### Privlege Underwriters Reciprocal Exchange v SBP N.Y., LLC 2024 NY Slip Op 32239(U) July 1, 2024 Supreme Court, New York County Docket Number: Index No. 152866/2021 Judge: David B. Cohen Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op 30001(U), are republished from various New York State and local government sources, including the New

York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.NYSCEF DOC. NO. 156 INDEX NO. 152866/2021 RECEIVED NYSCEF: 07/03/2024 

### SUPREME COURT OF THE STATE OF NEW YORK NEWYORK COUNTY PRESENT: HON. DAVID B. COHEN Justice

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PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE as subrogee ofTHOMAS PETERFFY and 432 PARK AVENUE #84A LTD., Plaintiff,

- V - SBP NEW YORK, LLC, PEMBROOKE & IVES INC., STH PAINTING, INC., REN INTERIORS, LLC, FRESCO DECORATIVE PAINTING, INC., RAEL AUTOMATIC SPRINKLER CO., INC., LEWIS A. SANDERS and ALICE SANDERS, Defendants.

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INDEX NO. 152866/2021 MOTION DATE MOTION SEQ. NO. 002

DECISION + ORDER ON MOTION 58

The following e-filed documents, listed by NYSCEF document number (Motion 002) 74,75,76,77,78,79,80,81,82,83,84,85,86,87,88,89,90,91,92,93,94,95,96,103,104,105,106,107,108,109, 110,111,112,113,114,115,116,117. were read on this motion to/for DISMISS In this subrogation action, defendants Lewis A. Sanders and Alice Sanders (collectively, Sanders) move pursuant to CPLR 321 l(a)(l) and (a)(7) for an order dismissing plaintiffs complaint and the cross-claims asserted against themby defendants Pembrooke & Ives Inc., STH Painting, Inc., Ren Interiors, LLC, Fresco Decorative Paintings, Inc., and Rael Automatic Sprinkler CO., Inc. (collectively, Cross-Claimants). I. PERTINENT BACKGROUND Subrogors Thomas Peterffy and 432 ParkAvenue #84ALTD (collectively, Peterffy) and defendants Sanders owned separate residential units in a mixed-use luxury condominium building located at 432 ParkAvenue in Manhattan. The complaint alleges that onApril 1, 2018,

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a fire broke out in Sanders' apartmentunit, which was undergoing renovations, and allegedly caused damage to personal property ownedby Peterffy in the amount of$643,000. As a result, Peterffy submitted a claim to plaintiff, his insurance provider, in accordance with his insurance policy, andplaintiffreimbursed Peterffy $393,000 after applying a $250,000 policy deductible. In the instant action, plaintiffasserts causes ofaction for negligence and breach of contract against defendants, and Cross-Claimants assert claims for common-law indemnification and contribution against Sanders. Fresco and STHhave also assert cross-claims for contractual indemnification against Sanders. II. DISCUSSION Sanders argues thatplaintiffs claims against them are precludedpursuant to the governing bylaws oftheir condominium, bywhich Peterffy waived the right to sue in subrogation, and that the cross-claims are improperbecause Sanders never exercised supervisory control over the renovation project. Plaintiffs contend that the waiver ofsubrogation rights in the bylaws do notbar distinct claims for breach ofan alteration agreement that supplemented the bylaws, and Cross-Claimants maintain that Sanders's motion is premature and thatthere is no legal basis for dismissal. On a motion pursuant to CPLR 321 l(a)(l), "a dismissal is warranted only ifthe documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter oflaw" (Leon vMartinez, 84 NY2d 83, 88 [1994]). Dismissal ofa complaintpursuant to CPLR 321 l(a)(7) requires that the pleading "be afforded a liberal construction" (see id.; CPLR 3026), and "[The court must] accept the facts as alleged in the complaint as true, accordplaintiffs the benefit ofeverypossible favorable inference, and determine onlywhether the facts as alleged

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fit within any cognizable legal theory" (Leon, 84 NY2d at 87-88 [1994]; see 511 W 232nd Owners Corp. v JenniferRealty Co., 98 NY2d 144 [2002]). "Condominium governance ... is guided bythe bylaws adopted bythe association
... [and] are in essence, an agreement among all ofthe individual unit owners as to the manner in which the condominium will operate, and which set forth the respective rights and obligations of unit owners, both with respectto their own units and the condominium's common elements" (Board of Mgrs. of the 28 Cliff St. Condominium vMaguire, 191 AD3d 25, 29 [1st Dept 2020] [internal quotation marks and citation omitted]). Here, the parties' condominium was governedbythree sets ofbylaws: the Residential
ones governing the use and occupancy ofresidential units, the Commercial ones governing the
use and occupancy ofcommercial units, and the Condominium ones governing the use and occupancy ofthe entire condominium (NYSCEF Doc. No. 76 at ,J30-31; Doc. No. 105 at ,J5). Section 6.4.2 ofthe Residential bylaws, entitled "Insurance," states,

(Doc. No. 89). All policies obtainedby any Residential Unit Owner, orbythe Residential Board on behalfofthe Residential Section or the Residential Unit Owners, shall provide that the liability ofthe carriers issuing insurance obtainedbythe Condominium Board shall notbe affected or diminished byreason ofany additional insurance carriedbythe Residential Board or any other Unit Owner and shall contain a waiver ofthe insurer's right ofsubrogation against the CondominiumBoard, the Residential Board and any Unit Owner.

Pursuant to the clear terms ofthe Residential bylaws, all insurance policies obtainedby residential unit owners were required to contain a subrogation waiver, and therefore plaintiffand its subrogors waived the right to sue Sanders to recover any insurance proceeds paidbyplaintiff (seeAspen Ins. Co. vNewman, 202 AD3d 613 [1st Dept 2022] [insurer's lawsuit for insurance payments made to condominium to reimburse it for property damage allegedly caused by fire in

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defendants' condominium unitwas barred as bylaws required policy containing waiver of subrogation rights];AllstateIndem. Co. v Virfra Holdings, LLC, 124 AD3d 528, 528 [1st Dept 2015] [valid subrogation waiverprecludes action to recover insurance payments]). Plaintiffs argumentthatthe Condominium bylaws required a waiver ofsubrogation only in certain insurance policies is unavailing, as the applicable bylaws here are the Residential ones, given that the fire occurred in a residential unit and damage was allegedly caused to another residential unit, and those bylaws require a subrogation waiver in all insurance policies. Sanders thus demonstrates that the documentary evidence here, the bylaws, conclusively establish a defense to plaintiffs subrogation claims. Turning to the Cross-Claimants, their claims for common-law indemnification and contribution mustbe dismissed as they fail to allege any duty, act, or omission on the part of Sanders which would render Sanders liable in negligence (Ramos v 200 W 86Apts. Corp., 179 AD3d 473,473 [1st Dept 2020]; seeMcCarthy v Turner Constr., Inc., 17 NY3d 369, 376 [2011] [duty imposed on those who actually supervised the work]). The FRESCO and STH claims for contractual indemnification must also be dismissed, as these parties do not allege that a contract actually existed between them and Sanders, apoint that FRESCO concedes (Doc. No. 111 at ,J4). "In order to state a cause ofaction to recover damages for abreach ofcontract, the [ movant's] allegations mustidentify the provisions ofthe contract that were breached" (34-06 73, LLCv Seneca Ins. Co., 39 NY3d44, 52 [2022]) quoting Barker v Time Warner Cable, Inc., 83 AD3d 750, 751 [2d Dept 2011]), which Fresco and STH fail to do here. Finally, while CPLR 321 l(d) provides a courtwith discretion to deny a motion to dismiss ifit appears that "'facts essential tojustify opposition may existbut cannot then be stated"'

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### (Lemle vLemle, 92 AD3d494, 499 [1st Dept 2012], quoting CPLR 3211 [d]), Cross-Claimants do not set forth anybasis for finding that additional discovery exists which could supporttheir cross-claims for indemnification orcontribution. Accordingly, itis hereby ORDERED, thatplaintiffs' subrogation claims against defendants Lewis A. Sanders and Alice Sanders are severed and dismissed; it is further ORDERED, that all cross-claims asserted against defendants Sanders are severed and dismissed; it is further ORDERED, that the clerk is directedto enterjudgmentaccordingly; anditis further ORDERED, that the remainingparties appear for the previously-scheduled status conference on September 24, 2024 at 9:30 am.

7/1/24 DATE CHECK ONE: DAVID B. COHEN, J.S.C.

APPLICATION: CHECKIF APPROPRIATE: CASE DISPOSED GRANTED**□** DENIED SETTLE ORDER INCLUDES TRANSFER/REASSIGN NON-FINAL DISPOSITION GRANTED IN PART SUBMIT ORDER FIDUCIARY APPOINTMENT

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