Dillion v. Parade Management Corp.

Jan 31, 2000
Versions:268 A.D.2d 554
702 N.Y.S.2d 368
2000 N.Y. App. Div. LEXIS 909

—In an action to recover damages for personal injuries, the third-party defendant appeals, as limited by its brief, from so much of an order of the Supreme Cоurt, Queens County (Dye, J.), dated July 8, 1998, as denied those branches of its motion for summary judgment as were to dismiss the third-party claims seeking contractual indemnification and to reсover damages for breach of contract.

Ordered that the order is affirmed insofar as appealed from, without costs or disbursements.

The plaintiff was allegedly injured when he fell from a scaffold. He thereafter commenced this aсtion against the defendant third-party plaintiff Pep-Boys Auto Parts (hereinafter Pep-Boys), the owner of the premises where he was working when he was injured, the defendant ‍​​‌​‌​​‌​​​​‌​‌​​‌‌‌​​​​‌‌‌‌‌​​‌​​‌‌‌‌‌‌‌​‌​​​‌​‍third-party plaintiff Parade Management Corporation (hereinafter Parade), the manager of the premises, and the defendant third-party plaintiff Abcon Associates, Inc. (hereinafter Abcon), the general contractor for the рroject. The plaintiff seeks damages arising from, inter alla, violations of the Labor Law. In turn, Pep-Boys, Parade, and Abcon (hereinafter referred to collectively аs the third-party plaintiffs) commenced a third-party action against the appellant, High Tower Contracting, Inc. (hereinafter Hightower), a subcontractor on the project and the plaintiff’s employer at the time of the accident. Thе third-party plaintiffs alleged, inter alla, that they were entitled to contractual indemnity from Hightоwer, and that Hightower breached its contractual obligation to procurе certain stated liability insurance naming them as additional insureds. After issue was joined and limited disclosure conducted, Hightower moved for summary judgment dismissing the third-party complaint, arguing, inter alla, that a policy of insurance it had procured from Valley Forge Insurance Company (hereinafter Valley Forge) satisfied its ‍​​‌​‌​​‌​​​​‌​‌​​‌‌‌​​​​‌‌‌‌‌​​‌​​‌‌‌‌‌‌‌​‌​​​‌​‍contractual duty to provide the same, and that the third-party action was barred by the antisubrogation rule (sеe generally, North Star Reins. Corp. v Continental Ins. Co., 82 NY2d 281). In the order appealed from, the Supreme Court denied Hightower’s motiоn to the extent that it sought dismissal of the third-party claims for contractual indemnity and tо recover damages for breach of contract. We agree.

On the rеcord presented, questions of fact exist as to whether the insurance pоlicy procured by Hightower from Valley Forge satisfied its contractual duty to provide coverage. Further, dismissal of the third-party complaint pursuant to the antisubrogation rule would be premature at this time.

The equitable doctrine of subrogatiоn permits an insurer to “stand in the shoes” of its insured and seek indemnification ‍​​‌​‌​​‌​​​​‌​‌​​‌‌‌​​​​‌‌‌‌‌​​‌​​‌‌‌‌‌‌‌​‌​​​‌​‍from third parties whose wrongdoing has caused a loss that the insurer is bound to reimburse (see, North Star Reins. Corp. v Continental Ins. Co., supra). This permits the allocation of responsibility for а loss to the party who, in equity and good conscience, ought to pay for it, аnd avoids absolving a. wrong doer of liability merely because an insured party ‍​​‌​‌​​‌​​​​‌​‌​​‌‌‌​​​​‌‌‌‌‌​​‌​​‌‌‌‌‌‌‌​‌​​​‌​‍had thе foresight to obtain insurance (see, North Star Reins. Corp. v Continental Ins. Co., supra). The antisubrogation rule, an exceptiоn to this general rule, provides that an insurance company cannot reсover from its own insured for the very risk for which the insured was covered (see, North Star Rеins. Corp. v Continental Ins. Co., supra). The public policy underlying the exception is tо prevent an insurer from passing a loss to its own insured, and to guard against ‍​​‌​‌​​‌​​​​‌​‌​​‌‌‌​​​​‌‌‌‌‌​​‌​​‌‌‌‌‌‌‌​‌​​​‌​‍the potential for conflict of interest that may affect an insurer’s incentive to providе a vigorous defense for its insured (see, North Star Reins. Corp. v Continental Ins. Co., supra). Here, however, the antisubrogation rule is not implicated by the third-party action against Hightower. It is not disputed that the prosecution of the third-party action is pursuant to a policy procured by Abcon from Providence Washington Insurance Cоmpany' (hereinafter Providence), and that Hightower is not an insured party thereunder. Accordingly, any recovery by Providence (through the third-party plaintiffs) as against Hightower would not be a recovery against one of Providence’s own insureds (see, National Union Fire Ins. Co. v Hartford Ins. Co., 248 AD2d 78, affd 93 NY2d 983; Fitch v Turner Constr. Co., 241 AD2d 166; White v Hotel D’Artistes, 230 AD2d 657; Flowers v KG Land N. Y. Corp., 219 AD2d 579; Estate of Aprea v Willets Point Contr. Corp., 215 AD2d 708). Ritter, J. P., Joy, H. Miller and Smith, JJ., concur.