Opinion
No. 4902/10.
2013-01-31
Luz Stella CELIS, Plaintiff, v. HSBC USA INC. and 894–896 Manhattan Avenue Inc., Defendants.
JACK M. BATTAGLIA, J.
Recitation in accordance with CPLR 2219(a) of the papers considered on the motion of defendants/second third-party plaintiffs HSBC USA, N.A. s/h/a HSBC USA Inc. and 894–896 Manhattan Avenue Inc. for an order, among other things, pursuant to CPLR 3212, granting summary judgment on the Second Third–Party Complaint; and on the cross-motion of second third-party defendant Impressive Plowing of NYC Inc. for an order, among other things, pursuant to CPLR 603 and Rule 1010, dismissing the Second Third–Party Complaint:
-Notice of Motion
Affirmation in Support
Exhibits A–R
-Notice of Cross–Motion
Affirmation in Support
Exhibits A–F
-Affirmation in Partial Opposition and in Partial Support of Second Third–Party Defendant's Cross–Motion
-Affirmation in Opposition
-Reply Affirmation
-Reply Affirmation
Defendant/second third-party plaintiff HSBC Bank USA, N.A. s/h/a HSBC USA Inc. and defendant/third-party plaintiff/second third-party plaintiff 894–896 Manhattan Avenue Inc. were represented by Justin J. Skvarce, Esq. of Raven & Kolbe, LLP. Second third-party defendant Impressive Plowing of NYC Inc. was represented by Matthew J. Rodriguez, Esq. and Erin M. McGinnis, Esq. of Kral Clerkin Redmond Ryan Perry & Van Etten, LLP.
The Verified Complaint of plaintiff Luz Stella Celis alleges that she sustained injury on February 11, 2010, when she slipped and fell on ice on the sidewalk in front of 896 Manhattan Avenue, Brooklyn, premises owned by defendant 894–896 Manhattan Avenue Inc. and leased to defendant HSBC USA Inc. Defendants served a second third-party complaint against Impressive Plowing of NYC Inc., seeking contractual and common law indemnification, and alleging breach of a contractual insurance provision. A first third-party action against Jones Lang LaSalle Americas, Inc. has been discontinued.
With this motion, Defendants/Second Third–Party Plaintiffs, the owner and lessee, move for an order, among other things, pursuant to CPLR 3212, granting summary judgment on the Second Third–Party Complaint. Second third-party defendant Impressive Plowing, a snow removal contractor, cross-moves for an order, among other things, pursuant to CPLR 603 and Rule 1010, dismissing the Second Third–Party Complaint.
In support of their motion, 894–896 Manhattan and HSBC submit transcripts of examinations before trial of Plaintiff; Agnes Kowalewski, an HSBC witness; and Anthony Ivey, a Jones Lang LaSalle witness. None of the transcripts is signed by the deponent, or shown to have been submitted to the deponent for review and signature pursuant to CPLR 3116(a), and, therefore, except for the transcript of the testimony of Agnes Kowalewski ( see Ashif v. Won Ok Lee, 57 A.D.3d 700, 700, 868 N.Y.S.2d 906 [2d Dept 2008] ), the transcripts are not admissible as evidence in support of summary judgment ( see Martinez v. 123–16 Liberty Ave. Realty Corp., 47 A.D.3d 901, 902, 850 N.Y.S.2d 201 [2d Dept 2008]; Delishi v. Property Owner (USA) LLC, 31 Misc.3d 661, 665–66, 920 N.Y.S.2d 597 [Sup Ct, Kings County 2011].)
As to the testimony of Ms. Kowalewski, although she did not see Plaintiff fall, she saw Plaintiff “on the ground” on the sidewalk and a “frozen spot,” “ice.” This testimony would confirm Plaintiff's allegation that she fell on ice on the sidewalk for purposes of Defendants/Third–Party Plaintiffs' prima facie showing on this motion.
Also submitted by 894–896 Manhattan and HSBC are an Affidavit of John White, the Senior Vice President of HSBC North America Holdings, Inc., presumably a company related in some unexplained way to defendant HSBC USA Inc.; and an Affidavit of Douglas S. Haymore, II, Esq., General Counsel of Symbiot Business Group, Inc. The Affidavits serve as vehicles for the submission of several documents, to be described, and little other purpose, since neither affiant establishes his personal knowledge of any of the relevant transactions or the admissibility of any documents on which the affiant may have relied.
Attached to the Affidavit of John White is a copy of a ten-year lease dated April 19, 2005 between 894–896 Manhattan Avenue, Inc. as Landlord, and HSBC USA, National Association as Tenant, for the property at 896 Manhattan Avenue. Mr. White points specifically to the following provision found at Section 7.1.3 of the lease.
“Tenant shall defend with counsel reasonably acceptable to Landlord (except no such consent shall be required as to any counsel appointed by Tenant's insurance carrier), save harmless, indemnify, and defend Landlord (i) from all claims of injury to persons or damage to property while on the Premise, unless arising from the negligence or willful misconduct of Landlord, its agents, employees or contractors, (ii) from all claims of injury to persons or damage to property occasioned by any negligence or willful misconduct of Tenant, and (iii) all costs and expenses incurred by reason of Tenant's breach of its obligations under this Lease.”
The lease shows signatures on behalf of Landlord and Tenant, and although there is no acknowledgment of any of the signatures, the document is sufficiently authenticated by its submission here by both of its parties. The Court also notes that 894–896 Manhattan Avenue is not attempting to enforce the quoted lease provision against HSBC.
Attached to the Affidavit of Douglas Haymore are a copy of a Snow Removal Service Contractor Agreement dated November 1, 2009 between Jones Lang LaSalle Americas Inc. and Pipestone Property Services LLC; a copy of an undated Master Services Agreement between Symbiot Property Services–America, LLC, signed by that party on April 5, 2010, and Infinity Towing DBA Impressive Plowing, signed by that party on March 25, 2010; and a copy of a Notice to Provide Services from Symbiot to Impressive “with an effective term of November 25, 2009 to April 30, 2010.” Mr. Haymore points specifically to the following provision found at Section 15 of the Master Services Agreement.
“Service Provider agrees to defend, indemnify and hold Symbiot and Customer and their respective officers, directors, employees, affiliates and agents harmless from and against any and all claims, losses liabilities and damages, and shall pay all claims, judgments awards, liabilities, costs and expenses (including attorney and expert witness fees) arising out of any of the following: (a) any breach or default of Service Provider under this Master Agreement; (b) the failure of Service Provider to perform Provider Services in accordance with this Master Agreement; or (c) any negligence, bad faith, willful misconduct or violation of law by Service Provider in connection with this Master Agreement or the provision of Provider Services.”
There are no acknowledgments of the signatures on the Snow Removal Service Contractor Agreement or the Master Services Agreement, nor is either document otherwise authenticated. ( See Prince, Richardson on Evidence § 9–101 et seq. [11th Ed., Farrell]; NYCTL 1998–2 Trust v. Santiago, 30 A.D.3d 572, 573, 817 N.Y.S.2d 368 [2d Dept 2006] [“A private document offered to prove the existence of a valid contract cannot be admitted into evidence unless its authenticity and genuiness are first properly established”].)
Perhaps more importantly, Plaintiff fell on February 11, 2010, i.e., before either Symbiot or Impressive Plowing signed the Master Services Agreement. Although the Master Services Agreement states that it governs all services provided by Impressive Plowing, including those “commenced before the date of [the] Master Services Agreement,” and the Notice to Provide Services applies to a period that includes the date of Plaintiff's fall, the Notice is not signed by Impressive Plowing, and there is no admissible evidence that snow removal services were being provided on that date. Unlike Cinquemani v. Old Slip Assoc., LP (77 A.D.3d 603, 912 N.Y.S.2d 224 [2d Dept 2010] ), relied upon by movants, here there are no “evidentiary submissions demonstrat[ing] prima facie [The Master Services Agreement] was intended to apply retroactively” ( see id. at 604, 912 N.Y.S.2d 224.)
In any event, 894–896 Manhattan and HSBC have not established prima facie that Impressive Plowing owes them defense and indemnity under the quoted provision of the Master Services Agreement. There is no showing of “any negligence, bad faith, willful misconduct or violation of law”; and, even assuming a breach by Impressive Plowing of the insurance provision of the Master Services Agreement, there is no showing that redress may be obtained through the indemnification provision, rather than through remedies generally available for breach of an agreement to provide insurance. ( See Inchaustegui v. 666 5th Ave. Ltd. Partnership, 96 N.Y.2d 111 [2001].)
Movants rely on “the failure of Service Provider to perform Provider Services in accordance with [the] Master Agreement,” quoting a provision of the Notice to Provide Services that “Service Provider will be expected to keep all ... sidewalks ... free from snow and ice in order to provide a safe condition for pedestrian ... traffic.” ( See Affirmation in Support ¶¶ 35, 36.) According to movants' counsel, “Quite obviously, the presence of ice on the subject sidewalk, which is undisputed, constitutes a failure to perform services and a breach of the [Master] Agreement” ( see id. ¶ 36, 725 N.Y.S.2d 627, 749 N.E.2d 196.)
The Master Agreement includes an Exhibit A, “Contract Duties” / “Snow and Ice Maintenance” / “Technical Specifications” / “Scope of Work,” consisting of more than three pages. The Notice to Provide Services includes an Exhibit A, “Provider Services,” consisting of more than a page. Movants do not allege any failure of the contractor to comply with any of the specific performance requirements of these contract documents.
The contractual indemnification provision benefits “Symbiot and Customer,” with “Customer” referring to “Symbiot's Customer” ( see Master Services Agreement ¶ 6). There is no contract between Impressive Plowing as indemnitor and either 894–896 Manhattan or HSBC. There is, however, a contract, i.e., the Snow Removal Service Contract Agreement dated November 1, 2009, between Jones Lang LaSalle “for the benefit of” HSBC as “Owner” and Pipestone Property Services LLC. According to Symbiot's General Counsel Douglas Haymore, Pipestone is “an affiliate of Symbiot,” but no further information is provided. In any event, 894–896 Manhattan does not appear anywhere in the contracts submitted on this motion, except in the lease between 894–896 Manhattan and HSBC. There is nothing that evidences an intent that 894–896 Manhattan is to be deemed “Symbiot's Customer” for purposes of Impressive Plowing's indemnity under the Master Services Agreement, and the indemnity provision in the lease does not make it so.
Movants appear to take the position that the fact that ice was present on the sidewalk when Plaintiff fell is sufficient to establish that Impressive Plowing did not keep the sidewalk “free from snow and ice in order to provide a safe condition for pedestrian ... traffic,” as it was “expected” to do ( see Notice to Provide Services, Exhibit A, Provider Services), constituting Impressive Plowing's “failure ... to perform Provider Services in accordance with [the] Master Agreement,” so as to trigger the indemnification provision ( see Master Services Agreement ¶ 15.) Movants contend, in effect, for a form of “strict liability” for defense and indemnity whenever there is snow or ice on the ground and a claimant falls.
The Court will assume that, absent statutory restriction ( seeGeneral Obligations Law § 5–322.1), a broad and unequivocal contractual undertaking to defend and indemnity in those circumstances would be enforced. ( See Brown v. Two Exch. Plaza Partners, 76 N.Y.2d 172, 177–78 [1990];Margolin v. New York Life Ins. Co., 32 N.Y.2d 149, 151–54 [1973];Imperati v. Kohl's Dept. Stores, 91 A.D.3d 1111, 1114, 936 N.Y.S.2d 374 [3d Dept 2012].) The question here is whether the indemnification provision at issue imposes that breadth of obligation upon Impressive Plowing.
This Court is not convinced on this record. In addition to Impressive Plowing's “negligence, bad faith, willful misconduct or violation of law,” none of which is shown here, the defense and indemnity obligations are triggered by the contractor's “breach or default” or “failure ... to perform Provider Services in accordance with [the] Master Agreement.” The term “Provider Services” is not defined, but reference is made to the Notice to Provide Services and “any specific instructions given by an officer or employee of Symbiot” ( see Master Services Agreement ¶ 2.)
Particularly where, as here, the contract, either expressly or by reference, specifies and details performance requirements for the contractor's services under the contract, an indemnity provision that speaks in terms of “breach or default” or “failure ... to perform” is not necessarily understood as imposing the “strict liability” for which 894–896 Manhattan Avenue and HSBC contend without some further evidence of the parties' intent. Indeed, it was two years after commencement of Plaintiff's action, and a substitution of Defendants' counsel, that the third-party action against Impressive Plowing was commenced and tender made to its carrier ( see Affirmation in Support ¶ 11.) Apparently, the applicability of the indemnity provision was not so immediately obvious to 894–896 Manhattan and HSBC.
Moreover, there is no evidence as to “any specific instructions given by an officer or employee or Symbiot,” or their absence. Nor is there any evidence that the parties intended the breadth of defense and indemnity that movants contend for.
As to the claim for common-law indemnification, suffice it to note that neither 894–896 Manhattan nor HSBC is shown to have been free from fault in causing Plaintiff's alleged injury. ( See McCarthy v. Turner Constr., Inc., 17 N.Y.3d 369, 377–78 [2011] [“a party cannot obtain common-law indemnification unless it has been held to be vicariously liable without any proof of any negligence or actual supervision on its part”].)
Finally as to the motion of 894–896 Manhattan and HSBC, movants seeks summary judgment on their claim for breach of a contractual obligation to procure insurance for their benefit. They contend that, by reason of that breach, they are “entitled to common law contribution, contractual indemnity and an Order directing Impressive Plowing to reimburse defendant for all reasonable defense costs incurred since April 9, 2012,” the date of their tender of the defense to Impressive Plowing's carrier ( see Affirmation in Support ¶ 43.)
The Court notes, first, that despite their reliance on Kinney v. G.W. Lisk Co. (72 N.Y.2d 215 [1990] ), movants ignore the court's caution that “[a]n agreement to procure insurance is not an agreement to indemnify and hold harmless, and the distinction between the two is well recognized” ( see id. at 218.) Second, movants cite no authority for the proposition that a carrier's refusal to defend under a policy procured in accordance with a contractual obligation to procure it constitutes a contractual breach by the party who procured the policy ( see Affirmation in Support ¶ 40.)
Movants assert in addition, however, that Impressive Plowing failed to procure coverage in the amounts it was required to, naming Symbiot, Jones Lang LaSalle, and HSBC (but note, not 894–896 Manhattan) as additional insureds ( see id. ¶ 41.) Movants cite a provision in the Snow Removal Service Contractor Agreement that requires general liability coverage of $3,000,000, whereas Impressives Plowing's policy only provides coverage of $1,000,000 ( see id. ¶¶ 41, 42.) The short answer to this contention is that Impressive Plowing is not a signatory to the Snow Removal Service Contractor Agreement between Jones Lang LaSalle and Pipestone Property Services LLC.
Indeed, the Master Services Agreement, which Impressive Plowing did sign, also contains an insurance provision ( see ¶ 12) that Impressive Plowing apparently did comply with. The Court has noted that Exhibit C, Insurance Requirements, to the Notice to Provide Services, which Impressive Plowing may be bound to but did not sign, contains requirements consistent with those found in the Snow Removal Service Contractor Agreement. But movants ignore these disparities, which, at the least, preclude a finding that they have made a prima facie showing as to breach.
In sum, defendants/second third-party plaintiffs HSBC and 894–896 Manhattan have failed to make a prima facie showing that they are entitled to judgment as a matter of law on any of the causes of action asserted in their Second Third–Party Complaint against Impressive Plowing, and their motion must be denied.
Impressive Plowing cross-moves for an order, pursuant to CPLR 603 and Rule 1010, dismissing the Second Third–Party Complaint, or, in the alternative, severing the third-party action, vacating the Plaintiff's note of issue, or allowing Impressive Plowing certain discovery. The note of issue was filed on April 23, 2012, i.e., several days after commencement of the second third-party action.
CPLR 603 authorizes severance of claims “[i]n furtherance of convenience or to avoid prejudice,” and CPLR 1010 authorizes dismissal of a third-party complaint “without prejudice, or severance of the third-party claim, on “such order as may be just,” guided by whether the third-party claim “will unduly delay the determination or prejudice the substantial rights of any party.” Caselaw considers any delay of the third-party plaintiff in commencing the third-party action and the status of disclosure in the main action. ( See Ambriano v. Bowman, 245 A.D.2d 404, 405, 666 N.Y.S.2d 471 [2d Dept 1997]; Cusano v. Sankyo Seiki Mfg. Co., 184 A.D.2d 489, 490, 584 N.Y.S.2d 324 [2d Dept 1992].) “[I]t would be better not to fragment trials, but to facilitate one complete and comprehensive hearing and determine all the issues involved between the parties at the same time.” (Shanley v. Callahan Indus., 54 N.Y.2d 52, 57 [1981].) To that end, post-note-of-issue discovery may be permitted where a movant “demonstrate[s] unusual or unanticipated circumstances and substantial prejudice' absent the additional discovery.” ( See Tirado v. Miller, 75 A.D.3d 153, 157, 901 N.Y.S.2d 358 [2d Dept 2010] [quoting 22 NYCRR 202.21(d)].)
Importantly, Plaintiff has not opposed Impressive Plowing's cross-motion, and the Court will not assume any prejudice to her as a result of determination of the motion. ( See Sichel v. Community Synagogue, 256 A.D.2d 276, 277, 682 N.Y.S.2d 382 [1st Dept 1998].) Defendants/Second Third–Party Plaintiffs oppose dismissal of the Second Third–Party Complaint or severance, but do not object to post-note-of-issue disclosure, even on an expedited basis.
The Court does not find sufficient cause for either dismissal or severance. Although 894–896 Manhattan and HSBC provide no explanation for waiting two years after commencement of Plaintiff's action before filing their Second Third–Party Complaint, Impressive Plowing offers no evidence that it was unaware of Plaintiff's claim until it received the Second Third–Party Complaint. Except as to disclosure that has been made to date in Plaintiff's action, Impressive Plowing does not suggest any prejudice from any delay in commencing the third-party action. Indeed, it is difficult to see that Impressive Plowing will be in a better position to defend against the Second Third–Party Complaint with an even further delay.
Given the clear commonality of issues in the main action and the third-party action, the absence of any stated prejudiced by Plaintiff, and the ability through post-note-of-issue disclosure to ameliorate the prejudice identified by Impressive Plowing, neither dismissal nor severance is warranted. Should either Plaintiff or Defendants/Second Third–Party Plaintiffs unduly hinder or delay readying the case for trial, Impressive Plowing may seek appropriate relief with a renewal of this motion.
The motion of Defendants/Second Third–Party Plaintiffs is denied.
The cross-motion of Second Third–Party Defendant is granted to the extent that: (1) within twenty (20) days after service upon them of a copy of this order with notice of entry, Defendants/Second Third–Party Plaintiffs shall deliver to Second Third–Party Defendant copies of all disclosure made by any party to the main action, except for deposition transcripts provided on this motion: and (2) all parties shall appear in the Central Compliance Part on April 8, 2013 for the purpose of providing for any additional disclosure before trial.