Ralex Services, Inc., doing business as Glen Island Center for Nursing and Rehabilitation, appellant,
Southwest Marine & General Insurance Company, respondent.
DeIorio Law Group, PLLC, Rye Brook, NY (Patrick V. DeIorio of
counsel), for appellant.
Carroll McNulty & Kull LLC, New York, NY (Joanna L. Young
and Daniel Pickett of counsel), for respondent.
C. DILLON, J.P., CHERYL E. CHAMBERS, JEFFREY A. COHEN, ANGELA
G. IANNACCI, JJ.
DECISION & ORDER
action, inter alia, for a judgment declaring that the
defendant is obligated to provide coverage to and indemnify
the plaintiff in an underlying action entitled United
States of America ex rel. Carolyn Hinestroza v Ralex
Services, Inc., doing business as "Glen Island Care
Center for Nursing and Rehabilitation, " commenced
in the United States District Court for the Eastern District
of New York under case number 10-CV-0822, the plaintiff
appeals from an order of the Supreme Court, Westchester
County (O. Bellantoni, J.), dated October 5, 2015, which
granted that branch of the defendant's motion which was
pursuant to CPLR 3211(a)(1).
that the order is affirmed, with costs, and the matter is
remitted to the Supreme Court, Westchester County, for the
entry of a judgment declaring that the defendant is not
obligated to provide coverage to or indemnify the plaintiff
in the underlying action.
August 2014, the plaintiff (hereinafter Ralex) entered into
stipulations and orders of settlement in an underlying action
whereby it agreed to pay $2.2 million plus interest in
exchange for a release of all potential civil claims and
penalties. In September 2014, Ralex informed the defendant,
Southwest Marine & General Insurance Company (hereinafter
Southwest), of the underlying action and requested
coverage/indemnification under an insurance policy issued by
Southwest. The following month, Southwest disclaimed coverage
and any obligation to defend or indemnify Ralex in connection
with the underlying action as well as the resulting
settlements. Ralex commenced this action, inter alia, for a
judgment declaring that Southwest is obligated to provide
coverage to and indemnify it in the underlying action.
Southwest filed a pre-answer motion to dismiss pursuant to
CPLR 3211(a). The Supreme Court granted that branch of
Southwest's motion which was pursuant to CPLR 3211(a)(1),
and Ralex appeals.
motion pursuant to CPLR 3211(a)(1) to dismiss based on
documentary evidence may be appropriately granted only where
the documentary evidence utterly refutes the plaintiff's
factual allegations, thereby conclusively establishing a
defense as a matter of law" (Sabre Real Estate
Group, LLC v Ghazvini, 140 A.D.3d 724, 724 [internal
quotation marks, brackets, and citations omitted]; see
Goshen v Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314,
326; 25-01 Newkirk Ave., LLC v Everest Natl. Ins.
Co., 127 A.D.3d 850, 851). "The evidence submitted
in support of such motion must be documentary or the motion
must be denied" (Cives Corp. v George A. Fuller Co.,
Inc., 97 A.D.3d 713, 714 [internal quotation marks
omitted]; see Attias v Costiera, 120 A.D.3d 1281,
1282; Fontanetta v John Doe 1, 73 A.D.3d 78, 84).
"In order for evidence submitted in support of a CPLR
3211(a)(1) motion to qualify as documentary evidence, '
it must be unambiguous, authentic, and undeniable'"
(Attias v Costiera, 120 A.D.3d at 1282, quoting
Granada Condominium III Assn. v Palomino, 78 A.D.3d
996, 996-997; see Cives Corp. v George A. Fuller Co.,
Inc., 97 A.D.3d at 714). "[J]udicial records, as
well as documents reflecting out-of-court transactions such
as mortgages, deeds, contracts, and any other papers, the
contents of which are essentially undeniable, ' would
qualify as documentary evidence' in the proper case"
(Fontanetta v John Doe 1, 73 A.D.3d at 84-85;
see Cives Corp. v George A. Fuller Co., Inc., 97
A.D.3d at 714), as would insurance policies (see Nisari v
Ramjohn, 85 A.D.3d 987, 990; GuideOne Specialty Ins.
Co. v Admiral Ins. Co., 57 A.D.3d 611, 613; Randazzo
v Gerber Life Ins. Co., 3 A.D.3d 485, 486).
the subject insurance policy Southwest issued to Ralex
provided that "[n]o insured will, except at that
insured's own cost, voluntarily make a payment, assume
any obligation, or incur any expense, other than for first
aid, without [Southwest's] consent." Contrary to
Ralex's contention, this provision is not ambiguous.
"Contracts of insurance, like other contracts, are to be
construed according to the sense and meaning of the terms
which the parties have used, and if they are clear and
unambiguous the terms are to be taken and understood in their
plain, ordinary and proper sense" (Johnson v
Travelers Ins. Co., 269 NY 401, 408; see Locascio v
Mutual of Omaha Ins. Co., 198 A.D.2d 403, 404).
"New York law views an insurer's right to consent to
any settlement as a condition precedent to coverage"
(PB Americas Inc. v Continental Cas. Co., 690
F.Supp.2d 242, 249-250 [SD NY]; see Vigilant Ins. Co. v
Bear Stearns Cos., Inc., 10 N.Y.3d 170, 177-178;
Bartolomeo v Fidelity Natl. Tit. Ins. Co. of N.Y.,
134 A.D.3d 1063, 1064). Here, the Supreme Court properly
granted that branch of Southwest's motion which was
pursuant to CPLR 3211(a)(1), since the documentary evidence
it submitted showed that Ralex undertook its own defense in
the underlying action, agreed to settle the underlying
action, and incurred defense costs without first obtaining
Southwest's consent. By doing so, Ralex breached the
insurance contract and is not entitled to coverage (see
Indemnity Ins. Co. of N. Am. v St. Paul Mercury Ins.
Co., 74 A.D.3d 21, 25; Royal Zenith Corp. v New York
Mar. Mgrs., 192 A.D.2d 390, 390).
light of our determination, we need not reach the alternate
bases asserted by Southwest for seeking dismissal of the
this is, in part, a declaratory judgment action, we remit the
matter to the Supreme Court, Westchester County, for the
entry of a judgment, inter alia, declaring that Southwest is
not obligated to provide coverage to, or indemnify Ralex ...