Lexington Ins. Co. v. New York Mar. & Gen. Ins. Co.

2025 NY Slip Op 30137(U)
New York Supreme Court, New York County·Decided January 10, 2025·No. Index No. 651214/2022·Unpublished

Opinion

Lexington Ins. Co. v New York Mar. & Gen. Ins. Co.

2025 NY Slip Op 30137(U)

January 10, 2025

Supreme Court, New York County Docket Number: Index No. 651214/2022 Judge: Melissa A. Crane

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.

FILED: NEW YORK COUNTY CLERK 01/10/2025 03:44 PM INDEX NO. 651214/2022 NYSCEF DOC. NO. 302 RECEIVED NYSCEF: 01/10/2025

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY

PRESENT: HON. MELISSA A. CRANE PART 60M

Justice

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LEXINGTON INSURANCE COMPANY, ON ITS OWN BEHALF AND AS SUBROGEE OF TWIN AMERICA, LLC INDEX NO. 651214/2022 AND MARK 'ZEV' MARMURSTEIN,

Plaintiff, MOTION DATE 04/15/2024

MOTION SEQ.

-v- NO. 012 NEW YORK MARINE AND GENERAL INSURANCE COMPANY, GREENWICH INSURANCE COMPANY, DECISION + ORDER ON MOTION TWIN AMERICA, LLC, MARK 'ZEV' MARMURSTEIN,

Defendants.

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The following e-filed documents, listed by NYSCEF document number (Motion 012) 224, 225, 226, 227, 228,229,230,231,232,233,234,235,236,237,238,239,240,241,242,243,244,245,246,247,248, 249,250,251,252,253,254,256,257,258,259,279,280,281,282,283 were read on this motion to/for JUDGMENT - SUMMARY

This case arises from a November 2015 tour bus accident in California. The accident allegedly injured various people, caused significant property damage, and resulted in various lawsuits against the tour operators and tour bus owners (the consolidated underlying litigation, Kfouri v CS Global SF, No. CGC-16-551098 [San Francisco Super. Ct.]). Ultimately, the underlying litigation settled for $10.5 million. Plaintiff Lexington Insurance Co. (Lexington), an insurer that provided umbrella coverage to defendants Twin America, LLC (Twin) and Mark 'Zev' Marmurstein (collectively, "Twin defendants"), brought this action to recover $2.5 million that it paid, subject to a reservation of rights, towards the settlement.

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FILED: NEW YORK COUNTY CLERK 01/10/2025 03:44 PM INDEX NO. 651214/2022 NYSCEF DOC. NO. 302 RECEIVED NYSCEF: 01/10/2025

Plaintiff seeks to recoup that $2.5 million from the only remaining defendant in this action, Twin, under theories of common law indemnification, breach of contract, and declaratory relief.

Background

The insurance coverage in the underlying litigation was arranged in two "towers," as illustrated by the graph below: (1) the insurance policies issued to the nonparty tour bus owners; and (2) the insurance policies issued to the vicariously liable defendants [the Twin defendants]

!Ji)

Lexington

Umbrella

Gotham Excess Axis Excess

NY Marine

Twn A1Mrica T -

(amended complaint, NYSCEF Doc No. 43 at 7).

In the first tower, defendant New York Marine and General Insurance Co. (NYM) issued a $1 million primary policy to the bus owners, and nonparty Gotham Insurance issued a $4 million excess policy to the bus owners. In the second tower, defendant Greenwich Insurance Co. (Greenwich) issued two $1 million primary policies to Twin, a commercial auto policy (the auto policy) and a commercial general liability policy (the CGL policy). Also in the second tower, nonparty Axis Insurance issued a $4 million excess policy to Twin, and plaintiff issued a $5 million umbrella liability policy to Twin.

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FILED: NEW YORK COUNTY CLERK 01/10/2025 03:44 PM INDEX NO. 651214/2022 NYSCEF DOC. NO. 302 RECEIVED NYSCEF: 01/10/2025

The bus owners' and Twin's respective excess insurers, Gotham and Axis, both contributed their total $4 million policy limits towards the settlement. Plaintiff paid the remaining $2.5 million under the umbrella policy it issued to Twin. Both the Greenwich auto and CGL policies are "fronting" policies with $1 million limits and matching $1 million deductibles. In this type of policy, the deductibles are the policy limits (see discussion in decision and order on motion 7 at pgs 11-13 [EDOC 13 7]).

Greenwich did not pay any amount towards the settlement under either of these primary policies. In addition, neither Twin nor its principal, Marmurstein, paid the Greenwich policies' deductibles or paid any amount for the settlement. However, Greenwich and Twin entered into a settlement agreement in April 2021 (Greenwich-Twin America settlement agreement, NYSCEF Doc No. 61 ). In that stipulation, they "agree[d] that any indemnity payments that New York Marine and/or Gotham pay on behalf of Twin and/or Marmurstein shall be applied to satisfy the [$1 million Greenwich auto policy] Indemnity Deductible" (id., ,r 1). None of the other insurers, including Gotham and NYM, were involved with that Greenwich-Twin agreement.

On January 19, 2023, this Court denied NYM's motion to dismiss based on forum non conveniens (January 19, 2023 Order, NYSCEF No. 113). On July 7, 2023, this Court denied dismissal of any claim against Twin but granted Greenwich's motion to dismiss and Marmurstein's [individual] motion to dismiss (July 7, 2023 Orders, NYSCEF Doc Nos. 136, 137). On July 9, 2024, this Court granted NYM's motion for summaryjudgment, leaving Twin as the only remaining defendant (July 9, 2024 Order, NYSCEF Doc Nos. 296, 297).

Plaintiff now moves for summary judgment, pursuant to CPLR 3212, on the remaining causes of action against Twin: (1) common law indemnification to recover $1 million pursuant to the Greenwich Auto Policy (third cause of action) (NYSCEF Doc No. 43); (2) common law

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FILED: NEW YORK COUNTY CLERK 01/10/2025 03:44 PM INDEX NO. 651214/2022 NYSCEF DOC. NO. 302 RECEIVED NYSCEF: 01/10/2025

indemnification to recover $1 million pursuant to the Greenwich CGL Policy (fourth cause of action) (id.); (3) declaratory relief stating ''that neither of the Greenwich deductibles, and neither of the limits of the Greenwich policies, were satisfied or exhausted, in whole or in part, by any defense and/or indemnity payments made, or to be made, by New York Marine and/or Gotham in connection with the Consolidated Underlying Actions" (fifth cause of action) (id.); and (4) breach of contract pursuant to Condition J.3 of the Lexington umbrella policy's "scheduled underlying insurance" (sixth cause of action) (id.).

Twin also cross-moves for summary judgment pursuant to CPLR 3212 on all the above.

TWIN'S RELEVANT INSURANCE POLICIES The Greenwich Auto Policy The Greenwich Auto Policy provides, in Section II ["Liability Coverage"], that "We [Greenwich] will pay all sums an 'insured' legally must pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies, caused by an 'accident' and resulting from the ownership, maintenance or use of a covered 'auto'" (Greenwich Auto Policy, NYSCEF Doc No. 59 § II [A] [Auto Policy]). That section further states that:

"We [Greenwich] have the right and duty to defend any 'insured' against a 'suit'

asking for such damages .... We may investigate and settle any claim or 'suit' as we consider appropriate. Our duty to defend or settle ends when the Liability Coverage Limit of Insurance has been exhausted by payment of judgments or settlements"

The Auto policy includes $1 million liability coverage and a $1 million deductible per accident (see id. at 74 [ENDORSEMENT #001]). The Greenwich CGL Policy

The CGL policy states, in Section 1 (a):

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FILED: NEW YORK COUNTY CLERK 01/10/2025 03:44 PM INDEX NO. 651214/2022 NYSCEF DOC. NO. 302 RECEIVED NYSCEF: 01/10/2025

"We will pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies. We will have the right and duty to defend the insured against any 'suit'

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Lexington Ins. Co. v. New York Mar. & Gen. Ins. Co., 2025 NY Slip Op 30137(U) (N.Y. Super. Ct. 2025).

2025 NY Slip Op 30137(U) (Lexington Ins. Co. v. New York Mar. & Gen. Ins. Co.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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