LM Ins. Corp. v. Fed. Ins. Co.
| Decision Date | 15 February 2022 |
| Docket Number | 20 Civ. 2258 (GBD) |
| Citation | 585 F.Supp.3d 493 |
| Parties | LM INSURANCE CORPORATION, Plaintiff, v. FEDERAL INSURANCE COMPANY; New York Marine and General Insurance Company, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Erica Sanders, Kennedys Law, LLP, Marshall Todd Potashner, Jaffe & Asher LLP, New York, NY, for Plaintiff.
Daniel Wagner London, James T.H. Deaver, Maria Jorgelina Foglietta, London Fischer LLP, New York, NY, for Defendant Federal Insurance Company.
Jennifer Freda Mindlin, Fleischner Potash LLP, Mineola, NY, Eric Ronald Leibowitz, Stewart LLP, New York, NY, for Defendant New York Marine And General Insurance Company.
Plaintiff LM Insurance Corporation brings this action seeking a declaration that Defendants Federal Insurance Company ("Federal") and New York Marine and General Insurance Company ("NYMAGIC") have a primary duty to defend and indemnify LM Insurance's named insured in the underlying state action, Mary Guzman v. Old Slip Property LLC and Beacon Capital Partners, LLC , Index No. 7292/2016. (Complaint, ECF No. 1.) NYMAGIC and Federal filed counterclaims against LM Insurance and crossclaims against one another. (NYMAGIC's Answer to Compl. ("NYMAGIC's Answer"), ECF No. 12, at ¶78; Federal's Answer to Compl. ("Federal's Answer"), ECF No. 25, at 11-13.) Before the Court are LM Insurance's and NYMAGIC's cross motions for summary judgment. (LM Insurance Mot. for Summary Judgment, ECF No. 55; NYMAGIC Mot. for Summary Judgment, ECF No. 61.) LM Insurance's motion is GRANTED to the extent that Federal has a duty to defend Old Slip in the underlying action, but DENIED as to NYMAGIC's duty to defend Old Slip, and DENIED without prejudice as to declaring whether Federal has a duty to indemnify LM Insurance. NYMAGIC's motion declaring that it has no duty to defend or indemnify LM Insurance or Federal is GRANTED.
The Court has drawn the following facts from the parties’ Local Rule 56.1 statements and summary judgment briefings. The facts are undisputed unless otherwise noted.
On June 20, 2016, Mary Guzman brought an action against Old Slip Property, LLC and Beacon Capitol Partners (collectively "Old Slip") in state court for injuries she suffered when a glass panel detached and fell on her while she was cleaning a revolving glass door on the fifteenth floor of Old Slip's building. (Complaint at ¶3.) Old Slip was the owner and landlord of the building where the incident occurred. (Statement of Undisputed Facts, ECF No. 57, at ¶7.) BNY1 leased the fifteenth floor where the revolving door was located. (Federal Counterstatement to Undisputed Facts, ECF No. 81, at ¶ 8.) Guzman was an employee of PBM—a cleaning services company that had separate service contracts with both Old Slip and BNY. (NYMAGIC Counterstatement to Undisputed Facts, ECF No. 71, at ¶¶ 16, 25; ECF No. 81 at ¶ 81.) The parties dispute whether Guzman was performing services for Old Slip or BNY when the accident occurred.2
On November 7, 2017, Old Slip impleaded PBM (the "Third Party Complaint") alleging that PBM caused Guzman's accident because of PBM's "affirmative, active and sole negligence." (ECF No. 57 at ¶¶ 10-11.) On February 25, 2019, Old Slip impleaded Bank of New York ("BNY") (the "Second Third Party Complaint") alleging that BNY leased the premises where the accident occurred and that "Guzman's injuries arose" out of BNY's "affirmative, active and primary negligence." (ECF No. 57 at ¶¶ 12-13.) BNY asserted cross claims against PBM on May 31, 2019 alleging that PBM is liable for Guzman's injuries. (ECF No. 58-10 at 10.) On June 29, 2020, Guzman filed an amended complaint naming BNY as a defendant. (ECF No. 57 at ¶ 14.)
All the parties in the underlying action have insurance. PBM is a named insured of NYMAGIC; BNY is a named insured of Federal; and Old Slip is the named insured of LM Insurance. (Id. at ¶¶ 31, 38, 46-47.) Notwithstanding the pleadings, LM Insurance provided notice to NYMAGIC regarding the defense and indemnification of Old Slip by email on July 15, 2016, and to Federal by letter on May 20, 2019.3 (Id. at ¶¶ 50, 52.)
BNY leased "the entire 15th ... Floor[ ]" from Old Slip in the building where the accident occurred. (Dec. of James T.H. Deaver, ECF No. 82-2, at 10.) As part of the lease agreement, BNY agreed to provide additional commercial liability insurance to Old Slip through Federal. (ECF No. 57 at ¶ 19.) Federal's insurance policy has two different endorsements that provide the qualifications for a person or organization to have liability coverage as an additional insured: the "Additional Insured-Designated Person/Organization" endorsement and the "Additional Insured-Scheduled Person or Organization" endorsement. (ECF No. 82-1 at 89, 110-11.) Federal's Designated Person/Organization endorsement qualifies as an additional insured "[a]ny Person or organization designated below ... only with respect to liability arising out of [BNY's] operations or premises owned or rented by [BNY]." (Id. at 89.) The Designated Person/Organization endorsement then goes on to provide that a designated person or organization is someone required by written contract and lists a Nevada organization as pictured below:
Designated Person Or Organization
WHERE REQUIRED BY WRITTEN CONTRACT
CLARK COUNTY, NEVADA C/O PURCHASING & CONTRACTS DIVISION
500 S. GRAND CENTRAL PKWY 4TH FL, PO BOX 551217
LAS VEGAS, NV 89155-1217
CITY OF LAS VEGAS, ITS OFFICERS, EMPLOYEES AND AGENTS
(ECF No. 82-1 at 89.) The Scheduled Person or Organization endorsement qualifies "any person or organization shown in the Schedule acting pursuant to a written contract or agreement between [BNY] and such person or organization" as an additional insured with respect to liability arising out of "[BNY's] premises." However, the Scheduled Person or Organization endorsement does not provide coverage for liability arising out of the additional insured's sole negligence. (Id. at 110.) The referenced Schedule provides as an additional insured "persons or organizations that [BNY] are obligated" to provide insurance to pursuant to a written agreement. (Id. at 111.)
Old Slip and BNY had written service contracts with PBM for specific cleaning services, including the cleaning of the revolving door at issue. (See Dec. of Kirsten Hoffman, ECF No. 59-3, at 15; Dec. of James T.H. Deaver, ECF No. 78-17, at 4.) Both service contracts require PBM to include Old Slip and BNY as an additional insured. (ECF No. 57 at ¶¶ 26-28; ECF No. 81 at ¶¶ 81-83.) NYMAGIC's Commercial General Liability Policy qualifies as an additional insured any person or organization PBM has a written agreement to provide additional insurance to and provides coverage when PBM is performing operations for such person/organization. (Dec. of Marshall Potashner, ECF No. 60-1, at 17.) NYMAGIC's additional insurance endorsement only provides coverage for liability "caused, in whole or in part, by" PBM's "acts or omissions ... in the performance of [PBM's] ongoing operations for the additional insured." (Id. )
LM Insurance brought this action on March 13, 2020, to obtain a declaration that Defendants Federal and NYMAGIC have a duty to defend and indemnify Old Slip in the underlying action, and that this additional insurance is primary to LM Insurance's coverage of Old Slip. (See Complaint at ¶¶ 58, 64.) NYMAGIC filed a crossclaim against Federal and a counterclaim against LM Insurance seeking a declaratory judgment that if NYMAGIC is found to have a duty to defend and indemnify, such duties are not primary but simply "other insurance." (NYMAGIC Answer to Complaint at ¶ 78.) Federal filed crossclaims against NYMAGIC seeking a declaration that NYMAGIC has a duty to defend and indemnify BNY in the underlying action and that such coverage is primary. (Federal Answer to Complaint at 11-13.)
LM Insurance moved for summary judgment seeking a declaratory judgment that (1) Federal has a duty to defend and indemnify, (2) NYMAGIC has a duty to defend, and (3) that all such coverage is primary. (ECF No. 55.) NYMAGIC moved for summary judgment against LM Insurance and Federal to dismiss all claims against NYMAGIC. (ECF No. 61.)
Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). A fact is material when it "might affect the outcome of the suit under the governing law." Gayle v. Gonyea , 313 F.3d 677, 682 (2d Cir. 2002) (citing Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ). "An issue of fact is ‘genuine’ if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ " Gayle , 313 F.3d at 682 (quoting Anderson , 477 U.S. at 248, 106 S.Ct. 2505 ).
The party seeking summary judgment has the burden of demonstrating that no genuine issue of material fact exists. See Marvel Characters, Inc. v. Simon , 310 F.3d 280, 286 (2d Cir. 2002). In turn, to defeat a motion for summary judgment, the opposing party must raise a genuine issue of material fact. See Caldarola v. Calabrese , 298 F.3d 156, 160 (2d Cir. 2002).
To do so, it "must do more than simply show that there is some metaphysical doubt as to the material facts," id. (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp. , 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ), and it "may not rely on conclusory allegations or unsubstantiated speculation," Fujitsu Ltd. v. Fed. Express Corp. , 247 F.3d 423, 428 (2d Cir. 2001) (quoting Scotto v. Almenas , 143 F.3d 105, 114 (2d Cir. 1998) ). Rather, the opposing party must...
To continue reading
Request your trial