Opinion
650065/2018
05-29-2020
FIRST MERCURY INSURANCE COMPANY, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Europa Construction Corporation, EL-AD 250 West LLC, New Line Structures, Inc., and A & V Interiors, Inc., Defendants.
Saiber LLC, New York, NY (Lisa C. Wood and Gregory Dennison of counsel), for plaintiff. Morris, Duffy, Alonso & Faley, New York, NY (Michael B. Titowsky of counsel), for defendants El-Ad 250 West LLC and New Line Structures, Inc. Bartlett LLP, White Plains, NY (Andrew M. Rohrer of counsel), for defendant A & V Interiors, Inc. No appearance for defendant Europa Construction Corporation.
Saiber LLC, New York, NY (Lisa C. Wood and Gregory Dennison of counsel), for plaintiff.
Morris, Duffy, Alonso & Faley, New York, NY (Michael B. Titowsky of counsel), for defendants El-Ad 250 West LLC and New Line Structures, Inc.
Bartlett LLP, White Plains, NY (Andrew M. Rohrer of counsel), for defendant A & V Interiors, Inc.
No appearance for defendant Europa Construction Corporation.
Gerald Lebovits, J.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 57, 58, 59, 60, 63, 64, 66, 67, 68, 69, 70, 71 were read on this motion for LEAVE TO AMEND.
This is the second motion in this action regarding insurance coverage for an accident on a construction site. Both plaintiff, First Mercury Insurance Company, and defendant State Farm Mutual Automobile Insurance Company issued insurance policies listing defendants, various construction contractors working on the site, as named or additional insureds. Non-party Joaquim DaSilva was injured on the site and brought a personal-injury action against defendants El-Ad 250 West LLC and New Line Structures, Inc. Those defendants in turn impleaded defendant Europa Construction Corporation.
On the prior motion in this coverage action, First Mercury and State Farm disputed which insurer, as between them, owed a duty to defend and to indemnify the defendants in the underlying action. First Mercury and State Farm also disputed and, to the extent that both insurers owed a duty to defend and indemnify, which insurer's coverage obligation was primary.
This court held as a matter of law that State Farm owed a duty to defend Europa, El-Ad, and New Line; that as a matter of law State Farm and owed a duty to indemnify Europa; and that fact issues remained as to whether State Farm owed a duty to indemnify El-Ad and New Line. This court further held that State Farm's duty to defend and indemnify was primary to any duty owed by First Mercury. (See First Mercury Ins. Co. v. State Farm Mut. Auto. Ins. Co. , 2019 NY Slip Op. 51773 [U] [Sup Ct, NY County Oct. 29, 2019].)
The underlying action remains ongoing. First Mercury now moves for leave to amend its complaint under CPLR 3025 (b) in light of what First Mercury understood this court to have held in the first order. In particular, First Mercury seeks to add a request for a declaration that it does not owe any defendant in the underlying action a duty either to defend or to indemnify. The motion for leave to amend is denied without prejudice.
The following summarizes those background facts that are relevant to this motion. For a fuller description of the underlying circumstances of the case, see First Mercury , 2019 NY Slip Op. 51773 (U), at *2-*3.
With respect to the underlying construction project, El-Ad owned the site. New Line was the general contractor. Europa was a subcontractor. DaSilva was a Europa employee. Europa had two relevant insurance policies: a general-liability policy, issued by First Mercury; and a automobile policy, issued by State Farm.
First Mercury's policy covers "those sums that the insured becomes legally obligated to pay as damages because of bodily injury" caused by an accident." (See Ex. K to Affirmation of Lisa C. Wood, NYSCEF No. 39, at 5, 18.) The policy excludes coverage, however, for bodily injury "arising out of the ownership, maintenance, use or entrustment to others of any ... auto ... owned or operated by ... any insured." "Used includes operation and loading and unloading." (Id. at 8 [exclusion g].)
State Farm's policy covers "damages an insured becomes legally liable to pay because of ... bodily injury to others caused by an accident that involves a vehicle for which that insured is provided liability coverage by this policy." (NYSCEF No. 26 at 10 [emphases omitted].) This court held in its first order in this action that in addition to Europa as the named insured, El-Ad and New Line qualified as additional insureds under this policy. (See First Mercury , 2019 NY Slip Op. 51773 (U), at *8-*9.)
According to the allegations of the complaint in the underlying action, DaSilva was injured at the construction site while attempting to unload pallets of cement from a flatbed truck owed by Europa. DaSilva initially sued El-Ad and New Line. (See DaSilva v. El-Ad 250 West LLC, Index No. 158079/2013 [Sup Ct, NY County].)
DaSilva's complaint alleged that El-Ad and New Line negligently failed to make certain that correct methods were used to unload cement pallets from trucks, to provide proper equipment for safe unloading, and to ensure that work areas were free of slipping hazards. (See NYSCEF No. 16 at 5.) And DaSilva's verified bill of particulars stated that the accident occurred at the loading dock of the construction site. (See NYSCEF No. 18 at 3.)
El-Ad and New Line brought separate third-party actions against Europa, seeking common-law and contractual indemnification or contribution. First Mercury assumed Europa's defense against these third-party claims. First Mercury asked State Farm whether it would agree to share in Europa's defense in light of the State Farm auto policy. State Farm declined.
First Mercury then brought this declaratory-judgment action against State Farm, seeking a declaration that State Farm owes the primary duty to defend and indemnify Europa, El-Ad, and New Line in the underlying personal-injury action. First Mercury moved for summary judgment under CPLR 3212 (motion sequence 001). As relevant here, this court held in its prior order that State Farm had a duty to defend Europa, because DaSilva's complaint and bill of particulars alleged that DaSilva had been injured in the process of unloading Europa's truck, in which case the terms of the State Farm auto policy would cover DaSilva's injury. (See First Mercury , 2019 NY Slip Op. 51773 [U], at *5-*6.)
This court also held that State Farm had a duty to indemnify Europa should Europa ultimately be held liable in indemnification or contribution to El-Ad and New Line. (See id. at *6.) This court concluded that "[u]nder the allegations in DaSilva's bill of particulars," if those allegations were ultimately proven at trial, Europa's liability would "stem from negligent acts or omissions related to the process of unloading Europa's truck," bringing that liability within the coverage of the State Farm auto policy. (Id. )
First Mercury now moves for leave to amend its complaint under CPLR 3025 (b) in light of this court's ruling on First Mercury's motion for summary judgment.
DISCUSSION
CPLR 3025 (b) provides that leave of court to amend "shall be freely given upon such terms as may be just including the granting of costs and continuances." Absent prejudice or surprise, leave should be denied only if "the proposed amendment is palpably improper or insufficient as a matter of law." ( CIFG Assur. N. Am., Inc. v. J.P. Morgan Sec. LLC , 146 AD3d 60, 65 [1st Dept 2016].)
Here, First Mercury seeks leave to add a request for a declaratory judgment that its insurance policy does not provide coverage for DaSilva's injuries, and that First Mercury does not owe a duty either to defend or to indemnify Europa, El-Ad, or New Line in the underlying action. First Mercury contends that this court's prior order made a factual finding that DaSilva was injured in the course of unloading Europa's truck, and that in light of this factual finding, the First Mercury policy exclusion for bodily injury arising of the use of an auto (like Europa's truck) necessarily applies. (See NYSCEF No. 46 at 6 ¶ 24.) This court disagrees, and therefore denies leave to amend.
As an initial matter, this court's prior order held that State Farm, not First Mercury, had the primary duty to defend Europa, El-Ad, and New Line in the underlying action. First Mercury's motion papers do not explain why it is nonetheless seeking to amend its complaint to disclaim that duty—nor why this court should treat First Mercury's request as a live claim rather than being merely academic.
With respect to First Mercury's request to disclaim any duty to indemnify, First Mercury's proposed amended complaint (and supporting motion papers) overreads this court's prior order. This court did not make a factual finding about the circumstances of DaSilva's injury—including any finding as to whether or not that injury occurred while DaSilva was helping to unload construction materials from Europa's truck. Instead, this court concluded that if the factual allegations in DaSilva's complaint and bill of particulars regarding the circumstances of the accident and his injury were established at trial, the resulting damages would be within the scope of State Farm's auto policy as a matter of law. But the underlying action has not yet advanced to trial (or even to summary judgment). The factfinder's ultimate findings about the circumstances of DaSilva's accident for purposes of liability in the underlying action—including whether DaSilva has proven his allegations—remain to be made.
First Mercury emphasizes this court's statement in the prior order that "Europa's damages would necessarily stem from negligent acts or omissions related to the process of unloading Europa's truck—i.e. , from the use of the truck." (See NYSCEF No. 71 at 5, quoting First Mercury , 2019 NY Slip Op. 51773 [U], at *6 [emphasis removed].) In context, though, this statement did not purport to determine how DaSilva's accident in fact occurred. This court was instead addressing (and rejecting) State Farm's argument that even if the accident had occurred while DaSilva was unloading Europa's truck, the injury would still not come within the scope of State Farm's policy because Europa had not been negligent. (See NYSCEF No. 34 at 6-9, citing ABC, Inc. v. Countrywide Ins. Co. , 308 AD2d 309 [1st Dept 2003].)
Thus, the factual predicate of First Mercury's motion for leave to amend—that the proposed amendment is "supported by the findings of fact in this Action" (NYSCEF No. 46 at 6)—is incorrect. To be sure, the factfinder in the underlying action could yet determine that DaSilva's injuries stemmed from an accident that occurred while he was unloading Europa's truck. And such a finding would be relevant to whether First Mercury has a duty to indemnify the defendants (and to whether First Mercury could amend its complaint to contest any such duty). On the present record, though, the motion for leave to amend plainly lacks merit. The motion is denied without prejudice.
Accordingly, for the foregoing reasons it is
ORDERED that the branch of First Mercury's motion under CPLR 3025 (b) seeking leave to amend the complaint to bring a claim for a declaratory judgment that First Mercury has no duty to defend in the underlying action is denied without prejudice as academic; and it is further
ORDERED that the branch of First Mercury's motion under CPLR 3025 (b) seeking leave to amend the complaint to bring a claim for a declaratory judgment that First Mercury has no duty to indemnify is denied without prejudice; and it is further
ORDERED that the branch of First Mercury's motion under CPLR 3025 (b) seeking leave to amend the complaint to add Joaquim DaSilva and Gracience DaSilva as defendants is denied without prejudice.