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American Automobile Insurance Co. v. Hallak Cleaners

United States District Court, S.D. New York

July 22, 2015

AMERICAN AUTOMOBILE INSURANCE COMPANY, Plaintiff,
v.
HALLAK CLEANERS, Defendant. HALLAK & SONS, INC. d/b/a HALLAK CLEANERS, Third-Party Plaintiff,
v.
480 PARK AVENUE CORP., Third-Party Defendant.

MEMORANDUM OPINION & ORDER

VALERIE CAPRONI, District Judge.

Plaintiff American Automobile Insurance Company ("AAIC")[1] brings this subrogation action against Defendant Hallak & Sons, Inc., d/b/a Hallak Cleaners ("Hallak"), arising out of claims for damaged clothing filed by AAIC's insured, Iris Apfel, a non-party to this litigation. In its Complaint, AAIC alleges that Hallak's negligence in treating Apfel's clothing caused AAIC to pay $170, 000 in order to settle Apfel's claims against AAIC. Hallak, as Third-Party Plaintiff, in turn brought claims against Third-Party Defendant 480 Park Avenue Corporation ("480 Park"), arguing that 480 Park was responsible for the water leak that damaged Apfel's clothing, and that if Hallak is liable to AAIC, 480 Park is liable for contribution to Hallak. Hallak has moved for summary judgment arguing that AAIC's Complaint is barred by the applicable statute of limitations.[2] 480 Park has also moved for summary judgment against Hallak. For the reasons discussed below, Hallak's Motion for Summary Judgment is GRANTED, and 480 Park's Motion is DENIED as moot.

BACKGROUND

This action arises out of a water leak in a cooperative, residential apartment building located at 480 Park Avenue, New York, New York. 480 Park's Rule 56.1 Statement ("480 Park's 56.1 Stmt.") ¶¶ 1-2, 5-19. Apfel, a resident of 480 Park, owned a storage room on the second floor where she kept a substantial supply of high-end clothing and accessories. Id. ¶¶ 2, 4; Compl. ¶ 7. On or about September 23, 2009, the building's maintenance staff discovered that water had entered her storage unit. Id. ¶ 19. As a result of the leak, some of Apfel's clothing was damaged. Compl. ¶ 7; Rossman Decl., Ex. G, Transcript of Deposition of Iris Apfel dated May 28, 2015 ("Apfel Dep.") at 29:16-33:19.

Apfel promptly filed a claim with her insurer, AAIC. Hallak's Statement of Material Facts Pursuant to Local Rule 56.1 ("Hallak's 56.1 Stmt.") ¶¶ 5-6 (citing Rossman Decl., Ex. E, Transcript of Deposition of Frank Lenzi dated March 17, 2014 ("Lenzi Dep.") at 27:19-25). About a month later, Apfel brought her damaged garments to Hallak to be dry cleaned and treated for odor and water damage. Hallak's 56.1 Stmt. ¶¶ 10-11 (citing Rossman Decl., Ex. F, Transcript of Deposition of Joseph Hallak dated June 5, 2014 at 44:22-25, 45:17-22, 58:15-59:6). After designating certain items as "unsalvageable, " Hallak treated approximately 1, 135 items, ultimately completing the job on December 11, 2009. Compl. ¶ 11; Hallak's 56.1 Stmt. ¶¶ 12-13, 17 (citing Rossman Decl., Ex. I, Invoice for Unsalvageable Items of Clothing; Ex. J, Hallak Invoice for 1, 135 Items of Clothing).

Although Hallak finished its work in December 2009, Apfel did not promptly receive delivery of her clothing because she did not have a storage room available and she was travelling. Apfel Dep. at 58:2-21. Hallak stored the clothes until Apfel retrieved them approximately five months later. Id. at 58:11-15.

On May 18, 2010, Apfel retrieved her clothes from Hallak and signed a release stating that she was satisfied with Hallak's dry cleaning and restoration services and directing AAIC to pay Hallak for its services. Hallak's 56.1 Stmt. ¶ 18 (citing Rossman Decl., Ex. K, Release dated May 18, 2010; Lenzi Dep. at 49:2-13.). Apfel testified that, at the time she signed the release, she noted that "there were a few things that [she] had looked at that were not to [her] satisfaction." Apfel Dep. at 59:9-10. On June 22, 2010, AAIC paid Hallak $98, 932.57 for its cleaning services. Hallak's 56.1 Stmt. ¶ 21 (citing Rossman Decl., Ex. J, Hallak Invoice). Over the following months, Apfel returned several of her garments to Hallak to be re-treated or re-cleaned. Apfel Dep. at 64:13-65:8.

On or around July 15, 2010, Apfel's insurance broker notified AAIC of a supplemental claim with respect to approximately 310 items of clothing that were allegedly damaged by Hallak. Hallak's 56.1 Stmt. ¶¶ 22-23 (citing Lenzi Dep. at 57:22-58:12, 59:6-19, 64:23-65:7).[3] On September 13, 2011, AAIC denied Apfel's supplemental claim. Hallak's 56.1 Stmt. ¶ 28 (citing Lenzi Dep. at 69:22-25, 77:12-14; Rossman Decl., Ex. N, Letter from AAIC to Apfel, dated September 13, 2011).

On January 24, 2012, Apfel executed a Sworn Statement in Proof of Loss, claiming $400, 000 in damages, Hallak's 56.1 Stmt. ¶ 30 (citing Rossman Decl., Ex. O, Sworn Proof of Loss dated January 4, 2012; see also Lenzi Dep. at 60:24-61:2, 76:11-77-23), and on December 5, 2012, Apfel sued AAIC claiming that AAIC had breached its insurance agreement by failing to cover her supplemental damages. Hallak's 56.1 Stmt. ¶ 33 (citing Rossman Decl., Ex. A, Apfel Complaint). AAIC ultimately settled Apfel's claims for $170, 000. Hallak's 56.1 Stmt. ¶ 36 (citing Compl. ¶ 25).

On May 20, 2013, AAIC filed the instant subrogation action based on Hallak's alleged negligence, seeking reimbursement for the $170, 000 settlement plus "all damages, costs, expenses and attorneys' fees in connection with [AAIC's] defense of Apfel's Complaint." Compl. ¶ 25. Hallak has moved for summary judgment.

DISCUSSION

Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "A material fact is one that would affect the outcome of the suit under the governing law, ' and a dispute about a genuine issue of material fact occurs if the evidence is such that a reasonable [factfinder] could return a verdict for the nonmoving party.'" Sista v. CDC Ixis N. Am., Inc., 445 F.3d 161, 169 (2d Cir. 2006) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). Thus, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.'" Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (internal quotation marks omitted)).

The moving party bears the burden of showing that it is entitled to summary judgment, Huminski v. Corsones, 396 F.3d 53, 69 (2d Cir. 2004) (citing Castro v. United States, 34 F.3d 106, 112 (2d Cir. 1994)), and courts must therefore "construe the evidence in the light most favorable to the non-moving party and... draw all reasonable inferences in [the non-movant's] favor." Huminski, 396 F.3d at 69 (citing World Trade Ctr. Props., L.L.C. v. Hartford Fire Ins. Co., 345 F.3d 154, 166 (2d Cir. 2003)). To overcome a motion for summary judgment, however, the non-movant may not rely on conclusory allegations or speculation, but instead must set forth affirmative evidence on which a reasonable fact-finder could decide in its favor. Battino v. Cornelia Fifth Ave., LLC, 861 F.Supp.2d 392, 400 (S.D.N.Y. 2012) (citing Anderson, 477 U.S. at 256-57); see also Lipton v. Nature Co., 71 F.3d 464, 469 (2d Cir. 1995) ...


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