PEERLESS INSURANCE COMPANY v. LLC

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

PEERLESS INSURANCE COMPANY, appellant, v. MICRO FIBERTEK, INC., et al., defendants, Crown Royal Ventures, LLC, respondent.

Decided: November 24, 2009

MARK C. DILLON, J.P., THOMAS A. DICKERSON, ARIEL E. BELEN, and SHERI S. ROMAN, JJ. Goldberg Segalla LLP, Mineola, N.Y. (Jeffrey L. Kingsley and Joanna M. Roberto), for appellant. Andrea G. Sawyers, Melville, N.Y. (David R. Holland of counsel), for respondent.

In an action, inter alia, for a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendant Micro Fibertek, Inc., in an underlying personal injury action entitled Wallerstein v. Crown Royal Ventures, LLC, pending in the Supreme Court, Suffolk County, under Index No. 36142/06, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Weber, J.), dated May 29, 2008, which, inter alia, granted the separate motions of the defendant Crown Royal Ventures, LLC, for leave to amend its answer and for summary judgment declaring that the plaintiff is obligated to defend and indemnify the defendant Micro Fibertek, Inc., in the underlying action.

ORDERED that the order is affirmed, with costs, and the matter is remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that the plaintiff is obligated to defend and indemnify Micro Fibertek, Inc., in the underlying action.

 Initially, we reject the plaintiff's contention that the Supreme Court erred in considering the motion of the defendant Crown Royal Ventures, LLC (hereinafter Crown Royal), for summary judgment by virtue of a prior order granting the plaintiff's motion for a default judgment against the defendant Micro Fibertek, Inc. (hereinafter Micro Fibertek).   The prior order did not determine the merits of the issues raised, and did not constitute the law of the case (see Allstate Ins. v. Liberty Lines Tr., Inc., 50 A.D.3d 712, 713, 855 N.Y.S.2d 599;  Meekins v. Town of Riverhead, 20 A.D.3d 399, 400, 798 N.Y.S.2d 133;  see also Kaufman v. Eli Lilly & Co., 65 N.Y.2d 449, 457, 492 N.Y.S.2d 584, 482 N.E.2d 63).

The Supreme Court properly awarded summary judgment to Crown Royal as an additional insured under the relevant insurance policy.   In response to Crown Royal's prima facie showing of entitlement to judgment as a matter of law, the plaintiff failed to raise a triable issue of fact (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, 427 N.Y.S.2d 595, 404 N.E.2d 718), as to whether a policy exclusion precluded coverage, or as to whether notice of the claim was timely given.

 Furthermore, Crown Royal's motion for summary judgment was not premature, since the plaintiff failed to offer an evidentiary basis to suggest that discovery might lead to relevant evidence (see Lauriello v. Gallotta, 59 A.D.3d 497, 499, 873 N.Y.S.2d 690;  Conte v. Frelen Assoc., LLC, 51 A.D.3d 620, 621, 858 N.Y.S.2d 258;  Kimyagarov v. Nixon Taxi Corp., 45 A.D.3d 736, 737, 846 N.Y.S.2d 309).

 The Supreme Court also properly granted Crown Royal's motion for leave to amend its answer.   Leave to amend pleadings should be freely given provided that the amendment is not palpably insufficient, does not prejudice or surprise the opposing party, and is not patently devoid of merit (see Gitlin v. Chirinkin, 60 A.D.3d 901, 902, 875 N.Y.S.2d 585).   A determination whether to grant such leave is within the Supreme Court's broad discretion, and the exercise of that discretion will not be lightly disturbed (id.).   Here, Crown Royal's proposed amendment was neither palpably insufficient nor patently devoid of merit, and the plaintiff did not demonstrate that it would suffer prejudice or surprise if leave to amend were granted.   Further, in light of Crown Royal's allegation that the plaintiff delayed in complying with its discovery demand by forwarding it a copy of the relevant insurance policy almost a year after it had initially requested it, the Supreme Court providently exercised its discretion in rejecting the contention that Crown Royal's motion for leave to amend the answer was untimely (see e.g. Gitlin v. Chirinkin, 60 A.D.3d at 902, 875 N.Y.S.2d 585;  cf. Peteroy v. St. Vincent's Med. Ctr. of Richmond, 278 A.D.2d 295, 718 N.Y.S.2d 199).

The plaintiff's remaining contention is without merit.

Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaring that the plaintiff is obligated to defend and indemnify Micro Fibertek in the underlying action (see Lanza v. Wagner, 11 N.Y.2d 317, 334, 229 N.Y.S.2d 380, 183 N.E.2d 670, appeal dismissed 371 U.S. 74, 83 S.Ct. 177, 9 L.Ed.2d 163, cert. denied 371 U.S. 901, 83 S.Ct. 205, 9 L.Ed.2d 164).

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