Philadelphia Indemnity Insurance Company v. Yeshivat Beth Hillel of Krasna, Inc. et al

Filing 59

ORDER, For the foregoing reasons, the Court GRANTS the Defendants' respective motions for summary judgment (Dkts. 48 , 49 ) and declares that Plaintiff is obligated to defend and indemnify Defendant Yeshivat Beth Hillel of Krasna, Inc. in conn ection with the Underlying Action. Plaintiff is also obligated to reimburse Yeshivat Beth Hillel of Krasna, Inc. for attorneys' fees incurred in connection with this action. If Yeshivat Beth Hillel of Krasna, Inc. wishes tomove for attorneys' fees, it is DIRECTED to confer with Plaintiff andsubmit a proposed briefing schedule for that motion. So Ordered by Judge Nicholas G. Garaufis on 3/30/2020. (Lee, Tiffeny)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
PHILADELPHIA INDEMNITY INSURANCE
COMPANY,
ORDER
16-CV-5096 (NGG) (CLP)

Plaintiff,
-againstYESHIVAT BETH HILLEL OF KRASNA, INC.;
M.G., a minor, by his parents and lawful
guardians RAMI GARBER and OLIVIA
GARBER; OLIVIA GARBER, individually; and
RAMI GARBER, individually,
Defendants.

NICHOLAS G. GARAUFIS, United States District Judge.
This action concerns Plaintiff Philadelphia Indemnity Insurance
Company’s (“Philadelphia”) obligations under a general liability
policy (the “Policy”) it issued to Defendant Yeshivat Beth Hillel
of Krasnia, Inc. (“Yeshivat”). In brief, Philadelphia seeks a declaratory judgment that it is not obligated to defend or indemnify
Yeshivat in connection with a separate state-court action (the
“Underlying Action”) brought by Defendants M.G., Rami Garber
(together, the “Garber Defendants”), and Defendant Olivia Garber1 to recover damages for injuries allegedly suffered by M.G.
as a result of being struck by a school bus transporting Yeshivat
students (the “Accident”). (See generally Compl. (Dkt. 1); Am.
Verified Compl. M.G., a Minor, by his Parents and Lawful Guardians v. Yeshivat Beth Hillel of Krasna, Inc., Index No. 9318/2013
(Kings Cty. Sup. Ct. July 16, 2013) (Dkt. 1-5 at ECF 3-13).) Yeshivat brings counterclaims for a declaratory judgment that

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Olivia Garber has not appeared in this action.

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Philadelphia is obligated to defend and indemnify it in the Underlying Action and to recover attorneys’ fees expended in
connection with this action. (See Answer & Countercl. (Dkt. 15).)
On February 8, 2019, this court denied Philadelphia’s motion for
summary judgment, holding, inter alia, that Philadelphia had, as
a matter of law, failed to properly disclaim coverage under New
York Insurance Law § 3420(d) and had therefore waived its right
to invoke the policy exclusion that it argued applied to bar coverage for the Accident. See Philadelphia Indem. Ins. Co. v. Yeshivat
Beth Hillel of Krasna, Inc., No. 16-cv-5096 (NGG), 2019 WL
499765, at *5 (E.D.N.Y. Feb. 8, 2019) (“Philadelphia I”).2 Philadelphia subsequently moved for reconsideration of this order,
which this court denied on July 31, 2019, affirming that Philadelphia’s reservation of rights letter was “too equivocal and
imprecise to have provided clear notice to Yeshivat of the precise
exclusion that the insurer invoked.” Philadelphia Indem. Ins. Co.
v. Yeshivat Beth Hillel of Krasna, Inc., No. 16-cv-5096 (NGG),
2019 WL 3500944, at *2 (E.D.N.Y. July 31, 2019) (“Philadelphia
II”).
Now before the court are Yeshivat’s and the Garber Defendants’
respective motions for summary judgment. (See Yeshivat Mot. for
Summ. J. (Dkt. 48); Yeshivat Mem. in Supp. (“Yeshivat Mem.”)
(Dkt. 48-2); Garber Mot. for Summ. J. (Dkt. 49); Garber Mem.
in Supp. (“Garber Mem.”) (Dkt. 51).) Both argue that the court’s
prior decisions are law of the case and that the holding of those
decisions entitles them to summary judgment. For the reasons
discussed herein, the court agrees and grants both motions.
At the outset, the court assumes familiarity with the facts of this
case, which are set forth in its prior order. See Philadelphia I, 2019

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When quoting cases, unless otherwise noted, all citations and internal
quotation marks are omitted and all alterations are adopted.

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WL 3500944, at *1-3. These facts are not in dispute3 and this
matter may thus be resolved as a matter of law. See Wausau Underwriters Ins. Co. v. QBE Ins. Corp., 496 F. Supp. 2d 357, 360
(S.D.N.Y. 2007) (collecting cases); Fed. R. Civ. Pro. 56(a).
Under New York law, an insured bears the initial burden of proving that the loss falls within the general coverage provision of the
subject policy, at which point the burden shifts to the insurer to
prove that a specific exclusion applies to bar coverage. See, e.g.,
Spandex House, Inc. v. Hartford Fire Ins. Co., 407 F. Supp. 3d 242,
250 (S.D.N.Y. 2019). Under New York Insurance Law § 3420(d),
an insurer who wishes to disclaim coverage on the basis of an exclusion must “apprise the claimant with a high degree of specificity
the ground or grounds on which the disclaimer is predicated.” Ability Transmission, Inc. v. John’s Transmission, Inc., 55 N.Y.S.3d 367,
368 (2d Dep’t 2017). Further, an insurer is barred from later asserting the applicability of any exclusion not invoked with the
requisite degree of specificity “even if that ground would otherwise
have merit.” Id.; see also Amro, 936 F.2d at 1431.

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Philadelphia endeavors to dispute some of these facts on this motion. In
nearly every instance, however, it fails to support these purported disputes
with specific citations to admissible evidence as required by Local Rule
56.1(d). (See generally Philadelphia Resp. to Yeshivat and Garber R. 56.1
Stmt. (Dkt. 48-12).) Moreover, Philadelphia’s opposition rests entirely on
legal argument regarding the effect of its purported disclaimer of coverage
and the applicability of certain policy exclusions (see generally Philadelphia
Mem. in Opp. to Mots. (Dkt. 48-13)), both of which present questions of
law. See, e.g., State of N.Y. v. Amro Realty Corp, 936 F.2d 1420, 1431 (2d
Cir. 1991) (“New York law establishes that an insurer is deemed, as a matter of law, to have intended to waive a defense to coverage when other
defenses are asserted, and where the insurer possesses sufficient
knowledge . . . of the circumstances regarding the unasserted defense.”);
Peerless Ins. Co. v. Tech. Ins. Co., Inc., 392 F. Supp. 3d 313, 316 (E.D.N.Y.
2019) (“The construction of an insurance contract is ordinarily a matter of
law to be determined by the court.”). Accordingly, and having independently reviewed the record and discerned no basis to conclude
otherwise, the court concludes the material facts are undisputed.

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As to the insured’s initial burden, no party explicitly contests that
the Accident and Underlying Action fall within the Policy’s general
coverage provision, which broadly insures Yeshivat against liability
for claims of “bodily injury.” (See Policy (Dkt. 48-7) at 144, 162.)
This court thus holds that, as a matter of law, the Underlying Action
triggers Philadelphia’s duty to defend and the Accident (if Yeshivat’s liability is proven) triggers its duty to indemnify under the
general coverage provision of the Policy.
Here, the burden ordinarily would shift to Philadelphia to show
that an exclusion applies. However, as discussed supra, this court
previously held that Philadelphia failed to properly invoke (and
was thus estopped from asserting) the exclusion on which it purported to rely, and that the exclusion that it had properly invoked
does not bar coverage. This holding constitutes the law of the case
and the court declines Philadelphia’s invitation to revisit it for a
third time. See, e.g., Ali v. Mukasey, 529 F.3d 478, 490 (2d Cir. 2008)
(“The law of the case doctrine, while not binding, counsels a court
against revising its prior rulings in subsequent stages of the same
case absent ‘cogent’ and ‘compelling’ reasons.”). Thus, to the extent
that Philadelphia might otherwise have a valid defense to coverage,
it cannot raise that defense in this action. This being the case, and
since there is no question that the Policy responds to the Underlying Action absent a valid exclusion, Defendants are entitled to
summary judgment.
Yeshivat also seeks summary judgment on its claim for attorneys’
fees. Under New York law, “an insured cast in a defensive posture
by the legal steps an insurer takes in an effort to free itself from its
policy obligations may recover attorneys’ fees and expenses incurred in defending against the insurer’s affirmative action to
settle its rights where the insured prevails in that action.” United
States Underwriters Ins. Co. v. Image by J & K, LLC, 335 F. Supp. 3d
321, 347 (E.D.N.Y. 2018) (collecting cases). That rule applies here,
and Yeshivat is therefore entitled to fees incurred in connection
with this action.

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For the foregoing reasons, the Court GRANTS the Defendants’ respective motions for summary judgment (Dkts. 48, 49) and
declares that Plaintiff is obligated to defend and indemnify Defendant Yeshivat Beth Hillel of Krasna, Inc. in connection with the
Underlying Action. Plaintiff is also obligated to reimburse Yeshivat
Beth Hillel of Krasna, Inc. for attorneys’ fees incurred in connection
with this action. If Yeshivat Beth Hillel of Krasna, Inc. wishes to
move for attorneys’ fees, it is DIRECTED to confer with Plaintiff and
submit a proposed briefing schedule for that motion.
SO ORDERED.
Dated:

Brooklyn, New York
March 30, 2020
_/s/ Nicholas G. Garaufis_
NICHOLAS G. GARAUFIS
United States District Judge

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