Opinion
0100502/2008.
May 27, 2008.
MEMORANDUM DECISION
Upon the foregoing papers, it is ordered that this motion
In accordance with the accompanying Memorandum Decision, it is hereby
ORDERED that the motion by defendant New Hampshire Insurance Company pursuant to CPLR § 3211(a)(7) to dismiss the Complaint of the plaintiff, Time Warner Cable of New York City, a Division of Time Warner Entertainment Company, L.P. for failure to state a cause of action is denied; and it is further
ORDERED that New Hampshire Insurance Company serve a copy of this order with notice of entry upon all parties withing 10 days of entry; and it is further
ORDERED that New Hampshire Insurance Company serve and file its Answer by June 30,2008; and it is further
ORDERED that the parties appear for a preliminary conference in Part 35, 60 Centre Street, New York on August 5, 2008 at 2:15 p.m.
This constitutes the decision and order of the Court, the decision and order of the Court.
In this insurance declaratory judgment action defendant, New Hampshire Insurance Company ("New Hampshire Insurance") moves pursuant to CPLR § 3211(a)(7) to dismiss the Complaint of the plaintiff, Time Warner Cable of New York City, a Division of Time Warner Entertainment Company, L.P. ("plaintiff" or "Time Warner Cable") for failure to state a cause of action.
Complaint
According to the instant Complaint, "Delia Cata" commenced a personal injury action against, inter alia, Time Warner Cable, alleging that on January 20, 2003, she was assaulted in her apartment located in Ozone Park, New York by one of Time Warner Cable's employees (the "Underlying Action"). Ms. Cata claimed that the Time Warner Cable employee gained access to her apartment because he had previously installed a cable television box in her apartment on July 12, 2002. Ms. Cata alleged that Time Warner Cable was negligent, reckless, and careless in hiring, monitoring and retaining the employee, failed to supervise the employee, and was vicariously liable for her injuries. During the course of discovery in the Underlying Action, the assailant was identified as Ansel Daly, an employee of PRWT/CFG, LLC, a successor in interest to CFG Cable Corp. and/or CFG Cable Corp. (collectively, "CFG"), a subcontractor hired by Time Warner Cable to install cable television equipment in the borough of Queens, New York.
The instant Complaint alleges that prior to the date of Ms. Cata's incident, Time Warner Cable entered into a cable installation contract with CFG, dated July 7, 1996 (the "CFG Contract"). The CFG Contract required CFG to defend, indemnify, and hold harmless Time Warner Cable for all claims, demands, damages, costs, losses, liabilities, causes of action, and expenses resulting from damage or claims on account of bodily injury sustained by any person, arising out of, or in any way connected to, the performance of the work under the CFG contract. CFG also agreed to procure "primary" Comprehensive General Liability insurance in the amount of at least $2,000,000 per occurrence and aggregate and to have Time Warner named as an additional insured under its Comprehensive General Liability insurance policy (the "Policy"). CFG was also required to have the Policy endorsed to name Time Warner Cable as an additional insured.
Time Warner alleges that prior to the date of Ms. Cata's incident, New Hampshire Insurance issued to CFG an insurance policy which provided liability insurance to CFG (the "Policy"). The Policy covered Time Warner Cable as an additional insured, and applied to each and every aspect of the claims made by Ms. Cata concerning her allegations of bodily injury. Although Time Warner Cable timely demanded that New Hampshire Insurance assume the defense and indemnification of Time Warner Cable, New Hampshire Insurance failed to comply with the demand.
By order dated September 25, 2006, Hon. Marguerite A. Gray granted Time Warner Cable summary judgment dismissing the Complaint in the Underlying Action, on the grounds that, inter alia, Time Warner Cable asserted no control over Mr. Daly or any of the employees of CFG.
As a result, Time Warner Cable seeks reimbursement of the fees and costs incurred in its defense of the Underlying Action, which were and remain the obligation of New Hampshire Insurance.
Plaintiff's first cause action seeks a declaration that the Policy issued by New Hampshire Insurance affords primary coverage for Time Warner Cable on the claims of bodily injury and other claims arising therefrom of Ms. Cata from the January 20, 2003 incident, and that New Hampshire Insurance is obligated to insure, defend, and indemnify Time Warner Cable in the Underlying Action, plus interest.
Plaintiff's second cause of action seeks a declaration that New Hampshire Insurance is obligated to reimburse Time Warner Cable for all attorneys' fees, costs, disbursements and other expenses incurred in its defense in the Underlying Action.
Motion
In support of its motion for dismissal of the Complaint for failure to state a cause of action, New Hampshire Insurance contends that section IX of the CFG Contract contains a provision which provides that "Unless terminated sooner as provided herein, this Agreement shall terminate December 31, 2000 or upon completion of the Work, whichever shall first occur. Nothing herein shall obligate TWCNYC to provide Contractor with any Work."
New Hampshire Insurance argues that the CFG Contract, upon which Time Warner Cable relies in seeking defense and indemnity under the Policy, expired by its terms at the end of 2000, or before, and does not provide a basis for plaintiff's claims for declaratory relief.
In opposition, Time Warner Cable argues that on a motion to dismiss pursuant to CPLR § 3211 (a)(7), the allegations in the Complaint must be taken as true, and should only be dismissed if there is no rational basis upon which a jury could find for plaintiff.
New Hampshire Insurance's motion misstates the allegations in the Complaint, in that Time Warner Cable does not allege that it is afforded coverage under the Policy solely by virtue to CFG's obligation to procure insurance pursuant to the CFG Contract. Rather, Time Warner Cable asserts that the Policy covered Time Warner Cable as an additional insured. Time Warner Cable cannot determine whether it qualifies as an additional insured based on the provisions of the Policy, because New Hampshire Insurance has not produced a copy of its Policy. Also, discovery has not taken place in this action. Thus, the motion is premature.
New Hampshire Insurance's motion also fails to take into account the possibility that Time Warner Cable is a specifically named insured under a policy issued to one of Time Warner Cable's contractors, in which case, a valid written contract would not be necessary. Moreover, New Hampshire Insurance's argument would also fail if the term of the Contract had been extended, either by written instrument or by custom or practice of the parties.
Time Warner Cable need only allege that New Hampshire Insurance issued a valid policy that was in effect at the time of Ms. Cata's incident, that the allegations in the Underlying Complaint triggered New Hampshire Insurance's duty to defend, Time Warner Cable is an additional insured under the Policy, that Time Warner tendered its defense and indemnity to New Hampshire Insurance for the Underlying Action, and that Time Warner Cable incurred expenses in its defense of the Underlying Action.
In reply, New Hampshire Insurance maintains that Time Warner Cable's claims are expressly premised on an expired agreement. Time Warner Cable's assertion, that the Policy names it as an additional insured does not constitute an independent basis for coverage. New Hampshire Insurance contends that Time Warner Cable's Complaint alleges in paragraphs 9,10, and 11, that the CFG Contract obligated CFG to hold Time Warner Cable harmless and provide insurance coverage naming Time Warner Cable as an additional insured. Further, the Complaint contains no allegation that New Hampshire Insurance issued a policy unrelated to and not required by the CFG Contract which provided Time Warner with the coverage to which it alleges it is entitled. Further, Time Warner Cable's remaining contentions are pure speculation.
Analysis
When determining a motion to dismiss the complaint for failure to state a cause of action, 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" ( see Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder Steiner, 96 NY2d 300, 303; Leon v Martinez, 84 NY2d 83, 87-88). The sole criterion is whether "from the four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law" ( Guggenheimer v Ginzburg, 43 NY2d 268, 275).
"An insurance policy is a contract between the insurer and the insured" ( Bovis Lend Lease LMB, Inc. v Great American Ins. Co., ___ NYS2d ___, 2008 WL 1063608 [1st Dept 2008]). The rights and obligations of parties under an insurance contract are predicated on the language of the policy and unambiguous provisions must be given their plain and ordinary meaning ( U.S. Fidelity Guar. Co. v CNA Ins. Cos., 208 AD2d 1163, 618 NYS2d 465 [3d Dept 1994]; see also, Travelers Indemn. Co. v American and Foreign Ins. Co., 286 AD2d 626, 730 NYS2d 231 [1st Dept 2001]). "Thus, the extent of coverage . . . is controlled by the relevant policy terms, not by the terms of the underlying trade contract that required the named insured to purchase coverage" ( Bovis Lend Lease LMB, Inc. v Great American Ins. Co., supra; see also, Travelers Indem. Co. v American Foreign Ins. Co., 286 AD2d 626, 730 NYS2d 231 [1st Dept 2001] ["it is the policy provisions that control (priority of coverage) and not the provisions of the subcontract" between the insureds]).
"It is well settled that an insurance company's duty to defend is broader than its duty to indemnify. Indeed, "the duty to defend 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 Air Conditioning Corp. v One Beacon Ins. Group 33 AD3d 116, 821 NYS2d 1 [1st Dept 2006] citing Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 648, 593 NYS2d 966). "If, liberally construed, the claim is within the embrace of the policy, the insurer must come forward to defend its insured no matter how groundless, false or baseless the suit may be" ( BP Air Conditioning Corp. v One Beacon Ins. Group, 33 AD3d 116, supra, citing Ruder Finn Inc. v Seaboard Sur. Co., 52 NY2d 663, 670, 439 NYS2d 858). "The duty remains 'even though facts outside the four corners of [the] pleadings indicate that the claim may be meritless or not covered'" ( BP Air Conditioning Corp. v One Beacon Ins. Group, 33 AD3d 116, supra citing Fitzpatrick v Am. Honda Motor Co., Inc., 78 NY2d 61, 63, 571 NYS2d 672).
Time Warner Cable's Complaint alleges that Ms. Cata commenced an action against Time Warner Cable for injuries she sustained by an employee of Time Warner Cable, and that New Hampshire issued a policy which covered Time Warner Cable as an additional insured. The Complaint also alleges that the Policy was in effect at the time of the incident, and covered "every aspect of the claims made by Cata concerning her allegations of bodily injuries allegedly sustained. . . ." It is also alleged that New Hampshire Insurance failed to comply with Time Warner Cable's timely demand for defense and indemnification. Thus, based on a plain reading of the Complaint, New Hampshire Insurance's duty to defend Time Warner Cable was implicated due to the claims made in the Underlying Complaint ( see Continental Cas. Co. v Rapid-American Corp., 80 NY2d at 648, supra). The Court notes that it has no bearing on the existence of a duty to defend that it is also possible that Time Warner Cable was not found liable for plaintiff's injuries "once the litigation [in the Underlying Action] ha[d] run its course" ( Automobile Ins. Co. of Hartford v Cook, 7 NY3d at 137, 818 NYS2d 176 supra).
The Court notes that defendant did not move for summary judgment dismissing the Complaint, but for dismissal based on an alleged failure to state a cause of action based primarily on the argument that the CFG Contract between Time Warner Cable and its subcontractor CFG was no longer in effect at the time of the Ms. Cata's incident.
In this regard, and contrary New Hampshire Insurance's contention, that the contract between Time Warner Cable and CFG giving rise to the procurement of the Policy was expired at the time of the alleged covered event, is not dispositive on the issue of whether the Policy affords coverage to Time Warner Cable. Paragraphs 9, 10 and 11 states, inter alia, that CFG's contract to install cable included an obligation to defend and indemnify Time Warner Cable, and an obligation to procure "primary" Comprehensive General Liability insurance in the coverage amount of $2,000,000 naming Time Warner Cable as an additional insured. However, Time Warner Cable does not seek damages against New Hampshire Insurance for an alleged failure to procure such insurance coverage pursuant to the CFG Contract. In such instance, the enforceability of CFG Contract and whether it had expired by its terms at the time of the alleged incident would be relevant, and thus, the allegations in paragraphs 9, 10, and 11 would be also relevant to whether such an obligation existed. Here, Time Warner Cable's claim for defense and indemnification rests solely on whether it is an additional insured under the Policy, and whether the Underlying Action is a covered event under the Policy. New Hampshire Insurance points to no provision in the Policy that excludes or precludes coverage, or states any other basis in the Policy to deny coverage. Further, there is no indication that the effective coverage period under the Policy is in any way tied to or dependent upon the effective period or termination of the CFG Contract.
Therefore, the motion by New Hampshire Insurance for dismissal of the Complaint for failure to state a cause of action is denied. Conclusion
Based on the foregoing, it is hereby
ORDERED that the motion by defendant New Hampshire Insurance Company pursuant to CPLR § 3211(a)(7) to dismiss the Complaint of the plaintiff, Time Warner Cable of New York City, a Division of Time Warner Entertainment Company, L.P. for failure to state a cause of action is denied; and it is further
ORDERED that New Hampshire Insurance Company serve a copy of this order with notice of entry upon all parties withing 10 days of entry; and it is further
ORDERED that New Hampshire Insurance Company serve and file its Answer by June 30, 2008; and it is further
ORDERED that the parties appear for a preliminary conference in Part 35, 60 Centre Street, New York on August 5, 2008 at 2:15 p.m.
This constitutes the decision and order of the Court, the decision and order of the Court.