| Wronka v GEM Community Mgt. |
| 2008 NY Slip Op 02835 [49 AD3d 869] |
| March 25, 2008 |
| Appellate Division, Second Department |
| Raymond C. Wronka, Plaintiff, v GEM CommunityManagement et al., Defendants and Third-Party Plaintiffs-Respondents-Appellants. Farm FamilyCasualty Insurance Company, Third-PartyDefendant-Appellant-Respondent. |
—[*1] Pinsky & Skandalis, Syracuse, N.Y. (Lauren M. Miller of counsel), for defendants third-partyplaintiffs-respondents-appellants.
In an action to recover damages for personal injuries, and a third-party action, inter alia, forcontractual indemnification and to recover the defense costs incurred in the main action pursuantto the terms of a liability insurance policy, (1) Farm Family Casualty Insurance Company appealsfrom (a) so much of an order of the Supreme Court, Orange County (Slobod, J.), datedSeptember 21, 2005, as granted that branch of the motion of GEM Community Management andHillside Village Condominium Association which was to direct it to pay, pursuant to the terms ofits liability insurance policy, the defense costs incurred in the main action prior to July 6, 2005,and denied its cross motion to dismiss the third-party complaint, and (b) so much of an order ofthe same court dated March 2, 2006, as, upon granting its motion for leave to reargue that branchof the motion of GEM Community Management and Hillside Village Condominium Association,and its cross motion, adhered to the original determination, and (2) GEM CommunityManagement and Hillside Village Condominium Association cross-appeal from (a) so much ofthe order dated September 21, 2005, as denied those branches of their motion which were todirect Farm Family Casualty Insurance Company to pay, pursuant to the terms of its liabilityinsurance policy, the defense costs incurred in the main action after July 6, 2005 and forcontractual indemnification in the main action, and denied those branches of their motion whichwere for leave to amend the third-party complaint to add a cause of action alleging breach ofcontract, and for summary judgment [*2]as to that cause ofaction, and (b) so much of the order dated March 2, 2006, as, upon granting their cross motionfor leave to reargue those branches of their motion which were to direct Farm Family CasualtyInsurance Company to pay, pursuant to the terms of its liability insurance policy, the defensecosts incurred in the main action after July 6, 2005 and for contractual indemnification in themain action, adhered to the prior determination.
Ordered that the appeal from the order dated September 21, 2005 is dismissed, without costsor disbursements, as that portion of the order was superseded by the order dated March 2, 2006,made upon reargument; and it is further,
Ordered that the cross appeal from so much of the order dated September 21, 2005, as deniedthose branches of the motion of GEM Community Management and Hillside VillageCondominium Association which were to direct Farm Family Casualty Insurance Company todefend them, pursuant to the terms of its liability insurance policy, in the main action after July 6,2005 and indemnify them in the main action, is dismissed, without costs or disbursements, asthose portions of the order were superseded by the order dated March 2, 2006, made uponreargument; and it is further,
Ordered that the order dated September 21, 2005 is reversed insofar as reviewed, on the law,without costs or disbursements, and those branches of the motion of GEM CommunityManagement and Hillside Village Condominium Association which were for leave to amend thethird-party complaint to add a cause of action alleging breach of contract, and for summaryjudgment on that cause of action, are granted; and it is further,
Ordered that the order dated March 2, 2006 is modified, on the law, without costs ordisbursements, by deleting the provision thereof which, upon reargument, adhered to so much ofthe original determination dated September 21, 2005, as granted that branch of the motion ofGEM Community Management and Hillside Village Condominium Association which was todirect Farm Family Casualty Insurance Company to pay, pursuant to the terms of its liabilityinsurance policy, the defense costs incurred in the main action prior to July 6, 2005 andsubstituting therefor a provision, upon reargument, vacating that portion of the order datedSeptember 21, 2005, and thereupon, denying that branch of the motion; as so modified, the orderis affirmed insofar as appealed and cross-appealed from.
The plaintiff slipped on ice on a walkway on property owned by Hillside VillageCondominium Association (hereinafter Hillside) and managed by GEM CommunityManagement (hereinafter GEM), and commenced this action against them. GEM and Hillsidethen commenced a third-party action against Keller Equipment Rental & Sales West, Inc.(hereinafter Keller), the contractor responsible for snow and ice removal on the property, andKeller's insurer, Farm Family Casualty Insurance Company (hereinafter Farm Family), forcontractual indemnification and to recover the defense costs incurred in the main action pursuantto the terms of Farm Family's liability insurance policy. GEM and Hillside are additionalinsureds on the Farm Family policy. By order dated July 6, 2005, the court granted Keller'smotion for summary judgment dismissing the third-party complaint insofar as asserted against it.
The Supreme Court erred in granting that branch of the motion of GEM and Hillside whichwas to direct Farm Family to pay, pursuant to the terms of its liability insurance policy, thedefense costs incurred in the main action prior to July 6, 2005. The claims against Keller havebeen [*3]dismissed. Farm Family may properly deny coveragepursuant to the terms of its liability insurance policy since it has been determined that the injuriesdid not result from a covered accident (see Central Gen. Hosp. v Chubb Group of Ins. Cos.,90 NY2d 195 [1997]; Town of Oyster Bay v Employers Ins. of Wausau, 269 AD2d387 [2000]).
That branch of the motion of GEM and Hillside which was for leave to amend the third-partycomplaint to add a cause of action alleging breach of contract against Farm Family should havebeen granted. Leave to amend shall be granted freely upon such terms as may be just (seeCPLR 3025 [b]). Here, GEM and Hillside did not unreasonably delay in seeking leave toamend, and no prejudice to Farm Family has been shown (see Santori v Met Life, 11AD3d 597 [2004]; cf. Haller v Lopane, 305 AD2d 370 [2003]).
Furthermore, upon amendment of the third-party complaint to assert a cause of actionalleging breach of contract, GEM and Hillside were entitled to summary judgment as to thatcause of action. Farm Family failed to raise an issue of fact in response to GEM and Hillside'sshowing of prima facie entitlement to judgment as a matter of law that Farm Family agreed toshare the costs of the defense in the main action. When parties enter into a preliminaryagreement, anticipating that a more formal contract will be executed later, the contract isenforceable if it embodies all the essential terms of the agreement (see Pescatore v Manniello,19 AD3d 571 [2005]; Sabetfard v Djavaheri Realty Corp., 18 AD3d 640 [2005]).Furthermore, an exchange of correspondence between counsel may constitute a bindingstipulation pursuant to CPLR 2104 (see Roberts v Stracick, 13 AD3d 1208 [2004];Gaglia v Nash, 8 AD3d 992 [2004]). Here, the material terms of the stipulation were setforth in a letter from counsel for Farm Family to counsel for GEM and Hillside dated May 4,2005, and confirmed in a reply from counsel for GEM and Hillside to counsel for Farm Familydated May 26, 2005. Farm Family now seeks to avoid enforcement of the terms that Farm Familyitself proposed (see Stefaniw v Cerrone, 130 AD2d 483 [1987]). We conclude that theexchange of correspondence presented here was sufficient to constitute an enforceable stipulationin the third-party action.
The parties' remaining contentions are without merit. Spolzino, J.P., Florio, Angiolillo andDickerson, JJ., concur.