Silverstein) filed a third-party claim against Kaback. On
November 6, 1994, Flamio filed a second action, in New York
State Supreme Court in the Bronx, naming Otis Elevator, Inc.
("Otis") as defendant. Otis filed third-party claims against
Kaback, Silverstein and Coolwind, and Silverstein filed
cross-claims against Kaback and Coolwind. On June 9, 1995, the
action against Otis was consolidated with the action against
Silverstein and Coolwind ("Bronx Action"). Flamio's claim
against Otis (and Silverstein's cross-claim against Kaback) was
dismissed on August 23, 1999.
On July 17, 1997, Silverstein filed an action in New York
State Supreme Court in Westchester County, seeking a declaratory
judgment that either Kaback or Liberty Mutual was required to
provide indemnification in the Bronx Action ("Westchester
Action"). Specifically, Silverstein sought an order declaring
either that it (Silverstein) was an "additional insured" under
the Liberty Mutual policy, or that Kaback had violated its
contractual agreement by failing to name Silverstein as an
additional insured. In a decision dated May 13, 1999, Justice
Aldo A. Nastasi found that Silverstein was not an additional
insured under the Liberty Mutual policy and that Kaback had
violated its contractual duty to obtain insurance covering
Silverstein. "Silverstein is entitled to a judgment . . .
declaring . . . that defendant Kaback is responsible to the
plaintiff Silverstein for all resulting damages including
payments in the discharge of liability to Flamio in the
underlying action and for all costs and attorneys fees incurred
by the plaintiff Silverstein in defending said action."
National Union Fire Ins. Co. v. Liberty Mutual Ins. Co., No.
102999, Slip Op. at 5 (Sup.Ct.West. Cty. May 13, 1999).
On June 9, 2000, a jury in the Bronx Action returned a verdict
awarding Flamio $11.745 million, finding Coolwind to be 60
percent liable and Kaback liable for the remaining 40 percent.
Following the verdiet, on July 28, 2000, the parties settled the
Bronx Action, by agreeing to pay Flamio $7.025 million, with
Coolwind paying $5 million, SIF (on behalf of Kaback) paying $2
million and Silverstein paying $25,000.
The instant action — i.e. the fourth action — was originally
filed in New York State Supreme Court in the Bronx and was
removed to this Court on March 1, 2000. Defendant filed a motion
for summary judgment on April 30, 2001. Plaintiff then filed a
cross-motion for summary judgment on July 19, 2001. On August
22, 2001, Liberty Mutual filed a reply memorandum, and SIF also
filed a reply on September 19, 2001.
II. Standard of Review
Summary judgment may not be granted unless "the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that the moving party
is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c);
see also Celotex Corp. v. Catrett, 477 U.S. 317,
106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Gallo v. Prudential Residential
Servs., Ltd., 22 F.3d 1219, 1223 (2d Cir. 1994). "The trial
court's task at the summary judgment motion stage of the
litigation is carefully limited to discerning whether there are
material issues of fact to be tried, not to decide them. Its
duty, in short, is confined at this point to issue-finding; it
does not extend to issue-resolution." Gallo, 22 F.3d at 1224.
The moving party bears the initial burden of "informing the
district court of the basis for its motion" and identifying the
matter that "it believes demonstrate[s] the absence of a genuine
issue of material fact." Celotex, 477 U.S. at 323,
106 S.Ct. 2548. The burden then shifts to the
non-moving party which "must set forth specific facts showing
that there is a genuine issue for trial." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202
(1986) (quoting Fed.R.Civ.P. 56(e)); accord Brass v. American
Film Technologies, Inc., 987 F.2d 142 (2d Cir. 1993). The
substantive law governing the case will identify those facts
which are material and "only disputes over facts that might
affect the outcome of the suit under the governing law will
properly preclude the entry of summary judgment." Anderson,
477 U.S. at 248, 106 S.Ct. 2505. In determining whether summary
judgment is appropriate, a court must resolve all ambiguities
and draw all reasonable inferences against the moving party.
See Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see also
Gallo, 22 F.3d at 1223.
When cross-motions for summary judgment are made the standard
is the same as that for individual motions for summary judgment.
See Morales v. Quintel Entertainment, Inc., 249 F.3d 115, 121
(2d Cir. 2001). Each motion must be considered independently of
the other and, when evaluating each, the court must consider the
facts in the light most favorable to the non-moving party. See
Defendant argues that its policy, because of the employee
exclusion, only covers contractual claims and because there were
no contractual claims pending against Kaback when the Bronx
Action was settled it has no duty to indemnify. Def. Mem. at 13.
Plaintiff argues that the Liberty Mutual policy was not limited
to contractual claims because the employee exclusion was not
raised in a timely manner and that Defendant was, therefore,
responsible for any claims (common-law and contractual) settled
as part of the Bronx Action. P1. Mem. at 13. Plaintiff also
argues that even if Liberty Mutual were only responsible for
contractual claims, those claims were "necessarily and
logically" part of the settlement in the Bronx Action,
particularly in light of Justice Nastasi's ruling in the
Westchester Action. P1. Mem. at 14.
Both parties' motions turn on disputed questions of material
fact. Indeed, the two sides dispute virtually every relevant
fact at issue in the case, including, inter alia: (i) the
scope of the claims covered by the settlement of the Bronx
Action, see, e.g., Vreeland v. Cardi, 134 F. Supp.2d 270, 274
(E.D.N.Y. 2000) ("To prevail here, the moving parties must show
the absence of any factual question as to the proper allocation
of the settlement funds."); (ii) whether or not Liberty Mutual
received timely notice of the Bronx Action, see, e.g., Sphere
Drake Ins. Co. v. Y.L. Realty Co., 990 F. Supp. 240, 242
(S.D.N.Y. 1997) ("Whether notice has been timely is generally a
question of fact. . . ."); (iii) whether Liberty Mutual timely
disclaimed coverage based on the employee exclusion, see e.g.,
U.S. Underwriters Ins. Co. v. Congregation B'Nai Israel,
900 F. Supp. 641, 647 (E.D.N.Y. 1995) ("As with a
notice-of-occurrence claim, questions of fact concerning
reasonableness of the delay in a notice of disclaimer are
generally reserved for the trier of fact."); and (iv) whether
Liberty Mutual had a full and fair opportunity to participate in
the Bronx Action, see, e.g., Nobel Ins. Co. v. Hudson Iron
Works, Inc., 51 F. Supp.2d 408, 414 (S.D.N.Y. 1999) (allegation
that defendant "was not notified of, or permitted to participate
in, the litigation and/or settlement decisions or discussions").
Moreover, the parties have failed even to establish, much less
agree, which facts are necessary to determine their motions. In
short, both sides have failed to establish a basis for summary
judgment and the finder of fact should
decide the disputed material issues.*fn2
For the foregoing reasons, the motions for summary judgment
are denied. The parties are directed to participate in a trial
scheduling/settlement conference on December 11, 2002 at 10:00
a.m., in Courtroom 706 of the Thurgood Marshall Courthouse, 40
Centre Street, New York, New York. The parties are directed to
engage in good faith settlement negotiations prior to the