United States Liability Insurance Company v. Lisena et al

Filing 73

MEMORANDUM & ORDER granting 62 Motion to Dismiss for Failure to State a Claim; granting 63 Motion for Declaratory Judgment; granting 63 Motion for Summary Judgment; denying 64 Motion for Summary Judgment; For the foregoing reasons, U.S . Liability's motion for summary judgment (Docket Entry 64) is DENIED, Defendant and Third-Party Plaintiff Luna's motion for summary judgment (Docket Entry 63) is GRANTED, and Third-Party Defendant Merchants Preferred Insurance Company's motion to dismiss (Docket Entry 62) is GRANTED. The Clerk of the Court is directed to TERMINATE Merchants as a party to this action. So Ordered by Judge Joanna Seybert on 9/8/2016. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------X
UNITED STATES LIABILITY INSURANCE
COMPANY,
Plaintiff,
MEMORANDUM & ORDER
14-CV-2155(JS)(AKT)

-againstANTHONY M. LISENA, ROCCO LISENA & SON
LANDSCAPING, INC., and LUIS TORRES
LUNA, a minor by his Father and
natural guardian PEDRO RAFAEL
TORRES AVILES,
Defendants.
-------------------------------------X
LUIS TORRES LUNA, a Minor by his
Father and Natural Guardian PEDRO
RAFAEL TORRES A VILES,
Third-Party Plaintiff,
-againstMERCHANTS PREFERRED INSURANCE COMPANY,

Third-Party Defendant.
-------------------------------------X
APPEARANCES
For Plaintiff:
Steven Verveniotis, Esq.
Frank Robert Malpigli, Esq.
Miranda Sambursky Slone Sklarin
Verveniotis LLP
240 Mineola Boulevard
Mineola, NY 11501
For Defendant and
Third-Party Plaintiff:
Luis Torres Luna
a minor by his Father
and natural guardian
Pedro Rafael
Torres Aviles

Jonathan Isidor Edelstein, Esq.
271 Madison Avenue, 20th Floor
New York, NY 10016

David S. Dender, Esq.
The Bongiorno Law Firm PLLC
250 Mineola Boulevard
Mineola, NY 11501
For Defendant:
Anthony M. Lisena
and Rocco Lisena &
Son Landscaping, Inc.:
For Third-Party
Defendant:
Merchants Preferred
Insurance Company:

No Appearances.

Agnieszka Anna Wilewicz, Esq.
Steven E. Peiper, Esq.
Hurwitz & Fine, P.C.
1300 Liberty Building
Buffalo, NY 14202

SEYBERT, District Judge:
Plaintiff
(“U.S.

Liability,”

United
or

States

“USLI”)

Liability

commenced

Insurance

this

action

Company
against

Defendants Anthony M. Lisena, Rocco Lisena & Son Landscaping
(“Lisena & Son”), Inc., Miguel A. Vasquez, 3rd, Miguel A. Vasquez,1
and Luis Torres Luna2 (“Luna”), seeking a declaration that an
umbrella insurance policy that it issued does not cover damages
incurred in automobile accident involving a car and a dump truck.
Pending before the Court is U.S. Liability’s motion for summary
judgment (Docket Entry 64), Defendant and Third-Party Plaintiff

Both Miguel A. Vasquez, 3rd, and Miguel A. Vasquez were
terminated as defendants in this action on December 3, 2014.
(See, Docket Entry 31.)

1

Luna is a minor and is therefore represented in this action his
father and natural guardian Pedro Rafael Torres Aviles.
2

2

Luna’s motion for summary judgment (Docket Entry 63), and ThirdParty

Defendant

Merchants

Preferred

Insurance

Company’s

(“Merchants”) motion to dismiss (Docket Entry 62). For the reasons
that follow, U.S. Liability’s motion is denied, Luna’s motion is
granted, and Merchants’ motion is granted.
BACKGROUND
On December 9, 2013, Luna was a passenger in a Volkswagen
car (the “Car”) owned by defendant Miguel Vasquez and driven by
defendant Miguel Vasquez III.

(Luna’s 56.1 Stmt., Docket Entry

63-2, ¶ 1.) That same day, defendant Anthony M. Lisena was driving
a 1994 Mitsubishi Dump Truck (the “Dump Truck” or the “Truck”).
(Luna’s 56.1 Stmt. ¶ 2.)

As the car proceeded southward along

Glen Cove Avenue, in Glen Cove, New York, Anthony Lisena made a
left turn from northbound Glen Cove Avenue onto Morris Avenue and
the

two

injuries.

vehicles

collided

causing

defendant

(Luna’s 56.1 Stmt. ¶¶ 1-3.)

Luna

to

sustain

At the time of the

accident, Anthony Lisena was working for Lisena & Son and was on
his way to dump the materials in the back of his Truck.

(USLI’s

56.1 Smt., Docket Entry 65, ¶ 60.)
The Dump Truck is a commercial vehicle owned by Lisena
& Son and Anthony Lisena is the CEO of Lisena & Son.
Stmt. ¶¶ 4-5; USLI’s 56.1 Stmt. ¶ 49.)

(Luna’s 56.1

However, the parties

dispute whether Anthony Lisena has a financial interest in Lisena

3

& Son.

(See Luna’s 56.1 Stmt. ¶ 6; USLI’s Counterstmt., Docket

Entry 69, ¶ 6.)
After the accident, Luna commenced a personal injury
action against Miguel Vasquez, Anthony Lisena and Lisena & Son,
captioned Luna v. Vasquez et. al., Index No. 015053/2013 (“the
State

Action”).

subsequently

(Luna’s

filed

this

56.1
case

Stmt.
on

¶ 7.)

April

4,

U.S.
2014,

Liability
seeking

a

declaratory judgment clarifying that its Umbrella Policy does not
cover any damages stemming from the accident.

(See Am. Compl.,

Docket Entry 26, at ¶¶ 37-44.)
Three separate insurance policies are at issue in this
case.

The

Harleysville

(“Harleysville”)
Landscaping,
Policy”).

issued

Inc.

on

the

Insurance
first

September

Company

policy

to

2013

of

(the

1,

(USLI’s 56.1 Stmt., ¶ 25.)

New

Lisena

York
&

Son

“Harleysville

The Harleysville Policy

lists the Dump Truck within the “Business Auto schedule” and also
lists Anthony Lisena within the “Drivers Schedule.”
Smt. ¶¶ 26-27.)
provides

(USLI’s 56.1

There is no dispute that the Harleysville Policy

insurance

coverage

for

the

accident

at

issue,

and

Harleysville is defending both Anthony Lisena and Lisena & Son in
the underlying State Court Action.

(USLI’s 56.1 Smt. ¶ 28.)

The second policy was issued by Merchants to Anthony
Lisena and Monique Lisena on August 20, 2013 (the “Merchants
Policy”).

(USLI’s 56.1 Stmt. ¶ 31.)
4

The Merchants Policy lists

only two personal automobiles on its declarations page, a 2003
Dodge Grand Caravan and a 1996 Dodge Ram 2500.

(USLI’s 56.1 Stmt.

¶ 36.) Moreover, the Merchants Policy does not list the Dump Truck
in its declarations.

(USLI’s 56.1 Stmt. ¶ 37.)

disclaimed coverage for the accident.
Luna’s 56.1 Stmt. ¶ 24.)

Merchants has

(USLI’s 56.1 Stmt. ¶ 38;

In addition, Luna does not argue in its

motion for summary judgment that the Merchant Policy should provide
coverage.
Finally,

U.S.

Liability

issued

a

personal

umbrella

liability policy to Anthony M. Lisena and Monique Lisena, on
September 1, 2013 (the “Umbrella Policy”. (Luna’s 56.1 Stmt. ¶ 8.)
The Umbrella Policy provides up to $ 1,000,000 in excess personal
liability coverage and names both Anthony Lisena and Monique Lisena
as insureds.

(Umbrella Policy, Docket Entry 63-7, at 1;3 Luna’s

56.1 Stmt. ¶ 9.)

Since the Umbrella Policy is primarily at issue

in this case, the Court will discuss its relevant provisions in
some depth.
Because the Umbrella Policy provides excess insurance
coverage, it only becomes applicable when a qualifying “Underlying
Insurance” policy provides coverage. (See Umbrella Policy § I(P).)
The Umbrella Policy specifically states that “[i]f you are legally
liable to pay damages for a loss to which this insurance applies,

The page numbers of the Umbrella Policy are those generated by
the Electronic Case Filing System.
3

5

we will pay your net loss in excess of the retained limit.”
(Umbrella Policy § II.)
accident,

including

The term “loss” is defined as “[a]n

continuous

or

repeated

exposure

to

substantially the same general harmful conditions, which results
. . . in bodily injury and/or property damage . . . .” (Umbrella
Policy § I(H).)

In addition, “Underlying Insurance” is defined as

follows:
Underlying Insurance means any policy with the
greater limit of:
1. The limit shown for that policy in the
DECLARATIONS in Item 6., Required Underlying
Insurance Coverage; or
2. The limit shown for that policy on the
Schedule of Underlying Insurance Endorsement
(if the Schedule of Underlying Insurance
Endorsement is attached to this policy) or
Specified Automobile Endorsement (if the
Specified Automobile Endorsement is attached
to this policy) or Addition of Scheduled
Watercraft endorsement (if the Addition of
Scheduled Watercraft is attached to this
policy); or
3. The sum of the applicable limits of liability
of all underlying insurance available to any
insured for injury or damage to which this
coverage applies (other than insurance written
specifically as excess over the Company’s
limit of liability under this policy);
without reduction for defense costs.
(Umbrella Policy § I(R).)

Thus, the Term “Underlying Insurance”

is defined broadly based upon policy limits and the definition
does not reference specific policy numbers, or other parameters.
The Policy also required Anthony and Monique Lisena to
maintain certain specific underlying insurance policies listed in

6

Item 6 of the declarations page.

The full text of Item 6 is as

follows:

(Umbrella Policy at 2.)
In addition, the Umbrella Policy contains a number of
exclusions. The Policy excludes coverage for “a loss . . . arising
out of any automobile provided to any insured by the employer of
any insured, it’s replacement or substitute unless underlying
insurance provides coverage for the loss.”
§ III(T).)

(Umbrella Policy

The Policy also excludes coverage for a loss “[c]aused
7

by your business or business property unless underlying insurance
provides coverage for the loss.”

(Umbrella § III(G)).

“Business”

is defined as “any employment, trade, profession, occupation, or
any other enterprise in which any insured has a financial interest,
including farming.”
Umbrella

Policy

(Umbrella Policy § I(D).)

includes

an

endorsement

definition of the term “Automobile.”

that

Moreover, the
modifies

the

The endorsement provides in

relevant part:
It is agreed:
I. DEFINITIONS, B. Automobile, is deleted in its
entirety and replaced with the following:
B. Automobile means:
1. A private passenger motor vehicle, motorcycle,
moped or motor home;
2. A vehicle designed to be pulled by a private
passenger motor vehicle or motor home; or
3. A farm wagon or farm implement while towed by
a private passenger motor vehicle or motor home.
(Umbrella Policy § I at 17; USLI’s Br. at 12.)
The parties vehemently dispute whether the Umbrella
Policy provides coverage for damages sustained in the accident on
December 9, 2013.

In its motion for summary judgment, U.S.

Liability principally argues that coverage is excluded by the
provisions of the Umbrella Policy because the accident involved a
commercial vehicle that was used in the course of a business
activity.

(See, USLI’s Br., Docket Entry 64-30, at 10-16.)

Conversely, Luna argues in his cross-motion that the Umbrella

8

Policy’s coverage is broad enough to cover the accident because
the

Harleysville

Policy

meets

the

definition

of

“Underlying

Insurance” in the Umbrella Policy, triggering coverage.

(See

Luna’s Br., Docket Entry 63-1, at 5-8.)
DISCUSSION
The Court will first set forth the applicable legal
standard for the parties’ motions for summary judgment before
turning to their arguments more specifically.
I.

Legal Standard
Summary judgment is only appropriate where the moving

party can demonstrate that there is “no genuine dispute as to any
material fact” and that the moving party is entitled to judgment
as a matter of law.

FED. R. CIV. P. 56(a).

In considering this

question, the Court considers “the pleadings, depositions, answers
to interrogatories and admissions on file, together with any other
firsthand information including but not limited to affidavits.”
Nnebe v. Daus, 644 F.3d 147, 156 (2d Cir. 2011) (internal quotation
marks and citation omitted); see also FED. R. CIV. P. 56(c).

“In

assessing the record to determine whether there is a genuine issue
to be tried . . . the court is required to resolve all ambiguities
and draw all permissible factual inferences in favor of the party
against whom summary judgment is sought.” McLee v. Chrysler Corp.,
109 F.3d 130, 134 (2d Cir. 1997).

The burden of proving that there

is no genuine issue of material fact rests with the moving party.
9

Gallo v. Prudential Residential Servs., L.P., 22 F.3d 1219, 1223
(2d Cir. 1994) (citing Heyman v. Com. & Indus. Ins. Co., 524 F.2d
1317, 1320 (2d Cir. 1975)).

Once that burden is met, the non-

moving party must “come forward with specific facts,” LaBounty v.
Coughlin, 137 F.3d 68, 73 (2d Cir. 1998), to demonstrate that “the
evidence is such that a reasonable jury could return a verdict for
the nonmoving party,” Anderson v. Liberty Lobby, 477 U.S. 242,
248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202, 218 (1986) (citation
omitted).
suffice.”

“Mere

conclusory

allegations

or

denials

will

not

Williams v. Smith, 781 F.2d 319, 323 (2d Cir. 1986).

And “unsupported allegations do not create a material issue of
fact.”

Weinstock v. Columbia Univ., 224 F.3d 33, 41 (2d Cir.

2000), superseded by statute on other grounds as stated in Ochei
v. Coler/Goldwater Mem’l Hosp., 450 F. Supp. 2d 275, 282 (S.D.N.Y.
2006).
II.

Underlying Insurance Exists, Triggering Coverage Under the
Umbrella Policy
U.S. Liability’s Umbrella Policy makes clear that it

does not provide insurance coverage unless applicable “Underlying
Insurance” provides coverage for the loss at issue.
Policy §§ I(P), II.)

(See Umbrella

Although Harleysville is providing coverage

for the accident, the parties dispute whether the Harleysville
Policy constitutes “Underlying Insurance” that can trigger the

10

excess coverage available under the Umbrella Policy.

(USLI’s Br.

at 14; Luna’s Br. at 6.)
Under New York law, “‘[c]ourts bear the responsibility
of determining the rights or obligations of parties under insurance
contracts based on the specific language of the policies.’” Labate
v. Liberty Mut. Ins. Co., 45 A.D.3d 811, 812, 847 N.Y.S.2d 128,
129 (2d. Dep’t 2007) (quoting Sanabria v. Am. Home Assur. Co., 68
N.Y.2d 866, 868, 501 N.E.2d 24, 24, 508 N.Y.S.2d 416 (N.Y. 1986).
Moreover, “[a] contract of insurance must be read as a whole,
including any introductory clause or heading, to determine the
intent of the parties.”

See Mazzaferro v. RLI Ins. Co., 50 F.3d

137, 140 (2d Cir. 1995) (internal quotation marks and citations
omitted).

When

the

provisions

of

a

policy

“are

clear

and

unambiguous, they must be given their plain and ordinary meaning,
and courts should refrain from rewriting the agreement.

Newman

Myers Kreines Gross Harris, P.C. v. Great N. Ins. Co., 17 F. Supp.
3d

323,

328

(S.D.N.Y.

2014).

However,

when

the

policy

is

ambiguous, its language must be construed against the drafter and
in favor of the insured.

See U.S. Fid. & Guar. Co. v. Annunziata,

67 N.Y.2d 229, 232, 492 N.E.2d 1206, 1207, 501 N.Y.S.2d 790 (N.Y.
1986).

“[T]he test to determine whether an insurance contract is

ambiguous focuses on the reasonable expectations of the average
insured upon reading the policy.”

11

Mostow v. State Farm Ins.

Companies, 88 N.Y.2d 321, 326–27, 668 N.E.2d 392, 645 N.Y.S. 2d
421 (N.Y. 1996).
Luna argues that because the Harleysville Policy meets
the definition of “Underlying Insurance” in the Umbrella Policy,
excess coverage exists.

(Luna’s Br. at 5-8).

Conversely, U.S.

Liability argues in opposition that the excess coverage in the
Umbrella Policy was never triggered because the Merchants Policy
is the only automobile policy that can serve as “Underlying
Insurance,” and the Merchants Policy does not provide coverage for
the accident.

(USLI’s Opp. Br., Docket Entry 67, at 17-19.)

In furtherance of its argument, U.S. Liability relies
heavily

upon

the

Second

Department’s

decision

in

Hasbani

v.

Nationwide Mut. Ins. Co., 98 A.D.3d 563, 563, 949 N.Y.S.2d 489,
490 (2d Dep’t 2012).

In Hasbani, the defendant insurance company

issued a personal umbrella policy to an insured whose car was
involved in an accident.
specified

that

it

covered

Id.

The insured’s umbrella policy

damages

in

excess

of

underlying

insurance, but the policy’s declaration page specifically listed
several underlying policies, including an automobile liability
policy issued by GEICO.

Id.

Siding with the insurance company,

the court held that excess insurance was not available because the
accident was not covered by the specific GEICO policy listed on
the declarations page, but was rather covered by different GEICO
policy that was not listed.

Id. at 563-64.
12

The court explained

that

“the

provisions

of

the

umbrella

policy

were

clear

and

unambiguous, and did not apply to any and all automobile accidents
and liabilities,” only those policies listed in the declaration
page.

Id. at 564.
Unlike the policy in Hasbani, U.S. Liability’s Umbrella

Policy does not list specific insurance policies in a schedule
that definitively constitute “Underlying Insurance.”

Instead, the

term “Underlying Insurance” is defined broadly based upon policy
limits, rather than by specific policy numbers or other parameters.
Moreover,

the

declarations

section

indicates

that

the

risks

assumed by U.S. Liability under the Umbrella Policy are not limited
to automobile accidents that take place while the insured is in a
specifically

designated

vehicle.

The

Umbrella

Policy’s

declarations section lists three “policy exposures”: (1) five
“Residences”,

(2)

two

“Automobiles”,

Anthony Lisena and Monique Lisena.

and

(3)

two

“Drivers”--

(Umbrella Policy at 3.)

In

addition, Item 6 within the declarations section requires that
underlying

insurance

be

obtained

in

five

categories:

(1)

“Automotive Liability,” (2) “Comprehensive Personal Liability &
Rental Property Liability,” (3) “Recreational Vehicle Liability,”
(4)

“Watercraft

Liability,”

Motorist Liability.”

and

(5)

“Uninsured/Underinsured

(Umbrella Policy at 4.)

U.S. Liability points to language in Item 6 of the
declarations

section

in

support
13

of

its

argument

that

the

Harleysville Policy, which is a commercial automobile policy,
cannot constitute “Underlying Insurance.”

(See USLI’s Opp. Br. at

6.) According to U.S. Liability, the language of Item 6 definitely
establishes that the applicable Underlying Insurance only insures
“residences, automobiles, recreational vehicles or watercraft,
owned by, leased or regularly furnished to you.” However, a closer
look at Item 6 reveals that this clause merely sets minimum limits
for

specific

underlying

insurance

policies

that

the

promised to maintain during the policy period.
definition

of

underlying

insurance

is

broad

insureds

However, the

enough

to

cover

additional policies that the insureds were not required to purchase
pursuant to Item 6. Thus, contrary to U.S. Liability’s assertions,
there is no specific language preventing a commercial policy from
serving as Underlying Insurance.
Nevertheless, there are elements of the Umbrella Policy
that suggest the Merchants Policy, and not the Harleysville Policy,
should

serve

declarations

as

“Underlying

section

lists

Insurance.”
only

“2”

For

instance,

automobiles

as

the

“Policy

Exposures,” which is consistent with the two personal vehicles
covered by the Merchants Policy.

Moreover, the Umbrella Policy

includes an endorsement limiting the definition of “Automobile” to
a “private passenger motor vehicle, motorcycle, moped, or mobile
home . . . .”
consistent

(Umbrella Policy at 17.)

with

the

Merchants
14

Policy,

And this limitation is
which

does

list

any

commercial vehicles in its declarations. However, it is also clear
that the Umbrella Policy does not simply provide excess insurance
for automobile accidents involving private passenger vehicles.

In

addition to automobile insurance, the Umbrella Policy provides
“comprehensive Personal Liability” insurance for any “accident”
which results in “personal injury,” and for which no exclusions
apply.

Here an accident has occurred, the Harleysville Policy is

providing coverage for the accident, and the Harleysville policy
meets the definition of “Underlying Insurance” in the Umbrella
Policy.

Given these conflicting provisions of the Policy, the

Court finds that the Umbrella Policy is ambiguous as to whether
the Harleysville Policy can serve as “Underlying Insurance.”

But

since any ambiguities in an insurance contract must be construed
against the drafter and in favor of the insured, see Annunziata,
67 N.Y.2d at 232, 492 N.E.2d at 1207, the Court finds that the
Harleysville

Policy

can

serve

as

“Underlying

Insurance,”

triggering US Liability’s obligation to provide excess coverage
for the accident.
III. No Exclusions Apply in the Umbrella Policy
U.S. Liability also argues that the accident is excluded
from coverage under the Umbrella Policy because it occurred while
Anthony Lisena was engaged in a “business activity.”
at 20.)

(USLI’s Br.

There is no dispute that when the accident occurred,

Anthony Lisena was on his way to dump the contents of his Truck
15

and was thus engaged in a business activity.

For this reason,

U.S. Liability points to exclusions “G” and “T,” which state as
follows:
III. EXCLUSIONS.
Under Coverage A, we will not provide coverage
for a loss:
***
G.
Caused by your business or business
property unless underlying insurance provides
coverage for the loss.
***
T. Arising out of any automobile provided to
any insured by the employer of any insured,
its
replacement
or
substitute
unless
underlying insurance provides coverage for the
loss.
(Umbrella Policy § III(G), (T).)

Although Exclusions G and T

remove accidents involving business activities from coverage, both
Exclusions are modified by the clause “unless underlying insurance
provides coverage for the loss.”

Thus, Exclusions G and T are

rendered inoperative when Underlying Insurance provides coverage
for the accident at issue.

Here, since the Harleysville Policy

meets the definition of “Underlying Insurance,” both Exclusions
are rendered inoperative and the accident is not excluded merely
because it occurred during the course of business activity.
IV.

Merchants’ Motion to Dismiss
Merchants also filed a motion to dismiss Luna’s Third-

Party Complaint, arguing that it is premature for Luna to sue it
directly.

(Docket Entry 62.)

Luna does not oppose the motion,

nor does he argue in any of his summary judgment papers that the
16

Merchants Policy affords coverage for the accident.

Therefore,

Merchant’s motion is GRANTED and Merchants is DISMISSED WITHOUT
PREJUDICE as a party to this action.
CONCLUSION
For the foregoing reasons, U.S. liability’s motion for
summary judgment (Docket Entry 64) is DENIED, Defendant and ThirdParty Plaintiff Luna’s motion for summary judgment (Docket Entry
63) is GRANTED, and Third-Party Defendant Merchants Preferred
Insurance Company’s (“Merchants”) motion to dismiss (Docket Entry
62) is GRANTED.

The Clerk of the Court is directed to TERMINATE

Merchants as a party to this action.
SO ORDERED.
/s/ JOANNA SEYBERT______
Joanna Seybert, U.S.D.J.
Dated:

September
8 , 2016
Central Islip, New York

17