Structure Tone, Inc. v. Merchants Preferred Ins. Co.

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Structure Tone, Inc. v Merchants Preferred Ins. Co. 2024 NY Slip Op 31164(U) April 5, 2024 Supreme Court, New York County Docket Number: Index No. 652906/2020 Judge: Mary V. Rosado Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

INDEX NO. 652906/2020 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 04/05/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. MA RY V. ROSADO PART 33M Justice ----------------------------------------- ------ -- ---- --- -------X lNDEX NO. 652906/2020 STRUCTURE TONE, I NC., MOTION DATE 12102/2023 Plaintiff, MOTION SEQ, NO. 1 - V -

MERCHANTS PREFERRED INSURANCE CO., NAVIGA'fORS INSURANCE CO., OLD REPUBLIC INSURANCE COMPANY, CATLIN SPECIALTY INSURANCE COMPANY. SCOTTSDALE INSURANCE DECISION + ORD ER ON COMPANY, TRAVELERS PROPERTY CASUAL TY MOTION COMPANY OF AMERICA, GREENWICH INSURANCE COMPANY

Defendant.

---------------------------------------------TT----- ------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 001) 39, 40, 41. 42, 43. 44. 45, 46,47,48. 49. 50, 51, 52, 53, 54, 56, 57, 58, 59,60. 61, 62, 63, 64. 65, 66.67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80. 81, 82, 83. 84, 85, 86, 87, 88, 89, 90, 91, 92 were read on this motion to/for SUMMARY JUDG_ry1ENT (AFTER JO!NDER)

Upon Lhe foregoing documents. and after oral argument, whi~h look place on October J,

2023, with Thomas Dillon, Esq. appearing for Plaintiff Structure Tone, Inc. ("Plainli rf"), J. Paul

Hm,vansky, Esq. appearing for Defendant :r,,,.-1crchants Preferred fnsuran~l: Co. ("Mcrchants'') 1 Kate

Maguire Tedrick, Esq. appearing for Defendant Old Republic Insurance Company ("Old

Republic''), and Ann ()dclson: Esq. appearing for Defendanl Sc.:ousJak: rnsurancc Company, lnc.

("Scottsdalc' 1) , Defendant Old Republic's motion for summary judgment dismissing all claim~ and

cross-claims against it is denied.

Defendant Scottsdale's cross-motion for swmnary judgment in favor of Scottsdale and

aga1ml Old Republic, dismissing Old Rcpublic 1s cross-claims against it is. granted.

65290612020 STRUCTURE TONE, INC. v:s. MERCHANTS PREFERRED INSURANCE CO. Ef AL Page 1 ot9 MQti on No. 001

INDEX NO. 652906/2020 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 04/05/2024

to lhc primary policy issued to Interstate by Catlin (N YSCEF Doc. 91 ). Scottsdale argues that. in

light of the discontinued action against it, Plaintiff is neither asserting that it is an additional insured

under the Scottsdale nce:-;s policy nor that Scottsdale js required to defend and to indemnify

Plaintiff in the Underlying Actjon upon exhaustion of the Catlin primary po1icy issued to Interstate

(NYSCEF Doc. 91 at 11 ). Scousdak: further asserts that Plain ti ff has discontinued its claims.

against Scoltsda]e1s insured (Interstate) and therefore, Old Republic 1s cross-claims for contribution

against Scottsdale are rendered moot (NYSCEF Doc. 9 l at 11 ).

The Court of Appeals has hcid that \Vherc multiple policies cover the same risk, insurers

may cover Lhe risk at different levels and limi l their contrihution obligation by virLrn:: ol" their 1• other

insurance dausc' 1 (State Farm Fire and Cas. Co. v LiAfauro, 65 KY2d 369,378 [ 1985)). Moreover,

\vhcrc scvera! policies cover the same risk and each provides the same level of coverage, it is

necessary to compare their "other insurance" clauses lo detem1ine priority of coverage (Sport Rock

Inrl.. Inc. v American Ca.t. Co. of Reading, Pa., 65 AD3d 12. 18 [l st Uept 2009}. Scottsdale ~irgues

that insofar a.s Old Rcpuhhc issued a primary general liahihty policy to Port Morris and Scottsdale

issued a commercial excess policy to Interstate, they jnsure different contractors for different risks

(NYSCEF Doc. 91 at 12).

The Scottsdale excess policy contains the following "Other Jnsurance'' clause: "This

insurance is excess over, and shall not contribute v,.rith any of the other insurance, whether primary,

excess, contingent or on any other basis 11 (NYSCEF Doc. 91 ), Thus, by iU, m\'TI tcrrm, the

Srnnsdale excess policy "negakd any intenlion to contribute with other policies" (State Farm Nre

and Cas. Co. at 377).

652906/2020 STRUCTURE TONE, tNC. vs, MERCHANTS PREFERRED INSURANCE CO. ET AL. Page 8 of9 Motion No. 001

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INDEX NO. 652906/2020 NYSCEF DOC. NO. 93 RECEIVED NYSCEF: 04/05/2024

The Court finds that Scottsdale has made a pr i ma fac ie showing that Plain ti ff discontinued

its claims against both Scottsdale an<l Scottsdale's insured (Interstate), and that therefore~ Old

Republic's cross-daims for contribution against Scottsdale are rendered moot.

Accordingly, it is hereby,

ORDERED lhat Defendant OM Republic Insurance Compuny's motion for an order for

summary judgment and dismis;(;ing al I claims and cross-claims against it~ is denied; and it is further

ORDERED Defendant Scottsdale lnstmmce Company. lnc.'s cross-motion for s.ummary

judgment seeking dismissal or Ol<l Republic Insurance Company's cross-claims against il, i') granted;

and it is further

ORDERED that \Vithin ten days or entry, counsel for Dcfondant Old Republic Insurance

Company shal I serve u copy of this Dccis.ion and Order with notice or entry on aJl partii::s to this

action; and it is further

ORDERF:D that the Clcl'k of the Court is directed to cntc:r j uJgmenl accordingly.

'Ibis constitutes the Decision and Order of lht: court.

⁴/512024 f})~~ VR1t,d'Q J s c HO~. MARY V-_~R-O~S~A~D=O-,-J-.S-.C-.--- DATE

CHECK ONE: CASE DISPOSED X NOfll-FfNAL. IJ ISPO5 ITI0N

GRANTED □ DENIED X CRA.NTi;;O IN PART □ OTHER APPLICATJON: Sl=:TTLE ORDER SUBMIT ORDEFi:

CHECK IF APPfi:OPR IA TE: INC L.UIJ!::5 TAANSFERIREASSI GN FLDUCIARV APPOlt,iTMENl □ REFERENCE

652906/2020 STRUCTURE TONE, INC. vs, MERCHANTS PREFERRED INSURANCE CO. ET AL Page 9 of 9 Mo~ion No. 001

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Footnotes

[1] of 9 [* 1] I. Background In this declaratory judgment and breach{) f contract action, Plaintiff, as general contractor for a project (the t 1ProjecC') located at 250 West 55th Street. New York, New York (the 11 Premiscs."), seeh a declaration of insurance coverage under multiple insurance policies in connection with an underlying personal injury action entitled Scott Cackell v Gladden Properties, !JC., Supreme Court. Ne,v York County. bearing Index Numhcr- ! 57267/2014 (the t 1Umlcrlying Actiontt) (KYSCF.F Doc. 40). The owner of the Premises js Gladden Properties, LJ.C ("(rladdcn' 1 )~ the managing agent is Bn:'iton Properties, LLC ('Boston Propcrrics 11 ) 1-md the tenant is Kaye Scholer, I.LP. ('"Scholer 1') (collectively with Plaintiff, the ''Project Defendants") (NYSCEF Doc. 59 at if 7). Scholer hired Plaimi ff lo buitd out their leased space (Id at i1 7). Plainli ff hired lnterstatc Dryv,•all, Corp. ("Interstate") m in~tall \vaU panels. door framcg and doors and Port Morris Tile & Marble Corp. ("Port \itorris") to perfom1 Liling \\'Ork (id at~ 7). On June 18, 2014, Scott Cacketl ("Cackctt 11 ) . an employee of Port 3forris and the plaintiff tn . . the Underlying Ac lion, was injured in the cour'i.e or his employment ut the Project \'v'hen he was ~trud hy a falling door C),iYSCEF Doc. 40 at 17). By Agreement dated february 19, 2020, the Underlying Action was settled between Cacketl and Gladden. iloston Properties, Plaintiff, Kay~ Scholer. and Interstate and the claims againsl Interstate were discontinued with prejudice (NYSCEF J)oc. 68). fn lhi~ motion sequence l, Old R..::publtc moves for swnmary judgment claiming that the general liability insurance policy issued by Old Republic lo Port r\forris does not afford additional insured covcrng1,; to Plaintiff and tha1 all claims asserted for coverage under the Old R.epuhlic policy 652906/2020 STRUCTUR~ TONI::., INC. vs. MERCHANTS PREFERRED INSURANCE CO. ET AL Page 2 of 9 Motion No. 001

[2] of 9 [* 2] should be dismissed. Dr fondant Scottsdale cross~moves for summary judgment seeking di:-;m1ssal o!" Old R~public's cross-claims for contribution asserted again~l it (NYSCF.F Doc. 78). Previously, a third-party action by Gladden, Boston Properties and Plaintiff wa'i. hroL.1ght against Port Morris in the L ndcrlying Action for c:ontractual indemnification and common law negligence and the parties moved for summary judgment. ln a decision of Justice Carol R. Edmcad entered January 8. 2019, the Court granted Port Morris' motion for summary judgment finding lhut the employee's accident did not arise out of Port \forris 1 \Vork, and dismissed the Project Defendants' claims for rnntractual in<lernnification against Port Morris (1\'"YSCEF Doc. 4 7). Uplm appeal, the Appellate Division, First Department unanimously modified, on the law the lower court's decision and rcinstalcd Proj~ct n~fondanls' c0ntnic:tual in<lemnilkation cluirn against Port Morris (NYSCEf Doc. 48). Subsequently. on July 6} 2020 1 Plaintiff ~crvcd the summons and complaint in this ai:lion, seeking both defonse and indemnity in the underlying action under mllltiple policies of insurance, including the policy issued to Port Morris by Old Republic. II. Discussion A. S landar<l CPLR §3212 provides that a motion for summary judgment shalJ be granted if, upon all the papers and proof submitted, th~ ca.us~ or ~lion or defense shall be e~Labhshe<l sufficiently to warrant the court, as a matter of law. to direct judgment in favor of any party (CPLR §3212 [b ]). The proponentofa summary judgment motion must make aprima.facie showing of entitlement to j udgn1ent as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case (J-Vtne_wud 1 1Veu,,. Y"ork Univ. Med Ctr .. 64 l'\Y2d 851, 853 119851; Alvarez v 1 Prospect I !mp., 68 NY2d 320, 324 [ 1986]). Failure to make a prima facie showing requires a 652'!1(]ti/2D20 STRUCTURE TONE, LNC. vs, MERCHANTS PREFERRED INSURANCE CO. ET AL Page 3 of 9 Motion No. 001

[3] of 9 [* 3] denial of the motion. regardless of the sufficiency of the opposing papers (Id.) 'rlte moving party's "hurden is a heavy one 11 and the "facts mu~t be viev,,'ed jr, the light most favorable to the non- moving party" {.lacohsen v New York City Health and f ivsps. Corp.) 22 NY3d 824, 833 [2014]). Once this showing is made, the burden shifts to the opposing party to produce evidentiary proof, in admissihle fom1, sunicient to establish the existence of material issues of fact which require a trial of the action'' (Alvarez at 324~ Zuckerman v City of New York, 49 NY2d 557, 562 p 980"1; Vega v Restani Const. Corp., 18 NY3d 499, SOJ 1.20121). Summary judgment is a <lrastic remedy and should not be granted where there is any doubt as to the exist~m.::e o t· a triable issue of fact (Rotulm Fxtrudel'.,. Inc. v Ceppos, 461'-Y2d 223,231 l"l 9781). B. Old Republic· s \ 1fotion for Summarv J w.honent is Denied J11 Plaintiffs insurance/jndcmnity agreement \Vith Port \forris} Port \1orris agreed to indemnify and hold harmless Plaintiff from all claims afr,;ing in whole or in p'1-rt (rum the acts or omissions, breach or default of Pon \forris or its employees in conncctjon with the performance of any work by or for Port Morris (>l"YSCFF Doc. 70 ). In support of its motion, Defendant Old Republic asserts that in order for Plaintiff to be cntitkd to coverage as an additional insured under the c.::ommercial genera] liability policy i~sued hy OlJ Republic to Port Morris, the injury must have been caused, in whole or in part, by the acts or omissions of the named insured (here~ Port Morris) citing Burlington Ins. Co. v ,VYC Tr. Auth., (29 NY3d 313 [2017]). OJd Republic further asserts that its policy docs nol providl: coverage for an ad<lilional insured for injllrics that merely "arise" out or· Port Morri~' ads or mni~s.ions (NYSCF.F Doc. 40 al • 19), fi 529DBl20 W STRUCTURE TONE;:, INC, vs, ME RC HA NTS PREFERRED fNSURA NC E CO, ET AL Page 4 of 9 Motion No. 0-01

[4] of 9 [* 4] Old Republic's reliance on Ru.rlington is misplaced. Bur/;ngton concerned an addi1ional- insured endorsement that. like Old R.epuhhc's pol icy here, provided coverage for accidents ••ww,;ed, in whule or in. part, by the acts or omissions of the named insured" (fd. at 317) (emphasis added). There. the Coun of AppeaL~ held that "caused, in whole or in part. 1' as w.;cd in the endorsement, require_'j the \nsured to be the proximate cause of the injury giving rise to liability (Rurlington, at 324). The JJuriin_Klon Court distinguished the "caust:J h:"' language of the additional insured endorsement from the ''arising 0ul or·• language of the indemnity provision Old Repuhlie argues that since the negligence causes or ac:tion asserted against Port :r,..-1orri ~ were dismissed in the Underlying Action: and the Hrst Department found that there was no evid~m;e that Port Morris was negligent, Old Republic is entitled to dismissal of this action seeking de rense and indemnification ( Cackett v Gladden Propenies, LLC'_ 183 AD3d 419, 422 I I st Dept 2020 I}. Old Republic arg ucs farther that where an underlying ad ion has determined that the named i11surediernployer was not negligent, there can be no finding of additional insured coverage for other parties under the policy, citing !.ive /1/ation l.ive .Vatinn Mklg.. Inc. v Greenwich Ins. Co.,

[188] AD3d 422 [1st Depl 2020]). Both Merchants' and Plaintiff oppose Old Republic's motion contending that neither the lower nmrt J~ci~ion nor lhe Appdlate Division decision, which reversed the lower court and reinstated Port Morris a'. a party to I.he underlying action, are dispositive. Merchants asserts that 1 Old Republic argues that Merch.a nts has no standing to oppose Old Republic's motion for summary judP,ment bccau~c Merchants did not cro5s-claim c1gain5t Old Republic in ib ariswer to the complaint, relying on /1.ugi.Nine v Hafr:yon Constr. Corp., 71 Misc. 3d 715 (Bronx ay. 2021). In Augustine, unlike here, neither the movant'~ co- defendant nor the plaintiff opposed the. motion, <1nd th~ rn-d~fendant's arguments WC"!rf! rnnsidcrC"!d "nothing more than speculat on ,Hld conjectur1=." 5:5:2906/2020 STRUCTURE TONE, INC. vs, MERCHANTS PREFERRED INSURANCE CO. ET AL Pagfl 5 of 9 Motion No. 001 5 of· 9 [* 5] the lower court did not consider proximate causation or negligence in resolving the common law indemnification/contribution cJajms against Port !\fotTis (1\YSCEF Do(.'. 58 at., 2). \ikrcharns further asserts that Old Republic cannot rdy on the Appellate 1Jivision1s finding that there \vas "no evidence that any negligence on Port Monis' part contributed to plaintiffs accident" because negligence was not a factor in detennining the contractual indemni ri~alion claim against Pml \forris ( Cackerr at 4n). The facts were different in Uve Nation, upon v,.:hich Old Republic rd ics~ where there was an actual, express determination in the underlying action that neither the named insured nor those acting on jl'j behalf. caused~ in whole or in part, plaintiffs bodily in_iurtes. As Men.: han is and Plain l i IT arg uc, it is weH sett led that the Jang ua ge of the indemnity clause at issue docs not require a finding of negligence in order Lo he triggered. Rather, the indemnity clause obligat~~ Port Morris to indemnify the additional insured for claims "mising in \vhole or in part ... from the acts, omissions, br~uch or <leErnl l or· [ (\-irl \1orris·1 ... in connection with the pcrft)rmancc of any work by or for fPort l\-lorris]" (Cackelt at 421-22) (NYSCEF Doc. 70). further, a "conlracluaJ indemnification clause may shift liability from an ov,mer or c:ontractor to an emplo.Yer even where the employer was not negligent," although the extenl of the indemnification will depend on the extent to \vhich the Project Defendants' negligence is found lo have proximately caused the accident 1' (Cackett. al 422). Clearly. the named insured 1s indemni ficatJon obllgation;(; are hoth hroadcr and separate and distinct from the insurer's duty to defend and to indemnify an additional insured (WDF Inc. v Ilarleysville Ins. Co. o/1\lY, 193 AD3d

[667] [l st Dept 20211). Both Merchants and Plaint1ff argue that there;: are;: issu~s of tact as to whcth.cr the injury was caused. in whole or in part. by acts or omissions of Port Morris or those acting on Port Morris' 6-S2906l2 □ 2D STfWCTURE TONE, INC. YS. MERCHANTS PREFERRED INSURANCE CO. ET AL Motion No. 001 [* 6] 6 of 9 behalf. A1nong these issues are that Port Morris had overall responsibility for the safety of its employees, and bol.h Cackett and Port Morris had prior notice of unsatisfactory working conditfons and of the dark condition of the room that Cackett entered in performing his work. Accordingly. the opposition contends, Cackett's comparative negligence is a question of fact that can only be decided by a jury at trial. The Court agrees that Merchants and Plaintiff have raised suffkicnt material questions of fact whether the negligence of Port Morris or iL'i- employees contributed in whole or in part to the rntployce'.s. injury which mandate denial of Old Repuhhc's motion for summary judgment (Tamhane v Citibank. l ilA., 61 AD3d 571. 572 11 st Dept 2009]). 1 C. Scottsdale's Cross-Motion Seeking Dismissal of Old Rcpuhlic's Cross-Claims is Granted Scottsc.lak cross-moves to dismiss Old Republic's cross-claims which alleged "in the event {it was] held liahlc lo provide coverage for {PJaintiff] in respect of the claims asserted in the underlying Action, [it wasJ entitled lo": (I) "a declaration as to the application of all other relevant insurer's avaibhlc coverage and pursuant to the coinsuranl'.e or 'Other Insurance' clauses contained in the res peer ivc insurance po Ii ci es of' othc:r ins urc rs IJ' and (2) "an allocation of' all cos ls of dcfc nse and indemnity in accordance with such 'Other Insurnm.::e' clauses." Scottsdale asserts that sinl'.l! the commencement of the inst.ml adion, Plaintiff has discontinued filth prejudice its claims against Interstate in the Underlying Action and, on January 5, 2023. voluntarily discontinued its claims against Scottsdale in the present action (NYSCLF Docs. 37. 79, 87, 91). and therefore, the only remaining claims against il are Old Republic's cross~ claims for contribution (NYSCEF Do~. 91). According to Scottsdule, Old R(!puhlic issued a primary general liability policy to Port Morris and Scottsdale jssued a commercial excess liability policy to Jnterslale, which was excess 65,9061202{1 STRUCTURE TONE, INC. vs. MERCHANTS PREFERRED INSUA:ANCE CO. ET AL Page 7 of 9 M□ tior'I N-o. 001 [* 7] 7 of 9