Plaintiff(s), -against- The following papers read on this motion: Notice of Motion... Cross-Motion... Defendant's Memorandum of Law... Reply Papers...

Transcription

1 SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK Present: HON KENNETH A DAVIS, GREGORY V SERIO, Superintendent of the State of New York, as Liquidator of FIRST CENTRAL INSURANCE COMPANY, -against- Plaintiff(s), PUBLIC SERVICE MUTUAL INSURANCE COMPANY, Defendant(s) Justice TRIAL/IAS, PART 11 NASSAU COUNTY 01/28/02 INDEX No: /01 SUBMISSION DATE: MOTION SEQUENCE s \ 3 #1,2 The following papers read on this motion: Notice of Motion Cross-Motion Defendant's Memorandum of Law Reply Papers Upon the foregoing judgment is denied, and part and denied in part papers, plaintiff's motion for summary defendant's cross-motion is granted in The instant action involves the allocation of the contribution of two insurance policies to a settlement agreement in a case resulting from an infant's eposure to lead paint in an apartment building in New York, NY, between September 1993 and October 1995 The owners of the apartment building were insured by plaintiff from June 29, 1995 to June 29, 1996, and by defendant from June 1, 1993 to June 1, 1995 Both policies provided for general commercial liability coverage up to $1 million and both used a standard insurance policy form The underlying action settled for $390,00000 Defendant claimed that both insurers should pay the sum in equal shares Plaintiff countered, claiming that since defendant insured the owners of the apartment building for a two years as opposed to plaintiff's one year, defendant should pay two-thirds of the settlement, leaving plaintiff to cover only one-third Both parties stipulated that each would pay the amount they thought they should pay, namely, plaintiff agreed to pay one-third and defendant agreed to pay one-half Plaintiff then brought the instant action for judgment declaring that, under the concurrent policies, defendant must pay the remaining balance of the

2 RE: SERIO v PUBLIC SERVICE MUTUAL Page 2 settlement of the underlying action, relying on the so-called "time on the risk" method of allocation Defendant then brought a cross-claim for a judgment declaring that both parties must pay the settlement equally, leaving the balance to the plaintiff-to dispense In its motion papers, defendant also requested that the action be transferred from Nassau County to New York County ALLOCATION As stated above, plaintiff brought a motion for summary judgment declaring that the parties must pay the settlement agreement using the "time on the risk" method The "time on the risk" method refers to the payment of insurance coverage claims between two or more insurers in a continuous tort action pro rata to the time the insured was covered for the liability claimed In other words, if a continuous tort lasted for three years, an insurer whose coverage lasted for two of those years would pay two-thirds of the claim, while an insurer whose coverage lasted for only one of those years would pay one-third of the claim Defendant, conversely, claims that the provisions of the identical policies entered into by both parties provide that the insurers must dispense of the sum of the settlement agreement in equal shares Defendant cites the "other insurance" clauses contained in the policies that state that: "If all of the other insurance permits contribution by equal shares, we will follow this method also" (&z&;zm CG O? , pp 8) The "other insurance" clause provides that each insurer will contribute equal amounts until it has reached the limit of its respective policy or until the sum of the claims has been paid in full, whichever should come first Defendant correctly relies on American Emoire Ins Co v PSM -Ins Cos, 259 AD2d 341, 687 NYS2d 32 (lst Dep't, 1999) See Hevmach v Cardiac Pacemakers, Inc, 183 Misc 2d 584, 698 NYS2d 837 (Suffolk County, 1999) (stating that "the rule in New York is that a trial court must follow an Appellate Division precedent in its own Department, and, in the absence of a relevant decision in its own Department, a trial court is bound to follow applicable decisions in another Department of the Appellate Division, until its own Appellate Division, decides otherwise"); see also Worldwide Ins Co v United States Caoital Ins Co:, 181 Misc 2d 480, 693 NYS2d 901 (New York, 1999) In American Emoire, there were three insurers who issued concurrent policies on a building in which a child suffered injuries due to eposure to lead paint All three insurance policies were for general commercial liability and followed form CG , the same policy form used by the parties in the instant action The court in American Empire relied on the

3 RE: SERIO v PUBLIC SERVICE MUTUAL "other insurance" clauses of the policies in determining that the insurers should pay the sum of the settlement agreement in equal shares The court held that, "the section providing for contribution on a pro rata basis would only have been applicable if the other insurance policies did not provide for contribution by equal shares In light of the language employed in the 'other insurance' provisions, it is apparent that all three insurance companies were required to pay the [equal amount] they each agreed to pay pursuant to the settlement" 259 AD2d at 342 Similarly, in the present action, the policies eecuted by both parties contain the "other insurance" clause seen in American Emoire It is apparent from the language of the "other insurance" clauses that in the section titled "Method of Sharing," the policy provides for contribution by equal shares if all other policies involved also so provide (See Form CG , pp 8) Since both insurers utilized the same form for their respective policies, and since both policies contained the same "other insurance" clause, the insurers are bound by the terms of their policies to contribute to the payment of the settlement agreement equally, regardless of the length of time either insurer was "on the risk" Therefore, both insurers are required to pay a total of $195,000 from their respective policies to fulfill the obligations of the settlement agreement CHANGE OF VENUE In its cross-claim, defendant moved for an order to transfer the instant action to New York County, pursuant to CPLR 510 and 511 Defendant contends that since it fulfilled its obligation to timely file a Demand for a Change of Venue, a claim that is undisputed, it is entitled to a change of venue as a matter of right CPLR 503(a) states that, "ecept where otherwise prescribed by law, the place of trial shall be in the county in which one of the parties resided when it was commenced; or if none of the parties then resided in the state in any county designated by the plaintiff" The party seeking a change of venue must prove that either (1) the county designated for that purpose is not a proper county; or (2) there is reason to believe that an impartial trial cannot be had in the proper county; or (3) the convenience of material witnesses and the ends of justice will be promoted by the change" CPLR 510 Defendant in the instant action claims that venue is improper in Nassau County due to the fact that neither the plaintiff nor the defendant reside in the County nor did -the underlying settlement take place in the County CPLR 511 provides the procedural rules that parties must comply with when making a demand for a change of venue Pursuant

4 RE: SERIO v PUBLIC SERVICE MUTUAL Page 4 to 511(b), defendant "shall serve a written demand that the action be tried in a county he specifies as proper Thereafter the defendant may move to change the place of trial within fifteen days after service of the demand" Defendant timely demanded for a change of venue by filing the demand with his Answer on October 18, 2001 However, defendant failed to file his motion to change venue within the fifteen-day statutory limitation That motion was filed on January 14, 2001, nearly three months later On its face, it would appear that defendant failed to comply with the statutory requirements and that its motion to change the venue of the action should be barred However, it has been held that where the demand for a change of venue was not made pursuant to the statute, the court has the discretion to award such change McBride v St Vincent's Hospital, 271 AD2d 581, 706 NYS2d 449 (2d Dep't 2000) Defendant cites 'several factors that, it argues, indicate that the proper forum for the adjudication of the present matter is New York County, r'ather than Nassau County First, defendant argues that since neither plaintiff nor defendant maintain an office in Nassau County, and that as a result neither party's records are in Nassau County, Nassau County is an improper forum to maintain the present action It is undisputed that defendant maintains its offices- in New York County It is also undisputed that plaintiff no longer maintains an office in Nassau County, as it is in the process of being liquidated by the State of New York as a bankrupt corporatipn Likewise, all of plaintiff's records are in the custody of the Superintendent of Insurance, whose office is also located in New York County However, Business Corporation Law, 1008 establishes as the proper venue for proceeding, in connection with a court supervised dissolution, the counties within the judicial district in which the dissolved corporation had its main office Gardner v Fvr-Fvter Co, 47 AD2d 591, 363 NYS2d 690 (4th Dep't, 1975) Defendant also argues that the current forum is improper as the underlying action involves residential property in New York County and was settled in New York County However, this argument is unavailing as it has been held that the granting of a motion to change the venue of an action is improper where all relevant pretrial activity had already taken place in [the current county] when -defendants brought motion to change venue months after note of issue was filed, and facts argued in support of change of venue were readily apparent at time action was commenced" D'Andrea v Albert Palancia Aaencv, Inc, 145 AD2d 334, 534 NYS2d 996 (1988, 1st Dept) The thrust of defendant's argument is that conducting the present action in Nassau County would be burdensome on the

5 RE: SERIO v PUBLIC SERVICE MUTUAL Page 5 parties and the court However, the fact remains that it filed an untimely motion to change the venue, leaving the determination of the motion squarely in the discretion of the court The Appellate Division of the Second Department has continuously held that it is an insufficient basis for a discretionary change of venue where the [defendant] proffered no reason for the delay, but urged that a change of the place of trial to New York County was appropriate pursuant to CPLR 510 in the court's discretion because 'all the material witnesses, including plaintiff are located in New York County' Cruz v Citv of New York, 251 AD2d 364, 674 NYS2d 81 (2d Dep't, 1998); see also Redelick v Williford, 240 AD2d 388, 658 NYS2d 1024 (2d Dep't, 1997); Aureliano v Hunt-Wesson Foods, Inc, 124 AD2d 691, 508 NYS2d 202 (2d Dep't, 1986) The rule in Cruz - may be applied to the instant action where the reasons Put forth by defendant relate to matters of convenience for the parties, including the assertion that both parties' records are located in New York County Defendant has not presented sufficient evidence to warrant a change of venue The travel time between Nassau County and New York County is usually less than an hour and the inconvenience of the parties would be minimal As -such, defendant has failed to sufficiently demonstrate that the 'parties would be so inconvenienced as to warrant a change of venue See, Romero, supra; Charles v NYC Transit Authority, 277 AD2d 194, 715 NYS2d 871 (2d Dep't 2000) Dated: MAR Accordingly, plaintiff's motion for summary judgment is denied Likewise, defendant's motion to change the venue of the action is denied and its motion for summary judgment declaring the parties pay equal shares of the underlying settlement agreement is granted < This decision constitutes the order of th,? court