Bahnuk v. Countryway Ins. Co.
| Docket Number | Index No. EFCA2019000970 |
| Decision Date | 27 July 2020 |
| Citation | 2020 NY Slip Op 35442 (U) |
| Parties | PAUL BAHNUK, Plaintiff, v. COUNTRYWAY INSURANCE COMPANY, Defendant |
| Court | New York Supreme Court |
Unpublished Opinion
Counsel for Plaintiff: ANNA B. ROBBINS, Esq., Stanley Law Offices.
Counsel for Defendant: JOHN L. MURAD, JR., Esq., Hancock Estabrook, LLP.
PRESENT: HON. EUGENE D. FAUGHNAN Justice Presiding.
DECISION AND ORDER
This matter is before the Court to consider the motion of Defendant Country way Insurance Company ("Country way") seeking dismissal of this action pursuant to CPLR 3211; and the cross-motion of Plaintiff, Paul Bahnuk ("Bahnuk") for summary judgment After due deliberation, and for the reasons set forth below Countryway's motion is denied, and Bahnuk's cross-motion is denied, without prejudice.
On or about March 6, 2012, Bahnuk was working as a paramedic and was called to respond to 42 Tremont Avenue in Binghamton, NY. Bahnuk alleges that he fell while exiting and descending the front steps. The premises were owned by Pauline Williams and rented to Christine Wesko. Williams had a homeowner's insurance policy through Countryway.
Bahnuk commenced an action against Williams in March, 2013 in Broome County (Bahnuk v. Williams. Index No.: CA2013006424), seeking damages for injuries sustained in the fall, which he claimed was caused by the stairs being in a defective condition. Countryway sent a letter to Williams that this incident was not covered under the insurance policy because Williams did not live at the premises and because her rental of the premises constituted operating a business on the property, which was not covered. Eventually, in the underlying action, Williams signed a Confession of Judgment to Bahnuk for $100,000, and a Judgment was entered in the County Clerk's office on January 28, 2019.
Thereafter, Bahnuk commenced this action against Countryway on April 2, 2019. Bahnuk's complaint alleges that he has a direct cause of action against Country way pursuant to Insurance Law §3420(a)(2), for the amount of the judgment entered against Williams. The amount sought in the complaint is $100,000, which is the amount of the judgment Bahnuk has against Williams. Countryway filed an Answer with Affirmative Defenses.
Countryway filed a motion seeking dismissal of Plaintiffs complaint on two different grounds. First, Country way claims that the judgment obtained in the underlying action was obtained by collusion, and is therefore a nullity which cannot form the basis of an action under Insurance Law §3420(a)(2). Second, Countryway contends that it properly disclaimed coverage because Williams did not reside at the property and by renting it to Wesko, it is excluded as a business exception.
The motion was given a return date of April 3,2020, but several Executive Orders and Administrative Orders issued as a result of the coronavirus pandemic closed courts and prevented the filing of papers. When filings were once again permitted, Plaintiff filed a cross motion on May 4,2020. By Order of this Court dated May 5,2020, both the motion and cross motion were given a return date of June 5,2020, on submission only.
Bahnuk opposes the motion to dismiss, claiming that there is no evidence of any collusion between Bahnuk and Williams in the underlying action. Rather, both parties had risks in continuing the litigation as well as expenses, and the settlement was the result of valid, good faith negotiations. Further, Countryway chose to disclaim and not be involved in the earlier action, so it cannot now complain about the final result Bahnuk also filed a cross motion seeking summary judgment on the basis that Country way failed to properly disclaim coverage because it did not do so with specific detail, or indicate what exclusion applied; and it failed to provide the notice to Bahnuk, an injured party, as required under Insurance Law §3420(d). Bahnuk also claims that at the very least there is a question of fact as to whether the claim is excluded under the policy.
On June 1,2020, Country way filed an attorney's affirmation in further support of its motion and in opposition to Plaintiff's motion. The affirmation continued to maintain that the evidence clearly establishes that the underlying judgment was the result of collusion, and the evidence supports the disclaimer of coverage. Bahnuk objected to Countryway's reply as being untimely. Further, Bahnuk argued that even if Countryway's additional submission is considered, Countryway failed to list the exclusions in its disclaimer, and therefore is precluded from raising them now.
The Court will first address Plaintiff's objection to Countryway's opposition papers. As noted above, the motion and cross motion were given a return date of June 5 2020. Plaintiff's cross motion papers required any reply papers to be filed at least 7 days before the return date of the motion. Countryway's opposition papers were not filed until June 1, 2020, less than 7 days prior to the return date.
CPLR 2214 sets forth the procedure for motions and the timing for the service of papers, including the "16-7-1" rule, that allows the movant to demand answering papers be served at least 7 days before the return date when the motion is made at least 16 days before the return date. Even though the opposition papers were not filed at least 7 days before the return date, the motion was on submission, so neither party had to physically appear and argue on June 5,2020. Plaintiff was able to complete and file a reply on June 3,2020, and if he had needed even more time, he could have asked for it. There is no evidence that Plaintiff suffered any prejudice from Country way's late submission. In light of the minimal delay of one business day, the lack of prejudice to Plaintiff and a strong public policy of deciding cases on the merits, the Court exercises its discretion to consider Countryway's opposition papers, and all other papers submitted in regard to these motions.
Turning now to the merits, Country way's Notice of Motion states that the motion is made "pursuant to CPLR 3211 and 5015... for an Order granting dismissal" of the Complaint. CPLR 5015 deals with relief from a judgment or order, and is based upon Countryway's argument that the underlying judgment was procured by collusion so it should be deemed a nullity. Country way's motion does not specify which of the grounds under CPLR 3211 it relies upon. This is particularly problematic because tills is a post-answer CPLR 3211 motion, and some of the CPLR 3211 grounds are waived if not made in a pre-answer motion, or raised as an affirmative defense in the Answer. See, CPLR 3211 (e). Countryway's motion also does not specifically identify which of its affirmative defenses it might be relying upon. The Court does note that Country way's Answer includes an affirmative defense of failure to state a cause of action, also found under CPLR 3211(a)(7), which is probably the broadest and most encompassing of the CPLR 3211(a) defenses. Although the motion lacks reference to a section of 3211 or any particular affirmative defense, it does reference CPLR 3211 as opposed to CPLR 3212 (). This is an important distinction. As the Third Department has stated, "[i]n contrast to a motion for summary judgment, a court resolving a motion to dismiss for failure to state a claim cannot base the determination upon submissions by the defendant - without regard to how compelling claims made in such submissions may appear." Carr v. Wegmans Food Mkts, Inc., 182 A.D.3d 667,668 (3rd Dept 2020) citing Miglino v. Bally Total Fitness of Greater N.Y., Inc., 20 N.Y.3d 342, 351 (2013) (other citation omitted). Under CPLR 3211 (c), the Court can treat a motion under CPLR 3211 as a motion for summary judgment, after adequate notice to the parties. Neither party has asked to convert Defendant's motion to a summary judgment motion, nor did the Court indicate that Defendant's motion would be considered a motion for summary judgment Therefore, the Court must treat this as a true CPLR 3211 motion (see, Siddiqui v. Nationwide Mut. Ins. Co., 255 A.D.2d 30 [3rd Dept. 1999]), and cannot rely upon Defendant's submissions.
In motions to dismiss, the Third Department has adhered to the rule that defendants' affidavits cannot be considered. Henbest & Morrisey, Inc. v. W.H. Ins. Agency Inc., 259 A.D.2d 829 (3ri Dept 1999); see also, Carr v. Wegmans Food Mkts, Inc., 182 A.D.3d 667; Crepin v. Fogarty, 59 A.D.3d 837 (3"1 Dept 2009); cf. Liberty Affordable Housing, Inc. v. Maple Ct. Apts., 125 A.D.3d 85 (4th Dept 2015); Basis Yield Alpha Fund (Master) v. Goldman Sachs Group, Inc. 115 A.D.3d 128 (1st Dept 2014). "The grounds for dismissal under CPLR 3211 (a) (7) are... strictly limited; the court is not allowed to render a determination upon a thorough review of the relevant facts adduced by both parties, but rather is substantially more constrained in its review, examining only the plaintiff s pleadings and affidavits." Carr v. Wegmans Food Mkts, Inc., 182 A.D.3d at 668 citing Rovello v. Orofino Realty Co., 40 N.Y.2d 633,635, (1976); Sokol v. Leader, 74 A.D.3d 1180,1181 (2nd Dept 2010). "On a motion to dismiss made pursuant to CPLR 3211, a court should construe the pleadings liberally, accept the allegations as true and afford the party opposing the motion the benefit of every possible inference to determine whether the facts alleged fit within a cognizable legal theory." T. Lemme Meeh, Inc. v. Schalmont Cent. School Dist., 52 A.D.3d 1006, 1008 (3rd Dept 2008) (citations omitted); see, EBC I, Inc. v. Goldman Sachs & Co., 5 N.Y.3d 11,19 (2005); Leon v. Martinez,...
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