The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge
On November 18, 2002, One Beacon Insurance f/k/a CGU Insurance ("One
Beacon") filed an action against Terra Firma Construction Management
General Contracting, LLC. ("Terra") and K.A.F.C.I. Corp. ("KAFCI")
to recover premiums owing under workers' compensation insurance policies.
See One Beacon Complaint ("Compl."). On June 11, 2003, Terra and
KAFCI filed a third-party action for indemnification, breach of contract
and negligence against their insurance broker, Select Planning, LTD.
("Select"). See Third-Party Complaint ("TP Compl.").
Third-Party Defendant Select now moves for summary judgment. In support
of its motion, Select submits that Terra & KAFCI's breach of contract
and negligence claims are barred by statutes of limitation and that Terra
and KAFCI cannot state a valid claim for indemnification. For the reasons
set forth below, Select's motion is granted and the Third-Party Complaint
One Beacon is an insurance provider organized under the laws of
Pennsylvania with its principal place of business in Pennsylvania. Terra
and KAFCI are companies engaged in interior/drywall construction and
contracting organized under the laws of New York, each with a principal
place of business in New York. Select is an insurance broker organized in
New York with a principal
place of business in New York. One Beacon Amended Complaint ("AM
Comp.") ¶¶ 2-3.
Sometime prior to 1994, Terra and KAFCI hired Select to review their
insurance needs and to procure workers' compensation insurance policies
for their employees and operations. TP Compl. ¶ 5.
On June 15, 1996, Select helped Terra and KAFCI obtain an insurance
contract from One Beacon (the "First Policy"). By the terms of that
contract, Terra and KAFCI were to pay insurance premiums to One Beacon in
return for one year of workers' compensation coverage. The First Policy
was effective from June 15, 1996 to June 15, 1997. AM Compl. ¶ 6.
The price of the insurance premiums that Terra and KAFCI owed to One
Beacon under the First Policy was subject to retrospective adjustment.
Id. Under insurance policies subject to retrospective
adjustment, the insured initially pays premiums at a set price.
Subsequently, the price of the premiums is adjusted by the insurer to
reflect updated estimates of risk for the insurance coverage
("Retrospective Adjustment"). Retrospective Adjustment can result in the
insured owing additional premiums or in premiums being returned to the
depending on whether the price is raised or lowered. In this case,
the premiums Terra and KAFCI owed to One Beacon under the First Policy
were retrospectively adjusted to a higher price. See id. ¶
11. This caused Terra and KAFCI to owe One Beacon additional premiums
(the "Retrospective Premiums"), which One Beacon claims it has not
received. See id.
On June 15, 1997, Select helped Terra and KAFCI obtain a second
contract from One Beacon for workers' compensation coverage (the "Second
Policy"). Unlike the First Policy, the Second Policy was not subject to
Retrospective Adjustment. Under that policy, Terra ...