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  • Aig Property Casuality Company As Subrogee Of Amy Irving v. Sf Construction Services, Inc., A&J Wood Floors, Inc. Torts - Other Negligence (PROPERTY DAMAGE) document preview
  • Aig Property Casuality Company As Subrogee Of Amy Irving v. Sf Construction Services, Inc., A&J Wood Floors, Inc. Torts - Other Negligence (PROPERTY DAMAGE) document preview
  • Aig Property Casuality Company As Subrogee Of Amy Irving v. Sf Construction Services, Inc., A&J Wood Floors, Inc. Torts - Other Negligence (PROPERTY DAMAGE) document preview
  • Aig Property Casuality Company As Subrogee Of Amy Irving v. Sf Construction Services, Inc., A&J Wood Floors, Inc. Torts - Other Negligence (PROPERTY DAMAGE) document preview
  • Aig Property Casuality Company As Subrogee Of Amy Irving v. Sf Construction Services, Inc., A&J Wood Floors, Inc. Torts - Other Negligence (PROPERTY DAMAGE) document preview
  • Aig Property Casuality Company As Subrogee Of Amy Irving v. Sf Construction Services, Inc., A&J Wood Floors, Inc. Torts - Other Negligence (PROPERTY DAMAGE) document preview
  • Aig Property Casuality Company As Subrogee Of Amy Irving v. Sf Construction Services, Inc., A&J Wood Floors, Inc. Torts - Other Negligence (PROPERTY DAMAGE) document preview
  • Aig Property Casuality Company As Subrogee Of Amy Irving v. Sf Construction Services, Inc., A&J Wood Floors, Inc. Torts - Other Negligence (PROPERTY DAMAGE) document preview
						
                                

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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 ----------------------------------------------------------------------X 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. ----------------------------------------------------------------------X SF CONSTRUCTION SERVICES, INC., Third-Party Plaintiff, -against- ELITE PRO CONSTRUCTION GROUP INC., Third-Party Defendant. ----------------------------------------------------------------------X 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- {00994179.DOCX /} 1 of 8 FILED: NEW YORK COUNTY CLERK 12/23/2020 04:09 PM INDEX NO. 150165/2017 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 12/23/2020 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 {00994179.DOCX /} 2 2 of 8 FILED: NEW YORK COUNTY CLERK 12/23/2020 04:09 PM INDEX NO. 150165/2017 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 12/23/2020 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. {00994179.DOCX /} 3 3 of 8 FILED: NEW YORK COUNTY CLERK 12/23/2020 04:09 PM INDEX NO. 150165/2017 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 12/23/2020 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 {00994179.DOCX /} 4 4 of 8 FILED: NEW YORK COUNTY CLERK 12/23/2020 04:09 PM INDEX NO. 150165/2017 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 12/23/2020 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 {00994179.DOCX /} 5 5 of 8 FILED: NEW YORK COUNTY CLERK 12/23/2020 04:09 PM INDEX NO. 150165/2017 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 12/23/2020 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. {00994179.DOCX /} 6 6 of 8 FILED: NEW YORK COUNTY CLERK 12/23/2020 04:09 PM INDEX NO. 150165/2017 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 12/23/2020 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 {00994179.DOCX /} 7 7 of 8 FILED: NEW YORK COUNTY CLERK 12/23/2020 04:09 PM INDEX NO. 150165/2017 NYSCEF DOC. NO. 39 RECEIVED NYSCEF: 12/23/2020 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 {00994179.DOCX /} 8 8 of 8