Travelers Cas. Ins. Co. of Am. v. Blizzard Busters Snowplowing Corp.

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TRAVELERS CASUALTY INSURANCE COMPANY OF AMERICA, Plaintiff, v. BLIZZARD BUSTERS SNOWPLOWING CORP., BLIZZARD BUSTERS SNOWPLOWING, INC., BLIZZARD BUSTERS, CORP., BLIZZARD BUSTERS LANDSCAPING & SNOWPLOWING, NORMA REID-LYNCH, AND COSTCO WHOLESALE CORPORATION, Defendants.

No. 21-CV-8220 (KMK)

United States District Court, S.D. New York

March 27, 2023

Amy C Gross, Esq. Usery & Associates Hartford, CT Counsel for Plaintiff

Allison C. Leibowitz, Esq. Matthew C. Maloney, Esq. Sal F DeLuca, Esq. Simmons, Jannace, LLP Syosset & Hauppauge NY Counsel for Defendant Costco Wholesale Corporation

OPINION & ORDER

KENNETH M. KARAS, UNITED STATES DISTRICT JUDGE

Plaintiff Travelers Casualty Insurance Company of America (“Plaintiff”) brings this Action against Costco Wholesale Corporation (“Defendant”); Blizzard Busters Snowplowing Corp.; Blizzard Busters Snowplowing, Inc.; Blizzard Busters Snowplowing Corp.; Blizzard Busters Landscaping & Snowplowing (collectively, the “Blizzard Buster Entities”); and Norma Reid-Lynch (“Reid-Lynch”; collectively the “Defendants”). Pursuant to the Declaratory Judgment Act (“DJA”), 28 U.S.C. § 2201(a), Plaintiff has requested a declaration that it has no obligation to defend or indemnify the Blizzard Buster Entities in connection with an underlying state court action against the Blizzard Buster Entities. (See generally Compl. (Dkt. No. 11).) Because the Blizzard Buster Entities and Reid-Lynch failed to appear, the Court has entered a default declaratory judgment in favor of Plaintiff as to the Blizzard Buster Entities and Reid-Lynch. (See Default J. (Dkt. No. 53).) Additionally, Defendant has filed counterclaims (the “Counterclaims”) against Plaintiff seeking a declaratory judgment that Plaintiff has a duty to defend and indemnify Defendant in the underlying action as an additional insured of the Blizzard Buster Entities and raising a breach of contract claim for Plaintiff's failure to defend and indemnify Defendant. (See generally Answer and Counterclaims (“Def's Answer”) (Dkt. No. 59).)

Before the Court is Defendant's Motion for Judgment on the Pleadings seeking its dismissal from this Action, pursuant to Federal Rule of Civil Procedure 12(c), (Not. of Mot. (“Def's Not.”) (Dkt. No. 64)), and Plaintiff's Motion to Dismiss Defendant's Counterclaims, pursuant to Federal Rule of Civil Procedure 12(b)(6), (collectively, the “Motions”) (Not. of Mot. (“Pl's Not.”) (Dkt. No. 68)). For the following reasons, both Motions are granted.

I. Background

A. Factual Background

This case arises out of an underlying action, Norma Reid-Lynch v. Costco Wholesale Corporation et al., No. 25857/2018E (N.Y. Sup. Ct.) filed on September 10, 2020 in New York Supreme Court, Bronx County (the “State Court Action”). (Compl. Ex. B at 1 (Dkt. No. 11-2).) In the State Court Action, Reid-Lynch alleges that, on January 13, 2018, she was injured when she slipped and fell on ice in the parking lot of a Costco store in New Rochelle, New York.

(Compl. ¶ 21.) She asserts negligence claims against Defendant and the Blizzard Busters Entities. (Id.) In a third-party complaint filed in the State Court Action, Defendant has asserted claims against the Blizzard Busters Entities for (i) indemnification pursuant to a contract with Costco to perform snow removal services at the Costco location where Reid-Lynch was allegedly injured, (ii) breach of contract for failure to procure insurance, (iii) contribution, and (iv) common-law indemnification. (Id. ¶ 22; id. at Ex. C (Dkt. No. 11-3).)

Plaintiff filed this Action against Defendant, the Blizzard Buster Entities, and Reid-Lynch, seeking declaratory relief concerning the coverage provided the Blizzard Buster Entities under the businessowner's insurance policy, policy number 680-0K130436-17-42, (the “Policy”), that Plaintiff had issued to Blizzard Busters Snowplowing Corp. (Id. ¶ 2; see also id Ex. A (“Travelers Policy”) (Dkt. No. 11-1).) Plaintiff requested the following declarations concerning the Policy:

[T]here is no coverage for [the Blizzard Buster Entities] for the [State Court Action] under the . . . Policy;

[Plaintiff] owes no duty to defend [the Blizzard Buster Entities] in connection with the [State Court Action];

[Plaintiff] owes no duty to indemnify [the Blizzard Buster Entities] in connection with the [State Court Action];

[Plaintiff] may withdraw its defense of [the Blizzard Buster Entities] in the [State Court Action][.]

(id. at 9).^[1]

B. Procedural History

Plaintiff filed its Complaint on October 5, 2021. (Compl.) Defendant appeared on November 19, 2021, (Dkt. No. 24), but although they were served, neither Reid-Lynch nor the Blizzard Buster Entities appeared. (See generally Dkt.) On December 7, 2021, Plaintiff filed Clerk's Certificates of Default and accompanying papers as to the Blizzard Buster Entities and Reid-Lynch, which the Clerk of Court issued the same day. (See Dkt. Nos. 30-44.) On December 15, 2021, Plaintiff filed a Proposed Order to Show Cause on Motion for Default Judgment and accompanying papers. (See Dkt. Nos. 46-49.) On January 24, 2022, the Court approved the Order to Show Cause and set a default hearing for February 16, 2022. (See Dkt. No. 50.) The default hearing was held on February 16, 2022, and the Blizzard Buster Entities and Reid-Lynch failed to appear. (See Dkt. No. minute entry for February 16, 2022.) The Court issued a Default Judgment as to the Blizzard Buster Entities and Reid-Lynch the same day which included the declarations Plaintiff requested in its Complaint. (See Default J. (Dkt. No. 53).) On April 6, 2022, Defendant filed its Answer and Counterclaims. (See Answer.) On April 8, 2022, Plaintiff filed a pre-motion letter requesting a conference to discuss filing a motion to dismiss Defendant's Counterclaims. (See Letter from Amy C. Gross, Esq. to Court (Dkt. No. 60).) Defendant responded on April 13, 2022. (See Letter from Sal F. DeLuca, Esq. to Court (Dkt. No. 61).) On April 14, 2022, the Court scheduled a status conference for May 4, 2022. (See Dkt. No. 62.) At the conference, the Court set a briefing schedule for Plaintiff's motion and also granted Defendant's request to file a motion for judgment on the pleadings. (See Dkt. No. (minute entry for May 4, 2022).) Defendant filed its Motion for Judgment on the Pleadings and accompanying papers on June 3, 2022. (Def's Not.; Decl. of Sal F. DeLuca, Esq. in Supp. of Mot. for J. on the Pleadings (Dkt. No. 65); Def's Mem. of Law in Supp. of Mot. for J. on the Pleadings (“Def's Pleadings Mem.”) (Dkt. No. 66).) On June 6, 2022, Plaintiff filed its Motion To Dismiss Defendant's Counterclaims and accompanying papers. (See Pl's Not.; Decl. of Amy C. Gross, Esq. in Supp. of Mot. to Dismiss (Dkt. No. 69); Pl's Mem. of Law in Supp. of Mot. to Dismiss (“Pl's MTD Mem.”) (Dkt. No. 70).) After the Parties jointly requested and received an extension (Dkt. Nos. 71, 72), Plaintiff filed its opposition to Defendant's Motion and accompanying declaration on July 25, 2022. (Pl's Mem. of Law in Opp'n to Mot. for J. on the Pleadings (“Pl's Pleadings Opp'n”) (Dkt. No. 73); Decl. of Amy C. Gross, Esq. in Supp. of Pl's Opp'n (Dkt. No. 74).) Defendant filed its opposition to Plaintiff's Motion and accompanying declaration the same day. (Def's Mem. of Law in Opp'n to Mot. To Dismiss (“Def's MTD Opp'n”) (Dkt. No. 76); Decl. of Matthew C. Maloney, Esq. in Supp. of Opp'n (Dkt. No. 79).) On August 8, 2022 Defendant filed its reply brief in support of its Motion for Judgment on the Pleadings. (See Def's Reply Mem. in Supp. of J. on the Pleadings (Dkt. No. 81); Decl. of Sal F. DeLuca in Supp. of Reply Mem. (Dkt. No. 80).) Plaintiff filed its reply brief (“Plaintiff's Reply”) in support of its Motion To Dismiss the same day. (Pl's Reply Mem. in Supp. of Mot. to Dismiss (“Pl's MTD Reply”) (Dkt. No. 83); Decl. of Amy C. Gross, Esq. in Supp. of Reply (Dkt. No. 84).) On August 18, 2022, Defendant filed a letter requesting that it be allowed to file a sur-reply to Plaintiff's Reply. (See Letter from Sal F. DeLuca, Esq. to Court (August 15, 2022) (Dkt. No. 87.) Plaintiff filed a letter in response the same day. (See Letter from Amy C. Gross, Esq. to Court (August 17, 2022) (Dkt. No. 88).) On August 22, 2022, the Court denied Defendant's request to file a sur-reply. (See Dkt. No. 89.)

II. Discussion

A. Standard of Review

The Supreme Court has held that although a complaint “does not need detailed factual allegations” to survive a motion to dismiss, “a plaintiff's obligation to provide the grounds of [its] entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration and quotation marks omitted). Indeed, Rule 8 of the Federal Rules of Civil Procedure “demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation marks omitted). “Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.” Id. (alteration and quotation marks omitted). Instead, a complaint's “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. At 555. Although “once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint,” id. at 563, and a plaintiff must allege “only enough facts to state a claim to relief that is plausible on its face,” id. at 570, if a plaintiff has not “nudged [his or her] claims across the line from conceivable to plausible, the[] complaint must be dismissed,” id.; see also Iqbal, 556 U.S. at 679 (“Determining whether a complaint states a plausible claim...