SURETEC INSURANCE COMPANY v. ATLAS SOLAR HOLDINGS LLC (2023)

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the defendants appeal from an order of the Supreme Court, Nassau County (Steven M. Jaeger, J.), dated April 23, 2020.  The order, insofar as appealed from, granted the plaintiff's motion for summary judgment on the issue of liability and denied the defendants’ cross motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed insofar as appealed from, with costs.

In September 2016, the defendants, Atlas Solar Holdings, LLC, and Yossef Kahlon (hereinafter together the Atlas defendants) requested that the plaintiff, SureTec Insurance Company (hereinafter SureTec), issue a supersedeas bond on their behalf to secure a judgment against them in a federal action.  As a condition of the execution of the bond, SureTec required that the Atlas defendants sign indemnification agreements, which provided that the Atlas defendants would indemnify SureTec for “any and all liability, damage, loss, cost and expense of whatsoever kind or nature, including ․ attorney's fee[s], which SureTec or its agents or representatives may at any time sustain or incur by reason or in consequence of hav[ing] executed or procured the execution of the bond.”  In a subsequent state action, the Atlas defendants attempted to fix the supersedeas bond as an undertaking in connection with an order of attachment, and SureTec opposed the Atlas defendants’ application.

SureTec commenced this action, inter alia, alleging breach of contract and seeking to recover attorneys’ fees that it incurred by opposing the order of attachment.  SureTec moved for summary judgment on the issue of liability, and the Atlas defendants cross-moved for summary judgment dismissing the complaint.  By order dated April 23, 2020, the Supreme Court, among other things, granted SureTec's motion and denied the Atlas defendants’ cross motion.  The Atlas defendants appeal.

“[T]he right to contractual indemnification depends upon the specific language of the contract” (Garcia v. Emerick Gross Real Estate, L.P., 196 A.D.3d 676, 679, 152 N.Y.S.3d 462, quoting Kader v. City of N.Y., Hous. Preserv. & Dev., 16 A.D.3d 461, 463, 791 N.Y.S.2d 634).  Here, SureTec demonstrated its prima facie entitlement to judgment as a matter of law on the issue of liability by submitting the indemnification agreements, the supersedeas bond, and proof that it incurred attorneys’ fees in the execution of its interests related to the bond (see Utica Mut. Ins. Co. v. Cardet Constr. Co., Inc., 114 A.D.3d 847, 849, 981 N.Y.S.2d 118;  International Fid. Ins. Co. v. Kulka Constr. Corp., 100 A.D.3d 967, 968, 954 N.Y.S.2d 638).

In opposition, the Atlas defendants failed to raise a triable issue of fact.  Contrary to the Atlas defendants’ contentions, the language of the indemnification agreements applies to the attorneys’ fees related to SureTec's efforts in protecting its interests and obligations under the supersedeas bond, and it was reasonable for SureTec to incur attorneys’ fees when the Atlas defendants improperly attempted to alter SureTec's obligation under the supersedeas bond (see Bier Pension Plan Trust v. Estate of Schneierson, 74 N.Y.2d 312, 315, 546 N.Y.S.2d 824, 545 N.E.2d 1212;  Excelsior Capital, LLC v. Superior Broadcasting Co., Inc., 82 A.D.3d 696, 698, 918 N.Y.S.2d 148;  cf.  American Motorists Ins. Co. v. Trans Intl. Corp., 265 A.D.2d 280, 281, 696 N.Y.S.2d 186;  American Motorists Ins. Co. v. Napco Sec. Sys., Inc., 244 A.D.2d 197, 197, 665 N.Y.S.2d 273).

Accordingly, the Supreme Court properly granted SureTec's motion for summary judgment on the issue of liability and properly denied the Atlas defendants’ cross motion for summary judgment dismissing the complaint.

IANNACCI, J.P., CHAMBERS, MALTESE and TAYLOR, JJ., concur.