Mack-Cali Realty Corp. v. Peerless Ins. Co.

• Decision Date: 24 July 2015
• Docket Number: No. 14 Cv. 10135.,14 Cv. 10135.
• Parties: MACK–CALI REALTY CORPORATION et al., Plaintiffs, v. PEERLESS INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of New York

115 F.Supp.3d 449

MACK–CALI REALTY CORPORATION et al., Plaintiffs,

v.PEERLESS INSURANCE COMPANY, Defendant.

No. 14 Cv. 10135.

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

Signed July 24, 2015.

Daniel Barnett Grossman, James FX Hiler, Mitchell Scott Cohen, Wechsler & Cohen, LLP, New York, NY, for Plaintiffs.

Marshall Todd Potashner, David Ross Shyer, Jaffe & Asher LLP, New York, NY, for Defendants.

OPINION AND ORDER

JOHN G. KOELTL, District Judge:

The Mack–Cali Realty Corporation ("Mack–Cali Corp."), Mack–Cali Realty, L.P. ("Mack–Cali LP"), So. Westchester Realty Associates L.L.C. ("Westchester"), and Mack–Cali So. West Realty Associates L.L.C. ("Mack–Cali Associates") (collectively, the "plaintiffs") bring this action against the defendant Peerless Insurance Company ("Peerless"). The plaintiffs allege that Peerless violated insurance agreements by refusing to defend them in two personal injury lawsuits that are proceeding in the New York State Supreme Court, one in New York County and the other in Westchester County.

The personal injury actions arose out of slip-and-fall accidents at premises for which the plaintiffs had responsibility. Peerless provided liability coverage to the snow removal contractor hired to maintain safe conditions at the premises, and the plaintiffs were "other insureds" under the insurance policies. Peerless alleges that the "other insured" coverage ended when the accidents occurred because the contractor had completed its snow removal work, and therefore the work had been put to its "intended use." The plaintiffs contend that Peerless had a duty to defend them and that the snow removal responsibilities were ongoing, had not concluded, and therefore were not yet put to their "intended use." The plaintiffs now move for partial summary judgment pursuant to Federal Rule of Civil Procedure 56.

The Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332.¹ For the following reasons, the motion is granted in part and denied in part.

I.

The standard for granting summary judgment is well established. "The Court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a) ; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Gallo v. Prudential Residential Servs., LP, 22 F.3d 1219, 1223 (2d Cir.1994). "[T]he trial court's task at the summary judgment motion stage of the litigation is carefully limited to discerning whether there are any genuine issues of material fact to be tried, not to deciding them. Its duty, in short, is confined at this point to issue-finding; it does not extend to issue-resolution." Gallo, 22 F.3d at 1224.

The moving party bears the initial burden of "informing the district court of the basis for its motion" and identifying the matter that "it believes demonstrate[s] the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The substantive law governing the case will identify those facts which are material and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In determining whether summary judgment is appropriate, a court must resolve all ambiguities and draw all reasonable inferences against the moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citing United States v. Diebold, Inc.,

369 U.S. 654, 655, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962) ). Summary judgment is improper if there is any evidence in the record from any source from which a reasonable inference could be drawn in favor of the non-moving party. See Chambers v. TRM Copy Ctrs. Corp., 43 F.3d 29, 37 (2d Cir.1994). If the moving party meets its burden, the non-moving party must produce evidence in the record and "may not rely simply on conclusory statements or on contentions that the affidavits supporting the motion are not credible." Ying Jing Gan v. City of New York, 996 F.2d 522, 532 (2d Cir.1993) (internal citations omitted).

II.

The following facts are undisputed unless otherwise noted.

A.

Westchester owns 6 Executive Plaza, and Mack–Cali Associates owns 100 Corporate Boulevard. See Plaintiffs' Local Rule 56.1 Statement of Undisputed Material Facts ("Pl. 56.1 Stmt.") ¶¶ 3–4, 9; Defendant's Response to Rule 56.1 Statement ("Def. 56.1 Resp.") ¶¶ 3–4, 9. Both properties are located at the South Westchester Executive Park Complex (the "SWEP complex"). Pl. 56.1 Stmt. ¶¶ 7–9; Def. 56.1 Resp. ¶¶ 7–9. Westchester, Mack–Cali LP, and Mack–Cali Associates are all part of Mack–Cali Realty Corp. Pl. 56.1 Stmt. ¶¶ 1–4; Def. 56.1 Resp. ¶¶ 1–4.

On July 26, 2012, Lascon, Inc. ("Lascon") agreed to provide snow removal and related services to the SWEP complex. Pl. 56.1 Stmt. ¶ 7; Def. 56.1 Resp. ¶ 7. This contract required Lascon to provide these services from October 1, 2012, through April 30, 2013. Grossman Decl. Ex. 1(C). On October 1, 2013, Lascon agreed to provide the same services at the same properties from October 1, 2013, through April 30, 2014 (collectively, the "Lascon Contracts"). Id. Ex. 1(D). The Lascon Contracts provide that the "Contractor [Lascon] is responsible for monitoring conditions at the [SWEP Complex]" and that the "Contractor is responsible for ensuring that all services are provided as required to ensure safe conditions for employees, tenants and visitors." Pl. 56.1 Stmt. ¶ 16; Def. 56.1 Resp. ¶ 16. The Lascon Contracts also include an indemnification/hold-harmless provision, the relevant portion of which provides that Lascon shall name Mack–Cali LP, Westchester, and Mack–Cali Associates—among other non-parties—as additional insureds on Lascon's liability policies "to completely protect" the plaintiffs from claims arising out of Lascon's operations. Grossman Decl. Ex. 1(C), Ex. 1(D).²

B.

Peerless issued Lascon a general liability insurance policy for the period of June 7, 2012, to June 7, 2013, and Lascon renewed the coverage for another year from June 7, 2013, to June 7, 2014 (the "Peerless Policy"). Pl. 56.1 Stmt. ¶ 6; Def. 56.1 Resp. ¶ 6. The Peerless Policy includes two relevant endorsements: the Endorsement Form No. 22–45 NY (12/02) (the "Extension Endorsement") and the Endorsement Form No. 22–132 (04/11) (the "OLC Endorsement"). These Endorsements amended the Peerless Policy to include entities that satisfied certain conditions as additional insureds. Grossman Decl. Ex. 1(A), Ex. 1(B).

The OLC Endorsement provides that any person or organization whom Lascon "agree[s] to add as an additional insured in a written contract or written agreement" qualifies as an additional insured. Id. In the Lascon Contracts, Lascon agreed to name Mack–Cali Corp., Westchester, and Mack–Cali LP as additional insureds for 6 Executive Plaza. And Lascon agreed to name Mack–Cali Corp., Mack–Cali LP, and Mack–Cali Associates as additional insureds for 100 Corporate Blvd. Id. Ex. 1(C), Ex. 1(D). The OLC Endorsement includes coverage for the acts of Lascon and those acting on Lascon's behalf "in the performance of [Lascon's] ongoing operations for the additional insured." Id. at Ex. 1(A), Ex. 1(B).

However, the OLC Endorsement³ also provides that an organization's "status as an additional insured" ends when "[t]hat portion of ‘[Lascon's] work’ out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project" (the "intended use" exclusion).⁴ Id. Ex. 1(A), Ex. 1(B).

C.

In September 2013, Shelly Sheppard commenced an action (the "Sheppard Lawsuit") against Mack–Cali Corp., and Westchester in the New York State Supreme Court, Westchester County. Grossman Decl. Ex. 4. Lascon⁵ and Mack–Cali LP⁶ were subsequently added as parties. Sheppard alleges that she was injured on February 20, 2013, when she slipped on ice on a path to the 6 Executive Plaza parking lot. Pl.'s 56.1 Stmt. ¶ 27; Def.'s 56.1 Resp. ¶ 27. She also claims that Mack–Cali Corp., Westchester, Mack–Cali LP, and Lascon had failed to remove ice and snow from the path. Grossman Decl. Ex. 4.

In April 2014, Yesenia Gonzalez commenced an action (the "Gonzalez Lawsuit") against Mack–Cali Corp., Lascon, Mack–Cali Associates, and other entities in the New York State Supreme Court, New York County. Grossman Decl. Ex. 5. Gonzalez alleges that she was injured on January 15, 2014, when she slipped on snow or ice on the exterior steps leading from Suite 111 at 100 Corporate Boulevard. Pl. 56.1 Stmt. ¶ 37; Def. 56.1 Resp. ¶ 37. She also claims that Mack–Cali Corp., Lascon, and Mack–Cali Associates failed to clear the snow and ice on those steps. Grossman Decl. Ex. 5.

The plaintiffs tendered the Sheppard and Gonzalez Lawsuits to the defendant, claiming that the plaintiffs were additional insureds. Id. Ex. 1(F), Ex. 1(L). Peerless has defended Lascon in these lawsuits, but has refused to defend the plaintiffs. Id. Ex. 1(J), Ex. 1(M).

D.

The plaintiffs filed this suit in the New York State Supreme Court, New York County, and the defendant timely removed it. The Complaint includes eight causes of action, each of which turns on the defendant's duty to defend or duty to indemnify the plaintiffs in the Sheppard and Gonzalez Lawsuits.

The plaintiffs moved for partial summary judgment on the First, Second, Fifth, and Sixth Causes of Action. The First and Fifth Causes of Action request declaratory judgments that Peerless has a duty to defend the plaintiffs in the Sheppard and Gonzalez Lawsuits, respectively. Am. Compl. at 9, 11. The Second and Sixth Causes of action request fees and costs that the plaintiffs have incurred in defending those lawsuits. Am. Compl. at 10–12.

The plaintiffs also...