Opinion
No. 2019-07575 Index No. 616628/18
06-26-2024
St. Paul Fire and Marine Insurance Company, et al., respondents, v. Getty Properties Corporation, etc., appellant.
Flaster Greenberg P.C., New York, NY (Jay M. Levin of counsel), for appellant. Clyde & Co U.S. LLP, New York, NY (Daren S. McNally, Barbara M. Almeida, Meghan C. Goodwin, and Kurt N. Campanile of counsel), for respondents.
Flaster Greenberg P.C., New York, NY (Jay M. Levin of counsel), for appellant.
Clyde & Co U.S. LLP, New York, NY (Daren S. McNally, Barbara M. Almeida, Meghan C. Goodwin, and Kurt N. Campanile of counsel), for respondents.
HECTOR D. LASALLE, P.J., CHERYL E. CHAMBERS, LINDA CHRISTOPHER, JANICE A. TAYLOR, JJ.
DECISION & ORDER
In an action for declaratory relief, the defendant appeals from an order of the Supreme Court, Nassau County (Timothy S. Driscoll, J.), entered May 15, 2019. The order denied the defendant's motion pursuant to CPLR 3211(a)(4) to dismiss so much of the complaint as sought declaratory relief with respect to the plaintiffs' insurance coverage obligations for an action commenced in a New Jersey state court and removed to federal court or, in the alternative, to stay that portion of this action pending resolution of a separate insurance coverage action commenced in a New Jersey state court.
ORDERED that the order is affirmed, with costs.
In 2007, the New Jersey Department of Environmental Protection commenced an action in the Superior Court of New Jersey against, among others, the defendant, inter alia, to recover damages related to the contamination of New Jersey surface and ground waters with methyl tertiary butyl ether (hereinafter MTBE), a fuel additive that was incorporated into gasoline beginning in the late 1970s (hereinafter the New Jersey MTBE action). The New Jersey MTBE action was later removed to federal court and transferred by the United States Judicial Panel on Multidistrict Litigation to the United States District Court for the Southern District of New York (hereinafter the SDNY) for coordinated or consolidated pretrial proceedings (hereinafter the MTBE multidistrict litigation). In 2014, an action was commenced in a Pennsylvania state court against the defendant, among others, alleging contamination of Pennsylvania waters with MTBE (hereinafter the Pennsylvania MTBE action), and that action was likewise removed to federal court, transferred to the SDNY, and consolidated with the MTBE multidistrict litigation. In 2017, an action was commenced in a Maryland state court against the defendant, among others, alleging contamination of Maryland waters with MTBE (hereinafter the Maryland MTBE action, and collectively with the New Jersey MTBE action and the Pennsylvania MTBE action, the underlying MTBE actions).
The plaintiffs, St. Paul Fire and Marine Insurance Company, Travelers Indemnity Company, Travelers Property Casualty Company of America, and Travelers Casualty and Surety Company, had issued the defendant various liability insurance policies that covered periods of time when MTBE contamination was alleged to have occurred in New Jersey, Pennsylvania, and Maryland. In a letter dated April 17, 2018, the defendant notified the plaintiffs that it was seeking coverage under those policies for defense and indemnification costs related to the underlying MTBE actions. In a letter dated October 29, 2018, the plaintiffs notified the defendant of a partial denial of coverage, while stating that it would continue to investigate other aspects of the claim. In a letter dated November 29, 2018, the defendant demanded that the plaintiffs contribute to a potential settlement of the New Jersey MTBE action.
On December 12, 2018, the plaintiffs commenced this action, inter alia, for a judgment declaring that they are not obligated to defend or indemnify the defendant in the underlying MTBE actions. Approximately three weeks later, the defendant commenced an action in the Superior Court of New Jersey against the plaintiffs and other insurers regarding their insurance coverage obligations for the New Jersey MTBE action (hereinafter the New Jersey insurance coverage action). Thereafter, the defendant moved in this action pursuant to CPLR 3211(a)(4) to dismiss so much of the complaint as sought declaratory relief with respect to the plaintiffs' insurance coverage obligations for the New Jersey MTBE action or, in the alternative, to stay that portion of this action pending resolution of the New Jersey insurance coverage action.
In an order entered May 15, 2019, the Supreme Court denied the defendant's motion, concluding, in reliance upon the first-in-time rule, that the matter should be determined in New York based on priority. The court also found that "New York is the most appropriate forum for the resolution of the parties' dispute" and the defendant failed to demonstrate that commencing this action in New York was "vexatious, oppressive, or instituted to obtain an inequitable advantage." The defendant appeals.
CPLR 3211(a)(4) authorizes a court to dismiss or stay an action on the ground that there is another action pending between the same parties for the same cause of action in another court (see Whitney v Whitney, 57 N.Y.2d 731, 732; Seneca Specialty Ins. Co. v T.B.D. Capital, LLC, 143 A.D.3d 971, 972). "[A] court has broad discretion in determining whether an action should be dismissed based upon another pending action where there is a substantial identity of the parties, the two actions are sufficiently similar, and the relief sought is substantially the same" (JPMorgan Chase Bank, N.A. v Luxama, 172 A.D.3d 1341, 1341 [internal quotation marks omitted]). "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" (id. [internal quotation marks omitted]; see Feldman v Harari, 183 A.D.3d 629, 631).
"[I]n deciding a motion to dismiss based on the pendency of another action, the analysis is similar to that employed in entertaining a motion predicated on forum non conveniens" (White Light Prods. v On The Scene Prods., 231 A.D.2d 90, 93, citing Flintkote Co. v American Mut. Liab. Ins. Co., 103 A.D.2d 501, 506, affd 67 N.Y.2d 857; cf. Islamic Republic of Iran v Pahlavi, 62 N.Y.2d 474, 478-479; Turay v Beam Bros. Trucking, Inc., 61 A.D.3d 964, 966). Additionally, "a major concern, as a matter of comity, is to avoid the potential for conflicts that might result from rulings issued by courts of concurrent jurisdiction" (White Light Prods. v On The Scene Prods., 231 A.D.2d at 93).
"Generally the court which has first taken jurisdiction is the one in which the matter should be determined and it is a violation of the rules of comity to interfere" (City Trade & Indus., Ltd. v New Cent. Jute Mills Co., 25 N.Y.2d 49, 58 [internal quotation marks omitted]; see Seneca Specialty Ins. Co. v T.B.D. Capital, LLC, 143 A.D.3d at 972). However, "[t]he practice of determining priorities between pending actions on the basis of dates of filing is a general rule, not to be applied in a mechanical way, regardless of other considerations" (White Light Prods. v On The Scene Prods., 231 A.D.2d at 97 [internal quotation marks omitted]; see IRX Therapeutics, Inc. v Landry, 150 A.D.3d 446, 447; L-3 Communications Corp. v SafeNet, Inc., 45 A.D.3d 1, 8-10). "Special circumstances warrant deviation from the general[, first-filed] rule, if the action sought to be restrained is vexatious, oppressive or instituted to obtain some unjust or inequitable advantage" (White Light Prods. v On The Scene Prods., 231 A.D.2d at 96 [internal quotation marks omitted]).
Here, the Supreme Court did not improvidently exercise its discretion in denying the defendant's motion pursuant to CPLR 3211(a)(4), inter alia, to dismiss so much of the complaint as sought declaratory relief with respect to the plaintiffs' insurance coverage obligations for the New Jersey MTBE action. The plaintiffs commenced this action first, approximately three weeks before the New Jersey insurance coverage action was commenced. The defendant's contention that the plaintiffs engaged in "gamesmanship" by commencing this action before the defendant commenced the New Jersey insurance coverage action in order to obtain an unfair tactical advantage was speculative and conclusory. Relatedly, the defendant failed to articulate why the commencement of this action, which occurred before the plaintiffs fully disclaimed coverage under all of the relevant policies issued by them, amounted to bad faith (cf. IRX Therapeutics, Inc. v Landry, 150 A.D.3d at 447; L-3 Communications Corp. v SafeNet, Inc., 45 A.D.3d at 8-9; San Ysidro Corp. v Robinow, 1 A.D.3d 185, 187). Notably, in a letter dated October 29, 2018, the plaintiffs denied coverage under most of the policies and suggested that, while they were still investigating and assessing their obligations under the remainder of the policies, they believed that they had a strong basis to fully disclaim coverage for the underlying MTBE actions.
On the other hand, the Supreme Court providently took into account that the defendant maintained a principal place of business in New York and that the subject policies were all brokered and issued in New York (see Borden Chem., Inc. v Growth Prods., Inc., 28 A.D.3d 337, 337; Seneca Ins. Co. v Lincolnshire Mgt., 269 A.D.2d 274, 274-275; cf. Flintkote Co. v American Mut. Liab. Ins. Co., 103 A.D.2d at 506). Furthermore, the court did not err in concluding that this action was more comprehensive than the New Jersey insurance coverage action because this action also sought declaratory relief with respect to the plaintiffs' insurance coverage obligations for the Pennsylvania MTBE action and the Maryland MTBE action (see AIG Fin. Prods. Corp. v Penncara Energy, LLC, 83 A.D.3d 495, 495-496).
Additionally, the Supreme Court was not, as a matter of comity, required to cede jurisdiction in favor of the New Jersey insurance coverage action (see generally Turay v Beam Bros. Trucking, Inc., 61 A.D.3d 964, 966; White Light Prods. v On The Scene Prods., 231 A.D.2d at 93; cf. Sensient Colors Inc. v Allstate Ins. Co., 193 N.J. 373, 386, 939 A.2d 767, 774). In any event, the New Jersey insurance coverage action is now no longer pending within the meaning of CPLR 3211(a)(4), and therefore, at this juncture, it would be inappropriate to relinquish New York's jurisdiction over the matter (see Resorts Group, Inc. v Cerberus Capital Mgt., L.P., 213 A.D.3d 621, 622-623; L-3 Communications Corp. v SafeNet, Inc., 45 A.D.3d at 7-8).
LASALLE, P.J., CHAMBERS, CHRISTOPHER and TAYLOR, JJ., concur.