Utica Mut. Ins. Co. v Litric

[*1] Utica Mut. Ins. Co. v Litric 2020 NY Slip Op 50773(U) Decided on July 1, 2020 Supreme Court, New York County Lebovits, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 1, 2020
Supreme Court, New York County

Utica Mutual Insurance Company, Plaintiff,

against

Dragan Litric d/b/a Litric Contracting, Litric Electric LLC d/b/a Litric Contracting, Louise Gunderson, 1035 Fifth Avenue Corporation, Gumley-Haft LLC, and Ivan Condo, Defendants.



Litric Electric LLC d/b/a Litric Contracting, Plaintiff,

against

Palitto Insurance Company, Defendant.



650156/2018



Lester Schwab Katz & Dwyer LLP, New York, NY (Joshua Zimring of counsel), for plaintiff.

Florio Perrucci Steinhardt & Cappelli, LLC, Phillipsburg, NJ (Brian R. Tipton of counsel), for defendants Dragan Litric and Litric Electric.

Rebar Kelly, New York, NY (Cathleen Kelly Rebar of counsel), for third-party defendant Palitto Insurance Company.
Gerald Lebovits, J.

The following e-filed documents, listed by NYSCEF document number (Motion 001) 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92 were read on this motion for SUMMARY JUDGMENT.

In this insurance-coverage dispute, plaintiff Utica Mutual Insurance Company moves for [*2]summary judgment under CPLR 3212 declaring that Utica is not obligated to defend or indemnify defendants Dragan Litric and Litric Electric LLC (collectively, Litric) in a personal-injury action (and related third-party action) pending in Supreme Court, Queens County. Utica also moves, pursuant to CPLR 3215, for a default judgment against Louise F. Gunderson and Ivan Condo.

BACKGROUND

Defendant Ivan Condo, while employed by Litric, was injured on a construction site (See Am. Compl. NYSCEF No. 18 at ¶ 12). Condo brought a personal injury action in Queens County against the building owner, 1035 Fifth Avenue, the building's manager, Gumley Haft LCC, and the proprietary lessee of the apartment, Louise F. Gunderson (id. at ¶¶ 11-12). (See Ivan Condo v 1035 Fifth Avenue Corporation, Index No. 10796/2015 [Sup Ct, Queens County].)

Condo alleges that on June 23, 2015, while performing construction work, he sustained injuries at 1035 5th Avenue, Apt. 12A, New York, New York, as a result of a fall from a defective and unsafe ladder (id.). Condo's bills of particulars claim, among other injuries, that he sustained a right shoulder rotator cuff and labral tear, left shoulder rotator and lateral cuff tear, left and right knee injuries and a laminectomy (Litric's Aff. in Opp., NYSCEF No. 68 at ¶¶ 38-44). Gunderson in turn brought a third-party claim for breach of contract for failure to procure insurance, contractual and common-law indemnification and contribution against Litric (NYSCEF No. 18 at ¶¶ 13-14).

Utica issued a worker' compensation and employers liability insurance policy to Litric, which was in effect from October 1, 2014 to October 1, 2015 (Utica policy, NYSCEF No. 47). There is no dispute that this policy was in effect at the time of Condo's alleged accident. The policy excluded coverage for "liability assumed by a contract" (NYSCEF No. 47 at 52). Utica, pursuant to a reservation of rights and partial declination of coverage letter, agreed to defend Litric in the third-party action (See Letter, NYSCEF No. 60). However, Utica disclaimed coverage for the asserted contractual indemnification and breach of contract claims; and it reserved its right to disclaim coverage for the common law indemnification and contribution claims if Condo did not sustain a grave injury (id.).

PARTIES' ARGUMENTS

Utica argues that it is entitled to summary judgment because Litric's insurance policy bars coverage for liability assumed under contract (plaintiff's affirmation in support, NYSCEF No. 46 at ¶ 29). Utica contends, therefore, that it does not owe coverage to Litric for the breach of contract for failure to procure insurance or contractual indemnification claims (id.). As to the common law indemnification and contribution claims, Utica argues that those claims are barred by the Workers' Compensation Law § 11 because Condo did not suffer a "grave injury" (id. at ¶¶ 24-28).

Defendant Litric counters that that there is no explicit exclusion or reference to exclusion on the basis of a "grave injury" in the plain language of the policy and therefore, any determination as to the interpretation of the policy language must be construed in favor of defendants (NYSCEF No. 68 at ¶ 58). Litric also argues that

"this court does not have jurisdiction to make a determination as to the permanency of Condo's injuries and is collaterally estopped from doing so, and must rely on the decision made by the decision the Queens County Court or a jury in the underlying action - which has not yet been made"

(NYSCEF No. 68 at ¶ 62). Litric asserts that is it entitled to attorney's fees due to Utica's putative [*3]bad faith in attempting to avoid a contractual duty to defend and indemnify.

Additionally, third party defendant Palitto Insurance Company argues that it would be prejudiced if this court were to make a determination of law that is already before the court in the Condo action (Palitto's Aff. in Opp., NYSCEF No. 88 at ¶ 48).

DISCUSSION

I. The Branch of Utica's Motion Seeking Summary Judgment on its Declaratory-Judgment Claim

To obtain summary judgment under CPLR 3212 (b), a movant must put forth "evidentiary proof in admissible form" to "establish [a] cause of action or defense 'sufficiently to warrant the court as a matter of law in directing judgment' in the [movant's] favor" (Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 1067 [1979] [citation omitted]). If that showing has been made, the burden shifts to the opposing party to produce evidence in admissible form sufficient to establish the existence of a material issue of fact which requires a trial (See De Lourdes Torres v Jones, 26 NY3d 742, 763 [2016]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

Litric's insurance policy contains an exclusion for "liability assumed under a contract" (NYSCEF No. 47 at 52). Neither Litric nor Palitto has challenged Utica's showing that this coverage exclusion encompasses the contractual-indemnification and breach-of-contract claims asserted in Gunderson's third-party action in the underlying proceedings in Supreme Court, Queens County. Utica therefore has no duty to defend or indemnify any party in relation to the claims for contractual indemnification and for breach of contract to procure insurance (see National Union Fire Ins. Co. of Pittsburgh, PA v 221-223 W. 82 Owners Corp., 120 AD3d 1140, 1141 [1st Dept 2014] [plaintiff was not obligated to defend or indemnify defendant for "the underlying contractual indemnification claim, since its policy clearly excludes coverage for 'liability assumed under a contract'"]).

Litric's policy does requires Utica to cover Litric for common law liability. Such coverage only exists if the injured worker, Condo, suffers a "grave injury" (see id.). Workers' Compensation Law § 11 defines

"a grave injury [to] mean only one or more of the following: death, permanent and total loss of use or amputation of an arm, leg, hand or foot, loss of multiple fingers, loss of multiple toes, paraplegia or quadriplegia, total and permanent blindness, total and permanent deafness, loss of nose, loss of ear, permanent and severe facial disfigurement, loss of an index finger, or an acquired injury to the brain caused by n external physical force resulting in permanent total disability."

"The grave injuries listed are deliberately both narrowly and completely described. The list is exhaustive, not illustrative; it is not intended to be extended absent further legislative action" (Castro v United Container Mach. Group, 96 NY2d 398, 402 [2001] [internal quotation marks, citation and emphasis omitted]; accord Fleischman v Peacock Water Co., Inc., 51 AD3d 1203, 1204 [3d Dept 2008] ["The Court of Appeals has clearly indicated that the grave injury categories listed in the statute are extremely limited and should be narrowly construed"]).

Utica, as the movant for summary judgment on the ground that Condo did not suffer a "grave injury" within the meaning of Workers' Compensation Law § 11, may satisfy its prima facie burden by relying on Condo's bill of particulars (Nat'l Union, 120 AD3d at 1140 ["National Union was entitled to rely on the underlying plaintiff's bill of particulars to make a prima facie showing that the ligament and meniscal tears he allegedly sustained do not qualify as 'grave [*4]injur[ies]' within the meaning of Workers' Compensation Law § 11"]; see also Marshall v Arias, 12 AD3d 423, 424 [2d Dept 2004]). Here, plaintiff has established prima facie that the injuries alleged in Condo's bill of particulars and four supplemental bills of particulars—though plainly serious injuries—are not "grave injuries" within the particular meaning of Workers' Compensation Law § 11.[FN1] In addition, Condo's own deposition testimony establishes that he does not have a permanent total disability, since he retains range of motion in both his arms and can still ambulate, albeit with a cane (see Aguirre v Castle Am. Constr., 307 AD2d 901, 901 [2d Dept 2003], lv denied 1 NY3d 501 [2003] [plaintiff's admission that he had some movement in his arm defeated claim that he sustained a permanent and total loss of use of that arm]).

In opposition, defendant Litric and third-party defendant Palitto have failed to rebut plaintiff's argument or raise a triable issue of fact. Moreover, defendants' contention that further discovery is still needed is unavailing. CPLR 3212 (f) provides that "[s]hould it appear from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated, the court may deny the motion or may order a continuance to permit affidavits to be obtained or disclosure to be had and may make such other order as may be just." Thus, a "grant of summary judgment cannot be avoided by a claimed need for discovery unless some evidentiary basis is offered to suggest that discovery may lead to relevant evidence" (DaSilva v. Haks Engrs., Architects & Land Surveyors, P.C., 125 AD3d 480, 482 [1st Dept 2015] [internal quotation marks omitted]). Here, defendants have "produced no evidence indicating that discovery will yield material and relevant evidence" (see Nat'l Union, 120 AD3d at 1140-1141).

Litric's argument that this court lack jurisdiction to render this declaratory-judgment decision while the Condo action is pending in Queens County is without merit (see Nat'l Union, 120 AD3d at 1140-1141; Granite State Ins. Co. v AIM Constr. of NY, Inc., 2020 NY Slip Op 20110 [Sup Ct, NY County 2020]).

Utica's motion for summary judgment declaring that it is not obligated to defend of indemnify Litric is granted in its entirety. Since Litric cannot prevail on the merits of Utica's declaratory-judgment action, Litric's request for attorney fees is denied (see U.S. Liab. Ins. Co. v Staten Is. Hosp., 162 AD2d 445, 447 [2d Dept 1990]).

II. The Branch of Utica's Motion Seeking a Default Judgment

Finally, Utica moves for a default judgment Gunderson and Condo. Utica's motion papers establish proof of service and default for purposes of CPLR 3215 (f),[FN2] and demonstrate [*5]that whether Utica has a duty to defend and indemnify Litric is a concrete controversy that will affect the rights of Gunderson and Condo in the underlying personal-injury action and third-party action. And as discussed above, Utica has shown that it is entitled to a declaratory judgment in its favor. Utica's motion for a default judgment against Gunderson and Condo is granted.

Accordingly, it is hereby

ORDERED that the branch of Utica Mutual Insurance Company's motion seeking summary judgment under CPLR 3212 as against defendants Dragan Litric and Litric Electric LLC is granted; and it is further

ORDERED that the branch of Utica Mutual Insurance Company's motion seeking default judgment under CPLR 3215 as against defendants Louise F. Gunderson and Ivan condo is granted; and it is further

ADJUDGED AND DECLARED that plaintiff Utica Mutual Insurance Company has no duty to defend or indemnify defendant Litric Contracting Co. in the underlying personal-injury action captioned Ivan Condo v 1035 Fifth Avenue Corporation, Gumley Haft LLC and Louise F. Gunderson, pending in Supreme Court, Queens County under Index No. 10796/2015, or the related third-party action captioned Louise F. Gunderson v Litric Contracting Co.

Dated: July 1, 2020

Hon. Gerald Lebovits Footnotes

Footnote 1: See Spiegler v Gerken Bldg. Corp. (35 AD3d 715, 717 [2d Dept 2006] [plaintiff's injury to his lumbar spine area, including disc bulges and herniations, as well as radiculopathy, did not constitute "grave injury" within meaning of Workers' Compensation Law § 11]); Kraker v Consolidated Edison Co., Inc. (23 AD3d 531, 533 [2d Dept 2005] [partial loss of use of right hand does not constitute grave injury]); Trimble v Hawker Dayton Corp. (307 AD2d 452, 453 [3d Dept 2003] [holding that where even minimal use of hand remains, injury does not constitute grave injury]); Commerce and Industry Ins. Co. v One Whitehall, L.P. (2018 NY Slip Op 31759 [Sup Ct, NY County 2018] [plaintiff's laminectomy and alleged left shoulder, cervical spine and lumbar spine injuries were not "grave" under Section 11 of the Workers' Compensation Law]).

Footnote 2: Utica has not shown that it provided Gunderson and Condo with additional advance notice of its default-judgment motion, that notice was not required here under CPLR 3215 (g) (1).