Opinion
Index No. 652321/2020 Motion Seq. No. 008
08-20-2024
E.E. CRUZ & COMPANY, INC., Plaintiff, v. STARR SURPLUS LINES INSURANCE COMPANY, Defendant.
Saxe, Doernberger & Vita P.C., Trumbull, Connecticut (Stacy M. Manobianca, Esq., of counsel) for plaintiff. Foran Glennon Palandech Ponzi & Rudloff P.C., New York, New York (Charles J. Rocco, of counsel) for defendant.
Unpublished Opinion
MOTION DATE 05/07/2024
The following e-filed documents, listed by NYSCEF document number (Motion 008) 191, 192, 193, 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224 were read on this motion to/for DISMISS DEFENSE.
APPEARANCES:
Saxe, Doernberger & Vita P.C., Trumbull, Connecticut (Stacy M. Manobianca, Esq., of counsel) for plaintiff.
Foran Glennon Palandech Ponzi & Rudloff P.C., New York, New York (Charles J. Rocco, of counsel) for defendant.
DECISION + ORDER ON MOTION
EMILY MORALES-MINERVA, JUSTICE
In this action for, among other things, breach of contract, plaintiff E.E. CRUZ &COMPANY, INC., moves, pursuant to CPLR § 3211(b), to dismiss defendant STARR SURPLUS LINES INSURANCE COMPANY'S fifth affirmative defense on the ground that a defense is not stated or has no merit. Defendant opposes the motion, and cross-moves, pursuant to CPLR § 2215, for an order of sanctions against plaintiff (see Rules of the Chief Administrator of the Courts [22 .NYCRR] § 130-1.1 [governing costs and sanction for frivolous conduct]).
CPLR § 2215 provides for relief demanded by other than moving party.
For the reasons set forth below, the court denies both plaintiff's motion and defendant's cross-motion.
BACKGROUND
Plaintiff E.E. CRUZ &COMPANY, INC. (Insured) filed a complaint, dated September 04, 2020, against defendant STARR SURPLUS LINES INSURANCE COMPANY (Insurance Company), setting forth five causes of action. The first cause of action is for a declaration that Insurance Company is required to provide insurance coverage to Insured for losses suffered in connection with the subject construction project; the second and third causes of action are for breach of contract and breach of the implied covenant of good faith and fair dealing; the fourth cause of action is for negligent misrepresentation; and the fifth cause of action is for deceptive business practices in violation of General Business Law § 349 (NYSCEF Doc. No. 04, Complaint). Insurance Company timely submitted its answer with affirmative defenses (NYSCEF Doc. No. 10, Answer).
Thereafter, on January 12, 2021, Insurance Company moved, pursuant to CPLR § 3211(a)(7), for an ordering dismissing the first, fourth, and fifth causes of action, and dismissing portions of the second and third causes of action, alleging the pleading failed to state a claim (NYSCEF Doc. No. 13, notice of motion).
Insurance Company did not seek to dismiss the breach of contract portions of the second and third causes of action.
The court (N. Bannon, J.S.C.) denied Insurance Company's motion (seq. no. 001) in its entirety (NYSCEF Doc. No. 34, Decision and Order, dated October 12, 2021). Later, Insurance Company filed motion (seq. no. 004), pursuant to CPLR § 3212, for an order, granting it summary judgment.
Motion sequences 002 and 003 for admission of counsel pro hac vice were unopposed and granted on December 15, 2021, and April 26, 2022 (NYSCEF Doc. Nos. 41, 53).
On February 7, 2024, the court (N. Bannon, J.S.C.) denied Insurance Company's motion for summary judgment in its entirety. Addressing each of the five causes of action, Judge N. Bannon concluded that Insurance Company failed to establish its prima facie entitlement to judgment as a matter of law on any of them (see NYSCEF Doc. No. 140, Decision and Order).
On March 8, 2024, Insurance Company moved, pursuant to CPLR § 2221, to reargue (seq. no. 005), which was summarily denied by the court (NYSCEF Doc. No. 161, Decision and Order, N. Bannon, J.S.C., April 8, 2024). On April 1, 2024, Insured moved for sanctions (seq. no. 006), which this Court denied in its entirety (NYSCEF Doc. No. 187, Decision and Order, April 29, 2024).
Now, in the subject motion (seq. no. 008), Insured moves, pursuant to CPLR § 3211 (b), to dismiss Insurance Company's fifth affirmative defense - that the subject insurance policy precludes Insured from receiving coverage for "loss, damage or expense caused by, resulting from or made worse by . . . fault, defect, error, deficiency or omission in design, plan or specification" (see NYSCEF Doc. No. 194, Policy, p 15). Insured contends that this defense is not stated or has no merit because Insurance Company "does not have any evidence that [insured] did anything wrong" and Insurance Company cannot prove "the fundamental element of 'fault'" under the Policy (see NYSCEF Doc. No. 224, Memorandum of Law, p 5).
Insurance Company counters that Insured's argument is misplaced, as the provision does not require "fault" on Insured's part. Further, Insurance Company argues that the applicability of the policy exclusion is a question of fact. Finally, Insurance Company cross-moves for sanctions against Insurer alleging its filing of the subject motion amounts to frivolous conduct (see Rules of the Chief Administrator of the Courts [22 NYCRR] § 130-1.1).
ANALYSIS
Motion to Dismiss
"A party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit" (CPLR § 3211 [b]). In making such a motion, "the plaintiff bears the heavy burden of showing that the defense is without merit as a matter of law" (Granite State Ins. Co. v Transatlantic Reins. Co., 132 A.D.3d 479, 481 [1st Dept 2015], citing 534 E. 11th St. Hous. Dev. Fund Corp, v Hendrick, 90 A.D.3d 541, 541 [1st Dept 2011]; see also Alpha Capital Anstalt v General Biotechnology Corp., 191 A.D.3d 515, 516 [1st Dept 2021]).
Further, courts must view the answer's allegations "in the light most favorable to the defendant" and must provide the defendant "the benefit of every reasonable intendment of the pleading, which is to be liberally construed (Alpha Capital Anstalt, 191 A.D.3d at 516 [citations omitted]; see also Granite State Ins. Co., 132 A.D.3d at 481; 182 Fifth Ave, v Design Dev. Concepts, 300 A.D.2d 198, 199 [1st Dept 2002]). In addition, "the court should not dismiss a defense where there remain questions of fact requiring a trial" (Granite State Ins. Co., 132 A.D.3d at 481) .
Applying these principles here, Insured fails to meet its burden. The fifth affirmative defense is neither patently devoid of merit, nor palpably insufficient (see MBIA Ins. Corp, v Greystone & Co., Inc., 74 A.D.3d 499 [1st Dept 2010]]). Moreover, the arguments presented indicate issues of fact as to the applicability of the exclusionary clause in the insurance policy.
Cross Motion for Sanctions
"The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court, except where prohibited by law, costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct . . (Rules of the Chief Administrator of the Courts [22 NYCRR] § 130-1.1 [a]; see also Gowen v Helly Nahmad Gallery, Inc., 226 A.D.3d 619, 619 [1st Dept 2024] [affirming denial of sanctions absent "clear abuse of discretion"]).
"Frivolous conduct" means conduct that is "completely without merit in law and cannot be supported by a reasonable argument ... is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another" or "asserts material factual statements that are false" (22 NYCRR § 130-1.1[c] [1-3]).
Here, Insurance Company's contention - that Insured's motion to dismiss is "an attempt to circumvent the summary judgment deadline" -- does not make a showing of actions "so egregious as to constitute frivolous conduct" (Nugent v City of New York, 189 A.D.3d 631, 632 [1st Dept 2020] [internal quotation marks omitted]; see also Fishoff Family Found, v Frydman, 148 A.D.3d 601, 601 [1st Dept 2017]).
Accordingly, it is
ORDERED that plaintiff E.E. CRUZ &COMPANY, INC.'s motion to dismiss (seq. no. 008) the fifth affirmative defense of defendant STARR SURPLUS LINES INSURANCE COMPANY is denied; and it is further
ORDERED that the same defendant's Cross-motion for sanctions is also denied.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.