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Anna Stranz v. New York State Energy Research and Development Authority (Nyserda

September 30, 2011

ANNA STRANZ,
PLAINTIFF,
v.
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY (NYSERDA),
BURNS INTERNATIONAL SECURITY SERVICES CORPORATION AND SECURITAS SECURITY SERVICES USA, INC.,
DEFENDANTS.
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY (NYSERDA),
THIRD-PARTY PLAINTIFF,
BURNS INTERNATIONAL SECURITY SERVICES CORPORATION AND SECURITAS SECURITY SERVICES USA, INC.,
THIRD-PARTY PLAINTIFFS-RESPONDENTS,
v.
WEST VALLEY NUCLEAR SERVICES COMPANY, LLC,
THIRD-PARTY DEFENDANT-APPELLANT.



Appeal from an order of the Supreme Court, Erie County (Diane Y. Devlin, J.), entered April 26, 2010 in a personal injury action. The order, insofar as appealed from, denied that part of third-party defendant's motion seeking summary judgment against defendant-third-party plaintiffs Burns International Security Services Corporation and Securitas Security Services USA, Inc.

Stranz v New York State Energy Research & Dev. Auth. (nyserda)

Appellate Division, Fourth Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on September 30, 2011

PRESENT: SCUDDER, P.J., CENTRA, FAHEY, GREEN, AND GORSKI, JJ.

It is hereby ORDERED that the order so appealed from is unanimously modified on the law by granting those parts of the motion of third-party defendant West Valley Nuclear Services Company, LLC for summary judgment dismissing the second third-party complaint of third-party plaintiffs Burns International Security Services Corporation and Securitas Security Services USA, Inc. and for summary judgment on its counterclaim against those third-party plaintiffs for up to the sum of $250,000 in costs incurred in defending itself in the third-party action with respect to third-party plaintiff New York State Energy Research and Development Authority (NYSERDA) and as modified the order is affirmed without costs.

Memorandum:

Plaintiff commenced this action seeking damages for injuries she sustained when she slipped and fell on an icy staircase at the Western New York Nuclear Service Center (hereafter, Site). Although the Site was owned by New York State, defendant-third-party plaintiff New York State Energy Research and Development Authority (NYSERDA) assumed jurisdiction over it. Pursuant to a "cooperative agreement" between NYSERDA and the United States Department of Energy (DOE), the DOE operated a high level radioactive waste management project at the Site. The record establishes that the DOE contracted with third-party defendant West Valley Nuclear Services Company, LLC (West Valley) to manage and operate the Site, and that West Valley in turn contracted with defendant-third-party plaintiff Burns International Security Services Corporation and its successor in interest, defendant-third-party plaintiff Securitas Security Services USA, Inc. (collectively, Burns), for Burns to provide security services on the Site. Incorporated into the two purchase order contracts between West Valley and Burns for the provision of the security services were West Valley's General Provisions for Commercial Items (General Provisions).

Two provisions in the General Provisions are relevant to this appeal taken by West Valley. Section 13A required Burns to indemnify and hold harmless West Valley from and against, inter alia, any and all claims, actions, causes of action, expenses and liabilities resulting from any injury to any person alleged to have occurred as a result of or in connection with the performance of Burns's contractual duties, except for any injuries that resulted "directly from the sole negligence" of West Valley. Section 13B required Burns to "procure . . . and . . . maintain . . ., while any work or Services are being performed, and for such periods thereafter as may be necessary under the circumstances' . . . insurance sufficient to protect . . . [West Valley] . . . against any and all liability, or alleged liability, with respect to bodily injury . . . arising pursuant to [the purchase orders]." Also pursuant to the General Provisions, the insurance policy was to contain a provision stating that the insurer agreed to waive " any rights of subrogation against [West Valley] . . . which might arise by reason of any payment under this policy.' " West Valley was to be named as an additional insured in the insurance policy.

The insurance policy obtained by Burns contained the requisite waiver of subrogation clause, named West Valley as an additional insured and provided single incident coverage of $1 million. That coverage, however, was in excess of a self-insured retention (SIR) of $250,000.

After plaintiff commenced her action against NYSERDA and Burns, they commenced separate third-party actions against West Valley. In its third-party answer in the NYSERDA third-party action, West Valley asserted a cross claim against Burns for common-law indemnification. In its amended third-party answer in the Burns third-party action, West Valley asserted two counterclaims, the first seeking contractual indemnification from Burns and the second seeking a defense from Burns or its insurer in the NYSERDA third-party action. West Valley thereafter moved for, inter alia, summary judgment dismissing the Burns "second third-party complaint" and for summary judgment on its two counterclaims. We conclude that Supreme Court erred in denying West Valley's motion with respect to Burns in its entirety. Rather, we conclude that the court should have granted those parts of the motion for summary judgment dismissing Burns's second third-party complaint and for summary judgment on the counterclaim seeking defense costs in the NYSERDA third-party action, but only up to the sum of $250,000. We therefore modify the order accordingly.

With respect to that part of its motion for summary judgment dismissing Burns's second third-party complaint, West Valley contends that the second third-party complaint is barred by both the contractual waiver of subrogation provision and the antisubrogation rule. Contrary to the contention of Burns, West Valley's assertion with respect to the contractual waiver of subrogation is preserved for our review. Furthermore, although Burns is correct that the assertion with respect to the antisubrogation rule is not preserved for our review, West Valley may raise that assertion for the first time on appeal because it involves " [a] question of law appearing on the face of the record . . . [that] could not have been avoided by [Burns] if brought to [its] attention in a timely manner' " (Art Capital Partners, LP v Tyco Acquisition Corp. XVIII, 71 AD3d 1404, 1405, quoting Oram v Capone, 206 AD2d 839, 840).

Nevertheless, although both assertions are properly before us, we conclude that the contractual waiver of subrogation provision does not constitute a basis for granting that part of the motion for summary judgment dismissing Burns's second third-party complaint. Here, the contract stated only that the insurance policy must contain a waiver of subrogation clause that would bar the insurer providing the insurance policy from seeking subrogation ...


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