State Farm Mut. Auto. Ins. Co. v. Am. Empire Surplus Lines Ins. Co.

1

2023 NY Slip Op 30898(U)

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Plaintiff, v. AMERICAN EMPIRE SURPLUS LINES INSURANCE COMPANY, ADVANCED CONSTRUCTION EQUIPMENT CORP., DANIEL DELUCCA, THE CITY OF NEW YORK, NEW YORK CITY HOUSING DEVELOPMENT CORPORATION, NEW YORK CITY HOUSING AUTHORITY, BQE INDUSTRIES, INC. Defendant.

Index No. 161274/2020, Motion Seq. Nos. 001, 002

Supreme Court, New York County

March 23, 2023

Unpublished Opinion

MOTION DATE: 06/09/2022, 07/25/2022.

DECISION + ORDER ON MOTION

HON J. MACHELLE SWEETING, J. S. C.:

The following e-filed documents, listed by NYSCEF document number (Motion 001) 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32 59, 60, 61, 62, 63, 67, 69, 70, 71, 72, 73, 74, 75, 76, 77 78, 79, 88, 89, 90, 94, 95, 96, 97, 98, 115, 116, 117, 118 were read on this motion to/for SUMMARY JUDGMENT (BEFORE JOINDER)

The following e-filed documents, listed by NYSCEF document number (Motion 002) 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 64, 65, 68, 80, 81, 82, 83, 84, 85, 86, 87, 91, 92, 93, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 119, 120, 121, 122 were read on this motion to/for JUDGMENT - SUMMARY

Plaintiff State Farm Mutual Automobile Insurance Company ("State Farm") brings this declaratory judgment action against defendant American Empire Surplus Lines Insurance Company ("AESLIC"), seeking a ruling as to which insurer provides coverage for their mutual named insured, Advanced Construction Equipment Corp. ("Advanced Construction"), for the allegations made against it in the third-party complaint for indemnification filed by defendant BQE Industries, Inc. ("BQE") in the action entitled Daniel DeLucca v The City of New York, Index No. 450905/2018 ("the DeLucca Action"), which is currently pending. State Farm also seeks reimbursement of costs that it expended in the defense of the DeLucca Action, and a declaration that coverage, defense, and indemnity is owed to Advanced Construction, Daniel DeLucca's employer, from AESLIC, rather than from State Farm. In its cross-claim, Advanced Construction likewise seeks a declaration that AESLIC is obligated to defend and indemnify Advanced Construction in the DeLucca Action.

Motion Sequence Nos. 001 and 002 are consolidated for disposition. In Motion Sequence No. 001, AESLIC moves, pursuant to Civil Practice Law and Rules ("CPLR") 3212, for summary judgment dismissing the complaint as against it.

In Motion Sequence No. 002, State Farm moves for summary judgment declaring: (1) that it has no duty to defend or indemnify Advanced Construction in the DeLucca Action, including no duty to defend or indemnify against any cross-claims or third-party claims in that action; (2) that AESLIC has a duty to defend or indemnify Advanced Construction in the DeLucca Action, including a duty to defend or indemnify against any cross-claims or third-party claims in that action; (3) that AESLIC must assume the obligation to defend or indemnify Advanced Construction in the DeLucca Action, including a duty to defend or indemnify against any cross-claims or third-party claims in that action; (4) that AESLIC must reimburse it for all litigation expenses and legal fees expended in Advanced Construction's defense in the DeLucca Action, including the defense against any cross-claims or third-party claims in that action, with interest. State Farm also moves for a hearing to determine the amount that AESLIC owes it for all litigation expenses and legal fees expended on Advanced Construction's defense in the DeLucca Action, including the defense against any cross-claims or third-party claims in that action.

Finally, State Farm moves, pursuant to CPLR 3215, for an order granting a default judgment against defendants Daniel DeLucca, the City of New York, the New York City Housing Development Corporation ("the HDC"), the New York City Housing Authority ("NYCHA") and BQE.

NYCHA cross-moves, pursuant to CPLR 3215 (c), for an order dismissing the complaint against it as abandoned on the ground that State Farm failed to move for a default judgment against NYCHA within one year of its default in answering the complaint.

For the reasons set forth below, AESLIC's motion is denied. State Farm's motion is also denied. NYCHA's cross-motion is granted.

FACTS

The DeLucca Action

The complaint in the DeLucca Action was filed on January 22, 2018 (see NYSCEF Doc No. 24). The DeLucca complaint names the City of New York, the HDC, NYCHA and BQE as defendants. Advanced Construction is not named as a defendant. The DeLucca complaint alleges that Mr. DeLucca was injured on July 5, 2017 at the premises located at 126 West 127th Street, New York, when "he was caused to be injured in a height related accident" (DeLucca complaint ¶¶ 77-78).

The DeLucca complaint also alleges that, on August 22, 2016 prior to the commencement of the action, a Notice of Claim was served on the City of New York (id., ¶ 1). The Notice of Claim (NYSCEF Doc No. 25), which was incorporated by reference in the DeLucca complaint, includes a more specific recitation of Mr. DeLucca's alleged injury as follows:

The Claimant was injured when he was caused to fall from a scaffold material/equipment/height while unloading scaffolding materials/equipment at a height (as an employee for Advanced Construction Equipment Corp., 154 East 3rrd Street, Mt. Vernon, New York 10550) on top of scaffold materials/equipment on top of a flatbed truck as part of a construction project located at 126 West 127 Street, in the County of New York, City and State of New York as he was caused to fall from a height to the ground below

(Notice of Claim at 2).

The DeLucca complaint also alleges that, on January 16, 2018, a hearing was held pursuant to General Municipal Law ("GML") section 50-h (DeLucca complaint, ¶ 5). This testimony is also incorporated by reference into the DeLucca complaint. During that hearing, Mr. DeLucca testified that, up to the point that his accident occurred, "we were unloading the scaffolding material from the back of the truck" (transcript of GML § 50-h hearing [NYSCEF Doc No. 25], at 24:16-19). Mr. DeLucca testified that he was employed by Advanced Construction, and knew that Advanced Construction owned the flatbed truck that he was unloading scaffolding from (id. at 25:13-14). Mr. DeLucca further testified that, at the time of his accident he was on top of the truck (id. at 28:19-22). Mr. DeLucca described the work he was doing as "one person is on top of the truck and they distribute to the other people and then they take it from that area to the staging area" (id. at 29:12-17).

According to Mr. DeLucca, his accident happened as he was handing materials down from the truck (id. at 29:22-24). Mr. DeLucca further explained that he was shaking pieces of scaffolding staircase apart, and when they came loose, he fell from the back of the truck (id. at 30:24-31:5). Mr. DeLucca clarified that he fell from the top of the stacked frames that were on top of the flatbed onto the bottom of the flatbed truck (id. at 32:22-33:8), and then fell from the flatbed truck to the ground (id. at 36:16-22).

On May 7, 2018, the City of New York tendered the DeLucca complaint to BQE and Advanced Construction for defense and indemnity.

On October 23, 2018, BQE filed a third-party complaint in the DeLucca Action against Advanced Construction, seeking common law indemnity, common law contribution, and breach of contract (see NYSCEF Doc No. 77).

Based on the allegations in the DeLucca Action and the complaint in the third-party action, Advanced Construction then tendered the third-party complaint to State Farm and AESLIC for defense and indemnity.

The State Farm Complaint

State Farm commenced this action by filing a complaint on December 8, 2020 (see NYSCEF Doc No. 1). State Farm alleges that AESLIC issued a commercial general liability policy to Advanced Construction, Policy Number 16CG0207420, effective November 5, 2016 to November 5, 2017 (complaint, ¶ 27). State Farm further alleges that it issued a policy of business automobile insurance to Advanced Construction under Policy Number 2098-051-52, effective January 29, 2017 to January 29, 2018 (id., ¶ 14).

State Farm alleges that, despite denying coverage to Advanced Construction, it conditionally offered to assign counsel to defend Advanced Construction in the third-party complaint filed by BQE under the State Farm policy, which covered the Advanced Construction truck from which plaintiff fell as he was unloading scaffolding (id., ¶¶ 47 50).

State Farm alleges that Mr. DeLucca testified that this accident occurred on July 5, 2017 at 3:45 p.m. at 126 West 127th Street while he was on a flatbed truck which he described as a "sixty to twenty feet long" flatbed vehicle that was parked in front of a housing project undergoing renovation (id., ¶ 20). State Farm admits that Mr. DeLucca testified that his accident occurred while he was standing on stacked framing on the back of a flatbed truck while pulling apart pieces of scaffolding (id., ¶ 20). State Farm also alleges that Mr. DeLucca was employed by Advanced Construction at the time of the incident (id., ¶ 21).

State Farm further alleges that AESLIC wrongfully denied State Farm's tender of defense and coverage to AESLIC for the DeLucca Action and the third-party complaint (id., ¶ 35).

The complaint contains two causes of action for declaratory judgment. In the first cause of action, State Farm seeks a declaration that AESLIC owes defense and indemnity to Advanced Construction, and that AESLIC must reimburse State Farm for its litigation expenses and legal fees incurred for the defense of Advanced Construction in the DeLucca...