ADDITIONAL CASES: Forty Seventh Fifth Company LLC, Third Party Plaintiff v. Roman Malakov Diamonds Ltd., Roman Malakov LLC, Elize International, Inc. d/b/a Elize’s Diamond & Fine Jewelry, and M&G Diamonds LLC d/b/a M.G. Diamond, Third Party Defendants DECISION AND ORDER I. BACKGROUND Defendant landlord Forty Seventh Fifth Company LLC moves to reargue (a) the motion by plaintiff insurer, subrogee of defendant landlord’s tenants, for summary judgment dismissing defendant landlord’s eighth affirmative defense, that a waiver of subrogation bars this action, and (b) its own cross-motion for summary judgment dismissing all claims against defendant landlord based on that defense. C.P.L.R. §§2221(d), 3212(b) and (e). Defendant landlord also moves to renew the prior motion and cross-motion based on additional evidence, but concedes that, if the court denies reargument, the additional evidence would not change the outcome and thus is inconsequential. C.P.L.R. §2221(e)(2). Finally, if the court denies reargument, defendant landlord moves to amend its third party complaint to add a claim for third party defendant tenants’ breach of their lease by failing to procure property insurance that included an enforceable waiver of subrogation in defendant landlord’s favor. C.P.L.R. §3025(b). The parties agree that the same justice decide all three related parts of the current motion. As set forth in the order that decided the prior motion and cross-motion that defendant landlord seeks to reargue, the incident that generated this action occurred January 8, 2018, when a sprinkler pipe burst in the first floor ceiling of a building at 1 West 47th Street, New York County, which Forty Seventh Fifth Company LLC owns. Plaintiff’s subrogors, Roman Malakov Diamonds Ltd., Roman Malakov LLC, Elize International, Inc., and M&G Diamonds LLC, leased premises on the building’s first floor where these tenants maintained a jewelry shop. They sustained loss, destruction, and damage of their inventory of jewelry during the flooding and defendant landlord’s clean-up that followed the burst sprinkler pipe. II. REARGUMENT Defendant landlord’s principal basis for reargument is that the court misconstrued or overlooked terms in plaintiff’s insurance policy covering the tenants’ jewelry that included defendant landlord in the policy’s waiver of subrogation provision. This provision is awkwardly constructed, to be sure: WAIVER OF SUBROGATION CLAUSE It is hereby understood and agreed that the Insured [the tenants] shall be at liberty to enforce or not, as they please, any rights that they may have against customers and/or persons authorized by the Insured to wear and/or carry the Property Insured on their behalf and/or persons or companies, including but not limited to Banks, Armoured Car Carriers, Entrustment Holders, Private Clients, Security Companies, Auction Houses and/or Gemological Laboratories in respect of any loss covered by this Policy of Insurance. Aff. of Lisa M. Coutu Ex. D (Aff. of Roshel Malakov) Ex. B, at 16 (of 26). Thus the insureds were permitted to waive recovery of damages against specified persons and entities, in which event their insurer, standing in the insureds’ shoes, would be barred from recovery against those same persons and entities. New York Presbyt. Hosp. v. Country Wide Ins. Co., 17 N.Y.3d 586, 593 (2011); Aspen Am. Ins. v. Newman, 202 A.D.3d 613, 614 (1st Dep’t 2022); Navigators Ins. Co. v. Ironshore Indem., Inc., 156 A.D.3d 426, 426 (1st Dep’t 2017); Daimler Chrysler Ins. Co. v. New York Cent. Mut. Fire Ins. Co., 125 A.D.3d 518, 519 (1st Dep’t 2015). So who are those persons and entities? Defendant landlord and plaintiff agree that those persons and entities include the insureds’ “customers and/or persons authorized by the Insured to wear and/or carry the Property Insured on their behalf,” notwithstanding that the plural noun to which the possessive pronoun “their” refers is ambiguous. Coutu Aff. Ex. D (Malakov Aff.) Ex. B, at 16. If it refers to the immediately antecedent plural noun, it would refer to persons authorized by the insured to wear or carry the insured’s property, the jewelry, on the authorized persons’ own behalf, which would be nonsensical. “[T]heir” also might refer to “customers,” the plural noun immediately before “persons authorized,” but more likely “their” refers to the insureds, even though the antecedent noun “Insured” is singular, which is the interpretation defendant landlord and plaintiff both apparently adopt. In dispute are the terms that follow “on their behalf”: “and/or persons or companies, including but not limited to Banks, Armoured Car Carriers, Entrustment Holders, Private Clients, Security Companies, Auction Houses and/or Gemological Laboratories.” Id. Defendant landlord contends that “persons or companies” establishes an entirely independent category against which plaintiff insurer would be barred from recovery, unqualified by the terms that precede or follow that phrase. According to defendant landlord, these “persons or companies” are any persons or companies, thus obviously including the insureds’ landlord. A. Application of Rules of Contract Construction To adopt this interpretation would render the terms that precede and follow “persons and companies” superfluous. See Atsco Footwear Holdings, LLC v. KBG, LLC, 193 A.D.3d 493, 494 (1st Dep’t 2021); HTRF Ventures, LLC v. Permasteelisa N. Am. Corp., 190 A.D.3d 603, 609 (1st Dep’t 2021); Eaglehill Genpar LLC v. FPGC, LLC, 188 A.D.3d 527, 529 (1st Dep’t 2020). If “persons or companies” are any persons or companies, there would be no point in describing the preceding categories, “customers” and “persons authorized by the Insured to wear and/or carry the Property Insured.” The broad, undelineated “persons or companies” would just subsume the delineated persons: “customers” and “persons authorized…to wear and/or carry the Property Insured.” Defendant landlord’s interpretation likewise would render the following examples meaningless: “Banks, Armoured Car Carriers, Entrustment Holders, Private Clients, Security Companies, Auction Houses and/or Gemological Laboratories.” See Atsco Footwear Holdings, LLC v. KBG, LLC, 193 A.D.3d at 494; HTRF Ventures, LLC v. Permasteelisa N. Am. Corp., 190 A.D.3d at 609; Eaglehill Genpar LLC v. FPGC, LLC, 188 A.D.3d at 529. If “persons or companies” are any persons or companies, there would be no point in listing these examples that, even though they are examples, obviously delineate types of persons or entities that would be “authorized by the Insured to wear and/or carry the Property Insured.” The broad, undelineated “persons or companies” would just subsume these delineated examples of persons and entities ordinarily or customarily “authorized…to wear and/or carry the Property Insured.” This construction contravenes the requirement that the provisions in insurance policies, like in any contract, be interpreted “in a manner that gives full force and effect to the policy language and does not render a portion of the provision meaningless.” Burlington Ins. Co. v. New York City Tr. Auth., 29 N.Y.3d 313, 322, 323 (2017); Cragg v. Allstate Indem. Corp., 17 N.Y.3d 118, 122 (2011). See Nomura Home Equity Loan, Inc., Series 2006-FM2 v. Nomura Credit & Capital, Inc., 30 N.Y.3d 572, 581 (2017); HTRF Ventures, LLC v. Permasteelisa N. Am. Corp., 190 A.D.3d at 607. In construing an insurance policy or other contract, one of the court’s objectives is to avoid an interpretation that would leave contract terms meaningless. Eaglehill Genpar LLC v. FPGC, LLC, 188 A.D.3d at 528. Consistent with this requirement, the court interpreted “persons or companies” as persons or companies that are the insured’s “customers” or “persons authorized by the Insured to wear and/or carry the Property Insured,” such as “Banks, Armoured Car Carriers, Entrustment Holders, Private Clients, Security Companies, Auction Houses and/or Gemological Laboratories.” This interpretation gives meaning and effect to all the terms in the waiver of subrogation provision. Consequently, even if “persons or companies” is susceptible of another interpretation, see HTRF Ventures, LLC v. Permasteelisa N. Am. Corp., 190 A.D.3d at 607; Lend Lease (US) Constr. LMB Inc. v. Zurich Am. Ins. Co., 136 A.D.3d 52, 56 (1st Dep’t 2015), aff’d, 28 N.Y.3d 675 (2017), defendant landlord’s interpretation, it is untenable. JFURTI, LLC v. First Capital Real Estate Advisors, L.P., 165 A.D.3d 419, 421 (1st Dep’t 2018); Lend Lease (US) Constr. LMB Inc. v. Zurich Am. Ins. Co., 136 A.D.3d at 56, 58, aff’d, 28 N.Y.3d 675; Bank of N.Y. Mellon v. WMC Mtge., LLC, 136 A.D.3d 1, 9 (1st Dep’t 2015), aff’d, 28 N.Y.3d 1039 (2016); Bajraktari Mgt. Corp. v. American Int’l Group, Inc., 81 A.D.3d 432, 432 (1st Dep’t 2011). It would negate the effect of the whole remainder of the waiver of subrogation provision. Rather than qualifying the category of persons or entities who may benefit from a waiver of subrogation, defendant landlord’s interpretation would create a single infinite category: anyone may benefit. Defendant landlord’s interpretation is also inconsistent with the rule of contract construction ejusdem generis, that contract terms be interpreted as referring to concepts similar to the concepts with which the terms are joined. MUFG Union Bank, N.A. v. Azos Bank, 196 A.D.3d 442, 444 (1st Dep’t 2021); Lend Lease (US) Constr. LMB Inc. v. Zurich Am. Ins. Co., 136 A.D.3d at 57, aff’d, 28 N.Y.3d 675. Directly applicable here, the rule dictates that “the meaning of a word in a series of words is determined ‘by the company it keeps.’” Lend Lease (US) Constr. LMB Inc. v. Zurich Am. Ins. Co., 136 A.D.3d at 57 (quoting People v. Illardo, 48 N.Y.2d 408, 416 (1979)), aff’d, 28 N.Y.3d 675. “A series of specific words describing things or concepts of a particular sort are used to explain a general one in the same series.” Matter of Riefberg, 58 N.Y.2d 134, 141 (1983); Lend Lease (US) Constr. LMB Inc. v. Zurich Am. Ins. Co., 136 A.D.3d at 57, aff’d, 28 N.Y.3d 675. Thus, if all the other words in a series share a particular attribute, the words in the series that require interpretation must be interpreted as sharing that attribute. Plaintiff’s policy sets forth a series of specific words describing persons or entities against which plaintiff would be barred from recovery via a waiver of subrogation: “customers,” “persons authorized by the Insured to wear and/or carry the Property Insured,” and “Banks, Armoured Car Carriers, Entrustment Holders, Private Clients, Security Companies, Auction Houses and/or Gemological Laboratories.” Coutu Aff. Ex. D (Malakov Aff.) Ex. B, at 16. These specific words are to be used to explain “persons or companies,” id., the “general” words “in the same series.” Matter of Riefberg, 58 N.Y.2d at 141; Lend Lease (US) Constr. LMB Inc. v. Zurich Am. Ins. Co., 136 A.D.3d at 57, aff’d, 28 N.Y.3d 675. The terms “persons or companies” do “not appear in isolation…, but as a catchall at the end of the phrase,” Miller Tabak + Co., LLC v. Senetek PLC, 118 A.D.3d 520, 521-22 (2014), here “customers and/or persons authorized by the Insured to wear and/or carry the Property Insured.” Coutu Aff. Ex. D (Malakov Aff.) Ex. B, at 16. The terms “persons or companies” also do not appear in isolation from the list that follows those terms, but as an introduction at the beginning of the list. “Thus, under the principle of ejusdem gereris, the general language…must be construed as limited in scope by the more specific words,” Miller Tabak + Co., LLC v. Senetek PLC, 118 A.D.3d at 522, here “customers and/or persons authorized by the Insured to wear and/or carry the Property Insured.” Coutu Aff. Ex. D (Malakov Aff.) Ex. B, at 16. The terms “including, but not limited to,” prefacing the list of “Banks, Armoured Car Carriers, Entrustment Holders, Private Clients, Security Companies, Auction Houses and/or Gemological Laboratories,” do not open the door wide to include dissimilar persons or entities. That phrase simply means that they are not limited to those precise examples listed, but the list illustrates the category to which the persons or entities to be included must be restricted. A landlord shares none of the attributes of the persons or entities described. They all hold jewelry with the insureds’ permission, as an extension or enhancement of the insureds’ business. Insulating them from claims would be in the insureds’ business interests. Because landlords do not fit that description, their inclusion among the persons or entities covered by the waiver of subrogation is wholly illogical. Therefore the waiver of subrogation applies only to the subrogor tenants’ claims against customers and persons or entities authorized to wear or carry their insured property (jewelry), but not to claims against a landlord. B. Construction of the Policy Together with the Lease Defendant landlord further contends that plaintiff’s policy must be construed to comport with the lease between defendant landlord and its tenants, plaintiff’s subrogors, which defendant landlord erroneously insists required the tenants to procure property insurance that included an enforceable waiver of subrogation provision in defendant landlord’s favor. As defendant landlord acknowledges, however: “When resolving disputes concerning the scope of coverage, we look to the specific language in the relevant insurance policies,” not in any contract requiring insurance coverage. Jin Ming Chen v. Insurance Co. of the State of Pa., 36 N.Y.3d 133, 138 (2020). See J.P Sec. Inc. v. Vigilant Ins. Co., 37 N.Y.3d 552, 561 (2021); Consolidated Rest. Operations, Inc. v. Westport Ins. Corp., ___ A.D.3d ___, 2022 WL 1040367, at *2 (1st Dep’t Apr. 7, 2022). Unquestionably, the lease required the tenants to procure both comprehensive liability insurance and property insurance covering defendant landlord as an additional insured. All the evidence presented supporting and opposing the prior motion and cross-motion and the current motion demonstrates that the tenants procured that insurance, the property insurance being plaintiff’s policy that is the subject of the motions. Regarding property insurance, Article 9(e) of the lease (“Destruction, Fire and Other Casualty”) provides that: each party shall look first to any insurance in its favor before making any claim against the other party for recovery for loss or damage resulting from fire or other casualty…. Coutu Aff. Ex. L (Aff. of Arthur J. Margolin) Ex. 2, at 2. The tenants complied with this requirement, resulting in plaintiff’s payment to them, which plaintiff now seeks to recover through this action. Article 9(e) continues: Owner and Tenant each hereby releases and waives all right to recovery…against the other, or anyone claiming through or under each of them, by way of subrogation or otherwise.…The foregoing release and waiver shall be in force only if both releasors’ insurance policies contain a clause providing that such a release and waiver shall not invalidate the insurance. Id. (emphasis added). Article 9(e) of the lease thus contemplates that the Owner or Tenant or both may procure a policy that does not include an enforceable waiver of subrogation. Article 9(e) merely dictates the consequences if both the landlord and the tenants do procure insurance that includes such a waiver: a waiver of subrogation will be permitted regarding claims between the tenants and defendant landlord if both procured insurance that authorizes the waiver of subrogation. E.g., Aspen Am. Ins. v. Newman, 202 A.D.3d at 614; Admiral Indem. Co. v. Johnson, 189 A.D.3d 428, 428 (1st Dep’t 2020); Allstate Indem. Co. v. Virfra Holdings, LLC, 124 A.D.3d 528, 528 (1st Dep’t 2015); Tower Risk Mgt. v. Ni Chunp Hu, 84 A.D.3d 616, 616 (1st Dep’t 2011). Since the tenants did not procure that insurance, no waiver of subrogation enforceable by defendant landlord is permitted. Baker v. 40 E. 80 Apt. Corp., ___ A.D.3d ___, 2022 WL 1086349, at *1 (1st Dep’t Apr. 12, 2022); Duane Reade v. Reva Holding Corp., 30 A.D.3d 229, 232 (1st Dep’t 2006). See Footlocker, Inc. v. KK&J, LLC, 69 A.D.3d 481, 481 (1st Dep’t 2010); One Beacon Ins. Co. v. French Inst. Alliance Francais NYC, 50 A.D.3d 388, 389 (1st Dep’t 2008). Nor does Article 61(c) of the lease, requiring the tenants to procure property insurance, require them to have procured a policy that included an enforceable waiver of subrogation in defendant landlord’s favor. Article 61(a) does require the tenants to procure insurance that included such a waiver, but Article 61(a) applies only to liability insurance. As much as defendant landlord may strain to find a requirement that the tenants were to procure a property insurance that did include an enforceable waiver of subrogation in defendant landlord’s favor, such a requirement is nowhere in the lease. III. RENEWAL The additional evidence on which defendant landlord relies for renewal of the prior motion and cross-motion, the Affidavit of Arthur J. Margolin, defendant landlord’s Executive Manager, and its exhibits, simply presents authenticated documents and clarifies facts that were immaterial to the prior motion and cross-motion. Since that evidence was immaterial to the determination of the prior motion and cross-motion, the evidence is immaterial now and would not change the outcome, as is essential to prevail on a motion for renewal. C.P.L.R. §2221(e)(2); Kolchins v. Evolution Mkts., Inc., 182 A.D.3d 408, 410 (1st Dep’t 2020); Eurotech Constr. Corp. v. Fischetti & Pesce, LLP, 169 A.D.3d 597, 597 (1st Dep’t 2019); Redstone v. Herzer, 162 A.D.3d 583, 584 (2018); Jones v. City of New York, 146 A.D.3d 690, 691 (1st Dep’t 2017). IV. AMENDMENT OF THE THIRD PARTY COMPLAINT Finally, defendant landlord moves to amend its third party complaint against third party defendant tenants to add a claim for their breach of the lease by failing to procure property insurance that included an enforceable waiver of subrogation in defendant landlord’s favor. C.P.L.R. §3025(b). Leave to amend a complaint is freely granted unless the amendment would surprise or otherwise prejudice the opposing parties, Davis v. South Nassau Communities Hosp., 26 N.Y.3d 563, 580 (2015); Kimso Apts., LLC v. Gandhi, 24 N.Y.3d 403, 411 (2014); Machado v. Gulf Oil, L.P., 195 A.D.3d 26, 30 (1st Dep’t 2021); Mashinsky v. Drescher, 188 A.D.3d 465, 466 (1st Dep’t 2020), or the amendment lacks merit. C.P.L.R. §3025(b); Mashinsky v. Drescher, 188 A.D.3d at 466; Avail 1 LLC v. Acquafredda Enters. LLC, 184 A.D.3d 476, 477 (1st Dep’t 2020); Brook v. Peconic Bay Med. Ctr., 172 A.D.3d 468, 469 (1st Dep’t 2019); Jean-Baptiste v. 153 Manhattan Ave. Hous. Dev. Fund Corp., 124 A.D.3d 476, 477 (1st Dep’t 2015). For the reasons explained in §II(B) above, this proposed claim lacks merit. The lease nowhere requires third party defendants to procure insurance that included a waiver of subrogation in third party plaintiff’s favor. V. CONCLUSION For all the reasons explained above and in the decision on the prior motion and cross-motion, plaintiff is entitled to summary judgment dismissing defendant Forty Seventh Fifth Company LLC’s eighth affirmative defense of waiver of subrogation, C.P.L.R. §3212(b) and (e), and Forty Seventh Fifth Company LLC is not entitled to summary judgment dismissing the complaint against this defendant based on that defense. C.P.L.R. §3212(b). Therefore the court denies defendant Forty Seventh Fifth Company LLC’s motion for reargument and renewal that seeks to alter that determination. C.P.L.R. §2221(d) and (e). Because its lease with plaintiff’s subrogors did not require them to procure property insurance that waived subrogation in Forty Seventh Fifth Company LLC’s favor, the court also denies its motion to amend its third party complaint to add a breach of contract claim based on the subrogors’ failure to procure such insurance. C.P.L.R. §3025(b). Dated: April 29, 2022
