Hermitage Insurance Company, Inc. v. Fieldston Property Owners Association, Inc., 2007 NY Slip Op 34405(U) (N.Y. Sup. Ct. 1/17/2007)
| Decision Date | 17 January 2007 |
| Docket Number | Motion Seq. No. 001.,Index No. 402063/05. |
| Citation | 2007 NY Slip Op 34405 |
| Parties | HERMITAGE INSURANCE COMPANY, INC., Plaintiff, v. FIELDSTON PROPERTY OWNERS ASSOCIATION, INC., MICHAEL GOODWIN, MARC MOELLER, TRAVIS EPES and FEDERAL INSURANCE COMPANY, Defendants. |
| Court | New York Supreme Court |
This is a declaratory judgment action brought by plaintiff Hermitage Insurance Company, Inc. (Hermitage). It arises in connection with an underlying action against its insured, defendant Fieldston Property Owners Association, Inc. (Fieldston).
Defendant Federal Insurance Company (Federal) moves for summary judgment, CPLR 3212. Hermitage cross-moves for summary judgment on its claim against Federal. For the reasons stated below, the motion and cross-motion are denied.
Hermitage issued a Commercial General Liability Policy to Fieldston for the period July 5, 2000 to July 5, 2001. Federal issued a Directors and Officers Liability Policy (D&O Policy) for the period February 13, 1999 to February 13, 2002. Federal also issued a Commercial Umbrella Policy to Fieldston for the period June 5, 2000 to June 5, 2001.
On April 20, 2001, non-party Chapel Farm Estates (Chapel Farm) sent a letter to Fieldston alleging that certain of Fieldston's officers had made false statements and fraudulent claims in connection with Chapel Farm, specifically with its right to access its property. Fieldston sent a Notice of Occurrence to Federal regarding Chapel Farm's allegations on May 14, 2001.
Chapel Farm commenced an action against Fieldston on August 31, 2001, in the US District Court for the Southern District of New York.
Fieldston retained counsel, which notified both Federal and Hermitage of the lawsuit.
In November of 2001, Hermitage retained counsel on behalf of Fieldston, subject to a full reservation of rights.
Federal notified Fieldston that it would not provide a defense.
Fieldston objected to the counsel retained by Hermitage and stated that it preferred to be represented by counsel it chose. Hermitage responded that it was entitled to choose counsel pursuant to the policy.
The Chapel Farm action was dismissed on August 19, 2003. In the meantime, Fieldston had commenced a declaratory judgment action in January of 2003, seeking to recover attorneys fees and costs incurred in defending the Chapel Farm action.
In a decision dated December 14, 2004, this court granted Federal's motion to dismiss the Complaint as well as Hermitage's cross-claim seeking contribution from Federal in connection with the general liability policy issued by Federal. However, the court declined to dismiss the cross-claim to the extent that it sought contribution pursuant to the Directors and Officers policy.
Fieldston served an Amended Complaint on June 17, 2005, asserting claims for breach of contract and bad faith. Hermitage served amended cross-claims on Federal on June 20, 2005.
Federal then moved for summary judgment dismissing Hermitage's amended cross-claims. Hermitage alleged that it was entitled to contribution from Federal to the extent that it is determined that Fieldston is entitled to coverage from Hermitage in connection with the Chapel Farm action. Hermitage alleged that Federal was responsible for defending Fieldston in the underlying action and that Hermitage is entitled to be reimbursed for monies spent in defending that action.
In a decision dated August 7, 2006, this court found that Hermitage was not entitled to reimbursement from Federal based on the D&O Policy because the Federal policy was excess to the Hermitage Policy. The Federal policy specifically stated that it was excess over other policies, except under certain circumstances not applicable in this case. The court further found that Hermitage had a duty to defend Fieldston in the underlying action, based on the policy provisions, without contribution from the excess insurer, Federal.
On October 1, 2003, an action had been commenced in Bronx County Supreme Court captioned Villanova Estates Inc (f/k/a Chapel Farm Estates, Inc;) v The Fieldston Property Owners Association, Inc, Michael Goodwin, Marc Moeller, and Travis Epes. Index No. 24792/2003. The Complaint set forth twenty-one causes of action, including various claims for wrongful interference with property rights, as well as injurious falsehood and defamation.
On October 24, 2003, Hermitage sent Fieldston a reservation of rights letter, stating that the cause of action for injurious falsehood was potentially covered and Hermitage would therefore assign counsel to Fieldston to defend the Villanova action.
On January 6, 2004, Federal issued a letter reserving its rights and stating that the Federal D&O Policy was strictly excess of the Hermitage policy.
In an order dated September 13, 2004, the court granted, in part, Fieldston's motion to dismiss the complaint, including the claim for injurious falsehood. In a decision dated November 1, 2005, the Appellate Division, First Department, among other things, affirmed that portion of the trial court's order dismissing the claim for injurious falsehood. 23 AD3d 160, 161 [1st Dept 2005].
Hermitage commenced the instant action on June 4, 2004, seeking a declaration that it is not obliged to defend or indemnify Fieldston in the Villanova action. It also seeks a declaration that Federal is obligated to indemnify Hermitage for any defense or indemnification costs it may incur in providing a defense to Fieldston in the Villanova action. Both parties now move for summary judgment.
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