Carlson v. Am. Int'l Grp., Inc.

• Decision Date: 02 July 2015
• Docket Number: 840 CA 14-02027
• Citation: 2015 N.Y. Slip Op. 05817,130 A.D.3d 1479,12 N.Y.S.3d 715
• Parties: Michael J. CARLSON, Sr., Individually and as Administrator of the Estate of Claudia D'Agostino Carlson, and as Assignee of William Porter, Plaintiff–Respondent–Appellant, v. AMERICAN INTERNATIONAL GROUP, INC., AIG Domestic Claims, Inc., American Alternative Insurance Co., National Union Fire Insurance Company of Pittsburgh, PA, Defendants–Appellants–Respondents, and DHL Express (USA), Inc., Formerly Known as DHL Worldwide Express, Inc., Defendant–Respondent.
• Court: New York Supreme Court — Appellate Division

130 A.D.3d 1479

12 N.Y.S.3d 715

2015 N.Y. Slip Op. 05817

Michael J. CARLSON, Sr., Individually and as Administrator of the Estate of Claudia D'Agostino Carlson, and as Assignee of William Porter, Plaintiff–Respondent–Appellant

v.AMERICAN INTERNATIONAL GROUP, INC., AIG Domestic Claims, Inc., American Alternative Insurance Co., National Union Fire Insurance Company of Pittsburgh, PA, Defendants–Appellants–RespondentsandDHL Express (USA), Inc., Formerly Known as DHL Worldwide Express, Inc., Defendant–Respondent.

840 CA 14-02027

Supreme Court, Appellate Division, Fourth Department, New York.

July 2, 2015.

Hodgson Russ LLP, Buffalo (Kevin D. Szczepanski of Counsel), for Defendants–Appellants–Respondents American International Group, Inc., AIG Domestic Claims, Inc. and National Union Fire Insurance Company of Pittsburgh, PA.

Rubin, Fiorella & Friedman LLP, New York City (Paul Kovner of Counsel), for Defendant–Appellant–Respondent American Alternative Insurance Co.

Brown Chiari LLP, Lancaster, Magavern Magavern Grimm LLP, Buffalo (Edward J. Markarian of Counsel), for Plaintiff–Respondent–Appellant.

Wilson Elser Moskowitz Edelman & Dicker LLP, New York City (Patrick J. Lawless of Counsel), for Defendant–Respondent.

PRESENT: CENTRA, J.P., CARNI, LINDLEY, and DeJOSEPH, JJ.

OpinionMEMORANDUM:

Plaintiff commenced this action pursuant to Insurance Law § 3420(a)(2) to collect on certain insurance policies after a second amended judgment against MVP Delivery and Logistics, Inc. (MVP) and William Porter was entered upon a jury verdict (see Carlson v. Porter [Appeal No. 2], 53 A.D.3d 1129, 861 N.Y.S.2d 907, lv. denied 11 N.Y.3d 708, 868 N.Y.S.2d 601, 897 N.E.2d 1085 ). DHL Worldwide Express, Inc., doing business as DHL Express (DHL), had a cartage agreement with MVP, whereby MVP provided delivery services for DHL. In the underlying wrongful death action, the jury determined that Porter was negligent in causing the motor vehicle accident that led to the death of plaintiff's decedent, and MVP was statutorily liable for Porter's negligence as the owner of the vehicle driven by Porter (see Carlson, 53 A.D.3d at 1133, 861 N.Y.S.2d 907 ). Plaintiff recovered from MVP's insurer and now seeks to recover under a primary and umbrella policy issued to DHL by defendant National Union Fire Insurance Company of Pittsburgh, PA (National Union), and under an umbrella policy issued to DHL by defendant American Alternative Insurance Co. (AAIC). Defendants American International Group, Inc., and AIG Domestic Claims, Inc. (collectively, AIG), together with National Union, moved to dismiss the complaint against them, and AAIC cross-moved to dismiss the complaint against it (collectively, defendants).

Defendants moved and cross-moved, respectively, to dismiss the complaint based on both a failure to state a cause of action (CPLR 3211[a] [7] ), and a defense based upon documentary evidence (CPLR 3211[a][1] ). Supreme Court granted in part the motion and cross motion. As a preliminary matter, we note that, “[o]n a motion to dismiss under CPLR 3211, the pleading is to be given a liberal construction, the allegations contained within it are assumed to be true and the plaintiff is to be afforded every favorable inference” (Simkin v. Blank, 19 N.Y.3d 46, 52, 945 N.Y.S.2d 222, 968 N.E.2d 459 ). We further note that “[d]ismissal under CPLR 3211(a)(1) is warranted ‘only if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law’ ” (511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 152, 746 N.Y.S.2d 131, 773 N.E.2d 496, quoting Leon v. Martinez, 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511 ).

We agree with defendants that the court erred in denying that part of their motion and cross motion seeking to dismiss the first cause of action, which was asserted pursuant to Insurance Law § 3420(a)(2), and we therefore modify the order accordingly. As we concluded in a companion appeal, plaintiff may not maintain a section 3420(a)(2) action against AAIC inasmuch as AAIC did not issue or deliver an insurance policy in this state (Carlson v. American Intl. Group, Inc., 130 A.D.3d 1477, 16 N.Y.S.3d 637, 2015 WL 4034016 [July 2, 2015] ). We also agree with AIG that the first cause of action should be dismissed against them because they established that they are not insurers. In the alternative, and with respect to National Union, we conclude that plaintiff may not maintain a section 3420(a)(2) action against defendants. The primary National Union policy defined an insured as, inter alia, “[a]nyone else while using with your permission a covered ‘auto’ you own, hire or borrow.” The umbrella National Union policy defined an insured as, inter alia, “[a]ny person ... or organization with respect to any auto owned by you, loaned to you or hired by you or on your be half [sic] and used with your permission.” The umbrella AAIC policy defined an insured as, inter alia, “any person or organization ... included as an insured in the Scheduled Underlying Insurance,” i.e., in the National Union primary policy. Thus, MVP and Porter may be an “insured” under the three policies only if the vehicle used by Porter at the time of the accident was “hired” by DHL and was being used with DHL's permission.

We agree with defendants that in order for the MVP vehicle driven by Porter to be deemed a vehicle “hired” by DHL, there must be a showing that DHL exercised control over the vehicle, and not general control over MVP (see 8A Couch on Insurance, §§ 118:48, 118:49 [3d ed 2014] ). “Generally, a vehicle owned by an independent contractor who contracts with the insured to perform services for the insured is not a hired automobile ... [T]he contract between the insured and the independent contractor in those situations is generally for the services of the subcontractor, not the vehicle used in providing the services” (id., § 118:52 [emphasis added] ). In Dairylea Coop. v. Rossal, 64 N.Y.2d 1, 7, 483 N.Y.S.2d 1001, 473 N.E.2d 251, an independent contractor was hired to transport milk. The Court held that the tanker truck was not a hired automobile where “the tank farm milk hauling contract ... called for transportation of milk by ... an independent contractor rather than use of a particular tanker in the rendition of such service” (id. at 10–11, 483 N.Y.S.2d 1001, 473 N.E.2d 251 ; see Federal Ins. Co. v. Ryder Truck Rental, 189 A.D.2d 582, 584, 592 N.Y.S.2d 38, affd. 82 N.Y.2d 909, 609 N.Y.S.2d 173, 631 N.E.2d 115, rearg. denied 83 N.Y.2d 830, 612 N.Y.S.2d 103, 634 N.E.2d 599 ; see also U.S. Fid. & Guar. Co. v. Heritage Mut. Ins. Co., 230...