Preview
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NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
ATLANTIC CASAULTY INSURANCE
COMPANY,
Index No.: 510798/2018
Plaintiff,
v.
EASTERN FRUIT & VEGETABLES INC.
Defendant.
REPLY MEMORANDUM OF LAW IN
FURTHER SUPPORT OF ATLANTIC’S CROSS-MOTION
KEIDEL, WELDON & CUNNINGHAM, LLP
Attorneys for Plaintiff Atlantic Casualty Ins. Co.
925 Westchester Avenue
Suite 400
White Plains, New York 10604
(914) 948-7000
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TABLE OF CONTENTS
PRELIMINARY STATEMENT ................................................................................................... 1
ARGUMENT
POINT I: ATLANTIC HAS ESTABLISHED ENTITLEMENT TO DISMISSAL OF
DEFENDANT’S DEFENSES BASED UPON BCL § 1312 ................................ 4
POINT II THE SECOND AND SIXTH AFFIRMATIVE DEFENSES LACK MERIT ....... 7
POINT III DEFENDANT’S PROCEDURAL ARGUMENTS LACK MERIT ..................... 9
A. The Notice of Cross-Motion is Not Defective and Nonetheless, Any Alleged
Ministerial Defects May be Disregarded ............................................................... 9
B. Defendant’s Argument Regarding Certificates of Conformity Lacks Merit ......... 9
C. Affiants Need Not Present Documentation Establishing the Basis for Their
Knowledge of the Facts Addressed in the Affidavits .......................................... 10
D. The Letter From ELANY is Not Evidence .......................................................... 11
E. Collateral Estoppel is Inapplicable ...................................................................... 11
F. Atlantic Filed a Timely Motion for Reargument ................................................. 12
POINT IV DEFENDANT HAS ASSERTED A NEW DEFENSE TO ATLANTIC’S
COMPLAINT FOR THE FIRST TIME IN ITS REPLY/OPPOSITION
WHICH SHOULD NOT BE CONSIDERED BY THE COURT ....................... 14
CONCLUSION ............................................................................................................................ 16
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PRELIMINARY STATEMENT
In response to Defendant’s second motion to dismiss, Atlantic Casualty Insurance
Company (“Atlantic”) filed a cross-motion seeking an order: (1) pursuant to CPLR § 3211(b)
dismissing or striking Defendant Eastern Fruit & Vegetables Inc.’s (“Defendant”) Second and
Sixth Affirmative Defenses (collectively the “Affirmative Defenses”); and/or (2) restoring Motion
Sequence 03 and, upon restoring such motion, granting the relief sought therein; and (3) granting
such other and further relief as this Court may deem just, equitable and proper.
Defendant has opposed that cross-motion [NYSCEF Doc. No. 116]. This memorandum of
law is submitted in reply.
As discussed in Atlantic’s cross-motion, Business Corporation Law § 1312 does not apply
because: (a) incorporated foreign insurers such as Atlantic are not “without authority” within the
meaning of BCL § 1312; and (b) Atlantic does not “do business” within the narrow meaning of
BCL § 1312.
Defendant’s opposition does not address any of these.
Consistent with Defendant’s intent to defeat this case on procedural grounds, Defendant
asserts several inapplicable procedural arguments. Defendant argues that the Notice of Cross-
Motion is defective because it does not state the dates of the papers on which it applies. However,
none of the rules cited by Defendant require such information to be specified. Defendant argues
that the affidavits do not contain Certificates of Conformity. However, as discussed below, no
such certificate is required with respect to the affidavit of Ms. Robinson (who signed in New York)
and the absence of such certificate in connection with Ms. Parrish’s affidavit is a technical defect
which the courts have uniformly found to be not fatal. Defendants argue that the affidavits from
Ms. Robinson and Ms. Parrish are not made on personal knowledge. However, as discussed below,
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that is incorrect. Defendant argues that the letter from ELANY, which is not evidentiary, does not
comply with the rules of evidence. However, since it is not evidentiary, this is entirely irrelevant.
Defendant further argues that the relief sought in Atlantic’s motion is barred by the doctrine of
collateral estoppel. However, as discussed below, Defendant fails to point to any prior action or
proceeding addressing any of the issues being litigated in this lawsuit. Moreover, Defendant fails
to demonstrate that the relief sought herein is inconsistent with any prior order to which Atlantic
was a party or in privity. Nonetheless, to the extent the Court may find to the contrary, this is the
precise reason we have asked that the Court restore Atlantic’s motion for reargument, which was
timely filed, but was marked “off” for procedural reasons.
The only substantive argument Defendant raises is that they claim the Complaint is
insufficient because “plaintiff failed to allege the requirements under New York Insurance law for
excess line carriers when it issued these policies to Eastern Fruit.” [NYSCEF Doc. No. 116].
However, Defendant’s Second and Sixth Affirmative Defenses are based upon a section of the
Business Corporation Law, which does not require a party to allege compliance with any other
laws. Nor has Defendant pointed this Court to any authority which might require Atlantic to allege
such compliance. This is because such authority does not exist. To the contrary, as discussed in
support of Atlantic’s cross-motion and below, the Insurance Law requirements cited by Defendant
are imposed upon surplus lines brokers – not the carriers. There is no private right of action under
those provisions and, instead, a broker’s failure to comply with the same is addressed by the
Superintendent of Insurance. The courts have expressly found that insurers may not be penalized
by a broker’s failure to comply with these requirements. As a result, it would simply be illogical
for the legislature or a court to require that a carrier plead compliance with such laws in order to
maintain an action seeking to enforce the policy.
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For the reasons discussed more fully in support of Atlantic’s cross-motion and below, it is
respectfully requested that this Court dismiss Defendant’s Second and Sixth Affirmative Defenses
or restore Motion Sequence 03 and, upon restoring such motion, grant reargument of Atlantic’s
prior motion and, upon such reargument, dismiss Defendant’s Second and Sixth Affirmative
Defenses.
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ARGUMENT
POINT I
ATLANTIC HAS ESTABLISHED ENTITLEMENT
TO DISMISSAL OF DEFENDANT’S DEFENSES
BASED UPON BCL § 1312
“CPLR 3211 (b) authorizes a plaintiff to move, at any time, to dismiss a defendant's
affirmative defense on the ground that it ‘has no merit’ (citations omitted).” (Greco v
Christoffersen, 70 AD3d 769, 771 [2d Dept 2010]). In this regard, it is well settled that “where
affirmative defenses ‘merely plead conclusions of law without any supporting facts,’ the
affirmative defenses should be dismissed pursuant to CPLR 3211 (b) (citation omitted).” (Bank
of Am., N.A. v 414 Midland Ave. Assoc., LLC, 78 AD3d 746, 750 [2d Dept 2010]); see also,
Fireman's Fund Ins. Co. v Farrell, 57 AD3d 721, 723 [2d Dept 2008] (affirming dismissal of
defenses on the basis that they “merely plead conclusions of law without any supporting facts”);
Robbins v Growney, 229 AD2d 356, 358 [1st Dept 1996] (finding that “bare legal conclusions are
insufficient to raise an affirmative defense….”; Carlyle, LLC v Beekman Garage LLC, 133 AD3d
510, 511 [1st Dept 2015] (dismissing affirmative defenses “because they consist of bare legal
conclusions”)). Consistent with this, a motion to dismiss based upon CPLR 3211(b) is properly
granted where plaintiff has come forward with evidence demonstrating that an affirmative defense
lacks merit, and where the defendant, in response, “merely came forward with
conclusory assertions….” (Vita v NY Waste Servs., LLC, 34 AD3d 559, 559 [2d Dept 2006]).
Defendant in this matter asserted the following defenses which are at issue in this motion:
SECOND AFFIRMATIVE DEFENSE
5. Plaintiff is not licensed by the New York State Department of Finance to
issue insurance policies in the State of New York and failed to allege any other
licensure or authority in any other jurisdiction.
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***
SIXTH AFFIRMATIVE DEFENSE
9. Incapacity to commence and maintain this action.
Defendant’s Answer (Exhibit 11 annexed to Cross-Motion [NYSCEF Doc. No. 100]) at ¶5.
The Sixth Affirmative Defense alleges a legal conclusion without any factual basis. The
Second Affirmative Defense alleges facts, but those facts do not provide any basis for this Court
to dismiss Plaintiff’s action. In particular, Defendant has failed to point to any statute, regulation,
court rule, case law or other authority which prohibits non-admitted insurance carriers from
commencing a lawsuit in this State. As a result, Atlantic has established a basis for striking those
defenses.
In addition to the insufficiency of the pleading itself, Atlantic has demonstrated that these
defenses lack any merit. Defendant has taken the position that these defenses are based upon
Business Corporation Law § 1312. Among other reasons why the defense lack merit, the defenses
are based upon a theory that, because Atlantic is not an “authorized” insurer under the Insurance
Law, it is somehow also not “authorized” for purposes of the Business Corporation Law. However,
Defendant has failed to provide any basis for this Court to take such a leap.
As demonstrated in support of Atlantic’s cross-motion, BCL § 1312 only applies to entities
which are required to be, but are not authorized under the Business Corporation Law. Nothing in
BCL § 1312 requires an insurance carrier to be licensed (or “authorized”) under the Insurance
Law. Nor does anything in that section require an insurer to allege it is licensed in order to be able
to maintain a lawsuit in this State. More importantly, as discussed in Atlantic’s cross-motion,
because incorporated foreign insurers are not required to become authorized under the Business
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Corporation Law, foreign incorporated insurers such as Atlantic (whether licensed or not) are
simply not within the scope of BCL § 1312.
Similarly, Defendant has failed to cite to any authority which would require Atlantic to
allege in its pleading whether or where it is licensed as an insurer. Nonetheless, as the Court of
Appeals has noted “a court may freely consider affidavits submitted by the plaintiff to remedy any
defects in the complaint (citation omitted) and ‘the criterion is whether the proponent of the
pleading has a cause of action, not whether he has stated one’ (citations omitted).” (Leon v
Martinez, 84 NY2d 83, 88 [1994]). In the event this Court feels Atlantic was required to allege
that it is not licensed to do business in this State and/or to allege the state in which Atlantic is
licensed, any such claimed defects were remedied by way of affidavits from Suzanne Parrish. See,
Affidavit of Suzanne Parrish accompanying Cross-Motion [NYSCEF Doc. No. 87]; Affidavit of
Suzanne Parrish annexed to Cross-Motion as part of Exhibit 12 [NYSCEF Doc. No. 101] at pdf
page 88; see also, ELANY Report annexed to Cross-Motion as part of Exhibit 12 [NYSCEF Doc.
No. 101] at pdf page 92. As a result, BCL § 1312 is inapplicable and any defenses which rely
upon that statute should be dismissed.
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POINT II
THE SECOND AND SIXTH AFFIRMATIVE DEFENSES LACK MERIT
Although we address above the most obvious reason why the Second and Sixth Affirmative
Defenses lack merit, Atlantic’s cross-motion addressed several reasons why these defenses lack
merit, including that:
“Authority” within the meaning of BCL § 1312 refers to a certificate of authority
from the Secretary of State, as required under BCL §§ 1301 and 1304. However,
Ins. Law § 108(e) expressly provides that BCL §§ 1301 and 1304, among others,
are not applicable to incorporated foreign insurers, such as Atlantic. As a result,
BCL § 1312 is inapplicable in this lawsuit.
The Affirmative Defenses were imposed for purposes of precluding Atlantic from
maintaining this lawsuit. Notably, the Sixth Affirmative Defense claims that
Atlantic lacks the capacity “to commence and maintain this action.” However, the
language of BCL § 1312 and the case law applying it make clear that such statute
was never intended to be a permanent bar to commencing or maintaining a lawsuit.
Instead, as stated in the statute, it was intended to encourage entities to become
authorized, as required under the Business Corporation Law, by imposing a stay of
the lawsuit “until such corporation has been authorized to conduct business in this
state….” Since surplus lines insurers, such as Atlantic cannot become authorized
under the Business Corporation Law (as intended by the statute) nor become
authorized under the Insurance Law (which would cause such entity to lose its
status as a surplus lines insurer), it is clear the statute was never intended to apply
to surplus lines insurers such as Atlantic.
Enforcing the Affirmative Defenses would have the effect of precluding surplus
lines insurers from maintaining lawsuits in this State to enforce their policies and
would, therefore, likely have a detrimental effect upon the surplus lines insurance
market, which is necessary to the State’s economy.
Enforcing these Affirmative Defenses, and applying BCL § 1312 as sought by
Defendant, would force surplus lines insurers to sue in their home states, in
contravention of the stated purpose of Ins. Law § 1312(a).
Surplus lines insurers, such as Atlantic, do not “do business” within the narrow
meaning of BCL § 1312, particularly under the heightened standard applied in order
to avoid violating the Commerce Clause of the United States Constitution.
Defendant does not address any of these issues in opposition to Atlantic’s cross-motion.
Instead, Defendant presumes (contrary to the statutory law cited by Atlantic) that the word
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“authorized” as used in BCL § 1312 must refer to “authorized” under the Insurance Law and cites
to the definition of an “authorized” insurer, arguing that Atlantic “failed to allege the requirements
under New York Insurance Law form excess line carriers when it issued these policies to Eastern
Fruit.” Affirmation of Blake Morris [NYSCEF Doc. No. 116] at p. 6 of 8. However, since the
word “authorized” within the meaning of BCL § 1312 does not refer to the insurance law
requirements for an “authorized insurer,” it is irrelevant whether Atlantic is an authorized insurer
or whether Atlantic has alleged in its Complaint that it is or is not an authorized insurer. In other
words, regardless of whether Atlantic is or is not an “authorized insurer” within the meaning of
Ins. Law § 107(a)(10), BCL § 1312 is inapplicable and does not preclude Atlantic from
maintaining this lawsuit.
Since BCL § 1312 is inapplicable to this lawsuit, Defendant’s Second and Sixth
Affirmative Defenses lack merit and, therefore, should be stricken pursuant to CPLR 3211(b).
Accordingly, Atlantic’s cross-motions should be granted.
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POINT III
DEFENDANT’S PROCEDURAL ARGUMENTS LACK MERIT
Consistent with its efforts to avoid this lawsuit solely on the basis of procedural grounds,
Defendant’s opposition is primary based upon various random procedural arguments, none of
which have any merit.
A. The Notice of Cross-Motion is Not Defective and Nonetheless, Any
Alleged Ministerial Defects May be Disregarded
For example, Defendant argues that Atlantic’s Notice of Cross-Motion is defective because
it does not list the dates of the affidavits on which it is based. However, as Defendant quotes in
its papers, CPLR 2214(a) which states that “[a] notice of motion shall specify the time and place
of the hearing on the motion, the supporting papers upon which the motion is based, the relief
demanded and the grounds therefor. Relief in the alternative or of several different types may be
demanded.” Nothing in that rule requires that the notice of motion list the dates of the affidavits
on which it is based. Nonetheless, even if this were a technical requirement, the absence of such
dates is not prejudicial and may be disregarded by the Court pursuant to CPLR 2001.
B. Defendant’s Argument Regarding Certificates of Conformity Lacks Merit
Defendant argues that Atlantic has failed to include certificates of conformity for the
affidavits of Ms. Robinson and Ms. Parrish which accompany the cross-motion. As Defendant
correctly notes, however, such certificate of conformity is only required if the oath or affirmation
is taken outside of New York State. Ms. Robinson’s affidavit was signed in Nassau County, which
is within New York State and, as a result, no certificate of conformity is required.
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As to the affidavit from Ms. Parrish, the Second Department has recognized that the failure
to include a Certificate of Conformity is a technical issue which should not prevent an affidavit
from being considered. As the Court explains:
the Appellate Division, Second Department, has typically held, since 1951, that the
absence of a certificate of conformity is not, in and of itself, a fatal defect (citations
omitted). The defect is not fatal, as it may be corrected nunc pro tunc (citations
omitted), or pursuant to CPLR 2001, which permits trial courts to disregard
mistakes, omissions, defects, or irregularities at any time during an action where a
substantial right of a party is not prejudiced (citations omitted). Thus, even if the
certificate of conformity was inadequate or missing, no substantial right of
the defendants is prejudiced.
(Midfirst Bank v Agho, 121 AD3d 343, 351-352 [2d Dept 2014]; see also
Matapos Tech. Ltd. v Cia. Andina de Comercio Ltd, 68 AD3d 672, 673 [1st Dept 2009] (“the
courts are not rigid about this requirement. As long as the oath is duly given, authentication of the
oathgiver's authority can be secured later, and given nunc pro tunc effect if necessary (citation
omitted). The absence of such a certificate is a mere irregularity, and not a fatal defect
(citation omitted).). In light of this, the Court should either disregard the defect pursuant to
CPLR 2001 or should accept nunc pro tunc the certificate of conformity submitted herewith.
C. Affiants Need Not Present Documentation Establishing the Basis for
Their Knowledge of the Facts Addressed in the Affidavits
Defendant argues that the affidavits fail to provide “supporting documentation for the basis
for which Suzanne Parrish and Beata Robinson have any personal knowledge of the alleged facts
contained in their respective affidavits.” Affirmation of Blake Morris [NYSCEF Doc. No. 116] at
p. 3 of 8. However, Defendant fails to point to any case law requiring that an affidavit present
documentation to support their personal knowledge. To the contrary, the cases cited by Defendant
establish that affidavits such as those submitted in connection with Atlantic’s opposition and cross-
motion are sufficient to support a motion or opposition. (See, e.g., Mitchell v Mid-Hudson Med.
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Assoc. P.C., 213 AD2d 932, 932 [3d Dept 1995]; Hunter v Enquirer/Star, Inc., 210 AD2d 32, 33
[1st Dept 1994]; Bev. Distribs. of Nevada, Inc. v Schenley Indus., 155 AD2d 356, 357 [1st Dept
1989]). In the first paragraph of each of the affidavits submitted in connection with Atlantic’s
cross-motion (and opposition), the affiants state the basis for their knowledge of the matters stated
therein. Defendant does not contest the validity of such representations – only that the affiants
have not presented documentary proof of the same. Since there is no requirement that affiants
present documents to support the basis for their knowledge, there is no basis to find that the
affidavits are inadmissible.
D. The Letter From ELANY is Not Evidence
Defendant argues that the letter from ELANY “fails the evidence requirements of the
CPLR.” Affirmation of Blake Morris [NYSCEF Doc. No. 116] at p. 4 of 8. That letter, however,
is not submitted as evidence – it is provided to assist the Court. It is the equivalent of an industry
article or other similar authority (i.e. akin to an amicus brief). As such, authentication is not
required.
E. Collateral Estoppel is Inapplicable
Defendant argues that Atlantic’s request to strike Plaintiff’s Affirmative Defenses pursuant
to CPLR 3211(b) is barred by collateral estoppel. However, as quoted in Defendant’s own papers,
that doctrine precludes a party from relitigating issues decided in a prior action. Defendant does
not point to any other actions in which any issues were decided relevant to the present lawsuit.
Moreover, it is well settled that “[t]o invoke collateral estoppel, the issue of ultimate fact must
have been determined by a ‘final judgment’ (citations omitted).” (McGrath v Gold, 36 NY2d 406,
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412 [1975]). To the extent Defendant attempts to rely upon a prior decision issued by this Court
in the present lawsuit, no such decision is final and, as a result, collateral estoppel is inapplicable.1
F. Atlantic Filed a Timely Motion for Reargument
Defendant correctly recites that CPLR 2221(d)(3) requires that a motion for reargument be
made within thirty days after the order determining the prior motion was served with notice of
entry. The order being reargued was served with notice of entry on July 29, 2019. See, Cross-
Motion Exhibit F [NYSCEF Doc. No. 101] at pdf page 99. Atlantic’s motion to reargue was filed
with the Court (and, thereby served as well) On August 28, 2019 – 30 days after the order was
served with notice of entry. See, Notice of Motion to Dismiss and/or Reargue, id. at pdf page 1.
As a result, the reargument motion was timely filed.
As discussed in Atlantic’s cross-motion, the reargument motion was “marked off” as the
attorneys did not appear. See, Cross-Motion Exhibit 15 [NYSCEF Doc. No. 104]. However, since
the matter was in pre-note of issue status, such marking does not constitute a ‘marking off’
pursuant to CPLR 3404. (See, Gorski v St. John's Episcopal Hosp., 36 AD3d 757, 757 [2d Dept
2007]). As such, the restoration of such motion should be automatic. Id. Nonetheless, Atlantic
has demonstrated a reasonable excuse for its failure to appear at the calendar call on
October 30, 2019 and has demonstrated that the argument being raised in its motion is meritorious.
1
To the extent Defendant may have meant to argue “law of the case,” that doctrine is similarly inapplicable since “a
court may revisit a prior ruling where there is subsequent evidence affecting the prior determination (citations
omitted).” (Gitman v Martinez, 169 AD3d 1283, 1284 [3d Dept 2019]). In Gittman, the court had previously found
there was an issue of fact preventing the Court from granting summary judgment. That same party filed a later
application requesting summary judgment and presenting additional documents to address the absence of an issue of
fact. The present cross-motion is based upon new facts, and, therefore, is not precluded by law of the case. Moreover,
we seek to address herein an issue not previously addressed. In particular, the only issue previously addressed was
whether Defendant presented evidence which would establish that Atlantic was “doing business” within the State
sufficient to overcome the presumption applied in connection with BCL § 1312. The present motion, on the other
hand, addresses the question of whether Atlantic falls within the scope of entities governed by BCL § 1312 in that
Atlantic is an incorporated foreign insurer, and on the basis that applying the statute to Atlantic would permanently
preclude Atlantic from maintaining this lawsuit, contrary to the purpose of BCL § 1312.
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As the restoration of such motion is not prejudicial, it is respectfully submitted that the Court
should restore the motion. (See, Deutsche Bank Natl. Trust Co. v Acevedo, 157 AD3d 859, 861
[2d Dept 2018]; Bux v Uddin, 2020 NY Slip Op 32169[U], *3 [Sup Ct, Queens County 2020]).
Since the reargument motion was timely filed before it was “marked off,” that motion
remains timely filed and may be considered on its merits. Notably, Defendant does not oppose
Atlantic’s entitlement to reargument on its substance. Furthermore, as discussed above, Defendant
does not dispute the substance of Atlantic’s arguments. As such, it is respectfully submitted that
this Court should restore Atlantic’s prior motion to reargue and, upon doing so, grant reargument
and modify the Court’s prior order to strike Defendant’s affirmative defenses which are based
upon BCL § 1312.
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POINT IV
DEFENDANT HAS ASSERTED A NEW DEFENSE TO ATLANTIC’S COMPLAINT
FOR THE FIRST TIME IN ITS REPLY/OPPOSITION
WHICH SHOULD NOT BE CONSIDERED BY THE COURT
Defendant’s motion seeks dismissal of the Complaint solely on the basis of CPLR 3211(a)
and BCL § 1312. In its final set of papers, Defendant argues for the first time that Plaintiff’s
Complaint lacks required specificity pursuant to CPLR 3013. This is an entirely different defense
which was not asserted in the Answer (see, Cross-Motion Exhibit 12 [NYSCEF Doc. No. 100] at
pp. 1-2; see also, Defendant’s motion [NYSCEF Doc. Nos. 74-75] and reply/opposition to cross-
motion [NYSCEF Doc. No. 116]). Having not been raised in the answer, such defense is waived.
At the very least, since this is not an issue which was raised in the original motion, it may not be
raised for the first time in Defendant’s reply. (Peterkin v City of NY, 293 AD2d 244, 249 [2d
Dept 2002]).
Nonetheless, even if the Court were to consider that defense, it lacks merit. It is well settled
that:
With certain exceptions set forth in CPLR 3016 that are not applicable to the instant
matter, New York adheres to notice pleading standards, requiring that a complaint
need only place the defendant on notice of the transactions and occurrences giving
rise to a claim (citations omitted). Although a complaint must allege the material
elements of each cause of action asserted (citations omitted), the plaintiff may
nonetheless submit an affidavit in opposition to a motion to dismiss in order to
remedy any defects in the complaint (citations omitted).
(Jacob v US Bank NA, 2019 NY Slip Op 30448[U], *2-3 [Sup Ct, NY County 2019]).
The Complaint in this matter clearly places Defendant on notice of the transactions and
occurrences giving rise to the claim. Although the Complaint does allege the material elements of
the relevant causes of action, any potential deficiencies were corrected by the affidavits submitted
by Atlantic. Defendant does not contest this.
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Instead Defendant argues Atlantic has “wrongly alleged” it is “authorized” to issue
insurance policies in this State. Affirmation of Blake Morris [NYSCEF Doc. No. 116] at p. 7 of
8. Defendant argues that it suffers prejudice as a result of this allegation. Certainly, Defendant
does not suffer prejudice as a result of this allegation. First, as discussed above and in Atlantic’s
cross-motion, the allegation is not critical to Atlantic’s claims in this lawsuit. Second, the
allegation does not “cloak[ Atlantic] with the imprimatur of legitimacy…” as alleged by
Defendant. Id. As indicated in connection with Atlantic’s original summary judgment motion,
(Cross-Motion Exhibit 12 [NYSCEF Doc. No. 101] at pdf pages 78-79 (¶¶11-13)), although
Atlantic is a surplus lines insurer and, therefore is not an “authorized insurer,” within the meaning
of Ins. Law § 107(a)(10), it is “authorized” to insure New York residents in that it is permitted to
do so under the Insurance Law. As a result, contrary to Defendant’s argument, this allegation is
not “wrongly allege[d].” As a result, Defendant’s newly asserted defense under CPLR 3013
similarly fails.
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CONCLUSION
For the reasons discussed herein, it is respectfully requested that this Court deny
Defendant’s motion to dismiss and grant Atlantic’s cross-motion, restoring to the calendar its
motion for reargument and granting reargument, dismissing Defendant’s Second and Sixth
Affirmative Defenses, and awarding to Atlantic such other and further relief as to this Court may
seem just, proper and equitable including.
Dated: White Plains, New York
September 10, 2020
Keidel, Weldon & Cunningham, LLP
By: ________________________________
Debra M. Krebs, Esq.
Robert Walker Lewis, Esq.
Attorneys for Plaintiff
Atlantic Casualty Insurance Co.
925 Westchester Avenue, Suite 400
White Plains, New York 10604
Tel: (914) 948-7000
Fax: (914) 948-7010
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FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS ATLANTIC CASAULTY INSURANCE COMPANY, Index No.: 510798/2018 Plaintiff, v. EASTERN FRUIT & VEGETABLES INC. Defendant. REPLY MEMORANDUM OF LAW IN FURTHER SUPPORT OF ATLANTIC’S CROSS-MOTION KEIDEL, WELDON & CUNNINGHAM, LLP Attorneys for Plaintiff Atlantic Casualty Ins. Co. 925 Westchester Avenue Suite 400 White Plains, New York 10604 (914) 948-7000 1 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 TABLE OF CONTENTS PRELIMINARY STATEMENT ................................................................................................... 1 ARGUMENT POINT I: ATLANTIC HAS ESTABLISHED ENTITLEMENT TO DISMISSAL OF DEFENDANT’S DEFENSES BASED UPON BCL § 1312 ................................ 4 POINT II THE SECOND AND SIXTH AFFIRMATIVE DEFENSES LACK MERIT ....... 7 POINT III DEFENDANT’S PROCEDURAL ARGUMENTS LACK MERIT ..................... 9 A. The Notice of Cross-Motion is Not Defective and Nonetheless, Any Alleged Ministerial Defects May be Disregarded ............................................................... 9 B. Defendant’s Argument Regarding Certificates of Conformity Lacks Merit ......... 9 C. Affiants Need Not Present Documentation Establishing the Basis for Their Knowledge of the Facts Addressed in the Affidavits .......................................... 10 D. The Letter From ELANY is Not Evidence .......................................................... 11 E. Collateral Estoppel is Inapplicable ...................................................................... 11 F. Atlantic Filed a Timely Motion for Reargument ................................................. 12 POINT IV DEFENDANT HAS ASSERTED A NEW DEFENSE TO ATLANTIC’S COMPLAINT FOR THE FIRST TIME IN ITS REPLY/OPPOSITION WHICH SHOULD NOT BE CONSIDERED BY THE COURT ....................... 14 CONCLUSION ............................................................................................................................ 16 i 2 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 PRELIMINARY STATEMENT In response to Defendant’s second motion to dismiss, Atlantic Casualty Insurance Company (“Atlantic”) filed a cross-motion seeking an order: (1) pursuant to CPLR § 3211(b) dismissing or striking Defendant Eastern Fruit & Vegetables Inc.’s (“Defendant”) Second and Sixth Affirmative Defenses (collectively the “Affirmative Defenses”); and/or (2) restoring Motion Sequence 03 and, upon restoring such motion, granting the relief sought therein; and (3) granting such other and further relief as this Court may deem just, equitable and proper. Defendant has opposed that cross-motion [NYSCEF Doc. No. 116]. This memorandum of law is submitted in reply. As discussed in Atlantic’s cross-motion, Business Corporation Law § 1312 does not apply because: (a) incorporated foreign insurers such as Atlantic are not “without authority” within the meaning of BCL § 1312; and (b) Atlantic does not “do business” within the narrow meaning of BCL § 1312. Defendant’s opposition does not address any of these. Consistent with Defendant’s intent to defeat this case on procedural grounds, Defendant asserts several inapplicable procedural arguments. Defendant argues that the Notice of Cross- Motion is defective because it does not state the dates of the papers on which it applies. However, none of the rules cited by Defendant require such information to be specified. Defendant argues that the affidavits do not contain Certificates of Conformity. However, as discussed below, no such certificate is required with respect to the affidavit of Ms. Robinson (who signed in New York) and the absence of such certificate in connection with Ms. Parrish’s affidavit is a technical defect which the courts have uniformly found to be not fatal. Defendants argue that the affidavits from Ms. Robinson and Ms. Parrish are not made on personal knowledge. However, as discussed below, 1 3 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 that is incorrect. Defendant argues that the letter from ELANY, which is not evidentiary, does not comply with the rules of evidence. However, since it is not evidentiary, this is entirely irrelevant. Defendant further argues that the relief sought in Atlantic’s motion is barred by the doctrine of collateral estoppel. However, as discussed below, Defendant fails to point to any prior action or proceeding addressing any of the issues being litigated in this lawsuit. Moreover, Defendant fails to demonstrate that the relief sought herein is inconsistent with any prior order to which Atlantic was a party or in privity. Nonetheless, to the extent the Court may find to the contrary, this is the precise reason we have asked that the Court restore Atlantic’s motion for reargument, which was timely filed, but was marked “off” for procedural reasons. The only substantive argument Defendant raises is that they claim the Complaint is insufficient because “plaintiff failed to allege the requirements under New York Insurance law for excess line carriers when it issued these policies to Eastern Fruit.” [NYSCEF Doc. No. 116]. However, Defendant’s Second and Sixth Affirmative Defenses are based upon a section of the Business Corporation Law, which does not require a party to allege compliance with any other laws. Nor has Defendant pointed this Court to any authority which might require Atlantic to allege such compliance. This is because such authority does not exist. To the contrary, as discussed in support of Atlantic’s cross-motion and below, the Insurance Law requirements cited by Defendant are imposed upon surplus lines brokers – not the carriers. There is no private right of action under those provisions and, instead, a broker’s failure to comply with the same is addressed by the Superintendent of Insurance. The courts have expressly found that insurers may not be penalized by a broker’s failure to comply with these requirements. As a result, it would simply be illogical for the legislature or a court to require that a carrier plead compliance with such laws in order to maintain an action seeking to enforce the policy. 2 4 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 For the reasons discussed more fully in support of Atlantic’s cross-motion and below, it is respectfully requested that this Court dismiss Defendant’s Second and Sixth Affirmative Defenses or restore Motion Sequence 03 and, upon restoring such motion, grant reargument of Atlantic’s prior motion and, upon such reargument, dismiss Defendant’s Second and Sixth Affirmative Defenses. 3 5 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 ARGUMENT POINT I ATLANTIC HAS ESTABLISHED ENTITLEMENT TO DISMISSAL OF DEFENDANT’S DEFENSES BASED UPON BCL § 1312 “CPLR 3211 (b) authorizes a plaintiff to move, at any time, to dismiss a defendant's affirmative defense on the ground that it ‘has no merit’ (citations omitted).” (Greco v Christoffersen, 70 AD3d 769, 771 [2d Dept 2010]). In this regard, it is well settled that “where affirmative defenses ‘merely plead conclusions of law without any supporting facts,’ the affirmative defenses should be dismissed pursuant to CPLR 3211 (b) (citation omitted).” (Bank of Am., N.A. v 414 Midland Ave. Assoc., LLC, 78 AD3d 746, 750 [2d Dept 2010]); see also, Fireman's Fund Ins. Co. v Farrell, 57 AD3d 721, 723 [2d Dept 2008] (affirming dismissal of defenses on the basis that they “merely plead conclusions of law without any supporting facts”); Robbins v Growney, 229 AD2d 356, 358 [1st Dept 1996] (finding that “bare legal conclusions are insufficient to raise an affirmative defense….”; Carlyle, LLC v Beekman Garage LLC, 133 AD3d 510, 511 [1st Dept 2015] (dismissing affirmative defenses “because they consist of bare legal conclusions”)). Consistent with this, a motion to dismiss based upon CPLR 3211(b) is properly granted where plaintiff has come forward with evidence demonstrating that an affirmative defense lacks merit, and where the defendant, in response, “merely came forward with conclusory assertions….” (Vita v NY Waste Servs., LLC, 34 AD3d 559, 559 [2d Dept 2006]). Defendant in this matter asserted the following defenses which are at issue in this motion: SECOND AFFIRMATIVE DEFENSE 5. Plaintiff is not licensed by the New York State Department of Finance to issue insurance policies in the State of New York and failed to allege any other licensure or authority in any other jurisdiction. 4 6 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 *** SIXTH AFFIRMATIVE DEFENSE 9. Incapacity to commence and maintain this action. Defendant’s Answer (Exhibit 11 annexed to Cross-Motion [NYSCEF Doc. No. 100]) at ¶5. The Sixth Affirmative Defense alleges a legal conclusion without any factual basis. The Second Affirmative Defense alleges facts, but those facts do not provide any basis for this Court to dismiss Plaintiff’s action. In particular, Defendant has failed to point to any statute, regulation, court rule, case law or other authority which prohibits non-admitted insurance carriers from commencing a lawsuit in this State. As a result, Atlantic has established a basis for striking those defenses. In addition to the insufficiency of the pleading itself, Atlantic has demonstrated that these defenses lack any merit. Defendant has taken the position that these defenses are based upon Business Corporation Law § 1312. Among other reasons why the defense lack merit, the defenses are based upon a theory that, because Atlantic is not an “authorized” insurer under the Insurance Law, it is somehow also not “authorized” for purposes of the Business Corporation Law. However, Defendant has failed to provide any basis for this Court to take such a leap. As demonstrated in support of Atlantic’s cross-motion, BCL § 1312 only applies to entities which are required to be, but are not authorized under the Business Corporation Law. Nothing in BCL § 1312 requires an insurance carrier to be licensed (or “authorized”) under the Insurance Law. Nor does anything in that section require an insurer to allege it is licensed in order to be able to maintain a lawsuit in this State. More importantly, as discussed in Atlantic’s cross-motion, because incorporated foreign insurers are not required to become authorized under the Business 5 7 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 Corporation Law, foreign incorporated insurers such as Atlantic (whether licensed or not) are simply not within the scope of BCL § 1312. Similarly, Defendant has failed to cite to any authority which would require Atlantic to allege in its pleading whether or where it is licensed as an insurer. Nonetheless, as the Court of Appeals has noted “a court may freely consider affidavits submitted by the plaintiff to remedy any defects in the complaint (citation omitted) and ‘the criterion is whether the proponent of the pleading has a cause of action, not whether he has stated one’ (citations omitted).” (Leon v Martinez, 84 NY2d 83, 88 [1994]). In the event this Court feels Atlantic was required to allege that it is not licensed to do business in this State and/or to allege the state in which Atlantic is licensed, any such claimed defects were remedied by way of affidavits from Suzanne Parrish. See, Affidavit of Suzanne Parrish accompanying Cross-Motion [NYSCEF Doc. No. 87]; Affidavit of Suzanne Parrish annexed to Cross-Motion as part of Exhibit 12 [NYSCEF Doc. No. 101] at pdf page 88; see also, ELANY Report annexed to Cross-Motion as part of Exhibit 12 [NYSCEF Doc. No. 101] at pdf page 92. As a result, BCL § 1312 is inapplicable and any defenses which rely upon that statute should be dismissed. 6 8 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 POINT II THE SECOND AND SIXTH AFFIRMATIVE DEFENSES LACK MERIT Although we address above the most obvious reason why the Second and Sixth Affirmative Defenses lack merit, Atlantic’s cross-motion addressed several reasons why these defenses lack merit, including that: “Authority” within the meaning of BCL § 1312 refers to a certificate of authority from the Secretary of State, as required under BCL §§ 1301 and 1304. However, Ins. Law § 108(e) expressly provides that BCL §§ 1301 and 1304, among others, are not applicable to incorporated foreign insurers, such as Atlantic. As a result, BCL § 1312 is inapplicable in this lawsuit. The Affirmative Defenses were imposed for purposes of precluding Atlantic from maintaining this lawsuit. Notably, the Sixth Affirmative Defense claims that Atlantic lacks the capacity “to commence and maintain this action.” However, the language of BCL § 1312 and the case law applying it make clear that such statute was never intended to be a permanent bar to commencing or maintaining a lawsuit. Instead, as stated in the statute, it was intended to encourage entities to become authorized, as required under the Business Corporation Law, by imposing a stay of the lawsuit “until such corporation has been authorized to conduct business in this state….” Since surplus lines insurers, such as Atlantic cannot become authorized under the Business Corporation Law (as intended by the statute) nor become authorized under the Insurance Law (which would cause such entity to lose its status as a surplus lines insurer), it is clear the statute was never intended to apply to surplus lines insurers such as Atlantic. Enforcing the Affirmative Defenses would have the effect of precluding surplus lines insurers from maintaining lawsuits in this State to enforce their policies and would, therefore, likely have a detrimental effect upon the surplus lines insurance market, which is necessary to the State’s economy. Enforcing these Affirmative Defenses, and applying BCL § 1312 as sought by Defendant, would force surplus lines insurers to sue in their home states, in contravention of the stated purpose of Ins. Law § 1312(a). Surplus lines insurers, such as Atlantic, do not “do business” within the narrow meaning of BCL § 1312, particularly under the heightened standard applied in order to avoid violating the Commerce Clause of the United States Constitution. Defendant does not address any of these issues in opposition to Atlantic’s cross-motion. Instead, Defendant presumes (contrary to the statutory law cited by Atlantic) that the word 7 9 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 “authorized” as used in BCL § 1312 must refer to “authorized” under the Insurance Law and cites to the definition of an “authorized” insurer, arguing that Atlantic “failed to allege the requirements under New York Insurance Law form excess line carriers when it issued these policies to Eastern Fruit.” Affirmation of Blake Morris [NYSCEF Doc. No. 116] at p. 6 of 8. However, since the word “authorized” within the meaning of BCL § 1312 does not refer to the insurance law requirements for an “authorized insurer,” it is irrelevant whether Atlantic is an authorized insurer or whether Atlantic has alleged in its Complaint that it is or is not an authorized insurer. In other words, regardless of whether Atlantic is or is not an “authorized insurer” within the meaning of Ins. Law § 107(a)(10), BCL § 1312 is inapplicable and does not preclude Atlantic from maintaining this lawsuit. Since BCL § 1312 is inapplicable to this lawsuit, Defendant’s Second and Sixth Affirmative Defenses lack merit and, therefore, should be stricken pursuant to CPLR 3211(b). Accordingly, Atlantic’s cross-motions should be granted. 8 10 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 POINT III DEFENDANT’S PROCEDURAL ARGUMENTS LACK MERIT Consistent with its efforts to avoid this lawsuit solely on the basis of procedural grounds, Defendant’s opposition is primary based upon various random procedural arguments, none of which have any merit. A. The Notice of Cross-Motion is Not Defective and Nonetheless, Any Alleged Ministerial Defects May be Disregarded For example, Defendant argues that Atlantic’s Notice of Cross-Motion is defective because it does not list the dates of the affidavits on which it is based. However, as Defendant quotes in its papers, CPLR 2214(a) which states that “[a] notice of motion shall specify the time and place of the hearing on the motion, the supporting papers upon which the motion is based, the relief demanded and the grounds therefor. Relief in the alternative or of several different types may be demanded.” Nothing in that rule requires that the notice of motion list the dates of the affidavits on which it is based. Nonetheless, even if this were a technical requirement, the absence of such dates is not prejudicial and may be disregarded by the Court pursuant to CPLR 2001. B. Defendant’s Argument Regarding Certificates of Conformity Lacks Merit Defendant argues that Atlantic has failed to include certificates of conformity for the affidavits of Ms. Robinson and Ms. Parrish which accompany the cross-motion. As Defendant correctly notes, however, such certificate of conformity is only required if the oath or affirmation is taken outside of New York State. Ms. Robinson’s affidavit was signed in Nassau County, which is within New York State and, as a result, no certificate of conformity is required. 9 11 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 As to the affidavit from Ms. Parrish, the Second Department has recognized that the failure to include a Certificate of Conformity is a technical issue which should not prevent an affidavit from being considered. As the Court explains: the Appellate Division, Second Department, has typically held, since 1951, that the absence of a certificate of conformity is not, in and of itself, a fatal defect (citations omitted). The defect is not fatal, as it may be corrected nunc pro tunc (citations omitted), or pursuant to CPLR 2001, which permits trial courts to disregard mistakes, omissions, defects, or irregularities at any time during an action where a substantial right of a party is not prejudiced (citations omitted). Thus, even if the certificate of conformity was inadequate or missing, no substantial right of the defendants is prejudiced. (Midfirst Bank v Agho, 121 AD3d 343, 351-352 [2d Dept 2014]; see also Matapos Tech. Ltd. v Cia. Andina de Comercio Ltd, 68 AD3d 672, 673 [1st Dept 2009] (“the courts are not rigid about this requirement. As long as the oath is duly given, authentication of the oathgiver's authority can be secured later, and given nunc pro tunc effect if necessary (citation omitted). The absence of such a certificate is a mere irregularity, and not a fatal defect (citation omitted).). In light of this, the Court should either disregard the defect pursuant to CPLR 2001 or should accept nunc pro tunc the certificate of conformity submitted herewith. C. Affiants Need Not Present Documentation Establishing the Basis for Their Knowledge of the Facts Addressed in the Affidavits Defendant argues that the affidavits fail to provide “supporting documentation for the basis for which Suzanne Parrish and Beata Robinson have any personal knowledge of the alleged facts contained in their respective affidavits.” Affirmation of Blake Morris [NYSCEF Doc. No. 116] at p. 3 of 8. However, Defendant fails to point to any case law requiring that an affidavit present documentation to support their personal knowledge. To the contrary, the cases cited by Defendant establish that affidavits such as those submitted in connection with Atlantic’s opposition and cross- motion are sufficient to support a motion or opposition. (See, e.g., Mitchell v Mid-Hudson Med. 10 12 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 Assoc. P.C., 213 AD2d 932, 932 [3d Dept 1995]; Hunter v Enquirer/Star, Inc., 210 AD2d 32, 33 [1st Dept 1994]; Bev. Distribs. of Nevada, Inc. v Schenley Indus., 155 AD2d 356, 357 [1st Dept 1989]). In the first paragraph of each of the affidavits submitted in connection with Atlantic’s cross-motion (and opposition), the affiants state the basis for their knowledge of the matters stated therein. Defendant does not contest the validity of such representations – only that the affiants have not presented documentary proof of the same. Since there is no requirement that affiants present documents to support the basis for their knowledge, there is no basis to find that the affidavits are inadmissible. D. The Letter From ELANY is Not Evidence Defendant argues that the letter from ELANY “fails the evidence requirements of the CPLR.” Affirmation of Blake Morris [NYSCEF Doc. No. 116] at p. 4 of 8. That letter, however, is not submitted as evidence – it is provided to assist the Court. It is the equivalent of an industry article or other similar authority (i.e. akin to an amicus brief). As such, authentication is not required. E. Collateral Estoppel is Inapplicable Defendant argues that Atlantic’s request to strike Plaintiff’s Affirmative Defenses pursuant to CPLR 3211(b) is barred by collateral estoppel. However, as quoted in Defendant’s own papers, that doctrine precludes a party from relitigating issues decided in a prior action. Defendant does not point to any other actions in which any issues were decided relevant to the present lawsuit. Moreover, it is well settled that “[t]o invoke collateral estoppel, the issue of ultimate fact must have been determined by a ‘final judgment’ (citations omitted).” (McGrath v Gold, 36 NY2d 406, 11 13 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 412 [1975]). To the extent Defendant attempts to rely upon a prior decision issued by this Court in the present lawsuit, no such decision is final and, as a result, collateral estoppel is inapplicable.1 F. Atlantic Filed a Timely Motion for Reargument Defendant correctly recites that CPLR 2221(d)(3) requires that a motion for reargument be made within thirty days after the order determining the prior motion was served with notice of entry. The order being reargued was served with notice of entry on July 29, 2019. See, Cross- Motion Exhibit F [NYSCEF Doc. No. 101] at pdf page 99. Atlantic’s motion to reargue was filed with the Court (and, thereby served as well) On August 28, 2019 – 30 days after the order was served with notice of entry. See, Notice of Motion to Dismiss and/or Reargue, id. at pdf page 1. As a result, the reargument motion was timely filed. As discussed in Atlantic’s cross-motion, the reargument motion was “marked off” as the attorneys did not appear. See, Cross-Motion Exhibit 15 [NYSCEF Doc. No. 104]. However, since the matter was in pre-note of issue status, such marking does not constitute a ‘marking off’ pursuant to CPLR 3404. (See, Gorski v St. John's Episcopal Hosp., 36 AD3d 757, 757 [2d Dept 2007]). As such, the restoration of such motion should be automatic. Id. Nonetheless, Atlantic has demonstrated a reasonable excuse for its failure to appear at the calendar call on October 30, 2019 and has demonstrated that the argument being raised in its motion is meritorious. 1 To the extent Defendant may have meant to argue “law of the case,” that doctrine is similarly inapplicable since “a court may revisit a prior ruling where there is subsequent evidence affecting the prior determination (citations omitted).” (Gitman v Martinez, 169 AD3d 1283, 1284 [3d Dept 2019]). In Gittman, the court had previously found there was an issue of fact preventing the Court from granting summary judgment. That same party filed a later application requesting summary judgment and presenting additional documents to address the absence of an issue of fact. The present cross-motion is based upon new facts, and, therefore, is not precluded by law of the case. Moreover, we seek to address herein an issue not previously addressed. In particular, the only issue previously addressed was whether Defendant presented evidence which would establish that Atlantic was “doing business” within the State sufficient to overcome the presumption applied in connection with BCL § 1312. The present motion, on the other hand, addresses the question of whether Atlantic falls within the scope of entities governed by BCL § 1312 in that Atlantic is an incorporated foreign insurer, and on the basis that applying the statute to Atlantic would permanently preclude Atlantic from maintaining this lawsuit, contrary to the purpose of BCL § 1312. 12 14 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 As the restoration of such motion is not prejudicial, it is respectfully submitted that the Court should restore the motion. (See, Deutsche Bank Natl. Trust Co. v Acevedo, 157 AD3d 859, 861 [2d Dept 2018]; Bux v Uddin, 2020 NY Slip Op 32169[U], *3 [Sup Ct, Queens County 2020]). Since the reargument motion was timely filed before it was “marked off,” that motion remains timely filed and may be considered on its merits. Notably, Defendant does not oppose Atlantic’s entitlement to reargument on its substance. Furthermore, as discussed above, Defendant does not dispute the substance of Atlantic’s arguments. As such, it is respectfully submitted that this Court should restore Atlantic’s prior motion to reargue and, upon doing so, grant reargument and modify the Court’s prior order to strike Defendant’s affirmative defenses which are based upon BCL § 1312. 13 15 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 POINT IV DEFENDANT HAS ASSERTED A NEW DEFENSE TO ATLANTIC’S COMPLAINT FOR THE FIRST TIME IN ITS REPLY/OPPOSITION WHICH SHOULD NOT BE CONSIDERED BY THE COURT Defendant’s motion seeks dismissal of the Complaint solely on the basis of CPLR 3211(a) and BCL § 1312. In its final set of papers, Defendant argues for the first time that Plaintiff’s Complaint lacks required specificity pursuant to CPLR 3013. This is an entirely different defense which was not asserted in the Answer (see, Cross-Motion Exhibit 12 [NYSCEF Doc. No. 100] at pp. 1-2; see also, Defendant’s motion [NYSCEF Doc. Nos. 74-75] and reply/opposition to cross- motion [NYSCEF Doc. No. 116]). Having not been raised in the answer, such defense is waived. At the very least, since this is not an issue which was raised in the original motion, it may not be raised for the first time in Defendant’s reply. (Peterkin v City of NY, 293 AD2d 244, 249 [2d Dept 2002]). Nonetheless, even if the Court were to consider that defense, it lacks merit. It is well settled that: With certain exceptions set forth in CPLR 3016 that are not applicable to the instant matter, New York adheres to notice pleading standards, requiring that a complaint need only place the defendant on notice of the transactions and occurrences giving rise to a claim (citations omitted). Although a complaint must allege the material elements of each cause of action asserted (citations omitted), the plaintiff may nonetheless submit an affidavit in opposition to a motion to dismiss in order to remedy any defects in the complaint (citations omitted). (Jacob v US Bank NA, 2019 NY Slip Op 30448[U], *2-3 [Sup Ct, NY County 2019]). The Complaint in this matter clearly places Defendant on notice of the transactions and occurrences giving rise to the claim. Although the Complaint does allege the material elements of the relevant causes of action, any potential deficiencies were corrected by the affidavits submitted by Atlantic. Defendant does not contest this. 14 16 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 Instead Defendant argues Atlantic has “wrongly alleged” it is “authorized” to issue insurance policies in this State. Affirmation of Blake Morris [NYSCEF Doc. No. 116] at p. 7 of 8. Defendant argues that it suffers prejudice as a result of this allegation. Certainly, Defendant does not suffer prejudice as a result of this allegation. First, as discussed above and in Atlantic’s cross-motion, the allegation is not critical to Atlantic’s claims in this lawsuit. Second, the allegation does not “cloak[ Atlantic] with the imprimatur of legitimacy…” as alleged by Defendant. Id. As indicated in connection with Atlantic’s original summary judgment motion, (Cross-Motion Exhibit 12 [NYSCEF Doc. No. 101] at pdf pages 78-79 (¶¶11-13)), although Atlantic is a surplus lines insurer and, therefore is not an “authorized insurer,” within the meaning of Ins. Law § 107(a)(10), it is “authorized” to insure New York residents in that it is permitted to do so under the Insurance Law. As a result, contrary to Defendant’s argument, this allegation is not “wrongly allege[d].” As a result, Defendant’s newly asserted defense under CPLR 3013 similarly fails. 15 17 of 18 FILED: KINGS COUNTY CLERK 09/10/2020 12:19 PM INDEX NO. 510798/2018 NYSCEF DOC. NO. 119 RECEIVED NYSCEF: 09/10/2020 CONCLUSION For the reasons discussed herein, it is respectfully requested that this Court deny Defendant’s motion to dismiss and grant Atlantic’s cross-motion, restoring to the calendar its motion for reargument and granting reargument, dismissing Defendant’s Second and Sixth Affirmative Defenses, and awarding to Atlantic such other and further relief as to this Court may seem just, proper and equitable including. Dated: White Plains, New York September 10, 2020 Keidel, Weldon & Cunningham, LLP By: ________________________________ Debra M. Krebs, Esq. Robert Walker Lewis, Esq. Attorneys for Plaintiff Atlantic Casualty Insurance Co. 925 Westchester Avenue, Suite 400 White Plains, New York 10604 Tel: (914) 948-7000 Fax: (914) 948-7010 16 18 of 18