Indian Harbor Ins. Co. v. Dort Baxter Skin Care

• Decision Date: 05 May 2006
• Docket Number: No. 04 Civ. 9746(PKL).,04 Civ. 9746(PKL).
• Parties: INDIAN HARBOR INSURANCE COMPANY, as subrogee of George Lax, d/b/a VP 57, LLC, Plaintiff, v. DORIT BAXTER SKIN CARE, INC. Defendant.
• Court: U.S. District Court — Southern District of New York

430 F.Supp.2d 183

INDIAN HARBOR INSURANCE COMPANY, as subrogee of George Lax, d/b/a VP 57, LLC, Plaintiff, v. DORIT BAXTER SKIN CARE, INC. Defendant.

No. 04 Civ. 9746(PKL).

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

May 5, 2006.

Gennet, Kallmann, Antin & Robinson, P.C., c/o Litman Suite, New York, New York, Mark L. Antin, for Plaintiff.

Sedgwick, Detert, Moran & Arnold, LLP, New York, New York, Michael Frank Bastone, Scott Lawrence Haworth, for Defendant.

OPINION AND ORDER

LEISURE, District Judge.

Plaintiff Indian Harbor Insurance Company, as subrogee of George Lax, d/b/a VP 57, LLC, brings this subrogation action against defendant Dorit Baxter Skin Care, Inc, a commercial tenant in a building owned by plaintiff. Plaintiff seeks to recoup insurance proceeds paid to Mr. Lax for property damage that the latter allegedly incurred after a fire was started on the floor occupied by defendant. Plaintiff specifically alleges that, due to defendant's negligence, gross negligence, and breach of the parties' lease, defendant caused the fire. Defendant moves for summary judgment, arguing that the waiver-of-subrogation clause in the parties' lease forecloses this action. For the reasons set forth below, defendant's motion is GRANTED.

BACKGROUND

I. Factual History

The facts of this case are straightforward.¹ George Lax, d/b/a VP 57, LLC owned and managed a commercial property located at 45 West 57th Street, New York, New York at the time of the events giving rise to this litigation. (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 7.) Mr. Lax rented a one-floor unit of his building to defendant Dorit Baxter Skin Care, Inc. pursuant to a lease dated June 21, 1993 and a lease extension agreement dated December 10, 2002 (together, the "Lease"). (Def.'s 56.1 ¶ 5; Murray Aff. Exs. E-F.) Defendant operated a hairstyling salon and skin-care spa in the rented premises. (Def.'s 56.1 ¶ 5; Am. Compl. 118.)

A. The Fire

Plaintiff alleges that on January 25, 2004, while the Lease was still in effect, a fire occurred within the premises operated by defendant. (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 11.) More specifically, plaintiff alleges that the fire started near a Maytag dryer that defendant used to dry sheets, towels, robes, and other fabrics. (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 11.) Plaintiff claims that the fire was caused by the spontaneous ignition of certain vegetable oil-laden cotton fabrics that had been put in the dryer for drying. (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 12.) Plaintiff claims that (1) the Maytag dryer used by defendant had a visible written statement warning of the potential of fire if materials containing, inter alia, flammable liquids such as vegetable oil were dried in the dryer; and (2) the dryer's user guide warned of the risk of fire if items spotted or soaked with vegetable oil were dried in the dryer. (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 14.) Additionally, plaintiff claims that it is "well known" in the skin care industry that fabrics containing or saturated with vegetable oils, even after having been washed, should not be dried in a dryer because they are prone to cause fire, (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 13.) Plaintiff further argues that a fire sprinkling system located in the ceiling of the room in which the dryer was kept was unable to quell the fire because defendant, in contravention of the terms of the Lease (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 9), had previously installed a soffit or partial partition which blocked the sprinkler, preventing its stream of water from reaching the fire (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 17).

After the fire, plaintiff, Mr. Lax's insurer, compensated Mr. Lax, pursuant to their commercial property insurance agreement, in the amount of $594,609.20 for the losses incurred from the fire. (Def.'s 56.1 ¶ 8; Am. Compl. ¶ 18; Murray Aff. Ex. G.)

B. The Operative Agreements

The Lease contains a waiver-of-subrogation clause which reads as follows:

Landlord and Tenant, respectively, hereby waive the right to recover from each other any damage or loss occasioned by hazards compensated by insurance (excluding liability insurance), regardless of whether said damage or loss resulted from the negligence of either party, their officers, employees, agents or otherwise and said parties do hereby waive the right to subrogate any insurance carrier or other party to their respective rights of recovery against each other in any event.² (Def.'s 56.1 ¶ 6; Murray Aff. Ex. E.) Both Mr. Lax's insurance agreement with plaintiff,³ and defendant's insurance agreement with its insurer, Granite State Insurance Company,⁴ contain provisions allowing the respective insured to waive in writing the rights of subrogation it would have against another party. (Murray Aff. Ex. G at § I of Commercial Property Conditions; Murray Aff. Ex. H at § K of Common Policy Conditions.)

II. Procedural History

Plaintiff brought this action on December 10, 2004, asserting causes of action for breach of contract, negligence, and gross negligence. (Def.'s 56.1 ¶ 1; Compl. ¶¶ 19-30.) Defendant answered on February 17, 2005. Plaintiff then filed an amended complaint on May 5, 2005, which included an additional count alleging breach of contract on the ground that defendant breached the Lease "by dangerously altering the premises without notice and approval by plaintiff"⁵ (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 28), and a prayer for greater damages (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 18). Defendant filed its amended answer on July 7, 2005, asserting, inter alia, an affirmative defense that the waiver-of-subrogation clause in the Lease bars this action. Defendant filed its motion for summary judgment on August 2, 2005, and the motion was fully briefed by September 22, 2005.

DISCUSSION

As a threshold matter, the Court finds that its subject matter jurisdiction has been properly invoked, as plaintiff is a Connecticut corporation with a principal place of business in Connecticut (Def.'s 56.1 ¶ 3; Am. Compl. ¶ 1), defendant is a New York corporation (Def.'s 56.1 ¶¶ 3-4; Am. Compl. ¶ 4; Am. Answer ¶ 1), and the damages alleged exceed $75,000 (Am. Compl.¶ 5). See U.S. Const. art. III, § 2; 28 U.S.C. § 1332(a)(1), (c)(1) (2000); Oscar Grass & Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir.2003).

I. Summary Judgment Standards

Summary judgment is a tool used by district courts "to pierce the pleadings to flush out those cases that are predestined to result in a directed verdict." Lightfoot v. Union Carbide Corp., 110 F.3d 898, 907 (2d Cir.1997); accord United Nat'l Ins. Co. v. Tunnel, Inc., 988 F.2d 351, 355 (2d Cir.1993) ("Summary judgment is a tool to winnow out from the trial calendar those cases whose facts predestine them to result in a directed verdict."). To that end, district courts are directed to issue summary judgment where the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). Where, as here, the party moving for summary judgment is the party against whom a claim has been asserted, it may move for summary judgment at any time. Fed. R.Civ.P. 56(e).

A court may grant summary judgment "`only if it can be established that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Opals on Ice Lingerie v. Body Lines Inc., 320 F.3d 362, 367-68 (2d Cir.2003) (quoting Int'l Bus. Machs. Corp. v. Liberty Mut. Fire Ins. Co., 303 F.3d 419, 423 (2d Cir.2002)). Of course, "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.'" Id. at 368 (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)); accord N.Y. Stock Exchange, Inc. v. New York, N.Y. Hotel LLC, 293 F.3d 550, 554 (2d Cir.2002) ("A dispute is not `genuine' unless the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" (quoting Anderson, 477 U.S. at 248, 106 S.Ct. 2505)). The relevant substantive law will demonstrate whether a fact is material for the purposes of summary judgment. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. ("As to materiality, the substantive law will identify which facts are material.").

When considering a summary judgment motion, a district court "must resolve all ambiguities and draw all reasonable inferences in favor of the party against whom summary judgment is sought, with the burden on the moving party to demonstrate the absence of any material factual issue genuinely in dispute." Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir.1975) (Kaufman, C.J.) (citing Adickes v. S. H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)); accord LaFond v. Gen. Physics Servs. Corp., 50 F.3d 165, 171 (2d Cir.1995) ("The inferences to be drawn from the underlying facts revealed in materials such as affidavits, exhibits, interrogatory answers, and depositions must be viewed in the light most favorable to the party opposing the motion.'" (quoting Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 36 (2d Cir.1994))); Patrick v. LeFevre, 745 F.2d 153, 158 (2d Cir.1984) (Kaufman, J.). If there exists "any evidence in the record from which a reasonable inference could be drawn in favor of the non-moving party on a material issue of fact, summary judgment is improper." Holt v. KMI-Continental, Inc., 95 F.3d 123, 129 (2d Cir.1996) (emphasis added).

Finally, where the issue on summary judgment concerns the interpretation of a contract, a court shall determine, as a matter of law, whether the contract is clear on its face, or whether its terms are so ambiguous as to require additional...