CONMED Corporation v. Federal Insurance Company

Filing 62

MEMORANDUM-DECISION AND ORDER denying 56 MOTION for Reconsideration re 51 Order on Motion for Judgment on the Pleadings. Signed by U.S. District Judge Mae A. D'Agostino on 8/1/22. (ban)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
CONMED CORPORATION,
Plaintiff,
vs.

6:21-CV-0083
(MAD/ML)

FEDERAL INSURANCE COMPANY,
Defendant.
____________________________________________
APPEARANCES:

OF COUNSEL:

CONMED CORPORATION
525 French Road
Utica, New York 13502
Attorneys for Plaintiff

DANIEL S. JONES, ESQ.

CONMED CORPORATION
1616 Long Ridge Road
Stamford, Connecticut 06903
Attorneys for Plaintiff

ERICA LYNN VISOKEY, ESQ.

HANCOCK EASTABROOK, LLP
1800 AXA Tower I
100 Madison Street
Syracuse, New York 13202
Attorneys for Plaintiff

JOHN G. POWERS, ESQ.
MARY L. D'AGOSTINO, ESQ.

COHEN ZIFFER FRENCHMAN &
McKENNA LLP
1325 Avenues of the Americas – 25th Floor
New York, New York 10019
Attorneys for the Plaintiff

MERIDITH ELKINS, ESQ.
ROBIN L. COHEN, ESQ.

ROBINSON & COLE LLP
Chrysler East Building
666 Third Avenue, 20th Floor
New York, New York 10017
Attorneys for Defendant

LAWRENCE KLEIN, ESQ.

Mae A. D'Agostino, U.S. District Judge:

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MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
Plaintiff, CONMED Corporation, initiated this lawsuit against Defendant, Federal
Insurance Company, on January 25, 2021. See Dkt. No. 1. In its amended complaint, Plaintiff
alleges that Defendant breached the terms of their insurance contract when Defendant failed to
defend Plaintiff's indemnitee, Sterigenics, in a lawsuit in Georgia. See Dkt. No. 24 at ¶ 9. On
June 10, 2021, the parties cross moved for judgment on the pleadings. See Dkt. Nos. 37, 38. On
March 10, 2022, the Court granted Plaintiff's motion for judgment on the pleadings. See Dkt. No.
51. Defendant has moved for reconsideration of the Court's ruling. See Dkt. No. 56. For the
following reasons, Defendant's motion is denied.
II. BACKGROUND
For a complete recitation of the relevant factual background, the Court refers the parties to
its March 10, 2022 Memorandum-Decision and Order. See Dkt. No. 51 at 2-5. To summarize,
Plaintiff, a medical technology company, had contracted with non-party Sterigenics to sterilize its
medical devices. See Dkt. No. 24 at ¶ 35. Plaintiff and Sterigenics were sued in Georgia state
court by fifty-three current and former employees of Plaintiff, alleging they were exposed to
unsafe levels Ethylene Oxide ("EtO") from Sterigenics' sterilization process. Id. at ¶ 28; Essence
Alexander, et al. v. Sterigenics U.S., LLC, et al., C.A. No. 20-A-1645 (State Court of Cobb
County) ("Alexander Action"). Plaintiff is paying the defense costs for Sterigenics in the
Alexander Action, citing an obligation to do so under their contract, which contains an
indemnification agreement. Id. at ¶ 38.
Since 2009, Plaintiff has purchased insurance policies from Defendant, which include
coverage for defense costs, indemnification obligations, and other losses resulting from bodily

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injury. See Dkt. No. 24-1 at 21. On May 26, 2020, Plaintiff gave Defendant notice of the
Alexander Action, including Plaintiff's indemnification of Sterigenics. Dkt. No. 24 at ¶ 39. On
November 16, 2020, Defendant denied coverage of the defense costs for Sterigenics in the
Alexander Action. Id. at ¶ 44. On March 10, 2022, the Court granted Plaintiff's motion for
judgment on the pleadings and denied Defendant's motion for judgment on the pleadings. See
Dkt. No. 51. The Court held that Defendant was required to defend Sterigenics in the Alexander
Action. Id.
III. DISCUSSION
A.

Standard of Review
Motions for reconsideration proceed in the Northern District of New York under Local

Rule 60.1. "In order to prevail on a motion for reconsideration, the movant must satisfy stringent
requirements." In re C-TC 9th Ave. P'ship v. Norton Co., 182 B.R. 1, 2 (N.D.N.Y. 1995). Such
motions "will generally be denied unless the moving party can point to controlling decisions or
data that the court overlooked — matters, in other words, that might reasonably be expected to
alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d
Cir. 1995). The prevailing rule "recognizes only three possible grounds upon which motions for
reconsideration may be granted; they are (1) an intervening change in controlling law, (2) the
availability of new evidence not previously available, or (3) the need to correct a clear error of
law or prevent manifest injustice." In re C-TC 9th Ave. P'ship, 182 B.R. at 3 (citation omitted).
Here, Defendant does not identify an intervening change in controlling law or new
evidence not previously available. Therefore, Defendant's motion for reconsideration seeks to
correct a clear error of law or prevent manifest injustice. "[A] motion to reconsider should not be
granted where the moving party seeks solely to relitigate an issue already decided." Shrader, 70

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F.3d at 257. Thus, a motion for reconsideration is not to be used for "presenting the case under
new theories, securing a rehearing on the merits, or otherwise taking a 'second bite at the apple.'"
Sequa Corp. v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998).
B.

Analysis
The insurance policies between Plaintiff and Defendant requires Defendant to "defend

[Plaintiff] against a suit, even if such suit is false, fraudulent or groundless." Dkt. No. 24-1 at 21.
The duty extends to "the indemnitee of the insured, provided the obligation to defend, or the cost
of the defense of, such indemnitee has been assumed by [Plaintiff] in an insured contract." Id.
The policy then defines "insured contract" to include "any other contract or agreement pertaining
to your business … in which you assume the tort liability of another person or organization to pay
damages, to which this insurance applies, sustained by a third person organization." Id. at 43.
The Court previously found that the relevant agreements between Plaintiff and Sterigenics
were insured contracts. See Dkt. No. 51 at 8-11. The Court found that these were insured
contracts because Plaintiff "assume[d] the tort liability of another person or organization to pay
damages, to which this insurance applies, sustained by a third person organization." Dkt. No. 241 at 43. And because Defendant's duty to defend Plaintiff extends to "the indemnitee of the
insured, provided the obligation to defend, or the cost of the defense of, such indemnitee has been
assumed by [Plaintiff] in an insured contract," Dkt. No. 24-1 at 21, the Court concluded that
Defendant was required to pay the defense costs of Sterigenics in the Alexander Action. See Dkt.
No. 51 at 8-11.
Defendant argues that this Court erred because the insurance policies "do not provide a
duty to defend [Plaintiff's] possible indemnitee." Dkt. No. 56-7 at 6. Defendant states that the
insurance policies do not provide a duty to defend Plaintiff's indemnitee because the

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"Investigation, Defense and Settlements" section of the insurance policies, on which the Court
relied, states, "[s]uch attorney fees and litigation expenses will be paid as described in the
Supplementary Payments section of this contract." Dkt. No. 24-1 at 21. The "Supplementary
Payments" section is subsequently limited by the phrase, "[s]ubject to all of the terms and
conditions of this insurance, we will pay, with respect to a … suit against an insured we defend
….'" Id. at 22 (emphasis added).
The Court finds that the duty to defend extends to Plaintiff's indemnitee because the
insurance policies clearly state that Defendant has a "duty to defend the insured against a suit,"
and "[i]f such a suit is brought, [Defendant] will pay reasonable attorney fees and necessary
litigation expenses to defend . . . the indemnitee of the insured, provided the obligation to defend,
or the cost of the defense of, such indemnitee has been assumed by such insured in an insured
contract." Dkt. No. 24-1 at 21. The reference to the Supplementary Payments section does not
alter the clear and unambiguous coverage extended to Plaintiff's indemnitee.
Confusingly, in its reply,1 Defendant recasts the issue to be whether the contracts between
Plaintiff and Sterigenics are "insured contracts," not whether Defendant has a duty to defend
Plaintiff, either abandoning or contradicting its argument that there is no duty to defend Plaintiff's
indemnitee. See Dkt. No. 58 at 4. The insurance policies define "insured contract" as
any other contract or agreement pertaining to your business
(including an indemnification of a municipality in connection with
work performed for such municipality) in which you assume the
tort liability of another person or organization to pay damages, to
1

In the Northern District, reply papers on non-dispositive motions are not permitted without the
Court's prior permission. N.D.N.Y. L.R. 7.1(a)(2). A Motion for Reconsideration is nondispositive because "the relief requested is simply reconsideration of a decision, not the litigation
of a new dispositive motion." District. Bruno v. City of Schenectady, No. 12-CV-285, 2014 WL
2707962, *3 (N.D.N.Y. June 16, 2014); see also Myers v. New York, No. 114-CV-1492, 2017 WL
6408721, *3 (N.D.N.Y. Sept. 28, 2017). Despite Defendant's failure to request leave, the Court
chooses to accept and consider Defendant's reply brief.
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which this insurance applies, sustained by a third person or
organization.
Dkt. No. 24-1 at 43. Pursuant to their agreement, Plaintiff was not required to indemnify
Sterigenics for Sterigenics' own negligence. Even though Sterigenics was sued for negligence, in
its March 10, 2022 Memorandum-Decision and Order, the Court held as follows:
Plaintiff's indemnification of Sterigenics was pursuant to an insured
contract because Sterigenics was sued for intentional torts as well
negligence in the Alexander Action, such as civil battery and
intentional infliction of emotional distress. "The duty of the insurer
to defend the insured rests solely on whether the complaint alleges
any facts or grounds which bring the action within the protection
purchased." Assunta, Inc., 2010 WL 93459, at *2 (emphasis
added). It is immaterial that the Alexander Action alleges causes of
actions outside the scope of the indemnification agreement while
also alleging causes of actions squarely within it. See id. …
Because intentional torts against Sterigenics are alleged in the
Alexander Action, it remains possible that Plaintiff will be required
to indemnify Sterigenics, and as such Plaintiff properly tendered a
defense of Sterigenics pursuant to an insured contract.
Dkt. No. 51 at 10. Defendant, however, again asserts that because Plaintiff is not required to
defend Sterigenics for Sterigenics' own negligence pursuant to their indemnification agreement,
and Sterigenics was sued for negligence in the Alexander Action, Plaintiff did not tender
Sterigenics' defense pursuant to an insured contract. See Dkt. No. 58 at 6. This exact argument
was previously rejected, and Defendant offers no support for its position. Sterigenics was sued
for negligence and intentional torts in the Alexander Action. Accordingly, the Court again finds
that Plaintiff tendered Sterigenics' defense in the Alexander Action pursuant to an insured
contract.
Next, Defendant argues, for the first time, that Defendant is only required to pay damages
that were assumed in an insured contract for bodily injury caused by an "occurrence." Dkt. No.
56-7 at 11. Indeed, an "insured contract" only covers tort liability assumed in an insured contract

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"to which this insurance applies." Dkt. No. 24-1 at 43. Relevant here, the insurance policy covers
"damages that the insured becomes legally obligated to pay by reason of liability … assumed in
an insured contract … for bodily injury … caused by an occurrence." Id. at 20. "Occurrence" is
subsequently defined as "an accident including continuous or repeated exposure to substantially
the same general harmful conditions." Id. at 46.
Defendant argues that "[t]he Court's decision instead turned on the fact that Sterigenics
was sued for intentional torts too. But, intentional acts are not 'occurrences' as required for
coverage under the Policies." Dkt. No. 56-7 at 11 (citations omitted). The Court disagrees. First,
intentional acts can qualify as "occurrences." See, e.g., Allegany Co-op Ins. Co. v. Kohorst, 254
A.D.2d 744, 744 (4th Dep't 1998) ("Accidental results can flow from intentional acts. The
damage in question may be unintended even though the original act or acts leading to the damage
were intentional"); Zurich Am. Ins. Co. v. Don Buchwald & Assoc., Inc., 2018 WL 6718869, *6
(N.Y. Sup. Ct. Dec. 21, 2018) (collecting cases in which "an otherwise 'intentional' tort may still
be 'accidental'"). Here, the allegations of intentional torts resulting from the sterilization of the
medical equipment were unforeseen accidental injuries and therefore "occurrences."
Second, the Court's finding that Plaintiff was required to tender Sterigenics' defense
because it was sued for intentional torts is irrelevant to whether the underlying harm alleged in the
Alexander Action was a bodily injury caused by an "occurrence." The underlying harm alleged in
the Alexander Action—exposure to harmful chemicals—unquestionably falls into the definition
of "occurrence." The fact that Plaintiff did not indemnify Sterigenics for Sterigenics' negligence
is irrelevant to that analysis. Accordingly, Defendant's motion for reconsideration is denied.
IV. CONCLUSION

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After carefully reviewing the record in this matter, the parties' submissions, and the
applicable law, and for the above-stated reasons, the Court hereby
ORDERS that Defendant's motion for Reconsideration (Dkt. No. 56) is DENIED; and the
Court further
ORDERS that the Clerk of the Court shall serve a copy of the Memorandum–Decision
and Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: August 1, 2022
Albany, New York

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