Opinion
Index No. 657442/2017
05-22-2020
KOOKMIN BEST INSURANCE COMPANY, LTD. (US Branch) f/k/a LEADING INSURANCE GROUP INSURANCE COMPANY LTD., Plaintiff, v. SENECA INSURANCE COMPANY, Defendant.
NYSCEF DOC. NO. 31
DECISION AND ORDER
MELISSA A. CRANE, J.:
In this insurance coverage dispute, plaintiff Kookmin Best Insurance Company, Ltd. (US Branch) moves, pursuant to CPLR 3212, for summary judgment declaring that defendant Seneca Insurance Company must reimburse plaintiff for the expenses it has incurred in an underlying personal injury action brought against its insured, nonparty Royal Slope Realty Inc. (Royal Slope), captioned Acey v Giatzikis, Sup Ct, Kings County, index No. 1431/2015 (the Acey Action).
Background
Nonparty Dimitra Giatzikis (Giatzikis) is the owner of a mixed-used building located at 288 8th Street, Brooklyn, New York (the Premises) (NY St Cts Elec Filing [NYSCEF] Doc No. 11, affirmation of Christopher G. Wosleger [Wosleger], exhibit A, ¶ 8). Giatzikis purchased commercial package policy no. 2184 (the Kookmin Policy) from plaintiff for the period beginning November 21, 2013 to November 21, 2014 (NYSCEF Doc No. 17, Kenneth Hayes [Hayes] aff, exhibit 1 at 1 and 97). Commercial General Liability Coverage form CG 00 01 12 07 provides that plaintiff "will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies" (id. at 80). The policy also contains an "Other Insurance" provision, which states, in relevant part:
"If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows:
a. Primary Insurance
This insurance is primary except when Paragraph b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in Paragraph c. below.
b. Excess Insurance
(1) This insurance is excess over:
...
(b) Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured by attachment of an endorsement.
(id. at 90).
(2) When this insurance is excess, we will have no duty under Coverages A or B to defend the insured against any 'suit' if any other insurer has a duty to defend the insured against that 'suit'. If no other insurer defends, we will undertake to do so; but we will be entitled to the insured's rights"
On August 10, 2010, Giatzikis, as "Lessor," and Royal Slope, as "Lessee," entered into a commercial lease (the Lease) for "office space at 288 8th Street" for a five-year term commencing October 1, 2010 (NYSCEF Doc No. 12, Wosleger affirmation, exhibit B at 1). Michael Schaum (Schaum) signed the Lease for Royal Slope as its president (id. at 12). Paragraph 3 of the Lease details Royal Slope's maintenance obligations and states, in part, that "Lessee shall, at his own expense and at all times, maintain the premises in good and safe condition ... [and] shall be responsible for all repairs required, excepting the roof, exterior walls, structural foundations ... [and] shall also maintain the sidewalk in front of said premises clean and free of debris and snow and ice" (id. at 1). The indemnification provision found in paragraph 10 reads as follows:
"Unless Lessor is negligent, Lessor shall not be liable for any damage or injury to Lessee, or any other person, or to any property, occurring on the demised premises or any part thereof. Lessee agrees to indemnify and hold Lessor harmless from any claims for damages which arise in connection with any such occurrence. Said indemnification shall include indemnity from any costs of fee which Lessor may incur in defending said claim"(id. at 2). Paragraph 24 of the rider to the Lease also states that:
"Tenant agrees to indemnify Landlord and the agents, servants and employees thereof against, and to defend, save and hold them harmless of and from, any and all liability, cost and damage for or arising by reason of any and all claims, suits or causes of action for bodily injury, personal injury, death or property damage to all and any persons in any manner caused wholly or in part by acts, negligence or omissions or, or any conditions created or caused by Tenant, is agents, servants, employees and contractors"(id. at 6).
The Lease required Royal Slope to "maintain public liability insurance including bodily injury and property damage insuring Lessee and Lessor" (NYSCEF Doc No. 12 at 2-3). Royal Slope purchased businessowners policy no. BOP 501 8240 (the Seneca Policy) from defendant, in effect from October 1, 2014 through October 1, 2015, with Royal Slope and Schaum listed as named insureds and the Premises listed as an insured location (NYSCEF Doc No. 15, Wosleger affirmation, exhibit E at 1-2). Businessowners Coverage Form BP 00 03 01 10 provides that defendant "will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' ... to which this insurance applies" (id. at 37). The "Additional Insured - Managers or Lessors of Premises" endorsement states that "[t]he person or organization shown in the Schedule is also an insured, but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Schedule" (id. at 56). The schedule shows "288 8th Street" as the leased Premises and names "Dimitri Giatzikis" as an additional insured (id.).
On February 5, 2015, nonparty Jo-Ann Acey (Acey) commenced a personal injury action against Giatzikis, Royal Slope, and nonparty Consolidated Edison Company of New York, Inc. (ConEd), alleging that on October 21, 2014, she "was caused to fall due to a defect located on the sidewalk in front of the premises known as 288 Eighth Street, Brooklyn, New York, also known as 423 Fifth Avenue" (NYSCEF Doc No. 11, Wosleger affirmation, exhibit A, ¶ 21).
Hayes, a Senior Claims Analysis for plaintiff, avers that Giatzikis timely tendered Acey's claim to defendant, but defendant denied coverage (NYSCEF Doc No. 16, Wosleger affirmation, exhibit F, ¶ 6). A senior claims examiner for defendant rejected plaintiff's tender by email dated June 11, 2015, writing that Acey's "loss was caused by a defective sidewalk which is the responsibility of your insured, the landlord. Additionally ... your insured is an additional insured on our policy, but only in respect to our insured's liability" (NYSCEF Doc No. 13, Wosleger affirmation, exhibit C at 1). Plaintiff has retained counsel to defend Giatzikis in the Acey Action (NYSCEF Doc No. 16, ¶ 6).
Plaintiff Kookim commenced the present action by filing a summons and complaint seeking a judgment declaring that defendant must defend and indemnify plaintiff's insured, Giatzikis, in the Acey Action, and a judgment declaring that defendant shall reimburse plaintiff for the defense costs incurred in the Acey Action. Plaintiff now moves for summary judgment on its cause of action for reimbursement of its defense costs.
Discussion
The movant on a summary judgment motion "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 from the case" (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). The motion must be supported by evidence in admissible form (see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]), and by the pleadings and other proof such as affidavits, depositions and written admissions (see CPLR 3212 [b]). The movant's "failure to make a prima facie showing of entitlement to summary judgment requires a denial of the motion, regardless of the sufficiency of the opposing papers" (William J. Jenack Estate Appraisers & Auctioneers, Inc. v Rabizadeh, 22 NY3d 470, 475 [2013], citing Vega v Restani Constr. Corp., 18 NY3d 499, 503 [2012]).
Preliminarily, the court will consider defendant's late-served opposition because there has been no prejudice to plaintiff, who has submitted a reply (see JPMorgan Chase Bank, N.A. v Hayes, 138 AD3d 617, 617 [1st Dept 2018]).
"[I]t is well settled that an insurer's duty to defend [its insured] is exceedingly broad and an insurer will be called upon to provide a defense whenever the allegations of the complaint suggest ... a reasonable possibility of coverage" (BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 714 [2007] [internal quotation marks and citation omitted]). Where there is a dispute over coverage, the court must "first look to the language of the applicable policies" (Fieldston Prop. Owners Assn., Inc. v Hermitage Ins. Co., Inc., 16 NY3d 257, 264 [2011] [internal quotation marks and citation omitted]). "[W]here the provisions of the policy are clear and unambiguous, they must be given their plain and ordinary meaning, and courts should refrain from rewriting the agreement" (Government Empls. Ins. Co. v Kligler, 42 NY2d 863, 864 [1977]). Thus, an insurer must provide a defense when the facts and allegations in the complaint "bring the claim even potentially within the protection purchased" (Regal Constr. Corp. v National Union Fire Ins. Co. of Pittsburgh, PA, 15 NY3d 34, 37 [2010] [internal quotation marks and citation omitted]; Fitzpatrick v American Honda Motor Co., 78 NY2d 61, 63 [1991] [stating that an insurer has a duty to defend even though "facts outside the four corners of those pleadings indicate that the claim may be meritless or not covered"]). However, "[i]f the allegations interposed in an underlying complaint allow for no interpretation which brings them within an insurance policy's provisions, then no duty on the part of the insurer to defend exists" (Atlantic Mut. Ins. Co. v Terk Techs. Corp., 309 AD2d 22, 29 [1st Dept 2003]).
At the outset, plaintiff has established that its insured is an additional insured under the Seneca Policy. Plaintiff is expressly named as an additional insured in the "Managers or Lessors of Premises" endorsement, and defendant does not contend otherwise. Plaintiff has also demonstrated that the facts alleged in the Acey Action implicate the "reasonable possibility of coverage" under the Seneca Policy (BP A.C. Corp., 8 NY3d at 714; Bravo Realty Corp. v Mt. Hawley Ins. Co., 33 AD3d 447, 447[1st Dept 2006]). The amended verified complaint filed in the Acey Action alleges that Acey fell on the sidewalk in front of a building bearing the address 288 8th Avenue, which is the same address for the Premises Royal Slope leases. These allegations, therefore, fall squarely within the coverage afforded under the Seneca Policy, and are sufficient to trigger defendant's duty to defend (see BP A.C. Corp., 8 NY3d at 715). Although the accident occurred on the public sidewalk, "the additional insured endorsement would give the landlords coverage for accidents occurring outside the demised premises, including on abutting public sidewalks" (Tower Ins. Co. of N.Y. v Leading Ins. Group Ins. Co., Ltd., 134 AD3d 510, 510 [1st Dept 2015] [collecting cases]).
Further, because the allegations are sufficient to trigger the duty to defend, it follows that defendant is obligated to pay plaintiff's defense costs based on the "Other Insurance" provision in the Kookmin Policy (see Port Auth. of N.Y. & N.J. v Brickman Group Ltd., LLC, 181 AD3d 1, 19-20 [1st Dept 2019] [collecting cases]). As noted earlier, the Kookmin Policy is "excess over ... [a]ny other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured by attachment of an endorsement" (NYSCEF Doc No. 17 at 90). Here, Giatzikis is a named additional insured under the Seneca Policy. As such, based on the plain language of the Other Insurance clause, above, coverage under the Kookmin Policy is excess to the primary insurance from the defendant (see QBE Ins. Corp. v Public Serv. Mut. Ins. Co., 102 AD3d 442, 443 [1st Dept 2013]). Thus, plaintiff is entitled to recover its defense costs in the Acey Action on a primary, noncontributory basis (see Port Auth. of N.Y. & N.J., LLC, 181 AD3d at 20).
Defendant has failed to raise a triable issue of fact in opposition to the motion. Defendant argues that the testimony adduced in the Acey Action establishes that the accident did not occur in front of the leased Premises. Acey explained that she fell next to a metal grate in the sidewalk adjacent to a "Subway" shop (NYSCEF Doc No. 26, affirmation of Gregory B. Coburn [Coburn], exhibit E at 18-19, 28 and 65), and Giatzikis testified that Subway leased the storefront known as 423 Fifth Avenue, which is in the same building as Royal Slope's office (NYSCEF Doc No. 24, Coburn affirmation, exhibit C at 14-15). However, defendant's contention that Royal Slope is not liable in the Acey Action does not bear on whether defendant has a duty to defend Giatzikis. "[A]n insurer may be required to defend under the contract even though it may not be required to pay once the litigation has run its course" (Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [2006]). Indeed, "'the primary obligation of an insurer is to provide its insured with a defense'" (Greenwich Ins. Co. v City of New York, 122 AD3d 470, 471 [1st Dept 2014], quoting Recant v Harwood, 222 AD2d 372, 373 [1st Dept 1995]). Whether the insurance carrier must also indemnify an insured "requires a determination of liability (id.). Therefore, the issue of Royal Slope's liability to Acey is immaterial to the issue of defendant's duty to defend.
To sustain a cause of action for declaratory relief, the plaintiff must show that the "cause of action is sufficient to invoke the court's power to 'render a declaratory judgment ... as to the rights and other legal relations of the parties to a justiciable controversy'" (Matter of Tilcon N.Y., Inc. v Town of Poughkeepsie, 87 AD3d 1148, 1150 [2d Dept 2011], quoting CPLR 3001]). In view of the foregoing, plaintiff is entitled to a judgment declaring that it may recover the defense costs, including attorneys' fees, it has incurred in defending Giatzikis in the Acey Action, from defendant (see Madison 96th Assoc., LLC v 17 E. Owners Corp., 117 AD3d 482, 482-483 [1st Dept 2014]); City of New York v Endurance Am. Ins. Co., 98 AD3d 900, 901 [1st Dept 2012]).
Accordingly, it is
ORDERED that the motion of plaintiff Kookmin Best Insurance Company, Ltd. (US Branch) for summary judgment is granted to the extent of declaring that defendant Seneca Insurance Company is obligated to reimburse plaintiff for the defense costs incurred in the personal injury action captioned Acey v Giatzikis, index No. 1431/2015, Sup Ct, Kings County, index No. 1431/2015, and it is further
ADJUDGED and DECLARED that defendant Seneca Insurance Company is obligated to reimburse to plaintiff Kookmin Best Insurance Company, Ltd. (US Branch) the defense costs plaintiff has incurred in Acey v Giatzikis , index No. 1431/2015, Sup Ct, Kings County, index No. 1431/2015; and it is further
ORDERED THAT the parties are to contact the court at macrane@nycourts.gov, cc'd to all sides, to set a date for an inquest regarding the issue of the amount of reasonable attorneys' fees, costs, and expenses plaintiff incurred from February 5, 2015 to date in the defense of the Acey Action. Dated: May 22, 2020
ENTER:
/s/
J.S.C.