Vineyard Sky, LLC v Ian Banks, Inc.

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Vineyard Sky, LLC v Ian Banks, Inc. 2013 NY Slip Op 32405(U) October 3, 2013 Sup Ct, New York County Docket Number: 650392/2012 Judge: Ellen M. Coin Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 10/04/2013 1] INDEX NO. 650392/2012 NYSCEF DOC. NO. 81 RECEIVED NYSCEF: 10/04/2013 SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY E. HON ¢. LLEN M. Con~ PRESENT: PART Justice Index Number: 65039212012 VINEYARD SKY, LLC t~ INDEX NO. _ _ _ __ vs MOTION DATE _ _ __ IAN BANKS, INC. Sequence Number: 005 DISMISS ACTION MOTION SEQ. NO. _ __ The following papers, numbered 1 to _ _ , were read on illismotrtm't /for _ _ _ _ _ _ _ _ _ _ _ _ __ Notice of Motion/Order to Show Cause - Affidavits - Exhibits Answering Affidavits - Exhibits _ _ _ _ _ _-'--_ _ _ _ _ _ _ _ __ Replying Affidavits _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ I No(s)._ _ _ _ __ I No(s). _--'-_ _ __ I No(s). _ _ _ _ __ Upon the foregoing papers, it is ordered that this motion is tA9fl~ t~ [):EC~OED IN ACCORDANCE 'V'ii'lH ~ j~NN~XeD DECISION ANbOKMR.. - -- -:- -.---:~~ Gv -------:--=-=~~ncr-' J.S.C. Dated: HaN. ELLEN M. COIN 1 CHECK ONE: .............................................~...................... . . "2. CHECK AS APPROPRIATE: ........................... MOTION IS: 0 o GRANTED 0 ~;~: ~:~~R 3. CHECK IF APPROPRIATE: ....................................... A CASE DISPOSED DENIED 0 0 FIDUCIARY ,NON-FINAL DISPOSITION GRANTED IN PART D OTHER APPO~T:~::'T O~:FERENCE [* 2] " SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 63 ---------------------------------------------------------------------J( VINEYARD SKY, LLC and ALLCO REALTY, LLC, Index No. 650392/2012 Motion Date: June 12,2012 Motion Sequence: 005 DECISION AND ORDER Plaintiffs, -againstIAN BANKS, INC., EVEREST NATIONAL INSURANCE COMPANY, PCF STATE RESTORATION INC. and ENDURANCE AMERICAN INSURANCE COMPANY, Defendants. --------------'-----------------.. ------------------------------------J( For Plaintiff: Thomas Melone, Esq. 43 West 64th Street, 14A New York, New York 10023 212-681-1120 For Defendants PCF and Endurance: Litchfield Cavo LLP 420 Lexington Avenue, Suite 2104 New York, New York 10170 212-434-0100 Papers considered in review of this motion: Papers Numbered Notice of Motion ......................................... :....... ;................................................. _1_ Affirmation in in Opposition ..... :............................................................................. _2_ Affirmation. in Reply.: ................................. ~.................. ,....................................... _3_ ELLEN M. COIN, J.: <, In this action seeking to recover for negligence and breach of contract, defendants PCF State Restoration Inc. (PCF) and Endurance American Insurance Company (Endurance) move pursuant to CPLR 3211 to dismiss the.complaint as against them. The moving defendants also seek to disqualify plaintiffs' counsel on the ground that he is also plaintiffs' managing agent and that, as such, he negotiated and signed the contracts that are the subject of this action. [* 3] THE COMPLAINT Plaintiff Vineyard Sky,LLC is the owner of condominium unit ·14A and plaintiff Allco Realty, LLC is the owner of condominium unit 12A in a condominium located at 43 West 64th Street in Manhattan. The complaint alleges that in September 2006, Thomas Melone (Melone), plaintiffs' manager, entered into a construction· contract with defendant Ian Banks, Inc. (IBI) for renovations to plaintiffs' condominium units and that as part of those renovations IBI hired a subcontractor, defendant PCF State Restoration, Inc. (PCF) to perform work on the roof above unit 14A. According to plaintiffs, in or about June 14,2008, PCF left the roof uncovered during a rainstorm, which allowed water to enter and cause substantial property damage to units 14A and 12A. The complaint alleges that pursuant to its contract, PCF and/or its insurer, defendant Endurance American Insurance Company (Endurance), were obligated to pay plaintiffs for the property damages to the condominium units; that Melone, as plaintiffs' agent, was an additional insured under the Endurance comprehensive general liability (CGL) policy and an intended third-party beneficiary of that policy; and that plaintiffs made claims against PCF and Endurance which have not been paid. Plaintiffs assert against~PCF claims for negligence (first cause of action) and breach of the construction contract (second cause of action) and against Endurance claims for breach of the insurance contract and promissory estoppel (sixth cause of action), failure to act in good faith (seventh cause of action) and unfair settlement practices (eighth cause of action). 2 [* 4] .,. ,- . '.. . ",,' "--~ '.~ CONTENTIONS~<~' ¢ . .;.;. ~. ,"; - .... PCF argues that it did not enter into a 'contract with-. plaintiffs. to perform the work. onthe ,.......0/ -" -. ' ¢ ¢ , '} r ~~. .,.. roof, and that the negligence caus~ of ~cdon Glso~against ,it is ,Jime-barred. Endurance seeks ,,,,",::,. ;!-. dismissal on grounds that. plaintiffs were notiil~ureds!lhder th~'subje~tpolicy and that because .,'.' "L they are strangers to the policy, they cannot maintaiIi~ direct aCtion against Endurance unless . , and until they are able·tp secure a judgment against-PCF as tortfeasor, In opposition to the motion to dismiss;-pi~tiI?-tiffsc~mend that the action against PCF is :~ ¢ :;'.:," ". ~-;.: .<!"/~". -. .,~ .. " ~, not time-barred because it sounds in contra2t, not negligence, and therefore the six-year statute ~~.~;"> . r · · ¢ . '" ,:, ... - ' : ....~. . :.~. of limitations applies. In addition, the; argue that tJ:1ey were_~<,lditional insureds and/or specific . . ~ . ~, , ~, ,~, . : ; . . . . .....,' "" .:, . ~ - '. c· - third-party beneficiaries under the Endurance CGL 'policy and, as such, they have the right to . . .' ~ ". .. . ~", maintain a direct action against p:ndurance.-, DISCUSSION- ':. '- .~ ~. " '-. .,' ~ " Ona motion to.-dismiss,Ah~ "court ~~st ~accept- a,s, true' th~ facts alleged in the complaint as well as all reasonableir:fereJ?ces that may be gleaned, from those,facts:" (Skillgames, LLC v Brody, 1 AD3d 247, 250' Jpl .Dept 200,3], citing McGiiz"v P~rker; 179 AD2d98, 105 [151 Dept . ..'"."., '. 1992]); Amaro v dani ..: ~ .,.,....... R~alty Corp.,. 69 AD3i491;492 [151 Dept 2009] )."When evidentiary .J .' - .. .;:_.... ; . material is considered, the criterion is whether Jhe ~proponent of the pleading has' a. cause of , :,- '.::',-. action, not whether he .h~s stated on~ , ~" ~ .::. ¢ - ¢ ¢ , .~ CO" ~ . ':. (Guggenheimer v Ginzburg,43 NY2d 268,275 [1977]; '. ,..,,~. . . see also White Plains Plaza Realty, LLC~v~CaPpelli,Enterprises, Inc., 108 AD3d 634, 636 [2d \ , ....: ~ Dept 2013]). "H~w~ver, factual allegations that do not'state a viable cause of action, that consist , <..- ¢ ~~ , ~ < of bare legal conc1usions, , o'r that are, inherently· incredible . or ~leafly contradict~d by - .. , ~ , '~",,~ -:' - " . documentaryevidence~eI?-0t e~titled to sucp.c~nsideration:' .(Skillgames, 1 AD3d at 2,50). . - '-':,. .-;: .~ ';'.',J; ...... '-"( . .. ¢ ¢ ,< . . - ¢ . '''''.. -'~ .'~ ':0 , :::', ' I [* 5] Where, as here, defendants rely on documentary evidence, 1 dismissal will not result unless the documentary evidence utterly. refutes the factual allegations of the complaint and conclusively establishes a defense to the claims as a matter of law (African Diaspora Maritme Corp. v Golden Gate Yacht Club, 109 AD3d 204 [PI Dept 2013]; Shuttle Contr. Corp. v Peikarian, 108 AD3d 516, 518 [2d Dept 2013]). 1. Negligence Plaintiffs denominate the first cause of action as a claim in negligence against PCF and allege that PCF failed to exercise the standard of care for performing work on a roof which resulted in plaintiffs' damages., ,Plaintiffs claim that the property damage to their condominium units occurred in June 2008.! Negligence actions are governed by a three-year statute of 'I limitations (CPLR 214). Defendants correctly argue that the statute of limitations on plaintiffs' :j negligence claim, ran in June, 2011, and because the complaint in this action was filed in February 2012, more than six months after the statute of limitations ran, the negligence cause of action as against PCF is time-barred (see Baron v Galasso, 83 AD3d 626,627 [2d Dept 2011]). However, even if the negligence claim were ~ot time-barred, which it is, dismissal would be required because the claim is duplicative of the breach of contract claim and does not posit any source of duty other than the alleged PCF contract. (See Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382,389-390 [1987]; Pacnet NetworkLtd. v KDDI Corp., 78 AD3d 478,479 [1 sl Dept 2010]). / 1 Moving defendants submit, as exhibit B to the Velardo affidavit, the insurance policy between Endurance and PCF that was in effect during the relevant period. 4 [* 6] ,.' 2. The Contract Causes of Action against PCF and Endurance The documentary evidence submitted does;not utterly refute plaintiffs' claims that they are entitled to indemnity" under the contract between IBI and PCF or that they are additional insureds or otherwise entitled to be indemnified under the ~ndurance policy. "One who seeks to recover as a third-party beneficiary of a contract must establish that a valid and binding contract exists between otherpal:ties, that the contract was intended for his or her benefit, and that the benefit was direct rather than incidental." (The Edge Mgt. Consulting, Inc. v Blank, 25 AD3d 364, 368 [1 sl Dept 2006][citations omitted]. "One is an intended beneficiary if one's right to performance is appropriate to effectuate the intention of the parties to the contract and either the performance will satisfy a money debt obligation of the promisee to the beneficiary or the circumstances indicate that the promisee intends to give the benefit of the promised performance." (Id. [internal quotations omitted]). The crucial evidence of the parties' (Zelber v Lewoc, 6AD3d 1043, 1045 [3 rd Dept actual intent is the language of the agreement. 2004]). PCF and Endurance rely on a letter generated by UTC Risk Management Services, Inc., which is the designated claims adjusting service for defendant Everest National Insurance Company (Complaint, exhibit A), stating that Melone was to be named as additional insured under the Endurance CGLpolicy, along with a list of businesses that does not include the . plaintiffs. That document states, in pertinent part: . "Our investigation into this matter has revealed that Ian Banks, Inc. hired P.C.F. State Restoration, Inc. to perform all the various work at the loss location including the installation of a new roof system. The written contract obligates P.C.F. State Restoration to indemnify, defend and hold harmless Thomas Melone, Ian Banks, Inc., At~ena Group LL~, 5 [* 7] Athena Liberty Lofts LP, Athens Liberty LLC, 43 W. 64th Street Condominium and Brown, Harris Stevens Residential Management LLC against claims, damages and losses arising out of or resulting from performance of the work. A copy of the contract is attached for your reference. Additionally, P.C.F. State Restoration Inc. is required to name Thomas Melone, Ian Banks, Inc. Athena Group LLC, Athena Liberty Lofts LP, Athens Liberty LLC, 43 W. 64th Street Condominium and Brown, Harris Stevens Residential Management LLC as additional insureds on the commercial general liability policy issued by Endurance American Insurance Company .... " , (Complaint, Ex. A). '1 This letter, together with the allegations in the complaint, raises issues of fact as to whether Melone entered into the contract withJBI as agent on behalf of plaintiffs; whether under IBI's contract with PCF Melone was to be indemnified by PCF in his representative capacity, if any; whether Melone, in his representative capacity, and plaintiffs were either third-party beneficiaries or additional insureds under the policy or otherwise entitled to indemnification under the November 5, 2012 settlement agreement and assignment. 2 The documents or deposition testimony required to resolve these issues are not before the Court and, even if available, would generally not be considered on a pre-answer motion. 3 Accordingly, the motion to dismiss the second, sixth, seventh and eighth causes of action must be denied, with leave to 2 Indeed, in the branch ofthe motion that seeks to disqmilify Melone as plaintiffs' counsel, defendant avers, that, "it is undisputed the Mr. Melone acted as manager for plaintiffs. He negotiated and signed contracts .. . which are the subject of this dispute ... (Reply brief, para. 19). The letters attached to the complaint in this case do not constitute documentary evidence. In order to qualify as documentary evidence, the evidence submitted must -be "unambiguous, authentic and undeniable." (See Cives Corp. v George A. Fuller Co.; Inc., 97 AD3d 713, 714 [2d Dept 2012] [internal quotation marks and citations omitted)). 3 6 [* 8] renew following completion of. discovery. "(See Logan-Baldwin v L.S.M General Contractors, ¢ 'r ¢ ' Inc., 94 AD3d 1466, 1468-1470 [4th Dept 2012][citations omitted]; R. H Sanbar ProjeCts, Inc. v Cruzen Partnership, 148 AD2d 316, 320 [1 st Dept 1989]). 3. Disqualification of Counsel .The advocate-witness rule prevents an attorney from representing a party and serving as a witness in the same proceeding. Rules 3.7 of Rules of Professional Conduct requires an attorney to withdraw from a case "if the' lawyer knows or it is obvious that the lawyer ought to be called as a witness on a significant issue on behalf of the client." (22 NYCRR 1200.0; S & S Hotel Ventures Ltd. Partnership v 777 S.H Corp., 69 NY2d 437, 446 [1987]). "In order to disqualify counsel pursuant to the advocate-witness rule, the moving party must demonstrate that (1) the testimony of the opposing party's counsel is necessary to his or her case, and (2) such testimony would be prejudicial to the opposing party." (McElduffv McElduff, 101 AD3d 832, 833 [2d Dept 2012]).). The proper timing of disqualification is dependent on the specific policy rationale implicated in the advocate-witness .disqualification analysis. If an attorney's role as both the advocate and witness for his client will confuse the jury, disqualification is appropriate only for the purposes of jury trial and any concerns may be allayed by designation of a separate trial counseL (Clifford v Montana Mills Bread Co., 275 AD2d 909, 909 [4th Dept 2000]). On the other hand, if an attorney may be called to give evidence adverse to client at some point during the course of litigation, disqualification is appropriate at the earliest time the conflict discovered. (Tatalovic v Nightlife Enterprises, L.P., 69 AD3d 439, 440 [1 st Dept 2010]). 7 IS [* 9] The challenging party carries a heavy bur:de~ of identifying the projected testimony of -" . . , ~- " the advocate-witness and demonstratl~g how it wouidbe "so adverse toJhe factual assertions or account, of events offered on behalf of the client ;as. to warrant 'his. disqualification." (Martinez v Suozzi, 186 AD2d378,J}9 [1 st Dept 1992]'):· The branch of the motion se,eking to disqualify' Melone as counsel for plaintiffs is , premature.' 'At this time, the 'Court cannot assess the natu~eof Melone's future .testimony, whether it is necessary and adverse to plaihtiffs"interests, or whether it might merely con.cem undisputed facts. Nor ~an the Court. clirrently determine whether Melone may avoid the .. . ~ advocate-witness rule byprocuring separate trial counsel. , '. I· . '.. '" , ,'.' In accordance with,the foregoing,'it is hereby, ORDERED that so much of the motion of defendants PCFState Restoration Inc. and Endurance American Insurance;Corripany as see!.<sto:disniiss the Firs't Cause of Action sounding in negligence is granted, and the I:'irst .. Caus~ oCAction is dismissed as against PCF State . '. . Restoration Inc. and Endurance American Insurance >C~mp<i?y, and t~e balance of the motion is denied; and it is further ORDERED thatthesecondbran9h of,the motion seeKing to disqualify Thomas Melone, y Esq. as plaintiff s counsel is denied with ieav~ to r~Ii~w following 'c'ompletion of ,discovery; and it is further ORDERED thatthe moving defendants aredirectecltoserve an answer to the complaint within 20 days after service of a copy of this order withnotice'ofe~try; and it is further 8 ,~- [* 10] .. ", ORDERED that counsel are directed to appear for a preliminary conference in Room 311, 71 Thomas Street, on December 11,2013, at 2:00 PM. Dated: (j~ 3I, J,or~ 'ENTER: ' Ellen M. Coin, A.l.S.C. ",

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