| American Bridge Co. v Acceptance Ins. Co. |
| 2008 NY Slip Op 04298 [51 AD3d 607] |
| May 6, 2008 |
| Appellate Division, Second Department |
| American Bridge Company et al.,Appellants, v Acceptance Insurance Company, Defendant and Third-PartyPlaintiff-Respondent, et al., Defendant. Zurich American Insurance Group, Third-PartyDefendant-Appellant. |
—[*1] Montfort, Healey, McGuire & Salley, Garden City, N.Y. (Donald S. Neumann, Jr., ofcounsel), for respondent.
In an action, inter alia, for a judgment declaring that Acceptance Insurance Company isobligated to indemnify American Bridge Company and Perini Corporation in connection with thesettlement of an underlying action entitled Prokop v Perini Corp., commenced in theSupreme Court, Westchester County, under index No. 2457/99, the plaintiffs and the third-partydefendant appeal, as limited by their brief, from so much of an order of the Supreme Court,Westchester County (Nicolai, J.), entered May 31, 2006, as granted the motion of the defendantthird-party plaintiff for summary judgment enforcing a stipulation of settlement entered in opencourt on February 14, 2001, which provided for reimbursement of its half of the funding of thesettlement proceeds in the underlying action.
Ordered that the appeal by the plaintiffs is dismissed, as they are not aggrieved by the portionof the order appealed from (see CPLR 5511); and it is further,
Ordered that the order is affirmed insofar as appealed from by the third-party defendantZurich American Insurance Group; and it is further,
Ordered that the respondent is awarded one bill of costs.[*2]
During settlement proceedings held on February 14, 2001in connection with an underlying personal injury action, it was agreed, on the record, that thefunding of the settlement proceeds would be divided equally between the third-party defendantZurich American Insurance Group (hereafter Zurich), the insurance carrier for the plaintiffsAmerican Bridge Company (hereafter American Bridge) and Perini Corporation (hereafterPerini), and the defendant third-party plaintiff Acceptance Insurance Company (hereafterAcceptance), the insurance carrier for the defendant Hannibal Construction Co., Inc. It was alsoagreed, at that time, that the settlement would not affect this action, then pending, for a judgmentdeclaring that Acceptance is obligated to indemnify American Bridge and Perini in connectionwith the settlement of the underlying action. Further, it was additionally stated on the recordduring the settlement proceedings that "there will be no interest against either [of] the insurancecompanies [i.e., Acceptance and Zurich] at the time that the coverage issues are decided," andthat "the agreement is that at the time the declaratory judgment is resolved, when one carrier isobligated to reimburse the other carrier, the reimbursement will be just for the amount paid to theplaintiff without interest."
On a prior appeal in this declaratory judgment action, this Court affirmed a judgment of theSupreme Court declaring that Acceptance was not obligated to indemnify American Bridge andPerini in the underlying personal injury action (see American Bridge Co. v Acceptance Ins. Co., 40 AD3d 666[2007]). Acceptance thereafter moved for summary judgment enforcing the stipulation ofsettlement, which provided for reimbursement of its half of the funding of the settlementproceeds in the underlying action. The Supreme Court granted the motion, and we affirm.
A stipulation of settlement entered into in open court is judicially favored and will not be setaside absent a showing of cause sufficient to invalidate a contract, such as fraud or collusion(see Hallock v State of New York, 64 NY2d 224, 230 [1984]). Zurich does not seek tohave the stipulation of settlement set aside. Instead, it contends that the Supreme Courtimproperly interpreted the stipulation of settlement as providing reciprocal reimbursement to theprevailing party in this action for a declaratory judgment as to insurance coverage. We disagree.
An oral stipulation of settlement that is made in "open court" and stenographically recordedbecomes enforceable (see CPLR 2104) as a contract binding on all the parties thereto,and is governed by general contract principles for its interpretation and effect (see Fukilman v 31st Ave. Realty Corp.,39 AD3d 812, 813 [2007]). Thus, as in a matter where parties seek enforcement of acontract, the court has the responsibility of effectuating the true intent of the parties, and wherethe terms are unambiguous, this intent must be gleaned from the plain meaning of the words usedby the parties (see W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 163 [1990];Teitelbaum Holdings v Gold, 48 NY2d 51, 56 [1979]; Fukilman v 31st Ave. Realty Corp., 39AD3d 812 [2007]).
Here, the oral stipulation between the parties clearly and unambiguously expressed theparties' reciprocal intent that the insurance carrier prevailing in this action would be entitled toreimbursement from the nonprevailing party. The reciprocal nature of the agreement betweenAcceptance and Zurich is underscored by the portion of the agreement which recites that theprevailing party in the coverage action waived the receipt of interest. While Acceptance neverformally pleaded a claim against Zurich for reciprocal reimbursement, nothing prevented theinsurers from entering into a stipulation on the record extending to matters beyond the pleadings,as they apparently did in the proceedings resulting in the settlement of the underlying personalinjury action. Accordingly, the Supreme Court properly granted Acceptance's motion forsummary judgment enforcing the oral stipulation between the insurance carriers. Fisher, J.P.,Ritter, Dillon and McCarthy, JJ., concur.