Court Opinion

ID: 9952890
Source: CourtListenerOpinion
Date Created: 2024-03-20 20:11:15.448755+00
Date Added: 2024-06-11T14:41:30.940504
License: Public Domain

Allied World Natl. Assur. Co. v AIG Specialty Ins. Co.
               2024 NY Slip Op 30857(U)
                     March 15, 2024
           Supreme Court, New York County
        Docket Number: Index No. 654162/2021
                Judge: Nancy M. Bannon
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
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 This opinion is uncorrected and not selected for official
                       publication.
  FILED: NEW YORK COUNTY CLERK 03/15/2024 04:46 PM                                                                   INDEX NO. 654162/2021
  NYSCEF DOC. NO. 349                                                                                          RECEIVED NYSCEF: 03/15/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. NANCY M. BANNON                                            PART                              61M
                                                                                      Justice
            ---------------------------------------------------------------------------------X   INDEX NO.          654162/2021
             ALLIED WORLD NATIONAL ASSURANCE COMPANY
             and ENDURANCE AMERICAN INSURANCE COMPANY,                                           MOTION DATE          3-15-24

                                                         Plaintiffs,                             MOTION SEQ. NO.         011

                                                -v–

                                                                                                   DECISION + ORDER ON
             AIG SPECIALTY INSURANCE COMPANY, IRONSHORE
             SPECIALTY INSURANCE COMPANY,                                                                MOTION

                                                         Defendants.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 011) 313, 314, 315, 316,
            317, 318, 319, 320, 323, 324, 325, 326, 327, 328, 329, 330, 331, 332, 333, 334, 335, 336, 337, 338, 339,
            340, 341, 342, 343, 344, 345, 346, 347
            were read on this motion to/for                                                       PRECLUDE                         .

                      In this declaratory judgment action, the plaintiff insurers seek, inter alia, a declaration
            that the defendant insurers had a duty to defend Parsons-Mahan Joint Venture (Joint Venture),
            a defendant contractor in the underlying negligence class action filed in the Circuit Court of
            Prairie County, Arkansas. Those plaintiffs, residents of Arkansas, claimed to have suffered
            bodily injuries from ingesting drinking water contaminated with raw sewage in September 2017.
            Plaintiff Allied World National Assurance Company (Allied), Joint Venture’s primary insurer,
            defended Joint Venture in that action and now seeks contribution - full or partial reimbursement
            - from the defendants. Defendant AIG Specialty Insurance Company (AIG) insures Parsons
            Construction Group, Inc, a member of Joint Venture, and defendant Ironshore Specialty
            Insurance Company (Ironshore) insures C.J. Mahan, another member of Joint Venture. Allied
            commenced this action on July 1, 2021. Plaintiff Endurance American Insurance Company,
            which issued an excess liability policy to Joint Venture, intervened the same year. The
            defendants answered, denying coverage under the terms of the respective policies.

             654162/2021 ALLIED WORLD NATIONAL vs. AIG SPECIALTY INSURANCE                                           Page 1 of 4
             Motion No. 011

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  FILED: NEW YORK COUNTY CLERK 03/15/2024 04:46 PM                                                 INDEX NO. 654162/2021
  NYSCEF DOC. NO. 349                                                                      RECEIVED NYSCEF: 03/15/2024

                   It is no longer disputed that there was raw sewage in the drinking water due to the
            insured’s negligence in cross-connecting sewage lines with municipal drinking water lines. The
            nature of the underlying action, as summarized in plaintiff Allied’s memo of law, is as follows:

                            The $11.9 million settlement in the underlying Betzner litigation
                   addressed systems-wide contamination of two public drinking water supplies with
                   untreated sewage and a certified class of individuals exposed to and, in certain
                   circumstances, ingesting and physically absorbing, that untreated sewage while
                   in their homes and businesses due to contractor negligence. The insured
                   contractors stipulated that they had negligently cross-connected sewage lines
                   with municipal drinking water lines. Thus, the only issue for trial was the extent of
                   the damage to class members caused by the contamination of public drinking
                   water with raw sewage.

                   The plaintiffs’ policies contain a “Total Pollution Exclusion” which excludes coverage for
            bodily injury caused by “pollutants” which includes “contaminants”, which in turn includes
            “waste.” By contrast, defendant AIG’s policy covers claims for bodily injury “resulting from
            pollution conditions” which includes the “discharge ... or release or escape of any solid or liquid
            ... contaminant, including … waste materials.” Similarly, Ironshore’s policy covers claims for
            bodily injury and property damage resulting from “a contractor’s pollution liability claim for a
            pollution condition arising from contractor activities” and defines “pollution conditions” to include
            the “discharge, dispersal, release or escape” of “contaminants or pollutants” including “toxic
            chemicals, mold, spores, fungi, microbes, bacteria [or] ... waste material” into “any watercourse
            or body of water.”

                   In this coverage action, the court (Ostrager, J.) set a discovery schedule in a preliminary
            conference order dated February 1, 2022. As relevant here, the court directed that all expert
            disclosure be completed no later than 30 days following the last deposition. After several status
            conferences, the court directed, in a so-ordered stipulation dated October 3, 2023, that non-
            expert depositions be completed by December 15, 2023, expert disclosures be completed by
            January 5, 2024, and rebuttal expert disclosures by February 5, 2024. The Note of Issue
            deadline was extended to February 29, 2024.

                   On January 5, 2024, plaintiff Allied served the defendants with a report of Dr. Valerie
            Harwood, a water quality specialist with a Ph.D. in biomedical sciences. In her report, Dr.

             654162/2021 ALLIED WORLD NATIONAL vs. AIG SPECIALTY INSURANCE                         Page 2 of 4
             Motion No. 011

                                                           2 of 4
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  FILED: NEW YORK COUNTY CLERK 03/15/2024 04:46 PM                                                   INDEX NO. 654162/2021
  NYSCEF DOC. NO. 349                                                                        RECEIVED NYSCEF: 03/15/2024

            Harwood opines that, based on her education, training and professional experience, and after
            her examination of case documents, the drinking water was contaminated with sewage and
            other pollutants and pathogens, including toxic chemicals and mold, as a result of the cross-
            connection between the drinking water and sewer lines by Joint Venture, and resultant
            infiltration of surface water and/or groundwater into the drinking water supply. The defendants
            did not serve any expert reports. No Note of Issue was filed.

                    On February 5, 2024, the defendants filed the instant motion to preclude the report and
            testimony of Dr. Harwood, or, in the alternative, for leave to conduct further discovery and file a
            late rebuttal expert report. In essence, the defendants argue that Dr. Harwood’s testimony
            would not be helpful and would not clarify any issue calling for professional knowledge outside
            the ken of a typical jury. Both plaintiffs oppose the motion. The motion is denied.

                    As a general rule, the admissibility of expert testimony on a particular point is addressed
            to the discretion of the trial court. See Selkowitz v County of Nassau, 45 NY2d 97 (1978). “The
            guiding principle is that expert opinion is proper when it would help to clarify an issue calling for
            professional or technical knowledge, possessed by the expert and beyond the ken of the typical
            juror.” De Long v County of Erie, 60 NY2d 296, 307 (1983); People v Allweiss, 48 NY2d 40, 50
            (1979). Dr. Harwood’s report addresses the central issue in this action – whether raw sewage
            in drinking water is a “pollutant” or “contaminant” within the scientific field of water quality, as
            those are terms found in the subject policies of liability insurance and relied upon by the parties
            in support of their respective positions. While Dr. Harwood may not invade teh jury’s province
            and opine as to the ultimate issue of coverage in the action (see e.g. Meason v Greenwich &
            Perry St. Hous. Corp., 268 AD2d 155 [1st Dept. 2000]), neither her report nor her expert
            testimony are precluded. See Landmark Ventures, Inc. v H5 Tech., Inc., 152 AD3d 657 (2nd
            Dept. 2017). Indeed, an expert witness may testify “to both the ultimate questions and those of
            lesser significance” (Sanders v Otis Elevator Co., 232 AD2d 327, 328 [1st Dept. 1996]) where
            that testimony would “help clarify an issue calling for a professional or technical knowledge,
            possessed by the expert and beyond the ken of the typical juror.” Id. quoting DeLong v County
            of Erie, 60 NY2d 296). This ruling, however, does not preclude the defendants from objecting to
            particular questions asked of this witness at trial, if there are proper grounds therefor. Those
            ruling are to be made by the trial judge.

             654162/2021 ALLIED WORLD NATIONAL vs. AIG SPECIALTY INSURANCE                            Page 3 of 4
             Motion No. 011

                                                            3 of 4
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  FILED: NEW YORK COUNTY CLERK 03/15/2024 04:46 PM                                                    INDEX NO. 654162/2021
  NYSCEF DOC. NO. 349                                                                           RECEIVED NYSCEF: 03/15/2024

                    The defendants’ application for alternative relief, leave to conduct further discovery, is
            denied as they have failed to establish entitlement to that relief on these papers. Discovery has
            been ongoing for more than two years, deadlines were extended numerous times after several
            discovery conferences and the final Note of Issue deadline has passed. No reasonable excuse
            for the defendants’ failure to timely complete discovery is provided. For the same reason, the
            defendants’ application for leave to file a late expert report is denied. Notably, this motion was
            filed on the last day for filing such a rebuttal report per the court’s order of October 3, 2023.

                     The parties shall appear for the status conference scheduled for March 21, 2024, where
            a short Note of Issue deadline may be issued so that, once filed, the case can be put on a trial
            calendar. The parties are reminded that there is no post-note discovery absent unusual or
            unanticipated circumstances. See 22 NYCRR 202.21(d).

                    The parties are encouraged to explore settlement.

                    Accordingly, it is

                    ORDERED that the defendants’ motion is denied in its entirety, and it is further

                    ORDERED that the parties shall appear for a status conference on March 21, 2024, at
            10:00 a.m., as previously scheduled.

                    This constitutes the Decision and Order of the court.

                                                                                    Nt:21~
                                                                                     HON. NANCY M. BANNON
                    3/15/2024                                                                 $SIG$
                      DATE
             CHECK ONE:                  CASE DISPOSED                  X   NON-FINAL DISPOSITION

                                                         □                                            □
                                         GRANTED          X    DENIED       GRANTED IN PART               OTHER

             APPLICATION:                SETTLE ORDER                       SUBMIT ORDER

                                                                                                      □
             CHECK IF APPROPRIATE:       INCLUDES TRANSFER/REASSIGN         FIDUCIARY APPOINTMENT         REFERENCE

             654162/2021 ALLIED WORLD NATIONAL vs. AIG SPECIALTY INSURANCE                            Page 4 of 4
             Motion No. 011

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