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SENECA INSURANCE COMPANY a/s/o SVA Holdings, LLC, Plaintiff, v. PERSPECTIVE CONSTRUCTION CORP., Ashland Maintenance Organization, Ashar Cleaning Corp. and Broom Sweep Cleaning Inc., Defendants.
The following papers numbered E133-E235 read on this motion by Plaintiff for an order ranting summary judgment pursuant to CPLR 3212(b) against Perspective Construction Corp. (“Perspective”) as no triable issues of fact exist regarding Perspective's obligations under the lease and Perspective's duty to indemnify SVA for this loss; and Defendant Perspective's for an order pursuant to CPLR 3212(b) granting it summary judgment as a matter of law, in its entirety, dismissing the Plaintiff's Verified Complaint against it.
Notice of Motions-Affirmation-Exhibits-Memo of Law E133-E165, E197-E201
Affirmation in Opposition-Exhibits-Memo of Law E216-E232
Reply Affirmation E233
Notice of Motions-Affirmation-Exhibits-Memo of Law E166-E196
Affirmation in Opposition-Exhibits-Memo of Law E202-E215
Reply Affirmation E234-E235
Upon the foregoing, it is ordered that Plaintiff's motion is denied and Defendant Perspective's motion is granted in part and denied in part for the following reasons:
Plaintiff commenced this action by filing a Summons and Verified Complaint on September 20, 2018, wherein it asserted a cause of action for breach of contract—contractual indemnification, common law indemnification, breach of contract for failing to procure insurance, and contribution against Defendant Perspective. This action was discontinued against Defendants Ashland Maintenance Organization (“Ashland”), Ashar Cleaning Corp and Broom Sweep Cleaning Inc. by Stipulation of Discontinuance, dated April 2, 2021 and file on April 6, 2021 under E-129. The following is undisputed: In an action entitled Bertha P. Gonzalez v SVA Holdings, LLC, Index Number 707669/14 in Supreme Court, Queens County (“underlying action”), Bertha Gonzalez (“Gonzalez”) alleged she sustained personal injuries on January 2, 2014 when she slipped and fell on snow and ice on the sidewalk at the premises located at 45-15 Barnett Avenue, Sunnyside, New York (“premises”). The premises was owned by SVA and occupied by Perspective pursuant to a Lease. Gonzalez obtained a default judgment against SVA, and an Inquest was held by Hon. Robert L. Nahman. After the hearing, Judge Nahman determined Gonzalez sustained damages in the amount of $1,766,409.00 with interest thereon from March 26, 2015, and was granted a judgment for said amount. Subsequently, SVA moved to vacate the default and Gonzalez opposed. While the default judgment motion was pending, SVA settled the claim with Gonzalez at a mediation on August 13, 2018 for $290,000.00.
Plaintiff now moves for summary judgment against Perspective. In support thereof, Plaintiff has submitted, among other things, the following: Gonzalez's deposition transcript; Gonzalez's affidavit, dated July 2, 2019, with Exhibits; Photographs; Nathan Rosenblatt's deposition transcript; weather report issued by the U.S. Department of Commerce on December 19, 2017; Gonzalez's affidavit, dated February 21, 2018; George Wright's affidavit, dated February 21, 2018; Lease; Gencer Hepozden's (Partner at Perspective) deposition transcript; Ara Araz's (owner of SVA) deposition transcript; SVA's motion to vacate the Default Judgment in the underlying action; Dr. Jerry A. Lubliner IME Report, dated July 7, 2015; Inquest Minutes; Judgment; Beverly Fraser Ford's (Senior Claims examiner for Seneca) deposition transcript; settlement documents; Seneca's Letter to Colony Insurance, dated November 17, 2017; and Colony Insurance's Letter to Seneca, dated November 9, 2017. At her deposition on August 19, 2020, Gonzalez testified she has resided at 28416 41st Street, Apartment B5, Astoria, New York for twenty years, and is an employee of Ashland. On January 2, 2014 at approximately 4:30 p.m., she drove from her home to the accident location, parked her car and walked to the subject premises to get her paycheck. As she was walking on the sidewalk abutting Perspective's premises, she slipped and fell on snow on the sidewalk. She marked a photograph showing that the area where she slipped and fell was the part of the sidewalk abutting Perspective's premises. She testified that there was snow on the ground when she parked her car, but it was not snowing at the time of her accident. Although the sidewalk abutting Perspective's premises was covered in snow, the remainder of the sidewalk abutting Ashland's premises was “clean.” In her affidavit, notarized on February 21, 2018 and submitted in opposition to the motion to vacate the default judgment in the underlying action, she stated that she woke up at 7:00 am on January 2, 2014 and observed snow on the ground. She further stated that it did not snow or rain from the time she woke up on January 2, 2014 until and including the time of her accident.
Nathan Rosenblatt, Ashland's owner, testified that Ashland had cleaned the sidewalk abutting its premises but did not engage in snow removal efforts for the sidewalk abutting Perspective's premises. He also testified that immediately after the accident, Gonzalez entered Ashland's premises and advised that she slipped and fell on the sidewalk injuring her wrist. Prior to Gonzalez's accident, Rosenblatt had gone out several times to shovel snow from the sidewalk abutting Ashland's premises.
Hepozden testified that Perspective's hours of operation were 7:00 a.m. to 4:30 p.m. At the time of Gonzalez's accident, Perspective was in possession of the premises and was responsible to engage in all snow and ice removal on the sidewalk abutting the premises. He also testified that SVA never performed snow removal at the premises. He further testified that Perspective maintained general liability insurance policy as well as an umbrella policy in 2014, pursuant to the terms of the lease. He also did not learn of the underlying action until he was served with litigation papers for the instant matter. However, he did concede that the Landlord had mentioned the underlying accident to him three years ago. Nevertheless, he denied ever receiving a letter Seneca sent to Colony nor did he receive the letter from Colony to Seneca in November of 2017.
Araz testified that the subject premises consisted of several commercial spaces which were leased to Perspective and Ashland on the date of the underlying claim. He also testified that Perspective did not perform snow removal at the premises, including on the date of the underlying accident. He did not speak to anyone at Perspective about the underlying action even after he received notice of the default judgment on or about April 27, 2017 from Gonzalez's attorney. In his affidavit, submitted in support of SVA's motion to vacate the default judgment, he stated that SVA had a meritorious defense to underlying action in that there was a storm in progress at the time of the accident. He claimed that according to the weather records, there was light snow from 3:51 a.m. until 5:51 am and freezing rain from 11:57 am until 2:51 pm on the day of Gonzalez's accident.
The weather report indicated that on January 2, 2014 there was freezing drizzle and snow, with a total snowfall of 3.4 inches. It also shows that on January 2, 2014, there was snow at 3:51 a.m. In his affidavit submitted in support of Gonzalez's opposition to SVA's motion to vacate the default judgment in the underlying action, George Wright, a professional Meteorologist, stated that on January 2, 2014 there was light snowfall from 3:45 a.m. to 5:45 a.m., and there was no precipitation occurred after this time that would have produced snow or ice on the subject sidewalk through the time of Gonzalez's accident. In reaching these conclusions, he analyzed, among other things, the official certified copies of weather and climatological data recorded by the National Weather Service (“NWS”) for the weather station at Central Park, La Guardia Airport (“La Guardia”) and John F. Kennedy Airport (“JFK”). The weather station in Central Park is located approximately 3.5 miles northwest of the premises, the weather station at La Guardia is located approximately 3.5 miles northeast of the premises and the weather station at JFK is located approximately 12 miles southeast of the premises. He noted that while the weather stations at La Guardia and JFK reported light freezing drizzle that amounted to an insignificant trace of precipitation, the weather station at Central Park did not report any precipitation after the snow ended there at 5:35 a.m. through the time of Plaintiff's accident on January 2, 2014. According to Mr. Wright, a trace of precipitation is defined by the NWS as less than one one-hundredth of an inch (0.01-in) and is considered unmeasurable. He concluded that since the weather stations at La Guardia and JFK are located on the coast of Long Island Sound and Jamaica Bay, the marine environment at these locations have a higher relative humidity. Thereby, he concluded light freezing drizzle formed in this moist environment and fell at La Guardia between 11:56 am and 3:19 pm and at JFK between 11:35 am and 2:44 pm, but Central Park reported no precipitation at any time during this period. As such, he concluded there was no storm in progress, since no additional precipitation occurred after approximately a 5:45 a.m. Thereby, he opined that the snowy, icy condition Gonzalez slipped and fell on was formed by the snow that fell prior to 5:45 a.m. on January 2, 2014 and was present on the subject sidewalk for than ten hours before the accident.
On or about April 19, 2012, Perspective, as tenant, entered into a lease with SVA, as owner for the subject premises, for a ten year term for a portion of the premises located at 45-15 Barnett Avenue, Long Island City, New York. Section 8.02(a) provide:
Tenant shall obtain and keep in full force and effect during the Term, at its own cost and expense, the following insurance (collectively “Tenant's Insurance”):
(a) Commercial general liability insurance covering the operations of Tenant with limits of $1,000,000 per occurrence Bodily Injury and Property Damage, $1,000,000 per occurrence Personal & Advertising Injury, $1,000,000 Products Liability and Completed Operations, $1,000,000 Fire Damage Legal Liability and $2,000,000 General Aggregate limit per location. The policy shall be written on an occurrence basis subject to no deductible
Section 8.03 provides:
All policies of insurance required in Section 8.02 above shall be endorsed to name Landlord as “additional insured” using form CG 2010 (11/85) or its equivalent. Definition of “additional insured” shall include all partners, officers, directors, employees, agents and representatives of the named entity, including its managing agent. Further, coverage for “additional insured” shall apply on a primary basis to any insurance carried by Landlord, whether collectible or not.
Section 8.06 provides, in pertinent part, that Perspective agreed to:
․ defend, indemnify and hold Landlord ․ harmless from and against any and all claims, loss (including attorney's fees, witnesses’ fees and all court costs), damages, expense and liability (including statutory liability), resulting from injury and/or death of any person or damage to or loss of any property arising out of any negligent or wrongful act, error or omission or breach of contract in connection with the operations of Tenant arising from or in connection with the possession, use, occupancy, management, repair, maintenance or control of the Premises, or any portion thereof The duty to defend, indemnify and hold harmless shall not depend on whether any indemnitee either shall or shall not be reimbursed by insurance, and shall survive the expiration or earlier termination of this Lease.
Section 11.05 provides that:
Tenant shall, at its cost and expense, take good care of, maintain, keep clean and free from garbage, debris, ice and snow, the interior of the Premises, any sidewalks, curbs and grounds immediately in front of the Premises. Additionally, Tenant shall, at its cost, keep free from debris, ice and snow, any parking areas, loading docks and roadways exclusively servicing the Premises.
Section 20.02 provides that:
Tenant hereby indemnifies Landlord against liability in connection with or arising from (a) any default by Tenant in the performance of any provisions of this Lease, and/or (b) the use or occupancy or manner of use or occupancy of the Premises by Tenant or any person claiming by, through or under Tenant, and/or (c) any acts, omissions or negligence of Tenant or any such person, or the contractors, agents, employees, invitees or licensees of Tenant or any such person, in or about the Premises either prior to, during or after the expiration of the Term.
In a letter, dated November 17, 2017, Seneca tendered the defense of the underlying action to Colony Insurance Company, Perspective's insurance carrier, seeking defense and indemnification on behalf of SVA approximately nine months prior to settling the underlying claim. In a letter, dated November 9, 2017,1 Colony notified Seneca it was denying coverage for the underlying claim, because the date of the underlying accident occurred pre-dated the inception of the policy. Colony's letter indicated that it was mailed to SVA, SVA's counsel and Perspective.
Based upon the foregoing, Plaintiff argues it is entitled to summary judgment because Perspective is responsible to indemnify it for the settlement sums paid to Gonzalez in the underlying action since there is actual and potential liability for Gonzalez's injuries because it was not snowing at the time of the accident, the snow ceased more than four (4) hours prior to the accident, and the sidewalk was not shoveled when the accident occurred. Plaintiff further argues the settlement was reasonable and made in good faith.
In opposition, Perspective argues Seneca failed to establish it is entitled to either contractual indemnification and/or common law indemnification. It argues that Seneca is not entitled to contractual indemnification, because Seneca failed to establish notice was served upon Perspective notifying it of the settlement in the underlying action. Perspective further argues that it did not owe a duty to Gonzalez to remove the snow and ice pursuant to the storm in progress doctrine. Perspective notes that in support of its motion to vacate the default judgment in the underlying action, Seneca argued it was not negligent due to the storm in progress doctrine, whereas now Seneca argues that the storm in progress defense is inapplicable. Moreover, Perspective argues Seneca's expert affidavit is insufficient because it based its findings on data from Central Park and not on data from Queens County where the accident occurred. Perspective has also submitted an affidavit from Howard Altschule, Certified Consulting Meteorologist and John Lombardo, Consulting Meteorologist and their report, as well as the certified meteorological and raw climatological data from the weather stations at Central Park, La Guardia and JFK, on which they relied upon. In their reports, Altschule and Lombardo stated that on January 2, 2014 mostly continuous light snow fell from approximately 3:46 a.m. through 6:30 a.m. After a lull in the precipitation, mostly continuous freezing drizzle fell from approximately 11:56 a.m. through 3:19 p.m. After another lull in the precipitation, mostly continuous light to occasionally moderate snow fell from approximately 6:25 p.m. through and beyond 11:59 p.m. Consequently, approximately 3.9” of new snow, 0.27” of liquid equivalent precipitation, and a coating of new ice/glaze less than 1/10th of an inch thick accumulated on January 2, 2014.
The proponent of a summary judgment motion must tender evidentiary proof in admissible form eliminating any material issues of fact from the case (see Alvarez v Prospect Hosp., 68 NY2d 320 ). Once this showing has been made, the burden shifts to the non-moving party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact that require a trial for resolution (see Alvarez v Prospect Hosp., supra; Zuckerman v City of New York, 49 NY2d 557 ). Failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 ).
“Subrogation is an equitable doctrine which allows an insurer to ‘stand in the shoes’ of its insured to seek indemnification from third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse” (Am. Ref-Fuel Co. of Hempstead v. Res. Recycling, Inc., 307 AD2d 939, 941-942 [2d Dept. 2003], internal quotations omitted). The subrogation doctrine “has a dual objective. It seeks, first, to prevent the insured from recovering twice for one harm, as it might if it could recover from both the insurer and from a third person who caused the harm, and, second, to require the party who has caused the damage to reimburse the insurer for the payment the insurer has made ․ The doctrine is liberally applied for the protection of those who are its natural beneficiaries—insurers that have been compelled by contract to pay the loss caused by the negligence of another” (id.).
A party's right to contractual indemnification depends upon the specific language of the relevant contract (see Crutch v 421 Kent Dev., 192 AD3d 982 [2d Dept. 2021]; Jara v Costco Wholesale Corp., 178 AD3d 687 [2d Dept. 2019]; Sawicki v GameStop Corp., 106 AD3d 979, 981 [2d Dept. 2013]; Alfaro v 65 W. 13th Acquisition, LLC, 74 AD3d 1255 [2d Dept. 2010]). “A promise to indemnify should not be found unless it can be clearly implied from the language and purpose of the entire agreement and the surrounding circumstances” (see Crutch v 421 Kent Dev., supra). Moreover, “a party seeking contractual indemnification must prove itself free from negligence, because to the extent its negligence contributed to the accident, it cannot be indemnified therefor” (Cava Constr. Co., Inc. v Gealtec Remodeling Corp., 58 AD3d 660, 662 [2d Dept. 2009]; see General Obligations Law § 5-322.1). “Likewise, [i]n order to establish a claim for common-law indemnification, a party must prove not only that [it was] not negligent, but also that the proposed indemnitor ․ was responsible for negligence that contributed to the accident or, in the absence of any negligence, had the authority to direct, supervise, and control the work giving rise to the injury” (Buffardi v BJ's Wholesale Club, Inc., 191 AD3d 833, 834 [2d Dept. 2021]).
Here, the Court finds issues of fact exist with regard to whether Seneca is entitled to contractual indemnification pursuant to the terms of the lease and/or common law indemnification against Perspective. “It is well settled that where an indemnitor does not receive notice of an action settled by the indemnitee, in order to recover reimbursement [for the settlement], [the indemnitee] must establish that [it] would have been liable and that there was no good defense to the liability” (Zurich Am. Ins. Co. v Tower Natl. Ins. Co., 159 AD3d 418, 419 [2d Dept. 2018], internal quotations omitted). The Court finds Seneca failed to establish Perspective was served with notice of the underlying action. Seneca claims Perspective received notice of the underlying action through the submission of the letter Colony mailed to SVA in November 2017, which was purportedly sent to Perspective. However, Seneca did not submit proof of mailing of this letter, nor was an affidavit from Colony submitted indicating this letter was mailed to Perspective. In any event, Hepozden, Perspective's owner, testified that he did not learn of the underlying action until he was served with papers for the instant matter.
The Court also finds issues of fact exist as to whether Perspective would have been liable for the underlying accident. “Under the so-called ‘storm in progress’ rule, a property owner will not be held responsible for accidents occurring as a result of the accumulation of snow and ice on its premises until an adequate period of time has passed following the cessation of the storm to allow the owner an opportunity to ameliorate the hazards caused by the storm (Bryant v Retail Prop. Tr., 186 AD3d 793, 793-794 [2d Dept. 2020]). The Court finds Seneca is not precluded from asserting that the storm in progress doctrine does not apply even though it asserted said defense in support of its motion to vacate the default judgment in the underlying action. Seneca asserted it did not learn of the issue regarding this defense until it reviewed Gonzalez's opposition papers. Moreover, the underlying action was settled prior to a determination on the motion to vacate the default judgment. However, contrary to Seneca's claims, Gonzalez was not an eyewitness to the weather in Long Island City from the time she awoke at 7:00 am until the moment of her accident later that day at 4:30 pm. Gonzalez testified that she resided in Astoria and did not leave her home on the day of the accident until she drove to Long Island City to collect her paycheck.
The Court also finds issues of fact exist with respect to the parties expert reports. Seneca's expert stated that light freezing drizzle formed in this moist environment and fell at La Guardia between 11:56 am and 3:19 pm, and at JFK between 11:35 a.m. and 2:44 p.m., but Central Park reported no precipitation during this period. However, Perspective's expert stated that after a lull in the precipitation, mostly continuous freezing drizzle fell from approximately 11:56 am through 3:19 pm. Consequently, an issue of fact exists regarding whether there was freezing rain fell between 11:56 am and 3:19 pm (Sherman v New York State Thruway Authority, 27 NY3d 1019 ) (“The undisputed facts that precipitation was falling at the time of claimant's accident and had done so for a substantial time prior thereto, while temperatures remained near freezing, established that the storm was still in progress and that the [Defendant's] duty to abate the icy condition had not yet arisen”). Accordingly, Plaintiff's motion is denied.
Defendant Perspective separately moves for summary judgment, dismissing Plaintiff's Complaint in its entirety. Based upon the foregoing, the branch of the motion seeking summary judgment, dismissing Plaintiff's cause of action for contractual and common law indemnification is denied. In support of the instant motion, Perspective made similar arguments to those it asserted in opposition to Plaintiff's motion for summary judgment.
The branch of the motion seeking summary judgment, dismissing Plaintiff's claim for breach of contract for failing to procure insurance is granted. The Court finds Defendant Perspective established its prima facie entitlement to judgment as a matter of law dismissing the cause of action alleging breach of contract for the failure to procure insurance through the submission of the policy it procured from Utica First Insurance Company, which was in effect on the day of Gonzalez's accident and named SVA as an additional insured (Simmons v Berkshire Equity, LLC, 149 AD3d 1119 [2d Dept. 2017]). The Court also finds Plaintiff's claim the lease not only requires Perspective to name the Landlord as “additional insured” under the policy of insurance, but Perspective's policy applies on a primary basis to any insurance carried by the Landlord, whether collectible or not is without merit. The Court further finds Plaintiff's claim that the Utica policy must be the primary policy, and since Utica has not provided additional insured coverage to SVA on a primary basis for this loss, Perspective violated its obligation to procure insurance under the lease is also without merit. Accordingly, the cause of action for breach of contract for failure to procure insurance is dismissed.
The remaining branch of the motion seeking summary judgment, dismissing the cause of action for contribution is granted without opposition. Accordingly, the cause of action for contribution s dismissed.
1. Although Colony's letter is dated November 9, 2017, it references a message it sent to Seneca on November 24, 2017 and Seneca's letter, dated November 17, 2017. Thereby, it appears the date of Colony's letter may be incorrect. In addition, at Hepozden it was also by counsel that the date of Colony's letter “may be a typo (TR. P. 56, L 7-14).
Robert I. Caloras, J.
Response sent, thank you
Docket No: Index No. 714373/18
Decided: October 08, 2021
Court: Supreme Court, Queens County, New York.
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