Zurich American Ins. Company, et al., Plaintiffs-Appellants,
Tower National Insurance Company, Defendant, Port Richmond Glass & Storefronts Inc., etc., Defendant-Respondent.
Fleischner & Fino, LLP, New York (Alexandra E. Rigney of
counsel), for appellants.
Marshall, Conway & Bradley P.C., New York (Lauren R.
Turkel of counsel), for respondent.
Friedman, J.P., Richter, Gische, Gesmer, JJ.
Supreme Court, New York County (Paul Wooten, J.), entered
March 9, 2016, which granted defendant Port Richmond Glass
& Storefronts, Inc.'s motion for summary judgment
dismissing the complaint as against it, unanimously reversed,
on the law, without costs, and the motion denied.
General American Investors Company, Inc. (GA) is a lessee at
a building owned by nonparty SLG 100 Park LLC (SLG). GA
retained plaintiff Aragon, LLC (Aragon) as the general
contractor for a construction project to be performed at
GA's premises. Aragon, in turn, subcontracted with
defendant Port Richmond Glass & Storefronts, Inc. (Port
Richmond) to install glass doors and partitions for the
project. On December 14, 2007, Don Brown, an employee of Port
Richmond, was injured when several sheets of glass fell upon
him, knocking him to the ground.
commenced an action against Aragon and SLG for common- law
negligence and violations of the Labor Law (the underlying
action); third-party actions were brought naming GA and Port
Richmond. The case proceeded to trial, where the jury
returned a verdict against Aragon, found Brown 50% at fault,
and assessed damages of approximately $1, 000, 000. The trial
court subsequently set aside the verdict as to Aragon's
liability, and Brown appealed. The case was ultimately
settled during a preargument conference in this Court for the
sum of $465, 000 payable by Aragon and its insurer, plaintiff
Zurich American Insurance Company.
commenced this action against Port Richmond and its insurer
alleging, as relevant here, that Port Richmond breached its
contractual obligation to indemnify and procure insurance for
Aragon and GA. Plaintiffs seek reimbursement for the
settlement amount, as well as attorneys fees paid during the
underlying action. The motion court dismissed the complaint
as against Port Richmond and this appeal ensued. We now
well settled that "where an indemnitor does not receive
notice of an action settled by the indemnitee, in order to
recover reimbursement [for the settlement], [the indemnitee]
must establish that [it] would have been liable and that
there was no good defense to the liability"
(Deutsche Bank Trust Co. of Ams. v Tri-Links Inv.
Trust, 74 A.D.3d 32, 39 [1st Dept 2010] [internal
quotation marks omitted]; see Feuer v Menkes Feuer,
Inc., 8 A.D.2d 294, 299 [1st Dept 1959]). Conversely,
"[w]here the indemnitor does receive notice of the claim
against the indemnitee, ... the general rule is that the
indemnitor will be bound by any reasonable good faith
settlement the indemnitee might thereafter make"
(Deutsche Bank at 39 [internal quotation marks
omitted]). As to notice, " [i]t is sufficient that the
party against whom ultimate liability is claimed is fully and
fairly informed of the claim and that the action is pending
with full opportunity to defend or to participate in the
defense'" (id. at 42, quoting Oceanic
Steam Nav. Co. [Ltd.] v Campania Transatlantica
Espanola, 144 NY 663, 665 ).
these principles, we find that the motion court improperly
dismissed the indemnification claim. The subcontract plainly
requires indemnification for claims arising out of Port
Richmond's work on the construction project. On appeal,
Port Richmond does not argue that Brown's injuries did
not arise from its work. Instead, Port Richmond contends that
because the underlying action was dismissed against Aragon,
plaintiffs cannot establish Aragon's liability for those
injuries. However, where notice is given, the indemnitee need
not establish its own liability for the underlying claim
(see Deutsche Bank, 74 A.D.3d at 34). There is no
dispute that Port Richmond had notice of the underlying
action as well as the settlement negotiations in this Court.
Although Port Richmond contends that it was asked to leave
the room prior to the time the settlement was reached, that
allegation was made in a reply affirmation below and cannot
properly be considered. In any event, even if true, it would
not entitle Port Richmond to judgment as a matter of law. Nor
has Port Richmond shown as a matter of law that the
settlement was unreasonable or not made in good faith.
court should not have dismissed the insurance procurement
claim. Port Richmond contends that it was not required to
procure insurance for GA because GA was not the owner of the
building. Although GA is not named as the owner in the
subcontract, the prime contract, which is referenced in the
subcontract, lists GA as "Owner." With respect to
Aragon, Port Richmond maintains that the requisite coverage
was obtained. However, Aragon contends that the insurer never
assumed Aragon's defense, has not paid any of
Aragon's defense costs and has refused to pay any amount
toward the settlement. It is unclear from the record whether
or not the insurer has actually disclaimed coverage and, if
so, on what basis. Thus, issues of fact exist as to ...