Opinion
604164/2007.
Decided January 12, 2011.
East 115th St.: Matthew S. Aboulafia, Esq., for Plaintiff.
Great American: Kevin F. Buckely (Mound, Cotton, Wollan Greengrass) Focus Struga: Dominic Boone, Esq. (Faust Goetz Schenker Blee LLP) Abad: Anthony D. Grande, Esq. (Ropers Majeski Kohn Bentley) Yanoff: Rochard P. Marin, Esq. (Marin Goodman LLP), for Defendants.
Sharon Engineering: Aisa L. Joseph, Esq. (Milber Makris Plousadis Seiden, LLP), S Ironworks: Nicole Y. Brown, Esq. (Wade Clark Mulcahy), for 3rd-Party Defendants.
This order concerns three motion sequence numbers.
On April 28, 2010, under motion sequence no. 005, Defendant I. Arthur Yanoff ("Yanoff") moved to reargue against Defendant Great American Insurance Company of New York's ("Great American") motion for summary judgment. Yanoff also moved for summary judgment. In the alternative, Yanoff moved to clarify certain potential findings of fact in the court's March 12, 2010 order ("March Order"). For the reasons set forth below, Yanoff's motion to reargue is denied. Yanoff's motion for summary judgment is denied. The court clarifies its March Order below.
On May 6, 2010, under motion sequence no. 006, Plaintiff East 115th Street Realty Corp. ("Plaintiff") moved for summary judgment against Defendant Abad Consulting ("Abad"). Plaintiff also moved to reargue and renew the March Order's decision denying Plaintiff's summary judgment against Yanoff and also granting summary judgment to Great American. For the reasons set forth below, Plaintiff's motion for summary judgment against Yanoff and its motion to renew and reargue are denied. Plaintiff's motion for summary judgment against Abad is granted.
On May 19, 2010, under motion sequence no. 008, Great American filed a motion to dismiss and/or to reargue summary judgment against of all cross claims against it. For the reasons set forth below, Great American's motion to dismiss the cross claims is granted.
PROCEDURAL HISTORY
On December 20, 2007, Plaintiff filed a complaint against Defendants Yanoff, Great American, Abad, Mazzocchi Wrecking, Inc. ("Mazzocchi") and Focus Struga Building Developers, LLC ("Focus") (collectively, "Defendants"). The complaint alleged seven causes of action: 1) breach of contract against Focus; 2) negligence against Focus; 3) breach of contract against Great American; 4) negligence and/or breach of contract as against Abad; 5) negligence and/or breach of contract against Yanoff; 6) breach of contract against Mazzocchi; and 7) negligence against Mazzocchi.
On September 17, 2008, Great American moved for summary judgment as to all claims against it. On January 14, 2009, Plaintiff cross-moved for summary judgment against Great American and Yanoff. On March 12, 2010, the court granted Great American's motion for summary judgment as to the Plaintiff's complaint, dismissing the cause of action against Great American. The court also denied Plaintiff's cross-motion for summary judgment.
A hearing on the three pending motions was held on August 11, 2010. The motions were fully submitted on August 31, 2010.
FACTUAL BACKGROUND
Plaintiff owns a five story masonry building located at 1861 Lexington Avenue, New York, New York ("Building"). Plaintiff engaged defendants Abad and Yanoff to broker insurance coverage for its planned renovation of the Building. Affirmation of Alyssa E. Litman in Opposition to Great American's Motion for Summary Judgment ("Litman Affirmation") ¶ 6, attached as Ex. 1 to Affirmation of Matthew Aboulafia in Support of Plaintiff's Cross Motions for Summary Judgment and to Renew and Reargue, April 23, 2010 ("Aboulafia Affirmation"). Yanoff also acted as Great American's insurance agent. Id.
On or about February 5, 2007, Yanoff emailed to Great American the Plaintiff's application for builder's risk insurance to cover a renovation project at the Building. Affidavit of Veronica Kirkham, January 8, 2009 ("Kirkham Affidavit"), ¶ 7, attached as Ex. E to Affirmation of Rodrigo Armand, Jr. in Support of Motion to Reargue, April 21, 2010 ("Armand Affirmation").
The insurance application lists specific risk factors concerning the applicant, the property to be renovated and the renovation plan. Question 12 of the application, under the Commercial General Liability Section's General Information, asked the applicant whether "any structural alterations [were] contemplated" to the Building. Plaintiff's brokers, on behalf of Plaintiff, responded "No." Litman Affirmation, ¶ 8. Question 13 of the same section asked whether "any demolition exposure [was] contemplated." Again, Plaintiff's Brokers, on behalf of Plaintiff, responded "No." Id.
Plaintiff's application to Great American also attached a cost breakdown sheet from the general contractor of the project, defendant Focus Struga. The cost breakdown sheet listed the expenses for various aspects of the Building's renovation project. Litman Affirmation, Ex. B (legible copy of "Discounted Costs"). The cost breakdown sheet first listed "Demolition Removal" and stated a "Discounted Cost" of $143,864. Id. The second listed expense, "new floor framing systems 2nd — 5th flr.," stated a "Discounted Cost" of $49,100. Id. The third listed expense was for a "new floor framing system 1st flr." and stated a "Discounted Cost" of $49,100. Id..
It is disputed whether the application submitted to Great American also included the Inter-Reco Contractors' Program Contractor/Developers Supplemental Application ("supplemental application"). The supplemental application is an agreement between Plaintiff and Focus Struga that describes the work Focus Struga was to perform at the Building. It includes a notation that "direct" demolition would occur. Litman Affirmation, ¶ 4 and Ex. C. Plaintiff alleges the supplemental application was part of the initial application, while Great American argues that it never received the supplemental application.
On February 8, 2007, Kirkham, vice president of Yanoff, sent an email to Marie Mancini ("Mancini"), stating "[t]he insured [Plaintiff] has a closing at 11 a.m [sic] this morning. They were looking for builders risk — SOME CLARIFICATION — they are renovating an existing structure — Not ground up — AND the broker advises there will be no structural changes." Kirkham Affidavit at Bates No. YANOFF00053.
On February 20, 2007, Great American sent Plaintiff a proposal for builder's risk insurance coverage on the Building. On February 27, 2007, Plaintiff returned the proposal, noting "Coverage BOUND on the above effective 3/1/07 per quotation. Signed app, cost breakdown, copy of insurance requirements, hold harmless and contract attached." Kirkham Affidavit, Ex. 1.
Great American issued Plaintiff builder's risk insurance policy No. IMP 797-28-10-00 providing insurance coverage for the renovation project at the Building effective March 1, 2007 through March 1, 2008 (the "Policy"). On March 27, 2007, the Building partially collapsed. What remained of the Building was soon after demolished and the remnants removed, allegedly under an order from New York City's Department of Buildings.
Plaintiff filed a claim with Great American under the Policy for coverage of its loss resulting from the Building's collapse. Great American denied coverage in a letter dated December 13, 2007. Great American stated therein that the application for insurance contained material misrepresentations which rendered the policy void from inception. Litman Affirmation, Ex. A. In particular, Great American cited representations in the insurance application that Plaintiff would do no work to load bearing members of the Building and that no demolition exposure was contemplated. Id..
Plaintiff filed the instant complaint on December 19, 2007. On March 12, 2010, Great American was granted summary judgment on Plaintiff's claim against it and those claims were dismissed.
STANDARDS OF LAW
1. Motion to Reargue
A motion for leave to reargue shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion.
NY C.P.L.R. 2221 (d) (2). The purpose for a motion for reargument is not "to serve as a vehicle for an unsuccessful party to argue once again the very questions decided." Pro Brokerage, Inc. v. Home Ins. Co., 99 AD2d 971, 971 (1st Dep't 1984), quoting Foley v. Roche, 68 AD2d 558, 567 (1st Dep't 1979).
2. Motion to Renew
A motion for leave to renew shall be based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination; and shall contain reasonable justification for the failure to present such facts on the prior motion.
NY C.P.L.R. 2221 (e) (2-3). Any alleged new facts must accompany a party's application to renew. Reyes v. Sequeira , 64 AD3d 500 , 512-513(1st Dep't 2009).
3. Motion for Summary Judgment
"The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact as to the claim or claims at issue. Failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers." People v. Grasso , 50 AD3d 535 , 545 (1st Dep't 2008) (citations and quotation marks omitted). Once the proponent has made a prima facie showing, the party opposing a motion for summary judgment bears the burden of producing evidentiary proof in admissible form sufficient to require a trial of material questions of fact. The substantive law governing a case dictates what facts are material, and only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Id..
ANALYSIS
1. Motion Sequence No. 008
Under motion sequence no. 008, Great American moves to dismiss the cross claims against it by Mazzocchi, Abad, Focus, and Yanoff and third-party defendant S Iron Work Incorporated ("S Iron"). This motion is unopposed and is granted.
In its original motion for summary judgment, Great American sought dismissal of all claims alleged against it, including cross-claims. See Great American's Notice of Motion for Summary Judgment, September 17, 2008, p. 2. In the March Order, the court dismissed Plaintiff's third cause of action against Great American. March Order, p. 26. However, the court did not dismiss the cross-claims against Great American. See Court Order of March 29, 2010 ("second March Order"), p. 7. Great American now moves to dismiss all remaining cross claims against it. See Affirmation of Kevin F. Buckley in Support of Motion to Dismiss/Reargue, April 16, 2010 ("Buckley Affirmation"), ¶ 2. Great American asserts that it owes no contractual or common law duty to any defendant. Id. at ¶ 8.
Mazzocchi, Abad, Focus, Yanoff and S Iron assert cross-claims against Great American. Mazzocchi argues that any damages or injuries to Plaintiff were caused by co-defendants, including Great American. See Mazzocchi's Verified Answer to Amended Complaint, ¶¶ 29-33. Abad, Focus, Yanoff and S Iron all make similar cross-claims. See Abad's Verified Answer, Cross-Claims 1-3; Focus's Amended Answer, ¶¶ 27-28; Yanoff's Answer to Amended Complaint, ¶¶ 84-86; S Iron's Answer to Amended Complaint, ¶¶ 65-66. None of these cross-claims assert a cause of action against Great American directly. Rather, these defendants' cross-claims rest upon Plaintiff's claims against Great American.
Each cross-claim depends upon Plaintiff suffering damage as caused by Great American. Buckley Affirmation, ¶¶ 34-35. However, in the March Order, the court granted Great American summary judgment dismissing Plaintiff's claims against it on the grounds that the insurance contract was void ab initio. March Order, pp. 19, 25). The court has thus dismissed the only cause of action alleged by the Plaintiff against Great American and none of the cross-claims indicate any duty owed by Great American to Plaintiff other than the void contract. As such, Great American has shown an entitlement to judgment as a matter of law on the cross-claims. Mazzocchi, Abad, Focus, Yanoff and S Iron have not refuted Great American's argument or shown an issue of material fact. Great American's motion for summary judgment on the cross-claims against it is granted. People v. Grasso, 50 AD3d at 545).
2. Motion Sequence No. 005
In motion sequence no. 005, Yanoff moves to reargue against Great American's summary judgment motion. The court granted Great American's summary judgment motion and dismissed Plaintiff's breach of contract claim against Great American because the court found the insurance policy between Great American and Plaintiff to be void ab initio. March Order, pp. 19, 25. Yanoff cross-claimed against Great American, and Yanoff's cross-claims are based upon the breach of contract asserted by Plaintiff, upon which Great American was granted summary judgment. In addition, Yanoff moves for summary judgment on Plaintiff's claims against Yanoff. Finally, Yanoff seeks clarification of certain potential findings of fact as detailed below.
First, Yanoff's motion to reargue to is denied. Yanoff merely states his request for reargument without any grounds listed whatsoever. Yanoff has thus not shown any matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion. NY C.P.L.R. 2221 (d) (2); Pro Brokerage, 99 AD2d at 971.
Second, Yanoff's motion for summary judgment is denied as well. The court previously denied Yanoff's motion to dismiss Plaintiff's complaint on October 9, 2008. See October 9, 2008 order ("October Order"). First, the court noted that there was no information as to how Abad informed Yanoff about the Plaintiff's insurance application. October Order, p. 4. Second, the court noted that while Plaintiff admitted that it hired Abad, not Yanoff, Plaintiff states that Yanoff processed the application, which could imply culpability. Id. at p. 5. Third, Plaintiff states that it put Yanoff on notice of the demolition work by submitting several documents that indicated demolition work, including a developer's cost break down with the first cost listed as "demolition and removal." Id. at pp. 5-6. The insurance application included this latter document. Id. at p. 6. Fourth, there was no showing as to whether or not Yanoff reviewed the insurance application and how it obtained the insurance quote. Id. Upon these facts, the court found that Plaintiff had stated claims against Yanoff and Yanoff's motion to dismiss was therefore precluded.
Yanoff argues that the "voluminous number of additional documents submitted . . . now removes the impediment previously cited by the Court as the reason for denial of [Yanoff's] Pre-Answer Motion to Dismiss." Armand Affirmation, ¶ 12. First, Yanoff cites a letter from Abad to Plaintiff in which Abad admits that it alone was responsible for checking the incorrect box on the builder's risk insurance application. Armand Affirmation, Ex. C. Second, Yanoff cites to the transcript of Plaintiff's president, Jacob Azoulay ("Azoulay"), where he states that Plaintiff had no direct dealings with Yanoff. Armand Affirmation, Ex. D. Third, Yanoff cites to a fax from Abad to Kirkham, which Yanoff argues makes clear that the insurance application was already filled out by Abad when faxed to Kirkham. Kirkham Affidavit, Ex. 1. Fourth, Yanoff cites to an email from Kirkham that attaches the insurance application faxed by Abad, showing that Kirkham made no changes to the application filled out by Abad. Id.
However, Yanoff does not tender sufficient evidence to eliminate all material issues of fact. The proffered documents do not show whether Yanoff reviewed the insurance application. The documents also do not conclusively show that Yanoff should have been aware that demolition was contemplated as part of the package. Nor do the documents remove the question as to how Yanoff processed the application, a question that would show if Yanoff failed to properly process the application of insurance and obtain coverage for Plaintiff.
Yanoff argues that because Great American was not held liable to Plaintiff due to Great American's lack of involvement in Abad's misdeeds, that Yanoff should similarly be absolved from liability to Plaintiff. However, as the court noted in the March Order, Great American was absolved partially because Abad, through Yanoff, assured Great American that there would be no ground-up renovation and no structural changes. March Order, pp. 16-17. This does not answer the question as to whether Yanoff was negligent in relying upon Abad's statements and whether Yanoff failed to properly process Plaintiff's insurance application. As the court stated in the October order, "Yanoff cites no law that a wholesale broker can never be liable to Plaintiff for its own negligence in procuring an insurance policy." October Order, p. 6. There is an issue of material fact as to whether Yanoff knew or should have known about the demolition involved when Yanoff procured the insurance quote. As such, Yanoff's motion for summary judgment is denied.
Finally, Yanoff asks for clarification of certain potential findings of fact contained in the March Order. Yanoff's Order to Show Cause seeking Reargument, April 28, 2010 ("Yanoff OTC"), p. 2. Yanoff argues that in the March Order, the court made statements that could be construed as findings of fact. Armand Affirmation, ¶ 4. Yanoff contends that such findings of fact are not supported by the evidence. Id.
Specifically, Yanoff disputes the court's naming both Abad and Yanoff as "Plaintiff's Brokers." Armand Affirmation, ¶ 21. Yanoff believes this wrongly characterizes Yanoff as filling out Plaintiff's application, while Yanoff contends it was only Abad that did so. Yanoff also claims that the March Order wrongly states that "Plaintiff's Brokers," implying Yanoff, was advised of Plaintiff's plans to make structural changes to the building. Id. The court herein clarifies that it makes no findings of fact as to whether Yanoff was involved in filling out Plaintiff's insurance application. The court herein also clarifies that it makes no findings of fact as to whether Yanoff was advised of Plaintiff's plans to make structural changes to the building.
3. Motion Sequence No. 006
In motion sequence no. 006, Plaintiff moves to renew and reargue the court's March Order denying Plaintiff's summary judgment against Yanoff and granting summary judgment to Great American. These motions are denied. Plaintiff further moves for summary judgment against Abad. This motion is granted.
Plaintiff makes motions to renew its arguments in favor of summary judgment against Yanoff and against summary judgment in favor of Great American. However, Plaintiff proffers no new facts nor demonstrates a change in the law since the court's ruling, either in respect to Yanoff or Great American. NY C.P.L.R. 2221 (e) (2-3); Reyes, 64 AD3d at 512-513. These motions to renew are denied.
Plaintiff also moves to reargue in favor of summary judgment against Yanoff and against summary judgment in favor of Great American. However, Plaintiff offers no matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion. NY C.P.L.R. 2221 (d) (2); Pro Brokerage, 99 AD2d at 971. Plaintiff merely reiterates the same legal arguments it brought up against Yanoff and Great American respectively. Plaintiff's motions to reargue are therefore also denied.
Finally, Plaintiff moves for summary judgment against Abad, whom Plaintiff employed as a broker for insurance purposes. Summary judgment is granted against Abad on the issue of negligence.
Plaintiff's president, Azoulay, testified that he told Abad that the work to be performed was a "complete gut job" and that "everything was to be removed." Litman Affirmation, Ex. E, pp. 96-97. Abad does not contradict this testimony. In fact, Abad admitted in a letter to Azoulay that it had erred in preparing the application because Abad was aware that Plaintiff would demolish its building. Id. at Ex. F. Azoulay was asked at his deposition whether he considered the Abad's answers to the insurance application questions regarding structural alterations and demolition to be accurate. Armand Affirmation, Ex. D., pp. 111-112. Azoulay testified that Abad's answers were not accurate. Id. Furthermore, an email made by Abad through Yanoff told Great American that there would be no structural changes. Kirkham Affidavit, ¶ 9. Abad does not contradict these facts. Thus, there is no dispute that Abad was informed of the demolition and did not check that demolition was to be done on the insurance application. It was these uncontradicted facts that led the court to grant summary judgment previously against Great American. March Order, pp. 15-17.
"[I]nsurance agents have a common-law duty to obtain requested coverage for their clients within a reasonable time or inform the client of the inability to do so." Murphy v. Kuhn, 90 NY2d 266, 270 (1997). "[A]n insured has a right to rely upon the agent's presumed obedience to his or her instructions." Mets Donuts v. Dairyland Ins. Co, 166 AD2d 508, 509 (2nd Dep't 1990). When an insurance agent "agrees with an insured to obtain insurance and fails to do so and neglects to give reasonable notice that such insurance has not been obtained, the agent becomes personally liable." Riedman Agency, Inc v. Meaott Construction Corp., 90 AD2d 963, 964 (4th Dep't 1982).
Plaintiff had a right to rely upon Abad's presumed obedience to its instructions. Abad had a duty to obtain the requested coverage and did not. Abad agreed to obtain the requested insurance for Plaintiff and did not. Abad does not rebut any of these facts. Plaintiff has thus established a prima facie case for summary judgment against Abad. People v. Grasso , 50 AD3d 535 , 545 (1st Dep't 2008). It has tendered sufficient evidence to eliminate any material issues of fact as to the claims against Abad.
Abad has not produced evidentiary proof in admissible form sufficient to require a trial of material questions of fact. Id. Abad does not state that Plaintiff gave him incorrect information, deny that it filled out the insurance application correctly, or argue that Abad had no duty to Plaintiff. Abad cites no case law for the argument that Plaintiff had duty to review the application before Abad submitted it. Abad failed to properly follow Plaintiff's instruction and obtain coverage including for demolition. Mets Donuts, 166 AD2d at 509.
Abad argues that Plaintiffs are bound to the representations that Abad made on the insurance application to Great American. Abad cites Falcon Crest Diamonds v. Dixon, 173 Misc 2d 450, 456 (New York County, August 1996) to support this contention. Falcon Crest is inapposite. First the court in Falcon Crest was binding a principal insured to the actions of its agent in securing insurance, in which there was no hint that the agent misrepresented the principal's instructions. Second, the present case concerns a negligence charge by a principal to an agent, and not a misrepresentation charge of an insurer to an insured. Third, and finally, Falcon Crest is not an appellate case and, while possibly highly persuasive, is not binding upon the court here.
Plaintiff has made a prima facie case for summary judgment against Abad. Abad has failed to produce evidentiary proof sufficient to require a trial on issues of material fact. Summary judgment is granted to Plaintiff on the issue of Abad's negligence.
Accordingly, it is
ORDERED that, under motion sequence no. 005, Defendant I. Arthur Yanoff's motion to reargue and summary judgment motion are DENIED; and it is further
ORDERED that, under the motion sequence no. 005, the March 12, 2010 order is clarified in that no findings of fact are made by the court as to Defendant I. Arthur Yanoff's involvement in filling out Plaintiff East 115th Street Realty Corp.'s insurance application and as to Defendant I. Arthur Yanoff's knowledge of Plaintiff East 115th Street Realty Corp.'s plans to make structural changes to the building located at 1861 Lexington Avenue, New York, New York; and it is further
ORDERED that, under motion sequence no. 006, Plaintiff's motions to renew and reargue are DENIED; and it is further
ORDERED that, under motion sequence no. 006, Plaintiff's motion for summary judgment against Defendant Abad Consulting on the issue of negligence is GRANTED;
ORDERED that, under motion sequence no. 008, Defendant Great American Insurance Company of New York's motion to dismiss the cross claims is GRANTED and all other aspects of Defendant Great American Insurance Company of New York's motion is denied.