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FILED: NEW YORK COUNTY CLERK 12/23/2020 04:09 PM INDEX NO. 150165/2017
NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 12/23/2020
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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AIG PROPERTY CASUALTY COMPANY a/s/o
AMY IRVING,
Index No.: 150165/2017
Plaintiffs,
AFFIRMATION
-against- IN SUPPORT
SF CONSTRUCTION SERVICES, INC., and A&J
WOOD FLOORS, INC.,
Defendants.
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SF CONSTRUCTION SERVICES, INC.,
Third-Party Plaintiff,
-against-
ELITE PRO CONSTRUCTION GROUP INC.,
Third-Party Defendant.
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JAMES M. O’HARA, an attorney duly licensed to practice law before the courts of the
State of New York, hereby affirms the following to be true, under the penalty of perjury,
pursuant to CPLR § 2106:
1. I am an Associate of the law firm of FARBER BROCKS AND ZANE, LLP,
attorneys for the Third-Party Defendant, ELITE PRO CONSTRUCTION GROUP INC., (“Elite
Pro”). I submit this affirmation upon information and belief, the source of which is the file
maintained by my office.
2. I submit this affirmation in support of Elite Pro’s cross motion for summary
judgment seeking to dismiss Defendant/Third-Party Plaintiff’s SF CONSTRUCTION
SERVICES, INC. (“SF”) Third-Party Complaint in its entirety and any and all claims and cross-
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claims asserted against Elite Pro in accordance with CPLR § 3212 upon the grounds that the
Complaint, the Third-Party Complaint and any cross-claims lack merit as a matter of law and for
such other and further relief as this Court may deem just and proper.
3. This matter allegedly arises out of a fire that occurred on or about April 9, 2016
during repair/renovation work performed by SF, Defendant A&J WOOD FLOORS, INC.
(“A&J”) and/or Elite Pro to the residence owned by Plaintiff AIG PROPERTY CASUALTY
COMPANY’s (“AIG”) insured/subrogor AMY IRVING (“Irving”) located at 75 Central Park
West, Apartments 9C and 9D, New York, New York (“Premises”). The Premises sustained
property damage due to the fire. AIG attributes the damage to the breach of contract/negligence
of the Defendants SF and A&J. AIG does not assert any direct claim(s) against Elite Pro. AIG
allegedly adjusted Irving’s loss and paid her the sum of $1,403,828.54 for the damage sustained
to the Premises due to the fire after the application of the policy’s $186,750 deductible.
PROCEDURAL HISTORY
4. AIG commenced this action on or about January 6, 2017 by filing its Summons
and Complaint with the New York County Clerk’s office (see Exhibit “A” attached to SF’s
Motion). The Complaint alleges that AIG issued an insurance policy to Irving insuring her for
loss and damage to her Premises caused by, among other things, the risk of fire (see ¶ Sixth of
the Complaint attached to SF’s Motion as Exhibit “A”). The Complaint further alleges that
Irving entered into a contract with SF to perform renovation work at her Premises and to be the
General Contractor for that work (see ¶ Seventh of the Complaint attached to SF’s Motion as
Exhibit “A”). AIG’s Complaint also alleges that SF retained A&J as a subcontractor on this
project to perform floor finishing work at the Premises (see ¶ Eighth of the Complaint attached to
SF’s Motion as Exhibit “A”). The Complaint asserts two (2) causes of action against SF and
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A&J based upon negligence and breach of contract and seeks damages in the amount of
$1,590,578.54. This sum includes the policy’s deductible.
5. A&J served its Answer to the Complaint on or about February 22, 2017 wherein it
denied the allegations contained therein and asserted several affirmative defenses thereto, as well
as a cross-claim against SF for common law contribution and indemnification and for insurance
coverage (see Exhibit “B” attached to SF’s Motion).
6. SF served its Answer to the Complaint on or about March 6, 2017 wherein it
denied the allegations contained therein and asserted several affirmative defenses thereto, as well
as a cross-claim against A&J for common law contribution (see Exhibit “C” attached to SF’s
Motion).
7. SF also commenced a Third-Party Action against Elite Pro by filing its Third-
Party Summons and Complaint on or about March 6, 2017 (see Exhibit “D” attached to SF’s
Motion). The Third-Party Complaint asserts a single cause of action based upon common law
contribution and indemnification against Elite Pro.
8. Elite Pro served its Answer to SF’s Third-Party Complaint on or about May 19,
2017 wherein it denied the allegations contained therein and asserted several affirmative
defenses thereto (see Exhibit “E” attached to SF’s Motion).
9. During discovery, Elite Pro served a Demand for a Verified Bill of Particulars
upon AIG (see Exhibit “A” attached hereto for a copy of Elite Pro’s Demand for a Verified Bill
of Particulars). Demand No. 2 demands that AIG set forth with particularity each and every act
and/or error of omission or commission by which AIG will contend that ELITE PRO was
careless, negligent, reckless, breached any warranties, breached any contract and/or violated any
duties.
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10. AIG provided its Bill of Particulars in response to Elite Pro’s demand on or about
February 16, 2018 (see Exhibit “B” attached hereto for a copy of AIG’s Bill of Particulars). In
response to Elite Pro’s Demand No. 2, AIG responded that there is currently no direct claim
against Elite Pro. To date no such direct claim has been made.
11. SF now moves for summary judgment to dismiss AIG’s action based upon the
equitable doctrine of waiver of subrogation.
12. Elite Pro likewise moves to dismiss SF’s third-party action against it on the same
grounds as well as upon the grounds that if SF’s motion is granted, the action against SF will be
terminated and there will be no legal basis for SF’s Third-Party Action against Elite Pro
predicated upon common law contribution and indemnification to continue.
PERTINENT FACTS
A. AIA Construction Contract
13. As more fully set forth in SF’s underlying summary judgment motion, on or about
November 13, 2015 Irving, as Owner, and SF, as Contractor, entered into an AIA Construction
Contract (“Contract”) to renovate the Premises (see the Affidavit of Sandy Friedman at ⁋4 and
Exhibit “F” attached to SF’s Motion).
14. Article 17 at Section 17.3 provides for property insurance to be maintained during
the construction work. Specifically, Paragraph 17.3.1 requires the Owner, Irving, to purchase
and maintain property insurance for the Premises on a replacement cost basis until final payment
has been made on the Contract. This insurance shall include the interests of the Owner, the
Contractor, Subcontractors and Sub-Subcontractors on the project (see Exhibit “F” attached to
SF’s Motion). It is not disputed that this insurance was obtained by Irving and remained in effect
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when the fire occurred. It is also not disputed that final payment under the Contract had not been
made prior to the fire.
15. The Contract also contains the standard AIA waiver of subrogation clause at
Paragraph 17.3.3, which provides, in pertinent part, as follows:
The Owner and Contractor waive all rights against (1) each other
And any of their subcontractors, sub-subcontractors,
agents and employees, each of the other… for damages caused
by fire or other causes to the extent covered by property
insurance obtained pursuant to section 17.3 or other property
insurance applicable to the Work, except such rights they have to
proceeds of such insurance held by Owner as fiduciary. The
Owner and Contractor, as appropriate, shall require of
the … subcontractors, sub-subcontractors, agents and
employees of any one of them, by appropriate agreements
written where legally required for validity, similar waivers each
in favor of other parties enumerated herein. The policies
shall provide such waivers of subrogation by endorsement or otherwise.
16. Based upon this express language, Irving and SF agreed to waive their and their
insurers’ subrogation rights. This waiver was expressly extended to include SF’s Subcontractors
and Sub-Subcontractors, including, but not limited to, A&J and Elite Pro.
B. Insurance
17. As more fully set forth in SF’s underlying summary judgment motion, both the
policy issued by AIG to Irving and SF’s insurer permit their insureds to waive the right to
subrogation prior to a loss. In addition, the Contract was clearly entered into by Irving and SF
prior to the fire and it contained a waiver of subrogation clause that applied to both Irving and SF
as well as to SF’s subcontractors and sub-subcontractors.
18. Elite Pro was insured by Utica First Insurance Company (“Utica First”) at the
time the incident occurred (see Exhibit “C” attached hereto). The Utica First insurance policy
likewise permits the waiver of subrogation prior to a loss. Specifically, the Contractors Special
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Endorsement (AP-100 Ed. 1.0) to the Utica First Policy at pages 1 and 23, provides, in pertinent
part, as follows:
COMMON POLICY CONDITIONS
* * *
This Common Policy Conditions Section contains additional “terms” that
apply to all coverages provided by this policy.
* * *
10. Subrogation – If we pay for a loss under this policy we may
require that the insured assign to us any right of recovery against
others up to the amount we paid. We are not liable for a loss if,
after the loss or occurrence, any insured impairs our right to
recover.
An Insured may waive its right to recover, in writing, before the
loss or occurrence takes place without voiding coverage.
* * *
CONDITIONS
* * *
In additions to the policy terms which are contained in other
sections of the Property Coverage, the following conditions apply.
* * *
5. Waiver of Right of Recovery – You may waive your right of
recovery in writing before a loss without voiding coverage.
19. Therefore, it cannot be disputed that the insurance policies issued to Irving, SF
and Elite Pro all permit the waiver of subrogation prior to a loss.
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ARGUMENT
A. SF’s Third-Party Action Against Elite Pro Must be Dismissed if Its Summary
Judgment Motion is Granted
20. Should the Court grant SF’s motion for summary judgment dismissing AIG’s
Complaint, then summary judgment should also be granted to Elite Pro dismissing SF’s Third-
Party Action against it. SF’s claims for common law contribution and indemnification against
Elite Pro would be extinguished and rendered moot by the dismissal of all claims against SF as
there will be nothing to contribute to nor indemnify SF for.
21. As such, SF’s Third-Party Complaint against Elite Pro must be dismissed as a
matter of law in the event its summary judgment motion is granted.
B. AIG’s Action is Barred by the Waiver of Subrogation
22. As more fully set forth in the accompanying Memorandum of Law, it is well-
settled that a waiver of subrogation contained in a lease or a contract constitutes a valid and
enforceable waiver where both insurance policies permit the waiver. The law is equally well-
settled that an insurer has no cause of action in subrogation under such circumstances.
Accordingly, AIG’s Complaint and SF’s Third-Party Complaint must be dismissed in their
entirety.
23. In the case at bar, the Contract permits the waiver of subrogation provided that
Irving’s and SF’s policies permit the waiver. It is clear that the policies of insurance issued by
AIG to Irving and SF’s insurer permit the waiver of subrogation prior to a loss.
24. The Contract further provides that the waiver of subrogation is extended to
include SF’s subcontractors and sub-subcontractors if their insurance policies likewise permit the
waiver. It is undisputed that SF retained Elite Pro as a subcontractor on this project. The policy
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of insurance issued by Utica First to Elite Pro also permits the waiver of subrogation prior to the
loss.
25. Since it cannot be disputed that the waiver of subrogation was agreed to by the
insureds prior to the fire, this action is barred by the doctrine of waiver of subrogation as a matter
of law.
C. Any and All Cross Claims Against Elite Pro Must Be Dismissed
26. Finally, to the extent that there are any cross-claims against Elite Pro in this
action, they must be dismissed as a matter of law. Any such claims for contribution and
indemnification must be dismissed because AIG’s Complaint is barred by the waiver of
subrogation. In addition, SF and A&J have been sued for their own active negligence and not
under a theory of vicarious liability.
27. No previous application has been by Elite Pro made for any of the relief requested
herein.
WHEREFORE, based upon the foregoing, it is respectfully requested that Third-Party
Defendant ELITE PRO CONSTRUCTION GROUP INC.’s cross motion for summary judgment
dismissing SF CONSTRUCTION SERVICES, INC.’s complaint and any and all claims and
cross-claims asserted against itbe granted in its entirety, together with such other and further
relief as this Court may deem just and proper.
Dated: Garden City, New York
December 23, 2020
_______James O’Hara_____
JAMES M. O’HARA
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