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FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017
NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
----------------------------------------x
INTERSTATE FIRE & CASUALTY COMPANY,
Plaintiff, Index No.: 153512/2017
-against-
ASPEN INSURANCE UK LIMITED, ASPEN
SPECIALTY INSURANCE COMPANY, ASPEN Motion Seq. No. 004
AMERICAN INSURANCE COMPANY, and
STANDARD WATERPROOFING CORPORATION,
Defendants.
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MEMORANDUM OF LAW IN SUPPORT OF STANDARD WATERPROOFING
CORPORATION’S MOTION TO DISMISS THE VERIFIED AMENDED COMPLAINT
TRAVIS LAW PLLC
Attorneys for Defendant
Standard Waterproofing Corporation
80 Maiden Lane, Suite 304
New York, New York 10038
Tel: (212) 248-2120
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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES …………………………………………………………………... ii
PRELIMINARY STATEMENT ……………........................................................……………. 1
STATEMENT OF FACTS ……….…....................................................................………...….. 2
ARGUMENT ………………………………………………………………………………...… 4
I. STANDARD FOR MOTION TO DISMISS PURSUANT TO CPLR 3211(a)(10) ....... 4
II. PLAINTIFF FAILED TO JOIN LIBERTY AND IMPERIUM TO THIS ACTION …. 5
CONCLUSION ………………………………………………………………………………... 8
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TABLE OF AUTHORITIES
CASES Page
27th St. Block Assn. v. Dormitory Auth.
302 A.D.2d 155, 160 (1st Dept. 2002) ……..……………………........………………………. 4
Éclair Advisor Ltd. v. Jindo Am., Inc.
3 A.D.3d 240, 245 (1st Dept. 2007) …………………………………..……..……………....... 5
Karama Supermarket v. Frawley Plaza Assocs.
200 A.D.2d 355, 356 (1st Dept. 1994) …….……........……………………….............………. 4
Matter of Colavito v. NY State Comptroller
130 A.D.3d 1221, 1222 (3d Dept. 2015) ………….……………….......................................... 4
New York v. Long Is. Airports Limousine Serv. Corp.
48 N.Y.2d 469, 475 (1979) …………....….......................................…………......................... 4
Nowitz v. Nowitz
37 A.D.3d 788 (2d Dept. 2007) ………….…………..….......................................................... 4
STATUTES AND REGULATIONS
CPLR § 3211 ……………………………….……………………………………....…............ 4
CPLR § 1001 ……………………………….……………………………………....…............ 4
CPLR § 1003 ……………………………….……………………………………....…............ 4
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PRELIMINARY STATEMENT
Defendant, Standard Waterproofing Corporation (“Standard”), moves to dismiss Plaintiff
Interstate Fire and Casualty Company’s (“Interstate”) Verified Amended Complaint (“Amended
Complaint”) pursuant to CPLR § 3211(a)(10) for failure to join two necessary parties – Liberty
Mutual Insurance Company (“Liberty”) and Imperium Insurance Company (“Imperium”),
formerly known as Delos Insurance Company. Interstate, Liberty, Imperium, and Aspen Insurance
UK Limited (“Aspen”), all provided coverage at different times to Standard over an eight-year
period, dating back to March 2006.
In or about January 2006, Standard was contracted to perform waterproofing services in
connection with the construction, conversion and rehabilitation of the building known as and
located at 15 East 86th Street, New York, New York (the “Building”). Ultimately, after the
conclusion of the construction project, the condominium board of directors at the Building filed
three separate suits against the sponsor/developer, and Standard was brought in as a third-party
defendant. Interstate defended Standard and settled the claims against Standard and now seeks
restitution and a declaratory judgment that Interstate had no duty to defend Standard in the
underlying actions.
Interstate only brought this declaratory judgment action against Aspen and Standard but
neglected to include Liberty and Imperium, who likewise issued policies and disclaimer letters to
Standard, like Aspen. Any decision in this action regarding the scope of insurance policies and
the validity of the disclaimers issued by the insurers would therefore affect all insurers, including
Liberty and Imperium. As a result, Liberty and Imperium are necessary parties, and this Court
must dismiss the Verified Amended Complaint for Interstate’s failure to name them in this action.
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STATEMENT OF FACTS
In 2006, Standard performed work on the Building pursuant to a series of contracts. The
condominium board of directors, as well as two individual unit owners, filed suit against the
sponsor/developer of the Building in three separate civil actions:
• Board of Managers of Fifteen Madison North Condominium v. Madison Park Owner, LLC,
et al., Index No. 652052/2011, Supreme Court of New York, County of New York;
• Jeffrey ad Gayle Klein v. Madison Park Owner, LLC, et al., Index No. 652061/2011,
Supreme Court of New York, County of New York;
• Irene Rodriguez v. Madison Park Owner, LLC, et al., Index No. 113248/2011, Supreme
Court of New York, County of New York.
The three actions were consolidated for discovery purposes on April 1, 2013 and are herein referred
to collectively as the “Underlying Action.” Interstate defended Standard and settled the claims
against Standard in the Underlying Action. The Underlying Action was discontinued on December
1, 2017.
During the time Standard was hired to perform work at the Building through the litigation
of the Underlying Action, Standard was insured by the four separate insurance carriers as follows:
Interstate from March 2006 to October 2007, Aspen from October 2007 to October 2009,
Imperium from October 2009 to October 2010, and Liberty from October 2010 to October 2014.
Interstate, on behalf of Standard, issued tender letters to Aspen, Imperium (Delos), and Liberty.
Imperium disclaimed coverage in April 2012, and then again in February 2015. Imperium
took the position that any damage allegedly caused by Standard arose prior to its policy taking
effect and further that the policy does not provide for contractual claims, which is sought against
Standard in the Underlying Action. Likewise, Liberty disclaimed coverage in March 2012 and
again in November 2014. Liberty denied coverage stating that any damage allegedly caused by
Standard occurred prior to the policy period.
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Lastly, Aspen disclaimed coverage in May 2015 based upon the position that there has
never been a claim for third party property damage. In addition, Aspen stated that even if there
were a claim for third party property damage, it would be excluded pursuant to the continuous and
progressive exclusion within the policy. Similar to Liberty and Imperium, Aspen also excluded
coverage for any contractual claims filed against Standard.
On April 14, 2017, Interstate initiated this declaratory judgment action, was given leave to
file an amended complaint on September 19, 2018, and subsequently filed its Verified Amended
Complaint on September 20, 2018. See the Verified Amended Complaint annexed to the
Affirmation of Joseph DeBlase (“DeBlase Aff.”) as Exhibit A. In the pleadings, Interstate only
seeks coverage for Board of Managers of Fifteen Madison North Condominium v. Madison Park
Owner, LLC, et al., Index No. 652052/2011, Supreme Court of New York, County of New York
(the “Board Action”). Plaintiffs in the Board Action (the “Board”) sought, in essence, a breach of
contract claim. The Board further sought economic damages to repair or replace the defective
work resulting from the alleged breach of the contract, namely, breach of the Offering Plan and
Purchase Agreements. The Board did not seek damages for third party property damage related
thereto, but only repair, replacement or completion of the work itself. Standard filed an Answer
to the Amended Complaint with Crossclaims against Aspen, and Counterclaims against Interstate,
on October 17, 2018. See the Answer with Crossclaims and Counterclaims annexed to the DeBlase
Aff. as Exhibit B.
Interstate asserted claims in the Amended Complaint against its insured, Standard, for
restitution and a declaratory judgment that it had no duty to indemnify Standard despite
representing Standard in the settlement of the Underlying Action. For the reasons set forth at
length below, the Amended Complaint should be dismissed in its entirety as and against Standard.
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ARGUMENT
I. STANDARD FOR MOTION TO DISMISS PURSUANT TO CPLR 3211(a)(10)
Pursuant to CPLR § 3211(a)(10), a party may move for dismissal of the complaint when
“the court should not proceed in the absence of a person who should be a party.” CPLR §
3211(a)(10). In setting forth the necessity to join parties, Section 1001 of the CPLR defines
“parties who should be joined” as “Persons who ought to be parties if complete relief is to be
accorded between the persons who are parties to the action or who might be inequitably affected
by a judgment in the action...” CPLR § 1001(a). Therefore, under CPLR § 1001(a), “necessary
parties to an action or proceeding fall into two distinct categories: persons ‘who ought to be parties
if complete relief is to be accorded between the persons who are parties to the action,’ or ‘who
might be inequitably affected by a judgment in the action.’” 27th St. Block Assn. v. Dormitory
Auth., 302 A.D.2d 155, 160 (1st Dept. 2002). “Nonjoinder of a party who should be joined under
CPLR Section 1001 is a ground for dismissal of an action without prejudice unless the court allows
the action to proceed without that party under the provisions of that section.” CPLR § 1003. “The
absence of a necessary party may be raised at any state of the proceedings, by any party or by the
court on its own motion.” Matter of Colavito v. NY State Comptroller, 130 A.D.3d 1221, 1222
(3d Dept. 2015); Nowitz v. Nowitz, 37 A.D.3d 788 (2d Dept. 2007).
Moreover, the Court of Appeals has held that the mandatory joinder rule “serves judicial
economy by preventing a multiplicity of suits.” New York v. Long Is. Airports Limousine Serv.
Corp., 48 N.Y.2d 469, 475 (1979). It is a waste of judicial time and resources when the responsible
party and its insurer could have handled the claim properly prior to litigation. See Karama
Supermarket v. Frawley Plaza Assocs., 200 A.D.2d 355, 356 (1st Dept. 1994) (Holding that
“caution should be exercised in dismissing third-party actions, so as to avoid multiplicity and
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circuity of litigation and to achieve the desirable goal of determining both primary and ultimate
liability in a single proceeding”). The goal of the Court is to resolve all potential coverage disputes
within one proceeding. “Mandatory joinder prevents multiple, inconsistent judgments relating to
the same controversy.” Éclair Advisor Ltd. v. Jindo Am., Inc., 39 A.D.3d 240, 245 (1st Dept. 2007).
As set forth herein and as demonstrated by the Amended Complaint itself, the Amended
Complaint fails to name two necessary parties – Liberty and Imperium – and therefore the
Amended Complaint should be dismissed pursuant to CPLR § 3211(a)(10).
II. PLAINTIFF FAILED TO JOIN LIBERTY AND IMPERIUM TO THIS ACTION
Interstate’s Amended Complaint includes causes of action against Aspen, and its related
entities, and Standard, but fails to name two other insurance companies who provided coverage to
Standard – Liberty and Imperium. Liberty and Imperium are in a similar, if not identical, position
as Aspen. Like Aspen, Liberty and Imperium also disclaimed coverage to Standard while
Interstate represented Standard in the Underlying Action. Interstate’s failure to bring suit against
Liberty and Imperium, and to limit itsclaims to Aspen and Standard, prevents the Court from
rendering complete relief. Liberty and Imperium would be inequitably affected should a judgment
be issued in this matter declaring that a duty existed to defend and indemnify Standard in the
Underlying Action.
In both Aspen and Imperium’s disclaimer letters, the carriers cite to identical “Contractual
Liability” exclusion clauses in their respective policies as grounds to disclaim coverage. Similarly,
the parties declared that there is no coverage for contractual claims, including but not limited to
the indemnification claim by the Board in the Underlying Action against Standard. Aspen, Liberty,
and Imperium all disclaimed coverage alleging the property damage sought to be repaired in the
Underlying Action occurred before their respective policy periods began.
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Meanwhile, Standard is in an awkward position as Interstate voluntary provided Standard
coverage in the Underlying Action but now seeks restitution from Standard, while only filing
claims against one of the three insurance companies who denied coverage to Standard.
Furthermore, Interstate attempts to use the same rationale as the other companies to hold Aspen
liable, claiming that the property damage allegedly caused by Standard in the Underlying Action
falls outside of Interstate’s coverage period. See Am. Compl., ¶¶ 38-41.
In itsefforts to essentially disclaim coverage post-resolution of the Underlying Action,
Interstate cites to the Underlying Action’s lack of specificity with respect to the timing of the
alleged injury or damage. See Am. Compl., ¶¶ 14, 27. Interstate also pleads, “the allegations in
the Underlying Action are silent as to when any alleged property damage allegedly resulting from
Standard’s work took place.” Am. Compl., ¶ 45.
All four insurers assert that the damage arose outside of their coverage period, three of the
insurers also disclaimed coverage based on an exclusion for contractual claims against the insured,
yet, two of these carriers are absent from the Amended Complaint. Instead of pleading against all
three insurance companies, Aspen, Liberty, and Imperium, Interstate asserted causes of action
against Standard, the insured, to recover the money it spent on defending Standard in the
Underlying Action. Simply put, Interstate failed to join two very necessary parties to this action,
and it would be prejudicial to continue this matter against Standard without Liberty and Imperium
also being named as defendants.
Should this Court find there was a valid duty to defend and indemnify Standard, the Court
cannot then enter a declaratory judgment without the ability to also apportion liability to the two
unnamed parties, Liberty and Imperium. Assuming Interstate is even entitled to the relief it seeks
against Standard, which it is not, Aspen alone would be unable to make Interstate whole, especially
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under the presumption that Interstate is owed contribution from Liberty and Imperium. Complete
relief requires all issues between the four insurance companies to be resolved collectively in a
single action. Without the ability to fully and accurately allocate liability amongst the four insurers
in one action, there is no way to ensure that each insurer is held accountable for its respective share
of the total obligation and indemnification of Standard. It would be an inefficient use of judicial
resources and create a risk of inconsistent judgments relating to the rights and obligations of the
insurers with respect to Standard, to have this Court first apportion liability between Aspen and
Interstate, and then have Aspen or Interstate subsequently litigate against Liberty or Imperium to
obtain restitution.
Lastly, Liberty and Imperium would be inequitably affected by a judgment in Interstate’s
favor. Any declaratory decision and judgment issued pertaining to the scope of Aspen’s policy
and the validity of the disclaimers thereunder will affect both Liberty and Imperium who had
substantively identical policies and issued similar disclaimer letters to Standard. Thus, if Aspen
is found to have a duty to have defended Standard in the Underlying Action, then likewise Liberty
and Imperium would possess that same duty, and Standard would have claims against them for
their failure to provide coverage to Standard under their respective policies. The rights and
obligations of the four insurers with respect to the Underlying Action should be resolved jointly.
Interstate’s failure to join Liberty and Imperium, two necessary parties and shared insurers of
Standard, warrants dismissal of the Amended Complaint pursuant to CPLR § 3211(a)(1).
CONCLUSION
For the reasons stated above and in the supporting Affirmation of Joseph A. DeBlase
submitted herewith, and upon the prior pleadings and proceedings herein, the Court should: (1)
dismiss the Verified Amended Complaint of Interstate Fire & Casualty Company as and against
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Standard Waterproofing Corporation in its entirety; and (2) award Standard Waterproofing
Corporation any additional relief the Court deems just and proper.
Dated: New York, New York
August 2, 2019 TRAVIS LAW PLLC
By:
Joseph A. DeBlase
Attorney for Defendant
Standard Waterproofing Corporation
80 Maiden Lane, Suite 304
New York, New York 10038
Phone (212) 248-2120
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Preview
FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ----------------------------------------x INTERSTATE FIRE & CASUALTY COMPANY, Plaintiff, Index No.: 153512/2017 -against- ASPEN INSURANCE UK LIMITED, ASPEN SPECIALTY INSURANCE COMPANY, ASPEN Motion Seq. No. 004 AMERICAN INSURANCE COMPANY, and STANDARD WATERPROOFING CORPORATION, Defendants. ----------------------------------------x MEMORANDUM OF LAW IN SUPPORT OF STANDARD WATERPROOFING CORPORATION’S MOTION TO DISMISS THE VERIFIED AMENDED COMPLAINT TRAVIS LAW PLLC Attorneys for Defendant Standard Waterproofing Corporation 80 Maiden Lane, Suite 304 New York, New York 10038 Tel: (212) 248-2120 1 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 TABLE OF CONTENTS Page TABLE OF AUTHORITIES …………………………………………………………………... ii PRELIMINARY STATEMENT ……………........................................................……………. 1 STATEMENT OF FACTS ……….…....................................................................………...….. 2 ARGUMENT ………………………………………………………………………………...… 4 I. STANDARD FOR MOTION TO DISMISS PURSUANT TO CPLR 3211(a)(10) ....... 4 II. PLAINTIFF FAILED TO JOIN LIBERTY AND IMPERIUM TO THIS ACTION …. 5 CONCLUSION ………………………………………………………………………………... 8 i 2 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 TABLE OF AUTHORITIES CASES Page 27th St. Block Assn. v. Dormitory Auth. 302 A.D.2d 155, 160 (1st Dept. 2002) ……..……………………........………………………. 4 Éclair Advisor Ltd. v. Jindo Am., Inc. 3 A.D.3d 240, 245 (1st Dept. 2007) …………………………………..……..……………....... 5 Karama Supermarket v. Frawley Plaza Assocs. 200 A.D.2d 355, 356 (1st Dept. 1994) …….……........……………………….............………. 4 Matter of Colavito v. NY State Comptroller 130 A.D.3d 1221, 1222 (3d Dept. 2015) ………….……………….......................................... 4 New York v. Long Is. Airports Limousine Serv. Corp. 48 N.Y.2d 469, 475 (1979) …………....….......................................…………......................... 4 Nowitz v. Nowitz 37 A.D.3d 788 (2d Dept. 2007) ………….…………..….......................................................... 4 STATUTES AND REGULATIONS CPLR § 3211 ……………………………….……………………………………....…............ 4 CPLR § 1001 ……………………………….……………………………………....…............ 4 CPLR § 1003 ……………………………….……………………………………....…............ 4 ii 3 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 PRELIMINARY STATEMENT Defendant, Standard Waterproofing Corporation (“Standard”), moves to dismiss Plaintiff Interstate Fire and Casualty Company’s (“Interstate”) Verified Amended Complaint (“Amended Complaint”) pursuant to CPLR § 3211(a)(10) for failure to join two necessary parties – Liberty Mutual Insurance Company (“Liberty”) and Imperium Insurance Company (“Imperium”), formerly known as Delos Insurance Company. Interstate, Liberty, Imperium, and Aspen Insurance UK Limited (“Aspen”), all provided coverage at different times to Standard over an eight-year period, dating back to March 2006. In or about January 2006, Standard was contracted to perform waterproofing services in connection with the construction, conversion and rehabilitation of the building known as and located at 15 East 86th Street, New York, New York (the “Building”). Ultimately, after the conclusion of the construction project, the condominium board of directors at the Building filed three separate suits against the sponsor/developer, and Standard was brought in as a third-party defendant. Interstate defended Standard and settled the claims against Standard and now seeks restitution and a declaratory judgment that Interstate had no duty to defend Standard in the underlying actions. Interstate only brought this declaratory judgment action against Aspen and Standard but neglected to include Liberty and Imperium, who likewise issued policies and disclaimer letters to Standard, like Aspen. Any decision in this action regarding the scope of insurance policies and the validity of the disclaimers issued by the insurers would therefore affect all insurers, including Liberty and Imperium. As a result, Liberty and Imperium are necessary parties, and this Court must dismiss the Verified Amended Complaint for Interstate’s failure to name them in this action. 1 4 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 STATEMENT OF FACTS In 2006, Standard performed work on the Building pursuant to a series of contracts. The condominium board of directors, as well as two individual unit owners, filed suit against the sponsor/developer of the Building in three separate civil actions: • Board of Managers of Fifteen Madison North Condominium v. Madison Park Owner, LLC, et al., Index No. 652052/2011, Supreme Court of New York, County of New York; • Jeffrey ad Gayle Klein v. Madison Park Owner, LLC, et al., Index No. 652061/2011, Supreme Court of New York, County of New York; • Irene Rodriguez v. Madison Park Owner, LLC, et al., Index No. 113248/2011, Supreme Court of New York, County of New York. The three actions were consolidated for discovery purposes on April 1, 2013 and are herein referred to collectively as the “Underlying Action.” Interstate defended Standard and settled the claims against Standard in the Underlying Action. The Underlying Action was discontinued on December 1, 2017. During the time Standard was hired to perform work at the Building through the litigation of the Underlying Action, Standard was insured by the four separate insurance carriers as follows: Interstate from March 2006 to October 2007, Aspen from October 2007 to October 2009, Imperium from October 2009 to October 2010, and Liberty from October 2010 to October 2014. Interstate, on behalf of Standard, issued tender letters to Aspen, Imperium (Delos), and Liberty. Imperium disclaimed coverage in April 2012, and then again in February 2015. Imperium took the position that any damage allegedly caused by Standard arose prior to its policy taking effect and further that the policy does not provide for contractual claims, which is sought against Standard in the Underlying Action. Likewise, Liberty disclaimed coverage in March 2012 and again in November 2014. Liberty denied coverage stating that any damage allegedly caused by Standard occurred prior to the policy period. 2 5 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 Lastly, Aspen disclaimed coverage in May 2015 based upon the position that there has never been a claim for third party property damage. In addition, Aspen stated that even if there were a claim for third party property damage, it would be excluded pursuant to the continuous and progressive exclusion within the policy. Similar to Liberty and Imperium, Aspen also excluded coverage for any contractual claims filed against Standard. On April 14, 2017, Interstate initiated this declaratory judgment action, was given leave to file an amended complaint on September 19, 2018, and subsequently filed its Verified Amended Complaint on September 20, 2018. See the Verified Amended Complaint annexed to the Affirmation of Joseph DeBlase (“DeBlase Aff.”) as Exhibit A. In the pleadings, Interstate only seeks coverage for Board of Managers of Fifteen Madison North Condominium v. Madison Park Owner, LLC, et al., Index No. 652052/2011, Supreme Court of New York, County of New York (the “Board Action”). Plaintiffs in the Board Action (the “Board”) sought, in essence, a breach of contract claim. The Board further sought economic damages to repair or replace the defective work resulting from the alleged breach of the contract, namely, breach of the Offering Plan and Purchase Agreements. The Board did not seek damages for third party property damage related thereto, but only repair, replacement or completion of the work itself. Standard filed an Answer to the Amended Complaint with Crossclaims against Aspen, and Counterclaims against Interstate, on October 17, 2018. See the Answer with Crossclaims and Counterclaims annexed to the DeBlase Aff. as Exhibit B. Interstate asserted claims in the Amended Complaint against its insured, Standard, for restitution and a declaratory judgment that it had no duty to indemnify Standard despite representing Standard in the settlement of the Underlying Action. For the reasons set forth at length below, the Amended Complaint should be dismissed in its entirety as and against Standard. 3 6 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 ARGUMENT I. STANDARD FOR MOTION TO DISMISS PURSUANT TO CPLR 3211(a)(10) Pursuant to CPLR § 3211(a)(10), a party may move for dismissal of the complaint when “the court should not proceed in the absence of a person who should be a party.” CPLR § 3211(a)(10). In setting forth the necessity to join parties, Section 1001 of the CPLR defines “parties who should be joined” as “Persons who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action...” CPLR § 1001(a). Therefore, under CPLR § 1001(a), “necessary parties to an action or proceeding fall into two distinct categories: persons ‘who ought to be parties if complete relief is to be accorded between the persons who are parties to the action,’ or ‘who might be inequitably affected by a judgment in the action.’” 27th St. Block Assn. v. Dormitory Auth., 302 A.D.2d 155, 160 (1st Dept. 2002). “Nonjoinder of a party who should be joined under CPLR Section 1001 is a ground for dismissal of an action without prejudice unless the court allows the action to proceed without that party under the provisions of that section.” CPLR § 1003. “The absence of a necessary party may be raised at any state of the proceedings, by any party or by the court on its own motion.” Matter of Colavito v. NY State Comptroller, 130 A.D.3d 1221, 1222 (3d Dept. 2015); Nowitz v. Nowitz, 37 A.D.3d 788 (2d Dept. 2007). Moreover, the Court of Appeals has held that the mandatory joinder rule “serves judicial economy by preventing a multiplicity of suits.” New York v. Long Is. Airports Limousine Serv. Corp., 48 N.Y.2d 469, 475 (1979). It is a waste of judicial time and resources when the responsible party and its insurer could have handled the claim properly prior to litigation. See Karama Supermarket v. Frawley Plaza Assocs., 200 A.D.2d 355, 356 (1st Dept. 1994) (Holding that “caution should be exercised in dismissing third-party actions, so as to avoid multiplicity and 4 7 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 circuity of litigation and to achieve the desirable goal of determining both primary and ultimate liability in a single proceeding”). The goal of the Court is to resolve all potential coverage disputes within one proceeding. “Mandatory joinder prevents multiple, inconsistent judgments relating to the same controversy.” Éclair Advisor Ltd. v. Jindo Am., Inc., 39 A.D.3d 240, 245 (1st Dept. 2007). As set forth herein and as demonstrated by the Amended Complaint itself, the Amended Complaint fails to name two necessary parties – Liberty and Imperium – and therefore the Amended Complaint should be dismissed pursuant to CPLR § 3211(a)(10). II. PLAINTIFF FAILED TO JOIN LIBERTY AND IMPERIUM TO THIS ACTION Interstate’s Amended Complaint includes causes of action against Aspen, and its related entities, and Standard, but fails to name two other insurance companies who provided coverage to Standard – Liberty and Imperium. Liberty and Imperium are in a similar, if not identical, position as Aspen. Like Aspen, Liberty and Imperium also disclaimed coverage to Standard while Interstate represented Standard in the Underlying Action. Interstate’s failure to bring suit against Liberty and Imperium, and to limit itsclaims to Aspen and Standard, prevents the Court from rendering complete relief. Liberty and Imperium would be inequitably affected should a judgment be issued in this matter declaring that a duty existed to defend and indemnify Standard in the Underlying Action. In both Aspen and Imperium’s disclaimer letters, the carriers cite to identical “Contractual Liability” exclusion clauses in their respective policies as grounds to disclaim coverage. Similarly, the parties declared that there is no coverage for contractual claims, including but not limited to the indemnification claim by the Board in the Underlying Action against Standard. Aspen, Liberty, and Imperium all disclaimed coverage alleging the property damage sought to be repaired in the Underlying Action occurred before their respective policy periods began. 5 8 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 Meanwhile, Standard is in an awkward position as Interstate voluntary provided Standard coverage in the Underlying Action but now seeks restitution from Standard, while only filing claims against one of the three insurance companies who denied coverage to Standard. Furthermore, Interstate attempts to use the same rationale as the other companies to hold Aspen liable, claiming that the property damage allegedly caused by Standard in the Underlying Action falls outside of Interstate’s coverage period. See Am. Compl., ¶¶ 38-41. In itsefforts to essentially disclaim coverage post-resolution of the Underlying Action, Interstate cites to the Underlying Action’s lack of specificity with respect to the timing of the alleged injury or damage. See Am. Compl., ¶¶ 14, 27. Interstate also pleads, “the allegations in the Underlying Action are silent as to when any alleged property damage allegedly resulting from Standard’s work took place.” Am. Compl., ¶ 45. All four insurers assert that the damage arose outside of their coverage period, three of the insurers also disclaimed coverage based on an exclusion for contractual claims against the insured, yet, two of these carriers are absent from the Amended Complaint. Instead of pleading against all three insurance companies, Aspen, Liberty, and Imperium, Interstate asserted causes of action against Standard, the insured, to recover the money it spent on defending Standard in the Underlying Action. Simply put, Interstate failed to join two very necessary parties to this action, and it would be prejudicial to continue this matter against Standard without Liberty and Imperium also being named as defendants. Should this Court find there was a valid duty to defend and indemnify Standard, the Court cannot then enter a declaratory judgment without the ability to also apportion liability to the two unnamed parties, Liberty and Imperium. Assuming Interstate is even entitled to the relief it seeks against Standard, which it is not, Aspen alone would be unable to make Interstate whole, especially 6 9 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 under the presumption that Interstate is owed contribution from Liberty and Imperium. Complete relief requires all issues between the four insurance companies to be resolved collectively in a single action. Without the ability to fully and accurately allocate liability amongst the four insurers in one action, there is no way to ensure that each insurer is held accountable for its respective share of the total obligation and indemnification of Standard. It would be an inefficient use of judicial resources and create a risk of inconsistent judgments relating to the rights and obligations of the insurers with respect to Standard, to have this Court first apportion liability between Aspen and Interstate, and then have Aspen or Interstate subsequently litigate against Liberty or Imperium to obtain restitution. Lastly, Liberty and Imperium would be inequitably affected by a judgment in Interstate’s favor. Any declaratory decision and judgment issued pertaining to the scope of Aspen’s policy and the validity of the disclaimers thereunder will affect both Liberty and Imperium who had substantively identical policies and issued similar disclaimer letters to Standard. Thus, if Aspen is found to have a duty to have defended Standard in the Underlying Action, then likewise Liberty and Imperium would possess that same duty, and Standard would have claims against them for their failure to provide coverage to Standard under their respective policies. The rights and obligations of the four insurers with respect to the Underlying Action should be resolved jointly. Interstate’s failure to join Liberty and Imperium, two necessary parties and shared insurers of Standard, warrants dismissal of the Amended Complaint pursuant to CPLR § 3211(a)(1). CONCLUSION For the reasons stated above and in the supporting Affirmation of Joseph A. DeBlase submitted herewith, and upon the prior pleadings and proceedings herein, the Court should: (1) dismiss the Verified Amended Complaint of Interstate Fire & Casualty Company as and against 7 10 of 11 FILED: NEW YORK COUNTY CLERK 08/02/2019 04:58 PM INDEX NO. 153512/2017 NYSCEF DOC. NO. 104 RECEIVED NYSCEF: 08/02/2019 Standard Waterproofing Corporation in its entirety; and (2) award Standard Waterproofing Corporation any additional relief the Court deems just and proper. Dated: New York, New York August 2, 2019 TRAVIS LAW PLLC By: Joseph A. DeBlase Attorney for Defendant Standard Waterproofing Corporation 80 Maiden Lane, Suite 304 New York, New York 10038 Phone (212) 248-2120 8 11 of 11