Opinion
697-09.
June 16, 2009.
Supreme Court Albany County All Purpose Term, June 4, 2009, Assigned to Justice Joseph C. Teresi.
Andrew M. Cuomo, Esq., Attorney General of the State of New York, Attn: Joan Matalavage, Esq., Attorneys for Plaintiff, The Capitol, Albany, New York.
Wilson, Elser, Moskowitz, Edelman Dicker LLP, Douglas Novotny, Esq., Attorneys for Defendant Titan Roofing, Inc., Albany, NY.
Colliau Elenius Murphy Carluccio Keener Morrow, Marian S. Hertz, Esq., Attorneys for Defendant Continental Casualty Company, New York, New York.
DECISION and ORDER
On September 22, 2005, Carlton Zelno (hereinafter "Zelno") was working on a construction project rehabilitating The State Capitol building's roof. Zelno was on the project's scaffolding and above him a stone, weighing up to 3, 600 pounds, was being set on the roof. When the stone slid out of position toward the scaffolding, Zelno was trampled by his fleeing co-workers and injured. The stone ultimately came to rest in the building's gutter before reaching the scaffolding.
The State of New York (hereinafter "Plaintiff") commenced this declaratory judgment action seeking defense and indemnification in the action Zelno brought against it, based on the above occurrence. Plaintiff's action against Titan Roofing, Inc. (hereinafter "Titan") claims common law and contractual indemnification pursuant to its contract with Titan, as its general contractor for the roof rehabilitation project. Plaintiff's claim against Continental Casualty Company (hereinafter "Continental") is based upon a policy of insurance, insuring Plaintiff against any claims arising from the roof rehabilitation project. Issue has been joined by both defendants and discovery is not complete.
Continental now moves for summary judgement, claiming that Plaintiff failed to notify it of Zelno's claim in a timely manner, thereby violating and voiding the policy. Plaintiff opposes the motion, and also moves for summary judgment on its claim against Titan. Plaintiff claims entitlement to judgment against Titan pursuant to the indemnity provision of its contract with Titan and common law indemnification principals. Titan opposes both motions. Because both Continental and Plaintiff demonstrated their entitlement to judgment as a matter of law, both of their motions are granted.
"Summary judgment is a drastic remedy that should not be granted where there is any doubt as to the existence of a triable issue." (Napierski v. Finn, 229 AD2d 869, 870 [3d Dept. 1996]). On a motion on for summary judgment, the movant must establish by admissible proof, their right to judgment as a mater of law. (Alvarez v. Prospect Hospital, 68 NY2d 320; Gilbert Frank Corp. v. Federal Insurance Co., 70 NY2d 966). If the movant establishes their right to judgment as a matter of law, the burden then shifts to the opponent of the motion to establish by admissible proof, the existence of genuine issues of fact. (Zuckerman v. City of New York, 49 NY2d 557).
On this record, Continental is entitled to summary judgment because it demonstrated that Plaintiff did not notify it of Zelno's claim within a reasonable period of time, as a matter of law. "Where a policy of liability insurance requires that notice of an occurrence be given 'as soon as practicable,' such notice must be accorded the carrier within a reasonable period of time." (Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 NY3d 742, 743).
Here, the policy of insurance requires Plaintiff to notify Continental "as soon as practicable of an 'occurrence' which may result in a claim"; and also requires notification "[i]f a claim is made or a suit is brought . . . as soon as practicable." Zelno was injured on September 22, 2005. Contemporaneously made documents, introduced by Continental and undisputed by Plaintiff, demonstrate Plaintiff's awareness of the Zelno occurrence on the day it happened. Then, in August 2006, Plaintiff defended itself against a motion made by Zelno in the Court of Claims, seeking leave to file and serve a late notice of claim. Zelno's motion was granted in part, and he commenced his Court of Claims action against Plaintiff on or about January 19, 2007. Despite the passage of one year and seven months from the date of the occurrence, nine months from Plaintiff being served with Zelno's motion and proposed claim, and four months from Plaintiff being served with Zelno's claim, Plaintiff notified Continental of Zelno's claim by letter dated May 21, 2007 (hereinafter "notice letter"). The extent of this delay is unreasonable as a matter of law. (Canal Realty Corp. v. Seneca Ins. Co., Inc., 5 NY3d 742, 743 reversing Great Canal Realty Corp. v. Seneca Ins. Co., Inc., 13 AD3d 227 [1st Dept. 2004][four month delay was unreasonable]).
Moreover, Plaintiff offers no excuse for their delay or introduces any evidence to establish an issue of fact, all but conceding that its notice was untimely. (Preferred Mutual Insurance Co. v. New York Fire-Shield, Inc., ___ AD3d ___, 2009 WL 1544657, 2 [3d Dept. 2009]; Klersy Building Corp. v. Harleysville Worcester Insurance Co., 36 AD3d 1117 [3d Dept. 2007]). Instead, Plaintiff and Titan claim that Continental's disclaimer of coverage was untimely.
"Insurance Law § 3420(d) requires an insurer to provide a written disclaimer as soon as is reasonably possible as measured from the time when the insurer learns of sufficient facts upon which to base the disclaimer." (U.S. Underwriters Ins. Co. v. Carson, 49 AD3d 1061 [3d Dept. 2008] quoting McEachron v. State Farm Ins. Co., 295 AD2d 685 [3d Dept. 2002] [internal quotations omitted]; see also First Fin. Ins. Co. v. Jetco Contr. Corp., 1 NY3d 64). Plaintiff claims Continental's disclaimer was untimely because it's notice letter, dated May 21, 2007, was not denied by Continental until June 20, 2007. Plaintiff alleges that Continental's basis for disclaimer was readily apparent from its notice letter (i.e. its untimeliness) and that Continental's delay of thirty days is unreasonable.
Continental's disclaimer must be measured from "the point in time when [they] first learned of the grounds for disclaimer". (First Fin. Ins. Co., supra at 68-9; Continental Cas. Co. v. Stradford, 11 NY3d 443). Plaintiff's reliance on the date set forth on their notice letter (May 21, 2007) for their disclaimer analysis' start time, is misplaced. Plaintiff, without explanation, disregards Continental's affirmative allegation that they did not receive Plaintiff's notice until June 1, 2007. Plaintiff neither submits an affidavit of service for their notice letter, nor any other admissible evidence demonstrating Continental's awareness of their claim prior to June 1, 2007. As such, on this record, no factual issue is raised that Continental did not "learn[] of the grounds for disclaimer" until June 1, 2007, only nineteen days prior to Continental's disclaimer. (Id.) Additionally, Continental asserts that the nineteen day delay was attributable to obtaining a complete copy of the insurance policy from their main headquarters, investigating the notice letter's ambiguity relative to who was insured under the policy and discussions with coverage counsel. In light of the steps taken by Continental, along with the relatively minor delay, Plaintiff fails to raise an issue of fact as to whether or not Continental's disclaimer was issued within a reasonable time. (ALIB, Inc. Atlantic Cas. Ins. Co., 52 AD3d 419 [3d Dept. 2008][20 day delay is not unreasonable]; (U.S. Underwriters Ins. Co., supra;Nationwide Ins. Co. v. Lukas, 264 AD2d 778 [2d Dept. 1999] [20 day delay not unreasonable]). Nor does plaintiff set forth any prejudice occasioned by the claimed delay. (Smith v. Gen. Accident Ins. Co., 295 AD2d 738 [3d Dept. 2002][36 day delay, with no prejudice shown, not unreasonable]; see also Fairmont Funding, Ltd. v. Utica Mut. Ins. Co., 264 AD2d 581 [3d Dept. 1999]).
Additionally, on this record, Plaintiff has "failed to demonstrate that further discovery could be expected to yield material and relevant evidence raising triable material issues of fact". (Judd v. Vilardo, 57 AD3d 1127, 1131 [3d Dept. 2008]). Plaintiff's bald assertion that "at the very least, the depositions of Continental's claims personnel are needed" prior to summary judgment being granted, constitutes nothing but "mere hope" of uncovering additional evidence, and is insufficient to defeat Continental's summary judgment motion pursuant to CPLR § 3212(f). (Merchant v. Greyhound Bus Lines, Inc., 45 AD3d 745 [2d Dept. 2007];Neryaev v. Solon, 6 AD3d 510 [2d Dept. 2004]).
Accordingly, Continental's motion for summary judgment dismissing the complaint against it, is granted.
Turning next to Plaintiff's motion for summary judgment against Titan, Plaintiff demonstrated its entitlement to a declaratory judgment in its favor on its contractual indemnification claim.
"In cases of contract interpretation, it is well settled that when parties set down their agreement in a clear, complete document, their writing should be enforced according to its terms." (Bower v. Board of Educ, Cazenovia Cent. School Dist., 53 AD3d 967, 968 [3d Dept. 2008] quoting South Road Associates, LLC v. Intern. Business Machines Corp., 4 NY3d 272). A contract imposing an indemnification "obligation must be strictly construed to avoid reading into it a duty which the parties did not intent to be assumed." (Hooper Associates, Ltd. v. AGS Computers, Inc., 74 NY2d 487).
Here, the contract between Plaintiff and Titan sets forth an unambiguous indemnification provision. The contract states, in pertinent part:
18.3 [Titan] shall indemnify and save harmless [Plaintiff] . . . from suits, actions, damages, and costs of every name and description relating to the performance of this contract during its prosecution and until the acceptance thereof . . . [Titan's] obligations under this paragraph shall not be deemed waived . . . nor shall such obligation be deemed limited or discharged by the enumeration or procurement of any insurance for liability for damages imposed by law upon [Titan], [a] subcontractor or the [Plaintiff].
It is undisputed that Zelno was injured in the "performance of this contract during its prosecution". Nor is it disputed that Zelno has brought suit against Plaintiff for damages due to such injury. Strictly construing the plain language of the parties' agreement leads to the single conclusion that Titan must indemnify Plaintiff for damages and costs incurred in defending Zelno's action against it. However, the plain language of this agreement contains no requirement that Titan defend Plaintiff in an action. Such provision was not included in the contract nor, on this strict construction, will it be inferred. Accordingly, Plaintiff has demonstrated its entitlement to judgment as a matter of law declaring its right to indemnity from Titan on the Zelno action, but not to a defense.
In opposition, Titan claims that "basic equity" precludes their indemnifying Plaintiff on the Zelno claim. Titan argues that because they provided Plaintiff with the above Continental insurance policy, and Plaintiff negligently lost the benefit of such insurance policy, it is inequitable to assign the risk of such loss to Titan. However, such equity argument is specifically contradicted by the plain language of the Plaintiff/ Titan contract. The contract provides that Titan's duty to indemnify Plaintiff is not "waived . . . limited or discharged" by Titan's providing Plaintiff with insurance. In light of this unambiguous and specifically applicable contractual provision, Plaintiff's loss of the Continental insurance policy is irrelevant to Titan's contractual obligation to indemnify. Moreover, the Titan/Plaintiff contract specifically requires Titan to obtain an insurance policy for Plaintiff during the roof rehabilitation project. With such provision no corresponding limitation of Titan's liability to indemnify Plaintiff is included. Considering the entire Titan/Plaintiff contract, and strictly construing it, plaintiff demonstrated Titan's obligation to indemnify it for the costs and damages it incurs in the Zelno action.
In view of the foregoing, it is unnecessary, and this Court will not, reach Plaintiff's common law indemnification claim.
Accordingly, for reasons set forth above, it is hereby:
ORDERED, ADJUDGED, DECLARED AND DECREED that defendant Titan is hereby obligated to indemnify, if necessary, Plaintiff from all damages and costs, including attorney's fees, with respect to an action pending in the New York State Court of Claims, captioned Carlton Zelno v. State of New York (Claim No. 113231).
All papers, including this Decision and Order, are being returned to the attorney for the Plaintiff. The signing of this Decision and Order shall not constitute entry or filing under CPLR § 2220. Counsel are not relieved from the applicable provisions of that section respecting filing, entry and notice of entry.
So Ordered.
PAPERS CONSIDERED:
1. Notice of Motion, dated March 2, 2009, Affirmation of Marian Hertz, dated March 2, 2009, with attached Exhibits 1-11; Verified Answer, dated February 26, 2009.
2. Affidavit of Joan Matalavage, dated April 29, 2009, with attached Exhibits "1"-"P-1".
3. Reply of Marian Hertz, dated May 18, 2009, with attached Exhibits "A"-"F".
4. Notice of Motion, dated May 5, 2009, Affidavit of Joan Matalavage, dated May 6, 2009, with attached Exhibits "A"-"J".
5. Reply of Marian Hertz, dated May 22, 2009, with attached Exhibits "A"-"B".
6. Affirmation of F. Douglas Novonty, dated May 18, 2009 with attached Exhibit "A".