LMIII REALTY, LLC v. GEMINI INSURANCE COMPANY ( 2011 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
1299
CA 11-00928
PRESENT: CENTRA, J.P., PERADOTTO, CARNI, LINDLEY, AND SCONIERS, JJ.
LMIII REALTY, LLC, EDWARD JOY COMPANY, AND
JOY PROCESS MECHANICAL SYSTEMS,
PLAINTIFFS-RESPONDENTS,
V MEMORANDUM AND ORDER
GEMINI INSURANCE COMPANY, DEFENDANT-APPELLANT,
ET AL., DEFENDANT.
(APPEAL NO. 2.)
COUGHLIN DUFFY LLP, NEW YORK CITY (JUSTIN N. KINNEY OF COUNSEL), FOR
DEFENDANT-APPELLANT.
SUGARMAN LAW FIRM, LLP, SYRACUSE (TIMOTHY J. PERRY OF COUNSEL), FOR
PLAINTIFFS-RESPONDENTS.
Appeal from a judgment (denominated order) of the Supreme Court,
Onondaga County (John C. Cherundolo, A.J.), entered February 10, 2011.
The judgment granted the motion of plaintiffs for leave to reargue
and, upon reargument, granted summary judgment to plaintiffs and
declared that defendant Gemini Insurance Company is obligated to
defend and indemnify plaintiff LMIII Realty, LLC as an additional
insured in the underlying personal injury action.
It is hereby ORDERED that the judgment so appealed from is
unanimously modified on the law by denying summary judgment to
plaintiffs in part, vacating the declaration and granting judgment in
favor of plaintiffs as follows:
It is ADJUDGED and DECLARED that plaintiff LMIII
Realty, LLC is an additional insured under the policy issued
by defendant Gemini Insurance Company,
and as modified the judgment is affirmed without costs.
Memorandum: Plaintiffs commenced this action seeking a
declaration that Gemini Insurance Company (defendant) is obligated to
defend and indemnify plaintiff LMIII Realty, LLC (LMIII) as an
additional insured in the underlying personal injury action.
Defendant made a pre-answer motion to dismiss the complaint and, in
the alternative, sought summary judgment declaring that it has no
obligation to defend or indemnify plaintiffs because they do not
qualify as additional insureds under the policy. Plaintiffs opposed
the motion and in addition sought a declaration that plaintiffs
-2- 1299
CA 11-00928
qualify as additional insureds under the policy. Supreme Court denied
defendant’s motion. Plaintiffs subsequently moved for leave to
reargue defendant’s motion and sought summary judgment declaring that
they are entitled to coverage from defendant as additional insureds.
The court granted plaintiffs’ motion for leave to reargue on the
ground that plaintiffs established that the court had “overlooked
controlling law on this issue” and, upon reargument, searched the
record pursuant to CPLR 3212 (b) notwithstanding the absence of a
cross motion by plaintiffs that preceded their motion for leave to
reargue defendant’s motion. The court granted summary judgment to
plaintiffs, i.e., relief “predicated upon a motion for the same
relief” sought by defendant in its motion, by declaring that defendant
is obligated to defend and indemnify LMIII as an additional insured in
the underlying action.
In the underlying action, a roofer employed by defendant Shaffer
Building Services, Inc. (Shaffer) seeks damages for injuries he
sustained during the course of his employment. LMIII hired Shaffer to
replace a roof on its property, and Shaffer was insured under a
commercial general liability policy issued by defendant. The policy’s
additional insured endorsement provided that a third party may
constitute an additional insured “when you and such person or
organization have agreed in writing in a contract or agreement that
such person or organization be added as an additional insured on your
policy.”
We agree with defendant that, contrary to the court’s
determination, the endorsement is not ambiguous on the issue whether
an agreement to add an additional insured was required to be in
writing. The term “in writing” refers to the entire phrase “in a
contract or agreement,” not merely to the phrase “in a contract” (see
Erin Constr. & Dev. Co., Inc. v Gulf Ins. Co., 2008 NY Slip Op
32046[U]; see also Timmons v Barrett Paving Materials, Inc., 83 AD3d
1473, 1477, lv dismissed in part and denied in part 17 NY3d 843). We
reject defendant’s contention, however, that there was no written
agreement in this case. Indeed, the purchase order constituted a
written agreement obligating Shaffer to add LMIII as an additional
insured to the policy (see Timmons, 83 AD3d at 1477; see generally BP
A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 712). The purchase
order was an enforceable agreement despite the fact that it was
unsigned because the evidence in the record establishes that the
parties intended to be bound by it (see Flores v Lower E. Side Serv.
Ctr., Inc., 4 NY3d 363, 369, rearg denied 5 NY3d 746; Kay-Bee Toys
Corp. v Winston Sports Corp., 214 AD2d 457, 458, lv denied 86 NY2d
705).
Nevertheless, we conclude that defendant is correct that the
court erred in granting summary judgment to plaintiffs on all issues
and in issuing the subject declaration, i.e., that defendant is
obligated to defend and indemnify LMIII as an additional insured in
the underlying action. Inasmuch as the record establishes that the
parties deliberately charted a summary judgment course, the court
properly granted summary judgment to plaintiffs on the issue of
LMIII’s general status as an additional insured under the policy (see
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CA 11-00928
Nowacki v Becker, 71 AD3d 1496, 1497; see generally Mihlovan v
Grozavu, 72 NY2d 506, 508). The court erred, however, in declaring at
this stage of the litigation that defendant is obligated to defend and
indemnify LMIII, before defendant answered the complaint (see City of
Rochester v Chiarella, 65 NY2d 92, 101-102). We therefore modify the
judgment accordingly.
Entered: December 23, 2011 Frances E. Cafarell
Clerk of the Court