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Garden City Apartments, LLC v. Xcel Plumbing of New York, Inc.

United States District Court, E.D. New York

January 18, 2017

Garden City Apartments, LLC, Plaintiff,
v.
Xcel Plumbing of New York, Inc., Defendant/Third-Party Plaintiff,
v.
EDI Architecture, P.C., et al., Third-Party Defendants.

          Plaintiff is represented by Daniel Q. Harrington of Cozen O'Connor

          Defendant is represented by Braden H. Farber and Richard Brian Camarda of Farber, Brocks & Zane L.L.P.

          MEMORANDUM AND ORDER

          JOSEPH F. BIANCO United States District Judge

         Plaintiff Garden City Apartments, LLC (“plaintiff”) brings this diversity action against Xcel Plumbing of New York, Inc. (“defendant”) for breach of contract and negligence under New York law.[1] Defendant now moves for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure and argues that plaintiff's potential recovery from defendant is limited by a subrogation waiver in the contract at issue. For the reasons stated below, the motion is denied.

         I. Background

         A. Facts

         The following facts are taken from the parties' affidavits and exhibits, as well as their respective Rule 56.1 statements of fact (“Def.'s 56.1, ” ECF No. 61-1; “Pl.'s 56.1” and “Pl.'s 56.1 Counterstatement, ” ECF No. 67-2; and “Def.'s 56.1 Counterstatement Resp., ” ECF No. 71). Unless otherwise noted, the facts are either undisputed or uncontroverted. Upon consideration of the motion for summary judgment, the Court shall construe the facts in the light most favorable to plaintiff as the nonmoving party, and will resolve all factual ambiguities in its favor. See Capobianco v. New York, 422 F.3d 47, 50 n.1 (2d Cir. 2001).

         This action arises out of property damage from a fire at an apartment home community owned by plaintiff. (Def.'s 56.1 ¶ 1; Pl.'s 56.1 ¶ 1.) Pursuant to two trade contracts dated August 17, 2011 (the “Trade Contracts”), defendant contracted with AvalonBay Communities, Inc. (“AvalonBay”) to perform plumbing and fire protection work (the “Work”) at a project located at 998 Stewart Avenue, Garden City, New York (the “Property”). (Def.'s 56.1 ¶¶ 2, 5; Pl.'s 56.1 ¶¶ 2, 5.) Plaintiff is a third-party beneficiary of the Trade Contracts. (Def.'s 56.1 ¶ 3; Pl.'s 56.1 ¶ 3.)

         Both Trade Contracts include the following provision:

32. INSURANCE ….
d. Property Insurance. The Builder's Risk or property insurance purchased by OWNER provides coverage for CONTRACTOR and OWNER for loss or damage to the Work. CONTRACTOR shall be responsible for the insurance policy deductible amount applicable to damage to the Work and/or damage to other work caused by CONTRACTOR. CONTRACTOR shall procure and maintain, at its own expense, insurance for its own property and equipment stored on the site, off the site or in transit. OWNER and CONTRACTOR waive all rights against each other and against all other contractors or subcontractors for loss or damage to the extent reimbursed by Builder's Risk or any other property or equipment insurance applicable to the Work, except such rights as they may have to the proceeds of such insurance. If the policies of insurance referred to in this Section require an endorsement or consent of the insurance company to provide for continued coverage where there is a waiver of subrogation, the party procuring such policies shall cause them to be so endorsed or obtain such consent.

(Def.'s 56.1 ¶ 8; Pl.'s 56.1 ¶ 8; Def.'s 56.1 Ex. B, ECF No. 61-3, at 19; Def.'s 56.1 Ex. C, ECF No. 61-4, at 19.) AvalonBay carries an insurance policy (the “Policy”)[2]that covers the Property, which insures “‘All Risk' of Direct physical loss or damage including flood, earth movement, and Boiler & and Machinery Insurance” and includes a deductibles provision. (Def.'s 56.1 ¶ 9; Pl.'s 56.1 ¶ 9; Def.'s 56.1 Ex. E, ECF No. 61-6, at 8, 11.) In addition, the Policy provides that “upon payment of any loss, [the] Insurer is subrogated to all the rights of [AvalonBay] to the extent of such payment, ” and “[i]n the event of any payment under this [P]olicy, except where subrogation rights have been waived, the Insurer shall be subrogated to the extent of such payment to [AvalonBay's] rights of recovery therefore.” (Def.'s 56.1 ¶ 9; Pl.'s 56.1 ¶ 9; Def.'s 56.1 Ex. E at 42-43.)

         On April 11, 2012, a fire broke out and damaged the Property, resulting in a loss valued at $2, 399, 846. (Def.'s 56.1 ¶¶ 10, 12; Pl.'s 56.1 ¶¶ 10, 12.) Pursuant to the Policy, AvalonBay paid a deductible of $254, 301 and received reimbursement for the remainder from its insurer. (Def.'s 56.1 ¶¶ 13-14; Pl.'s 56.1 ¶¶ 13-14.) The total cost to repair the plumbing and fire protection work was $159, 775. (Pl.'s 56.1 Counterstatement ¶¶ 17-18; Def.'s 56.1 Counterstatement Resp. ¶¶ 17-18.)

         B. Procedural History

         Plaintiff commenced this action on March 17, 2015. (ECF No. 1.) On March 1, 2016, defendant moved for summary judgment. (ECF No. 61.) Plaintiff filed its opposition on April 1, 2016 (ECF No. 67), and defendant filed its reply on April 18, 2016 (ECF No. 70). The Court held oral argument on May 4, 2016 (ECF No. 72) and has carefully considered the parties' submissions.

         II. Standard of Review

         The standard for summary judgment is well-settled. Pursuant to Federal Rule of Civil Procedure 56(a), a court may grant a motion for summary judgment only if “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 Gonzalez v. City of Schenectady, 728 F.3d 149, 154 (2d Cir. 2013). The moving party bears the burden of showing that it is entitled to summary judgment. See Huminski v. Corsones, 396 F.3d 53, 69 (2d Cir. 2005). Rule 56(c)(1) provides that a

party asserting that a fact cannot be or is genuinely disputed must support the assertion by: (A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or (B) showing that the materials cited do not establish the absence or ...

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