GULF INSURANCE COMPANY v. KANEN

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

GULF INSURANCE COMPANY, a/s/o Barco Auto Leasing Corp., respondent, v. David KANEN, et al., appellants.

Decided: December 27, 2004

NANCY E. SMITH, J.P., THOMAS A. ADAMS, STEPHEN G. CRANE, and ROBERT A. LIFSON, JJ. Shayne, Dachs, Stanisci, Corker & Sauer, Mineola, N.Y. (Norman H. Dachs and Jonathan A. Dachs of counsel), for appellant David Kanen. Lewis, Johs, Avallone, Aviles & Kaufman, LLP, Melville, N.Y. (Ann K. Kandel and Michael G. Kruzynski of counsel), for appellant Howard Kanen. McDonough, Marcus, Cohn, Tretter, Heller & Kanca, LLP, New Rochelle, N.Y. (Frank T. Cara and Brian J. Divney of counsel), for respondent.

In an action, inter alia, for contractual indemnification, the defendant David Kanen appeals, as limited by his notice of appeal and brief, from so much of an order of the Supreme Court, Nassau County (Warshawsky, J.), entered August 21, 2003, as granted that branch of the plaintiff's motion which was for summary judgment on the first cause of action in the amended complaint insofar as asserted against him and denied that branch of his cross motion which was for summary judgment dismissing that cause of action insofar as asserted against him, and the defendant Howard Kanen separately appeals, as limited by his brief, from so much of the same order as granted that branch of the plaintiff's motion which was for summary judgment on the first cause of action in the amended complaint insofar as asserted against him and denied that branch of his cross motion which was for summary judgment dismissing that cause of action insofar as asserted against him.

ORDERED that the order is modified, on the law, by deleting the provision thereof granting that branch of the motion which was for summary judgment on the first cause of action in the amended complaint and substituting therefor a provision denying that branch of the motion;  as so modified, the order is affirmed insofar as appealed from, with one bill of costs payable to the appellants.

The defendants maintained an automobile insurance policy with Travelers Indemnity Company (hereinafter Travelers) with liability limits below those required under a vehicle lease (hereinafter the lease) under which the defendant David Kanen (hereinafter D. Kanen) leased a vehicle from Barco Auto Leasing Corp. (hereinafter Barco), with the defendant Howard Kanen (hereinafter H. Kanen), as guarantor. D. Kanen was involved in an automobile accident while driving the leased vehicle, causing serious injuries to an occupant of another vehicle who commenced a personal injury action against him, H. Kanen, and Barco.   The action was settled and Travelers paid its policy limit of $100,000 and the legal expenses incurred in the defense of the defendants and Barco.   Barco's insurer, Gulf Insurance Company, or its parent, Gulf Insurance Group, contributed $345,000 to the settlement pursuant to Barco's contingent and excess liability policy with the insurer.

Gulf Insurance Company, a/s/o Barco (hereinafter Gulf), commenced this action against the defendants D. Kanen and H. Kanen, inter alia, for contractual indemnification pursuant to the lease.   The Supreme Court granted that branch of Gulf's motion which was for summary judgment on the first cause of action in the amended complaint for contractual indemnification of the $345,000 it contributed to the settlement.

 CPLR 4544 renders inadmissible a document in a consumer transaction, such as the lease, the printing of which fails to meet specified minimum type sizes (see Bauman v. Eagle Chase Assocs., 226 A.D.2d 488, 489, 641 N.Y.S.2d 107).   Contrary to the Supreme Court's opinion that the defendants' objections under CPLR 4544 “exalt form over substance,” the defendants raised a triable issue of fact that precluded the grant of summary judgment (see Hamilton v. Khalife, 289 A.D.2d 444, 446, 735 N.Y.S.2d 564;  Bauman v. Eagle Chase Assocs., supra ).

 The defendants made a prima facie showing of entitlement to judgment as a matter of law through an expert affidavit demonstrating that the type size of the subject lease did not meet the requirements of CPLR 4544 (see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572;  Zuckerman v. City of New York, 49 N.Y.2d 557, 562-563, 427 N.Y.S.2d 595, 404 N.E.2d 718).   In opposition, Gulf submitted an affidavit of its expert who opined that the type size was eight points.   These contradictory conclusions presented a credibility issue requiring resolution at trial (see Barbuto v. Winthrop Univ. Hosp., 305 A.D.2d 623, 624, 760 N.Y.S.2d 199).

By contrast, the Supreme Court correctly rejected the other defenses asserted in opposition to Gulf's motion for summary judgment, including waiver (see Gilbert Frank Corp. v. Federal Ins. Co., 70 N.Y.2d 966, 968, 525 N.Y.S.2d 793, 520 N.E.2d 512), the statute of limitations (see CPLR 213[2];  McDermott v. City of New York, 50 N.Y.2d 211, 217, 428 N.Y.S.2d 643, 406 N.E.2d 460;  Loscalzo v. Lupinacci, 275 A.D.2d 349, 350, 712 N.Y.S.2d 175;  Vavallo v. Consolidated Edison Co. of N.Y., 150 A.D.2d 556, 559, 541 N.Y.S.2d 837), the anti-subrogation rule (see Hamilton v. Khalife, supra at 445-446, 735 N.Y.S.2d 564), and the unreasonableness of the underlying settlement (see Coleman v. J.R.'s Tavern, 212 A.D.2d 568, 622 N.Y.S.2d 334;  Gray Mfg. Co. v. Pathe Ind., 33 A.D.2d 739, 305 N.Y.S.2d 794, affd. 26 N.Y.2d 1045, 312 N.Y.S.2d 200, 260 N.E.2d 821;  cf. Hamilton v. Khalife, supra at 446, 735 N.Y.S.2d 564).

 The argument of the defendant D. Kanen, that the $345,000 was not paid by Gulf but by its parent, and, therefore, that Gulf had no claim, is raised for the first time on appeal and we decline to address it (see DeRise v. Kreinik, 10 A.D.3d 381, 382, 780 N.Y.S.2d 773;  Hospital for Joint Diseases v. Hertz Corp., 9 A.D.3d 392, 779 N.Y.S.2d 367;  Mann v. All Waste Sys., 293 A.D.2d 656, 741 N.Y.S.2d 272).

The defendants' remaining contentions are without merit.

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