Fashion Tanning Co., Inc. v. Fulton County Elec. Contractors, Inc.

• Decision Date: 12 January 1989
• Docket Number: STEWART-WARNER,No. 1,No. 2,1,2
• Citation: Fashion Tanning Co., Inc. v. Fulton County Elec. Contractors, Inc., 536 N.Y.S.2d 866, 142 A.D.2d 465 (N.Y. App. Div. 1989)
• Parties: FASHION TANNING COMPANY, INC., Respondent, v. FULTON COUNTY ELECTRICAL CONTRACTORS, INC., et al., Defendants, and Stewart-Warner Corporation, Appellant. (Action) (And Two Third-Party Actions.) HERMANN LOEWENSTEIN, INC., et al., Respondents, v.CORPORATION, Appellant, et al., Defendants. (Action) (And Three Third-Party Actions.)
• Court: New York Supreme Court — Appellate Division

Page 866

536 N.Y.S.2d 866

142 A.D.2d 465

FASHION TANNING COMPANY, INC., Respondent, v. FULTON COUNTY ELECTRICAL CONTRACTORS, INC., et al., Defendants, and Stewart-Warner Corporation, Appellant. (Action No. 1.)

(And Two Third-Party Actions.)

HERMANN LOEWENSTEIN, INC., et al., Respondents, v. STEWART-WARNER CORPORATION, Appellant, et al., Defendants.

(Action No. 2.) (And Three Third-Party Actions.)

Supreme Court, Appellate Division Third Department.

Jan. 12, 1989.

Noonan, Troue, Gutermuth & O'Connor (Thomas J. O'Connor, of counsel), Troy, for appellant.

Ainsworth, Sullivan, Tracy, Knauf, Warner & Ruslander (John W. Bailey, of counsel), Albany, New York for Fashion Tanning Co., Inc., respondent.

Before KANE, J.P., and MIKOLL, YESAWICH, LEVINE and HARVEY, JJ.

YESAWICH, Justice.

On July 31, 1979, a fire destroyed the building and contents of a leather tannery owned by plaintiff Fashion Tanning Company, Inc. (hereinafter Fashion Tanning), as well as cowhide products owned by plaintiffs Hermann Loewenstein, Inc., Leather Designs, Ltd. and Langloe Leathers, Inc. (hereinafter collectively referred to as the leather plaintiffs), which were awaiting processing by Fashion Tanning. Lumbermens Mutual Casualty Company (hereinafter Lumbermens), the fire insurance carrier for Fashion Tanning, paid Fashion Tanning $400,000, the maximum payable under its fire policy, though the cash value of the loss was estimated at $530,814 (with a replacement cost of $662,811). The leather plaintiffs were likewise insured against fire loss through Lumbermens and received $73,521.05, the total value of their loss. Lumbermens is involved in the subject litigation as subrogee of Fashion Tanning and the leather plaintiffs (hereinafter collectively referred to as plaintiffs) to the extent of these payments. Plaintiffs charge in their respective complaints that defendant Stewart-Warner Corporation (hereinafter Stewart-Warner), a manufacturer of spray booths used by Fashion Tanning at the time of the fire, negligently or defectively designed or manufactured the booths which in turn caused the fire responsible for their losses.

Stewart-Warner moved for partial summary judgment based upon the fact that its liability insurance carrier, American Motorist Insurance Company (hereinafter American), is a member, along with Lumbermens, of the Kemper Group of insurance companies. Stewart-Warner maintained that within the Kemper Group management, premiums, losses and expenses were shared to such an extent that Lumbermens and American should be considered one and the same insurance company for the purpose of applying the equitable public policy, formally articulated by the Court of Appeals in Pennsylvania Gen. Ins. Co. v. Austin Powder Co., 68 N.Y.2d 465, 510 N.Y.S.2d 67, 502 N.E.2d 982, that a subrogee is prohibited from recovering from its own insured. Alternatively, Stewart-Warner sought to have Lumbermens joined as a necessary party plaintiff and leave to amend its answers to assert defenses of contributory negligence and assumption of the risk based upon Lumbermens' claimed negligence associated with issuance of the fire loss policy to Fashion Tanning.

Supreme Court denied summary judgment, holding that Pennsylvania Gen. Ins. Co. forecloses a subrogation suit only where the subrogor and the defendant are both insured under the very policy giving rise to the subrogation. The court also denied the alternative relief requested on the ground that, even if Lumbermens was a necessary party, the culpable conduct attributed to it cannot be imputed to its subrogor, Fashion Tanning. Stewart-Warner appeals.

Courts are constrained to make determinations on the narrowest of available grounds to the end that only issues necessarily raised are decided, thereby avoiding the issuance of advisory opinions (see generally, Cuomo v. Long Is. Lighting Co., 71 N.Y.2d 349, 354, 525 N.Y.S.2d 828, 520 N.E.2d 546; 4 NY Jur2d, Appellate Review, § 325, at 417). This rule, without more, dictates an affirmance, for Stewart-Warner, the moving party seeking summary judgment, failed to supply proof in admissible form (see, Friends of Animals v. Associated Fur Mfrs., 46 N.Y.2d 1065, 1067, 416 N.Y.S.2d 790, 390 N.E.2d 298) that Lumbermens and American are one and the same insurance company, a prerequisite to invoking the concept fashioned in Pennsylvania Gen. Ins. Co. Stewart-Warner's only proof of corporate identity is its attorney's affirmation "information and belief" that American and Lumbermens "are under common management and share premiums, losses and expenses under a pooling arrangement". Since the affiant was without personal knowledge, his affirmation is of no probative value (see, Sutton v. East Riv. Sav. Bank, 55 N.Y.2d 550, 553, 450 N.Y.S.2d 460, 435 N.E.2d 1075). Even if it was sufficient, the affidavit by one of Lumbermens' officers to the effect that, though they are members of the Kemper Group, Lumbermens and American are distinct corporate entities creates a factual dispute sufficient to resist summary judgment.

Although this conclusion makes the posture of this case such that application of Pennsylvania Gen. Ins. Co. is now academic, the question presented appears to us to be one of substantial public importance and likely to occur with some frequency; accordingly, we deem it advisable to confront it in the interest of judicial economy (see, Matter of Gold v. Lomenzo, 29 N.Y.2d 468, 475-476, 329 N.Y.S.2d 805, 280 N.E.2d 640). Even assuming, arguendo, that Lumbermens and American (hereinafter collectively referred to as the Kemper Group) are one and the same insurance company, the finely drawn holding of Pennsylvania Gen. Ins. Co. is inapplicable to the facts at hand, for unlike the defendant Austin Powder Company in Pennsylvania Gen. Ins. Co., Stewart-Warner's status is not that of an additional insured of the fire policy underlying the Kemper Group's subrogation claim (see, Pennsylvania Gen. Ins. Co. v. Austin Powder Co., 68 N.Y.2d 465, 473, 510 N.Y.S.2d 67, 502...