of those entries, on January 12, 2006 and February 8, 2006, as including some work which may be unrelated to this matter. Disregarding all services rendered on those two (2) dates, Mr. Getnick rendered 56.3 hours of work, which the Court finds to be fair, reasonable and necessary to protect the defendants' interests. The Court further finds a rate of $175 per hour to be a fair and reasonable rate for the services rendered by Mr. Getnick, and awards him attorney's fees of $9,852.50 along with his disbursements from both actions. In accordance with the prior Order of this Court [*3](Julian, J.), Integon and New York Central Mutual are each liable to pay one-half of those fees and disbursements, which shall be paid to Mr. Getnick within 30 days of service of the Order herein with notice of entry.

This constitutes the Decision of the Court and no further costs are awarded other than those specifically stated herein. Mr. Getnick is directed to submit an Order for signature with this original Letter Decision appended thereto, after submitting a copy of same to counsel for approval as to form.

Very truly yours,

Anthony F. Shaheen, J.S.C.

AFS/bac