The following e-filed documents, listed by NYSCEF document number (Motion 004) 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139 were read on this motion to/for SUMMARY JUDGMENT(AFTER JOINDER. DECISION + ORDER ON MOTION This action involves an insurance dispute arising from the construction of three bridges in Westchester County. In its complaint dated September 4, 2020 (Complaint), E. E. Cruz & Company, Inc. (Cruz or Plaintiff) alleges, inter alia, that defendant Starr Surplus Lines Insurance Company (Starr or Defendant) breached the terms of the insurance policy by failing to pay Cruz for monetary losses suffered in connection with a construction project. The Complaint asserts five causes of action: (1) declaration that Starr is not obligated to provide coverage; (2) and (3) breach of contract and breach of the implied covenant of good faith and fair dealing; (4) negligent misrepresentation; and (5) deceptive business practices under GBL §349. By an order dated October 8, 2021, the court denied a motion by Starr to dismiss the first, fourth and fifth causes of action, as well as the breach of the implied covenant of good faith and fair dealing portion (but not the breach of contract portion) of the second and third causes of action, pursuant to CPLR 3211(a)(7) (MOT SEQ 001). Discovery ensued. By the instant motion (MOT SEQ 004), Starr seeks summary judgment, pursuant to CPLR 3212, dismissing all five of the Plaintiff’s causes of action. Cruz opposes the motion. The motion is denied. On a motion for summary judgment, the moving party must make a prima facie showing of its entitlement to judgment as a matter of law by submitting evidentiary proof in admissible form sufficient to establish the absence of any material, triable issues of fact. See CPLR 3212(b); Jacobsen v. New York City Health & Hosps. Corp., 22 NY3d 824 (2014); Alvarez v. Prospect Hosp., 68 NY2d 320 (1986); Zuckerman v. City of New York, 49 NY2d 557 (1980). Once such a showing is made, the opposing party, to defeat summary judgment, must raise a triable issue of fact by submitting evidentiary proof in admissible form. However, if the movant fails to meet its burden and establish its claim or defense in the first instance (see Alvarez v. Prospect Hosp., supra; Zuckerman v. City of New York, supra; O’Halloran v. City of New York, 78 AD3d 536 [1st Dept. 2010]), the motion must be denied regardless of the sufficiency of the opposing papers. See Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851 (1985); O’Halloran v. City of New York, supra; Giaquinto v. Town of Hempstead, 106 AD3d 1049 (2nd Dept. 2013). This is because “‘summary judgment is a drastic remedy, the procedural equivalent of a trial. It should not be granted if there is any doubt about the issue.’” Bronx-Lebanon Hosp. Ctr. v. Mount Eden Ctr., 161 AD2d 480 (1st Dept. 1990), quoting Nesbitt v. Nimmich, 34 AD2d 958, 959 (2nd Dept. 1970). Starr contends that the first cause of action for declaratory judgment and that portion of the second and third causes of action as allege breach of contract should be dismissed because the loss for which Cruz seeks to recover is not covered under the subject insurance policy. Specifically, it argues that coverage is precluded by (1) the policy’s “Caisson Endorsement,” which excludes coverage for damaged “caissons” under the circumstances alleged by Cruz, and (2) the policy’s “Cost of Making Good Exclusion,” which precludes coverage for “damage or expense caused by, resulting from, contributed to or made worse by…[any] [f]ault, defect, error, deficiency or omission in design, plan or specification[.]” These contentions are unavailing. While Starr points to numerous documents in which the damaged property is referred to as a “caisson,” Cruz submits the deposition testimony of several witnesses indicating that these references are inaccurate. Indeed, Cruz’s evidence indicates that, in fact, its insurance claim does not arise from the construction of a “caisson,” but instead relates to the construction of a “drilled shaft,” which is a different and distinct form of structural support. Moreover, because the term “caisson” is not defined anywhere in the subject insurance policy, the court cannot conclude that the Caisson Endorsement was intended to limit or exclude coverage for damage to a “drilled shaft.” As such, Cruz’s submissions raise a triable issue of fact precluding summary judgment on the basis of the Caisson Endorsement. As to the Cost of Making Good Exclusion, Starr submits no evidence that the damage to the drilled shaft was caused by, or in any way related to, a “[f]ault, defect, error, deficiency or omission in design, plan or specification” (emphasis added). Accordingly, Starr fails to establish its prima facie entitlement to judgment as a matter of law on the basis of this exclusion. Starr next contends that even if coverage is not completely precluded, the policy does not provide coverage for “impact costs,” which comprise most of the value of the claimed loss. Specifically, it contends that coverage for such impact costs was available pursuant to an optional Contractor’s Extra Expense (CEE) coverage extension, but that Cruz never requested this additional coverage when negotiating the policy, and that the declarations found at the front of the final policy therefore state that CEE is “not covered.” However, the evidence submitted by Cruz raises questions of fact as to whether, consistent with industry standards, CEE coverage was understood by the parties to be included by default in Starr’s standard form policy unless a sublimit or exclusion was specifically discussed or identified by Starr; and as to whether Starr removed CEE coverage from the final policy by adding the “not covered” notation to the policy declarations without providing Cruz with any notice of the change. Cruz’s submissions also raise questions of fact precluding summary judgment with respect to the remainder of its claims. Starr contends that the claim for breach of the implied covenant of good faith and fair dealing must fail because there is no evidence that it acted in bad faith. However, Cruz submits evidence that raises triable issues as to whether Starr negotiated the policy and investigated Cruz’s claim in good faith. As discussed above, there is a triable issue of fact as to whether, having agreed to terms based on an understanding that CEE coverage was a default provision of the policy, Starr altered the final policy to exclude CEE coverage without providing notice to Cruz. Moreover, Cruz’s evidence also raises issues of fact as to whether Starr took coverage positions during its investigation of the claim that were not supported by the facts known to it, and as to whether it failed to timely render those positions, thereby drawing out the investigation unnecessarily and at Cruz’s expense. These issues of fact likewise preclude summary judgment on the negligent misrepresentation and GBL §349 claims. In this court’s prior order of October 8, 2021, the court found that the complaint sufficiently stated a cognizable claim of negligent misrepresentation and a cognizable claim under GBL §349 for purposes of that motion. Ensuing discovery did not resolve the issues in favor of Starr. In particular, issues of fact were raised regarding whether CEE coverage was intended to be included in the policy, and specifically with respect to Starr’s representations on that issue, which precludes summary judgment on the negligent misrepresentation claim. And as to the GBL §349 claim, the issues of fact concerning Starr’s allegedly bad faith negotiation of the policy and investigation of the claim implicate conduct that could reasonably be found to be both “consumer-oriented,” in that it could potentially affect similarly situated consumers, and materially misleading. Accordingly, it is ORDERED that defendant Starr Surplus Lines Insurance Company’s motion, pursuant to CPLR 3212, for summary judgment on all five causes of action asserted against it is denied; and it is further ORDERED that the Clerk shall mark the file accordingly. This constitutes the Decision and Order of the court. CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION GRANTED X DENIED GRANTED IN PART OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE Dated: February 7, 2024
