Charter Oak Fire Ins. Co. v. N.Y. Marine & Gen. Ins. Co.

• Decision Date: 08 September 2021
• Docket Number: 20 Civ. 2911 (JPC)
• Citation: 559 F.Supp.3d 244
• Parties: The CHARTER OAK FIRE INSURANCE COMPANY, Plaintiff, v. NEW YORK MARINE AND GENERAL INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of New York

559 F.Supp.3d 244

The CHARTER OAK FIRE INSURANCE COMPANY, Plaintiff,

v.NEW YORK MARINE AND GENERAL INSURANCE COMPANY, Defendant.

20 Civ. 2911 (JPC)

United States District Court, S.D. New York.

Signed September 8, 2021

Amy Christine Gross, Meg R. Reid, Reid & Associates, Hartford, CT, for Plaintiff.

Sherri N. Pavloff, Stonberg Moran, New York, NY, for Defendant.

OPINION AND ORDER

JOHN P. CRONAN, United States District Judge:

This case concerns which of two insurance companies must defend a business in a personal injury action pending in New York state court. The parties have filed cross motions for summary judgment. For the reasons stated below, the Court grants Plaintiff's motion and denies Defendant's motion.

I. Background

A. Factual Background

Unless otherwise indicated, the following facts are undisputed and are taken from the parties’ statements of material facts pursuant to Local Civil Rule 56.1. See Dkt. 35-7 ("Def.’s Resp. to Pl.’s 56.1 Stmt."); Dkt. 36-5 ("Pl.’s Resp. to Def.’s 56.1 Stmt.").

In 2016, Acadia Realty Limited Partnership and Acadia West 54th Street, LLC (collectively, "Acadia") owned the premises located at 834 7th Avenue, New York, New York, and had leased the ground floor unit to 834 7th Avenue LLC, doing business as The Stagecoach Tavern ("Stagecoach"). Pl.’s Resp. to Def.’s 56.1 Stmt. ¶¶ 3, 6; Def.’s Resp. to Pl.’s 56.1 Stmt. ¶ 8. One section of the lease discussed Stagecoach's obligations with regard to sidewalks in front of its premises. Pl.’s Resp. to Def.’s 56.1 Stmt. ¶ 8. It stated:

22. Sidewalks. If the premises are situated on the ground floor of the Building, the tenant thereof shall further, at the tenant's expense, keep the sidewalks and curb in front of said premises free of any tripping hazards, clear of any violations. Tenant shall be responsible for the maintenance and repair of sidewalks to include patching, replacing damaged sections, if such patching or replacing of damaged sections results from damage caused by Tenant or its employees, agents or customers willful misconduct or negligence, cleaning sidewalk and keeping sidewalk free from ice, snow, trash, debris etc.

Id. ; see also Dkt. 34 ("Charter Oak Motion"), Exh. D at Exh. H ¶ 22.

Plaintiff The Charter Oak Fire Insurance Company ("Charter Oak") issued a commercial general liability policy to Acadia for the July 1, 2016 to July 1, 2017 time period (the "Charter Oak Policy"). Def.’s Resp. to Pl.’s 56.1 Stmt. ¶ 1. The policy provided coverage for bodily injury that occurred during the policy period and was caused by an accident. Id. ¶ 2. It also included an "other insurance" provision that explained that coverage under the Charter Oak Policy was excess over any other coverage available to Acadia. Id. ¶ 3. This included insurance that was available to Acadia "as an additional insured under any other policy." Id. (internal quotation marks omitted).

Defendant New York Marine and General Insurance Company ("NYM") issued a commercial policy to Stagecoach for the July 30, 2016 to July 30, 2017 time period (the "NYM Policy"). Id. ¶ 4. Like the Charter Oak Policy, this policy also provided coverage for bodily injury that occurred during the policy period and was caused by an accident. Id. ¶ 5. The NYM Policy listed Acadia as an "[a]dditional [i]nsured." Id. ¶ 6. It further provided that Acadia's inclusion as an additional insured was "only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Schedule." Id.¹ The NYM Policy too included an "other insurance" provision. Id. ¶ 7. It stated that the NYM Policy was "primary" unless certain exceptions applied. Id.

Jeffrey Holmes alleges that, on November 25, 2016, he was walking on 7th Avenue when he tripped and fell on a tree well guard located on the sidewalk in front of Stagecoach. Pl.’s Resp. to Def.’s 56.1 Stmt. ¶¶ 1, 2. The tree well guard consisted of a small wrought iron fence around an area of land that normally would contain a tree, but at the time did not. Id. ¶ 2; see also Charter Oak Motion, Exh. F at 1 (describing the fence as approximately "18 inches to 2 feet high" and surrounding a landscape that "[a] tree had once occupied"). In 2015, Acadia had hired a contractor to install that tree well guard. Pl.’s Resp. to Def.’s 56.1 Stmt. ¶ 12. Following his alleged accident, Holmes filed a personal injury action, Holmes et al. v. The City of New York et al. , Index No. 155768/2017, in the Supreme Court of the State of New York, County of New York. Def.’s Resp. to Pl.’s 56.1 Stmt. ¶ 11. In that suit, Holmes named Stagecoach, Acadia, and two other defendants that are not relevant here. Id.

In his state court action, Holmes alleges that both Stagecoach and Acadia "had a duty to maintain" the location where he allegedly fell "in a reasonably safe and suitable condition and in good repair." Id. ¶¶ 12, 13. He further contends that both entities "installed or placed the fence surrounding the tree well." Id. ¶ 12; see also id. ¶ 13. Further, Holmes argues that Stagecoach and Acadia "caused and created the dangerous, defective, and unsafe condition that led to [his] injury" and that his accident was caused by the "negligence, wrongdoing, carelessness, recklessness, and/or tortious conduct" of both companies. Id. ¶¶ 12 (internal quotation marks omitted), 13 (internal quotation marks omitted).

On January 5, 2017, Charter Oak notified NYM of Holmes's claim and demanded NYM defend and indemnify Acadia. Id. ¶ 14. On July 13, 2017, NYM advised Charter Oak that it was unable at the time to make a decision as to Charter Oak's tender. Id. ¶ 15; Charter Oak Motion, Exh. G. The next day, Charter Oak tendered Holmes's state court action to NYM and demanded that NYM defend Acadia as an additional insured under the NYM Policy. Def.’s Resp. to Pl.’s 56.1 Stmt. ¶ 16. On August 18, 2017, NYM denied Acadia coverage and stated that it would "neither defend nor indemnify Acadia." Id. ¶ 17; see also Pl.’s Resp. to Def.’s 56.1 Stmt. ¶ 18; Charter Oak Motion, Exh. I. Charter Oak has been defending Acadia in Holmes's state action ever since. Def.’s Resp. to Pl.’s 56.1 Stmt. ¶ 18.

B. Procedural History

On April 8, 2020, Charter Oak initiated this action against NYM. Dkt. 1 ("Complaint" or "Compl."). The Complaint seeks declaratory relief and argues that the NYM Policy obligates NYM to "defend and indemnify" Acadia in Holmes's state court action. Id. ¶ 1. NYM filed an answer on June 17, 2020. Dkt. 12. This case was reassigned to the undersigned on September 29, 2020.

On December 21, 2020, NYM filed a motion for summary judgment, a memorandum of law in support of its motion, Dkt. 32-1 ("NYM Motion"), and supporting exhibits and other materials. See Dkt. 32. NYM seeks a declaration that it has "no obligation to defend or indemnify Acadia." NYM Motion at 2. That same day, Charter Oak also filed a motion for partial summary judgment, a memorandum of law in support of its motion, and supporting exhibits and other materials. See Dkts. 33; Charter Oak Motion. Charter Oak seeks a declaration that NYM "has a duty to defend Acadia." Charter Oak Motion at 1. On January 11, 2021, each party filed an opposition to the other's motion, Dkts. 35 ("NYM Opposition"), 36, and on January 19, 2021, both filed reply briefs in support of their respective motions, Dkts. 37 ("NYM Reply"), 39 ("Charter Oak Reply"). In its reply, Charter Oak confirmed that it seeks only partial summary judgment because any question of damages should be decided at a future inquest. Charter Oak Reply at 1, 8.²

II. Legal Standard

A district court should grant summary judgment when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "An issue of fact is genuine if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party,’ " and "[a] fact is material if it ‘might affect the outcome of the suit under the governing law.’ " Roe v. City of Waterbury , 542 F.3d 31, 35 (2d Cir. 2008) (quoting Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). The moving party is entitled to judgment as a matter of law when "the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof." Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In deciding a motion for summary judgment, the Court "resolve[s] all ambiguities, and credit[s] all factual inferences that could rationally be drawn, in favor of the party opposing summary judgment." Spinelli v. City of New York , 579 F.3d 160, 166 (2d Cir. 2009) (quoting Brown v. Henderson , 257 F.3d 246, 251 (2d Cir. 2001) ).

These same standards apply when parties file cross-motions for summary judgment. Morales v. Quintel Ent., Inc. , 249 F.3d 115, 121 (2d Cir. 2001). "[W]hen both parties move for summary judgment, asserting the absence of any genuine issues of material fact, a court need not enter judgment for either party. Rather, each party's motion must be examined on its own merits, and in each case all reasonable inferences must be drawn against the party whose motion is under consideration." Id. (internal citation omitted).

III. Discussion

Under New York law³ , "the duty of an insurer to defend its insured is ‘exceedingly broad’ and far more expansive than the duty to indemnify its insured." High Point Design, LLC v. LM Ins. Corp. , 911 F.3d 89, 94-95 (2d Cir. 2018) (quoting Cont'l Cas. Co. v. Rapid-Am. Corp. , 80 N.Y.2d 640, 648, 593 N.Y.S.2d 966, 609 N.E.2d 506 (1993) ); accord Regal Constr. Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA , 15 N.Y.3d 34, 37, 904 N.Y.S.2d 338, 930 N.E.2d 259 (2010). "[T]he insurer's duty to provide a defense is invoked ‘whenever the allegations in a complaint against the insured fall within the scope of the risks undertaken by the...