United Rentals (N. Am.), Inc. v. Conti Enters., Inc.

293 F.Supp.3d 447

UNITED RENTALS (NORTH AMERICA), INC., Plaintiff,

v.CONTI ENTERPRISES, INC., Defendant.

16–cv–0040 (VM)

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

Signed March 6, 2018

Gregory D. Podolak, Saxe, Doernberger & Vita, PC, Hamden, CT, Phillip Adrian Perez, Pro Hac Vice, Saxe, Doernberger & Vita, P.C., Trumbull, CT, for Plaintiff.

John E. Sparling, Pro Hac Vice, London Fischer, LLP, New York, NY, Christopher E. Ruggiero, London Fischer, LLP, New York, NY, for Defendant.

DECISION AND ORDER

VICTOR MARRERO, United States District Judge.

United Rentals (North America), Inc. ("UR" or "Plaintiff") initiated this action in the District of Connecticut on February 27, 2015, alleging breach of contract and seeking a declaratory judgment relating to alleged indemnification obligations of Conti Enterprises, Inc. ("Conti" or "Defendant"). ("Complaint," Dkt. No. 1.) Conti filed a motion to dismiss the Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6) and for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). (See Dkt. No. 17.) UR then filed a Motion to Transfer to Another District, which was granted, and the case subsequently transferred to this Court. (See Dkt. Nos. 26, 43, 45, 46.) On November 18, 2015, UR filed an Amended Complaint ("Amended Complaint," Dkt. No. 44). Conti filed its Answer to the Amended Complaint on March 3, 2016 (Dkt. No. 50), and on March 24, 2017 moved for summary judgment pursuant to Federal Rule of Civil Procedure 56 ("Motion," Dkt. No. 75).

For the reasons stated below, the Motion is DENIED.

I. BACKGROUND ¹

In September 2008, Conti of New York, LLC (a Conti entity) was hired by the Triborough Bridge and Tunnel Authority ("TBTA"), an affiliate agency of the Metropolitan Transit Authority ("MTA"), to repair the Whitestone Bridge. In connection with the repair work, Conti rented certain equipment from UR. The rental arrangement is reflected in a number of documents. UR and Conti entered into a National Account Agreement ("NAA"), dated August 1, 2009.² In addition, on August 4, 2009, UR and Conti entered into a rental contract ("Rental Agreement"), whereby Conti rented a JLG boom lift, serial number 0300118085 ("the Lift").

The Rental Agreement, at least according to UR, consisted of two pages: one page which bears the words "Rental Agreement" at the top, and a second page which is titled "Rental Agreement Additional Terms and Conditions." (See Amended Complaint, Ex. B.) Conti alleges it did not receive the "Rental Agreement Additional Terms and Conditions" page along with the "Rental Agreement" and notes that no facsimile transmission stamp appears on the additional terms page as it does on the Rental Agreement page.³ (See Defendant's Memorandum of Law in Support of Motion for Summary Judgment ("Def. Mem."), Dkt. No. 76, at 7; Amended Complaint, Ex. B at 2–3.)

The "Rental Agreement Additional Terms and Conditions" contained an indemnity provision, which states:

3. Indemnify/Hold Harmless: To the fullest extent permitted by law, Customer agrees to indemnify, defend and hold United harmless from and against any and all liability, claim, loss, damage, or costs (including, but not limited to, attorneys' fees, loss of profit, business interruption or other special or consequential damages, damages relating to bodily injury, damages relating to wrongful death) caused by or in any way arising out of or related to the operation, use, maintenance, instruction, possession, transportation, ownership or rental of the equipment, including, but not limited to, whenever such liability, claim, loss, damage or cost is founded, in whole or in part, upon any negligent or grossly negligent act or omission of United or the provision of any allegedly defective product by United. This indemnity provision applies to any claims asserted against United based upon strict or product liability causes of action, breach of warranty or under any other theory of law.

(Amended Complaint, Ex. B at 3.)

In addition, regarding Conti's required insurance coverage, the additional terms and conditions require:

18. Customer's Insurance Coverage: Customer agrees to maintain and carry, at its sole cost, adequate liability, physical damage, public liability, property damage and casualty insurance for the full replacement cost of the Equipment, including, but not limited to all risks of loss or damage covered by the standard extended coverage endorsement, to cover any damage or liability arising from the handling, transportation, maintenance, operation, possession or use of the Equipment during the entire Rental Period. When requested, Customer shall supply to United proof of such insurance by Certificate of Insurance clearly setting forth the coverage for the Equipment and naming United as loss payee and additional insured; such insurance and evidence thereof to be in amounts and form satisfactory to United. The Certificate of Insurance and policy shall provide that, United shall receive no less than 30 days' notice prior to any cancellation of the insurance required hereunder.

(Id. )

Finally, according to the additional terms and conditions, the "Customer agrees to pay all reasonable costs of collection, court, attorneys' fees and other expenses incurred by United in the collection of any charges due under this Rental Agreement or in connection with the enforcement of its terms." (Id. )

On or about May 6, 2010, Conti employees Karl Fritz ("Fritz") and Richard O'Keefe, Jr. ("O'Keefe") allegedly sustained injuries after the Lift malfunctioned at the Whitestone Bridge project site. Fritz commenced an action in November 2010 against UR and other defendants for damages relating to his injuries. In April 2011, O'Keefe filed his own lawsuit as a result of his alleged injuries, in which defendants MTA and TBTA filed a Third–Party complaint against UR and others. These lawsuits ("Underlying Lawsuits") have since been consolidated in New York state court.

The Amended Complaint alleges that Conti breached the NAA and/or the Rental Agreement by: (1) failing to indemnify UR in the Underlying Lawsuits, and (2) failing to secure liability insurance providing "Additional Insured coverage" to UR for any liability arising from the use of the Lift. The Amended Complaint also seeks a declaratory judgment that: (1) Conti is obligated to defend and indemnify UR in the Underlying Lawsuits; (2) Conti must pay UR's defense costs incurred in the Underlying Lawsuits going forward; and (3) Conti must pay all amounts UR is held liable for and obligated to pay by way of settlement or judgment in connection with the Underlying Lawsuits.

In its motion for summary judgment, Conti argues: (1) the indemnification provision of the Rental Agreement is void and unenforceable as a matter of law under New York General Obligations Law § 5–322.1 ; (2) the insurance procurement provision was not breached and is not enforceable as a matter of law; and (3) The Rental Agreement does not provide for an award of attorneys' fees under the "American Rule" of attorney fee recovery. (See generally Def. Mem.; Defendant's Reply Memorandum of Law in Support of Motion for Summary Judgment ("Reply Mem."), Dkt. No. 86.) Conti argues that UR's complaint should be dismissed for these reasons and requests that the Court issue an order declaring that Conti (i) is not obligated to defend and indemnify UR in the current action and the Underlying Lawsuits; (ii) is not obligated to fund UR's prior and/or future defense costs in the Underlying Lawsuits; and (iii) is not obligated to pay, on behalf of UR, all sums UR becomes obligated to pay by reason of liability for damages, including attorneys' fees and costs in connection with this action or the Underlying Lawsuits. (Def Mem. at 21.)

In opposition, UR argues: (1) the Rental Agreement's indemnity provision is valid and enforceable; (2) Conti's motion for summary judgment should be denied because there has been no finding of fault; (3) Conti breached the insurance procurement provision of the Rental Agreement by not naming UR as an "additional insured" for all liability arising from use of the Lift; and (4) Section 22(b) of the Rental Agreement provides for the recovery of attorneys' fees incurred by UR in connection with the enforcement of the agreement. (See generally Plaintiff's Opposition to Defendant's Motion for Summary Judgment ("Pl. Opposition"), Dkt. No. 82.)

II. LEGAL STANDARD

Summary judgment is appropriate if the evidence shows that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In making this assessment, the Court looks to the relevant substantive law to determine which facts are material: "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). To survive summary judgment, the disputed factual issues must also be "genuine"—that is, "sufficient evidence [must] favor[ ] the nonmoving party for a jury to return a verdict for that party." Id. at 249, 106 S.Ct. 2505. The role of a court in ruling on such a motion "is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried, while resolving ambiguities and drawing reasonable inferences against the moving party." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986).

The moving party bears the initial burden of demonstrating the absence of any genuine issues of material fact. See Celotex, 477 U.S. at 323, 106 S.Ct. 2548. If the moving party satisfies its burden, the nonmoving party must provide specific facts showing that there is a genuine issue for trial in order to survive the motion for summary judgment. See Shannon v. New York City Transit...