Town Plaza of Poughquag, LLC v. Hartford Ins. Co.

• Decision Date: 31 March 2016
• Docket Number: 12-CV-7823 (ALC)
• Citation: 175 F.Supp.3d 93
• Parties: Town Plaza of Poughquag, LLC and Tower Insurance Company of New York, Plaintiffs, v. Hartford Insurance Company, Defendant.
• Court: U.S. District Court — Southern District of New York

175 F.Supp.3d 93

Town Plaza of Poughquag, LLC and Tower Insurance Company of New York, Plaintiffs,

v.Hartford Insurance Company, Defendant.

12-CV-7823 (ALC)

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

Signed March 31, 2016

Joshua Levi Seltzer, Law Offices of Max W. Guvshweir, New York, NY, for Plaintiffs.

Jeffrey I. Carton, Joanna Frances Sandolo, Denlea & Carton LLP, White Plains, NY, for Defendant.

OPINION & ORDER

ANDREW L. CARTER, JR.

, District Judge:

In this insurance case, plaintiffs Town Plaza of Poughquag, LLC (“Town Plaza”) and Tower Insurance Company of New York (“Tower”) seek indemnification from Hartford Insurance Company (“Hartford”) for the costs of defending and settling a personal injury action commenced by Richard Luders and Deborah Luders in the Supreme Court of the State of New York, Dutchess County. Before the Court are cross-motions for summary judgment submitted by the plaintiffs and the defendant.

BACKGROUND

The Court has drawn the following facts from the parties' depositions and exhibits, and from the parties' respective Rule 56.1 Statements of Facts.¹ Upon consideration of a motion for summary judgment, the Court shall construe the facts in the light most favorable to the non-moving party. See Capobianco v. City of New York, 422 F.3d 47, 50 n. 1 (2d Cir.2005)

. Unless otherwise noted, all facts taken from a party's Statement of Material Facts are undisputed or the opposing party has pointed to no evidence in the record to contradict it.

Plaintiff Town Plaza owned a shopping center in Poughquag, New York. (Def. R. 56.1

¶ 34) Town Centre leased a portion of this shopping center and conducted business under the name Beekman Pharmacy. (Id. ¶¶ 36-37.) Pursuant to the lease between Town Plaza and Town Centre, Beekman Pharmacy occupied a space that was to be expanded with a new addition constructed by the landlord, Town Plaza. (Id. ¶ 39.) Specifically, the lease defined the “Demised Premises” as:

[A]pproximately 2700 square feet (the “Original Area”) plus new construction of 2,500 square feet to be built in the spring of 2009 and completed with a final Certificate of Occupancy by September 30, 2009 (the “New Area”), to be ready for occupancy by Lessee on or about October 1, 2009. Upon completion, the Demised Premises will consist of approximately 5,200 square feet which will be the basis of rental and impositions ....

(Id. ). The lease required Town Centre to maintain liability insurance protecting Town Plaza from all liability occurring in or about the demised premises, including “adjoining sidewalks, curbs, vaults and vault space, if any, streets or ways, or any appurtenances thereto,” in an amount of at least $3 million per occurrence. (Pl. R. 56

.1 ¶ 5.) Additionally, the lease required Town Centre to name Town Plaza as insured under a liability policy and required Town Centre to defend, indemnify, and hold harmless Town Plaza in respect to any liability that is “claimed to have occurred on or about the Demised Premises or any part thereof.” (Id. ¶¶ 6-7.)

Defendant Hartford provided business liability coverage to Towne Centre, pursuant to an insurance policy bearing policy number 12 SBA BG9522, with effective dates from September 23, 2009 through September 23, 2010. (Def. R. 56.1

¶ 36.) The policy also named Town Plaza as an additional insured. (Id. ¶ 42.) Specifically, the policy stated the following:

F. Optional Additional Insured Coverages

* * *

2. Additional Insured—Manager Or Lessors of Premises

a. WHO IS AN INSURED under Section C. is amended to include as an additional insured the person(s) or organization(s) shown in the Declarations as an Additional Insured—Designated Person Or Organization; but only with respect to liability arising out of the ownership, maintenance, or use of that part of the premises leased to you and shown in the Declarations.

(Id. ). Moreover, this additional insured coverage excludes liability arising out of, among several conditions, new construction:

b. With respect to the insurance afforded to these additional insureds, the following additional exclusions apply:

This insurance does not apply to:

* * *

(2) Structural alterations, new construction or demolition operations performed by or on behalf of such person or organization.

(Id. ¶ 43.)

The policy states that coverage for the additional insured “is primary if you [Town Centre] have agreed in a written contract, written agreement or permit that this insurance is primary.” (Pl. R. 56

.1 ¶ 13.) Plaintiff Tower issued a commercial lines policy to Town Plaza, effective May 13, 2009 to May 13, 2010, in connection with the premises. (Id. ¶ 14.) The Tower policy states that it is excess to “[a]ny other primary insurance available to you [Town Plaza] covering liability for damages out of the premises or operations for which you [Town Plaza] have been added as an additional insured by attachment of an endorsement.” (Id. ¶ 16.)

On the evening of November 20, 2009, Richard Luders injured himself when he fell off the sidewalk ten to fifteen steps from the front entrance of Beekman Pharmacy. (Def. R. 56.1

¶ 44; Seltzer Decl. Ex. D, Richard Luders Dep. Tr. at 7:16-20, 13:24-14:15.) Richard Luders had filled a prescription at the pharmacy and was walking away from the establishment when he fell. (R. Luders Dep. Tr. at 8:22-24, 13:6-23.) He was walking on the sidewalk toward a common parking area when he tripped off the sidewalk curb. (PI. R. 56.1 ¶ 20.) At the time, Luders was maneuvering around a pallet of construction materials obstructing the sidewalk. (Id. ¶ 21.) The injury took place on the sidewalk adjacent to the new addition. (R. Luders Dep. Tr. at 51:9-12.) This sidewalk was constructed along with the pharmacy extension and was previously a section of the parking lot. (Seltzer Decl. Ex. F, Arnold Papowitz Dep. Tr. at 20:18-20, Seltzer Decl. Ex. G, Gjafer Berisha Dep. Tr. at 14:2-18, 53:11-15.) In their depositions and affidavits, Richard and Deborah Luders stated that the sidewalk and area outside of the pharmacy were not illuminated even though the sun had already set. (R. Luders Dep. Tr. at 12:23-13:5, 14:4-7, 37:14-38:18; Seltzer Decl. Ex. H, Deborah Luders Dep. Tr. at 6:13-17.) Richard Luders had limited visibility in the dark and could not see the pallet until he attempted to veer to the left of it. (R. Luders Dep Tr. at 14:4-15.) In his attempt to maneuver around the pallet, Luders placed his right foot on the edge of the curb and fell as he lost his footing. (Id. at 17:4-7, 17:15-18:20.)

The lease required Town Centre, at its sole expense, to “furnish and install all lighting tubes, lamps, bulbs and ballasts” for the demised premises. (Pl. R. 56

.1 ¶ 3.) Town Centre was also required to pay a proportionate share of expenses incurred in “owning, operating, maintaining and repairing common areas of the Property.” (Def. Counter R. 56.1 ¶ 4.) Plaintiffs assert that Town Centre controls the lighting installed on the outside of the demised premises—the same lighting that illuminates the sidewalk area. (Pl. R. 56.1 ¶ 23.) Defendant disputes this and asserts that Town Centre controlled three lights in the soffit outside of the Demised Premises and that Town Plaza controls the lighting in the parking area. (Def. Counter R. 56.1 ¶ 23.)

Defendant states that the new area of the premises was not completed by September 30, 2009 and that a Certificate of Occupancy was not issued until December 23, 2009—one full month after Mr. Luders' alleged accident. (Def. R. 56.1

¶ 40.) Plaintiffs dispute the date of completion, noting that the deposition testimony does elucidate whether Beekman Pharmacy occupied the new space before or after receiving a Certificate of Occupancy and does not point to any specific date when Town Plaza had finished constructing the new area. (Pl. Counter R. 56.1 ¶ 40.) Indeed, Gjafer Berisha, the owner of Town Plaza, testified that Town Plaza had ceased its construction in the new area by late October 2009 and had given the keys to the owner of the pharmacy in November 2009. (Berisha Dep. Tr. at 32:24-33:3, 35:24-36:8.) Moreover, the owner of the pharmacy, Arnold Papowitz testified that he hired contractors to install shelving, carpet, and additional lighting for the interior of the new area. (Papowitz Dep. Tr. at 32:22-36:18.) When asked, Papowitz could not recall when his contractors began their work. (Id. ) He also noted that it was possible that he had observed his contractors leave materials outside of the new addition while completing their work. (Id. at 47:4-11.)

On March 21, 2011, the Luderses filed a complaint alleging that the sidewalk in front of the Beekman Pharmacy on the property known as Town Plaza was defective, dangerous, unsafe, and/or in need of repair. (Sandolo Decl. Ex. 3 ¶¶ 10, 19.) In their Bill of Particulars, they elaborated that the defects included an “[u]nlit sidewalk and parking lot,” “a pallet/skid of construction material in the path where plaintiff walked,” and “a curb height higher than the standard.” (Sandolo Decl. Ex. 6 ¶ 4.) On November 16, 2010, Tower tendered Town Plaza's defense and indemnification to Hartford on the basis that Town Plaza was entitled to additional-insured coverage. (Pl. R. 56

.1 ¶ 27.) On November 29, 2010, Hartford acknowledged receipt of the tender letter and stated it would need to investigate the accident. (Id. ¶ 28.) On July 18, 2011, Hartford notified Tower that it was denying Tower's tender because “indications are that this loss occurred in the common parking lot which was under [Town Plaza's] control.” (Sandolo Decl. Ex. 8.) Tower ultimately incurred more than $137,000 defending and indemnifying Town Plaza through the date the underlying dispute settled. (Pl. R. 56.1 ¶ 30.)

Plaintiffs initiated this action in New York County Supreme Court, and Hartford removed the action to this Court based on diversity jurisdiction. Plaintiffs seeks a declaration that Hartford must reimburse Tower for all amounts it incurred defending and indemnifying Town Plaza in the...