| Osorio v Kenart Realty, Inc. |
| 2008 NY Slip Op 01514 [48 AD3d 650] |
| February 19, 2008 |
| Appellate Division, Second Department |
| Angel Osorio, Plaintiff, v Kenart Realty, Inc., et al.,Defendants, and Madison 45 Company et al., Defendants and Third-PartyPlaintiffs-Appellants-Respondents. Tower Insurance Company, Third-PartyDefendant-Respondent-Appellant, et al., Third-Party Defendants. |
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Law Offices of Andrew P. Saulitis, P.C., New York, N.Y., for third-partydefendant-respondent-appellant Tower Insurance Company.
In an action to recover damages for personal injuries, (1) the defendant third-party plaintiffMadison 45 Company and the third-party plaintiff American National Fire Insurance Companyappeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County(Schneier, J.), dated March 28, 2006, as (a) denied that branch of their motion which was forsummary judgment in the third-party action declaring that the insurance coverage provided by thethird-party plaintiff American National Fire Insurance Company is excess to that provided by thethird-party defendant Tower Insurance Company in connection with the defense andindemnification of the defendant third-party plaintiff Madison 45 Company in the underlyingaction, (b) denied that branch of their motion which was for summary judgment in the third-party[*2]action declaring that the third-party defendant TowerInsurance Company must fully reimburse the third-party plaintiff American National FireInsurance Company for all defense costs incurred, and (c) directed the third-party plaintiffAmerican National Fire Insurance Company and the third-party defendant Tower InsuranceCompany to "share, on a primary basis, in the defense and indemnification" of the defendantthird-party plaintiff Madison 45 Company in the underlying action, and (2) the third-partydefendant Tower Insurance Company cross-appeals, as limited by its brief, from so much of thesame order as directed it to "share, on a primary basis, in the defense and indemnification" of thedefendant third-party plaintiff Madison 45 Company in the underlying action.
Ordered that the order is reversed insofar as appealed from, on the law, those branches of themotion of the defendant third-party plaintiff Madison 45 Company and the third-party plaintiffAmerican National Fire Insurance Company which were for summary judgment in the third-partyaction declaring that the insurance coverage provided by the third-party plaintiff AmericanNational Fire Insurance Company is excess to that provided by the third-party defendant TowerInsurance Company and that the third-party defendant Tower Insurance Company must fullyreimburse the third-party plaintiff American National Fire Insurance Company for all defensecosts incurred are granted, and the matter is remitted to the Supreme Court, Kings County, forentry of an appropriate declaratory judgment in accordance herewith; and it is further,
Ordered that the cross appeal is dismissed as academic in light of our determination on theappeal; and it is further,
Ordered that one bill of costs is awarded to the defendant third-partyplaintiff-appellant-respondent Madison 45 Company and the third-partyplaintiff-appellant-respondent American National Fire Insurance Company.
The plaintiff Angel Osorio commenced this action to recover damages for personal injurieshe sustained while working on premises owned by the defendant third-party plaintiff Madison 45Company (hereinafter Madison), and leased to the defendant third-party defendant Pizza-Del,Inc., doing business as Eurostar Cafe (hereinafter Pizza-Del). As part of the lease betweenPizza-Del and Madison, Pizza-Del agreed to indemnify, hold harmless, and defend Madisonagainst all claims arising from work performed or negligent acts occurring on the premises.Pizza-Del also agreed to obtain insurance on a primary basis, with Madison named as anadditional insured.
The third-party defendant Tower Insurance Company (hereinafter Tower), is the insurer ofPizza-Del, and the third-party plaintiff American National Fire Insurance Company (hereinafterAmerican National) is the insurer of Madison. Upon receipt of the notice of occurrence, Towerdisclaimed coverage, inter alia, on the ground of late notice.
American National and Madison (hereinafter collectively the third-party plaintiffs)subsequently commenced a third-party action alleging, among other things, that Tower isobligated to provide them with a defense and indemnification in the plaintiff's underlying action.The third-party plaintiffs moved, inter alia, for summary judgment in the third-party actiondeclaring (1) that Tower must defend and indemnify Madison in the plaintiff's underlying action,(2) that the insurance coverage provided by American National is excess to that provided byTower, and (3) that Tower must fully reimburse American National for all defense costs incurred.In an order dated July [*3]15, 2004, the Supreme Court, amongother things, concluded that Tower's disclaimer was untimely and granted that branch of thethird-party plaintiffs' motion which was for summary judgment declaring that Tower wasobligated to defend and indemnify Madison pursuant to the policies and the lease. However, thecourt failed to decide the other branches of the third-party plaintiffs' motion which were, interalia, for summary judgment declaring that American National's insurance was excess and thatTower must fully reimburse American National for all defense costs incurred.
The third-party plaintiffs appealed from the order dated July 15, 2004. By decision and orderon motion dated June 29, 2005, this Court dismissed the appeal because the third-party plaintiffswere not aggrieved by the order appealed from. We noted that to the extent the third-partyplaintiffs claimed that the Supreme Court failed to decide certain branches of their motion, thoseissues were not properly before the Court as those branches of the motion remained pending andundecided (see Katz v Katz, 68 AD2d 536 [1979]).
In an order dated March 28, 2006, the Supreme Court determined those branches of thethird-party plaintiffs' motion which remained pending and undecided at the time of their appealfrom the order dated July 15, 2004. The Supreme Court determined, inter alia, that since bothpolicies contained "other insurance" clauses and both policies purported to be excess to eachother, the clauses "cancel[ed] each other out" and the insurers were obligated to share equally,"on a primary basis," in the defense and indemnification of Madison in the underlying action.Thus, the Supreme Court denied those branches of the third-party plaintiffs' motion which werefor summary judgment declaring that American National's insurance was excess to that providedby Tower and that Tower must fully reimburse American National for all defense costs incurred.The third-party plaintiffs appealed from the order dated March 28, 2006 and Towercross-appealed.
Generally, unless it would distort the plain meaning of the policies, where there are multiplepolicies covering the same risk, and each generally purports to be excess to the other, the excesscoverage clauses are held to cancel each other out and each insurer contributes in proportion toits limit amount of insurance (see State Farm Fire & Cas. Co. v LiMauro, 65 NY2d 369,374 [1985]; Lumbermens Mut. Cas. Co. v Allstate Ins. Co., 51 NY2d 651, 655 [1980];American Tr. Ins. Co. v Continental Cas. Ins. Co., 215 AD2d 342, 343 [1995]). Incontrast, however, if one party's policy is primary with respect to the other policy, then the partyissuing the primary policy must pay up to the limits of its policy before the excess coveragebecomes effective (see Great N. Ins. Co. v Mount Vernon Fire Ins. Co., 92 NY2d 682,687 [1999]).
Here, it is undisputed that the American National policy and the Tower policy cover the samerisk. Moreover, both policies have "other insurance" clauses specifying when their coverage isprimary as opposed to excess. In the order on appeal, the Supreme Court determined that "the'other insurance' clauses in both policies are effective and, therefore, both policies purport to beexcess." We disagree.
The provision of the American National policy entitled "Amendment Of Other InsuranceCondition (Occurrence Version)," by its plain wording, renders that policy excess with respect tothe Tower policy. In contrast, the "other insurance" clause contained in paragraph 10 of theTower policy, entitled "Insurance Under More than One Policy," states, in relevant part:[*4]
"(a) Insurance under this General Liability Coverage isprimary except as provided under paragraph 10c below, or unless otherwise stated. The amountof our liability is not reduced because of other insurance which applies to the loss onother than a primary basis. . . . (c) Insurance under this General Liability Coverage isexcess over any other insurance: (1) if the other insurance, whether primary, excess, contingentor on any other basis, provides: (a) fire, extended coverage, builders' risk, installation risk orsimilar coverage for your work; or (b) fire insurance for premises rented to you;or (2) if the other insurance applies to any loss arising out of the maintenance or use of aircraft,autos or watercraft which may be covered by this policy." This language renders theTower policy excess only in specific, enumerated circumstances where first-party property losscoverage would serve as primary indemnification for a loss (see Great N. Ins. Co. v MountVernon Fire Ins. Co., 92 NY2d at 689). Insofar as those circumstances do not exist in thecase at bar, Tower bears the initial responsibility for defending and indemnifying Madison in theunderlying action, and American National is entitled to full reimbursement accordingly.
In its brief, Tower challenges the propriety of the prior order dated July 15, 2004 as a basisfor its request for relief in connection with the order presently cross-appealed from. However,Tower did not appeal from that prior order, and thus, Tower's contention that such order shouldbe reversed is not properly before this Court (see CPLR 5515; Hecht v City of NewYork, 60 NY2d 57, 61 [1983]; Damiani v Federated Dept. Stores, Inc., 23 AD3d 329, 332 [2005]).Contrary to Tower's contention, its cross appeal from the order dated March 28, 2006 does notbring the prior order dated July 15, 2004 up for review pursuant to CPLR 5501 (a) (1), since thatprovision applies only to appeals from final judgments (see Cardinal Holdings v ChandreCorp., 302 AD2d 550 [2003]).
Since the third-party action seeks, in part, a declaratory judgment, we remit the matter to theSupreme Court, Kings County, for the entry of a judgment declaring that the insurance coverageprovided by American National is excess to that provided by Tower and that Tower must fullyreimburse American National for all defense costs incurred (see Lanza v Wagner, 11NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US901 [1962]). Lifson, J.P., Miller, Angiolillo and McCarthy, JJ., concur.