| Carlson v American Intl. Group, Inc. |
| 2015 NY Slip Op 05817 [130 AD3d 1479] |
| July 2, 2015 |
| Appellate Division, Fourth Department |
[*1]
| Michael J. Carlson, Sr., Individually and asAdministrator of the Estate of Claudia D'Agostino Carlson, Deceased, and as Assigneeof William Porter, Respondent-Appellant, v American International Group, Inc.,et al., Appellants-Respondents, and DHL Express (USA), Inc., Formerly Known asDHL Worldwide Express, Inc., Respondent. |
Hodgson Russ LLP, Buffalo (Kevin D. Szczepanski of counsel), fordefendants-appellants-respondents American International Group, Inc., Aig DomesticClaims, Inc. and National Union Fire Insurance Company of Pittsburgh, Pa.
Rubin, Fiorella & Friedman LLP, New York City (Paul Kovner of counsel), fordefendant-appellant-respondent American Alternative Insurance Co.
Brown Chiari LLP, Lancaster, Magavern Magavern Grimm LLP, Buffalo (Edward J.Markarian of counsel), for plaintiff-respondent-appellant.
Wilson Elser Moskowitz Edelman & Dicker LLP, New York City (Patrick J.Lawless of counsel), for defendant-respondent.
Appeals and cross appeal from an order of the Supreme Court, Niagara County(Ralph A. Boniello, III, J.), entered June 25, 2014. The order, among other things, deniedin part the motion of defendants American International Group, Inc., AIG DomesticClaims, Inc., and National Union Fire Insurance Company of Pittsburgh, PA, and thecross motion of defendant American Alternative Insurance Co., to dismiss plaintiff'scomplaint.
It is hereby ordered that the order so appealed from is unanimously modified on thelaw by granting the motion and cross motion in their entirety and dismissing thecomplaint, and as modified the order is affirmed without costs.
Memorandum: Plaintiff commenced this action pursuant to Insurance Law§ 3420 (a) (2) to collect on certain insurance policies after a secondamended judgment against MVP Delivery and Logistics, Inc. (MVP) and William Porterwas entered upon a jury verdict (see Carlson v Porter [appeal No. 2], 53 AD3d1129 [2008], lv denied 11 NY3d 708 [2008]). DHL Worldwide Express, Inc.,doing business as DHL Express (USA), Inc. (DHL), had a cartage agreement with MVP, whereby MVP provideddelivery services for DHL. In the underlying wrongful death action, the jury determinedthat Porter was negligent in causing the motor vehicle accident that led to the death ofplaintiff's decedent, and MVP was statutorily liable for Porter's negligence as the ownerof the vehicle driven by Porter (see Carlson, 53 AD3d at 1133). Plaintiffrecovered from MVP's insurer and now seeks to recover under a primary and umbrellapolicy issued to DHL by defendant National Union Fire Insurance Company ofPittsburgh, PA (National Union), and under an umbrella policy issued to DHL bydefendant American Alternative Insurance Co. (AAIC). Defendants AmericanInternational Group, Inc., and AIG Domestic Claims, Inc. (collectively, AIG), togetherwith National Union, moved to dismiss the complaint against them, and AAICcross-moved to dismiss the complaint against it (collectively, defendants).
Defendants moved and cross-moved, respectively, to dismiss the complaint based onboth a failure to state a cause of action (CPLR 3211 [a] [7]), and a defense based upondocumentary evidence (CPLR 3211 [a] [1]). Supreme Court granted in part the motionand cross motion. As a preliminary matter, we note that, "[o]n a motion to dismiss underCPLR 3211, the pleading is to be given a liberal construction, the allegations containedwithin it are assumed to be true and the plaintiff is to be afforded every favorableinference" (Simkin v Blank,19 NY3d 46, 52 [2012]). We further note that "[d]ismissal under CPLR 3211 (a) (1)is warranted 'only if the documentary evidence submitted conclusively establishes adefense to the asserted claims as a matter of law' " (511 W. 232nd OwnersCorp. v Jennifer Realty Co., 98 NY2d 144, 152 [2002], quoting Leon vMartinez, 84 NY2d 83, 88 [1994]).
We agree with defendants that the court erred in denying that part of their motion andcross motion seeking to dismiss the first cause of action, which was asserted pursuant toInsurance Law § 3420 (a) (2), and we therefore modify the orderaccordingly. As we concluded in a companion appeal, plaintiff may not maintain asection 3420 (a) (2) action against AAIC inasmuch as AAIC did not issue or deliver aninsurance policy in this state (Carlson v American Intl. Group, Inc., 130 AD3d 1477 [2015]). We also agree with AIG that the first cause of action should be dismissedagainst them because they established that they are not insurers. In the alternative, andwith respect to National Union, we conclude that plaintiff may not maintain a section3420 (a) (2) action against defendants. The primary National Union policy defined aninsured as, inter alia, "[a]nyone else while using with your permission a covered 'auto'you own, hire or borrow." The umbrella National Union policy defined an insured as,inter alia, "[a]ny person . . . or organization with respect to any autoowned by you, loaned to you or hired by you or on your be half [sic] and used with yourpermission." The umbrella AAIC policy defined an insured as, inter alia, "any person ororganization . . . included as an insured in the ScheduledUnderlying Insurance," i.e., in the National Union primary policy. Thus, MVP and Portermay be an "insured" under the three policies only if the vehicle used by Porter at the timeof the accident was "hired" by DHL and was being used with DHL's permission.
We agree with defendants that in order for the MVP vehicle driven by Porter to bedeemed a vehicle "hired" by DHL, there must be a showing that DHL exercised controlover the vehicle, and not general control over MVP (see 8A Steven Plitt et al.,Couch on Insurance 3d §§ 118:48, 118:49 [2014]). "Generally, avehicle owned by an independent contractor who contracts with the insured to performservices for the insured is not a hired automobile . . . [T]he contract betweenthe insured and the independent contractor in those situations is generally for theservices of the subcontractor, not the vehicle used in providing theservices" (id. § 118:52 [emphasis added]). In Dairylea Coop. vRossal (64 NY2d 1, 7 [1984]), an independent contractor was hired to transport milk.The Court held that the tanker truck was not a hired automobile where "the tank farmmilk hauling contract . . . called for transportation of milk by. . . an independent contractor rather than use of a particular tanker in therendition of such service" (id. at 10-11; see Federal Ins. Co. v Ryder TruckRental, 189 AD2d 582, 584 [1993], affd 82 NY2d 909 [1994], reargdenied 83 NY2d 830 [1994]; see also United States Fid. & Guar. Co. vHeritage Mut. Ins. Co., 230 F3d 331, 334-335 [2000]; Toops v Gulf Coast Mar.Inc., 72 F3d 483, 487-488 [1996]; Chicago Ins. Co. v Farm Bur. Mut. Ins. Co. ofArk., Inc., 929 F2d 372, 373-374 [1991]; American Cas. Co. of Reading, Pa. vDenmark Foods, 224 F2d 461, 463 [1955]). General supervision is not enough(see United States Fid. & Guar. Co., 230 F3d at 335). There is a "distinctionbetween hiring a company that provides transportation and hiring a truck"(Toops, 72 F3d at 487).
We conclude that the cartage agreement does not show that DHL had sufficientcontrol over the MVP vehicle in order for it to be deemed a "hired" automobile. Rather, itshowed that DHL hired MVP as an independent contractor to provide delivery services.It provided that MVP "shall have the sole right to determine all aspects of itsperformance of its obligations under this Agreement, including the staffing, operation,and routing of the [MVP] Vehicles in the Service Areas." MVP was responsible forregistering, insuring, fueling, and bearing all other costs and fees relating to the vehicles.The fact that DHL required the MVP vehicles to have a certain appearance does not, inour view, show the requisite control over the vehicle within the meaning of a "hired"automobile. "The [vehicle] was not hired by [DHL] and was not being used at the time ofthe accident by an employee of [DHL] in its business or in its behalf, but was being usedby an employee of [MVP] under an independent contract" (American Cas. Co. ofReading, Pa., 224 F2d at 463). Moreover, inasmuch as DHL did not have controlover the MVP vehicle, "it cannot be said in any realistic sense that . . .[DHL] could grant [MVP] permission to use it" (Dairylea Coop., 64 NY2d at10).
We further agree with defendants that the court erred in denying that part of theirmotion and cross motion seeking to dismiss the fourth cause of action, alleging aviolation of General Business Law § 349, and we therefore further modifythe order accordingly. The allegations in the complaint show that this is a" 'private' contract dispute over policy coverage and the processing of a claimwhich is unique to these parties" (New York Univ. v Continental Ins. Co., 87NY2d 308, 321 [1995]; seeShou Fong Tam v Metropolitan Life Ins. Co., 79 AD3d 484, 486 [2010]; Cooper v New York Cent. Mut.Fire Ins. Co., 72 AD3d 1556, 1557-1558 [2010]). In light of our determination,we conclude that plaintiff's cross appeal, which seeks reinstatement of themisrepresentation and bad faith causes of action, is without merit.Present—Centra, J.P., Carni, Lindley and DeJoseph, JJ.