State Farm Mut. Auto. Ins. Co. v. American Empire Surplus Lines Ins. Co.

State Farm Mut. Auto. Ins. Co. v American Empire Surplus Lines Ins. Co. 2024 NY Slip Op 31852(U) May 29, 2024 Supreme Court, New York County Docket Number: Index No. 161274/2020 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. 161274/2020 NYSCEF DOC. NO. 177 RECEIVED NYSCEF: 05/29/2024

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. MARY V. ROSADO PART 33M Justice ------------------------- -------------X INDEX NO. 161274/2020 STATE FARM MUTUAL AUTOMOBILE INSURANCE MOTION DATE 07/24/2023 COMPANY,

Plaintiff, MOTION SEQ. NO. 004

- V-

AMERICAN EMPIRE SURPLUS LINES INSURANCE COMPANY, ADVANCED CONSTRUCTION EQUIPMENT CORP., DANIEL DELUCCA, THE CITY OF NEW YORK, DECISION + ORDER ON NEW YORK CITY HOUSING DEVELOPMENT MOTION CORPORATION, NEW YORK CITY HOUSING AUTHORITY, BOE INDUSTRIES, INC.

Defendants. -------------------------------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 004) 1, 33, 125, 138, 139, 140,141,144,145,146,147 were read on this motion to/for MISCELLANEOUS

Upon the foregoing documents, Defendant Advanced Construction Equipment Corp.'s

("ACE") motion for an Order entering judgment against Plaintiff State Farm Mutual Automobile

Insurance Company ("Plaintiff') in the amount of attorneys' fees, expenses and interest incurred

by ACE in defending this insurance coverage action brought by Plaintiff, is denied.

I. Background

On December 28, 2020 Plaintiff commenced this action seeking, inter alia, a declaration

that Plaintiff owed neither a duty to defend nor to indemnify ACE in an underlying action entitled

Daniel Delucca v. City ofNew York, New York City Housing Development Corp., New York City

Housing Authority and BQE Industries, Inc., Supreme Court of the State of New York, County of

Kings - Index No. 501320/18 (the "DeLucca Action") (NYSCEF Doc. 1). In the DeLucca Action,

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the plaintiff, Mr. DeLucca, alleged that he suffered an injury at a construction site on July 5, 2017

while employed by ACE (NSYCEF Doc. 139 at 17).

On July 13, 2022 Plaintiff filed a motion (Mot. Seq. 002) for summary judgment seeking,

in relevant part, a declaration that it did not have a duty to defend or to indemnify ACE for the

DeLucca Action (NYSCEF Doc. 33). In Mot. Seq. 002 Plaintiff also sought a further declaration

that Defendant American Empire Surplus Lines Insurance Company ("AESLIC") was obligated

to defend and to indemnify the DeLucca Action and sought reimbursement from AESLIC for

defense costs incurred (NYSCEF Doc. 33). By Decision and Order dated March 23, 2023, the

Court denied Plaintiffs motion holding that "that branch of State Farm's motion in which it seeks

a declaration that it is not required to indemnify or defend Advanced Construction in the

underlying action is denied" (NYSCEF Doc. 125 at 28).

On July 4, 2023, based on the Decision and Order rendered on Mot. Seq. 002, ACE brought

the instant motion for an Order entering judgment against Plaintiff and in favor of ACE in the

amount of attorneys' fees, expenses and interest incurred by ACE in defending the insurance

coverage action brought by Plaintiff on the ground that Plaintiffs claim against it was unsuccessful

(NYSCEF Doc. 138). In opposition, Plaintiff contends that ACE has not been charged any

attorneys' fees and thus has no standing to bring a claim for attorneys' fees (NYSCEF Doc. 144 at

1 3). Plaintiff argues further that ACE is not entitled to attorneys' fees because the declaratory judgment action sought a determination to have AESLIC cover and defend the DeLucca Action

(Id. at 1 4). Additionally, Plaintiff asserts that ACE' s motion is premature as no final determination

of the declaratory judgment action has been adjudicated (Id. at 18).

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II. Discussion

It is well established that "a prevailing party may not recover attorneys' fees from the losing

party except where authorized by statute, agreement or court rule" (US. Underwriters Ins. Co. v

City Club Hotel, LLC, 3 NY3d 592, 595 [2004]). However, an insured who prevails on the merits

"in an action brought by an insurer seeking a declaratory judgment that it has no duty to defend or

indemnify the insured, may recover attorneys' fees expended in defending against the declaratory

judgment action regardless of whether the insurer provided a defense to the insured" (Id.).

Here, ACE' s motion is based on the argument that because the Decision and Order on Mot.

Seq. 002 denied Plaintiffs motion for a declaration that it is not required to indemnify or defend

Advanced Construction in the underlying action, ACE has prevailed against Plaintiff in this

declaratory judgment action (NYSCEF Doc. 139 at 8). However, "[i]t is well settled that the denial

of a motion for summary judgment is not an adjudication on the merits" (Metropolitan Steel Indus.,

Inc. v Perini Corp. 36 AD3d 568, 570 [2007]). In light of the foregoing, the Court finds that the

denial of Plaintiffs summary judgment motion does not render ACE the prevailing party. As there

has not yet been a final determination of the declaratory judgment action, ACE's motion is denied

as premature.

Accordingly, it is hereby,

ORDERED that Defendant Advanced Construction Equipment Corp.'s motion for an

Order entering judgment against Plaintiff State Farm Mutual Automobile Insurance Company for

of attorneys' fees, expenses and interest incurred by ACE in defending Plaintiffs insurance

coverage action, is denied; and it is further

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ORDERED that within ten days of entry, counsel for Plaintiff State Farm Mutual

Automobile Insurance Company shall serve a copy of this Decision and Order, with notice of

entry, on all parties to this case; and it is further

ORDERED that the Clerk of the Court is directed to enter judgment accordingly.

This constitutes the Decision and Order of the Court.

5/29/2024 DATE HON MARY V. ROSADO, J.S.C.

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

APPLICATION:

CHECK IF APPROPRIATE: GRANTED

SETTLE ORDER 0 DENIED

INCLUDES TRANSFER/REASSIGN 8 GRANTED IN PART

SUBMIT ORDER

FIDUCIARY APPOINTMENT □ OTHER

□ REFERENCE

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