| Frank v Continental Cas. Co. |
| 2014 NY Slip Op 08808 [123 AD3d 878] |
| December 17, 2014 |
| Appellate Division, Second Department |
[*1]
| Murray L. Frank et al.,Appellants, v Continental Casualty Company, Also Known as CNA, et al.,Respondents. |
Menaker & Herrmann, LLP, New York, N.Y. (Richard G. Menaker of counsel),for appellants.
Colliau Carluccio Keener Morrow Peterson & Parsons, New York, N.Y.(Marian S. Hertz of counsel), for respondent Continental Casualty Company.
Havkins Rosenfeld Ritzert & Varriale, LLP, New York, N.Y. (Alexander R.Kearse of counsel), for respondent Leading Insurance Group Insurance Co., Ltd.
In an action, inter alia, for a judgment declaring that the defendants ContinentalCasualty Company and Leading Insurance Group Insurance Co., Ltd., are obligated todefend and indemnify the plaintiffs in an underlying action entitled Colon v Frank,pending in the Supreme Court, Kings County, under index No. 4224/09, theplaintiffs appeal, as limited by their brief, from so much of an order of the SupremeCourt, Kings County (Vaughan, J.), dated March 20, 2013, as granted the motion of thedefendant Continental Casualty Company for summary judgment dismissing thecomplaint insofar as asserted against it, granted the separate motion of the defendantLeading Insurance Group Insurance Co., Ltd., for summary judgment declaring that itwas not obligated to defend or indemnify the plaintiff Murray L. Frank in the underlyingaction, and denied those branches of the plaintiffs' cross motion which were for summaryjudgment declaring that they are additional insureds under a policy issued by thedefendant Continental Casualty Company and that Continental Casualty Company isobligated to defend them in the underlying action.
Ordered that the order is modified, on the law, (1) by deleting the provision thereofgranting the motion of the defendant Continental Casualty Company for summaryjudgment, and substituting therefor a provision denying that motion, and (2) by deletingthe provision thereof denying those branches of the plaintiffs' cross motion which werefor summary judgment declaring that they are additional insureds under the policy issuedby the defendant Continental Casualty Company and that the defendant ContinentalCasualty Company is obligated to defend them in the underlying action, and substitutingtherefor a provision granting those branches of the plaintiffs' cross motion; as somodified, the order is affirmed insofar as appealed from, with one bill of costs payable bythe defendant Continental Casualty Company to the plaintiffs, and one bill of costspayable by the plaintiffs to the defendant Leading Insurance Group Insurance Co., Ltd.,and the matter remitted to the Supreme Court, Kings County, for the entry of a judgmentdeclaring that the plaintiffs are additional insureds under the policy issued by thedefendant Continental Casualty Company, that the defendant Continental CasualtyCompany is obligated to defend the plaintiffs in the underlying action, and that thedefendant Leading Insurance Group Insurance Co., Ltd., is not obligated to defend orindemnify the plaintiffs in the underlying action.
[*2] At issue in this case is the defendant insurance carriers'duty to defend or indemnify the plaintiffs in an underlying action against the plaintiffs torecover damages for personal injuries allegedly sustained on August 25, 2008, whenGloria Colon allegedly slipped and fell due to a defective condition on the publicsidewalk outside of premises owned by the plaintiffs. At her deposition, Colon claimedthat, as she walked past clothing racks on the sidewalk, she tripped, and her husbandthereafter told her that she tripped on a crack in the sidewalk.
The plaintiffs leased the premises to White Plains Sportswear Corp., which in turnsubleased the premises to Pretty Girl, Inc. The general liability insurance carrier of WhitePlains Sportswear Corp. was Continental Casualty Company (hereinafter Continental),and the general liability insurance carrier of Pretty Girl, Inc., was Leading InsuranceGroup Insurance Co., Ltd. (hereinafter Leading).
In the order appealed from, the Supreme Court granted Continental's motion forsummary judgment, and Leading's separate motion for summary judgment, and deniedthose branches of the plaintiffs' cross motion which were for summary judgmentdeclaring that they are additional insureds under Continental's policy and that Continentalis obligated to defend them in the underlying action. We conclude that Continental isobligated to defend the plaintiffs in the underlying action, and that Leading is not soobligated.
An insurance carrier's duty to defend arises whenever the allegations in a complaintstate a cause of action that gives rise to the reasonable possibility of recovery under thepolicy. If any of the claims against an insured arguably arise from covered events, theinsurer is required to defend the entire action (see Fieldston Prop. Owners Assn., Inc. v Hermitage Ins. Co.,Inc., 16 NY3d 257, 264 [2011]; Scottsdale Indem. Co. v Beckerman, 120 AD3d 1215[2014]; Salt Constr. Corp. vFarm Family Cas. Ins. Co., 120 AD3d 568 [2014]). If the allegations of thecomplaint are even potentially within the language of the insurance policy, there is a dutyto defend (see Town of Massena v Healthcare Underwriters Mut. Ins. Co., 98NY2d 435, 443 [2002]; NaturalOrganics, Inc. v OneBeacon Am. Ins. Co., 102 AD3d 756, 758 [2013]; City of New York v Safeco Ins.Co. of Am., 31 AD3d 478, 480 [2006]).
On its motion, Continental failed to establish, prima facie, that it had no duty underthe subject policy to defend the plaintiffs in the underlying action. The Continentalpolicy contains an endorsement stating that a lessor of premises is an additional insuredwith respect to liability arising out of the ownership, maintenance, or use of the specificpart of the premises leased. The plaintiffs, who are the owners and lessors of the subjectpremises, established that their potential liability in the underlying action arises out of theownership, maintenance, or use of the specific part of the premises leased toContinental's insured, White Plains Sportswear Corp., and sublet to Pretty Girl, Inc.
Inasmuch as Administrative Code of the City of New York § 7-210imposes liability on owners of commercial property for defective conditions onsidewalks, the plaintiffs' potential liability arises from their ownership of the leasedpremises (see L&B Estates,LLC v Allstate Ins., 71 AD3d 834, 836 [2010]). The underlying claim arises outof the maintenance or use of the leased premises, as the sidewalk was necessarily usedfor access in and out of the leased building (see ZKZ Assoc. v CNA Ins. Co., 89NY2d 990 [1997]; 1515Broadway Fee Owner, LLC v Seneca Ins. Co., Inc., 90 AD3d 436, 437 [2011];Jenel Mgt. Corp. v Pacific Ins.Co., 55 AD3d 313 [2008]; Ambrosio v Newburgh Enlarged City School Dist., 5 AD3d410, 412 [2004]). Continental's remaining contentions are without merit. Since theallegations in the complaint are potentially within the language of the Continental policy,Continental has a duty to defend the plaintiffs in the underlying action. Thus, theSupreme Court should have denied Continental's motion and granted those branches ofthe plaintiffs' cross motion which were for summary judgment declaring that they areadditional insureds under the policy issued by Continental and that Continental isobligated to defend them in the underlying action.
However, the Supreme Court did not err in granting Leading's separate motion forsummary judgment, since, at the time of the accident, the plaintiffs were not listed asadditional insureds under the policy. The plaintiff Murray L. Frank was not listed as anadditional insured under an endorsement until November 21, 2008, about three monthsafter the accident. Therefore, Leading had no duty to defend or indemnify Frank or anyof the other plaintiffs (see YorkRestoration [*3]Corp. v Solty's Constr., Inc., 79AD3d 861, 862 [2010]; ADF Constr. Corp. v Home Insulation &Supply, 237 AD2d 915, 916 [1997]).
The plaintiffs failed to offer an evidentiary basis to suggest that further discoverymight lead to relevant evidence. The mere hope or speculation that evidence sufficient todefeat a motion for summary judgment may be uncovered during the discovery process isan insufficient basis for denying a motion for summary judgment (see Hanover Ins. Co. v Prakin,81 AD3d 778, 780 [2011]; Woodard v Thomas, 77 AD3d 738, 740 [2010]).
Since this is, in part, a declaratory judgment action, we remit the matter to theSupreme Court, Kings County, for the entry of a judgment declaring that the plaintiffsare additional insureds under the policy issued by the defendant Continental CasualtyCompany, that the defendant Continental Casualty Company is obligated to defend themin the underlying action, and that the defendant Leading Insurance Group Insurance Co.,Ltd., is not obligated to defend or indemnify the plaintiffs in the underlying action(see Lanza v Wagner, 11 NY2d 317, 334 [1962]). Rivera, J.P., Hinds-Radix,Duffy and LaSalle, JJ., concur.