| Chunn v New York City Hous. Auth. |
| 2008 NY Slip Op 08019 [55 AD3d 437] |
| October 23, 2008 |
| Appellate Division, First Department |
| Christopher Chunn, Plaintiff, v New York City HousingAuthority, Respondent, and American Security Systems, Inc., Appellant. New York CityHousing Authority, Third-Party Plaintiff-Respondent, v American Security Systems, Inc.,Third-Party Defendant-Appellant. New York City Housing Authority, Second Third-PartyPlaintiff-Respondent, v National Casualty Company et al., Second Third-PartyDefendants-Appellants. |
—[*1] Ahmuty, Demers & McManus, Albertson (Brendan T. Fitzpatrick of counsel), for NationalCasualty Company and Scottsdale Insurance Company, appellants. Herzfeld & Rubin, P.C., New York (David B. Hamm of counsel), for respondent.
Order, Supreme Court, New York County (Louis B. York, J.), entered March 11, 2008,which granted the motion of defendant/third-party plaintiff New York City Housing Authority(NYCHA) for summary judgment declaring that third-party defendants American SecuritySystems, Inc. (ASSI) and National Casualty Company (NCC) are obligated to defend andindemnify it in the underlying personal injury action and denied ASSI's cross motion to sever thesecond third-party action and for a declaration that the indemnification provision of the service[*2]contract between NYCHA and ASSI is void andunenforceable pursuant to General Obligations Law § 5-322.1, unanimously modified, onthe law, NYCHA's motion for summary judgment denied as to the obligation of ASSI and NCCto indemnify it in the underlying action and ASSI's motion to sever granted, and otherwiseaffirmed, without costs.
The comprehensive general liability (CGL) policy issued by NCC to ASSI provides forinsurance for NYCHA as an additional insured with respect to liability for, inter alia, bodilyinjury caused, in whole or in part, by ASSI's "acts or omissions." The complaint asserts thatplaintiff's injury was caused, in whole or in part, by ASSI's acts or omissions with respect to theNYCHA building's systems. Therefore, NYCHA is entitled to a defense under the policy (seeSantos v BRE/Swiss, LLC, 9 AD3d 303 [2004]). Contrary to the insurers' contention thatthey have demonstrated as a matter of law that "there is no possible factual or legal basis onwhich [they] might eventually" be obligated to indemnify NYCHA (quoting Seaboard Sur.Co. v Gillette Co., 64 NY2d 304, 312 [1984] [internal quotation marks and citationomitted]), the affidavit by plaintiff's sister, a tenant in the building, which asserts that theintercom had been broken for several months before the incident in which plaintiff was assaulted,presents an issue of credibility that precludes summary judgment.
NYCHA is also entitled to a defense under the excess policy issued to ASSI by ScottsdaleInsurance Company (SIC), because that policy follows the form of NCC's CGL policy, underwhich NYCHA is an additional insured (see Cheektowaga Cent. School Dist. v BurlingtonIns. Co., 32 AD3d 1265, 1266-1267 [2006]).
The insurers' ground for disclaiming coverage under the owners and contractors protective(OCP) policy issued by SIC, i.e., late notice, is belied by the record, as is their contention thatnotice to NCC did not constitute notice to SIC as well. However, in any event, any delay innotice was due to misleading statements by the NCC claims department concealing the existenceof the OCP policy (see Cicero v Great Am. Ins. Co., 53 AD3d 460 [2008]).
While the duty to defend is clear, issues of fact as to liability in the underlying personalinjury action render premature the conclusion that the insurers have a duty to indemnify NYCHA(see e.g. 79th Realty Co. v X.L.O. Concrete Corp., 247 AD2d 256 [1998]).
The second third-party action should be severed to avoid the prejudice to the secondthird-party defendants that would result from the jury's awareness of the existence of liabilityinsurance (see Kelly v Yannotti, 4 NY2d 603 [1958]).
It would be premature to declare that the indemnification provisions of the contract betweenNYCHA and ASSI are void and unenforceable under General Obligations Law § 5-[*3]322.1 (see Itri Brick & Concrete Corp. v Aetna Cas. & Sur.Co., 89 NY2d 786, 795 n 5 [1997]). Concur—Lippman, P.J., Saxe, Friedman, Sweenyand Acosta, JJ.