Encompass Ins. Co. of Am. v. English

• Decision Date: 05 March 2013
• Docket Number: 11 Civ. 2606 (KMW)
• Citation: Encompass Ins. Co. of Am. v. English, 11 Civ. 2606 (KMW) (S.D. N.Y. Mar 05, 2013)
• Parties: ENCOMPASS INSURANCE COMPANY OF AMERICA, as subrogor of Stephen Isola, Plaintiff, v. WILLIAM TODD ENGLISH, Defendant.
• Court: U.S. District Court — Southern District of New York

ENCOMPASS INSURANCE COMPANY OF AMERICA, as subrogor of Stephen Isola, Plaintiff,

v.WILLIAM TODD ENGLISH, Defendant.

11 Civ. 2606 (KMW)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

Dated: March 5, 2013

OPINION & ORDER

KIMBA M. WOOD, U.S.D.J.:

Plaintiff Encompass Insurance Company of America ("Encompass") brings this subrogation action against Defendant William Todd English ("English") seeking to recover damages English allegedly caused to an apartment insured by Encompass. Encompass filed its Complaint on April 19, 2011, asserting claims for negligence and breach of contract. [Dkt. No. 1]. English filed his Answer on July 11, 2011. [Dkt. No. 11]. The Parties subsequently engaged in extensive discovery, which concluded by September 30, 2012. [Dkt. No. 25].¹

Before the Court is English's motion for summary judgment. [Dkt. No. 28]. For the following reasons, the motion is GRANTED.

I. FACTUAL BACKGROUND

As required, the Parties have submitted Rule 56.1 statements. (See Def.'s 56.1 Statement [Dkt. No 27]; Pl.'s 56.1 Counterstatement [Dkt. No. 39]; Def.'s Resp. to Pl.'s Counterstatment [Dkt. No. 50]). These statements reveal the following undisputed facts.

A. The Parties

Plaintiff Encompass Insurance Company of America is an Illinois corporation authorized to issue insurance policies in the State of New York. (Compl. 1). Defendant William Todd English is a resident of New York.

On October 9, 2007, English entered into a one-year lease ("the Lease") to rent an apartment located at 195 Hudson Street, New York, New York ("the Apartment") from Mr. Stephen Isola, a non-party to this case. (Def.'s 56.1 ¶ 6; Pl.'s 56.1 ¶ 31).

B. The Operative Agreements

The Lease required both English and Isola to obtain insurance, and also contained a provision whereby both English and Isola agreed to waive their respective insurer's rights of subrogation. The waiver of subrogation provided:

Unless prohibited by the applicable policies, to the extent such insurance is collected, [English] and [Isola] release and waive all right of recovery against the other or anyone claiming through or under each by way of subrogation."

(Def.'s 56.1 ¶ 7 (citing Lease § 22 E)).

Isola and English obtained the necessary insurance—Isola through Encompass, and English through The American Insurance Company ("American"). (Id. ¶¶ 8, 10). Isola's policy with Encompass permitted Isola to waive Encompass' right of subrogation so long as it was done "in writing[,] before a loss." (Coppola Aff. Ex. E). English's policy with American permitted English to waive American's right of subrogation under similar circumstances. (Id. Ex. G.).

C. The Fire

On September 21, 2008, a fire occurred at the Apartment. (Def.'s 56.1 ¶ 3; Pl.'s 56.1 ¶ 35). At the time of the fire, English was in Boston, Massachusetts. (Def.'s 56.1 ¶ 12). New York City Fire Marshall John Franzone, Jr. investigated the fire and concluded that the fireoriginated "in the area of electrical wiring in combustible material (plastic wire insulation)" inside one of the Apartment's closets. (Id. ¶¶ 23-24). Although Marshall Franzone "could not fully ascertain the cause of the fire," he "stated that it most likely was caused by electrical wiring." (Id. ¶ 25). Neither Party had experienced any problems with the closet's light fixture or the Apartment's electrical system prior to the fire. (Pl.'s 56.1 ¶ 60; Def.'s 56.1 ¶ 13).

Both Parties hired experts to investigate the cause of the fire. English's expert, William Nolan, determined that the fire originated in the closet at issue, but could not determine the cause. (Def.'s 56.1 ¶ 27; Pl's 56.1 ¶ 27). In contrast, Encompass' expert, Bruce Bohlander, concluded that the fire began "because combustible bedding material was overstuffed into the [closet]" so as to come into contact with the exposed light bulbs in the light fixture, causing the material to ignite. (Pl.'s 56.1 ¶ 38).

Encompass commenced this subrogation action seeking to recover approximately $400,000 in damages arising out of this fire. (Def.'s 56.1 ¶ 3).

II. STANDARD OF REVIEW

A. Summary Judgment

Summary judgment is appropriate only if the record establishes that there is no "genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party has the burden of demonstrating that no dispute of a material fact exists. Jeffreys v. City of New York, 426 F.3d 549, 554 (2d Cir. 2005). In evaluating whether the moving party has met its burden, a court must "construe the evidence in the light most favorable to the non-moving party and . . . draw all reasonable inferences in the non-moving party's favor." Stonewell Corp. v. Conestoga Title Ins. Co., 678 F. Supp. 2d 203, 208 (S.D.N.Y. 2010) (Wood, J.) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).

A motion for summary judgment should be denied "if the evidence is such that a reasonable jury could return a verdict" in favor of the non-moving party. NetJets Aviation, Inc. v. LHC Commc'ns, LLC, 537 F.3d 168, 178-79 (2d Cir. 2008); see also Fed. R. Civ. P. 56(e). Accordingly, where adjudication of a claim requires assessing credibility or deciding between conflicting versions of events, summary judgment is not appropriate. See Jeffreys, 426 F.3d at 553-54; Hayes v. N.Y.C. Dep't of Corr., 84 F.3d 614, 619 (2d Cir. 1996). The non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts," Matsushita Elec. Indus. Co., Ltd., v. Zenith Radio Corp., 475 U.S. 574, 586 (1986), but must show that there is "significant, probative evidence" on which a reasonable factfinder could decide in its favor. Anderson, 477 U.S. at 247.

B. Lease Interpretation

"Courts applying New York law must discern the meaning of the terms of a lease by looking to the plain meaning of its terms." Indian Harbor Ins. Co. v. Dorit Baxter Skin Care, Inc., 430 F. Supp. 2d 183, 190 (S.D.N.Y. 2006) (Leisure, J.). Questions of contract interpretation may be resolved at the summary judgment stage where the "words convey a definite and precise meaning absent any ambiguity." Seiden Assocs., Inc. v. ANC Holdings, Inc., 959 F.2d 425, 428 (2d Cir. 1992). However, "[w]here the language used is susceptible to differing interpretations, each of which may be said to be as reasonable as another, and where there is relevant extrinsic evidence of the parties' actual intent, the meaning of the words become an issue of fact and summary judgment is inappropriate." Id. (citations omitted); see also Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir. 1975) (same).

III. DISCUSSION

As a threshold matter, the Court finds that subject matter jurisdiction exists; Encompass is an Illinois corporation, English is a resident of New York, and the damages alleged exceed $75,000. See U.S. Const. art. III, § 2; 28 U.S.C. § 1332(a)(1), (c)(1); (see also Compl. ¶¶ 1-3). Venue is proper because the relevant acts occurred in New York, New York. 28 U.S.C. § 1391(a). Neither party disputes that New York law governs.

In his motion, English asserts three bases for summary judgment. The Court addresses each in turn.

A. Evidence Regarding the Fire's Cause

English contends that he is entitled to summary judgment because Encompass has not produced sufficient evidence for a jury to conclude that his acts or omissions were a proximate cause of the fire. (See English Mem. 4-6 (citing Mittendorf v. Brooklyn Union Gas Co., 195 A.D.2d 449 (N.Y. App. Div. 1993); N.Y. Cent. Mut. Fire Ins. Co. v. Turnerson's Elec., Inc., 280 A.D.2d 652 (N.Y. App. Div. 2001))).

English's argument mischaracterizes the available evidence. Although the cause of the fire remains disputed, Encompass has produced substantial evidence that English caused the fire. For example, Encompass has submitted the affidavit of Bruce Bohlander,² an engineer and home inspector who has "performed numerous forensic engineering investigations . . . into the origin and cause of fires." (Bohlander Aff. ¶ 3 [Dkt. No. 42]). Bohlander investigated the Apartmentfire and concluded that the fire was caused "by the careless placement of combustible materials" which ignited when they came into contact with exposed light bulbs in the closet. (See id. ¶¶ 5-6, 14; see also id. Ex. B (Bohlander August 10, 2012 Report).³ Encompass has also submitted deposition testimony describing the closet, prior to the fire, as "stuffed" and "too crowd[ed]" with blankets and linens. (See Kirker Aff., Ex. A 41-43 (Isola Dep.); Ex. B 17-18 (Hernandez Dep.)). Viewing this evidence in the light most favorable to Encompass, the Court finds sufficient evidence for a jury to conclude that English was responsible for the fire.

Summary judgment on this ground is therefore denied.

B. Spoliation

Next, English contends that he is entitled to summary judgment as a sanction for Encompass' spoliation of evidence. (See English Mem. 7). In particular, English contends that he "never had the opportunity to examine the [closet light] fixture because the area was totally compromised before his expert was able to examine the fire scene." (Id. at 8).

"Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation." West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999). A court may impose sanctions for spoliation even without a discovery order. Id. (citing Chambers v. NASCO, Inc., 501 U.S. 32, 43-45 (1991)). The Second Circuit has instructed that spoliation sanctions should be crafted to (1) deter, (2) "place the risk of an erroneous judgment on the [spoliator]," and (3) "restore the prejudiced party to the same position he would have been" absent the spoliation." Id. (quoting Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998)). Although outrightdismissal of a lawsuit is a permissible sanction for spoliation, such a "drastic remedy" should...