Paris Suites Hotel, Inc. v Seneca Ins. Co., Inc.
Annotate this CaseDecided on August 7, 2013
Supreme Court, Queens County
Paris Suites Hotel, Inc., Aggressive Realty Corp., Aggressive Holding Corp., Plaintiff,
against
Seneca Insurance Company, Inc., Archer A. Associates, Inc., Defendants.
28184/09
Bernice Daun Siegal, J.
The following papers numbered 1 to 11read on this motion by third party defendant
Mayer, Sommer, Banerjee, Inc. for summary judgment dismissing the third party complaint and all other claims against it and on this cross motion by third party defendant A.J. Sigman for summary judgment dismissing the third party complaint and all other claims against itPapers
Numbered
Notice of Motion - Affidavits - Exhibits........................................1
Notice of Cross Motion - Affidavits - Exhibits ............................2
Answering Affidavits - Exhibits.....................................................3-7
Reply Affidavits..............................................................................8-9
Memoranda of Law ..........................................................................10-11
Upon the foregoing papers it is ordered that the motion by Mayer, Sommer, Banerjee, Inc. is denied. The cross motion by A.J. Sigman is denied.
The plaintiffs, Paris Suites Hotel, Inc., Aggressive Realty Corp., and Aggressive Holding Corp., own a hotel located at 109-17 Horace Harding Expressway, Corona, New York. The plaintiffs purchased two insurance policies for the hotel through an insurance broker, Archer A. Associates (Archer). The first policy, a commercial property policy, was secured through Markel Insurance Company. Intending to enlarge the hotel, the plaintiffs also procured a second insurance policy, a builders risk policy, from Seneca Insurance Company, Inc. (Seneca) to cover the plaintiffs in the event of damage to the hotel while under renovation.. Seneca's policy provided coverage for the plaintiffs' business income, building, and fixtures during construction.
The plaintiffs hired Mayer, Sommer, Banerjee, Inc. (MSBI) to act as the general contractor, and MSBI in turn subcontracted work to Dad's Construction, Inc. (DCI), and J.R. Builders, Inc. A.J. Sigman drew the architectural plans for the project. The new construction included the addition of two floors to the building above the existing floors and the expansion of the building along its east side. The contractors demolished a parapet wall running along the existing roof of the building so that height could be added to the existing concrete wall, and, during the course of the work, the contractors discovered that the building lacked adequate flashing.
On October 27, 2007, the hotel, while undergoing the new construction, suffered water damage allegedly exceeding $1,000, 000 during a storm. The plaintiffs alleged that "strong wind, wind storm, rainwater, [and] heavy rainfall caused damage to the property's roof while under renovation, causing damage to the interior structure," but the parties dispute how the water entered the building. Moshse Bensaul, the plaintiffs' principal, believed that the water got in after the contractors removed the parapet wall.
MSBI stopped working on the project in December, 2007 and eventually assigned its contract to J. R. Builders. Eventually, Bensaul organized a company (Monte Carlo Construction) to act as the general contractor.
On May 9, 2008, more than six months after the water damage occurred, Seneca received its first notice about the loss. The plaintiffs alleged that their contractors had caused the damage by failing to cover the roof. Seneca assigned Greg Crapanzano to investigate the claim. In July, 2009, approximately fourteen months after receiving notice of the occurrence, Seneca denied coverage under the terms of the policy.
On or about October 15th, 2009, the plaintiffs began this action against Seneca seeking to recover under the policy for the loss allegedly caused by the storm and seeking to recover damages for an alleged violation of General Business Law §349. The plaintiffs subsequently served a [*2]supplemental summons and an amended complaint adding Archer as a defendant on the theory that it had negligently failed to promptly provide Seneca with notice of the occurrence. On March 3, 2011, Seneca began a third-party action against MSBI, its sub-contractors, and A.J. Sigman, alleging that holes were put in the roof by a sub-contractor during the renovations and that MSBI was contractually responsible for the subcontractor's work, errors, or omissions pursuant to its contract with the plaintiffs. The third party complaint alleges that the third party defendants committed negligence during the course of their work.
By decision and order dated December 2, 2011, this court dismissed the third party complaint insofar as it sought to recover on the ground of equitable subrogation because the insurer had failed to allege that it had made payment to its insured. However, the court determined that the third party complaint could be "read to assert claims against Third-Party Defendants by Seneca as contractual subrogee of Plaintiffs, and Seneca has the requisite standing to pursue those claims, notwithstanding Seneca's lack of any payments to plaintiffs."
MSBI has now brought the instant motion for summary judgment on the grounds that (1) the contract between the plaintiff hotel and MSBI contains a waiver of subrogation clause that precludes Seneca from seeking subrogation based on contract and (2) the insurer is incapable of proving that MSBI or its subcontractors caused damage to the structure. ( The papers tangentially raise issues concerning which of the three plaintiffs or all of them are in privity of contract with MSBI, but these issues may be disregarded for the purposes of this motion, and the plaintiffs are sometimes collectively referred to herein as "the plaintiff hotel.")
The policy issued by Seneca provided: " If any person or organization to or for whom we make payment under this Coverage Part has rights to recover damages from another, those rights are transferred to us to the extent of our payment. *** But you may waive your rights against another party in writing: (1) Prior to loss to your Covered Property ***."
The contract between the plaintiff hotel and MSBI contained a waiver of subrogation clause which read: "11.4.7 Waivers of Subrogation. The Owner and Contractor waive all rights against (1) each other and any of their subcontractors, sub-subcontractors, agents, employees, each of the other, and (2) the Architect *** for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to Section 11.4 or other property insurance applicable to the Work *** A waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and whether or not the person or entity had an insurable interest in the property damaged."
Section 11.4 of the contract between the plaintiff hotel and MSBI provided: "PROPERTY INSURANCE [:] 11.4.1 Unless otherwise provided, the Owner shall purchase and maintain, in a company or companies lawfully authorized to do business in the jurisdiction in which the Project is located, property insurance written on a builder's risk "all risk" or equivalent policy in the amount of the initial contract sum , plus value of subsequent contract modifications and cost of materials [*3]supplied or installed by others, comprising total value for the entire project at the site on a replacement cost basis without optional deductibles.."
Article I, "GENERAL PROVISIONS," of the contract between the plaintiff hotel and MSBI sets out relevant definitions: "The Project" is defined as "the total construction for which the Work [is] performed under the Contract Documents. "The Work" is defined as " the construction and services required by the Contract Documents *** whether completed or partially completed ***." The contract documents, of course, concerned the new construction undertaken by MSBI.
The proponent of a summary judgment motion in an action which turns on the interpretation of a written agreement has the burden of establishing that its construction of the agreement is the only construction which can fairly be placed upon it. ( Nancy Rose Stormer, P.C. v. County of Oneida, 66 AD3d 1449[2009]; Jellinick v. Joseph J. Naples & Associates, Inc., 296 AD2d 75 [2002].) MSBI failed to carry that burden. The waiver of subrogation clause in the contract between the plaintiff hotel and MSBI may fairly be construed as applying only to the new work undertaken by the contractor. Section 11.4.7 provided that the parties waived their rights against each "for damages caused by fire or other causes of loss to the extent covered by property insurance obtained pursuant to Section 11.4 or other property insurance applicable to the Work ***." (Emphasis added.) The insurance called for by section 11.4.1 covered the new construction only, and the contract elsewhere makes clear that the term "the Work" used in connection with the phrase "other property insurance" essentially meant the new construction. The parties waived their subrogation rights only to the extent that the loss would be covered by property insurance obtained by the owner "applicable to the Work, " i.e., " " the construction and services required by the Contract Documents." The only insurance referred to in the subrogation clauses of the contract is insurance covering the "total value for the entire project," i.e., " " the construction and services required by the Contract Documents." The plaintiff made an insurance claim for damages to that part of the structure which pre-existed the new construction undertaken by MSBI. The plaintiff made no claim concerning damage to the new construction. The waiver of subrogation clause in the contract between the parties may fairly be construed as has having no application to the existing first and second floors or to any of the fixtures or furnishings on the premises.
Although MSBI argues that the waiver of subrogation clause merely "delineates" the coverage amounts required under the Builders Risk Policy, the contractor failed to establish that this is the only reasonable interpretation of the agreement. Although MSBI further argues that the Seneca policy covered the existing structure as well as the new construction, the specific waiver of subrogation clauses may fairly be construed as having relevance only to the new construction. The waiver of subrogation clause applied to " payment under this Coverage Part ." Moreover, "[w]hile parties to an agreement may waive their insurer's right of subrogation, a waiver of subrogation clause cannot be enforced beyond the scope of the specific context in which it appears ***." ( Kaf-Kaf, Inc. v. Rodless Decorations, Inc., 90 NY2d 654, 660, [1997].) In the case, the waiver of subrogation clauses appear in a context which concerns the new construction. In sum, MSBI is not entitled to summary judgment on the ground of contractual waiver of subrogation. [*4]
MSBI is also not entitled to summary judgment on the ground that Seneca cannot prove that the contractor or its subcontractors caused the damage to the hotel. Contrary to the argument made by MSBI, it does not matter that the insurer did not conduct its own investigation into the cause of the loss. Other parties conducted investigations, and the voluminous record in this case shows that there are at least four genuine issues of fact which preclude summary judgment in MSBI's favor: (1) whether J.R. Builders left doors to the roof open through which water entered, (2) whether the parapet wall had been removed without installing protection against the entry of water, (3) whether MSBI failed to properly secure tarps on the roof which were loosened by strong winds, and (4) whether MSBI or its subcontractors cut holes in the roof "to tie in structural steel" without adequately waterproofing the roof during this phase of the construction.
Turning to third party defendant Sigman's cross motion for summary judgment, this court's order signed on or about February 6, 2013 extended the time for the parties to make dispositive motions up until March 11, 2013. Sigman served his cross motion for summary judgment on March 18, 2013. All of the opponents object that the cross motion is untimely. Their objection is properly taken. The court cannot entertain a motion for summary judgment made after the expiration of a court-ordered deadline where the proponent fails to demonstrate good cause for the delay. (See, Mizell v. Eastman & Bixby Redevelopment Co., LLC , 34 AD3d 770 [2006].) Sigman failed to show that there was "good cause" for the delay. ( See, Alexander v. Gordon, 95 AD3d 1245 [2012].) It is true that a court may entertain an untimely cross motion where the issues which it raises are "nearly identical" to those raised on a timely main motion. ( Alexander v. Gordon, supra, 1247.) However, Sigman's cross motion raises at least two new issues, i.e., whether CPLR 214(6), the Statute of Limitations applicable to a cause of action for architectural malpractice, bars the claims against him and whether Sigman had any responsibility for the supervision of the work. Under the circumstances, the cross motion cannot be entertained. ( See, Teitelbaum v. Crown Heights Ass'n for Betterment, 84 AD3d 935 [2011].).
Dated: August 7, 2013
Bernice D. Siegal, J.S.C.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
