MEMORANDUM OPINION AND ORDER
Allianz Global Corporate & Specialty ("Allianz") brings this action against Douglas L. Sacks ("Defendant"), seeking indemnification for a settlement paid in connection with a personal injury action ("the Allianz Action"). In a related but unconsolidated action, Sacks seeks a declaratory judgment that Executive Risk Indemnity, Inc. ("ERII"), must indemnify him for any judgment rendered against him in the Allianz Action ("ERII Action"). The Court has jurisdiction of both actions pursuant to 28 U.S.C. § 1332.
In the Allianz Action, Allianz and Sacks have cross-moved for summary judgment pursuant to Federal Rule of Civil Procedure 56. Allianz seeks a determination that it is entitled to indemnification in the amount of $975,000, plus interest, and attorney's fees and costs for both the underlying personal injury action and the case at bar. Sacks, as defendant, seeks dismissal of all claims against him. Cross-motions for summary judgment are also pending in the ERII Action. Sacks, as plaintiff, seeks a declaratory judgment, and ERII seeks dismissal of the claims against it.
The Court has reviewed thoroughly and considered carefully all parties' submissions. For the following reasons: (1) Allianz's motion for summary judgment is granted in part and denied in part; (2) Sacks's motion for summary judgment in the Allianz Action is granted in part and denied in part; (3) ERI's motion for summary judgment is granted; and (4) Sacks's motion for summary judgment in the ERII Action is denied.
The following facts are undisputed.*fn1
Lease and Insurance Policies
On or about December 6, 2003, Sacks entered into a lease agreement with the Mercedes Benz Credit Corporation ("MBCC") for a 2004 Mercedes Benz automobile (Allianz's Local Rule 56.1 Statement of Undisputed Facts In Support of Motion for Summary Judgment ("Allianz 56.1 St.") ¶ 3.) The lease includes an indemnification clause in which Sacks agrees that "[i]f [MBCC is] subjected to any claims, losses, injuries, expenses, or costs related to the use, maintenance, or condition of the vehicle, [Sacks] will pay all of [MBCC's] resulting costs and expenses, including attorney's fees." (Cunningham Aff., Ex. B ("Exemplar Lease") at ¶ 23.)
MBCC's rights and obligations under the lease were thereafter assigned to DCFS Trust. (Allianz 56.1 St. ¶ 4.) DCFS Trust maintained insurance coverage, provided by Allianz, on each vehicle it owned or leased, including Sacks's new vehicle which was covered under policy number 2001001 (the "Allianz Policy"). (Id. ¶ 5.) The body of the Allianz Policy provides that "[t]he following are 'insureds': . . . [a]nyone else while using with your permission a covered 'auto' you own, hire or borrow . . . ." (Croster Aff., Ex. A at SACKS 0093.) An endorsement entitled "Leasing Concerns - Contingent Liability Coverage" modifies the policy document by providing that "liability coverage and any required no-fault insurance provided by the policy for a covered 'auto' applies, subject to the following provisions: . . . for the lessee . . . no insurance is provided by this policy." (Id. at SACKS 0120.) Another endorsement entitled "Leasing Concerns - Second Level Coverage" further modifies the policy document by providing that "for the difference between the limit of insurance [provided by the policy] and the limit of insurance shown in any leasing agreement that requires a lessee to provide primary insurance for you, ["]who is an insured["] applies except that none of the following is an 'insured': . . . the lessee . . . ." (Id. at SACKS 0121 (emphasis omitted).) (Croster Aff., Ex. A., at SACKS 0121). It is undisputed, based upon both Allianz's and Sacks's submissions, that the endorsement containing this provision was incorporated in the original insurance policy. (Id.; Vasile Aff., Ex. H). Pursuant to the requirements of his lease with MBCC, Sacks acquired automotive insurance on the vehicle through Great Northern Insurance Company with a limit of $300,000 per occurrence (the "Chubb Policy"). (Allianz 56.1 St. ¶ 8.)
The Underlying Accident, Injury, and Lawsuit
On the morning of December 15, 2003, Sacks was exiting a parking garage in New York, New York. (Id. ¶ 14.) As Sacks edged out of the garage and into the street, he was involved in a collision with a taxi cab operated by Toufiqu Iman. (Id. ¶15; Sacks's Memorandum of Law in Support of his Motion for Summary Judgment in the Allianz Action ("Sacks Allianz Mem. of Law") at 2.) Deborah Hagaman, a passenger in the taxi cab, suffered significant injuries as a result of the collision, including injuries to her shoulder, neck, and back. (Allianz 56.1 St. ¶ 17.) Her injuries necessitated three surgeries, including (a) a cervical diskectomy, spondylectomy and bone graft of her cervical vertibrae; (b) a debriedment and repair of her right rotator cuff; and (c) a spinal laminectomy and fusion of her lumbar vertebrae. (Id.)
Following the accident and her injury, Ms. Hagaman filed suit against Sacks, DCFS Trust, MBCC, Iman, and Y Talli Taxi, Inc. (the "Hagaman Action"). (Id. ¶16; Buckley Decl., Ex. D.) Following multiple court-ordered mediation sessions at which Sacks was represented by both appointed counsel and his personal counsel (Allianz 56.1 St. ¶ 21), Ms. Hagaman settled with the defendants for $1,275,000. (Sacks's Statement Pursuant to Rule 56.1 in the Allianz Action ("Sacks Allianz 56.1 St.") ¶ 6.) Sacks's primary insurer, Great Northern Insurance Company, contributed to the settlement the maximum allowable payment under Sacks's policy, $300,000. (Allianz 56.1 St. ¶ 20.) Allianz, on behalf of DCFS Trust, paid the remaining $975,000, without releasing Sacks from his contractual indemnity obligations to Allianz. (Id. ¶¶ 18-19.) At the time the settlement was reached, Allianz, on behalf of MBCC as defendant in the Hagaman Action, had a pending motion to amend its Answer to include a cross claim for indemnification against Sacks, which, given the existence of a settlement, the court denied as moot. (Executive Risk Indemnity, Inc.'s Rule 56.1 Statement of Undisputed Material Facts ("ERII 56.1 St.") ¶¶ 8, 11.) Allianz thereafter commenced the Allianz Action against Sacks.
Before or during the pendency of the Hagaman Action -- and prior to either the Allianz Action or the ERII Action -- both Sacks's personal attorney and his insurance company-appointed attorney developed the good faith belief that a finder of fact was likely to find Sacks liable for the accident. (Allianz 56.1 St. ¶ 22.) For example, on May 4, 2006, an attorney at Perez, Furey & Varvaro wrote to Sacks's insurance carrier and noted that "our client [Sacks] may have some liability for this action and as you know there is limited coverage because of his failure to renew his excess policy." (Buckley Decl., Ex. K at SACKS 0526.) Sacks's personal attorney wrote in an April 21, 2005, letter that "[t]he taxi cab had the right of way and our client [Sacks] pulled out from a parking garage into traffic, therefore liability is probable." (Buckley Decl., Ex. K at SACKS 0468.)
Goldman Sachs, Sacks's employer, was issued a Personal Excess Liability Policy for the policy period spanning January 1, 2003, to January 1, 2004 ("2003 Excess Policy"). (ERII 56.1 St. ¶ 20.) Sacks was not an insured under that policy. (Id.) Sacks was, however, an insured under the Personal Excess Liability Policy issued to Goldman Sachs by ERII for the period spanning January 1, 2007, to January 1, 2008 ("2007 Excess Policy"). (Id. ¶ 21.) The policy provided coverage for, inter alia, "damages a covered person is legally obligated to pay for personal injury or property damage, caused by an occurrence . . . in excess of damages covered by the underlying insurance." (Id. ¶ 22.) An "occurrence," for purposes of the policy, is defined as "a loss or accident to which this insurance applies occurring within the policy period." (Id. ¶ 23.)
On August 17, 2007, well after the assessments by Sacks's attorneys that he was likely to be found liable for the accident, Sacks purchased coverage under the 2007 Excess Policy and sought indemnification by ERII for any liability arising from the underlying accident in excess of the maximums on his Chubb Policy . (Id. ¶ 29.) ERII disclaimed coverage under the 2003 Excess Policy on August 17, 2007, and April 22, 2008, because Sacks was not an insured under that policy. (Id.) On September 28, 2008, ERII again disclaimed coverage under the 2003 Excess policy because Sacks was not an insured, and also disclaimed coverage under any policies subsequent to 2003, because the occurrence did not occur during the coverage period of any such policies. (Id. ¶ 35.) Sacks commenced the ERII Action on October 16, 2008, seeking a declaratory judgment that ERII must indemnify him for any damages awarded in the Allianz Action. (Id. ¶ 18; ERII Compl.)
Summary judgment is appropriate where the "pleadings, the discovery and disclosure materials on file, and any affidavits show 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." Fed. R. Civ. P. 56(c). A fact is material "if it 'might affect the outcome of the suit under the governing law,'" and "[a]n issue of fact is 'genuine' if 'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Holtz v. Rockefeller & Co., 258 F.3d 62, 69 (2d Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The evidence is viewed in the light most favorable to the nonmoving party and all reasonable inferences are drawn in its favor. Rubens v. Mason, 527 F.3d 252, 255 (2d Cir. 2008) (citing United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)). The non-moving party, however, "must do more than simply show that there is some metaphysical doubt as to the material facts. . . . [T]he nonmoving party must come forward with specific facts showing that there is a genuine issue for trial." Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 2002) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (alteration in original)). "[M]ere conclusory allegations, speculation or conjecture" will not suffice to defeat summary judgment. Cifarelli v. Vill. of Babylon, 93 F.3d 47, 51 (2d Cir. 1996); see also Fed. R. Civ. ...