Court Opinion

ID: 9954328
Source: CourtListenerOpinion
Date Created: 2024-03-25 21:11:32.119123+00
Date Added: 2024-06-11T08:12:04.850846
License: Public Domain

National Union Fire Ins. Co. of Pittsburgh, P.A. v
        American Pipe & Tank Lining Co., Inc.
               2024 NY Slip Op 30883(U)
                     March 18, 2024
           Supreme Court, New York County
        Docket Number: Index No. 654183/2022
                  Judge: Lyle E. Frank
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.
                                                                                                                       INDEX NO. 654183/2022
  NYSCEF DOC. NO. 122                                                                                           RECEIVED NYSCEF: 03/18/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. LYLE E. FRANK                                               PART                              11M
                                                                                       Justice
            ----------------------------------------------------------------- ----------------X   INDEX NO.           654183/2022
             NATIONAL UNION FIRE INSURANCE COMPANY OF
                                                                                                                       10/17/2023,
             PITTSBURGH, P.A.,
                                                                                                  MOTION DATE          12/04/2023
                                                         Plaintiff,
                                                                                                  MOTION SEQ. NO.        003 004
                                                 - V -

             AMERICAN PIPE & TANK LINING CO., INC.,                                                 DECISION + ORDER ON
                                                                                                          MOTION
                                                         Defendant.
            ------------------------------------------------------------------- --------------X

             AMERICAN PIPE & TANK LINING CO., INC.                                                             Third-Party
                                                                                                         Index No. 595434/2023
                                                          Plaintiff,

                                                  -against-

                                                          Defendant.
             -------------------------------------------------------------------------------- X

            The following e-filed documents, listed by NYSCEF document number (Motion 003) 81, 82, 83, 84, 85,
            86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99,100,104,106,107,119
            were read on this motion to/for                                                         DISMISS

            The following e-filed documents, listed by NYSCEF document number (Motion 004) 101, 102, 103, 105,
            108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 120
            were read on this motion to/for                                                         DISMISS

                      This matter arises out of defendant/third-party plaintiff American Pipe & Tank Lining

            Co., Inc.' s ("American Pipe") failure to notify its gap insurance carrier of a potential claim. As a

            result, American Pipe's excess insurer, Plaintiff National Union Fire Insurance Company of

            Pittsburgh, P.A. ("National Union") claims that it was caused to pay $1,210,751.24 more than

            what it was obligated to pay under the excess insurance policy that it issued to American Pipe.

             654183/2022 Motion No. 003 004                                                                            Page 1 of4

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                                                                                                   INDEX NO. 654183/2022
  NYSCEF DOC. NO. 122                                                                      RECEIVED NYSCEF: 03/18/2024

                       Third-party defendant/second third-party plaintiff, Insurance Office of America ("IOA''),

            commenced the second third-party action against second third-party defendants, ICA Risk

            Management Consultants ("ICA"), and Ryan Services Group, LLC (D/B/A RSG Insurance

            Services, LLC), Ryan Specialty, LLC (F/K/A Ryan Specialty Group, LLC), RSG Specialty, LLC

            (F/K/A R-T Specialty, LLC) (collectively "RT"), for contribution or common-law

            indemnification.

                       Second third-party defendants move separately, motions sequences 003 and 004, to

            dismiss the second third-party complaint pursuant to CPLR § 321 l(a)(1)1, and (7). For the

            reasons set forth below, both motions to dismiss are granted.

            Standard of Review

                       When considering a motion to dismiss based upon CPLR § 3211(a)(7), the court must

            accept the alleged facts as true, accord the plaintiff the benefit of every possible favorable

            inference, and determine whether the facts alleged fit into any cognizable legal theory. Leon v

            Martinez, 84 NY2d 83 [1994]. On a motion to dismiss the court "merely examines the adequacy

            of the pleadings", the court "accept as true each and every allegation made by plaintiff and limit

            our inquiry to the legal sufficiency of plaintiffs claim." Davis v Boeheim, 24 NY3d 262, 268

            [2014].

            Discussion

                       IOA alleges, that ICA and RT were negligent in failing to notify American Pipe's

            insurers of potential claims. The second third-party complaint seeks indemnification and

            contribution from ICA and RT.

            1
                Only ICA seeks dismissal pursuant to this provision.
                654183/2022 Motion No. 003 004                                                     Page 2 of 4

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                                                                                                     INDEX NO. 654183/2022
  NYSCEF DOC. NO. 122                                                                        RECEIVED NYSCEF: 03/18/2024

                      Here, ICA and RT have established primafacie entitlement to dismissal of the second

            third-party complaint. First, ICA and RT have established that the complaint fails to allege a

            viable cause of action for common law indemnity. It is undisputed that the underlying action

            alleges IOA breached its contract with American Pipe in failing to timely notify its insurer, thus

            any finding of fault would be based on IOA' s conduct or lack thereof, not based vicariously on

            the acts of another (Bd. ofMgrs. of Olive Park Condominium v Maspeth Props., LLC, 170 AD3d

            645, 647 [2d Dept 2019]). Neither the second-third party complaint nor in opposition does IOA

            allege any legal or factual support to sustain its common-law indemnification cause of action.

            Thus, the cause of action for common law indemnification is dismissed.

                      As to the claim for contribution the second third-party defendants have established

            entitlement to dismissal of the claim, as the damages sought in the present action are purely

            economic and arise solely as the result of the various parties' contractual obligations. The Court

            of Appeals has held that contribution is not available for economic loss resulting solely from a

            breach of contract Board ofEducation of Hudson City School District v Sargent, Webster,

            Crenshaw & Folley, 71 NY2d 21, 24 [1987]. The Court is not persuaded by IOA's attempt to

            style the underlying action as a tort action based on the allegation that it negligently breached the

            contract.

                      As the Court finds the second third-party complaint fails to state a cause of action, the

            Court does not reach the issue of whether or not documentary evidence establishes a complete

            defense to the underlying action. Accordingly, it is hereby

                      ORDERED that the second third-party complaint is dismissed in its entirety; and it is

            further

                      ORDERED that the Clerk is directed to enter judgment accordingly.

             654183/2022 Motion No. 003 004                                                          Page 3 of 4

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                                                                                                         INDEX NO. 654183/2022
  NYSCEF DOC. NO. 122                                                                              RECEIVED NYSCEF: 03/18/2024

                    3/18/2024
                      DATE                                                              LYLE E. FRANK, J.S.C.

                                       ~                                   ~
             CHECK ONE:                       CASE DISPOSED                    NON-FINAL DISPOSITION

                                                              □ DENIED
                                                                                                        □
                                              GRANTED                          GRANTED IN PART              OTHER

             APPLICATION:                     SETTLE ORDER                     SUBMIT ORDER

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

             654183/2022 Motion No. 003 004                                                              Page4 of 4

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