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 

NEW YORK COUNTY 

PRESENT: HON. DAVID B. COHEN 

Justice 

---------------------------------------------------------------------------------X 

PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE 

as subrogee of THOMAS 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. 

---------------------------------------------------------------------------------X 

AND THIRD-PARTY ACTIONS. 

PART 

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 them by 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 Park Avenue #84A LTD ( collectively, Peterffy) and 

defendants Sanders owned separate residential units in a mixed-use luxury condominium 

building located at 432 Park A venue in Manhattan. The complaint alleges that on April 1, 2018, 

152866/2021 PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE vs. SBP NEW YORK, LLC 

Motion No. 002 

1 of 5 

Page 1 of 5 

[* 1]
NYSCEF DOC. NO. 156 

INDEX NO. 152866/2021 

RECEIVED NYSCEF: 07/03/2024 

a fire broke out in Sanders' apartment unit, which was undergoing renovations, and allegedly 

caused damage to personal property owned by 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, and plaintiff reimbursed Peterffy $393,000 after applying a $250,000 

policy deductible. 

In the instant action, plaintiff asserts causes of action for negligence and breach of 

contract against defendants, and Cross-Claimants assert claims for common-law indemnification 

and contribution against Sanders. Fresco and STH have also assert cross-claims for contractual 

indemnification against Sanders. 

II. DISCUSSION 

Sanders argues that plaintiffs claims against them are precluded pursuant to the 

governing bylaws of their condominium, by which Peterffy waived the right to sue in 

subrogation, and that the cross-claims are improper because Sanders never exercised supervisory 

control over the renovation project. Plaintiffs contend that the waiver of subrogation rights in the 

bylaws do not bar distinct claims for breach of an alteration agreement that supplemented the 

bylaws, and Cross-Claimants maintain that Sanders' s motion is premature and that there is no 

legal basis for dismissal. 

On a motion pursuant to CPLR 321 l(a)(l), "a dismissal is warranted only if the 

documentary evidence submitted conclusively establishes a defense to the asserted claims as a 

matter of law" (Leon v Martinez, 84 NY2d 83, 88 [1994]). Dismissal of a complaint pursuant 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, accord plaintiffs 

the benefit of every possible favorable inference, and determine only whether the facts as alleged 

152866/2021 PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE vs. SBP NEW YORK, LLC 

Motion No. 002 

2 of 5 

Page 2 of 5 

[* 2]
NYSCEF DOC. NO. 156 

INDEX NO. 152866/2021 

RECEIVED NYSCEF: 07/03/2024 

fit within any cognizable legal theory" (Leon, 84 NY2d at 87-88 [1994]; see 511 W 232nd 

Owners Corp. v Jennifer Realty Co., 98 NY2d 144 [2002]). 

"Condominium governance ... is guided by the bylaws adopted by the association ... 

[and] are in essence, an agreement among all of the 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 respect to their own units and the condominium's common elements" 

(Board of Mgrs. of the 28 Cliff St. Condominium v Maguire, 191 AD3d 25, 29 [1st Dept 2020] 

[internal quotation marks and citation omitted]). 

Here, the parties' condominium was governed by three sets of bylaws: the Residential 

ones governing the use and occupancy of residential units, the Commercial ones governing the 

use and occupancy of commercial units, and the Condominium ones governing the use and 

occupancy of the entire condominium (NYSCEF Doc. No. 76 at ,J30-31; Doc. No. 105 at ,J5). 

Section 6.4.2 of the Residential bylaws, entitled "Insurance," states, 

(Doc. No. 89). 

All policies obtained by any Residential Unit Owner, or by the Residential Board 

on behalf of the Residential Section or the Residential Unit Owners, shall provide 

that the liability of the carriers issuing insurance obtained by the Condominium 

Board shall not be affected or diminished by reason of any additional insurance 

carried by the Residential Board or any other Unit Owner and shall contain a 

waiver of the insurer's right of subrogation against the Condominium Board, the 

Residential Board and any Unit Owner. 

Pursuant to the clear terms of the Residential bylaws, all insurance policies obtained by 

residential unit owners were required to contain a subrogation waiver, and therefore plaintiff and 

its subrogors waived the right to sue Sanders to recover any insurance proceeds paid by plaintiff 

(see Aspen Ins. Co. v Newman, 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 

152866/2021 PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE vs. SBP NEW YORK, LLC 

Motion No. 002 

3 of 5 

Page 3 of 5 

[* 3]
NYSCEF DOC. NO. 156 

INDEX NO. 152866/2021 

RECEIVED NYSCEF: 07/03/2024 

defendants' condominium unit was barred as bylaws required policy containing waiver of 

subrogation rights]; Allstate Indem. Co. v Virfra Holdings, LLC, 124 AD3d 528, 528 [1st Dept 

2015] [ valid subrogation waiver precludes action to recover insurance payments]). 

Plaintiffs argument that the Condominium bylaws required a waiver of subrogation 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 must be 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 86 Apts. Corp., 179 

AD3d 473,473 [1st Dept 2020]; see McCarthy 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, a point that 

FRESCO concedes (Doc. No. 111 at ,J4). "In order to state a cause of action to recover damages 

for a breach of contract, the [ movant' s] allegations must identify the provisions of the contract 

that were breached" (34-06 73, LLC v Seneca Ins. Co., 39 NY3d 44, 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 court with discretion to deny a motion to dismiss 

if it appears that "'facts essential to justify opposition may exist but cannot then be stated"' 

152866/2021 PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE vs. SBP NEW YORK, LLC 

Motion No. 002 

4 of 5 

Page 4 of 5 

[* 4]
NYSCEF DOC. NO. 156 

INDEX NO. 152866/2021 

RECEIVED NYSCEF: 07/03/2024 

(Lemle v Lemle, 92 AD3d 494, 499 [1st Dept 2012], quoting CPLR 3211 [d]), Cross-Claimants 

do not set forth any basis for finding that additional discovery exists which could support their 

cross-claims for indemnification or contribution. 

Accordingly, it is hereby 

ORDERED, that plaintiffs' 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 directed to enter judgment accordingly; and it is further 

ORDERED, that the remaining parties 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: 

CHECK IF APPROPRIATE: 

CASE DISPOSED 

GRANTED □ DENIED 

SETTLE ORDER 

INCLUDES TRANSFER/REASSIGN 

NON-FINAL DISPOSITION 

GRANTED IN PART 

SUBMIT ORDER 

FIDUCIARY APPOINTMENT 

152866/2021 PRIVILEGE UNDERWRITERS RECIPROCAL EXCHANGE vs. SBP NEW YORK, LLC 

Motion No. 002 

5 of 5 

□ OTHER 

□ REFERENCE 

Page 5 of 5 

[* 5]