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.

ALLIANZ INSURANCE CO. v. CAVAGNUOLO

May 6, 2004.

ALLIANZ INSURANCE COMPANY as subrogee of MERCEDES BENZ CREDIT CORPORATION, Plaintiff, -against- DOMINIC CAVAGNUOLO, ANGELA CAVAGNUOLO and ANDREA MAIORANO, Defendants; DOMINIC CAVAGNUOLO and ANGELA CAVAGNUOLO, Third-Party Plaintiffs, -against- ALLSTATE INSURANCE COMPANY, FRANK MERLINO, ESQ., ROBERT TUSA, ESQ. and THE LAW OFFICE OF ROBERT TUSA, f/k/a THE LAW OFFICE OF FRANK MERLINO, Third-Party Defendants


The opinion of the court was delivered by: HAROLD BAER, Jr., District Judge

OPINION & ORDER

Plaintiff Allianz Insurance Company ("Allianz") moves for summary judgment against defendants/third-party plaintiffs, Dominic Cavagnuolo and Angela Cavagnuolo (collectively "the Cavagnuolos"), who cross-move for summary judgment against Allianz. The Cavagnuolos also move for leave to amend their answer to add a cross claim against Andrea Maiorano. For the reasons set forth below, Allianz's motion is granted and the Cavagnuolos' cross-motion is denied. The Cavagnuolos' motion for leave to amend their answer is also denied. I. BACKGROUND*fn1

On January 17, 1998, Dominic Cavagnuolo and his mother, Angela Cavagnuolo, entered into a written lease agreement ("the Lease") with the Mercedes Benz Credit Corporation ("MBCC") to lease a 1998 Mercedes Benz model ML-320 automobile from David Michael Motor Car Corporation in Freehold, New Jersey. Pursuant to paragraph 16 of the Lease, the Cavagnuolos obtained liability insurance with Allstate Insurance Company ("Allstate") in the amount of $100,000 per person.

  On October 7, 1998, Mr. Cavagnuolo asked Andrea Maiorano to pick up the leased vehicle from where it was parked and drive it to Mr. Cavagnuolo's place of business so it could be used by Ms. Cavagnuolo. En route, Maiorano struck and injured a pedestrian, Paul Gagliano, who was crossing the street at the corner of Fulton and Gold Streets in Manhattan. Gagliano filed suit ("the Gagliano lawsuit") in New York State Supreme Court, Kings County against Maiorano and Ms. Cavagnuolo and subsequently amended his complaint to add Mr. Cavagnuolo and MBCC as additional defendants. Frank Merlino, Allstate's in-house counsel, filed an answer on behalf of all defendants, although Allstate later assigned MBCC separate counsel, Lester, Schwab, Katz & Dwyer LLP. The Gagliano lawsuit was ultimately settled for the amount of $260,000. Of that sum, Allstate paid $100,000 on behalf of the Cavagnuolos and Maiorano, the full extent of their insurance coverage. Allianz agreed to pay the remaining $160,000 on behalf of MBCC.

  On March 10, 2003, Allianz filed the instant action to obtain common law and contractual indemnification from the Cavagnuolos and Maiorano under the terms of the Lease, which provides that the Cavagnuolos would pay all of the "costs and expenses, including attorneys' fees," associated with "any claims, losses, injuries, expenses, or costs related to the use, maintenance, or condition of the vehicle." Lease ¶ 23. On July 2, 2003, the Cavagnuolos instituted a third-party action against Allstate, Merlino, Robert Tusa, and the Law Offices of Robert Tusa f/k/a the Law Offices of Frank Merlino, in which they asserted malpractice and negligence claims and sought indemnification in the event that Allianz prevailed on its claims. Allianz now moves for summary judgment, contending that the indemnification clause entitles MB'CC, and Allianz and its subrogee, to be repaid for the $160,000 MBCC expended to settle the Gagliano lawsuit, as well as costs, disbursements, and legal fees, for a total of $217,933.99. The Cavagnuolos cross-move for summary judgment on the grounds that the indemnification clause is against public policy and thus unenforceable. Alternatively, the Cavagnuolos seek a fairness hearing to determine whether the Gagliano lawsuit was settled for an appropriate sum. The Cavagnuolos also seek leave to amend their answer to add a cross-claim against Maiorano, who has not yet appeared in the instant lawsuit.

  II. DISCUSSION

 A. Standard of Review

  Pursuant to Federal Rule of Civil Procedure ("Fed.R. Civ. P.") 56(c), a district court must grant summary judgment if the evidence demonstrates that "there is no genuine issue as to any material fact and [that] the moving party is entitled to judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). "Summary judgment is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to `secure the just, speedy and inexpensive determination of every action.'" Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed.R.Civ.P. 1).

  In determining whether there is a genuine issue of material fact, a court must resolve all ambiguities and draw all inferences against the moving party. United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam); Donahue v. Windsor Locks Bd. of Fire Comm'rs, 834 F.2d 54, 57 (2d Cir. 1987). However, the mere existence of disputed factual issues is insufficient to defeat a motion for summary judgment. Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11-12 (2d Cir. 1986). The disputed issues of fact must be "material to the outcome of the litigation," id. at 11, and must be backed by evidence that would allow "a rational trier of fact to find for the non-moving party," Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts." Id. With respect to materiality, "substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248.

 B. Choice of Law

  In diversity actions such as this, when conflicts exist between the rules of two states, the Court applies choice-of-law rules of New York, the forum state. Klaxon Co. v. Stentor Elec. Mfg., 313 U.S. 487, 496 (1941). It is firmly established under New York law, that where a case involves a contract with a clear choice-of-law provision, "[a]bsent fraud or violation of public policy, a court is to apply the law selected in the contract as long as the state selected has sufficient contacts with the transaction." Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 556 (2d Cir. 2000). Here, as the Cavagnuolos note, the Lease has a specific choice-of-law provision. Paragraph 25 of the Lease, titled "Applicable Law" (bold and italics removed), provides: "The laws of the state in which the Lessor (Dealer) has its principle place of business will govern this Lease and any disputes that may arise from it." The Cavagnuolos leased the Mercedes from a car dealership located in Freehold, New Jersey, thus indicating that the parties determined that New Jersey law would apply to any disputes arising from their agreement.

  "New York courts generally defer to the choice of law made by the parties to a contract." Cargill Inc. v. Charles Kowskv Res., Inc., 949 F.2d 51, 55 (2d Cir. 1991). Moreover, the "parties' intention and the place of the making of the contract are to be given heavy weight in determining which jurisdiction has the most significant contacts." Mechanic v. Princeton Ski Shop, Inc., No. 91 Civ. 6740, 1992 WL 397576, at *3 (S.D.N.Y. Dec. 30, 1992). These two factors counsel for the application of New Jersey law. While the parties rely heavily on New York law in the motion and cross-motion submissions, they have presented neither arguments or case law for the application of New York law.*fn2 I see no reason to apply New York law where the relevant contract was entered into in another state, it provides for the application of the law of another state, and none of the parties to the contract are New York residents.*fn3 Instead, as the parties agreed in the contract, New Jersey law applies.

 C. Indemnification Clause

  Allianz argues that the Lease contains an unambiguous indemnification clause that requires the Cavagnuolos to reimburse Allianz as subrogee of MBCC for the total amount of expenses and legal fees associated with their operation of the vehicle. The Cavagnuolos assert in both their opposition to Allianz's motion for summary judgment and their own cross-motion that this clause is void as against public policy because it is manifestly unfair and solely the result of the disproportionate bargaining power between the parties to the ...


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.