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Harleysville Worcester Insurance Co. v. MGB Building, Inc.

United States District Court, W.D. New York

November 16, 2017

HARLEYSVILLE WORCESTER INSURANCE COMPANY, Plaintiff/Counter Defendant,
v.
MGB BUILDING, INC., MATTHEW G. BROOKS, CHAD BROOKS, KATHLEEN M. HOLDING, BRIAN HOLDING, Defendants/Counter-Claimants,

          For Plaintiff/Counter-Defendant Harleysville Worcester Insurance Company: Dan D. Kohane, Esq. Jennifer Jeanne Phillips, Esq. Hurwitz & Fine, P.C., James J. Duggan, Esq. Jesse John Cooke, Esq. Duggan Pawlowski & Cooke LLP

          For Defendant/Counter-Claimant MGB Building, Inc.: Sean Michael Spencer, Esq. Hagelin Spencer LLP

          For Defendants/Counter-Claimants Matthew G. Brooks and Chad Brooks: Elsa Johanna Schmidt, Esq. Jessica L. Foscolo, Esq. Kenney, Shelton, Liptak & Nowak LLP

          For Defendants/Counter-Claimants Kathleen M. Holding and Brian Holding: Kevin A. Szanyi, Esq. Webster Szanyi LLP

          DECISION AND ORDER

          CHARLES J. SIRAGUSA United States District Judge

         INTRODUCTION

         This insurance contract case, here on diversity jurisdiction, is now before the Court on the following applications all filed on May 30, 2017: (1) motion for summary judgment filed by Harleysville Worchester Insurance Company (“Harleysville”), ECF No. 69; (2) cross-motion for summary judgment filed by Brian Holding and Kathleen M. Holding (“Holdings”), ECF No. 70; and (3) cross-motion for summary judgment by Chad Brooks, Matthew G. Brooks, and MGB Building, Inc. (“MGB”), ECF No. 71. For the reasons stated below, the Court denies Harleysville's application, and grants the remaining applications.

         BACKGROUND

         Harleysville Worchester Insurance Company (“Harleysville”) commenced this action seeking a declaratory judgment that it is not responsible for coverage on a 2012 Dodge Ram truck used by Chad Brooks which was involved in a personal injury accident. Harleysville issued a Commercial Lines insurance policy, number BA 00000014020J, effective on March 12, 2013, until March 12, 2014. That policy provided commercial auto liability coverage to MGB. Matthew Brooks also has a personal auto policy, specifically covering the Dodge Ram truck, through State Farm Insurance Company.

         The accident occurred on Christmas Eve in 2013 as Kathleen Holding was crossing a street in Spencerport, New York. Kathleen Holding's injuries included traumatic brain injury and fractures to her back and face. On August 27, 2014, she brought suit against MGB, Matthew Brooks, and Chad Brooks in New York State Supreme Court. Harleysville was not a party to the state court lawsuit.

         As indicated above, the Dodge Ram truck that struck Ms. Holding was operated by Chad Brooks. The vehicle was titled to Chad Brooks' father, Matthew Brooks, and according to Defendants was on loan to Matthew Brooks' company, MGB.[1] In that regard, Matthew Brooks testified at his deposition in the state court action: that the truck had been on loan to MGB for approximately one year prior to the Christmas Eve accident; that it was used exclusively by MGB; that MGB paid all the expenses related to the truck including loan payments. Additionally, the Dodge Ram truck was marked with the MGB logo. Letter from Hon. J. Scott Odorisi to Kevin A. Szanyi, Joshua Henry and Brent Seymour (Jan. 4, 2016), ECF No. 25-4. Chad Brooks was employed by MGB and the truck had been assigned to him to use in his employment. MGB & Brooks Joint Statement of Facts ¶ 31, ECF No. 71-18. At the time of the incident, Chad Brooks had just left an MGB Christmas party luncheon.

         Harleysville disclaimed coverage for the Christmas Eve accident on the grounds that the truck was owned by Matthew Brooks, not MGB, and was being driven by Chad Brooks for personal use, not in furtherance of MGB business. Dan D. Kohane letter to Brooks and MGB (Sept. 12, 2014) attached to Bond Decl. as Ex. J, ECF No. 71-1.[2]

         In the underlying state court action, the Honorable J. Scott Odorisi, New York State Supreme Court Justice, granted partial judgment on the issue of liability for the Holdings against Chad Brooks and further granted partial summary judgment against Matthew Brooks and MGB, finding both vicariously liable for the accident. Defendants appealed, but that appeal was subsequently dismissed upon the filing of a stipulation of discontinuance. Holding v. Brooks, 151 A.D.3d 1781 (N.Y.App.Div. 4th Dep't 2017).

         STANDARD OF LAW

         Summary ...


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