Villarreal v Atlantic Apts., LLC

[*1] Villarreal v Atlantic Apts., LLC 2008 NY Slip Op 52401(U) [21 Misc 3d 1136(A)] Decided on November 25, 2008 Supreme Court, Bronx County Hunter, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 25, 2008
Supreme Court, Bronx County

Juan Manuel Villarreal, Plaintiff,

against

The Atlantic Apartments, LLC, Babchik & Young, LLP, and The Travelers Indemnity Company, Defendants.



302690/08



Counsel for Plaintiff: Dimitrios C. Fotopoulos, Esq.

Counsel for The Atlantic Apartments, LLC: Mitchell Schuster, Esq. and Kevin Fritz, Esq.

Counsel for Babchik & Young, LLP: Thomas W. Hyland, Esq., Richard B. Porter, Esq. and Robert J. Pariser, Esq.

Counsel for The Travelers Indemnity Company: Andrew L. Margulis, Esq. and Amber W. Locklear, Esq.

Alexander W. Hunter, J.

The defendants each filed separate motions to dismiss plaintiff's complaint pursuant to C.P.L.R. §3211(a)(1), (5) and (7). All of the motions will be resolved in the decision herein. The motions are hereby granted.

The underlying cause of action was for personal injuries sustained by the plaintiff as a result of a fall while working at the premises owned by defendant The Atlantic Apartments, LLC (hereinafter "Atlantic").

In a decision and order dated November 21, 2007, this court denied a motion by the plaintiff for an order directing the entry of judgment in favor of the plaintiff and against Atlantic, in the amount of $150,000 plus interest. This court ruled that plaintiff's only recourse was to file a plenary action as the parties had executed a stipulation discontinuing the underlying action with prejudice. Plaintiff then filed the instant action.

Defendant The Travelers Indemnity Company (hereinafter "Travelers") moves to dismiss plaintiff's complaint and argues that on September 28, 2006, plaintiff settled his personal injury [*2]action against Atlantic. In connection with the settlement, plaintiff executed a General Release which states, in pertinent part:

"Juan Manuel Villarreal...in consideration for the sum of Eight Hundred Fifty Thousand Dollars ($850,000) received from The Atlantic Apartments, LLC., Atlantic Maintenance Group, Inc., Shore Assets, Inc., Buckingham Badler Associates, Levitt-Furst Associates, Traveler's Insurance Company and its Subsidiaries, as Releasees, receipt of which is hereby acknowledged, releases and discharges The Atlantic Apartments, LLC., Atlantic Maintenance Group, Inc., Shore Assets, Inc., Buckingham Badler Associates, Levitt-Furst Associates, Traveler's Insurance Company and its Subsidiaries, the Releasees, Releasee's heirs, executors, administrators, successors, and assigns from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands whatsoever in law, admiralty or equity, which against the Releasees, the Releasor, Releasor's heirs, executors, administrators, successors, and assigns ever had, now have or hereafter can, shall or may have for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the day this release is executed. This Release may not be changed orally..."

Travelers argues that said Release acknowledges that the case was being settled in exchange for a payment of $850,000. Travelers issued check number 24174, in the amount of $850,000 to the plaintiff and said check was posted on November 24, 2006.

Travelers contends that the instant action in which plaintiff seeks an additional $150,000, must be dismissed as the General Release is clear and unambiguous, and must be enforced according to its terms. Travelers asserts that the documentary evidence, such as the executed General Release, as well as the copy of the check cashed by the plaintiff, contradicts the claims raised in the complaint herein. Moreover, Travelers contends that the instant cause of action cannot be maintained as plaintiff signed the General Release which unambiguously manifested the intent to resolve all claims between the parties. Travelers asserts that plaintiff's allegations that the parties settled the action for $1 million or that the settlement was contingent upon receipt of the applicable insurance policy is insufficient to defeat the motions to dismiss as all negotiations are presumed to be merged into a release.

Defendants Babchik & Young, which represented Atlantic in the underlying personal injury action, also move to dismiss plaintiff's complaint on the same grounds delineated by defendant Travelers. In addition, Babchik & Young argues that the General Release executed by the plaintiff extends to them and they cite to case law which holds that a general release extends to a released party's agents, including the released party's attorneys, regardless of whether such entities are specifically named in the release. Rodriguez v. Saal, 51 AD3d 449 (1st Dept. 2008).

Babchik & Young further asserts that by facsimile dated April 11, 2007, they provided payment records, corroborated by printouts from Travelers' payment system, showing that [*3]defense costs in the underlying action totaled $150,000. A copy of the facsimile is annexed to their motion papers as Exhibit D. In addition, they argue that plaintiff's third cause of action for willful breach should be dismissed because it fails to plead a prima facie case. They contend that plaintiff failed to explain how a "willful breach" is different from the first and second causes of action and said cause of action is "awkwardly attempting" to plead a fraud claim. (Hyland Aff., para. 13). Furthermore, they assert that the "willful breach" allegation fails as a matter of law because the complaint has failed to allege that Babchik & Young acted with the mind set required to prove an intentional tort.

Atlantic moves to dismiss plaintiff's complaint on grounds similar to those made by Travelers and in addition, Atlantic argues that there was no written settlement agreement to support plaintiff's counsel's contentions that the settlement in the underlying action was contingent upon his receipt of the $1 million insurance policy with Travelers as well as documents evidencing that such coverage had been offset by $150,000 in costs defending the underlying action. Moreover, Atlantic repeats the argument by defendant Babchik & Young that the insurance policy as well as records from Travelers demonstrating that Atlantic had incurred $150,000 in costs defending the underlying action, were sent to the plaintiff by facsimile.

Plaintiff opposes the motions by each of the defendants and argues that the underlying cause of action was settled for the full amount of the insurance policy with Travelers, which was $1 million with the agreement and understanding that the policy of insurance at issue called for the deduction of all defense costs as a "set off" to the policy limits. Plaintiff's counsel asserts that at the time of the settlement, he was advised that there was approximately $150,000 expended in defense costs that would have to be deducted from the policy limits and same was agreed upon contingent on his receipt of clear copies of the policy that set forth the fact that defense costs reduce the amount of coverage as well as proof of payment of all defense costs.

Plaintiff asserts that on January 11, 2007, a letter was sent to defense counsel requesting said information and no response was received. Another letter was sent on March 19, 2007 and finally on April 11, 2007, plaintiff's counsel received a facsimile setting forth the purported amounts of defendants' costs along with a few pages of redacted insurance documents that proved nothing of what was alleged and also did not include the requested policy documents. Moreover, no copies of cancelled checks were provided by the defendants to support the amounts they claimed they expended for legal defense costs. Plaintiff's counsel argues that since the requested documents pursuant to the terms of the settlement were never received, the instant action was filed.

Plaintiff's counsel reiterates his contention that it was understood and agreed between counsel at the time of the settlement that same was subject to proof of the actual attorneys' fees, costs and disbursements and copies of invoices and checks proving that same had been actually paid by the carrier and that a clear copy of the policy would be provided. Plaintiff's counsel [*4]argues that to date, he has yet to receive a complete or adequate response from defense counsel and requests that the proofs and original insurance policy in effect at the time of plaintiff's loss be produced in court or wherever the defendants desire. Moreover, plaintiff argues that the cancelled check submitted by Travelers does not include the payment voucher which is marked as payment for "property damage" and does not state that it is in full and final satisfaction of a personal injury settlement.

C.P.L.R. §3211(a)(1) states that, "A party may move for judgment dismissing one or more causes of action asserted against him on the ground that...a defense is founded upon documentary evidence." It is well established that on a C.P.L.R. § 3211(a)(1) motion to dismiss, a defendant must demonstrate that the documentary evidence proffered definitively resolves all issues of fact, thereby resulting in the failure of plaintiff's claim as a matter of law. Fortis Fin. Servs., LLC v. Fimat Futures USA, Inc., 290 AD2d 383 (1st Dept. 2002); Robinson v. Robinson, 303 AD2d 234, 235 (1st Dept. 2003).

C.P.L.R. §3211(a)(5) states that a party may move for judgment dismissing one or more causes of action on the ground that "the cause of action may not be maintained because of arbitration and award, collateral estoppel, discharge in bankruptcy, infancy or other disability of the moving party, payment, release, res judicata, statute of limitations, or statute of frauds." In addition, C.P.L.R. §3211(a)(7) states that a party may move for judgement dismissing an action on the ground that the pleading fails to state a cause of action.

It is well established that on a motion to dismiss pursuant to C.P.L.R. §3211, the court is to, "...accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit any cognizable legal theory." Leon v. Martinez, 84 NY2d 83 (1994). The complaint should be liberally construed in favor of the plaintiff. Robinson v. Robinson (supra).

However, in the case at bar, this court finds that each of the defendants have adequately demonstrated that plaintiff's complaint should be dismissed. The documentary evidence submitted herein, specifically the General Release executed by the plaintiff, demonstrates that the underlying personal injury action settled for $850,000. Plaintiff's counsel asserts, without any proof, that the action settled for $1 million dollars but that claim is belied by the language in the General Release which is clear and unambiguous. Said Release makes no reference whatsoever to plaintiff's contention that the settlement was conditioned upon receipt by plaintiff of a copy of the insurance policy issued by Travelers or proof of what defense costs were. If the settlement was conditioned upon said terms, then the Release should have been drafted to include those specific terms.

It is well settled that, "... extrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face'..." (citations omitted). W.W.W. Associates, Inc. v. Giancontieri, 77 NY2d 157 (1990). Moreover, in Collins v. E-Magine, LLC, 291 AD2d 350 (1st Dept. 2002), the court ruled that, [*5]"...plaintiff may not, in view of the clear and unambiguous nature of the release, endeavor to vary its terms or to create an ambiguity by resorting to extrinsic evidence..." (citations omitted). Id. at 351. The General Release executed by plaintiff on September 28, 2006 does not include all of the additional terms that plaintiff's counsel asserts were a part of the settlement nor did plaintiff's counsel submit any documentation to support his contention that the underlying cause of action actually settled for a total of $1 million and not the $850,000 that is clearly stated in the General Release.

Accordingly, plaintiff's cause of action cannot be sustained and the motions by each of the defendants to dismiss the complaint of the plaintiff are hereby granted.

Defendant Travelers is hereby directed to serve a copy of this order with notice of entry upon all parties and file proof thereof with the clerk's office.

This constitutes the decision and order of the court.

Dated: November 25, 2008

J.S.C.