National Union Fire Ins. Co. of Pittsburgh, P.A. v. American Pipe & Tank Lining Co., Inc.

2024 NY Slip Op 30883(U)

• Court: New York Supreme Court, New York County
• Decided: March 18, 2024
• Status: Unpublished

Opinion

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.

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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.

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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.

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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

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