| Employers' Fire Ins. Co. v Brookner |
| 2008 NY Slip Op 00448 [47 AD3d 754] |
| January 22, 2008 |
| Appellate Division, Second Department |
| Employers' Fire Insurance Company,Respondent, v Andrew Brookner, Appellant, et al.,Defendants. |
—[*1] Cozen O'Connor, New York, N.Y. (John B. Galligan and Robert W. Phelan of counsel), forrespondent.
In a subrogation action, inter alia, to recover amounts paid by the plaintiff to its insureds forproperty damage, the defendant Andrew Brookner appeals from so much of an order of theSupreme Court, Kings County (Schmidt, J.), dated February 5, 2007, as denied that branch of hismotion which was to dismiss the complaint insofar as asserted against him pursuant to CPLR3211 (a) (1) and (5).
Ordered that the order is affirmed insofar as appealed from, with costs.
The medical office of the defendant Andrew Brookner was located on the third floor of abuilding owned by the plaintiff's subrogor RAIA Realty Corp. (hereinafter RAIA). The othermedical offices in the building sustained heavy water damage when a water hose on Brookner'ssurgical laser machine burst. The plaintiff insurance carrier paid the claims of its insureds, RAIA,A.E.M. Optical, Inc., doing business as Kings Highway Vision Center (the tenant of the firstfloor of the building; hereinafter AEM), and the principals of those two corporations, arisingfrom the water damage.
Alexandra Etkin, the occupant of the second floor of the building, together with her husbandEdward Etkin commenced an action (hereinafter the Etkin action) against Brookner, RAIA, andRAIA's principal, Akiva Mitzmacher, alleging property damage and personal injuries resultingfrom the water leak. The latter two defendants asserted a cross claim against Brookner, seeking[*2]indemnification or contribution. The parties subsequentlyreached a settlement agreement, under which Brookner was to pay the Etkins the sum of $30,000.Neither RAIA nor Mitzmacher was required to make any payment to the Etkins, and neitherRAIA nor Mitzmacher recovered any money from Brookner. The parties to the Etkin actionentered into a stipulation discontinuing the action, which specified that the discontinuance was"with prejudice."
The plaintiff subsequently commenced this subrogation action against Brookner and others,seeking to recover the amounts it had paid to its insureds as a result of the water damageallegedly caused by, inter alia, Brookner's negligence. Brookner moved to dismiss the complaintand all cross claims insofar as asserted against him, arguing that the instant action was barred byres judicata, based on the stipulation of discontinuance in the Etkin action, which arose from thesame occurrence. In the order appealed from, the Supreme Court denied Brookner's motion. Weaffirm the order insofar as appealed from.
A plaintiff suing as a subrogee " 'is subject to whatever rules of estoppel would apply to theinsured' " (State Farm Mut. Auto. Ins. Co. v Polge, 258 AD2d 911, 911 [1999], quotingD'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 665 [1990]). Thus, if RAIAand Mitzmacher would be barred by the doctrine of res judicata from commencing an actionagainst Brookner to recover for the property damage caused by his alleged negligence, then theplaintiff's subrogation action—at least to the extent that it seeks to recover amounts paid toRAIA and Mitzmacher—would likewise be barred.
A final judgment "bars future actions between the same parties on the same cause of action"(Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347 [1999]). This doctrine of resjudicata only bars "additional actions between the same parties on the same claims based uponthe same harm" (Matter of LaRocco vGoord, 43 AD3d 500, 500 [2007],quoted in City of New York v Welsbach Elec. Corp., 9 NY3d 124, 127-128[2007]; see Parker v Blauvelt Volunteer Fire Co., 93 NY2d at 347-348). Under thecircumstances presented here, the cross claim for indemnification or contribution asserted byRAIA and Mitzmacher in the Etkin action was not the "same claim" as the cause of action forproperty damage asserted in the plaintiff's subrogation action. Nor was the cross claim asserted inthe Etkin action based upon the "same harm" as the cause of action asserted in the subrogationaction; the cross claim was based on the harm suffered by the Etkins, while the plaintiff's causeof action was based on the harm suffered by its insureds. Thus, although the Etkin action and theinstant action have some factual issues in common, and it would have been technicallypermissible for RAIA and Mitzmacher to assert, through cross claims, causes of action to recoverfor their own property damage in the action commenced by the Etkins (see CPLR 601[b]), they were not precluded from litigating their property damage claims in a separate action(see City of New York v Welsbach Elec.Corp., 9 NY3d 124 [2007]; Xiao Yang Chen v Fischer, 6 NY3d 94, 102 [2005]).
Moreover, when the final determination relied upon for res judicata effect is a stipulation ofdiscontinuance, "the language 'with prejudice' is narrowly interpreted when the interests ofjustice, or the particular equities involved, warrant such an approach" (Dolitsky's DryCleaners v YL Jericho Dry Cleaners, 203 AD2d 322, 323 [1994]). Here, the settlement of theEtkin action did not involve, and the stipulation of discontinuance did not mention, the crossclaim for indemnification or contribution asserted by RAIA and Mitzmacher (cf. Fifty CPW Tenants Corp. v Epstein,16 AD3d 292 [2005]). The most natural understanding of the phrase "with prejudice" in thiscase is that relitigation of the Etkins' claims would be precluded. The parties could not havereasonably intended or believed that, by settling the Etkin action for the sum of $30,000,Brookner would forever extinguish not only his liability to the Etkins, but his liability to theoccupant of the first floor (AEM), the owner of the [*3]building(RAIA), and the principals of those corporations, for the separate damages they sustained as aresult of his alleged negligence.
Thus, since an action by RAIA and Mitzmacher against Brookner to recover for theirproperty damage would not be barred by res judicata, the plaintiff's subrogation action assertingthe same claims is likewise not barred. Accordingly, the Supreme Court properly denied thatbranch of Brookner's motion which was to dismiss the complaint insofar as asserted against him.
The parties' remaining contentions are without merit or need not be reached in light of ourdetermination. Prudenti, P.J., Mastro, Santucci and Lifson, JJ., concur.