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FILED: NEW YORK COUNTY CLERK 06/04/2020 04:43 PM INDEX NO. 650162/2017
NYSCEF DOC. NO. 77 RECEIVED NYSCEF: 06/04/2020
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
PRESENT: HON. NANCY M. BANNON PART IAS MOTION 42EFM
Justice
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INDEX NO. 650162/2017
RLI INSURANCE COMPANY FOR ITSELF AND AS
SUBROGEE/ASSIGNEE OF TECHNO CONSULT INC. MOTION DATE 01/15/2020
AND WILLIAM DOBSON
MOTION SEQ. NO. 001
Plaintiff,
-v-
DECISION + ORDER ON
THE PORT AUTHORITY OF NEW YORK AND NEW
JERSEY, MOTION
Defendant.
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The following e-filed documents, listed by NYSCEF document number (Motion 001) 16, 17, 18, 19, 20,
21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 42, 43, 44, 45, 46, 47, 48, 49,
50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 71, 72, 73, 74, 75
were read on this motion to/for SUMMARY JUDGMENT (AFTER JOINDER) .
This motion is decided in accordance with the attached memorandum Decision and
Order.
/2/2020 $SIG$
DATE
CHECK ONE: X CASE DISPOSED NON-FINAL DISPOSITION
X GRANTED DENIED GRANTED IN PART OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE
650162/2017 RLI INSURANCE COMPANY FOR vs. PORT AUTHORITY OF NEW Page 1 of 1
Motion No. 001
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: I.A.S. PART 42
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RLI INSURANCE COMPANY FOR ITSELF AND AS
SUBROGEE/ASSIGNEE OF TECHNO CONSULT INC.
and WILLIAM DOBSON
DECISION AND ORDER
Plaintiffs,
Index No. 650162/2017
- v - MOT SEQ 001
THE PORT AUTHORITY OF NEW YORK AND NEW
JERSEY,
Defendant.
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NANCY M. BANNON, J.:
I. INTRODUCTION
In this insurance coverage action arising from a multi-car
accident, the defendant, The Port Authority of New York and New
Jersey, moves pursuant to CPLR 3212 to dismiss the complaint as
against it, and for a judicial declaration (i) that it is not
required to defend and indemnify defendants Techno Consulting,
Inc. (Techno) and William T. Dobson (Dobson) in four underlying
actions and (ii) that the plaintiff is required to defend and
indemnify the defendant in those underlying actions. The four
underlying actions, consolidated for discovery and trial in the
Supreme Court of Nassau County, are: (i) Daniel DaSilva v Port
Authority of New York and New Jersey, William T. Dobson. and
Techno Consult. Inc., Supreme Court, Nassau County, Index No.
3793/2016; (ii) Anthony DeToma v William T. Dobson, Joseph
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DeFelice and The Port Authority of New York & New Jersey,
(originally filed in Supreme Court, New York County under Index
No. 159961/2016, now venued in Supreme Court, Nassau County
under Index No. 609109/2017); (iii) Joseph DeFelice v William T.
Dobson, The Port Authority of New York and New Jersey and Techno
Consult. Inc., (originally filed in Supreme Court, Bronx County
under Index No. 28711/2016E, now venued in Supreme Court, Nassau
County under Index No. 610060/2017); and (iv) Josue Almonte
Sanchez v The Port Authority of New York and New Jersey, Techno
Consult. Inc., William T. Dobson and Joseph DeFelice,
(originally filed in Supreme Court, Queens County under Index
No. 715404/2016, now venued in Supreme Court, Nassau County,
Index No. 608402/2017). The plaintiff opposes the motion and
cross-moves for summary judgment dismissing the defendant’s
counterclaims, a judicial declaration that the defendant must
defend and indemnify defendants William T. Dobson (Dobson) and
Techno Consulting Inc. (Techno) in the underlying actions in
which they are named, and to reimburse the plaintiff for the
costs it incurred in defending Dobson and Techno in the
underlying actions. The defendant’s motion is granted. The
plaintiff’s cross-motion is denied.
II. BACKGROUND
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The defendant is a bi-state agency created by interstate
compact between the States of New York and New Jersey and with
the consent of the United States Congress. Techno was an
engineering consultant for the defendant. Dobson was a Techno
employee. On the morning of January 12, 2016, Dobson was driving
an automobile owned by the defendant in and around John F.
Kennedy Airport in Jamaica, New York in the course of his
employment for Techno. At the time of the accident, Dobson was
travelling eastbound on Rockaway Boulevard near that road's
intersection with Guy R. Brewer Boulevard. Dobson attempted to
make a left turn onto Guy Brewer Blvd. and crashed with a
vehicle driven by Joseph DeFelice, a Port Authority police
officer. Daniel DaSilva, also a Port Authority police officer,
was a passenger in the vehicle driven by Joseph DeFelice. The
force of the crash caused DeFelice's vehicle to spin and strike
two other vehicles occupied by Josue Almonte Sanchez and Anthony
DeToma, respectively. DaSilva, DeFelice, DeToma, and Sanchez
each initiated individual and separate personal injury actions
against the defendant, Dobson, and Techno. By court order, dated
June 23, 2017 the cases were consolidated for purposes of joint
discovery and joint trial.
The dispute in this action centers around whether the
defendant must defend and indemnify Dobson and Techno, inasmuch
as Dobson was driving one of the defendant’s vehicles, or, on
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the other hand, whether the plaintiff is required to defend and
indemnify Dobson, Techno, and the defendant pursuant to an
October 1, 2014 agreement between the defendant and Techno. That
agreement states in relevant part:
“[Techno] assumes the following distinct and several risks
to the extent arising from the negligent or willful
intentional acts or omissions of [Techno] or its
subconsultants in the performance of services hereunder:
D. The risk of claims, just or unjust, by third persons
made against [Techno] or its subconsultants or the
Authority on account of injuries (including wrongful death
loss or damage of any kind whatsoever arising in connection
with the performance of services hereunder…
[Techno] shall indemnify the Authority against all claims
described in subparagraphs A through D above and for all
expense incurred by it in the defense, settlement or
satisfaction thereof including expenses of attorneys.”
The agreement also obligated Techno to procure Commercial
General Liability Insurance as set forth in Section 26 of the
Agreement, which states in pertinent part as follows:
“Commercial Liability Insurance: 1) [Techno] shall take out
and maintain at his own expense Commercial General
Liability Insurance including but not limited to Premises-
Operations, Completed Operations and Independent
Contractors' coverages in limits of not less than
$5,000,000.00 combined single limit per occurrence for
Bodily Injury Liability and Property Damage Liability. And
if vehicles are to be used to carry out the performance of
this Agreement, then the Consultant shall also take out,
maintain and pay the premiums on Automobile Liability
Insurance covering all owned, non-owned and hired autos in
not less than $5,000,000.00 combined single limit per
accident for bodily injury and property damage… In
addition, the liability policies (other than Professional
Liability) shall include the Authority and its related
wholly-owned entities as additional insureds… Furthermore,
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[Techno’s] insurance shall be primary with respect to the
above additional insureds. Any insurance or self-insurance
maintained by the above additional insureds shall not
contribute to any loss or claim.” (emphasis added).
Following the execution of the Agreement, Techno took out
an insurance policy with the plaintiff (Policy No. PSB0003124).
Part of an endorsement to Techno's insurance policy is entitled
"RLI Pack for Professionals Blanket Additional Insured
Endorsement," which defines an "insured" to include "as an
additional insured any person or organization that you agree in
a contract or agreement requiring insurance to include as an
additional insured on this policy, but only with respect to
liability for bodily injury, property damage or personal and
advertising injury caused in whole or in part by [Techno] or
those acting on [Techno’s] behalf… in the performance of ongoing
operations."
Consistent with the agreement between the defendant and
Techno, the endorsement provides that the policy shall be
"primary and non-contributory" and that "this insurance is
primary to other insurance that is available to such additional
insured which covers such additional insured as a normal
insured, and we will not share with that other insurance.” The
professional endorsement also contains an anti-subrogation
clause which states: “We [RLI Insurance Co., on behalf of
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Techno] waive any rights of recovery we may have against any
person or organization because of payments we make for bodily
injury, property damage or personal and advertising injury
arising out of [Techno’s work], or on [Techno’s] behalf, under a
contract or agreement with that person or organization. We waive
these rights only where [Techno] has agreed to do so as part of
a contract or agreement with such person or organization entered
into by you before the bodily injury or property damage occurs.”
Techno’s insurance policy also contains an endorsement for
"RLI Pack Hired Auto and Non-Owned Auto Liability." This auto
liability endorsement also contains a section specifically
laying out the parameters for coverage for hired and non-owned
auto liability, stating in relevant part:
“Each of the following is considered an insured to the
extent that it is: a. [Techno]; b. Any other person using a
"hired auto" with [Techno’s] permission; c. For a "non-
owned auto": 1. Any partner or "executive officer" of
[Techno]; or 2. Any "employee" of [Techno]; d. Any other
person or organization, but only for their liability
because of acts or omissions of an insured under a. b. or
c. above.”
By letter dated May 20, 2016, the defendant tendered a
demand for defense and indemnification from Techno and the
plaintiff in two of the underlying actions (the DeToma and
DaSilva actions). The defendant requested the same on May 23,
2016 in the third action (the DeFelice action). A fourth tender
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request was made by the defendant on September 15, 2016 for the
final action (the Sanchez action). By letter dated June 22, 2016
to the defendant, the plaintiff denied coverage for the first
three claims as they related to defense and indemnification for
the defendant, and then similarly denied coverage for the claim
regarding the fourth action on September 27, 2016. The plaintiff
disclaimed coverage on the ground that the automobile being
driven by Dobson, Techno’s employee, was a non-owned vehicle.
The plaintiff then submitted to the defendant a notice of
claim on November 16, 2016, asserting that the defendant is
statutorily required to defend and indemnify Techno and Dobson
for all actions arising from the January 12, 2016 accident. The
defendant denied this claim via letter dated January 5, 2017, on
the grounds that there was no contractual obligation between the
defendant and either Techno or Dobson requiring the defendant to
provide defense or indemnification.
This action ensued. The plaintiffs filed the complaint on
January 10, 2017. The defendant asserted in its verified answer
two counter-claims against the plaintiff alleging that the
defendant was entitled to insurance coverage and contractual
indemnification based on its agreement with Techno.
III. DISCUSSION
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It is well settled that the movant on a summary judgment
motion “must make a prima facie showing of entitlement to
judgment as a matter of law, tendering sufficient evidence to
eliminate any material issues of fact from the case.” See
Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 (1985).
The motion must be supported by evidence in admissible form, and
the pleadings and other proof such as affidavits, depositions,
and written admissions. See Zuckerman v City of New York, 49
NY2d 557 (1980); CPLR 3212. The “facts must be viewed in the
light most favorable to the non-moving party.” Vega v Restani
Constr. Corp., 18 NY3d 499, 503 (2012) (internal quotation marks
and citation omitted). Once the movant meets its burden, it is
incumbent upon the non-moving party to establish the existence
of material issues of fact. See id., citing Alvarez v Prospect
Hosp., 68 NY2d 320 (1986).
In support of its motion, the defendant submits, inter
alia, the agreement between Techno and the defendant and the
insurance policy that Techno procured from the plaintiff in
accordance with that agreement. These submissions demonstrate,
prima facie, that the plaintiff has the primary duty to defend
and indemnify Techno and Dobson, that the defendant is an
additional insured under the policy, that the defendant has no
obligation to defend or indemnify any party to the underlying
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actions, and to the contrary, that the defendant is entitled to
defense and indemnification from the plaintiff as well.
The agreement between Techno and the defendant expressly
obligated Techno to obtain a commercial general liability
insurance policy, name the defendant as additional insured, and
have that policy be primary coverage for any incident covered
thereby. The defendant is an additional insured under the policy
that Techno purchased as the policy expressly provides that an
additional insured is "any person or organization that you agree
in a contract or agreement requiring insurance to include as an
additional insured on this policy, but only with respect to
liability for bodily injury, property damage or personal and
advertising injury caused in whole or in part by [Techno] or
those acting on [Techno’s] behalf… in the performance of ongoing
operations." Furthermore, the agreement between the defendant
and Techno demonstrates that Techno was to “include the
Authority and its related wholly-owned entities as additional
insureds” under the insurance that it procured.
The endorsements to the policy provide that the policy
shall be "primary and non-contributory" and that "this insurance
is primary to other insurance that is available to such
additional insured which covers such additional insured as a
normal insured, and [the plaintiff] will not share with that
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other insurance.” The endorsement also contains an anti-
subrogation clause which states: “We [RLI Insurance Co., on
behalf of Techno] waive any rights of recovery we may have
against any person or organization because of payments we make
for bodily injury, property damage or personal and advertising
injury arising out of [Techno’s work], or on [Techno’s] behalf,
under a contract or agreement with that person or organization.
We waive these rights only where [Techno] has agreed to do so as
part of a contract or agreement with such person or organization
entered into by you before the bodily injury or property damage
occurs.” As it is undisputed that the accident occurred with
respect to liability for bodily injury, caused in whole or in
part by Techno’s employee, Dobson, in the performance of
Techno’s operations, and that Techno, in its agreement with the
defendant, was to procure insurance, name the defendant as an
additional insured, and indemnify the defendant for any injury
arising from its work, the defendants demonstrate their
entitlement to summary judgment as a matter of law.
In opposition, and in support of its cross-motion
dismissing the defendant’s counterclaims and for a judicial
declaration that the defendant must defend and indemnify Techno
and Dobson in the underlying action, the plaintiff incorrectly
argues that the plaintiff’s obligation to indemnify and defend
the defendant was abrogated by Vehicle & Traffic Law (VTL)
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Section 388(1), which states, in part: "Every owner of a vehicle
used or operated in this state shall be liable and responsible
for death or injuries to person or property resulting from
negligence in the use or operation of such vehicle, in the
business of such owner or otherwise, by any person using or
operating the same with the permission, express or implied, of
such owner.”
However, this argument was rejected by the Court of
Appeals, in Morris v Snappy Car Rental, [84 NY2d 21 (1994)],
which held that with regard to the issue of vehicle owners'
responsibility pursuant to VTL § 388 and indemnification,
Section 388, is to be narrowly construed as there is “no basis
for inferring that the Legislature, in its desire to ensure that
owners ‘act responsibly,’ intended to go so far as to abrogate
the right of indemnification.” It is further well settled under
New York law that a party may protect itself from losses
resulting from liability from others' negligence, as well as
from one's own active negligence by means of insurance
agreements and indemnity agreements. See Great Northern Ins. Co.
v Interior Const. Corp., 7 NY3d 412 (2006). Thus, the defendant
is entitled to indemnification from the plaintiff on a
contractual basis and any liability imputed to the defendant
under VTL § 388 is superseded the policy that the plaintiff
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issued to Techno, under which the defendant is an additional
insured. See Morris v Snappy Car Rental, supra.
The plaintiff further argues that the defendant, in moving
for summary judgment seeking a declaration that it is entitled
to defense and indemnification from the plaintiff, seeks relief
beyond the scope of its counterclaims. However, as correctly
argued by the defendant, the interposed counterclaims
sufficiently allege that the plaintiff was required to defend
and indemnify the defendant. Specifically, the defendant alleged
in its counterclaims that:
13. At all times set forth in the Complaint, the Agreement
requires Techno to procure a policy of insurance with
regard to claims, such as the various claims arising out of
the alleged accident, and to name the Port Authority as an
additional insured on the policy of insurance for any and
all claims that may be made against it, such as those
asserted by the various lawsuits arising out of the alleged
accident.
14. Upon information and belief. Techno failed to procure
appropriate insurance with regard to claims, such as the
various claims referenced herein, and to name the Port
Authority as an additional insured under a policy of
insurance for any and all claims that may be made against
it.
15. The Port Authority duly tendered a letter dated May 20,
2016, to plaintiff RLI Insurance, the insurer of Techno
Consult, Inc., requesting that RLI Insurance defend and
indemnify it in matters arising out of this incident. The
letters make reference to the Agreement containing the
responsibility of Techno Consult, Inc. to defend,
indemnify, and hold the Port Authority harmless for this
action and to maintain general liability insurance naming
the Port Authority as an additional insured. RLI Insurance
denied acceptance of the tender on June 22, 2016.
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These pleadings were sufficient to put the plaintiff on
notice of the defendant’s request for indemnification, defense,
and coverage under the policy, and directly lay out that the
plaintiff had an obligation to defend and indemnify the
defendant under the terms of the policy and the defendant’s
agreement with Techno.
As such, the plaintiff’s fail to raise a triable issue of
fact in opposition to refute the defendant’s prima facie showing
of its entitlement to judgment as a matter of law. As such, the
defendant’s motion for summary judgment dismissing the
complaint, and for a judicial declaration that (i) the defendant
is not required to defend or indemnify Techno and Dobson and
(ii) the plaintiff is required to defend and indemnify the
defendant is granted. As summary judgment is granted, the
plaintiff’s cross-motion for summary judgment dismissing the
defendant’s counterclaims and for a judicial declaration that
the defendant must defend and indemnify defendants in the
underlying action is denied.
IV. CONCLUSION
Accordingly, it is hereby,
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ORDERED that the motion of the defendant, The Port
Authority of New York and New Jersey, for summary judgment
pursuant to CPLR 3212 dismissing the complaint against it and
for a declaratory judgment