Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

WABCO TRADE CO. v. S.S. INGER SKOU

December 16, 1980

WABCO TRADE COMPANY, DIVISION OF WORLD STANDARD EXPORT LTD., Plaintiff,
v.
S.S. INGER SKOU and S.S. AMARYLLIS, their engines, boilers, etc., GCC Shipping Co. Ltd., d/b/a Constellation Line; Ove Skou R/A; Hydra Navigation Co., Ltd. and Constellation Navigation Inc., Defendants. WABCO TRADE COMPANY, DIVISION OF WORLD STANDARD EXPORT LTD., Petitioner, v. GREAT AMERICAN INSURANCE COMPANY, St. Paul Fire and Marine Insurance Company, Highlands Insurance Company and Continental Insurance Company, Respondents



The opinion of the court was delivered by: SWEET

ORDER

The plaintiff Wabco Trade Company, Division of World Standard Export Ltd. ("Wabco") obtained a judgment against defendants SS Inger Skou, SS Amaryllis, GCC Shipping Co. doing business as Constellation Line, and Constellation Navigation Inc. (collectively "GCC"). See opinion of this court dated October 24, 1979. Wabco now seeks to enforce that judgment in a special proceeding against GCC's insurers, the respondents Great American Insurance Company, St. Paul Fire and Marine Insurance Company, Highlands Insurance Company, and Continental Insurance Company ("the Insurers"). Once again Wabco has prevailed, despite the novelty of the remedy sought.

The facts under which GCC was held liable to Wabco were described in the previous opinion and need only brief repetition here. GCC undertook the shipment of four motor graders from New York to Beirut in late 1975. GCC put the graders ashore at Piraeus, Greece, because of the civil unrest in Beirut, and then later made delivery to Beirut. The graders were there seized from a warehouse and lost. Judgment was entered for Wabco for $ 259,841.65 plus interest. It is not contested that the Insurers issued a "Broad Form Deviation Legal Liability" insurance policy to GCC which was in effect at the time of the events which were the subject of the earlier opinion. The policy protected against "... liability to cargo ... by reason of (certain named events resulting in loss to cargo as set forth in the policy)." Wabco has initiated this special proceeding under Fed.R.Civ.P. 69(a) and N.Y. CPLR § 5201, claiming that the obligation of the Insurers is a debt "a cause of action which could be assigned or transferred accruing within or without the state" under id. § 5201(a).

 The Insurers have resisted this proceeding on three grounds: first, that their obligation, whatever it may be, is not a "debt"; second, that § 167 of the New York Insurance Law precludes recovery; and third, that in any case the policy does not cover the loss which is the basis of Wabco's present claim. The memoranda of the parties demonstrate that there is no direct controlling precedent and that metaphysical issues, such as the definitions of "debt" and "cargo," and the distinction between procedural and substantive legislation are presented.

 The Insurers quote the following section from Professor Siegel's Practice Commentaries to the CPLR, McKinney's Cons. Laws of New York, Vol. 7B p. 49 et seq. at p. 50, on the interpretation of the section in question:

 
Clearly the wisest treatment of this provision is that offered by the Court of Appeals in the Abcko case in 1976 ( *fn1" ) ... in which the economic realities of a situation are permitted to rule the technical language of CPLR 5201.

 No authorities have dealt with marine insurance on this issue, but the economic realities would seem to dictate that such a judgment creditor should obtain a determination of his rights, whether or not the policy benefits him, as soon and as directly as possible.

 The closest precedent cited under New York law is Baumgold Bros. Inc. v. Schwarzschild Bros., Inc., 276 A.D. 158, 93 N.Y.S.2d 658 (1st Dep't 1949), aff'd. 302 N.Y. 628, 97 N.E.2d 357 (1951) in which the plaintiff, a jewelry wholesaler, sought successfully to obtain a warrant of attachment on an insurance policy against loss. The defendant's premises having been burglarized and jewelry, including some belonging to plaintiff, lost. The court stated:

 
The contract obligation of the insurance company was created by its promise to pay on the happening of the contingency covered (which concededly has occurred), although proof of loss and indeed other steps within the insured's volition are required before insured can collect.

 93 N.Y.S.2d at 660.

 
On the facts herein disclosed we hold that as the loss had occurred while the policy was in effect and notice of loss had been given and received, the promise to pay was no longer contingent but a definite liability subject, of course, to defenses.

 Id., 93 N.Y.S.2d at 661-62.

 In Ahmed v. American S.S. Owners Mutual Protection & Indemnity Ass'n., Inc., 444 F. Supp. 569 (N.D.Cal.1978), a default judgment was obtained on a personal injury suffered by plaintiff, who then sought to reach defendants' insurers. The District Court held that New York common law barred a recovery on an indemnity insurance policy and that the exception to New York Insurance Law § 167 for marine insurance policies barred recovery against the insurance company under that section. The court also relied on Cucurillo v. American S.S. Owners Mutual Protection & Indemnity Ass'n., Inc., 1969 A.M.C. 2334 (Sup.Ct.N.Y.Cty.1969) which barred a recovery, such as is sought here, under a marine indemnity policy. These decisions concern indemnity policies, on which a "debt" does not arise until the insured has actually paid damages, see, e.g. Ahmed, supra, at 571, and do not confront the CPLR § 5201(a) issue presented here.

 As Baumgold, supra, appears to state New York law, see Guercio v. Hertz, 40 N.Y.2d 680, 686, 389 N.Y.S.2d 568, 573, 358 N.E.2d 261, 265 (1976); see also Seafood Imports, Inc. v. A. J. Cunningham Packing Corp., 405 F. Supp. 5 (S.D.N.Y.1975); N.Y. CPLR § 6202; Practice Commentaries, supra, C5201:6, :7 at 57-59, *fn2" the question is ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.