Hilgreen v. Pollard Excavating, Inc.

• Decision Date: 01 April 2021
• Docket Number: 531037
• Citation: 193 A.D.3d 1134,146 N.Y.S.3d 323
• Parties: Matthew HILGREEN, Plaintiff, v. POLLARD EXCAVATING, INC., et al., Defendants, and John J. Pollard III et al., Individually and Doing Business as the Homefront Café, Defendants and Third-Party Plaintiffs-Respondents; Central Mutual Insurance Company, Third–Party Defendant–Appellant, et al., Third–Party Defendants.
• Court: New York Supreme Court — Appellate Division

193 A.D.3d 1134
146 N.Y.S.3d 323

Matthew HILGREEN, Plaintiff,
v.
POLLARD EXCAVATING, INC., et al., Defendants,
and
John J. Pollard III et al., Individually and Doing Business as the Homefront Café, Defendants and Third-Party Plaintiffs-Respondents;

Central Mutual Insurance Company, Third–Party Defendant–Appellant, et al., Third–Party Defendants.

531037

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

Calendar Date: January 6, 2021
Decided and Entered: April 1, 2021

Rivkin Radler LLP, Albany (Michael C. Cannata of counsel), for third-party defendant-appellant.

E. Stewart Jones Hacker Murphy, Troy (James E. Hacker of counsel), for defendants and third-party plaintiffs-respondents.

Before: Egan Jr., J.P., Aarons, Pritzker, Reynolds Fitzgerald and Colangelo, JJ.

MEMORANDUM AND ORDER

Colangelo, J.

In June 2016, plaintiff allegedly sustained personal injuries when he fell while descending an exterior staircase outside of his apartment located at 196 Main Street in the Village of Altamont, Albany County. Plaintiff thereafter commenced this negligence action against defendants John J. Pollard III and Clinda Pollard (hereinafter collectively referred to as the Pollards), who own plaintiff's apartment complex and operate the Homefront Cafe´ on the lower level of 196 Main Street. Plaintiff also named defendants Pollard Excavating, Inc. and Pollard Disposal Service Inc., each of which are companies owned and operated by the Pollards. After the action was commenced, the Pollards sought liability coverage from third-party defendant Central Mutual Insurance Company under an insurance policy issued to Pollard Excavating and sought liability coverage from third-party defendant National Interstate Insurance Company under a policy issued to Pollard Disposal. Both Central Mutual and National Interstate disclaimed coverage on the ground that the Pollards were

146 N.Y.S.3d 325

not named insureds under the respective policies.

Upon the denial of coverage, the Pollards commenced a third-party action seeking defense and indemnification in the underlying action (hereinafter the declaratory judgment action) from both Central Mutual and National Interstate. The Pollards also named, among others, third-party defendant Avid Insurance Agency, Inc. and its principal, third-party defendant Roger Saddlemire (hereinafter collectively referred to as Avid), who procured the insurance policies on behalf of the Pollards. The Pollards thereafter filed an amended third-party complaint in the underlying action to assert, as relevant here, causes of action against Central Mutual for reformation of the insurance policy contract between Central Mutual and Pollard Excavating to include the Pollards as insureds. The Pollards also sought a declaration that Central Mutual is obligated to defend and indemnify the Pollards under the reformed contract. As relevant here, Central Mutual moved, pre-answer, to dismiss the amended third-party complaint on the grounds that the complaint failed to state a cause of action for reformation and that the Pollards were not the named insureds under the insurance policy contract. The Pollards, in opposition, defended the sufficiency of the pleading and, alternatively, sought leave to re-plead. Supreme Court denied Central Mutual's motion and granted the Pollards leave to re-plead the reformation claim.

The Pollards filed a second amended third-party complaint that, among other things, reasserted the same causes of action as the prior amended complaint. Central Mutual moved to dismiss the second amended third-party complaint with prejudice for failure to state a cause of action for reformation and for a declaration that the Pollards are not entitled to coverage under the policy issued to Pollard Excavating. The Pollards and Avid opposed the motion. Supreme Court denied the motion, finding that the second amended third-party complaint sufficiently pleaded a cause of action for reformation based on mutual mistake. Central Mutual appeals.

"On a motion to dismiss pursuant to CPLR 3211(a)(7) for failure to state a claim, we must afford the complaint a liberal construction, accept the facts as alleged in the pleading as true, confer on the nonmoving party the benefit of every possible inference and determine whether the facts as alleged fit within any cognizable legal theory" ( Graven v Children's Home R.T.F., Inc., 152 A.D.3d 1152, 1153, 60 N.Y.S.3d 556 [2017] [internal quotation marks and citations omitted]; accord Matter of Santander Consumer USA, Inc. v. Kobi Auto Collision & Paint Ctr., Inc., 183 A.D.3d 984, 987, 123 N.Y.S.3d 699 [2020] ). However, "allegations consisting of bare legal conclusions as well as factual claims flatly contradicted by documentary evidence are not entitled to any such consideration" ( Simkin v. Blank, 19 N.Y.3d 46, 52, 945 N.Y.S.2d 222, 968 N.E.2d 459 [2012] [internal quotation marks and citation omitted]; see Graven v. Children's Home R.T.F., Inc., 152 A.D.3d at 1153, 60 N.Y.S.3d 556 ; Town of Tupper Lake v. Sootbusters, LLC, 147 A.D.3d 1268, 1269, 47 N.Y.S.3d 778 [2017] ). "Moreover, a claim predicated on mutual mistake must be pleaded with the requisite particularity necessitated under CPLR 3016(b)" ( Simkin v. Blank, 19 N.Y.3d at 52, 945 N.Y.S.2d 222, 968 N.E.2d 459 ), which provides that "[w]here a cause of action or defense is based upon misrepresentation, fraud [or] mistake ..., the circumstances constituting the wrong shall be stated in detail" ( CPLR 3016[b] ; see

146 N.Y.S.3d 326

Friedland Realty, Inc. v. 416 W, LLC, 120 A.D.3d 1185, 1187, 993 N.Y.S.2d 43 [2014] ).

The party seeking reformation bears the burden to show "by clear and convincing evidence, that the writing in question was executed under mutual mistake or unilateral mistake coupled with fraud and to demonstrate in no uncertain terms, not only that mistake or fraud exists, but exactly what was really agreed upon between the parties" ( Imrie v. Ratto, 187 A.D.3d 1344, 1346, 134 N.Y.S.3d 101 [2020] [internal quotation marks and citations omitted]; see George Backer Mgt. Corp. v. Acme Quilting Co., 46 N.Y.2d 211, 219, 413 N.Y.S.2d 135, 385 N.E.2d 1062 [1978] ). "In a case of mutual mistake, the parties have reached an oral agreement and, unknown to either, the signed writing does not express that...