Atl. Cas. Ins. Co. v. Rjnj Serv. Inc.

Decision Date01 November 2011
Citation89 A.D.3d 649,932 N.Y.S.2d 109,2011 N.Y. Slip Op. 07786
PartiesATLANTIC CASUALTY INSURANCE COMPANY, appellant,v.RJNJ SERVICES, INC., doing business as Classic Construction, et al., defendants;Fairfield Ronkonkoma, LLC, et al., respondents.
CourtNew York Supreme Court — Appellate Division

OPINION TEXT STARTS HERE

Keidel, Weldon & Cunningham, LLP, White Plains, N.Y. (Debra M. Krebs of counsel), for appellant.Rubin Fiorella & Friedman LLP, New York, N.Y. (James M. Haddad and Mandie R. Forman of counsel), for respondents.WILLIAM F. MASTRO, J.P., ARIEL E. BELEN, SANDRA L. SGROI, and ROBERT J. MILLER, JJ.

In an action, inter alia, for a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendant RJNJ Services, Inc., doing business as Classic Construction, as a third-party defendant in an underlying personal injury action entitled Lala v. Fairfield Ronkonkoma, LLC, pending in the Supreme Court, Bronx County, under Index No. 14880/05, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Pastoressa, J.), entered March 30, 2010, as denied its motion for leave to enter a default judgment against the defendant RJNJ Services, Inc., doing business as Classic Construction, declaring that it is not obligated to defend or indemnify that defendant as a third-party defendant in the underlying action, and to sever the action against that defendant.

ORDERED that the order is affirmed insofar as appealed from, with costs.

On March 16, 2005, Jose Lala fell from a roof while performing his work as an employee of Painting & Home Design, a subcontractor of the defendant RJNJ Services, Inc., doing business as Classic Construction (hereinafter RJNJ). RJNJ had been hired by the defendants Fairfield Ronkonkoma, LLC, Fairfield Properties, and Fairfield Brokerage, LLC (hereinafter collectively Fairfield), to perform the roofing work at a building project in Ronkonkoma.

In April 2005 Lala commenced an underlying personal injury action against Fairfield to recover damages for personal injuries. In June 2006 American Claims, an authorized representative of the plaintiff Atlantic Casualty Insurance Company (hereinafter Atlantic), received a copy of the complaint in the underlying personal injury action from York Claims on behalf of Fairfield. In August 2006 Fairfield commenced the underlying third-party action against RJNJ. In 2007, the Supreme Court granted Fairfield's motion for a default judgment against RJNJ in the underlying third-party action.

Atlantic had issued a commercial general liability policy to RJNJ for a coverage period including the date of the occurrence. RJNJ did not give notice to Atlantic of the occurrence, the underlying personal injury action, or the underlying third-party action. RJNJ also did not give Atlantic notice of the default judgment against it in the underlying third-party action.

On September 29, 2006, after it had completed an investigation, Atlantic sent a written notice of disclaimer of coverage to RJNJ. The disclaimer was based on the grounds that RJNJ had never notified Atlantic about the accident or the default judgment entered against RJNJ, and that the policy precluded coverage since Lala was an employee of RJNJ's subcontractor.

In July 2008 Atlantic commenced the instant declaratory judgment action against, among others, RJNJ and Fairfield. RJNJ failed to appear or answer the complaint in the instant action. Atlantic moved for leave to enter a default judgment against RJNJ, declaring that it is not obligated to defend or indemnify RJNJ as a third-party defendant in the underlying action, and to sever the action against RJNJ. Fairfield opposed Atlantic's motion and cross-moved, in effect, for summary judgment declaring that Atlantic is obligated to defend and indemnify RJNJ as a third-party defendant in the underlying action. The Supreme Court denied the motion and the cross motion, determining that there were triable issues of fact as to the timeliness of Atlantic's disclaimer.

On a motion for leave to enter a default judgment pursuant to CPLR 3215, the...

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