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Where Extrinsic Evidence Indicates a Party’s Interpretation of Ambiguous Language Is the Only Fair Interpretation, Summary Judgment Is Appropriate

In finding that the meaning of a title insurance policy was properly determined as a matter of law, the Second Department explained the complicated analytical criteria:

Generally, courts determine the rights and obligations of parties under insurance contracts based on the specific language of the policies … . However, where the language is reasonably susceptible of more than one interpretation, and thus ambiguous, “the parties to the policy may, as an aid in construction, submit extrinsic evidence of their intent at the time of contracting” … . “[I]f the tendered extrinsic evidence is itself conclusory and will not resolve the equivocality of the language of the contract, the issue remains a question of law for the court” … . “Under those circumstances, the ambiguity must be resolved against the insurer which drafted the contract” … .

“It is only where such evidence does not resolve the equivocality that the ambiguity must be resolved against the insurer” … . Where there is ambiguity and the “determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence, then such determination is to be made by the jury” … . Where, however, a party’s extrinsic evidence demonstrates “not only that its interpretation is reasonable but that it is the only fair interpretation,” summary judgment is appropriate … . Demetrio v Stewart Tit Ins Co, 2015 NY Slip Op 00720, 2nd Dept 1-28-15

 

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Criteria for Denial of Coverage Based Upon Noncooperation of the Insured Party Explained/Default Judgment In Favor of Defendant American States Re: Other Defendants Did Not Preclude, Under the Doctrine of Collateral Estoppel, Plaintiff’s Direct Action Against American States

The Second Department determined a question of fact existed about whether the “noncooperation-of-an-insured-party” rationale for denying coverage applied.  The court noted that a prior default judgment in favor of defendant American States re: other defendants did not preclude, under the doctrine of collateral estoppel, plaintiff’s direct action against American States:

American States prevailed in that declaratory judgment action against the defendants in the underlying action which determined that American States is not obligated to defend and indemnify the defendants in the underlying action. However, those orders were entered upon the underlying defendants’ default, and thus, did not collaterally estop the plaintiff from bringing the instant, direct action against American States pursuant to Insurance Law § 3420(a)(2) … . …

The noncooperation of an insured party in the defense of an action is a ground upon which an insurer may deny coverage, and may be asserted by the insurer as a defense in an action on a judgment by an injured party pursuant to Insurance Law § 3420(a)(2) … . In order to establish a proper disclaimer based on its insured’s alleged noncooperation, an insurer is required to demonstrate that “it acted diligently in seeking to bring about its insured’s cooperation, that its efforts were reasonably calculated to obtain its insured’s cooperation, and that the attitude of its insured, after the cooperation of its insured was sought, was one of wilful [sic] and avowed obstruction'” … . The insurer has a “heavy” burden of proving lack of cooperation … . Here, the submissions of the American States defendants were insufficient to sustain their prima facie burden on the cross motion for summary judgment, with respect to American States. West St Props LLC v American States Ins Co, 2015 NY Slip Op 00751, 2nd Dept 1-28-15

 

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Right-to-Intervene Criteria Explained (Criteria Not Met Here)

The Second Department described the criteria for intervening in an action (criteria not met here):

Upon a timely motion, a person is permitted to intervene in an action as of right, “1. when a statute of the state confers an absolute right to intervene; or 2. when the representation of the person’s interest by the parties is or may be inadequate and the person is or may be bound by the judgment; or 3. when the action involves the disposition or distribution of, or the title or a claim for damages for injury to, property and the person may be affected adversely by the judgment” (CPLR 1012[a]). Additionally, upon a timely motion, the court, in its discretion, may permit a person to intervene, “when a statute of the state confers a right to intervene . . . or when the person’s claim or defense and the main action have a common question of law or fact” (CPLR 1013). In exercising its discretion, the court shall consider whether the intervention will unduly delay the determination of the action or prejudice the substantial rights of any party (see id.).  Wells Fargo Bank NA v Mazzara, 2015 NY Slip Op 00750, 2nd Dept 1-28-15

 

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Question of Fact Whether Failure to Wear a Harness Precluded Recovery in a Labor Law 240 (1) Action

The Second Department determined defendant had raised a question of fact whether plaintiff’s actions were the sole proximate cause of the accident (which would preclude recovery in a Labor Law 240 (1) action).  Plaintiff was injured when plywood flooring collapsed. However the defendant presented evidence plaintiff was aware he was required to wear a harness which would have prevented him from falling to the floor below:

” Labor Law § 240(1) imposes upon owners and general contractors, and their agents, a nondelegable duty to provide safety devices necessary to protect workers from risks inherent in elevated work sites'” … . To prevail on a cause of action pursuant to Labor Law § 240(1), the plaintiff must establish a violation of the statute and that the violation was a proximate cause of his injuries … . Although contributory negligence on the part of the worker is not a defense to a Labor Law § 240(1) claim …, where a plaintiff’s actions are the sole proximate cause of his injuries, liability under Labor Law § 240(1) does not attach … .

Here, although the plaintiff met his prima facie burden of establishing a violation of Labor Law § 240(1) … the defendants produced evidence that a safety harness and line were available to the plaintiff, that he was aware that he was required to anchor the line on the floor where he was working, and that the anchors, harness, and line would have prevented him from falling to the 14th floor, but that the plaintiff had consciously decided not to anchor his line on the 15th floor as instructed. The defendant’s submissions were sufficient to raise a triable issue of fact as to whether the plaintiff’s actions were the sole proximate cause of his accident … . Bascombe v West 44th St Hotel LLC, 2015 NY Slip Op 00712, 2nd Dept 1-28-15

 

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Criteria for Area Zoning Variance and Court Review of Local Variance Proceedings Explained

The Second Department determined the zoning board had properly considered and denied an application for an area variance.  The court explained its review powers and the analytical criteria to be used by a zoning board:

“Local zoning boards have broad discretion in considering applications for variances, and judicial review is limited to determining whether the action taken by the board was illegal, arbitrary, or an abuse of discretion” … . “Accordingly, on judicial review, the determination of a zoning board should be sustained if it is not illegal, has a rational basis, and is not arbitrary and capricious”… .

In determining whether to grant an area variance, a zoning board of appeals is required to engage in a balancing test, weighing the benefit to the applicant against the detriment to the health, safety, and welfare of the neighborhood or community if the variance is granted (see Village Law § 7-712-b[3][b]…). A zoning board must also consider “(1) whether an undesirable change will be produced in the character of the neighborhood or a detriment to nearby properties will be created by the granting of the area variance; (2) whether the benefit sought by the applicant can be achieved by some method, feasible for the applicant to pursue, other than an area variance; (3) whether the requested area variance is substantial; (4) whether the proposed variance will have an adverse effect or impact on the physical or environmental conditions in the neighborhood or district; and (5) whether the alleged difficulty was self-created, which consideration shall be relevant to the decision of the board of appeals, but shall not necessarily preclude the granting of the area variance” (Village Law § 7-712-b[3][b]). In making that determination, the personal observations of members of the zoning board may be considered … . Matter of Sacher v Village of Old Brookvile, 2015 NY Slip Op 00773, 2nd Dept 1-28-15

 

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Criteria for Piercing the Corporate Veil Explained/Appellate Review Powers Re: a Bench Trial Described

The Second Department determined Supreme Court (in a bench trial) had properly pierced the corporate veil to find the owner personally liable.  The court described the criteria for piercing the corporate veil and noted that, in reviewing a bench trial, the appellate court has the same fact-finding powers as the trial court:

“In reviewing a determination made after a nonjury trial, the power of this Court is as broad as that of the trial court, and we may render a judgment we find warranted by the facts, bearing in mind that in a close case, the trial court had the advantage of seeing and hearing the witnesses” … .

“The general rule . . . is that a corporation exists independently of its owners, who are not personally liable for its obligations, and that individuals may incorporate for the express purpose of limiting their liability” … . The doctrine of piercing the corporate veil is an exception to this general rule, allowing the imposition of individual liability on owners for the obligations of their corporation “to prevent fraud or to achieve equity” … . “A plaintiff seeking to pierce the corporate veil must demonstrate that a court in equity should intervene because the owners of the corporation exercised complete domination over it in the transaction at issue and, in doing so, abused the privilege of doing business in the corporate form, thereby perpetrating a wrong that resulted in injury to the plaintiff” … . AZTE Inc v Auto Collection Inc, 2015 NY Slip Op 00711, 2nd Dept 1–28-15

 

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“General Supervisory Authority” Over Work Not Sufficient to Impose Liability Under the Labor Law

In affirming summary judgment in favor of the defendants, the Second Department described the nature of work-supervision necessary to hold a defendant liable under Labor Law 240 (1), 241 (6), 200 and common-law negligence theories.  “General supervisory authority” is not enough to impose liability:

“Labor Law §§ 240(1) and 241(6) apply to owners, contractors, and their agents” … . “A party is deemed to be an agent of an owner or general contractor under the Labor Law when it has supervisory control and authority over the work being done where a plaintiff is injured” … . “Similarly, where, as here, a claim against a defendant arises out of alleged defects or dangers in the methods or materials of the work, recovery cannot be had under Labor Law § 200 or pursuant to the principles of common-law negligence unless it is shown that the party to be charged under that theory of liability had the authority to supervise or control the performance of the work” … . * * *

Here, the defendants established their prima facie entitlement to judgment as a matter of law dismissing the causes of action alleging violations of Labor Law §§ 240(1) and 241(6) by establishing that they were not owners, contractors, or statutory agents under those provisions … . The defendants also established their prima facie entitlement to judgment as a matter of law dismissing the causes of action alleging violations of Labor Law § 200 and common-law negligence through the submission of evidence which demonstrated that they did not have the authority to supervise or control the manner in which the injured plaintiff performed his work … .

To the extent that the defendants had general supervisory authority over the work, this was insufficient in itself to impose liability under the Labor Law … . Fucci v Plotke, 2015 NY Slip Op 00726, 2nd Dept 1-28-15

 

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Injury Caused by Another Student In Gym Class Could Not Have Been Prevented by Supervision/Unsigned Depositions Which Were Certified by the Stenographer Should Have Been Considered by the Court

The Second Department determined summary judgment should have been granted to the defendant in an action stemming from infant-plaintiff’s participation in a gym-class basketball game.  The actions of another player, which caused the injury, could not have been prevented by supervision.  The Second Department noted that the unsigned deposition transcripts, which were certified by the stenographer, should have been considered by Supreme Court:

The Supreme Court also should have granted that branch of the defendants’ motion which was for summary judgment dismissing the complaint insofar as asserted against the New York City Department of Education (hereinafter the DOE). In support of their motion, the defendants submitted the transcripts of the deposition testimony of the infant plaintiff and teachers … . While those transcripts were unsigned, they were certified by the stenographer, and the plaintiffs do not challenge their accuracy. Thus, contrary to the plaintiffs’ contention, the transcripts were admissible and should have been considered by the Supreme Court on the defendants’ motion … . This evidence demonstrated, prima facie, that the spontaneous act of the other student in grabbing the infant plaintiff’s left arm from behind and throwing or dragging him to the ground as the infant plaintiff attempted to shoot a basketball during a basketball game in gym class occurred in such a short span of time that it could not have been prevented even by the most intense supervision … . Moreover, the other student’s alleged prior conduct was insufficient to place the DOE on notice of the conduct that led to the infant plaintiff’s injury … . Thomas v City of New York, 2015 NY Slip Op 00748, 2nd Dept 1-28-15

 

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Basic Criteria Re: Common-Law and Contractual Indemnification Explained

In finding that the criteria for common-law and contractual indemnification were not met, the Second Department explained some of the basic requirements for both:

“[T]he key element of a common-law cause of action for indemnification is not a duty running from the indemnitor to the injured party, but rather is a separate duty owed the indemnitee by the indemnitor'” … . ” Since the predicate of common-law indemnity is vicarious liability without actual fault on the part of the proposed indemnitee, it follows that a party who has itself actually participated to some degree in the wrongdoing cannot receive the benefit of the doctrine'” … .

… General Obligations Law § 5-322.1 …  “generally renders void a clause in a construction contract purporting to indemnify a party for its own negligence” (… see General Obligations Law § 5-322.1). … [A] contractual clause that purports to indemnify a party for its own negligence ” may be enforced where the party to be indemnified is found to be free of any negligence'” … . Dreyfuss v MPCC Corp, 2015 NY Slip Op 00723, 2nd Dept 1-28-15

 

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Code Provision Which Requires Abutting Landowners to Keep a Sidewalk in Good Repair Does Not Impose Tort Liability on the Abutting Landowner for Failure to Do So (Absent Specific Language to that Effect)

The Second Department explained that village code provision which required abutting landowners to keep a sidewalk in good repair did not impose tort liability for the landowner’s failure to do so:

Unless a statute or ordinance clearly imposes liability upon an abutting landowner, only a municipality may be held liable for the negligent failure to maintain a public sidewalk … . Although the Code of the Village of Great Neck Plaza requires an abutting landowner to keep a sidewalk in good and safe repair, it does not specifically impose tort liability for a breach of that duty … .

The defendant established its prima facie entitlement to judgment as a matter of law by demonstrating that it was an abutting landowner which could not be held liable under the Code of the Village of Great Neck for negligent failure to maintain the public sidewalk … . Ahdout v Great Neck Park Dist, 2015 NY Slip Op 00710, 2nd Dept 1-28-15

 

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