| Homeland Ins. Co. of N.Y. v National Grange Mut. Ins. Co. |
| 2011 NY Slip Op 03805 [84 AD3d 737] |
| May 3, 2011 |
| Appellate Division, Second Department |
| Homeland Insurance Company of New York,Respondent, v National Grange Mutual Insurance Company,Appellant. |
—[*1] Curtis, Vasile, P.C., Merrick, N.Y. (Patricia M. D'Antone of counsel), forrespondent.
In an action for a judgment declaring that the defendant is obligated to pay a proportionateshare of the defense and settlement costs incurred by the plaintiff in an underlying action entitledCoon v Olde Post Mall Apartments, pending in the Supreme Court, Dutchess County,under index No. 234/04, the defendant appeals, as limited by its brief, from so much of an orderof the Supreme Court, Suffolk County (Costello, J.), entered January 12, 2010, as denied, asuntimely, its cross motion for summary judgment.
Ordered that the order is reversed insofar as appealed from, on the law and in the exercise ofdiscretion, with costs, the defendant's cross motion for summary judgment is granted, and thematter is remitted to the Supreme Court, Suffolk County, for the entry of a judgment declaringthat the defendant is not obligated to pay a proportionate share of the defense and settlementcosts incurred by the plaintiff in the underlying action.
The owner of an apartment complex, Olde Post Mall Apartments (hereinafter Olde Post),entered into a contract with Asset Property Services, Inc. (hereinafter Asset Property), to managethe apartment complex. Pursuant to the contract, Olde Post agreed to indemnify Asset Propertyagainst personal injury claims in connection with the property unless the injury was caused byAsset Property's negligence, in which case Asset Property would indemnify Olde Post. Olde Postwas also required to carry liability insurance and include Asset Property as an insured under itspolicy. Olde Post obtained a liability insurance policy from the plaintiff Homeland InsuranceCompany of New York (hereinafter Homeland), which provides that Asset Property, as a realestate manager, is an insured under the policy. Asset Property obtained its own liability insurancepolicy from the defendant National Grange Mutual Insurance Company (hereinafter NationalGrange).
In August 2004 Vernon Coon commenced a personal injury action against Olde Post andAsset Property alleging that he sustained injuries when he slipped and fell on a wooden rampwhile delivering an appliance at the apartment complex. Homeland assigned counsel to representboth Olde Post [*2]and Asset Property as its insureds under itspolicy. National Grange, notified by Asset Property of the claim, communicated with Homelandand assigned counsel, and was assured that Homeland's policy was primary and NationalGrange's policy was excess. In April 2005, near the completion of discovery in the underlyingaction, Homeland determined that National Grange was a primary coinsurer of Asset Propertyand requested National Grange to contribute to the defense and potential settlement on behalf ofAsset Property. National Grange refused to contribute as a primary insurer. Homeland thensettled the underlying action on behalf of both Olde Post and Asset Property to the limits of itspolicy and commenced this action seeking a declaration that National Grange is obligated to payone half of the defense and settlement costs made on behalf of Asset Property. Homeland movedfor summary judgment, and National Grange cross-moved for summary judgment. The SupremeCourt denied the motion, concluding that Homeland failed to establish its prima facie entitlementto judgment as a matter of law, and denied the cross motion as untimely.
The Supreme Court improvidently exercised its discretion in denying, as untimely, NationalGrange's cross motion for summary judgment. While the cross motion was made more than 120days after the note of issue was filed and, therefore, was untimely (see Brill v City of New York, 2 NY3d648 [2004]), "an untimely motion or cross motion for summary judgment may be consideredby the court where, as here, a timely motion for summary judgment was made on nearly identicalgrounds" (Grande v Peteroy, 39AD3d 590, 591-592 [2007]; seeWhitehead v City of New York, 79 AD3d 858, 860 [2010]; Lennard v Khan, 69 AD3d 812,814 [2010]; Bressingham v JamaicaHosp. Med. Ctr., 17 AD3d 496, 497 [2005]). In such circumstances, the issues raised bythe untimely cross motion are already properly before the motion court and, thus, the nearlyidentical nature of the grounds may provide the requisite good cause (see CPLR 3212 [a])to review the merits of the untimely cross motion (see Grande v Peteroy, 39 AD3d at592). Notably, a court, in deciding the timely motion, may search the record and award summaryjudgment to a nonmoving party (see CPLR 3212 [b]).
The Supreme Court, therefore, should have entertained National Grange's cross motion forsummary judgment and, upon addressing the merits of that cross motion, should have granted it.The antisubrogation rule provides that "[a]n insurer . . . has no right of subrogationagainst its own insured for a claim arising from the very risk for which the insured was covered"(North Star Reins. Corp. v Continental Ins. Co., 82 NY2d 281, 294 [1993]; seePennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465, 471 [1986]; Romano v Whitehall Props., LLC, 59AD3d 697, 698 [2009]). "Public policy requires this exception to the general rule [ofsubrogation] both to prevent the insurer from passing the incidence of loss to its own insured andto guard against the potential for conflict of interest that may affect the insurer's incentive toprovide a vigorous defense for its insured" (North Star Reins. Corp. v Continental Ins.Co., 82 NY2d at 294-295).
Here, National Grange established its entitlement to judgment as a matter of law bydemonstrating that the policies underlying the antisubrogation rule are implicated by Homeland'shandling of the defense of its insureds in the underlying action. Homeland fashioned thelitigation to favor its insured, Olde Post, at the expense of its other insured, Asset Property, bynot vigorously pursuing a defense on behalf of Asset Property and having the same attorneyrepresent both Olde Post and Asset Property. By doing so, Homeland created a conflict betweenits interests and the interests of its insured, and attempted to shift the loss of its insured to anotherinsurer, National Grange (see North Star Reins. Corp. v Continental Ins. Co., 82 NY2d at295-296; Alinkofsky v Country-Wide Ins. Co., 257 AD2d 70, 73-74 [1999]; NationalCas. Co. v State Ins. Fund, 227 AD2d 115, 116-117 [1996]; National Union Fire Ins. Co.of Pittsburgh, Pa. v State Ins. Fund, 213 AD2d 164, 165-166 [1995]). Accordingly, pursuantto the antisubrogation rule, Homeland cannot recover from its insured, Asset Property, throughAsset Property's insurer, National Grange, for any potential liability on the part of Asset Propertyin connection with the underlying action (see Insurance Co. of Evanston v Mid-HudsonCo-Op. Ins. Co., 271 AD2d 651, 652 [2000]; Maryland Cas. Co. v Nationwide Ins.Co., 262 AD2d 458, 459 [1999]; cf. National Union Fire Ins. Co. of Pittsburgh, Pa. vHartford Ins. Co. of Midwest, 248 AD2d 78, 85-86 [1998], affd 93 NY2d 983[1999]).
Since this is a declaratory judgment action, the matter must be remitted to the SupremeCourt, Suffolk County, for the entry of a judgment declaring that National Grange is notobligated to pay a proportionate share of the defense and settlement costs incurred by Homelandin the underlying action (see Lanza v Wagner, 11 NY2d 317 [1962], appeal dismissed371 US 74 [1962], cert denied 371 US 901 [1962]). Dillon, J.P., Covello, Eng andChambers, JJ., concur.