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Rli Insurance Company v. Leslie Smiedala

June 8, 2012

RLI INSURANCE COMPANY,
PLAINTIFF-RESPONDENT,
v.
LESLIE SMIEDALA, ET AL., DEFENDANTS, AND REGIONAL INTEGRATED LOGISTICS, INC.,
DEFENDANT-APPELLANT.



Appeal from a judgment (denominated order) of the Supreme Court, Niagara County (Frank Caruso, J.), entered May 23, 2011.

RLI Ins. Co. v Smiedala

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 June 8, 2012

PRESENT: SCUDDER, P.J., SMITH, CENTRA, LINDLEY, AND MARTOCHE, JJ.

The judgment, insofar as appealed from, denied the motion of defendant Regional Integrated Logistics, Inc. for a declaration.

It is hereby ORDERED that the judgment insofar as appealed from is unanimously reversed on the law without costs, the motion of defendant-appellant is granted and judgment is granted in favor of defendant-appellant as follows: It is ADJUDGED and DECLARED that plaintiff is obligated to defend and indemnify defendant-appellant for the obligations it assumed pursuant to its indemnification agreement with defendant Michael J. Hale, and

It is further ADJUDGED and DECLARED that a hearing to determine the legal services that should be apportioned between defendant-appellant and defendant Michael J. Hale is no longer necessary.

Memorandum: Plaintiff commenced this action seeking judgment declaring that it is not obligated to defend or indemnify defendant Michael J. Hale and defendant-appellant, Regional Integrated Logistics, Inc. (Regional), in the underlying personal injury action and related third-party action under the commercial automobile insurance policy issued by plaintiff to Regional. Defendant Leslie Smiedala commenced the underlying personal injury action seeking damages for injuries he allegedly sustained when the vehicle in which he was a passenger collided with a vehicle driven by Hale, which Hale had leased from Audi Financial Services and VW Leasing, Ltd. (Audi/VW), defendants-third-party plaintiffs in the underlying action. Hale, an employee of Regional, was driving to the bank at the time of the accident in order to make a deposit for Regional. Audi/VW commenced the third-party action against Regional seeking contribution and/or indemnification for any liability arising from Hale's negligence under the doctrine of respondeat superior.

Hale and Regional moved for summary judgment declaring that plaintiff must defend and indemnify them under the policy. Before that motion was decided, Regional and Hale entered into an indemnification agreement (R-H Agreement) pursuant to which Regional agreed to indemnify and hold harmless Hale "from and against any and all claims, damages, losses, expenses, liability and exposure, including, but not limited to, counsel fees, costs and disbursements, imposed upon or awarded against Hale as a result of and/or in connection with" the motor vehicle accident. Although Supreme Court denied the initial motion of Hale and Regional, the court thereafter granted their motion for leave to reargue and, upon reargument, granted the initial motion and issued the requested declaration. On a prior appeal, we concluded that the court should have granted the declaration only in favor of Regional but not Hale. We thus modified the judgment accordingly (RLI Ins. Co. v Smiedala, 71 AD3d 1553 [first appeal]).

While the first appeal was pending, Hale and Regional moved for summary judgment declaring that plaintiff was obligated to pay the costs and legal fees incurred by them in defending the declaratory judgment action commenced by plaintiff. The court granted that motion but, on appeal, we modified the judgment by denying that part of the motion with respect to Hale, based on our earlier determination that plaintiff was not obligated to defend or indemnify Hale in the underlying personal injury action (RLI Ins. Co. v Smiedala, 77 AD3d 1293 [second appeal]). We also remitted the matter to Supreme Court "to determine the amount of reasonable attorneys' fees to which Regional is entitled in the declaratory judgment action following a hearing, if necessary," on the ground that the same attorney represented Hale and Regional in the declaratory judgment action, and it was not possible on the record before us to determine that part of the attorneys' fees attributable to each (id. at 1295).

Following our decision in the second appeal, Regional moved for summary judgment seeking a declaration that plaintiff was "obligated to provide coverage to [Hale] for the contractual indemnification agreement that [Regional] entered into with [Hale]." Regional also sought a declaration that a hearing was no longer needed to determine the amount of attorneys' fees that should be attributed to Hale and Regional. Regional contended in support of the motion, as it does on this appeal, that plaintiff was "obligated to provide coverage for the [R-H] [A]greement that Regional entered into with [Hale]," including coverage for Regional's obligation "to pay the counsel fees of [Hale]." We conclude that the court erred in denying Regional's motion.

We agree with Regional that our decision in the first appeal does not preclude us from deciding the merits of the issues raised on this appeal inasmuch as our earlier decision neither addressed nor resolved the contention that plaintiff is obligated to defend and indemnify Regional for liabilities it assumed under the R-H Agreement (see New York State Thruway Auth. v ...


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