Cascade Builders Corp. v. Rugar

• Decision Date: 19 October 2017
• Docket Number: 524429.
• Parties: CASCADE BUILDERS CORP., Appellant–Respondent, v. John RUGAR, Doing Business as JACK RUGAR PAINTING, et al., Respondents–Appellants, et al., Defendant.
• Court: New York Supreme Court — Appellate Division

154 A.D.3d 1152
63 N.Y.S.3d 543

CASCADE BUILDERS CORP., Appellant–Respondent,
v.
John RUGAR, Doing Business as JACK RUGAR PAINTING, et al., Respondents–Appellants, et al., Defendant.

524429.

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

Oct. 19, 2017.

63 N.Y.S.3d 544

Thorn Gershon Tymann and Bonanni, LLP, Albany (Erin Mead of counsel), for appellant-respondent.

Flink Smith Law LLC, Albany (Edward B. Flink of counsel), for John Rugar, respondent-appellant.

Farber, Brocks & Zane LLP, Garden City (Sherri N. Pavloff of counsel), for

63 N.Y.S.3d 545

Utica First Insurance Company, respondent-appellant.

Before: PETERS, P.J., EGAN JR., DEVINE, MULVEY and PRITZKER, JJ.

EGAN JR., J.

Cross appeal from an order of the Supreme Court (Ellis, J.), entered April 25, 2016 in Franklin County, which, among other things, partially granted a motion by defendants John Rugar and Utica First Insurance Company to reargue.

For many years, plaintiff has been the general contractor for Craig Weatherup and Connie Weatherup, who own a residence in the Town of Brighton, Franklin County. In May 2011, plaintiff subcontracted with defendant John Rugar to perform certain exterior power washing on the Weatherups' residence. The contract between plaintiff and Rugar required, among other things, that Rugar indemnify and hold plaintiff harmless for any work performed by Rugar and obtain insurance that, among other things, named plaintiff as an additional insured and would be primary to any other insurance policies. Rugar procured the subject insurance from defendant Utica First Insurance Company. Thereafter, while pressure washing the residence, Rugar utilized a cleaning solution manufactured by defendant Benjamin Moore & Co. that allegedly caused damage to the exterior of the residence. Plaintiff, as an additional insured on the policy, thereafter submitted a coverage demand to Utica First for the damages sustained. On May 9, 2012, Utica First denied coverage as to Rugar and, on February 27, 2013, disclaimed coverage as to plaintiff. Plaintiff's insurance carrier, Interstate Fire & Casualty Co., subsequently paid the Weatherups approximately $600,000 as compensation for the damages that were sustained to the exterior of the residence. As part of the compensation agreement, the Weatherups also released Interstate and plaintiff from any further liability with respect to the damage sustained and assigned their right to bring suit for damages to both Interstate and plaintiff.

Plaintiff thereafter commenced the instant action seeking to recover the damages paid to the Weatherups, alleging causes of action for, among other things, negligence by Rugar and breach of contract by Utica First. Following joinder of issue, plaintiff served defendants with a discovery demand requesting, among other things, Utica First's pre-denial claim file. Utica First provided plaintiff with a portion of the claim file and a privilege log. Plaintiff thereafter demanded production of the entire pre-denial claim file, prompting Utica First to move for a protective order prohibiting disclosure of the documents in the privilege log on the ground that they were immune from discovery as material prepared in anticipation of litigation. Rugar both joined in Utica First's motion and, separately, moved for a protective order.

In May 2015, Supreme Court denied the motions of Utica First and Rugar and directed Utica First to provide plaintiff with the entirety of its pre-denial claim file. Rugar thereafter moved for, among other things, reargument, severance of the tort action against Rugar from the breach of contract action against Utica First and to join Interstate as a necessary party. Utica First filed an affidavit in support of Rugar's motion. In the interim, plaintiff also moved to compel Rugar to comply with its demand seeking disclosure of an incomplete December 31, 2014 affidavit. By order entered April 2016, Supreme Court, among other things, granted Rugar's motion to reargue, determining that the contents of Utica First's privilege log were immune from disclosure, granted Rugar's motion for a protective order preventing

63 N.Y.S.3d 546

plaintiff from using the disputed December 31, 2014 affidavit inasmuch as it was inadvertently disclosed by Rugar's counsel, denied severance and declined to join Interstate as a necessary party. Plaintiff now appeals and Rugar and Utica First cross-appeal.

A motion for leave to reargue (see CPLR 2221[d][2] ) is addressed to the sound discretion of the court and is properly granted upon a showing that the facts and/or law were overlooked or misapprehended by the court in determining the prior motion (see Valiando v. Catalfamo, 138 A.D.3d 1271, 1272–1273, 29 N.Y.S.3d 685 [2016] ; Loris v. S & W Realty Corp., 16 A.D.3d 729, 730, 790 N.Y.S.2d 579 [2005] ). In granting...