Long Island Lighting Company v. Allianz Underwriters Insurance Company

• Decision Date: 14 December 2006
• Docket Number: 8358.
• Citation: 2006 NY Slip Op 09377,35 A.D.3d 253,826 N.Y.S.2d 55
• Parties: LONG ISLAND LIGHTING COMPANY et al., Respondents, v. ALLIANZ UNDERWRITERS INSURANCE COMPANY et al., Defendants, and CONTINENTAL CASUALTY COMPANY, Appellant.
• Court: New York Supreme Court — Appellate Division

35 A.D.3d 253

826 N.Y.S.2d 55

2006 NY Slip Op 09377

LONG ISLAND LIGHTING COMPANY et al., Respondents, v. ALLIANZ UNDERWRITERS INSURANCE COMPANY et al., Defendants, and CONTINENTAL CASUALTY COMPANY, Appellant.

8358.

Appellate Division of the Supreme Court of the State of New York, First Department.

Decided December 14, 2006.

Order, Supreme Court, New York County (Helen E. Freedman, J.), entered March 17, 2005, which, to the extent appealed from as limited by the briefs, upon granting plaintiff's motion for reargument and renewal, modified an earlier order of the same court (Ira Gammerman, J.), entered on or about December 24, 2003, to deny summary judgment to defendant Continental Casualty Company, affirmed, with costs.

"The supreme court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy whether or not further relief is or could be claimed" (CPLR 3001). A declaratory judgment action thus "requires an actual controversy between genuine disputants with a stake in the outcome," and may not be used as "a vehicle for an advisory opinion" (Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C3001:3).

Here, the "potential liability" may reach into Continental's excess coverage, rendering this controversy justiciable. The Court of Appeals has recognized that, "there are different ways to prorate liability among successive policies" (Consolidated Edison Co. of N.Y. v Allstate Ins. Co., 98 NY2d 208, 224 [2002]). Furthermore, the worst case or "highest estimate of damages" (id. at 225) may be used to ascertain whether or not a claim is justiciable against a particular excess insurer's policy (State Farm Fire & Cas. Co. v LiMauro, 103 AD2d 514, 517-518 [1984], affd 65 NY2d 369 [1985]). Our holding in Combustion Eng'g v Travelers Indem. Co. (75 AD2d 777 [1980], affd 53 NY2d 875 [1981]), relied upon by defendant Continental, does not dictate the opposite conclusion. The plaintiff in Combustion Engineering pleaded damages in an amount less than the excess carrier's policy floor, and thus failed to state a claim that the excess policy could even be reached. Given plaintiff's highest projected damages in the instant case, as established by their expert who took into account, inter alia, new investigations and concomitant remedial recommendations as well as the County's push for more stringent clean-up measures, there is a question of fact precluding summary judgment and as to whether Continental's excess insurance policy is implicated.

Concur — Nardelli, J.P., Catterson and Malone, JJ.

Williams and McGuire, JJ., dissent in a memorandum by McGuire, J., as follows:

I respectfully dissent. The parties apparently agree that, in accordance with Consolidated Edison Co. of N.Y. v Allstate Ins. Co. (98 NY2d 208, 221-225 [2002]), the estimated damages must be prorated among the various insurers over the 33 years of insurance coverage. According to plaintiffs' expert, the likely scenario in its view is that the costs plaintiffs have incurred and will incur in investigating and remediating the contamination at any of the seven sites will not be sufficient to implicate the excess liability policy issued by defendant Continental Casualty Co. with the lowest attachment point.

The report of plaintiffs' expert, "includes a probabilistic cost analysis that identified the reasonable range of site contamination conditions and the potential remediation measures that may be required at each site. Probabilities were assigned to each potential remediation measure, and the cost of each...