| Netjets, Inc. v Signature Flight Support, Inc. |
| 2007 NY Slip Op 06847 [43 AD3d 1016] |
| September 18, 2007 |
| Appellate Division, Second Department |
| Netjets, Inc., Plaintiff, v Signature Flight Support, Inc.,Defendant, Signature Flight Support Corp., Respondent-Appellant, Sharp Detailing, Inc.,Appellant-Respondent, et al., Defendants. |
—[*1] Dombroff & Gilmore, New York, N.Y. (Raymond L. Mariani and Karen M. Berberich ofcounsel), for respondent-appellant.
In an action, inter alia, to recover damages for breach of contract, the defendant SharpDetails, Inc., incorrectly sued herein as Sharp Detailing, Inc., appeals (1) from so much of anorder of the Supreme Court, Westchester County (Barone, J.), entered December 5, 2005, asgranted the motion of the defendant Signature Flight Support Corp. for summary judgment on theissue of liability on the cross claims asserted by that defendant against it for contractualindemnification and to recover damages for breach of its obligation to procure insurance namingthe defendant Signature Flight Support Corp. as an additional insured and (2), as limited by itsbrief, from so much of an order of the Supreme Court, Westchester County (Smith, J.), enteredMarch 1, 2006, as, upon reargument, adhered to so much of the determination in the orderentered December 5, 2005, as granted that branch of the motion of the defendant Signature FlightSupport Corp. which was for summary judgment on the issue of liability on the cross claimasserted by that defendant and against it to recover damages for breach of its obligation toprocure insurance naming the defendant Signature Flight Support Corp. as an additional insured,and further directed it to reimburse Global Aerospace, the insurance carrier of the defendantSignature Flight Support Corp., the sum of $91,470.61 for costs and reasonable attorney's feesexpended by Global Aerospace in defending the defendant Signature Flight Support Corp., and toreimburse the defendant Signature Flight Support Corp. for all out-of-pocket expenses incurredin the defense of this action, as well as the cost of premiums, [*2]copayments, deductibles, and increases in insurance premium rates,and the defendant Signature Flight Support Corp. cross-appeals from so much of the orderentered March 1, 2006, as granted that branch of the motion of the defendant Sharp Details, Inc.,incorrectly sued herein as Sharp Detailing, Inc., which was for reargument and, upon reargument,vacated so much of the order entered December 5, 2005, as granted that branch of its motionwhich was for summary judgment on the issue of liability on its cross claim for contractualindemnification insofar as asserted against that defendant, denied that branch of its motion whichwas for summary judgment on the issue of liability on its cross claim for contractualindemnification insofar as asserted against the defendant Sharp Details, Inc., incorrectly suedherein as Sharp Detailing, Inc., and upon searching the record, awarded summary judgment infavor of the defendant Sharp Details, Inc., incorrectly sued herein as Sharp Detailing, Inc.,dismissing that cross claim.
Ordered that the appeal by the defendant Sharp Details, Inc., incorrectly sued herein as SharpDetailing, Inc., from the order entered December 5, 2005, is dismissed, without costs ordisbursements, as the portion of the order appealed from was superseded by the order enteredMarch 1, 2006, made upon reargument; and it is further,
Ordered that the order entered March 1, 2006 is modified, on the law, by deleting theprovision thereof directing the defendant Sharp Details, Inc., incorrectly sued herein as SharpDetailing, Inc., to pay Global Aeropsace, the insurance carrier of the defendant Signature FlightSupport Corp., the sum of $91,470.61; as so modified, the order entered March 1, 2006, isaffirmed insofar as appealed and cross-appealed from, without costs or disbursements.
The Supreme Court correctly determined that, after all of the causes of action asserted by theplaintiff against the defendant Signature Flight Support Corp. (hereinafter Signature), except thefirst cause of action sounding in breach of contract, were dismissed in a prior order, thedefendant Sharp Details, Inc., incorrectly sued herein as Sharp Detailing, Inc. (hereinafter Sharp),had no obligation to indemnify Signature. Moreover, with respect to plaintiff's remaining causeof action alleging Signature's breach of contract, the terms of the indemnification clause in thecontract entered into by Sharp and Signature did not obligate Sharp to indemnify Signature forSignature's own breach of its contract with the plaintiff.
However, Sharp does not dispute that its insurance policy failed to name Signature as anadditional insured. Sharp's agreement with Signature specified the nature of the insurancecoverages Sharp was supposed to maintain, and further specified that Sharp was to nameSignature as an additional insured. Such coverages included Sharp's liability for its "acts oromissions while operating on the Airport and Signature's entire leasehold." Pursuant to Sharp'sobligation to procure appropriate insurance naming Signature as an additional insured, Sharp'sinsurer would have had the duty to defend Signature in this action, to the same extent that aproperly named additional insured would have been entitled to a defense in this action (see City of New York v Evanston Ins.Co., 39 AD3d 153 [2007]; cf.Automobile Ins. Co. of Hartford v Cook, 7 NY3d 131, 137 [2006]). Instead, due toSharp's failure in this regard, Signature's own insurer was required to carry on Signature'sdefense.
Signature's damages for Sharp's breach were limited to Signature's out-of-pocket expenses inobtaining and maintaining its own separate insurance underwritten by its own insurance carrier,Global Aerospace, as well as the costs of "the premiums and any additional costs it incurred suchas deductibles, co-payments and increased future premiums" (Inchaustegui v 666 5th Ave.Ltd. Partnership, 96 NY2d 111, 114 [2001]; see American Ref-Fuel Co. of Hempstead vResource Recycling, 307 AD2d 939, 941 [2003]).[*3]
However, the Supreme Court prematurely awardedGlobal Aerospace reimbursement of "all of its incurred costs and reasonable attorney's feesexpended" up until the time of the court's adjudication. Global Aerospace is not a party to theinstant action, which has not yet been finally resolved. Global Aerospace may ultimately have asubrogation claim against Sharp to recoup its costs of defending Signature in the instant action.Pursuant to the indemnification clause, Sharp's promise to defend and indemnify Signature aroseupon "any act or failure to act or negligence" committed by Sharp. There has not yet been anyfinding that Sharp was responsible for the loss that gave rise to the claims against Signature.Thus, until responsibility for the plaintiff's loss is established (see American Ref. Fuel Co. vResource Recycling, 307 AD2d at 942), it was premature for the court to reach the issue ofwhether Signature's insurance carrier is entitled to reimbursement for defense costs from Sharp(cf. Farduchi v United Artists TheatreCircuit, Inc., 23 AD3d 613 [2005]). Crane, J.P., Krausman, Lifson and Balkin, JJ.,concur.