Liberty Insurance Underwriters Inc. v. Greenwich Insurance Company
Filing
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ORDER granting DE 23 Motion for Partial Summary Judgment; denying DE 24 Motion for Partial Summary Judgment. For the reasons set forth in the attached Memorandum and Order, Plaintiff's motion for partial summary judgment is granted and Def endant's motion for partial summary judgment is denied. Further, a status conference is set for September 13, 2018 at 11:00 a.m. in Courtroom 820 of the Central Islip courthouse, at which time the Court will enter an amended scheduling order. Ordered by Magistrate Judge Steven I. Locke on 8/28/2018. (Budhu, Ryan)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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LIBERTY INSURANCE
UNDERWRITERS, INC.,
Plaintiff,
-against-
MEMORANDUM AND
ORDER
16-CV-4293 (ADS) (SIL)
GREENWICH INSURANCE COMPANY,
Defendant.
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STEVEN I. LOCKE, United States Magistrate Judge:
The parties’ cross-motions for partial summary judgment in this insurance
coverage declaratory judgment action turn on their competing views over whether
New York Insurance Law (“N.Y. Ins. L.”) § 3420 applies to this case. Section 3420’s
application here would require the carrier Defendant Greenwich Insurance Company
(“Defendant” or “Greenwich”) to show prejudice to disclaim coverage based on its late
notice defense.
See Docket Entry (“DE”) [23], [24].1 Plaintiff Liberty Insurance
Underwriters, Inc. (“Plaintiff” or “Liberty”) contends that section 3420 governs its
claims. Greenwich argues the opposite. After the motions were fully briefed, the New
York Court of Appeals handed down its decision in Carlson v. Amber. Int’l Group,
Inc., 30 N.Y.3d 288, 67 N.Y.S.3d 100 (2017) interpreting the statutory language at
issue and establishing that section 3420 governs the parties’ dispute. As a result,
The parties’ cross-motions were originally referred to this Court by Hon. Arthur D. Spatt by order
dated October 26, 2017. The parties later filed an executed Notice, Consent and Reference of a Civil
Action to a Magistrate Judge so that this Court could issue a final decision on the motions, which
Judge Spatt So Ordered. See DE [33, 35].
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and for the reasons below, Liberty’s motion for partial summary judgment is granted
and Greenwich’s cross-motion is denied.
I.
Background
The following facts are taken from the parties’ pleadings, deposition
transcripts, affidavits, exhibits and respective Rule 56.1 statements.
Unless
otherwise noted, these facts are not in dispute.
Liberty is an Illinois corporation with its principal place of business in
Massachusetts. See generally Compl. Greenwich is a Delaware corporation with its
principal place of business in Connecticut and maintains an office in New York.
See id. The parties’ insurance coverage dispute stems from a New York State Court
personal injury action commenced on or about October 7, 2011, Schutt v. Dynasty
Transportation of Ohio, Inc., Index. No. 31979/2011 (N.Y. Sup. Ct. Suffolk County)
(the “Underlying Action”). See Defendant’s Rule 56.1 Statement of Facts (“Def.’s 56.1
Stmt.”), ¶ 1. In the Underlying Action the plaintiffs allege that on May 9, 2009,
Robert Schutt was injured while working for Noble Elevator Co. Inc. (“Noble”), a New
York corporation, on a construction project in Bay Shore, New York. See id. ¶¶ 2-3.
Noble was hired by the project’s general contractor T.G. Nickel & Associates (“T.G.
Nickel”). See id. ¶¶ 4-6. In the Underlying Action the plaintiffs sued T.G. Nickel,
which in turn initiated a third-party action against Noble. See id.
In accordance with a commercial general liability policy, Liberty is defending
T.G. Nickel in the Underlying Action. See id. ¶ 22. Greenwich is defending Noble in
Underlying Action pursuant to a separate commercial general liability policy
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(the “Greenwich Policy”). Two provisions of the Greenwich Policy are relevant to the
parties’ motions here: (1) T.G. Nickel is named as an additional insured; and (2)
notice of a claim or suit be given “as soon as practicable.” See id. ¶¶ 7, 10. Based on
T.G. Nickel being an additional insured, Liberty provided notice of the claim in the
Underlying Action to Greenwich and tendered the defense of T.G. Nickel on December
21, 2011, which was received by Greenwich on December 29, 2011. See id. ¶ 25.
Greenwich denied Liberty’s claim based on the late notice, among other reasons.
See id. ¶ 26.
Liberty now moves for partial summary judgment, seeking a ruling that the
Greenwich Policy is governed by N.Y. Ins. L. § 3420, which requires the additional
showing of prejudice to disclaim based on late notice. See Plaintiff’s Memorandum in
Support, DE [23-21]. Greenwich cross-moves for a ruling that N.Y. Ins. L. § 3420
does not apply, and so no such showing of prejudice is required. See Defendant’s
Memorandum in Support, DE [24-1]. Greenwich concedes that Noble and the insured
risk are both in New York. See Def.’s Mem. at 11 (“Although Greenwich does not
dispute that Noble and the risk are both located in New York . . . . ”). For the reasons
below the Court concludes that section 3420 applies, and as a result, Liberty’s motion
for partial summary judgment is granted and Greenwich’s cross-motion is denied.
II.
Legal Standard
Under Federal Rule of Civil Procedure 56, summary judgment is appropriate
only “if the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
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material fact and that the moving party is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56. Rule 56(c) deems a fact “material” when its resolution “might affect
the outcome of the suit under the governing law.” Murray v. Town of N. Hempstead,
853 F. Supp. 2d 247, 257–58 (E.D.N.Y. 2012) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248, 106 S. Ct. 2505, 2510 (1986)). The evidence alleged to support a
“genuine issue” must be “such that a reasonable jury could return a verdict for the
nonmoving party” based on that evidence. Id. “The inferences to be drawn from the
underlying affidavits, exhibits, interrogatory answers, and depositions must be
viewed in the light most favorable to the party opposing the motion.” Cronin v. Aetna
Life Ins. Co., 46 F.3d 196, 202 (2d Cir. 1995) (citing United States v. Diebold, Inc., 369
U.S. 654, 655, 82 S. Ct. 993, 994 (1962) (per curiam); Ramseur v. Chase Manhattan
Bank, 865 F.2d 460, 465 (2d Cir. 1989)).
If the moving party meets its burden, then it is incumbent upon the nonmoving
party to put forth in its opposition “specific facts showing that there is a genuine issue
for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106
S. Ct. 1348, 1356 (1986) (quoting Fed. R. Civ.P. 56(e)). Such a showing must be
specified and articulated and must provide more than a “metaphysical doubt” that
the moving party’s evidence warrants judgment in its favor. Matsushita, 475 U.S. at
586, 106 S. Ct. at 1356; see Gallo v. Prudential Residential Servs., 22 F.3d 1219, 122324 (2d Cir. 1994) (citations omitted) (holding summary judgment is appropriate when
the moving party can show that “little or no evidence may be found in support of the
nonmoving party’s case.”).
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III.
Discussion
As set forth above, the sole issue here is whether N.Y. Ins. L. § 3420 applies to
the Greenwich Policy so that Defendant must make a showing of prejudice to succeed
on its late notice defense. For the reasons below, the Court concludes that it does.
New York Insurance Law § 3420 provides:
No policy or contract insuring against liability for injury to any person…or
destruction of [] property shall be issued or delivered in this state, unless it
contains in substance the following provisions or provisions that are equally or
more favorable:
***
(5) A provision that failure to give any notice required to be given by such policy
within the time prescribed therein shall not invalidate any claim made by the
insured . . . unless the failure to provide timely notice has prejudiced the
insurer.
N.Y. Ins. L. § 3420(a)(5).
The issue before the Court is whether the Greenwich Policy was “issued or
delivered in this state” within the meaning of the statute. Although the statute itself
does not define this term, the New York Court of Appeals has recently concluded that
this language includes “policies that cover both insureds and risks located in [New
York].” Carlson, 30 N.Y.3d at 296, 305-09, 67 N.Y.S.3d at 103, 110-13 (relying on its
holding in Preserver Ins. Co. v. Ryba, 10 N.Y.3d 635, 862 N.Y.S.2d 820 (2008)
interpreting a prior version of N.Y. Ins L § 3420(d) containing different language in
a similar manner). Because the insured, Noble, is a New York company, and the risk
was a construction site in Bay Shore, New York, under Carlson the Greenwich Policy
is governed by N.Y. Ins. L. § 3420 and its prejudice requirement applies to
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Defendant’s late notice defense. Accordingly, Liberty’s motion for partial summary
judgment on this issue is granted and Greenwich’s cross-motion is denied.
IV.
Conclusion
For the reasons set forth above, Plaintiff’s motion for partial summary
judgment is granted and Defendant’s motion for partial summary judgment is denied.
Further, a status conference is set for September 13, 2018 at 11:00 a.m. in Courtroom
820 of the Central Islip courthouse, at which time the Court will enter an amended
scheduling order.
Dated:
Central Islip, New York
August 28, 2018
s/ Steven I. Locke
STEVEN I. LOCKE
United States Magistrate Judge
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