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Hanover Insurance Co. v. Duncan

Sup Ct, New York County

March 28, 2013

HANOVER INSURANCE COMPANY A/S/0 SOHO GEMS, Plaintiff,
v.
TIM DUNCAN, CONTRAST COMMUNICATIONS, INC., AND CONTRAST MEDIA, INC., Defendants. TIM DUNCAN, CONTRAST COMMUNICATIONS, INC., AND CONTRAST MEDIA, INC., Third-Party Plaintiff,
v.
FOOD CENTER REALTY CORP., Third-Party Defendants. Index No. 104158/2010

Unpublished Opinion

PRESENT: Hon. EILEEN A. RAKOWER Justice

The following papers, numbered 1 to _______were read on this motion for/to PAPERS NUMBERED

Notice of Motion/ Order to Show Cause - Affidavits - Exhibits ... _________1, 2, 3______________

Answer — Affidavits — Exhibits __________________________________4, 5_______________

Replying Affidavits _____________________________________________6, 7_______________

Hanover Insurance Company ("Hanover Insurance"), as a subrogee of Soho Gems, seeks recovery in subrogation for amounts it paid to its insured upon a claim for property damage which occurred on September 25, 2009, at its premises at 367 West Broadway, New York, NY. Defendant Food Center Realty Corp. ("FCRC") now moves for summary judgment pursuant to CPLR §3212.

Soho Gems conducts business at 367 West Broadway, New York, NY, and is insured by Hanover Insurance. 500 Broome Street adjoins the property located at 367 West Broadway, New York. FCRC is the owner and leasor of 500 Broome Street. On March 5, 1988, FCRC leased the entire building, except for the second floor, to 500 Broome Street Associates. On December 25, 2003, FCRC leased the second floor of 500 Broome Street to Contrast Communications, Inc. ("Contrast Communications"). Tim Dugan ("Dugan"), is the principal and sole shareholder of Contrast Communications.

On September 25, 2009, a boiler located in the Contrast Communications leasehold at 500 Broome Street, burst, resulting in a water leak. As a result of the water leak, Soho Gems suffered damage to its property. Soho Gems submitted a claim to Hanover Insurance. Hanover Insurance made payments to Soho Gems, Hanover now seeks to recover money that it paid to Soho Gems as a result of the water damage.

Hanover Insurance's complaint alleges that Dugan, Contrast Communications, and Contrast Media (collectively, "Defendants") failed to take appropriate steps to protect the property from water damages, and that the leak was caused by or contributed to by reasons of Defendants' negligence. Hanover Insurance demands $105, 740.06 in damages from Defendants.

Defendants commenced a third-party action against FCRC on September 30, 2011. In the third-party complaint, they allege that FCRC, who leased the premises to Contrast Communications, was responsible for the upkeep and maintenance of the premises located at 500 Broome Street, including the building water heater located within Contrast Communication's premises. They allege that if Hanover Insurance recovers judgment against Defendants, then all three parties are entitled to recover from FCRC in the amount of such judgment.

FCRC now moves for summary judgment and to dismiss the third party complaint against it. Dugan opposes this motion. Hanover Insurance takes no position.

The proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, That party must produce sufficient evidence in admissible form to eliminate any material issue of fact from the case. Where the proponent makes such a showing, the burden shifts to the party opposing the motion to demonstrate by admissible evidence that a factual issue remains requiring the trier of fact to determine the issue. The affirmation of counsel alone is not sufficient to satisfy this requirement. (Zuckerman v. City of New York, 49 N.Y.2d 557 [1980]). In addition, bald, conclusory allegations, even if believable, are not enough. (Ehrlich v. American Moninger Greenhouse Mfg. Corp., 26 N.Y.2d 255 [1970]). (Edison Stone Corp. v. 42ndStreet Development Corp., 145 A.D.2d 249, 251-252 [1st Dept. 1989]).

An out of possession landlord is one who "has surrendered possession and control over premises leased to a tenant." (Mehl v. Fleisher, 234 A.D.3d 274, 650 N.Y.S.2d 784 [2nd Dept 1996]). An out of possession landlord is generally not liable in negligence with respect to the condition of the demised property. (Guzman v. Haven Plaza Hous. Dev. Fund Co., 69 N.Y.2d 559 [1987]). However, there are two exceptions to this general rule: where the landlord "(1) is contractually obligated to make repairs or maintain the premises; or (2) has contractual right to reenter, inspect and make needed repairs and liability is based on a significant structural or design defect that is contrary to a specific ...


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