Preview
FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E
NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023
NEW YORK SLIPREME COURT - COUNTY OF BRONX
PART 32
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF THE BRONX
\a
KENT AVENUE PROPERTY 3, LLC AND J.E.
LEVINE BUILDER,INC. d/b/a LEVINE
BUILDERS,
Index No. 814800/2021E
Plaintiffs,
Hon. FIDEL E. GOMEZ
- against - Justice
ALLIED WORLD NATIONAL ASSURANCE
COMPANY AND SCOTTSDALE INSURANCE
coMPANY,
Defendants.
Y
The following papers numbered I to 6, Read on this Motion noticed on 5/05123, and duly submitted as no. 4 on the
Motion Calendar of 5105/23.
PAPERS NUMBERED
Notice of Motion - Order to Show Cause - Exhibits and Affidavits Annexed I
Answering Affidavit and Exhibits 5
Replying Affidavit and Exhibits
Notice of Cross-Motion - Aflidavits and Exhibits 3
Pleadings - Exhibit
Stipulation(s) - Referee's Report - Minutes
Filed Papers- Order of Reference Judgment and Appointment of Referee to
Compute
Memorandum of Law 2,4,6
Defendant's motion is decided in accordance with the Decision and Order annexed hereto
Dated:5/3012023
Hon.
FIDEL E. GOMEZ, JSC
I.CHECK ONE X CASE DISPOSED tr NON-FINAL DISPOSITION
2. MOTION/CROSS-MOTION IS X GRANTED (MOTION) D DENIED (MOTION)
tr GRANTEDINPART trOTHER
3. CHECK IF APPROPRIATE, tr SE1TTLE ORDER
tr SUBMIT ORDER
tr DO NOT POST
tr FIDUCIARY APPOINTMENT
O REFEREE APPOINTMENT
tr NEXTAPPEARANCE DATE:
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SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF THE BRONX
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KENT AVENUE PROPERTY 3, LLC AND J.E.
LEVINE BUILDER, INC. d/b/a LEVINE
BUILDERS,
Plaintiffs,
-against- DECISION AND ORDER
Index No. 814800/2021E
ALLIED WORLD NATIONAL ASSURANCE
COMPANY AND SCOTTSDALE INSURANCE
COMPANY,
Defendants.
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Defendant Allied World National Assurance Company (Allied) moves for an Order
dismissing the complaint as against it pursuant to CPLR § 3211(a)(1), (5) and (7).
Plaintiffs Kent Avenue Property 3, LLC (Kent) and J.E. Levine Builder, Inc. (Levine)
cross-move for summary judgment, pursuant to CPLR § 3212, seeking an Order declaring that
Allied must defend and indemnify Kent and Levine in the underlying personal injury action
captioned Edwin Herrera and Lauteria Herrera v. Kent Avenue Property III, LLC, J.E. Levine
Builder, Inc. and J&A Concrete Corp. (Sup. Ct. Bronx Cty., Index No. 304215/2013E) (the
Underlying Action).
For the reasons which follow, Allied’s motion is granted and Plaintiffs’ cross-motion is
denied as moot.
BACKGROUND
This insurance dispute arises from an occurrence in which Edwin Herrera (Herrera),
Plaintiff in the Underlying Action, alleges he was injured on March 5, 2013 while working at a
building located at 1 North 4th Place, Brooklyn, NY in the course of his employment with New
Cassel Construction Corp. (New Cassel). In this action, Levine and Kent seek insurance
coverage as a named insured and additional insured, respectively, under an Allied commercial
general liability policy issued to Levine, and by endorsement to New Cassel. Scottsdale
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Insurance Company (Scottsdale) issued an excess liability policy to Levine as a named insured,
and Kent is an additional insured under the policy. On September 12, 2013, Allied disclaimed
coverage for Levine and Kent in the Underlying Action based upon the Policy’s Exclusion -
Designated Project Policy since Levine and Kent were named insureds under a project-specific
commercial general liability policy issued by Catlin Insurance Company (Catlin) for the subject
project.
The complaint in this action alleges three causes of action for declaratory judgment,
namely, judgments declaring that: (1) Allied must defend and indemnify Levine and Kent in the
Underlying Action; (2) Scottsdale must defend and indemnify Levine and Kent in the
Underlying Action; and (3) Levine and Kent’s coverage under the Allied and Scottsdale policies
is primary to and non-contributory with other policies obtained by Levine and Kent in
connection with the project at 1 North 4th Place.
Specifically, the complaint alleges as follows: On or about August 1, 2012, Kent, the
owner of the subject property, and Levine entered into a written contract for Levine to be the
construction manager for a construction project at 1 North 4th Place. The Kent-Levine contract
provides, inter alia, that Levine purchase and maintain commercial general liability insurance
with a per-occurrence limit of $1 million and umbrella/excess liability insurance with total limits
of not less than $100 million, under which Kent qualifies as an additional insured on a primary
and non-contributory basis. On or about September 21, 2012, Levine entered into a written
subcontract with New Cassel for New Cassel to perform certain work in connection with the
project at 1 North 4th Place. The Levine-New Cassel subcontract requires, inter alia, that New
Cassel purchase and maintain commercial general liability insurance with a per-occurrence limit
of $1 million and commercial umbrella liability insurance with total limits of not less than $5
million under which Kent and Levine qualify as additional insureds on a primary and non-
contributory basis. Allied issued Levine a primary commercial general liability insurance policy
for the period June 15, 2012 to June 15, 2013. New Cassel is also a named insured on the policy.
Scottsdale issued Levine an excess liability policy for the period April 5, 2012 to April 19, 2013
which provides “follow-form” excess coverage above the underlying Allied policy. New Cassel
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is also a named insured on the policy. On or about March 5, 2013, Herrera was allegedly injured
during the course of his employment for New Cassel on the project at 1 North 4th Place. On or
about July 3, 2013, Herrera commenced the Underlying Action. The complaint in the
Underlying Action asserts causes of action for negligence and violations of the New York Labor
Law against Kent and Levine in connection with Herrera’s alleged March 5, 2013 accident. The
Allied and Scottsdale policies were in effect on the day of the accident. Allied was placed on
notice of the Underlying Action no later than April 4, 2013. Scottsdale was placed on notice of
the Underlying Action no later than May 6, 2013. On or about August 15, 2013, nonparty
Catlin, on behalf of its insureds Kent and Levine, demanded that Allied defend and indemnify
Kent and Levine in the Underlying Action as additional insureds under the Allied policy issued
to Levine and New Cassel. On September 12, 2013, Allied issued disclaimer letters denying
defense and indemnification for Kent and Levine in the Underlying Action pursuant to an
alleged Exclusion - Designated Project Policy in the Allied policy. On January 13, 2014,
Scottsdale issued a disclaimer letter denying defense and indemnification for Kent and Levine in
the Underlying Action pursuant to the grounds set forth in Allied’s disclaimer. Allied’s
September 12, 2013 disclaimer pursuant to the Exclusion - Designated Project Policy is
ineffective and invalid as against Kent and Levine pursuant to Insurance Law § 3450(d)(2) as
untimely, having been issued over five months after Allied was placed on notice of the
underlying accident. Scottsdale’s disclaimer is ineffective and invalid as untimely pursuant to
section 3450 (d)(2), having been issued over eight months after Scottsdale was placed on notice
of the underlying accident and over four months after Allied issued its disclaimer. To date,
Allied and Scottsdale continue to refuse to defend and indemnify Kent and Levine in the
Underlying Action.
**********
In support of dismissal of the first and third causes of action asserted against it, Allied
contends that Plaintiffs’ claims, which seek to dispute the validity of the September 12, 2013
disclaimer letter, accrued on the date of the disclaimer, and since the instant action was not
commenced until October 29, 2021 – more than eight years after the issuance of the disclaimer
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letter – Plaintiffs’ claims are untimely. Allied asserts that the six-year statute of limitations
period set forth in CPLR § 213(1) is applicable here because there is no express statute of
limitations period on a declaratory judgment cause of action.
In opposition to Allied’s motion and in support of their cross-motion for summary
judgment, Plaintiffs contend that this action is not time-barred because under New York law a
cause of action based on an insurer’s alleged breach of a contractual duty to defend accrues only
when the underlying litigation brought against the insured has been finally terminated and the
insurer can no longer defend the insured even if it chooses to do so. Here, Kent and Levine seek,
inter alia, a declaration that Allied must defend and indemnify them in the Underlying Action.
Regardless of the date of Allied’s disclaimer, Plaintiffs assert, the Underlying Action is still
ongoing and Kent and Levine need a defense each day for as long as it continues. Thus, the
statute of limitations has not yet accrued and therefore cannot have expired.
In addition, Plaintiffs contend that they are entitled to coverage under the Allied policy as
a matter of law based on Allied’s failure to comply with Insurance Law § 3420 (d)(2) given its
five-month delay in disclaiming coverage. In this regard, Plaintiffs note that an insurer who
delays in timely disclaiming coverage by giving written notice bears the burden of justifying the
delay. Plaintiffs aver that Allied cannot justify its delay in disclaiming on the ground that it
allegedly did not learn of the Catlin policy until September 5, 2013 because Allied should have
immediately asked its insureds if there is project-specific coverage in place. Because Allied did
not conduct a diligent investigation in this regard, its disclaimer is untimely as a matter of law.
In support of summary judgment, Plaintiffs submitted the affidavit and attached exhibits
of Deborah Lewis. In her affidavit, Lewis states as follows: She is a claim director of RLI
Insurance Company (RLI) and is responsible for handling certain liability and coverage matters
in connection with the Underlying Action. RLI issued a second-layer excess liability policy to
Levine and Kent that was in effect on the date of Herrera’s alleged accident. As part of her
responsibilities, Lewis evaluated the coverage available to Kent and Lewis in connection with
the Underlying Action including their coverage under the policies issued by Allied and
Scottsdale. Lewis also conferred with representatives of Kent and Levine in connection with
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bringing this action to enforce their rights under the Allied and Scottsdale policies. Notably,
Lewis does not opine as to whether coverage exists under either policy for Herrrera’s alleged
accident. Lewis states that the documents attached to her affidavit are part of RLI’s claim file
and were received or generated in the regular course of RLI’s claim investigation and handling.
Said documents include the RLI policy, the Catlin policy, the Allied policy, a contract between
Kent and Levine for the 1 North 4th Place construction project, and various correspondence.
In opposition to Plaintiffs’ cross-motion and in further support of its motion, Allied
points to other insurance coverage allegedly available to Kent and Levine in the Underlying
Action, above the RLI policy. In addition, Allied avers that, in their papers, Plaintiffs do not
dispute the validity of the basis for Allied’s disclaimer of coverage. Instead, Allied asserts,
Plaintiffs’ sole claim in the instant action is that Allied is precluded from denying coverage due
to its alleged failure to comply with the time restrictions of Insurance Law § 3420 (d). Allied
avers that Plaintiffs had six years to dispute the timeliness of Allied’s September 12, 2013
disclaimer and they failed to do so within the statute of limitations. Allied asserts that, should
the Court decline to dismiss Plaintiffs’ complaint as time-barred, the Court should search the
record and declare that Allied has no obligation to provide coverage to Plaintiffs for the
Underlying Action because it timely denied coverage pursuant to the Policy’s Exclusion -
Designated Project Policy, and because any coverage for Plaintiffs under the Allied policy would
not apply until all other coverage available to Plaintiffs is exhausted.
Alternatively, Allied contends that Plaintiffs’ motion for summary judgment should be
denied as premature because discovery has not yet taken place. On this point, Allied refers to
Plaintiffs’ third cause of action which seeks a declaration that coverage under the Allied policy is
primary and non-contributory to any other coverage available to them. Allied contends that it is
entitled to discovery regarding other insurance policies available to Plaintiffs, which information
is within the exclusive knowledge of Plaintiffs. Further, Allied claims that Plaintiffs have now
admitted that they are receiving coverage under the Catlin project-specific primary policy, the
Axis project-specific excess policy and the RLI project-specific excess policy and, upon
information and belief, Plaintiffs are also receiving additional insurance coverage under the
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primary and excess policies issued to J&A Concrete, which is a defendant in the Underlying
Action.
In support of its contentions, Allied submitted the affidavit with attached exhibits of
Michael Sirianni (Sirianni) wherein he states, in pertinent part, as follows: He is employed by
Rockville Risk Management Associates, Inc. (RRMA), the third-party administrator for Allied.
Allied issued policy No. 5050-0230 to Levine and by endorsement to New Cassel for the policy
period of June 15, 2012 to June 15, 2013. Allied received notice of the occurrence involving
Herrera on April 4, 2013. The notice included a copy of a letter from Gorayeb & Associates, PC
requesting records and information from New Cassel. The Acord General Liability Notice of
Occurrence/Claim form specifically states that the occurrence was being “report[ed] for record
only.” On or about May 10, 2013, Herrera filed an order to show cause seeking pre-action
discovery from New Cassel. Allied retained Milber Makris Plousadis & Seiden, LLP to respond
to the order to show cause and assist with its investigation. Herrera subsequently filed the
Underlying Action on July 5, 2013. On or about August 15, 2013, John Beider (Beider) of Traub
Lieberman Strauss & Shrewsberry LLP, counsel for Kent, Levine and North 4th Place LLC in the
Underlying Action, wrote to Allied to request defense and indemnification for his clients
pursuant to Allied’ additional insured coverage obligations and New Cassel’s contractual
indemnification obligations. On or about September 12, 2013, RRMA, on behalf of Allied,
wrote to Beider and advised that Allied denied any obligation to provide coverage to Kent and
Levine for the Underlying Action because the Policy’s Exclusion - Designated Project Policy
applies and excludes coverage since Catlin issued a Designated Project Policy to them for the
subject project. By letter dated September 4, 2013, Lloyd Wilmot, a liability claims specialist
for Zurich, wrote to Beider and advised that Zurich would provide additional insured coverage to
Kent and Levine under a policy it issued to J&A Concrete, without reservation, up to its $1
million primary limit per occurrence. This letter was “carbon copied” to RRMA.
Sirianni attached copies of the Allied policy, the Acord General Liability Notice of
Occurrence/Claim form, the Beider August 15, 2013 tender letter, Allied’s disclaimer letter to
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Beider, and Zurich’s letter indicating additional insurance coverage for Levine and Kent to his
affidavit.
Standard of Review
I. Motion to Dismiss - CPLR § 3211 (a)(1), (5) and (7)
In deciding a motion to dismiss pursuant to CPLR § 3211, a court must “accept the facts
alleged in the complaint is true, accord plaintiffs the benefit of every possible favorable
inference, and determine only whether the facts as alleged fit within any cognizable legal theory”
(Leon v Martinez, 84 NY2d 83, 87-88 [1994]). The pleading is to be afforded a liberal
construction (id. at 87). Ambiguous allegations must be resolved in plaintiff’s favor (JF Capital
Advisors, LLC v Lightstone Group, LLC, 23 NY3d 759, 764 [2015]). “The motion must be
denied if from the pleadings’ four corners factual allegations are discerned which taken together
manifest any cause of action cognizable at law” (511 West 232nd Owners Corp. v Jennifer Realty
Co., 98 NY2d 144, 152 [2002]). “Where . . . the allegations consist of bare legal conclusions, as
well as factual claims either inherently incredible or flatly contradicted by documentary
evidence, they are not entitled to such consideration” (Ullman v Norma Kamali, Inc., 207 AD2d
691, 692 [1st Dept 1994]).
It is well settled that a defense based on documentary evidence is not dispositive “unless
the documents submitted resolve all of the factual issues as a matter of law” (Standard
Chartered Bank v D. Chabbott, Inc, 178 AD2d 112, 112 [1st Dept 1991]). Dismissal of the
complaint pursuant to CPLR § 3211(a)(1), therefore, is only warranted where “the documentary
evidence submitted conclusively establishes a defense to the asserted claims as a matter of law”
(Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]).
When a party moves to dismiss a complaint pursuant to CPLR § 3211(a)(7), the standard
is whether the pleading states a cause of action, not whether the proponent of the pleading has a
cause of action ( Guggenheimer v Ginzburg, 43 NY2d 268 [1977]). “Whether a plaintiff can
ultimately establish its allegations is not part of the calculus” (EBC I, Inc. v Goldman Sachs &
Co., 5 NY3d 11, 19 [2005]). On a motion made pursuant to CPLR § 3211(a)(7), the burden
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never shifts to the nonmoving party to rebut a defense asserted by the moving party (Sokol v
Leader, 74 AD3d 1180, 1181 [2nd Dept 2010]). While “CPLR § 3211 allows a plaintiff to
submit affidavits, [] it does not oblige him to do so on penalty of dismissal” (Rovello v Orofino
Realty Co., 40 NY2d 633, 635 [1976]). Affidavits may be received for a limited purpose only,
serving normally to remedy defects in the complaint, and such affidavits are not to be examined
for the purpose of determining whether there is evidentiary support for the pleading (id. at 636).
Thus, a plaintiff “will not be penalized because he has not made an evidentiary showing in
support of his complaint” (Rovello at 635).
However, a court may consider evidentiary material submitted by a defendant, and if it
does so, the criterion becomes “whether the proponent of the pleading has a cause of action, not
whether he has stated one” (Guggenheimer at 275). Affidavits submitted by a defendant “will
almost never warrant dismissal under CPLR § 3211 unless they establish conclusively that [the
plaintiff] has no cause of action” (Lawrence v Graubard Miller, 11 NY3d 588, 595 [1976]
quoting Rovello at 636). Indeed, a motion to dismiss pursuant to CPLR § 3211(a)(7) must be
denied “unless it has been shown that a material fact as claimed by the pleader to be one is not a
fact at all and unless it can be said that no significant dispute exists regarding it” (Guggenheimer
at 275).
Under CPLR § 3211 (a)(5), a party may move for judgment dismissing one or more
causes of action asserted against it on the ground that the cause of action may not be maintained
because of the statute of limitations. To dismiss a cause of action pursuant to CPLR § 3211
(a)(5) on the ground that it is barred by the statute of limitations, a defendant bears the initial
burden of establishing prima facie that the time in which to sue has expired (MTGLQ Invs., LP v
Wozencraft, 172 AD3d 644, 644-645 [1st Dept 2019]; Swift v New York Med. Coll., 25 AD3d
686, 687 [2d Dept 2006]). The burden then shifts to the plaintiff to raise a question of fact as to
whether the statute of limitations is inapplicable or whether the action was commenced within
the statutory period (Wilson v Southampton Urgent Med. Care, P.C., 112 AD3d 499, 500 [1st
Dept 2013]). To make a prima facie showing, the defendant must establish, inter alia, when the
plaintiff’s causes of action accrued (Swift at 687).
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**********
As an initial matter, the parties disagree as to whether subsection (1) or subsection (2) of
CPLR § 213 governs Plaintiffs’ claims. CPLR § 213(1) is a catch-all provision and applies a
six-year statute of limitations period in an action “for which no limitation is specifically
prescibed by law.” CPLR § 213(2) applies a six-year statute of limitations period in “an action
upon a contractual obligation or liability, express or implied.” Although a six-year statutory
period applies under each subsection, it is nonetheless important to discern the nature of the
causes of action asserted by Plaintiffs here to determine when those causes of action accrued.
The CPLR prescribes no general period of limitation for a declaratory judgment action (Solnick
v Whalen, 49 NY2d 224, 229 [1980]). Courts must look to the underlying claim and the nature
of the relief sought to determine the applicable period of limitations (id. at 229). Stated
differently, a court’s inquiry focuses on the “substance of [the] action to identify the relationship
out of which the claim arises and the relief sought” (id.). “When the rights of parties sought to
be stabilized in a declaratory judgment action are, or have been, open to resolution through a
particular procedural route for which a specific limitation period is statutorily provided, then that
period generally governs the time for commencement of the declaratory judgment action”
(Vigilant Ins. Co. of America v Housing Authority of City of El Paso, Texas, 87 NY2d 36, 41
[1995] [internal citations omitted]). Otherwise, the six-year “catch-all” period in CPLR § 213(1)
applies (Id.; New York City Health & Hosps. Corp. v McBarnette, 84 NY2d 194, 201 [1994]).
Here, contrary to Plaintiffs’ contention, Plaintiffs’ claims for declaratory relief are not
based on contract. Rather, they are based upon defendants’ alleged untimely disclaimers of
coverage pursuant to Insurance Law § 3420(d)(2), which requires an insurer disclaiming liability
or denying coverage for death or bodily injury arising out of an accident occurring within New
York to give “written notice as soon as is reasonably possible of such disclaimer of liability or
denial of coverage to the insured and the injured person or any other claimant” (id.) Indeed, the
complaint does not allege that either Allied or Scottsdale breached any contractual obligation
owed to Plaintiffs; instead, it alleges that the disclaimers issued by Allied and Scottsdale are
“ineffective and invalid” because they were untimely. The CPLR does not expressly provide a
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statute of limitations period for claims premised on alleged violations of § 3420(d)(2). And,
neither party cites, nor has the Court found, any cases applying a limitations period to a claim
based on an alleged violation of § 3420(d)(2). Nor is there any other form of proceeding for the
resolution of Plaintiffs’ claims. As such, the Court finds that the six-year statutory period set
forth in CPLR § 213(1) is applicable.
We turn next to the issue of when Plaintiffs’ section 3420(d)(2) claims accrued. CPLR §
203(a) provides that “[t]he time within which an action must be commenced, except as otherwise
expressly prescribed, shall be computed from the time the cause of action accrued to the time the
claim is interposed.” In support of their contention that the claims alleged herein have not yet
accrued because the Underlying Action is ongoing, Plaintiffs rely on New York decisions which
have found that a cause of action based on an insurer’s breach of a contractual duty to defend or
indemnify accrues only when the underlying litigation brought against the insured has been
finally terminated and the insurer can no longer defend the insured even if it chooses to do so
(Ghaly v First Am. Title Ins. Co. of New York, 228 A.D.2d 551, 552 [2d Dept 1996]; Liberty
Mut. Fire Ins. Co. v Hamilton Ins. Co., 356 F. Supp. 3d 326, 335 [SDNY 2018]; Roldan v
Allstate Ins., 149 AD2d 20, 26-27 [2d Dept 1989]). However, Plaintiffs’ reliance on those cases
is misplaced because, as discussed above, Plaintiffs’ claims are not based on a breach of any
contractual obligation, but rather, on alleged violations of Insurance Law § 3420(d)(2). In this
regard, the Court finds the situation in Quality Bldg. Contr, Inc. v Ill. Union Ins. Co. (2016 U.S.
Dist. Lexis 101925), relied upon by Allied, mirrors the situation in this decision. In Quality
Building, the Plaintiff challenged the timeliness of its insurer’s notice of disclaimer and argued
that its claim accrued for statute of limitation purposes only when its “liability or legal obligation
is finally fixed and the underlying action has terminated” (id. at *13). In support, the Plaintiff
relied upon the same New York decisions relied upon by Plaintiffs herein. Notably, the court
found reliance on those cases misplaced because the cause of action at issue in Quality Building
was not seeking a judicial determination of the insurer’s contractual duty to indemnify or defend
under the policy, but rather, sought a determination that the insurer gave inexcusably late notice
of its intention to disclaim coverage in violation of § 3420(d)(2) and thereby waived or is
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estopped from denying coverage to the Plaintiff (id.). In that case, the court found that the
Plaintiff’s claim accrued when Plaintiff possessed sufficient information to formulate the factual
basis for its assertion (id.). The court also noted that, at that time, a legal dispute had crystalized
concerning the timeliness of the insurer’s disclaimer, and a judicial declaration would have
served a useful purpose in determining the insurer’s coverage obligations with respect to the
underlying action going forward (id. at *14).
Significantly, the Court of Appeals has held that a cause of action accrues when all of the
facts necessary to sustain the cause of action have occurred, so that a party could obtain relief in
court (Vigilant Ins. Co. of America at 43). In Vigilant Ins. Co. of America, the Court also noted
that the “accrual of an action depends on a nice balancing of policy considerations” and that “[a]
defendant’s interest in defending a claim must be balanced with a plaintiff’s interest in not being
deprived of a claim before a reasonable chance to assert it arises” (id.).
Here, Plaintiffs possessed sufficient information to formulate the factual basis for their
claim of untimely disclaimer against Allied on September 12, 2013, when Allied disclaimed
coverage for the Underlying Action. Yet, inexplicably, Plaintiffs waited until October 29, 2021
to challenge the effectiveness of Allied’s disclaimer. This puts Allied in the unenviable position
of having to pursue an investigation into why, over eight years ago, it delayed notifying
Plaintiffs of its disclaimer of coverage for the Underlying Action.
The Court notes that upon a search of the record1, while Scottsdale did not move for
dismissal of Plaintiffs’ claims, the same reasoning applies with respect to the claims asserted
against Scottsdale.
For the foregoing reasons, the Court finds that Plaintiffs’ claims against Allied and
Scottsdale are time-barred. Given this finding, Plaintiffs are not entitled to summary judgment
in their favor on those claims and the cross-motion is denied as moot.
Accordingly, it is hereby
1
When a court is deciding a motion for summary judgment, it can search the record and
can grant summary judgment to a nonmoving party (Dunham v. Hilco Constr. Co., 89 NY2d
425, 429 [1996]).
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ORDERED that Plaintiffs’ Complaint is dismissed in its entirety. It is further
ORDERED that Allied shall serve a copy of this Decision and Order upon all
parties, with Notice of Entry, within thirty (30) days of the date hereof.
This constitutes the Decision and Order of this Court.
Dated: Bronx, New York
May 30, 2023
Hon. __________________________
FIDEL E. GOMEZ, J.S.C.
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FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 NEW YORK SLIPREME COURT - COUNTY OF BRONX PART 32 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF THE BRONX \a KENT AVENUE PROPERTY 3, LLC AND J.E. LEVINE BUILDER,INC. d/b/a LEVINE BUILDERS, Index No. 814800/2021E Plaintiffs, Hon. FIDEL E. GOMEZ - against - Justice ALLIED WORLD NATIONAL ASSURANCE COMPANY AND SCOTTSDALE INSURANCE coMPANY, Defendants. Y The following papers numbered I to 6, Read on this Motion noticed on 5/05123, and duly submitted as no. 4 on the Motion Calendar of 5105/23. PAPERS NUMBERED Notice of Motion - Order to Show Cause - Exhibits and Affidavits Annexed I Answering Affidavit and Exhibits 5 Replying Affidavit and Exhibits Notice of Cross-Motion - Aflidavits and Exhibits 3 Pleadings - Exhibit Stipulation(s) - Referee's Report - Minutes Filed Papers- Order of Reference Judgment and Appointment of Referee to Compute Memorandum of Law 2,4,6 Defendant's motion is decided in accordance with the Decision and Order annexed hereto Dated:5/3012023 Hon. FIDEL E. GOMEZ, JSC I.CHECK ONE X CASE DISPOSED tr NON-FINAL DISPOSITION 2. MOTION/CROSS-MOTION IS X GRANTED (MOTION) D DENIED (MOTION) tr GRANTEDINPART trOTHER 3. CHECK IF APPROPRIATE, tr SE1TTLE ORDER tr SUBMIT ORDER tr DO NOT POST tr FIDUCIARY APPOINTMENT O REFEREE APPOINTMENT tr NEXTAPPEARANCE DATE: 1 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF THE BRONX --------------------------------------------------------------------X KENT AVENUE PROPERTY 3, LLC AND J.E. LEVINE BUILDER, INC. d/b/a LEVINE BUILDERS, Plaintiffs, -against- DECISION AND ORDER Index No. 814800/2021E ALLIED WORLD NATIONAL ASSURANCE COMPANY AND SCOTTSDALE INSURANCE COMPANY, Defendants. --------------------------------------------------------------------X Defendant Allied World National Assurance Company (Allied) moves for an Order dismissing the complaint as against it pursuant to CPLR § 3211(a)(1), (5) and (7). Plaintiffs Kent Avenue Property 3, LLC (Kent) and J.E. Levine Builder, Inc. (Levine) cross-move for summary judgment, pursuant to CPLR § 3212, seeking an Order declaring that Allied must defend and indemnify Kent and Levine in the underlying personal injury action captioned Edwin Herrera and Lauteria Herrera v. Kent Avenue Property III, LLC, J.E. Levine Builder, Inc. and J&A Concrete Corp. (Sup. Ct. Bronx Cty., Index No. 304215/2013E) (the Underlying Action). For the reasons which follow, Allied’s motion is granted and Plaintiffs’ cross-motion is denied as moot. BACKGROUND This insurance dispute arises from an occurrence in which Edwin Herrera (Herrera), Plaintiff in the Underlying Action, alleges he was injured on March 5, 2013 while working at a building located at 1 North 4th Place, Brooklyn, NY in the course of his employment with New Cassel Construction Corp. (New Cassel). In this action, Levine and Kent seek insurance coverage as a named insured and additional insured, respectively, under an Allied commercial general liability policy issued to Levine, and by endorsement to New Cassel. Scottsdale -1- 2 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 Insurance Company (Scottsdale) issued an excess liability policy to Levine as a named insured, and Kent is an additional insured under the policy. On September 12, 2013, Allied disclaimed coverage for Levine and Kent in the Underlying Action based upon the Policy’s Exclusion - Designated Project Policy since Levine and Kent were named insureds under a project-specific commercial general liability policy issued by Catlin Insurance Company (Catlin) for the subject project. The complaint in this action alleges three causes of action for declaratory judgment, namely, judgments declaring that: (1) Allied must defend and indemnify Levine and Kent in the Underlying Action; (2) Scottsdale must defend and indemnify Levine and Kent in the Underlying Action; and (3) Levine and Kent’s coverage under the Allied and Scottsdale policies is primary to and non-contributory with other policies obtained by Levine and Kent in connection with the project at 1 North 4th Place. Specifically, the complaint alleges as follows: On or about August 1, 2012, Kent, the owner of the subject property, and Levine entered into a written contract for Levine to be the construction manager for a construction project at 1 North 4th Place. The Kent-Levine contract provides, inter alia, that Levine purchase and maintain commercial general liability insurance with a per-occurrence limit of $1 million and umbrella/excess liability insurance with total limits of not less than $100 million, under which Kent qualifies as an additional insured on a primary and non-contributory basis. On or about September 21, 2012, Levine entered into a written subcontract with New Cassel for New Cassel to perform certain work in connection with the project at 1 North 4th Place. The Levine-New Cassel subcontract requires, inter alia, that New Cassel purchase and maintain commercial general liability insurance with a per-occurrence limit of $1 million and commercial umbrella liability insurance with total limits of not less than $5 million under which Kent and Levine qualify as additional insureds on a primary and non- contributory basis. Allied issued Levine a primary commercial general liability insurance policy for the period June 15, 2012 to June 15, 2013. New Cassel is also a named insured on the policy. Scottsdale issued Levine an excess liability policy for the period April 5, 2012 to April 19, 2013 which provides “follow-form” excess coverage above the underlying Allied policy. New Cassel -2- 3 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 is also a named insured on the policy. On or about March 5, 2013, Herrera was allegedly injured during the course of his employment for New Cassel on the project at 1 North 4th Place. On or about July 3, 2013, Herrera commenced the Underlying Action. The complaint in the Underlying Action asserts causes of action for negligence and violations of the New York Labor Law against Kent and Levine in connection with Herrera’s alleged March 5, 2013 accident. The Allied and Scottsdale policies were in effect on the day of the accident. Allied was placed on notice of the Underlying Action no later than April 4, 2013. Scottsdale was placed on notice of the Underlying Action no later than May 6, 2013. On or about August 15, 2013, nonparty Catlin, on behalf of its insureds Kent and Levine, demanded that Allied defend and indemnify Kent and Levine in the Underlying Action as additional insureds under the Allied policy issued to Levine and New Cassel. On September 12, 2013, Allied issued disclaimer letters denying defense and indemnification for Kent and Levine in the Underlying Action pursuant to an alleged Exclusion - Designated Project Policy in the Allied policy. On January 13, 2014, Scottsdale issued a disclaimer letter denying defense and indemnification for Kent and Levine in the Underlying Action pursuant to the grounds set forth in Allied’s disclaimer. Allied’s September 12, 2013 disclaimer pursuant to the Exclusion - Designated Project Policy is ineffective and invalid as against Kent and Levine pursuant to Insurance Law § 3450(d)(2) as untimely, having been issued over five months after Allied was placed on notice of the underlying accident. Scottsdale’s disclaimer is ineffective and invalid as untimely pursuant to section 3450 (d)(2), having been issued over eight months after Scottsdale was placed on notice of the underlying accident and over four months after Allied issued its disclaimer. To date, Allied and Scottsdale continue to refuse to defend and indemnify Kent and Levine in the Underlying Action. ********** In support of dismissal of the first and third causes of action asserted against it, Allied contends that Plaintiffs’ claims, which seek to dispute the validity of the September 12, 2013 disclaimer letter, accrued on the date of the disclaimer, and since the instant action was not commenced until October 29, 2021 – more than eight years after the issuance of the disclaimer -3- 4 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 letter – Plaintiffs’ claims are untimely. Allied asserts that the six-year statute of limitations period set forth in CPLR § 213(1) is applicable here because there is no express statute of limitations period on a declaratory judgment cause of action. In opposition to Allied’s motion and in support of their cross-motion for summary judgment, Plaintiffs contend that this action is not time-barred because under New York law a cause of action based on an insurer’s alleged breach of a contractual duty to defend accrues only when the underlying litigation brought against the insured has been finally terminated and the insurer can no longer defend the insured even if it chooses to do so. Here, Kent and Levine seek, inter alia, a declaration that Allied must defend and indemnify them in the Underlying Action. Regardless of the date of Allied’s disclaimer, Plaintiffs assert, the Underlying Action is still ongoing and Kent and Levine need a defense each day for as long as it continues. Thus, the statute of limitations has not yet accrued and therefore cannot have expired. In addition, Plaintiffs contend that they are entitled to coverage under the Allied policy as a matter of law based on Allied’s failure to comply with Insurance Law § 3420 (d)(2) given its five-month delay in disclaiming coverage. In this regard, Plaintiffs note that an insurer who delays in timely disclaiming coverage by giving written notice bears the burden of justifying the delay. Plaintiffs aver that Allied cannot justify its delay in disclaiming on the ground that it allegedly did not learn of the Catlin policy until September 5, 2013 because Allied should have immediately asked its insureds if there is project-specific coverage in place. Because Allied did not conduct a diligent investigation in this regard, its disclaimer is untimely as a matter of law. In support of summary judgment, Plaintiffs submitted the affidavit and attached exhibits of Deborah Lewis. In her affidavit, Lewis states as follows: She is a claim director of RLI Insurance Company (RLI) and is responsible for handling certain liability and coverage matters in connection with the Underlying Action. RLI issued a second-layer excess liability policy to Levine and Kent that was in effect on the date of Herrera’s alleged accident. As part of her responsibilities, Lewis evaluated the coverage available to Kent and Lewis in connection with the Underlying Action including their coverage under the policies issued by Allied and Scottsdale. Lewis also conferred with representatives of Kent and Levine in connection with -4- 5 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 bringing this action to enforce their rights under the Allied and Scottsdale policies. Notably, Lewis does not opine as to whether coverage exists under either policy for Herrrera’s alleged accident. Lewis states that the documents attached to her affidavit are part of RLI’s claim file and were received or generated in the regular course of RLI’s claim investigation and handling. Said documents include the RLI policy, the Catlin policy, the Allied policy, a contract between Kent and Levine for the 1 North 4th Place construction project, and various correspondence. In opposition to Plaintiffs’ cross-motion and in further support of its motion, Allied points to other insurance coverage allegedly available to Kent and Levine in the Underlying Action, above the RLI policy. In addition, Allied avers that, in their papers, Plaintiffs do not dispute the validity of the basis for Allied’s disclaimer of coverage. Instead, Allied asserts, Plaintiffs’ sole claim in the instant action is that Allied is precluded from denying coverage due to its alleged failure to comply with the time restrictions of Insurance Law § 3420 (d). Allied avers that Plaintiffs had six years to dispute the timeliness of Allied’s September 12, 2013 disclaimer and they failed to do so within the statute of limitations. Allied asserts that, should the Court decline to dismiss Plaintiffs’ complaint as time-barred, the Court should search the record and declare that Allied has no obligation to provide coverage to Plaintiffs for the Underlying Action because it timely denied coverage pursuant to the Policy’s Exclusion - Designated Project Policy, and because any coverage for Plaintiffs under the Allied policy would not apply until all other coverage available to Plaintiffs is exhausted. Alternatively, Allied contends that Plaintiffs’ motion for summary judgment should be denied as premature because discovery has not yet taken place. On this point, Allied refers to Plaintiffs’ third cause of action which seeks a declaration that coverage under the Allied policy is primary and non-contributory to any other coverage available to them. Allied contends that it is entitled to discovery regarding other insurance policies available to Plaintiffs, which information is within the exclusive knowledge of Plaintiffs. Further, Allied claims that Plaintiffs have now admitted that they are receiving coverage under the Catlin project-specific primary policy, the Axis project-specific excess policy and the RLI project-specific excess policy and, upon information and belief, Plaintiffs are also receiving additional insurance coverage under the -5- 6 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 primary and excess policies issued to J&A Concrete, which is a defendant in the Underlying Action. In support of its contentions, Allied submitted the affidavit with attached exhibits of Michael Sirianni (Sirianni) wherein he states, in pertinent part, as follows: He is employed by Rockville Risk Management Associates, Inc. (RRMA), the third-party administrator for Allied. Allied issued policy No. 5050-0230 to Levine and by endorsement to New Cassel for the policy period of June 15, 2012 to June 15, 2013. Allied received notice of the occurrence involving Herrera on April 4, 2013. The notice included a copy of a letter from Gorayeb & Associates, PC requesting records and information from New Cassel. The Acord General Liability Notice of Occurrence/Claim form specifically states that the occurrence was being “report[ed] for record only.” On or about May 10, 2013, Herrera filed an order to show cause seeking pre-action discovery from New Cassel. Allied retained Milber Makris Plousadis & Seiden, LLP to respond to the order to show cause and assist with its investigation. Herrera subsequently filed the Underlying Action on July 5, 2013. On or about August 15, 2013, John Beider (Beider) of Traub Lieberman Strauss & Shrewsberry LLP, counsel for Kent, Levine and North 4th Place LLC in the Underlying Action, wrote to Allied to request defense and indemnification for his clients pursuant to Allied’ additional insured coverage obligations and New Cassel’s contractual indemnification obligations. On or about September 12, 2013, RRMA, on behalf of Allied, wrote to Beider and advised that Allied denied any obligation to provide coverage to Kent and Levine for the Underlying Action because the Policy’s Exclusion - Designated Project Policy applies and excludes coverage since Catlin issued a Designated Project Policy to them for the subject project. By letter dated September 4, 2013, Lloyd Wilmot, a liability claims specialist for Zurich, wrote to Beider and advised that Zurich would provide additional insured coverage to Kent and Levine under a policy it issued to J&A Concrete, without reservation, up to its $1 million primary limit per occurrence. This letter was “carbon copied” to RRMA. Sirianni attached copies of the Allied policy, the Acord General Liability Notice of Occurrence/Claim form, the Beider August 15, 2013 tender letter, Allied’s disclaimer letter to -6- 7 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 Beider, and Zurich’s letter indicating additional insurance coverage for Levine and Kent to his affidavit. Standard of Review I. Motion to Dismiss - CPLR § 3211 (a)(1), (5) and (7) In deciding a motion to dismiss pursuant to CPLR § 3211, a court must “accept the facts alleged in the complaint is true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (Leon v Martinez, 84 NY2d 83, 87-88 [1994]). The pleading is to be afforded a liberal construction (id. at 87). Ambiguous allegations must be resolved in plaintiff’s favor (JF Capital Advisors, LLC v Lightstone Group, LLC, 23 NY3d 759, 764 [2015]). “The motion must be denied if from the pleadings’ four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law” (511 West 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 152 [2002]). “Where . . . the allegations consist of bare legal conclusions, as well as factual claims either inherently incredible or flatly contradicted by documentary evidence, they are not entitled to such consideration” (Ullman v Norma Kamali, Inc., 207 AD2d 691, 692 [1st Dept 1994]). It is well settled that a defense based on documentary evidence is not dispositive “unless the documents submitted resolve all of the factual issues as a matter of law” (Standard Chartered Bank v D. Chabbott, Inc, 178 AD2d 112, 112 [1st Dept 1991]). Dismissal of the complaint pursuant to CPLR § 3211(a)(1), therefore, is only warranted where “the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law” (Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]). When a party moves to dismiss a complaint pursuant to CPLR § 3211(a)(7), the standard is whether the pleading states a cause of action, not whether the proponent of the pleading has a cause of action ( Guggenheimer v Ginzburg, 43 NY2d 268 [1977]). “Whether a plaintiff can ultimately establish its allegations is not part of the calculus” (EBC I, Inc. v Goldman Sachs & Co., 5 NY3d 11, 19 [2005]). On a motion made pursuant to CPLR § 3211(a)(7), the burden -7- 8 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 never shifts to the nonmoving party to rebut a defense asserted by the moving party (Sokol v Leader, 74 AD3d 1180, 1181 [2nd Dept 2010]). While “CPLR § 3211 allows a plaintiff to submit affidavits, [] it does not oblige him to do so on penalty of dismissal” (Rovello v Orofino Realty Co., 40 NY2d 633, 635 [1976]). Affidavits may be received for a limited purpose only, serving normally to remedy defects in the complaint, and such affidavits are not to be examined for the purpose of determining whether there is evidentiary support for the pleading (id. at 636). Thus, a plaintiff “will not be penalized because he has not made an evidentiary showing in support of his complaint” (Rovello at 635). However, a court may consider evidentiary material submitted by a defendant, and if it does so, the criterion becomes “whether the proponent of the pleading has a cause of action, not whether he has stated one” (Guggenheimer at 275). Affidavits submitted by a defendant “will almost never warrant dismissal under CPLR § 3211 unless they establish conclusively that [the plaintiff] has no cause of action” (Lawrence v Graubard Miller, 11 NY3d 588, 595 [1976] quoting Rovello at 636). Indeed, a motion to dismiss pursuant to CPLR § 3211(a)(7) must be denied “unless it has been shown that a material fact as claimed by the pleader to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it” (Guggenheimer at 275). Under CPLR § 3211 (a)(5), a party may move for judgment dismissing one or more causes of action asserted against it on the ground that the cause of action may not be maintained because of the statute of limitations. To dismiss a cause of action pursuant to CPLR § 3211 (a)(5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing prima facie that the time in which to sue has expired (MTGLQ Invs., LP v Wozencraft, 172 AD3d 644, 644-645 [1st Dept 2019]; Swift v New York Med. Coll., 25 AD3d 686, 687 [2d Dept 2006]). The burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations is inapplicable or whether the action was commenced within the statutory period (Wilson v Southampton Urgent Med. Care, P.C., 112 AD3d 499, 500 [1st Dept 2013]). To make a prima facie showing, the defendant must establish, inter alia, when the plaintiff’s causes of action accrued (Swift at 687). -8- 9 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 ********** As an initial matter, the parties disagree as to whether subsection (1) or subsection (2) of CPLR § 213 governs Plaintiffs’ claims. CPLR § 213(1) is a catch-all provision and applies a six-year statute of limitations period in an action “for which no limitation is specifically prescibed by law.” CPLR § 213(2) applies a six-year statute of limitations period in “an action upon a contractual obligation or liability, express or implied.” Although a six-year statutory period applies under each subsection, it is nonetheless important to discern the nature of the causes of action asserted by Plaintiffs here to determine when those causes of action accrued. The CPLR prescribes no general period of limitation for a declaratory judgment action (Solnick v Whalen, 49 NY2d 224, 229 [1980]). Courts must look to the underlying claim and the nature of the relief sought to determine the applicable period of limitations (id. at 229). Stated differently, a court’s inquiry focuses on the “substance of [the] action to identify the relationship out of which the claim arises and the relief sought” (id.). “When the rights of parties sought to be stabilized in a declaratory judgment action are, or have been, open to resolution through a particular procedural route for which a specific limitation period is statutorily provided, then that period generally governs the time for commencement of the declaratory judgment action” (Vigilant Ins. Co. of America v Housing Authority of City of El Paso, Texas, 87 NY2d 36, 41 [1995] [internal citations omitted]). Otherwise, the six-year “catch-all” period in CPLR § 213(1) applies (Id.; New York City Health & Hosps. Corp. v McBarnette, 84 NY2d 194, 201 [1994]). Here, contrary to Plaintiffs’ contention, Plaintiffs’ claims for declaratory relief are not based on contract. Rather, they are based upon defendants’ alleged untimely disclaimers of coverage pursuant to Insurance Law § 3420(d)(2), which requires an insurer disclaiming liability or denying coverage for death or bodily injury arising out of an accident occurring within New York to give “written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant” (id.) Indeed, the complaint does not allege that either Allied or Scottsdale breached any contractual obligation owed to Plaintiffs; instead, it alleges that the disclaimers issued by Allied and Scottsdale are “ineffective and invalid” because they were untimely. The CPLR does not expressly provide a -9- 10 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 statute of limitations period for claims premised on alleged violations of § 3420(d)(2). And, neither party cites, nor has the Court found, any cases applying a limitations period to a claim based on an alleged violation of § 3420(d)(2). Nor is there any other form of proceeding for the resolution of Plaintiffs’ claims. As such, the Court finds that the six-year statutory period set forth in CPLR § 213(1) is applicable. We turn next to the issue of when Plaintiffs’ section 3420(d)(2) claims accrued. CPLR § 203(a) provides that “[t]he time within which an action must be commenced, except as otherwise expressly prescribed, shall be computed from the time the cause of action accrued to the time the claim is interposed.” In support of their contention that the claims alleged herein have not yet accrued because the Underlying Action is ongoing, Plaintiffs rely on New York decisions which have found that a cause of action based on an insurer’s breach of a contractual duty to defend or indemnify accrues only when the underlying litigation brought against the insured has been finally terminated and the insurer can no longer defend the insured even if it chooses to do so (Ghaly v First Am. Title Ins. Co. of New York, 228 A.D.2d 551, 552 [2d Dept 1996]; Liberty Mut. Fire Ins. Co. v Hamilton Ins. Co., 356 F. Supp. 3d 326, 335 [SDNY 2018]; Roldan v Allstate Ins., 149 AD2d 20, 26-27 [2d Dept 1989]). However, Plaintiffs’ reliance on those cases is misplaced because, as discussed above, Plaintiffs’ claims are not based on a breach of any contractual obligation, but rather, on alleged violations of Insurance Law § 3420(d)(2). In this regard, the Court finds the situation in Quality Bldg. Contr, Inc. v Ill. Union Ins. Co. (2016 U.S. Dist. Lexis 101925), relied upon by Allied, mirrors the situation in this decision. In Quality Building, the Plaintiff challenged the timeliness of its insurer’s notice of disclaimer and argued that its claim accrued for statute of limitation purposes only when its “liability or legal obligation is finally fixed and the underlying action has terminated” (id. at *13). In support, the Plaintiff relied upon the same New York decisions relied upon by Plaintiffs herein. Notably, the court found reliance on those cases misplaced because the cause of action at issue in Quality Building was not seeking a judicial determination of the insurer’s contractual duty to indemnify or defend under the policy, but rather, sought a determination that the insurer gave inexcusably late notice of its intention to disclaim coverage in violation of § 3420(d)(2) and thereby waived or is -10- 11 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 estopped from denying coverage to the Plaintiff (id.). In that case, the court found that the Plaintiff’s claim accrued when Plaintiff possessed sufficient information to formulate the factual basis for its assertion (id.). The court also noted that, at that time, a legal dispute had crystalized concerning the timeliness of the insurer’s disclaimer, and a judicial declaration would have served a useful purpose in determining the insurer’s coverage obligations with respect to the underlying action going forward (id. at *14). Significantly, the Court of Appeals has held that a cause of action accrues when all of the facts necessary to sustain the cause of action have occurred, so that a party could obtain relief in court (Vigilant Ins. Co. of America at 43). In Vigilant Ins. Co. of America, the Court also noted that the “accrual of an action depends on a nice balancing of policy considerations” and that “[a] defendant’s interest in defending a claim must be balanced with a plaintiff’s interest in not being deprived of a claim before a reasonable chance to assert it arises” (id.). Here, Plaintiffs possessed sufficient information to formulate the factual basis for their claim of untimely disclaimer against Allied on September 12, 2013, when Allied disclaimed coverage for the Underlying Action. Yet, inexplicably, Plaintiffs waited until October 29, 2021 to challenge the effectiveness of Allied’s disclaimer. This puts Allied in the unenviable position of having to pursue an investigation into why, over eight years ago, it delayed notifying Plaintiffs of its disclaimer of coverage for the Underlying Action. The Court notes that upon a search of the record1, while Scottsdale did not move for dismissal of Plaintiffs’ claims, the same reasoning applies with respect to the claims asserted against Scottsdale. For the foregoing reasons, the Court finds that Plaintiffs’ claims against Allied and Scottsdale are time-barred. Given this finding, Plaintiffs are not entitled to summary judgment in their favor on those claims and the cross-motion is denied as moot. Accordingly, it is hereby 1 When a court is deciding a motion for summary judgment, it can search the record and can grant summary judgment to a nonmoving party (Dunham v. Hilco Constr. Co., 89 NY2d 425, 429 [1996]). -11- 12 of 13 FILED: BRONX COUNTY CLERK 05/30/2023 12:25 PM INDEX NO. 814800/2021E NYSCEF DOC. NO. 125 RECEIVED NYSCEF: 05/30/2023 ORDERED that Plaintiffs’ Complaint is dismissed in its entirety. It is further ORDERED that Allied shall serve a copy of this Decision and Order upon all parties, with Notice of Entry, within thirty (30) days of the date hereof. This constitutes the Decision and Order of this Court. Dated: Bronx, New York May 30, 2023 Hon. __________________________ FIDEL E. GOMEZ, J.S.C. -12- 13 of 13