St. John's Univ. v. Butler Rogers Baskett Architects, P.C.

• Decision Date: 14 February 2012
• Citation: 938 N.Y.S.2d 578
• Parties: ST. JOHN'S UNIVERSITY, New York, appellant, v. BUTLER ROGERS BASKETT ARCHITECTS, P.C., et al., defendants, Skanska USA Building, Inc., defendant third-party plaintiff-respondent; Phase I Group, Inc., third-party defendant-respondent (and another third-party action).
• Court: New York Supreme Court — Appellate Division

938 N.Y.S.2d 578

ST. JOHN'S UNIVERSITY, New York, appellant,

v. BUTLER ROGERS BASKETT ARCHITECTS, P.C., et al., defendants,Skanska USA Building, Inc., defendant third-party plaintiff-respondent;Phase I Group, Inc., third-party defendant-respondent(and another third-party action).

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

Feb. 14, 2012.

Biedermann, Hoenig, Semprevivo, P.C., New York, N.Y. (Peter W. Beadle and Philip C. Semprevivo of counsel), LeClair Ryan, New York, N.Y. (Anthony Presta of counsel), and Garfunkel Wild, P.C., Great Neck, N.Y., for appellant (one brief filed).

Sesti Law Firm P.C., New York, N.Y. (Robert A. Sesti of counsel), for defendant third-party plaintiff-respondent.

Ahmuty, Demers & McManus, Albertson, N.Y. (Brendan T. Fitzpatrick of counsel), for third-party defendant-respondent.

WILLIAM F. MASTRO, A.P.J., RUTH C. BALKIN, CHERYL E. CHAMBERS, and PLUMMER E. LOTT, JJ.

In an action, inter alia, to recover damages for breach of contract, injury to property, engineering malpractice, and architectural malpractice, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Queens County (Grays, J.), entered June 21, 2010, as granted those branches of the motion of the defendant Skanska USA Building, Inc., and the separate motion of the third-party defendant, Phase I Group, Inc., which were for summary judgment dismissing so much of the complaint as sought to recover for damage sustained by a building on its campus known as the Taffner Field House to the extent that its casualty insurer reimbursed it for that damage, and denied those branches of its cross motion which were for summary judgment dismissing the third and fourth affirmative defenses asserted by the defendant Skanska USA Building, Inc.

ORDERED that the order is modified, on the law, (1) by deleting the provision thereof granting those branches of the motion of the defendant Skanska USA Building, Inc., and the separate motion of the third-party defendant, Phase I Group, Inc., which were for summary judgment dismissing so much of the complaint as sought to recover for damages to the Taffner Field House to the extent that the plaintiff's casualty insurer reimbursed the plaintiff for that damage, and substituting therefor a provision denying those branches of the motions, and (2) by deleting the provision thereof denying that branch of the plaintiff's cross motion which was for summary judgment dismissing the third affirmative defense asserted by the defendant Skanska USA Building, Inc., and substituting therefor a provision granting that branch of the plaintiff's cross motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

On two occasions in July 2006, and again in June, July, and August 2007, severe rainstorms swept the Jamaica, Queens, campus of St. John's University (hereinafter the plaintiff), resulting in flooding of two of its buildings, the Taffner Field House and Carnesecca Hall, and millions of dollars in property damage. The plaintiff filed a claim with its insurer, Lloyd's of London (hereinafter Lloyd's) under two institutional casualty insurance policies (hereinafter the IPI policies) that covered losses to the plaintiff's property worldwide occurring between July 1, 2006, and July 1, 2008. Lloyd's paid the plaintiff the sum of $2.7 million under the IPI policies.

The plaintiff commenced the instant action against Skanska USA Building, Inc. (hereinafter Skanska), which had contracted with the plaintiff to manage the construction of the Taffner Field House, alleging that Skanska, inter alia, had breached the contractual duty it owed to the plaintiff, and was otherwise negligent in failing to ensure that the Taffner Field House was free from defects, and that these breaches of contractual and common-law duty caused the flooding at and in the vicinity of that building. The plaintiff sought to recover for the damage caused by the flooding to both the Taffner Field House and Carnesecca Hall and, thus, in effect, sought to recover, on behalf of Lloyd's, the insurance proceeds paid by Lloyd's to the plaintiff under the IPI policies. Skanska joined issue, asserting that, to the extent that the causes of action sought to recover for damages to the Taffner Field House that had already been paid to the plaintiff by Lloyd's, those causes of action were barred by the antisubrogation rule (the third affirmative defense), and that the plaintiff had waived the right of subrogation under its contract with Skanska (the fourth affirmative defense). Skanska commenced a third-party action against Phase I Group, Inc. (hereinafter Phase I), seeking, inter alia, contractual indemnification, since Phase I installed the drainage system pursuant to a subcontract with Skanska.

Skanska and Phase I moved for summary judgment dismissing the causes of action that sought to recover for damage to the Taffner Field House and Carnesecca Hall, to the extent that Lloyd's had already paid the plaintiff for that damage, and the plaintiff cross-moved for summary judgment, inter alia, dismissing Skanska's third and fourth affirmative defenses. The Supreme Court granted those branches of the motions of Skanska and Phase I which were for summary judgment dismissing the causes of action that sought to recover for damage to the Taffner Field House, to the extent that Lloyd's had already paid for that damage. The Supreme Court held that, pursuant to a waiver of subrogation provision in the contract between the plaintiff and Skanska, the plaintiff had waived its right to seek recovery on behalf of Lloyd's for the damage to the Taffner Field House. However, the Supreme Court concluded that an issue of fact existed as to whether the scope of the waiver included the damage to Carnesecca Hall. The Supreme Court, inter alia, denied those branches of the plaintiff's cross motion which were for summary judgment dismissing Skanska's third and fourth affirmative defenses.

Subrogation, an equitable doctrine, entitles an insurer to stand in the shoes of its insured to seek indemnification from third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse (see North Star Reins. Corp. v. Continental Ins. Co., 82 N.Y.2d 281, 294, 604 N.Y.S.2d 510, 624 N.E.2d 647). The subrogation doctrine allocates responsibility for the loss to the person who in equity and good conscience ought to pay it, in the interest of avoiding absolution of a wrongdoer from liability simply because the insured had the foresight to procure insurance coverage (id. ). However, an insurer has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered (see Pennsylvania Gen. Ins. Co. v. Austin Powder Co., 68 N.Y.2d 465, 468, 510 N.Y.S.2d 67, 502 N.E.2d 982).

Here, the plaintiff satisfied its prima facie burden of establishing its entitlement to judgment as a matter of law dismissing Skanska's third affirmative defense, which alleged that the antisubrogation rule barred certain of the plaintiff's claims, by demonstrating that Skanska was not an additional insured under the IPI policies (see Glens Falls Ins. Co. v. City of New York, 293 A.D.2d 568, 570, 741 N.Y.S.2d 68) and that consequently, the plaintiff, by prosecuting the action, in...