Allstate Vehicle & Prop. Ins. Co. v. Mars
| Decision Date | 12 April 2021 |
| Docket Number | 2:20-cv-1558 (DRH) (AKT) |
| Citation | 533 F.Supp.3d 71 |
| Parties | ALLSTATE VEHICLE AND PROPERTY INSURANCE COMPANY, Plaintiff, v. Krzystof MARS and Dorota Mars, Individually and as Parents and Natural Guardians of M.M., an infant, and Willie Moore and Ursula Moore, Individually and as the Parents and Natural Guardians of D.W.M. and D.D.M., infants, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
LEWIS JOHS AVALLONE AVILES, LLP, Attorneys for Plaintiff, One CA Plaza, Suite 225, Islandia, NY 11749, By: Karen M. Berberich, Esq.
TIERNEY & TIERNEY, ESQS., Attorneys for Krzystof Mars and Dorota Mars, 409 Route 112, Port Jefferson Station, NY 11776, By: Stephen A. Ruland, Esq.
LAW OFFICE OF CORY H. MORRIS, Attorneys for the Ursula Moore and Willie Moore, 135 Pinelawn Road, Suite 250s, Melville, NY 11747, By: Cory H. Morris, Esq., Victor John Yannacone, Jr., Esq.
INTRODUCTION
Plaintiff Allstate Vehicle and Property Insurance Company ("Allstate") brings this action against the captioned Defendants for a declaratory judgment that it is not obligated to defend or indemnify M.M., the minor son of its insureds, Defendants Krysztof and Dorota Mars (the "Mars"), in an underlying action brought against him1 by Defendants Willie and Ursula Moore on behalf of their minor children D.W.M. and D.D.M. (the "Moores," and together with the Mars, "Defendants"). Presently before the Court is Allstate's motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c). [DE 28]. For the reasons set forth below, Allstate's motion is GRANTED.
The following facts from the Amended Complaint and materials properly considered on Allstate's motion are taken as true for the purposes of this Order and are construed in a light most favorable to the Defendants, the non-movants. Hayden v. Paterson , 594 F.3d 150, 160–61 (2d Cir. 2010) ; Faison v. Maccarone , 2012 WL 681812, at *1 (E.D.N.Y. Mar. 1, 2012) (Bianco, J.).
In the underlying action, D.W.M. ex rel. Moore v. St. Mary School , No. 2:18-cv-3099 (E.D.N.Y.) (the "Underlying Action"), the Moores allege M.M. cyber-bullied his classmates D.W.M. and D.D.M. with racist and threatening photographs, creating a situation which their school subsequently failed to remedy. (Am. Compl. ¶¶ 15–17 ("AC") [DE 16]). The Underlying Action Complaint asserted causes of action based on 42 U.S.C. §§ 1981, 1983, 1985, 1986, 2000a, 2000d, as well as New York state common law negligence, intentional infliction of emotional distress ("IIED"), negligent infliction of emotional distress, prima facie tort, and breach of contract. . The Mars were named defendants individually and as parents of infant M.M. Underlying Action Compl.
Pursuant to a House and Home insurance policy (Form AVP117) (the "Policy"), (Ex. E to AC), Allstate has been defending the Mars in the Underlying Action subject to a partial denial and disclaimer letter sent June 25, 2018, (Ex. B to AC). The Policy provides coverage for "damages which an insured person becomes legally obligated to pay because of bodily injury or property damages arising from an occurrence to which this policy applies," which does not include "bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person." (Ex. E at 392 to AC). "Bodily injury" means, in relevant part, "physical harm to the body, including sickness or disease, and resulting death." (Id. at 22). "Occurrence" means "an accident, including continuous or repeated exposure to substantially the same general harmful conditions during the policy period, resulting in bodily injury or property damage." (Id. ).
In the June 25, 2018 letter, Allstate advised the Mars that the Policy provided "no coverage" for all but two of the Underlying Action's causes of action:
[T]hey do not allege bodily injury or property damage as those terms are defined in the policy. Accordingly, none of the remaining causes of action constitute an occurrence as that term is defined in the policy. Furthermore, with [two] exception[s] ..., the remaining causes of action all allege intentional conduct by the insureds ... [and are] barred by the exclusion for intentional/criminal acts.
(Ex. B at 6 to AC). Allstate nevertheless agreed to defend the Mars because at least one cause of action triggered coverage – though Allstate made clear the Policy obligated payment only for damages from physical harm caused by negligence. (Id. at 6–7).
On August 21, 2019, the Court in the Underlying Action dismissed all causes of action against the Mars individually and all causes of action, save one, against them as the parents of their son, M.M. (AC ¶¶ 20–22; D.W.M. ex rel. Moore v. St. Mary Sch. , 2019 WL 4038410, at *18 (E.D.N.Y. Aug. 27, 2019) ). Only the IIED claim survived against M.M., id. , prompting Allstate to send a second letter on February 26, 2020 denying coverage. (Ex. D to AC). Allstate contends the Moores’ IIED claim "does not allege bodily injury" as defined by the Policy, does not reflect "accidental conduct," and trips the Policy's "intentional acts exclusion." (Id. ). Allstate then instituted this declaratory judgment action on March 3, 2020, seeking a declaration that it has no duty to defend or indemnify the Mars. [DE 1]. Allstate moved for judgment on the pleadings on August 28, 2020. [DE 28].
The standard for evaluating a motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) is the same as the standard for a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). See Karedes v. Ackerley Group, Inc. , 423 F.3d 107, 113 (2d Cir. 2005). In deciding a Rule 12(b)(6) motion to dismiss, the Court applies a "plausibility standard," which is guided by "[t]wo working principles." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ); accord Harris v. Mills , 572 F.3d 66, 71–72 (2d Cir. 2009). First, although the Court must accept all allegations as true, this "tenet" is "inapplicable to legal conclusions"; thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ; accord Harris , 572 F.3d at 72. Second, only complaints that state a "plausible claim for relief" can survive a Rule 12(b)(6) motion to dismiss. Iqbal , 556 U.S. at 679, 129 S.Ct. 1937. Determining whether a complaint does so is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. ; accord Harris , 572 F.3d at 72.
In making its determination, the Court is confined to "the allegations contained within the four corners of [the] complaint." Pani v. Empire Blue Cross Blue Shield , 152 F.3d 67, 71 (2d Cir. 1998). However, this has been interpreted broadly to include any document attached to the complaint, any statements or documents incorporated in the complaint by reference, any document on which the complaint heavily relies, and anything of which judicial notice may be taken. See Chambers v. Time Warner, Inc. , 282 F.3d 147, 152–53 (2d Cir. 2002) (citations omitted); Kramer v. Time Warner Inc. , 937 F.2d 767, 773 (2d Cir. 1991).
"[A] federal court sitting in diversity jurisdiction applies the choice of law rules of the forum state," here New York. AEI Life LLC v. Lincoln Benefit Co. , 892 F.3d 126, 132 (2d Cir. 2018). As the Court must interpret a liability insurance contract, New York choice of law rules dictate application of "the substantive law of ‘the jurisdiction with the most significant relationship to the transaction and the parties [which] generally [is] the jurisdiction which the parties understood was to be the principal location of the insured risk.’ " U.S. Underwriters Ins. Co. v. Image By J & K, LLC , 335 F. Supp. 3d 321, 333 n.3 (E.D.N.Y. 2018) (alteration in original) (quoting In re Liquidation of Midland Ins. Co. , 16 N.Y.3d 536, 544, 947 N.E.2d 1174, 923 N.Y.S.2d 396 (2011) ). The parties agree that New York law governs. Allstate Mem. at 5–6 [DE 28-1]; e.g. , Mars Opp. at 4 [DE 29] ("New York case law is clear ...."); Moore Opp. at 10 [DE 30] (reciting "decisional law" from the New York Court of Appeals). The Court concurs: "Under New York law, questions regarding an insurer's duties in respect to events that occurred in New York are governed by New York law." U.S. Underwriters Ins. Co. v. Beckford , 1998 WL 23754, at *2 (E.D.N.Y. Jan. 20, 1998) (citing U.S. Underwriters Ins. Co. v. Congregation B'Nai Israel , 900 F. Supp. 641, 644 n.2 (E.D.N.Y. 1995) ). Defendants live in New York state, their children attend a Catholic school in New York, "all of the acts and/or omissions attributed to M.M. are alleged to have occurred in New York," and the Policy "was written in New York, for risks located in New York." See Allstate Mem. at 6.
Courts applying New York law interpret insurance policies "according to general rules of contract interpretation." Olin Corp. v. Am. Home Assur. Co. , 704 F.3d 89, 98 (2d Cir. 2012). As such, " ‘words and phrases ... should be given their plain meaning,’ and the contract ‘should be construed so as to give full meaning and effect to all of its provisions.’ " Shaw Group, Inc. v. Triplefine Int'l Corp. , 322 F.3d 115, 121 (2d Cir. 2003) (ellipses in original); White v. Cont'l Cas. Co. , 9 N.Y.3d 264, 267, 878 N.E.2d 1019, 848 N.Y.S.2d 603 (2007) ; Consol. Edison Co. v. Allstate Ins. Co. , 98 N.Y.2d 208, 221–22, 774 N.E.2d 687, 746 N.Y.S.2d 622 (2002).
The Court (i) begins with whether the Policy affords coverage for the IIED claim, (ii) addresses Defendants’ untimely disclaimer argument, and (iii) finishes by discussing ...
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