Opinion
650510/2014
07-09-2019
EUROTECH CONSTRUCTION CORP., Plaintiff, v. ILLINOIS NATIONAL INSURANCE COMPANY and Structure Tone, Inc., Defendants.
Plaintiff: FG McCabe & Associates, PLLC, 45 Rockefeller Plz, Ste 2000, New York, NY 10111, By: Gerard G. Mccabe, Esq. Defendant: Structure Tone, Inc., Barry McTiernan & Moore, 2 Rector Street, Floor 14, New York, NY 10006, By: Mark A Collesano, Esq.
Plaintiff: FG McCabe & Associates, PLLC, 45 Rockefeller Plz, Ste 2000, New York, NY 10111, By: Gerard G. Mccabe, Esq.
Defendant: Structure Tone, Inc., Barry McTiernan & Moore, 2 Rector Street, Floor 14, New York, NY 10006, By: Mark A Collesano, Esq.
Robert R. Reed, J.
In this declaratory judgment action, plaintiff Eurotech Construction Corp. (Eurotech) moves, pursuant to CPLR 3212, for summary judgment declaring, in effect, that defendant Structure Tone, Inc. (Structure Tone) is not entitled to contractual indemnification from Eurotech under a certain purchase order agreement (Mot. Seq. No. 004). Also before the court is Structure Tone's motion, pursuant to CPLR 3211(a)(4), (5), and (7), to dismiss the third amended complaint (Mot. Seq. No. 005).
The underlying facts and procedural history of this action are set forth in detail in a prior order (see Eurotech Constr. Corp. v. Illinois Natl. Ins. Co. , 51 Misc 3d 1209 [A], 2016 NY Slip Op 50514 [U] [Sup Ct, NY County 2016] ). Familiarity with the facts and prior order is assumed, and will not be repeated here, except as necessary for the disposition of the instant motions.
This case arises from an accident that occurred on April 17, 2007. On that date, Thomas McGinty (McGinty), an employee of Eurotech, was injured when he tripped and fell on construction debris and materials that had been left on the floor of his work site at the newly constructed 7 World Trade Center in lower Manhattan. At the time of the accident, Eurotech was performing carpentry work on the premises, pursuant to a subcontract with defendant Structure Tone. Structure Tone had contracted with Moody's Corporation (Moody's), the lessee of the space, to act as construction manager on a project to build out Moody's office space at the site.
In October 2008, McGinty commenced an action to recover damages for personal injuries in the Supreme Court, Bronx County, captioned Thomas McGinty v. Structure Tone Inc., Silverstein Properties, Inc., 7 World Trade Company, L.P. and Moody's Corporation (Sup Ct, Bronx County, Index No. 307933/2008)(the underlying action). The complaint in the underlying action alleges causes of action sounding in common-law negligence and violations of Labor Law §§ 200, 240 and 241.
In 2009, Structure Tone and the other defendants in the underlying action, commenced a third-party action by impleading Eurotech. In the third-party action, captioned Structure Tone, Inc., Silverstein Properties, Inc., 7 World Trade Center Company, L.P. and Moody's Corporation v. Eurotech Construction Corp. (Sup Ct, Bronx County, Index No. 84116/2009), Structure Tone is seeking, among other things, contractual indemnification from Eurotech.
In 2012, Structure Tone, and the other defendants/third-party plaintiffs in the underlying action, moved for summary judgment dismissing the negligence and Labor Law §§ 200, 240 and 241 claims, or, in the alternative, for contractual indemnification against Eurotech (Affirmation in Opposition to Eurotech's Motion, exhibit F, Defendants/Third-Party Plaintiffs' Notice of Motion in underlying action [NYSCEF Doc. No. 107] ). As is relevant here, Structure Tone sought contractual indemnification from Eurotech based upon certain language that appeared on the reverse side of the signature page of a "Purchase Order" agreement and a "Blanket Insurance/Indemnity Agreement" between Structure Tone and Eurotech (Affirmation in Opposition to Eurotech's Motion for Summary Judgment, exhibit F, Defendants/Third-Party Plaintiffs' Attorney Affirmation submitted in support of motion for summary judgment in underlying action at ¶¶ 48-50 [NYSCEF Doc. No. 107] ). In pertinent part, the Purchase Order agreement states the following on the reverse side of the signature page:
"11.1 The insurance and indemnification provisions are set forth in the separate Blanket Insurance/Indemnity Agreement signed by Subcontractor, the terms of which are incorporated herein. In the absence of said Agreement, the following indemnification and insurance provisions shall apply.
"11.2 To the Fullest extent permitted by Law, Subcontractor will indemnify and hold harmless Structure Tone, Inc. (‘STI’) and Owner, their officers, directors, agents and employees from and against any and all claims, suits, liens, judgments, damages, losses and expenses including reasonable legal fees and costs arising in whole or in part and in any manner from the acts and omissions, breach or default of Subcontractor, its officers, directors, agents, employees and subcontractors, in connection with the performance of any work by Subcontractor pursuant to this Purchase Order and/or a related Proceed Order. Subcontractor will defend and bear all costs of defending any actions or proceedings brought against STI and/or Owner, their officers, directors, agents and employees, arising in whole or in part out of any such acts, omission, breach or default"
(Affirmation in Opposition to Eurotech's Motion for Summary Judgment, exhibit F, Purchase Order annexed as exhibit to Defendants/Third-Party Plaintiffs' Attorney Affirmation submitted in support of motion for summary judgment in underlying action [NYSCEF Doc. No. 107] ). As is relevant here, the Blanket Insurance/Indemnity Agreement, dated January 25, 1995, referred to in paragraph 11.1 of the Purchase Order, states:
"6. To the fullest extent permitted by law, subcontractor will indemnify and hold harmless Structure Tone, Inc. (‘STI’) and Owner, their officers, directors, partners, representatives, agents and employees from and against any and all claims, suits liens, judgements, damages, losses and expenses, including legal fees and all court costs and liability (including statutory liability) arising in whole or in part and in any manner from injury and/or death of any person or damage to or loss of any property resulting from the acts, omissions breach or default of Subcontractor, its officers, directors, agents, employees and subcontractors, in connection with the performance of any work by or for Subcontractor pursuant to any Purchase Order and/or related Proceed Order. Subcontractor will defend and bear all costs of defending any actions or proceedings brought against STI and/or Owner, their officers, directors, agents, and employees arising in whole or in part out of any such acts, omissions, breach or default. The foregoing indemnity shall include injury or death of any employee of the contractor or subcontractor and shall not be limited in any way by an amount or type of damage, compensation, or benefits payable under any applicable workers compensation, disability benefits or other similar employees benefit act"
(Affirmation in Opposition to Eurotech's Motion for Summary Judgment, exhibit F, Blanket Insurance/Indemnity Agreement annexed as exhibit to Defendants/Third-Party Plaintiffs' Attorney Affirmation submitted in support of motion for summary judgment in underlying action [NYSCEF Doc. No. 107] ). The Blanket Insurance/Indemnity Agreement was signed by Eurotech's president (id. ).
In support of that branch of its motion for contractual indemnification against Eurotech, Structure Tone argued that "the indemnity clause in the Purchase Order and Blanket Insurance/Indemnity Agreement are valid and enforceable [and] that the indemnity clause is triggered based on the fact that Mr. McGinity's accident arose out of" Eurotech's work (Affirmation in Opposition to Eurotech's Motion for Summary Judgment, exhibit F, Defendants/Third-Party Plaintiffs' Attorney Affirmation submitted in support of motion for summary judgment in underlying action at ¶ 54 [NYSCEF Doc. No. 107] ). Therefore, Structure Tone argued, in the event the underlying action was not dismissed against it, the court should award it contractual indemnity, legal fees, and costs from Eurotech (id. at ¶ 58).
In opposition, Eurotech argued that " New York General Obligations Law § 5-322.1 (1) prohibits a party from being indemnified for its own negligence" and if the court denied Structure Tone's motion for summary judgment dismissing the complaint, there would be an issue of fact as to Structure Tone's own negligence (Affirmation in Reply to Eurotech's Opposition to Motion to Dismiss, exhibit A, Affirmation of Frank V. Pesce in underlying action, ¶ 4 [NYSCEF Doc. No. 131] ). As such, Structure Tone would not be entitled to summary judgment on its claim for contractual indemnification. In addition, Eurotech argued that since its primary insurance carrier, QBE Insurance Company (QBE), had since assumed the defense and indemnification of Structure Tone, Structure Tone's request for contractual indemnification from Eurotech was now moot (Affirmation in Reply to Eurotech's Opposition to Motion to Dismiss, exhibit A, Further Affirmation of Frank V. Pesce in underlying action, ¶ 5 [NYSCEF Doc. No. 131] ).
In a decision and order, dated December 11, 2012, the Supreme Court, Bronx County (Hon. Sharon A.M. Aarons), dismissed the Labor Law §§ 240(1) and 241(a) claims, insofar as asserted against all of the defendants in the underlying action, dismissed the common law negligence and Labor Law § 200 claims, insofar as asserted against all of the defendants except Structure Tone, and dismissed some of the Labor Law § 241(6) claims, insofar as asserted against all of the defendants (Affirmation in Opposition to Eurotech's Motion for Summary Judgment, exhibit A, order in underlying action [NYSCEF Doc. No. 102] ). As to that branch of the motion for contractual indemnification against Eurotech, the court stated:
"The contractual indemnification between Structure-Tone and Eurotech is enforceable as it is in writing, contains sufficient details and is signed by the parties.... The indemnification clause of the contract does not provide that the general contractor is to be indemnified for a claim arising out of its own conduct, and is thus not in violation of General Obligations Law § 5-322[1]. Summary judgment on the issue of contractual indemnification cannot be granted where there are triable issues of fact as to whose negligence led to plaintiff's injury.... Here, there has not been a determination on the issue of Structure-Tone's liability, as such, Structure-Tone's motion for summary judgment for contractual indemnification is denied as premature"
(id. at 5 [internal citations omitted] ).
On February 14, 2014, Eurotech commenced the instant declaratory judgment action against Structure Tone. In the third amended complaint, filed August 17, 2016, Eurotech seeks relief against Structure Tone under two causes of action (Third Amended Complaint [NYSCEF Doc. No. 66] ). In the first cause of action, Eurotech seeks a declaration, in effect, that Structure Tone is not entitled to contractual indemnification from Eurotech under the language that appeared on the reverse side of the signature page of the Purchase Order agreement between Structure Tone and Eurotech (id. at ¶¶ 13-22). Under the second cause of action, Eurotech seeks a declaration that Structure Tone conceded that Eurotech comported with its contractual obligations through judicial admissions, consequently obviating any attempt by Structure Tone to seek any further recompense from Eurotech (id. at ¶ 23-28). Under the same cause of action, Eurotech also seeks a declaration that Structure Tone must pay a $500,000 self-insured retention amount, that is purportedly applicable under a policy Structure Tone has with North Hampshire Insurance Company, in order to contribute towards the damages claimed by McGinity in the underlying action (id. at ¶ 28).
Eurotech also named its commercial umbrella liability insurer, Illinois National Insurance Company (INIC), as a defendant in this action, seeking a declaration that INIC was obligated to defend and indemnify it in the underlying action and/or in the underlying third-party action. On February 1, 2016, this court granted INIC's motion for summary judgment declaring that INIC is not so obligated (see Eurotech Constr. Corp. v. Illinois Natl. Ins. Co. , 51 Misc 3d 1209 [A], 2016 NY Slip Op 50514 [U] [Sup Ct, NY County 2016] ).
Eurotech filed a first amended complaint on October 9, 2014 (NYSCEF Doc. 11), a second amended complaint on November 14, 2014 (NYSCEF Doc. 16), and a third amended complaint on August 17, 2016 (NYSCEF Doc. No. 66).
Eurotech now moves, pursuant to CPLR 3212, for summary judgment on the third amended complaint. However, it does do not proffer a legal argument in support of granting it summary judgment on its second cause of action. Its contentions are solely directed at the first cause of action, which seeks, in effect, a declaration that Structure Tone is not entitled to contractual indemnification from Eurotech under the language that appears on the reverse side of the signature page of the Purchase Order agreement between Structure Tone and Eurotech. Structure Tone opposes the motion and moves, pursuant to CPLR 3211(a)(4), (5), and (7), to dismiss the third amended complaint. For the following reasons, Structure Tone's motion is granted, Eurotech's motion is denied as academic, and the third amended complaint is dismissed.
ANALYSIS
CPLR 3211(a)(4) vests the court with "broad discretion to dismiss an action on the ground that another action is pending between the same parties arising out of the same subject matter or series of alleged wrongs, and it is inconsequential that different legal theories or claims were set forth in the two actions" ( Shah v. RBC Capital Mkts. LLC , 115 AD3d 444, 444-445 [1st Dept 2014] ; see Whitney v. Whitney , 57 NY2d 731, 732 [1982] ; JPMorgan Chase Bank, N.A. v. Luxama , 172 AD3d 1341, 1341 [2d Dept 2019] [" ‘It is not necessary that the precise legal theories presented in the first action also be presented in the second action [so] long as the relief ... is the same or substantially the same’ "], quoting Dec v. BFM Realty, LLC , 153 AD3d 497, 497 [2d Dept 2017] ). "[S]ubstantial, not complete, identity of parties is all that is required to invoke CPLR 3211 (a) (4)" ( Syncora Guar. Inc. v. J.P. Morgan Sec. LLC , 110 AD3d 87, 96 [1st Dept 2013] ). Generally, a substantial identity of parties "is present when at least one plaintiff and one defendant is common in each action" ( Morgulas v. Yudell Realty , 161 AD2d 211, 213 [1st Dept 1990] ). "A motion made pursuant to CPLR 3211 (a) (4) should be granted where an identity of parties and causes of action in two simultaneously pending actions raises the danger of conflicting rulings relating to the same matter" ( Diaz v. Philip Morris Cos., Inc. , 28 AD3d 703, 705 [2d Dept 2006] ; see White Light Prods. v. On The Scene Prods. , 231 AD2d 90, 93 [1st Dept. 1997] [dismissal is warranted under CPLR 3211[a][4] "to avoid the potential for conflicts that might result from rulings issued by courts of concurrent jurisdiction"] ).
Here, Eurotech claims in the first cause of action that Structure Tone is not entitled to contractual indemnification from Eurotech under the Purchase Order agreement between Structure Tone and Eurotech. Structure Tone's claim in the underlying third-party action, that it is entitled to contractual indemnification under the same Purchase Order agreement, involves a substantial identity of the parties and similarity of claims. Accordingly, in order to avoid the potential for conflicting rulings relating to the same matter, the first cause of action is dismissed pursuant to CPLR 3211(a)(4) and Eurotech's motion for summary judgment is denied as academic.
As to the remainder of the complaint, Structure Tone correctly argues that it should be dismissed pursuant to CPLR 3211(a)(7) for failure to state a cause of action. On a motion to under CPLR 3211(a)(7), the court must
"accept the facts as alleged in the complaint as true, accord plaintiff[ ] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory. At the same time, however, allegations consisting of bare legal conclusions ... are not entitled to any such consideration. Dismissal of the complaint is warranted if the plaintiff fails to assert facts in support of an element of the claim, or if the factual allegations and inferences to be drawn from them do not allow for an enforceable right of recovery"
( Connaughton v. Chipotle Mexican Grill, Inc. , 29 NY3d 137, 141-142 [2017] [internal quotation marks and citations omitted] ). "[A]ny deficiencies in the complaint may be amplified by supplemental pleadings and other evidence" ( AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co. , 5 NY3d 582, 591 [2005] ).
Here, in the second cause of action, Eurotech seeks a declaration that Structure Tone
"has conceded the comportment of Eurotech with its contractual obligations through judicial admissions, consequently obviating any attempt by [Structure Tone] to seek any further recompense from Eurotech and further order [Structure Tone] to meet its non-delegable duty to pay [a] $500,000 Self-Insured Retention [under a policy it has with New Hampshire Insurance Company,][in order to contribute towards any future damages in the underlying action]"
(Third Amended Complaint, ¶ 28 [NYSCEF Doc. No. 66] ).In support of this request for relief, Eurotech alleges that Structure Tone's attorney, in the context of a prior motion in this action, filed an affirmation in which he argued that Eurotech's notice to its commercial umbrella liability insurer, INIC, should not be considered untimely (id. at ¶ 25; Affirmation in Support of Structure Tone's Motion, exhibit H, Affirmation in Opposition to INIC's Motion for Summary Judgment, ¶¶ 26-29 [NYSCEF Doc. No. 117] ).
The allegations in the third amended complaint, and inferences to be drawn therefrom, are insufficient to establish that Eurotech is entitled to the relief requested in the second cause of action. The fact that Structure Tone took the position on a prior motion that the court should consider Eurotech's notice to INIC to be timely, does not, in and of itself, create a duty on the part of Structure Tone to pay a self-insured retention amount, or bar it from seeking to enforce any contractual rights it might have against Eurotech.
In accordance with the foregoing, it is hereby
ORDERED that defendant Structure Tone, Inc.'s motion to dismiss is granted, the third amended complaint is dismissed in its entirety, and the clerk is directed to enter judgment accordingly; and it is further
ORDERED that plaintiff's motion for summary judgment is denied as academic.