Utica Mut. Ins. Co. v Government Empls. Ins. Co.

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Utica Mut. Ins. Co. v Government Empls. Ins. Co. 2011 NY Slip Op 32428(U) September 13, 2011 Supreme Court, Nassau County Docket Number: 23395/09 Judge: Thomas P. Phelan 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] REVISED SHORT FORM ORDER STATE OF NEW YORK SUPREME COURT Present: HON. THOMAS P. PHELAN. Justice. TRIALIIAS PART 2 NASSAU COUNTY UTICA MUTUAL INSURANCE COMPANY AND BRIAN FINNERAN ORIGINAL RETURN DATE: SUBMISSION DATE: 06/01/11 06/15/11 Plaintiff Index No. 23395109 -against- MOTION SEQUENCE #2 GOVERNMENT EMPLOYEES INSURANCE COMPANY Defendant. The following papers read on this motion: Notice of Motion................................................... Answering Papers... . Reply. . .............................3 THIS ORDER REVISES THE SHORT FORM ORDER DATED JULY 12 , 2011 (PHELAN , J. ), BY DIRECTING GEICO TO REIMBURSE UTICA MUTUAL FOR GEICO' S $3 000 000 SHARE OF THE SETTLEMENT AMOUNT , PLUS STATUTORY INTEREST FROM THE DATE OF THE SETTLEMENT , MAY 26, 2011. Plaintiffs move for an order of this Court: (1) pursuant to CPLR 3212 granting them summary judgment against defendant (" GEl CO" ) as to the Carline Hippolite as ersonal Needs and property Management of Wilner the Guard anq Carliippolite. individually v. State Bancorp.. Inc. d/b/a reasonableness of the settlement in the action entitled tle State Bank of L.I. and Brian Finneran , previously pending in the Supreme Court of the State of New York County of Queens , Index No. 5174/08 (referred to herein as the " Underlying Action ); and , (2) pursuant to CPLR 3001 , declaring that GEICO must pay the full $3 000 000 policy limit of the GEICO Personal Umbrella Policy, No. P 5030630 , toward the settlement of the Underlying Action. The motion is granted in its entirety. [* 2] RE: UTICA MUTUAL INSURANCE and FINNERAN v. GEICO Page 2 pedestrian knockdown accident. The evidence herein establishes that , as a result of the underlying accident The Underlying Action involved a Wilner Hippolite is awake and can feel pain but is trapped in his own body and unable to communicate. Plaintiffs brought this action seeking a declaration of priority of insurance coverage obligations with respect to the underlying automobile accident. By short form order dated January 18 , 2011 (Phelan , J. ), this court ruled in plaintiffs ' favor and held that GEICO is obligated to indemnify Brian Finneran for any damages awarded in the Underlying Action and that the Utica Mutual Umbrella Policy is excess to the GEICO Personal Umbrella Policy. This Court held that the GEICO Personal Umbrella Policy must be exhausted before the Utica Mutual Umbrella Policy applies. 00. Prior to reaching 000. this settlement , counsel for plaintiffs sent GEICO' s counsel a letter inviting GEICO to participate in the mediation in the Underlying Action. The letter The Underlying Action was settled for $6, 750 stated in pertinent part as follows: The medi tion will afford GEICO the opportunity to contribute towards to express its position as to the a settlement if any, and reasonableness of the settlement amount. Should GEICO elect not to participate , it will have waived any objections to the reasonableness of a settlement. Utica Mutual and Brian Finneran reserve all rights to proceed against GEICO up to the full limits of the GEICO Personal Umbrella Policy. The day before the scheduled mediation , counsel an GEICO' s counsel sent plaintiffs email in which he stated in part that " GEICO will not be participating in the mediation of the Hippolite Action , which we understand remains scheduled to take place tomorrow. On September 24 , 2010 , the parties in the Underlying Action agreed to a 750 000 settlement before the Honorable Robert Roberto , Jr. , a mediator. The settlement was memorialized in a Mediation and Settlement Agreement (Movant' s Ex. 35). On September 27 , 2010 , counsel for plaintiffs advised GEICO' s counsel of the settlement and " demand(ed) that GEICO pay the full $3 000 000 policy limit of the Personal Umbrella Policy [* 3] RE: UTICA MUTUAL INSURANCE and FINNRAN v. GEICO Page 3 it issued to Brian Finneran towards the Hippolite settlement." Thereafter , in the short form order declared inter alia the following: dated January 18 , 2011 , this Court Accordingly, I DECLARE that Pursuant to CPLR 3001 , that under the GEICO Personal Umbrella Policy No. P5030630 , GEICO is required to indemnify Brian Finneran for damages , if any, awarded in the action Personal Needs and Property Management of Wilner Hippolite and Carline Hippolite , individually v. State Bancorp. , Inc. d/b/a State entitled " Carline Hippolite as the Guardian for the Bank of L.I. and Brian Finneran, " pending in the Supreme Court of the State of New York , County of Queens , Index No. 5174/08 (the " Underlying Action ), which exceed the $1 000 000 limit of the primary Utica National Assurance Company auto policy, I,p full $3 000 000 policy limit of the GEICO Personal Umbrella Policy; and that coverage for Brian Finneran under the Utica Mutual Commercial Umbrella Policy, No. CULP to the 4078511 , is excess to the GEICO Personal Umbrella Policy. Following plaintiffs filing of the instant motion , the Queens County , issued a Compromise Supreme Court , Hon. Martin J. Schulman , J. Order , which approved the $6 750 000. 00 settlement and prescribed the manner in which the settlement proceeds were to be distributed. Thereafter , plaintiffs in the Underlying Action provided a stipulation of settlement , a release and a stipulation discontinuing the Underlying Action with prejudice. In accordance with the Court' s Compromise Order , Utica National and Utica Mutual then issued 15 settlement checks totaling 750 000. 00. Upon the instant motion , plaintiffs seek summary judgment as to the reasonableness of the settlement and a declaration that GEICO should pay its full $3 000 000 policy limit toward the Hippolite settlement. Plaintiffs , as movants herein , have submitted ample evidence establishing that the economic damages in the Underlying Action would exceed $4 000 000 sustainable conscious pain and suffering values would exceed $4 000 000 [* 4] RE: UTICA MUTUAL INSURANCE and FINNRAN v. GEICO Page 4 000 a sustainable loss of parental guidance claim would exceed $1 000 and a sustainable loss of services/consortium claim would approximate $300 000 , which together with additional orthopedic injuries would render the sustainable value of the claims in neighborhood of $10 million (Movant' s the Underlying Action in the Ex. 32). (W)here an insurer unjustifiably refuses to defend a suit , the insured may make a reasonable settlement or compromise of the injured party s claim and is then entitled to reimbursement from the insurer (Isadore Rosen & N. Y. 31 NY2d 342 , 347 (1972) (internal Sons v Security Mut. Ins. Co. of Hempstead v American Ref281 AD2d 573 (2d Dept. 2001)). Here , this Court has already determined that the GEICO Personal Umbrella Policy covered Brian Finneran for the Underlying Action. Therefore , there is no question quotation marks Fuel omitted); Co. of Resource Recycling, that GEICO is obligated to pay for any reasonable settlement of that action New York supra; Sons , Inc. v. Security Mut. Ins. (Isadore Rosen Cardinal v. State 304 NY 400 (1952)). Co. of Further , in that regard, having refused to participate in the settlement negotiations in the Underlying Action , GEICO is also foreclosed from contesting the reasonableness of Co. , 7 AD3d 277 , 278 (Serio v. Public Service 27 AD3d 609 New York v. ZurichMut. Ins. the settlement Dept. 2004); City of American Ins. Group, GEICO refuse to participate in the settlement negotiations , but it also failed to offer its own (2d Dept. 2006)). Indeed , in this case , not only did view of what a " reasonable settlement" would be. Accordingly, GEICO does riot have any basis to contest the reasonableness of the settlement. In any event , in opposition , GEICO fails to present any admissible evidence raising an issue of fact as to the reasonableness of the settlement and whether it should pay its full $3, 000 000 policy limit toward the Hippolite Settlement. As stated above , this Court previously held that the GEICO Personal Umbrella Policy covers Brian Finneran for the Hippolite loss and that the GEICO Personal Umbrella Policy must be exhausted before the Utica Mutual Umbrella Policy applies. GEICO fails , in opposition , to raise any issue of fact with respect to liability or damages. GEICO' s argument that " (i)f the Hippolite action had proceeded to trial a jury would likely have considered (the) fact (that Mr. Hippolite contributed substantially to the occurrence which resulted in his injuries) and was also free to conclude that Mr. Hippolite s injuries were so severe that he would [* 5] RE: UTICA MUTUAL INSURNCE and FINNRAN v. GEICO not have lived to the life expectancy of a person of his age " unavailng (Aff. in Opp Page 5 is simply , ,-11 ). One opposing a motion for summary judgment must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact; mere conclusions , expressions of hope or unsubstantiated allegations (Alvord v. Swift or assertions are insufficient Muller Constr. Co. 46 NY2d 276 (1978)). -In order to recover the amount of the settlement from the insurer , the insured need not establish actual liability to the party with whom it has settled ' so long as * * * potential liability on the facts known to the (insured is) shown to exist , culminating in a settlement in an amount reasonable in view of the size of possible recovery and degree of & Co. probability of claimant' Inc. v. Allance Assur. Co. , Ltd. 780 F. 2d 1082 , 1091 (2d Cir. 1986) (citation omitted)). GEICO does not dispute that there was a potential for liability finding. Thus , on this motion to recover $3 000 000 from GEICO, plaintiffs are not required to demonstrate with certainty that a jury would (Luria Bros. s success against the (insured)' have found Brian Finneran liable or that Wilner Hippblite s damages were worth precisely $6. 75 milion (or $4 million). Rather , viewing the settlement in light of the potential liability and damages under the circumstances GEICO has failed to raise any issue of fact as to the reasonableness of the settlement in which it did not participate. Further , GEICO' s argument that " the reasonableness of the settlement presents an issue of fact under the circumstances presented" (Aff. in Opp , ,-12), also flies in face of the fact that GEICO was given the its view as to the so. Because of the opportunity to attend the mediation and to express question of reasonableness but it declined to do absence of any admissible evidence creating an issue of fact , plaintiffs motion for summary judgment is granted in its entirety. Pursuant to CPLR 3001 , I declare that GEICO must pay the full $3 000 000 limit of the GEICO Personal Umbrella Policy, No. P 5030630 , toward the settlement of the underlying Hippolite Action. The parties ' remaining contentions have been considered by this Court and do not warrant discussion. ./ [* 6] RE: UTICA MUTUAL INSURNCE and FINNERAN v. GEICO Page 6 It appearing that Utica Mutual tendered payments on May 26 , 2011 , in accordance with the order dated May 18 , 2011 (Schulman , J. ), GEICO is hereby directed to reimburse Utica Mutual for GEICO' s $3 000 000 share of the settlement amount , plus statutory interest from May 26 , 2011. In the event that GEICO fails to reimburse Utica Mutual within ten (10) days days from the date hereof , upon submission of proof of service of a copy of this order and an affdavit of default , the Clerk is directed to enter judgment in favor of Utica Mutual and against GEICO in the sum of $3 000 000 with interest thereon from May 26 , 2011. This decision constitutes the order of the court. Dated: -- HON THOMS P. PHLAN 9- Attornevs for the Parties Lester Schwab Katz & Dwyer , LLP Attention: EricA. Portuguese, Esq. Attorneys for Plaintiffs 120 Broadway New York, NY 10271- 0071 Bleakley, Platt & Schmidt , LLP Attention: Robert D. Meade, Esq. Attorneys for Defendant One North Lexington Avenue , 7th Floor P. O. Box 5056 White Plains , NY 10601- 5056 ... ,"Yl". .-J ENTERED SEP 15 2011 NASSAU COUNTY COUNTY CLERK' S OFfiCE

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