ATLANTIC MUTUAL INSURANCE COMPANY v. << (1997)

Supreme Court, Appellate Division, First Department, New York.

ATLANTIC MUTUAL INSURANCE COMPANY, as Subrogee of Health Insurance Plan of Greater New York, Also known as H.I.P., Plaintiff-Respondent, v.
UNITED SECURITY GROUP, INC., et al., Defendants-Appellants/Third-Party Plaintiffs-Appellants, v. GEMMA CONSTRUCTION CO., et al., Third-Party Defendants, Westchester Creek Corp., Third-Party Defendant-Respondent.

Decided: February 27, 1997

Before MILONAS, J.P., and ELLERIN and NARDELLI and TOM, JJ.

Stephen M. Marcusa, for plaintiff-respondent. Barry Jacobs, for defendants-appellants/third-party plaintiffs-appellants. Jill C. Lesser, for third-party defendant-respondent.

Order, Supreme Court, New York County (Alice Schlesinger, J.), entered on or about September 4, 1996, which denied defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, with costs.

The agreement between plaintiff's subrogor and defendant does not preclude tort claims by either the contracting tenant or the noncontracting owner arising from the security company's negligent performance of its services.

Based upon defendant security company's reasonable expectations and the non-contracting building owner's detrimental reliance on its tenant's agreement with the security company, the owner is within the intended ambit of contractual beneficiaries entitled to seek recovery in tort for breach of the agreement (see, Palka v. Servicemaster Mgt. Servs. Corp., 83 N.Y.2d 579, 587, 611 N.Y.S.2d 817, 634 N.E.2d 189; cf., Hagan v. Comstat Sec., 214 A.D.2d 435, 625 N.Y.S.2d 196).

We agree with the motion court's determination that the criminal conduct was not, as a matter of law, an intervening cause of the fire and resulting insurance losses. A trier of fact could find that the arson was a foreseeable act, in view of the security guard's conversation with the apparent arsonist and decision to leave his post just minutes before the fire broke out.

We have considered plaintiff-respondent's contentions for affirmative relief and find them to be without merit.

M-398-Atlantic Mutual v. United Security, et al.

Motion to stay trial and for other related relief granted.

MEMORANDUM DECISION.

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