Allen v. Leon D. Dematteis Constr. Corp.

175 A.D.3d 642

108 N.Y.S.3d 50

Edward W. ALLEN, et al., Plaintiffs,

v.LEON D. DEMATTEIS CONSTRUCTION CORP., Defendant Third-Party Plaintiff-Respondent, RJR Mechanical, Inc., Defendant Third-Party Defendant/Second Third-Party Plaintiff, et al., Defendants; Interstate Fire & Casualty Company, et al., Third-Party Defendants; Liberty Mutual/Peerless Insurance Company, Second Third-Party Defendant-Appellant, et al., Second Third-Party Defendants.

2017–00877

Index No. 10335/10

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

Argued - May 6, 2019

August 28, 2019

Goldberg Segalla LLP, Buffalo, N.Y. (Brian R. Biggie and Joanna Roberto of counsel), for second third-party defendant-appellant.

Westermann Sheehy Keenan Samaan & Aydelott, LLP, Uniondale, N.Y. (Peter S. Samaan and Seth D. Rosmarin of counsel), for defendant third-party plaintiff-respondent.

ALAN D. SCHEINKMAN, P.J., LEONARD B. AUSTIN, JEFFREY A. COHEN, SYLVIA O. HINDS–RADIX, JJ.

DECISION & ORDER

ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the motion of the second third-party defendant Liberty Mutual/Peerless Insurance Company which was for summary judgment dismissing so much of the second third-party complaint as alleged bad faith in its failure to comply with its contractual obligations, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

The defendant third-party plaintiff, Leon D. DeMatteis Construction Corp. (hereinafter DeMatteis), was hired as a general contractor for a project involving work at the United States Mission to the United Nations. DeMatteis then subcontracted portions of the work to the defendant third-party defendant/second third-party plaintiff RJR Mechanical, Inc. (hereinafter RJR). The contract between DeMatteis and RJR contained an indemnity/hold harmless clause and required RJR and its subcontractors to procure an insurance policy that named DeMatteis as an additional insured. The contract between DeMatteis and RJR provided that "[t]he provisions of this Contract shall apply to all such changes, modifications, omissions and additions (collectively, ‘Changes’), as required by DeMatteis, with the same effect as if they were embodied in the original Plans." Thus, the insurance provisions of the contract applied to change orders.

RJR subcontracted with third-party defendant/second third-party defendant Anron Sheet Metal Corp. (hereinafter Anron). That subcontract was made "subject to the terms and conditions of the contract documents." The second third-party defendant Liberty Mutual/Peerless Insurance Company (hereinafter Peerless) issued a commercial general liability policy to Anron.

On January 5, 2009, the plaintiff Edward W. Allen (hereinafter the injured plaintiff), who was employed by Anron, was injured at the job, allegedly while preparing to evaluate a change order. In March 2010, the injured plaintiff, and his wife suing derivatively, commenced the instant personal injury action, naming, among others, DeMatteis and RJR as defendants. The plaintiffs alleged, inter alia, violations of Labor Law §§ 200, 240(1), and 241(6). In October 2010, Peerless disclaimed coverage to RJR on the basis that RJR was not entitled to coverage as an insured under the policy, as well as on the basis that each claimant under the policy had an independent duty to provide timely notice of the loss, and RJR provided a late notice of claim. In January 2011, RJR commenced a second third-party action against, among others, Anron and Peerless, seeking, inter alia, enforcement of a contractual duty to defend and indemnify, and alleging that Peerless acted in bad faith in refusing to comply with its contractual obligations.

In February 2016, Peerless moved, inter alia, for summary judgment dismissing the second third-party complaint insofar as asserted against it on the basis, inter alia, that the injured plaintiff's accident did not occur...