Burlington Ins. Co. v SP Realty, LLC

[*1] Burlington Ins. Co. v SP Realty, LLC 2019 NY Slip Op 51994(U) Decided on November 26, 2019 Supreme Court, Kings County Rivera, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 26, 2019
Supreme Court, Kings County

The Burlington Insurance Company, Plaintiff,

against

SP Realty, LLC, Utica First Insurance Company, Sutter Restoration of N.Y. Corp., and Nationwide Insurance Company of America (formerly Scottsdale Insurance Company), Defendants.



523890/2017



Attorney for Plaintiff Burlington Ins. Co.

Anna Karin F. Manalaysay, Esq.

Adrian & Associates, LLC

200 Park Avenue, 17th Floor

New York, NY 10166

(646) 632-3704

Attorney for Defendant SP Realty, LLC

Peter F. Breheny, Esq.

Carman, Callahan & Ingham, LLP

266 Main Street

Farmingdale, NY 11735

Attorney for Defendant Utica First Ins. Co.

Audra S. Zane, Esq.

Farber Brocks & Zane LLP

400 Garden City Plaza, Suite 100

Garden City, NY 11530

(516) 739-5100

Attorney for Sutter Restoration of NY Corp.

No appearance Attorney for Defendants Nationwide Insurance Company of America

(formerly Scottsdale Insurance Company)

Ann Odelson, Esq.

Kennedys CMK LLP

570 Lexington Avenue — 8th Floor

New York, NY 10022

(212) 252-0004
Francois A. Rivera, J.

Recitation in accordance with CPLR 2219 (a) of the papers considered on notice of the motion of Nationwide Insurance Company of America, formerly Scottsdale Insurance Company (hereinafter Nationwide) filed on June 13, 2019 under motion sequence number four for an order pursuant to CPLR 3212: (1) dismissing the tenth cause of action as asserted against Nationwide, and (2) granting Nationwide summary judgment in its favor on its counterclaims asserted against the Burlington Insurance Company (hereinafter Burlington).

Notice of motion

Memorandum of law in support

Affirmation in support

Exhibits A-K

Affirmation of Audra S. Zane

BACKGROUND

By summons and complaint filed on December 12, 2017, Burlington commenced the instant action. By decision and order dated March 29, 2019, the Court granted Burlington's unopposed motion to amend the complaint.

The instant action arises from a tort claim filed in an underlying action brought in the Kings County Supreme Court under Index Number 20758/2013 by Francisco Castro-Brion, as plaintiff against SP Realty, LLC, Basonas Construction Corp., and Canido Basonas Construction Corp (hereinafter Canido), as defendants (hereinafter "the underlying action" or "the Castro-Brion" action). The Castro-Brion action arose from an alleged accident that occurred on September 25, 2013 at 157 21st Street, Brooklyn, New York (hereinafter the premise), a premise allegedly owned by SP Realty, LLC and leased by Canido. In the Castro-Brion action, the plaintiff alleged that his injuries were caused solely by the negligence of SP Realty, LLC, Basonas Construction Corp., and Canido.

By the amended summons and amended verified complaint dated April 1, 2019 Burlington alleged one hundred and twenty seven allegations of fact in support of twelve denominated causes of action. The first cause of action seeks for a judgment declaring that the reference to "Canido Basonas Co"., as the named insured in the SP Realty Utica Policy is a mere scrivener's error and was meant to refer to Canido. The second is for a judgment declaring that Canido qualifies as a named insured or as an additional insured in the SP Realty Utica Policy. The third is for a judgment declaring that Utica[FN1] is obligated to defend Canido in the Castro-[*2]Brion action. The fourth is for a judgment declaring that Utica is obligated to indemnify Canido in the Castro-Brion action. The fifth is for a judgment declaring that Utica under the SP Realty Utica policy is obligated to reimburse Burlington for all amounts it has incurred or will incur in the defense of the Castro-Brion action. The sixth is for a judgment declaring that Canido qualifies as an additional insured in the Sutter Utica Policy. The seventh is for a judgment declaring that Utica is obligated to defend Canido in the Castro-Brion action. The eighth is for a judgment declaring that Utica is obligated to indemnify Canido in the Castro-Brion action. The ninth is for a judgment declaring that Utica is obligated to reimburse Burlington for all amounts it has incurred or will incur in the defense of the Castro-Brion action. The tenth is for a judgment declaring that Nationwide is obligated to provide coverage to Canido in the Castro-Brion action. In particular, Burlington alleged that Nationwide has refused to acknowledge any coverage obligation on its part in connection with the underlying action and further alleged that Nationwide thus contributed to the settlement as a mere volunteer and is thereby not entitled to any priority over Burlington to receive reimbursement from Utica. The eleventh is for a judgment declaring that Burlington is subrogated to the rights of Canido as well as a judgment in its favor and against the defendants in the amount of $1,000,000.00 which it expended in the settlement of the Castro-Brion action. The twelfth is against Sutter Restoration of NY Corp. for breach of contract by failing to provide contractual indemnification, by failing to procure additional insured status, or by failing to defend Canido in the Castro-Brion action.

Burlington alleges, among other things, that it provided a defense to Canido and is therefore subrogated to the rights of Canido against the defendants for defense fees and cost incurred on behalf of Canido. Burlington also contributed $1,000,000.00 to settle the injured party's claim against Canido and contends that Burlington is contractually and equitably subrogated to the rights of Canido.

Burlington also alleged in the instant complaint that Canido hired Sutter Restoration of NY Corp. to perform work on the premise pursuant to a contract dated April 18, 2012. The April 18, 2012 contract allegedly required Sutter Restoration of NY Corp. to add Canido as an additional insured and contained an indemnification provision. There was also a contract between Sutter Restoration of NY Corp. and SP Realty, LLC dated November 8, 2011 which required Sutter Restoration of NY Corp. to add SP Realty, LLC as an additional insured. That November 8, 2011 contract also contained an indemnification provision.

Burlington also alleged that Utica First Insurance Company issued two primary commercial general liability policies, one to defendant SP Realty, LLC, and one to Sutter Restoration of NY Corp. The Sutter Utica Policy contained provisions by which Canido qualified for coverage in the Castro-Brion action. The SP Realty Utica Policy also included provisions by which Canido qualified for coverage in the Castro-Brion action.

Burlington alleges that Sutter Restoration of NY Corp. tendered to Utica under the Sutter Utica Policy and that Utica rejected the tender. Utica tendered on behalf of SP Realty, LLC under the Nationwide Policy and Nationwide denied Utica's tender.

On July 25, 2018, Burlington paid its full $1,000,000.00 policy limit and Nationwide paid $1,700,000.00 of its $5,000,000.00 limit on behalf of Canido and Utica paid $100,000.00 on [*3]behalf of SP Realty, LLC to settle the claims asserted against Canido in the underlying action. As relevant here, Burlington and Nationwide each allege that Utica owed a duty to indemnify Canido as an additional insured under the Utica Policies and that Utica thus must reimburse them for their settlement payments.

SP Realty, LLC interposed an answer to the amended complaint with cross claims dated May 1, 2019.

Utica First Insurance Company interposed an answer to the amended complaint with counterclaims and cross claims dated April 29, 2019.

Nationwide interposed an answer to the amended complaint with counterclaims and cross claims dated April 25, 2019.

Utica First Insurance Company interposed an answer to Naionwide's cross claims asserted against it dated May 9, 2019.

Burlington interposed a reply to the counterclaim asserted against it by Nationwide dated May 8, 2019.

Burlington interposed a reply to the counterclaim asserted against it by Utica First Insurance Company dated May 17, 2019.

MOTION PAPERS

Nationwide's motion papers consists of a notice of motion, a memorandum of law in support, an affirmation in support, and eleven exhibits labeled A through K. Exhibit A is described as a copy of the Burlington Policy. Exhibit B is described as a copy of the Nationwide Excess Policy. Exhibit C is described as a copy of a supplemental summons and amended complaint in an underlying action brought in Kings County Supreme Court under Index Number 20758/2018 by Francisco Castro-Brion as plaintiff against SP Realty, LLC, Basonas Construction Corp., and Canido, as defendants. Exhibit D is a copy of the original summons and complaint filed in the instant action. Exhibit E is a copy of the amended complaint in the instant action. Exhibit F is a copy of Nationwide Insurance Company's answer with counterclaims and cross claims to the amended complaint dated April 25, 2019. Exhibit G is a copy of Utica First Insurance Company's answer to the amended complaint with counterclaims and cross claims dated April 29, 2019. Exhibit H is a copy of SP Realty, LLC's answer to the amended complaint with cross claims dated May 1, 2019. Exhibit I is a copy of Utica First Insurance Company's answer to Nationwide Insurance Company's cross claims asserted against it dated May 9, 2019. Exhibit J is a copy of plaintiff's reply to Nationwide's counterclaim asserted against it dated May 8, 2019. Exhibit K is a copy of Burlington's reply to the counterclaim asserted by Utica First Insurance Company against it dated May 17, 2019.

Burlington opposed the motion with an affirmation of counsel, a memorandum of law and one annexed exhibit labeled Exhibit A. Exhibit A is described as a copy of an email between Nationwide and Burlington dated March 6, 2019.

Utica First Insurance Company submitted an affirmation of its counsel.

Nationwide replied with a memorandum of law.

LAW AND APPLICATION

Nationwide seeks an order granting summary judgment in its favor pursuant to CPLR 3212 and dismissing the tenth cause of action as asserted against it. Burlington's tenth cause of action is for a judgment declaring that Nationwide is obligated to provide coverage to Canido in [*4]the Castro-Brion action.

Nationwide also seeks an order granting summary judgment in its favor on the two counterclaims that it has asserted against Burlington. The first counterclaim is for a judgment declaring that it is entitled to reimbursement under the Utica policies for its cost incurred to indemnify Canido in the Castro-Brion action before Burlington receives reimbursement from Utica for any indemnity payments made by Burlington on behalf of Canido in the Castro-Brion action.

The second counterclaim is for the same relief under the principles of equitable contribution and indemnification.

The instant action is for a declaratory judgment action involving an insurance-coverage dispute over the obligations of the party insurers to defend and to indemnify Canido in the underlying action.

It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists (Alvarez v Prospect Hospital, 68 NY2d 320 [1986]). The burden is upon the moving party to make a prima facie showing that he or she is entitled to summary judgment as a matter of law by presenting evidence in admissible form demonstrating the absence of material facts (Guiffirda v Citibank, 100 NY2d 72 [2003]).

A failure to make that showing requires the denial of the summary judgment motion, regardless of the adequacy of the opposing papers (Ayotte v Gervasio, 81 NY2d 1062 [1993]). If a prima facie showing has been made, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact (Alvarez, 68 NY2d at 324).

In order to determine the priority of coverage among different policies, a court must review and consider all the relevant policies at issue (BP Air Conditioning Corp. v One Beacon Ins. Group, 8 NY3d 708 [2007]; Briarwoods Farm, Inc. v Central Mut. Ins. Co., 22 Misc 3d 427 [Sup. Ct. Orange County 2008]). There is no dispute that Nationwide did not annex copies of the two insurance policies that Utica First Insurance Company issued to defendant SP Realty, LLC and to defendant Sutter Restoration of NY Corp. Without these policies, among others, the Court may not determine the priority of coverage between Nationwide and Burlington. Accordingly, Nationwide cannot make a prima facie showing of entitlement to a judgment dismissing Burlington's tenth cause of action seeking a declaration that Nationwide is obligated to provide coverage to Canido in the Castro-Brion action.

Similarly, Nationwide cannot make a prima facie showing of entitlement to a judgment declaring that it is entitled to reimbursement under the Utica policies for its cost incurred to indemnify Canido in the Castro-Brion action before Burlington receives reimbursement from Utica for any indemnity payments made by Burlington on behalf of Canido in the Castro-Brion action.

Inasmuch as Nationwide did not make a prima facie showing of entitlement to judgment dismissing the tenth cause of action asserted against it or granting summary judgment in its favor on the counterclaims it asserted against Burlington, the motion must be denied regardless of the sufficiency of the opposing parties' papers (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]).

CONCLUSION

The motion by Nationwide Insurance Company of America, formerly Scottsdale Insurance Company for an order pursuant to CPLR 3212 dismissing the tenth cause of action as asserted against it is denied.

The motion by Nationwide Insurance Company of America, formerly Scottsdale Insurance Company for an order pursuant to CPLR 3212 granting summary judgment in its favor on its counterclaims asserted against the Burlington Insurance Company is denied.

The foregoing constitutes the decision and order of this Court.

Dated: November 26, 2019

HONORABLE FRANCOIS A. RIVERA

J.S.C. Footnotes

Footnote 1: Based on the amended complaint Burlington used the word Utica throughout the complaint although the name of the defendant is Utica First Insurance Company and the plaintiff in paragraph 2 & 3 of the complaint identified two insurance policies that contain the word Utica, SP Realty Utica policy and Sutter Utica Realty Policy.