Motion to Withdraw or Substitute Party in William Castillo Jr., Julissa Castillo v. 99 Church Investors Llc, Tishman Construction Corporation, Tishman Construction Corporation Of New York| Trellis.Law

On May 31, 2017 a Motion-Secondary was filed involving a dispute between Julissa Castillo, William Castillo Jr., and 99 Church Investors Llc, Tishman Construction Corporation, Tishman Construction Corporation Of New York, for Torts - Other (PERSONAL INJURY) in the District Court of New York County.

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FILED: NEW YORK COUNTY CLERK 04/02/2019 03:17 PM INDEX NO. 154952/2017
NYSCEF DOC. NO. 69 RECEIVED NYSCEF: 04/02/2019

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
----- ----------------------- ----------x
WILLIAM CASTILLO, JR. and JULISSA CASTILLO,
Index No.: 154952/2017

Plaintiffs,
Affirmation in Opposition to
-against- Third Defendant. Port
Party
Morris Tile & Marble Corp.'s
99 CHURCH INVESTORS LLC, TISHMAN Motion to Strike
CONSTRUCTION CORPORATION and TISHMAN
CONSTRUCTION CORPORATION OF NEW YORK,

Defendants.
---------------------------------------------------------x
99 CHURCH INVESTORS LLC, TISHMAN
CONSTRUCTION CORPORATION and TISHMAN
CONSTRUCTION CORPORATION OF NEW YORK,

Third-Party Plaintiffs,

-against-

PORT MORRIS TILE & MARBLE CORP.

Third-Party Defendant.
----------------------------------------------------------------------X
CANDICE Y. LANEZ, an attorney duly admitted to practice law before the Courts of the

State of New York, hereby affirms the following to be true under the penalties of perjury:

1. I am associated with the law firm of WOOD SMITH HENNING & BERMAN, LLP,

Attorneys for Defendants/Third-Party Plaintiffs, 99 CHURCH STREET INVESTORS, LLC,

TISHMAN CONSTRUCTION CORPORATION and TISHMAN CONSTRUCTION

CORPORATION OF NEW YORK (collectively "Tishman") in the above-referenced matter, and as

such, I am fully familiar with the facts and circumstances as set forth herein.

2. This affirmation isrespectfully submitted in opposition to the motion of Third-Party

Defendant, Port Morris Tile & Marble Corp., ("Port Morris") seeking an Order: (1) striking the

third-party complaiñt for failure to provide a copy of the OCIP policy; (2) pursuant to CPLR

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leave to amend the answer to include the affirmative defense of anti-
§3025(b) seeking third-party

subrogation; and, (3) for such other and further relief as the Court deems just, equitable, and proper.

3. This action seeks personal injuries arising from an alleged incident that occurred on

February 10, 2017 at the premises/work site located at 99 Church Street, New York, New York.

4. The third-party defendant has no proper basis to seek to have Tishman's third-party

complaint stricken. Tishman disclosed the ACE/Chubb Wrap Policy and complied with the

Compliance Conference Order issued on January 9, 2019. The motion of the third-party defendant

should be denied as the discovery sought has been provided and itsmotion is moot.

5. Courts have broad discretion in supervising disclosure, including granting or denying

(2nd
applications to strike pleadings. Javeed v. 3619 Realty Corp., 129 A.D.3d 1029 Dep't 2015). A

penalty under CPLR §3126 will apply when a party "refuses to obey an order for disclosure or

disclosed."
willfully fails to disclose information which the court finds ought to have been CPLR

§3126; Gibbs v. St. Barnabas Hosp., 16 N.Y.3d at 79 (2010).

6. In New York, Courts have long recognized that [striking a pleading] for

noncompliance with preliminary conference order should not be granted unless lack of compliance

was willful, contumacious, deliberate, or in bad faith. McKinney's CPLR 3126, subd. 3.; Little v.

Long Island Jewish Med. Ctr., 23 1 A.D.2d 496 (1996). Additionally, the drastic remedy of striking

an answer for failure to comply with discovery demands is inappropriate, unless there is a clear

showing that defendant's failure to comply was willful or contumacious. Hoi Wah Lai v. Mack, 89

(2nd
A.D.3d 990 Dep't 2011). Further, courts have recognized that "[i]t is well established that the

sanction . . . pursuant to CPLR 3126(3) should be granted only where itis conclusively shown that

the discovery default was deliberate or contumacious". Wetzler v. Sisters of Charity Hosp., 17

(4"'
A.D.3d 1088 Dep't 2005). A court will typically find willful and contumacious behavior when a

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party repeatedly failsto comply with court orders directing disclosure. McMahon v. Cobblestone

(1st
Lofts Condominium, 134 A.D.3d 646 Dep't 2015); Herrera v. City of New York, 238 A.D.2d

(2nd
475 99

7. Furthermore, in How Wah Lai, the Court found that the defendants did not miss any

plaintiffs'
court-ordered deadlines since the defendants already served responses to notice to produce

at the time of that the order was issued. Id., Palomba_v. Schindler Elevator Corp., 74 A.D.3d 1037

(2nd (2nd
Dep't 2010); New York Timber. LLC v. Seneca Companics, 133 A.D.3d 576 Dep't 2015);

(2nd
Pascarelli v. City of New York, 16 A.D.3d 472 Dep't 2005) (belated compliance was not due to

willful and contumacious conduct.).

TISHMAN'S ANSWER SHOULD NOT BE STRICKEN SINCE TISHMAN'S
DISCLOSURE OF THE ACE/CHUBB POLICY IN COMPLIANCE WITH THE
COMPLIANCE CONFERENCE ORDER DATED JANUARY 9, 2019, WAS NEITHER
WILLFUL NOR CONTUMACIOUS

8. In this case, Tishman complied with the Compliance Conference Order issued on

January 9, 2019, that directed itto furnished a copy of the ACE/Chubb policy.

9. Tishman disclosed the primary policy afforded by Insurance Company of the State of

Pennsylvania policy ("Primary policy"), the excess policy afforded by Westchester Fire Insurance

Company ("Excess Policy"), and ACE/Chubb policy ("Wrap Policy") to all parties on or about

January 23, 2019. A copy of Tishman's disclosure of the Primary Policy and Excess Policy is

annexed hereto as Exhibit "A".

10. On or about March 14, 2019, Tishman served a copy of the Wrap Policy and a copy

of the expiration notification of the policy on December 31, 2016 ("Expiration Notification"),

pursuant to the Court Order. A copy of the aforementioned response and disclosure is annex hereto

as Exhibit "B". The January 9, 2019 Compliance Conference Order was the only order directing

Tishman's disclosure of the Wrap Policy. However, Tishman's belated disclosure is neither willful

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nor contumacious as Tishman ultimately disclosed a full copy of the Wrap Policy. See Exhibit A.

Therefore, Tishman's third-party complaint should not be dismissed.

PORT MORRIS SHOULD NOT BE ENTITLED TO ADD THE AFFIRMATIVE
DEFENSE OF ANTI-SUBROGATION BECAUSE THE DEFENSE IS
COMPLETELY DEVOID OF MERIT

11. Port Morris should not be permitted to amend it'sthird-party answer to assert the

affirmative defense of anti-subrogation because ithas not identified one reason for their entitlement

to seek leave. In general, leave to amend an answer to assert an affirmative defense may be granted

where the proposed amendmeñt is neither palpably insufficient nor patently devoid of merit, and

there is no evidence that itwould prejudice or surprise opposing party. Jeboda v. Danza, 133 A.D.3d

(2nd
569 Dep't 2015). However, "the general rule is that motions for leave to amend must be

supported by at least a minimal showing of merit". Tilden Fiñañcial Corp. v. Muffoletto, 161

(2nd (3rd
A.D.2d 583 Dep't 1990) (citations omitted). See also Mathiesen v. Mead, 168 A.D.2d 736

Dep't 1990). Additionally, geñerally a court will not decide the merits but will determine ifa prima

facie basis for the amendment has been established. Hospital for Joint Diseases Orthopaedic

Institute v. James Katsikis Enviroñmcñtal Contractors, Inc., 173 A.D.2d 210 (1st Dep't 1991).)

12. Here, Port Morris vaguely states that itis entitled to add the affirmative defense of

anti-subrogation since there will be no prejudice to Tishmsm Port Morris provides that "[Tishman

has] known the facts which form the basis of this Motion, since the inception of this lawsuit". See

Affirmation of Port Morris in Support of Motion to Strike dated February 27, 2019, $28. Port Morris

has not established why or how Tishman would not otherwise be prejudiced or how Tishman knew

of facts underlying the motion. Port Morris's bareboñes statement that "Tishman has known the

facts"
providing the basis of the motion to strike/add anti-subrogation isinsufficient to establish their

entitlement to same. i_d.Since Port Morris failed to establish a prima face case that a defense of

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anti-subrogation has merit or identified a single reason for same, the Court should deny Port Morris

from amending their third-party answer.

13. Furthermore, Port Morris should not be permitted to assert the affirmative defense of

anti-subrogation since the claim has no merit and Tishman would be severely prejudiced.

shoes"
Subrogation allows an insurer to "stand in the of its insured to seek indemnification from

third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse.

Millennium Holdings LLC v. Glidden Co., 27 N.Y.3d 406 (2016). The anti-subrogation rule bars

owners' contractors'
insurers, that issued protective policies naming owners as insureds and general

contractors'
liability policies naming contractors as insured from covering from contractors for

amounts paid under OCP policies. North Star Reinsurance Corp. v. Coritinental Ins. Co., 82 N.Y.2d

281 (1993) (stating that "OCP and GCL policies were purchased together as coverage against same

risk and paid for by contractors, and thus, OCP and GCL policies were indistinguishable from single

policy"). In other words, anti-subrogation bars an insurer from subrogation against its own insured

for a claim arising from the risk for which the insured was covered even when the insured expressly

agreed to indemnify the party from whom the insurer's rights are derived. Millennium Holdings

LLC v. Glidden Co., 27 N.Y.3d 406 (2016).

14. However, subrogation is typically permissible where the third-party is not named or

additional insured. Millennium Holdings LLC v. Glidden Co., 27 N.Y.3d 406 (2016). Thus, the

party seeking to claim anti-subrogation must establish that party the insurer is seeking to enforce its

right of subrogation is (1) itsinsured, (2) an additional insured, or (3) a party who is intended to be

covered the insurance in some other way. id. The essential element of the anti-
by policy

subrogation rule is that the party to which the insurer seeks to subrogate is covered by the relevant

insurance policy. id.

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15. Tishman was the named insured under the Primary Policy that had a policy number

GL 05-16-12, with a policy period from October 1, 2016 to October 1, 2017, and had a policy limits

of up to $2,000,000.00 per occurrence and $4,000,000.00 general aggregate. S_ee Exhibit A.

insured"
However, Tishman was not obligated to insure or name Port Morris as an "additional under

the terms and conditions of the Primary Policy. Specifically, pursuant to Section II,entitled "Who Is

Insured"
An of the Primary Policy, additional insureds include "person(s) or organization(s) shown

injury"
in the Schedule, but only with respect to liability for "bodily . . .in
the performance of your

operations for the additional at the designated above.". See Exhibit A.
ongoing insured(s) location(s)

The Schedule identified those additional insured person(s) or organization(s) as "any person or

organization whom you become obligated to include as an additional insured as a result of any

contract or agreement you have entered into". i_d.

16. However, Port Morris was not considered an additional insured under the Schedule

pursuant to the terms and conditions of the subcontract agreement between Tishman and Port Morris

dated September 26, 2013 ("Port Morris Agreement"), a copy of which is annexed hereto as Exhibit

"C". Rather, the Port Morris Agreement contained a unilateral obligation on Port Morris to

indemnify, defend, and hold Tishman Harmless. See Exhibit C, §7. Tishman had no

indemnification obligation to Port Morris. Specifically, Section 7 of the Port Morris Agreement sets

forth:

To the fullest extent permitted by law, the Contractor shall indemnify,
defend through counsel acceptable to Construction Manager and

Owner, and hold harmless the Owner [99 Church], Construction
Manager [Tishman] and Owner, and hold harmless the Owner,
Construction Manager, such other Indemnitees as may be defined

herein, and theirrespective parent companies, corporations, members,
limited liability companies and/or partnerships and their owned,
controlled, associated, affiliated and subsidiary companies,
corporations, members, limited liability companies, and/or
partnerships . .. . from and against all claims or causes of action,

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attorneys'
damages, losses and expenses, including but not limited to
fees and legal and settlement costs and expenses (collectively,
"Claims"), arising out of or resulting from the acts or omissions of
Contractor of anyone for who acts Contractor may be liable in
connection with the Contract Documents, the performance of, or
failure to perform, the Work, or the Contractor's operations, including
the performance of the obligations set forth in this Clause. To the
fullest extend permitted by law, Contractor's duty to indemnify the
Indemnitees shall arise whether or not caused in part by the active or
passive negligence or other fault of any of the Indemnitees, provided,
however, that Contractor's duty hereunder shall not arise to the extent
that any such claim, damages, loss or expense was caused by the sole
negligence or the Indemnitees or an Indemnitee.

See Exhibit C, §7.

"Indemnitees"
17. are specifically defined as Tishman Construction Corporation ofNew

York, Owner (identified as 99 Church Investors LLC) and Owner's Representatives, and their

respective parent companies, corporations, members and/or partnerships and their owned, controlled,

affiliated, associated and subsidiary companies. Exhibit C.

18. Furthermore, the Port Morris Agreement explicitly obligated Port Morris to obtain

insurance for its own work. Under §8 and Rider of the Port Morris Agrcemêñt, Port Morris was

required to procure insurance for itswork performed pursuant to the agreement and list
as additional

insureds: "99 Church Street Investors, LLC, New York City Transit Authority/MTA, and allenrolled

OCIP Contractors". See Exhibit C. Clearly, Port Morris was required to obtain itsown insurance

coverage pursuant to the explicit terms of the Port Morris Agreement and to procure insurance in

favor of defendants/third-party plaintiffs, 99 Church Investors, LLC, Tishman Construction

Corporation and Tishman Construction Corporation of New York and to indemnify same pursuant to

(2nd
the Port Morris Agreement. Flowers v. KG Land New York Corp., 219 A.D.2d 579

1995). Additionally, there was no coverage afforded to Port Morris as an additional insured under

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the Primary Policy. The Wrap Policy that previously afforded coverage to Port Morris was not in

effect at the time of the incident.

19. Port Morris obtained itsown insurance with Old Republic Insurance under policy

number A2DG00451605, for the policy period from May 14, 2016 to May 14, 2017. Copies of the

Old Republic Insurance copy and Certificate of Liability are annexed hereto as Exhibit "D".

20. Additionally, pursuant to the Expiration Notification, the Wrap Policy expired on

December 31, 2016, nearly two months before the accident occurred. he Exhibit B. Port Morris

was notified of the expiration on December 1, 2016 clearly informing them to obtain their own

insurance coverage, which Port Morris obtained through Old Republic Insurance. i_d.The expired

Wrap Policy, existing Old Republic Insurance obtained by Port Morris pursuant to the Port Morris

Agreement, Port Morris's unilateral obligation to indemnity and insure Tishman pursuant to §§7-8 of

the Port Morris Agreemeñt and Rider, and the Primary Policy's explicit terms excluding Port Morris

from coverage establish that Tishman neither named nor intended for Port Morris to be an additional

(2nd
insured or to be covered. Flowers v.KG Land New York Corp., 219 A.D.2d 579 Dep't 1995).

Port Morris is clearly not a named or intended insured under any of Tishman's policies. There is no

cognizable way that Port Morris could be covered under the Primary Policy or under an expired

Wrap Policy. Tishman does not seek rights of subrogation against an insured under the Primary

Policy or non-existent Wrap Policy. Therefore, since anti-subrogation clearly does not apply, itis

meritless and Port Morris's motion to seek leave should be denied.

21. Port Morris's motion should also be denied because Tishman would be severely

prejudiced in allowing the amêñdmêñt. "Prejudice has been defined as a special right lost in the

interim, a change in position, or significant trouble or expense that could have been avoided had the

amendment."
original pleading coñtained the proposed Ward v. City of Schenectady, 204 A.D.2d

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779 (3d Dep't 1994) (citations omitted). See also Sterling Power Partners. L.P. v. Niagara Mohawk

Power Corp., 239 A.D.2d 191, 657 N.Y.S.2d 407, 35 U.C.C. Rep. Serv. 2d 814 (1st Dep't 1997).

The Wrap Policy expired on December 31, 2016-which is when Port Morris was immediately

required to obtain their own commercial liability policy. Ithas been nearly two (2) years and two (2)

months since the Wrap Policy expired and Port Morris was required to obtain their own insurance.

As such, Port Morris's anti-subrogation defense is without merit. Mr. Castillo's accident allegedly

occurred while working for Port Morris at a Tishman project site on February 10, 2017.

22. Tishman interposed the third-party complaint against Port Morris seeking contractual

and common law indemnification, contribution, and additional insured status pursuant to the terms

and conditions of the "Port Morris Agreement". A copy of the aforementioned impleader isannexed

hereto as Exhibit "E". Tishman's impleader was based upon Port Morris's contractual obligation to

indemnify Tishman and 99 Church Street Investors, LLC, and obtain insurance in favor of Tishman

for the project and claim asserted by Plaintiffs. Since Port Morris knew that that Wrap Policy clearly

expired over two years ago, Tishman would be forced to expend unnecessary expense prosecuting a

meritless defense and would be severely prejudiced. As such, the court should prevent Port Morris

from asserting anti-subrogation as an affirmative defense.

WHEREFORE, itis respectfully requested that the Court deny Port Morris's motion in its

entirety.

Dated: New York, New York
April 2, 2019

C A E

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Case Info

Judge

Barbara Jaffe Track Judge’s New Case

Case No.

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Document Filed Date

April 02, 2019

Case Filing Date

May 31, 2017

County

Parties

99 CHURCH INVESTORS LLC Defendant
ABATEMARCO, TRACY JILL Attorney for the Defendants
Julissa Castillo Plaintiff
LANEZ, CANDICE YVONNE Attorney for the Defendants
PAYNE, STEVEN R Attorney for the Plaintiff
RUSHFORTH, ARTHUR THOMAS Attorney for the Defendants
TISHMAN CONSTRUCTION CORPORATION Defendant
TISHMAN CONSTRUCTION CORPORATION OF NEW YORK Defendant
William Castillo jr. Plaintiff
JENNIFER BUDNER Attorney

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Motion-Secondary: William Castillo Jr., Julissa Castillo v. 99 Church Investors Llc, Tishman Construction Corporation, Tishman Construction Corporation Of New York

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