The opinion
American Home Assur. Co. v SBP N.Y., LLC
2024 NY Slip Op 34466(U)
December 23, 2024
Supreme Court, New York County
Docket Number: Index No. 152177/2019
Judge: David B. Cohen
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
Op 30001(U), are republished from various New York
State and local government sources, including the New
York State Unified Court System's eCourts Service.
This opinion is uncorrected and not selected for official
publication.
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
SUPREME COURT OF THE STATE OF NEW YORK
NEW YORK COUNTY
PRESENT: HON. DAVID B. COHEN PART 58
Justice
---------------------------------------------------------------------------------X INDEX NO. 152177/2019
AMERICAN HOME ASSURANCE COMPANY, ZURICH
AMERICAN INSURANCE COMPANY, CONTINENTAL 06/21/2023,
CASUALTY COMPANY, WESTPORT INSURANCE MOTION DATE 05/31/2024
CORPORATION AS SUBROGEE OF 432 PARK AVENUE
CONDOMINIUM, MOTION SEQ. NO. 004 006
Plaintiff,
-v-
SBP NEW YORK, LLC,PEMBROOKE & IVES INC.,STH DECISION + ORDER ON
PAINTING, INC.,FRESCO DECORATIVE PAINTING, MOTION
INC.,RAEL AUTOMATIC SPRINKLER CO., INC.,LEWIS A.
SANDERS, ALICE SANDERS, REN INTERIORS, LLC,
Defendant.
---------------------------------------------------------------------------------X
STH PAINTING, INC. Third-Party
Index No. 595904/2022
Plaintiff,
-against-
TRZASKA CONSTRUCTION CORP.
Defendant.
--------------------------------------------------------------------------------X
SBP NEW YORK, LLC Second Third-Party
Index No. 595355/2023
Plaintiff,
-against-
I.J. PEISER'S SONS, INC.
Defendant.
--------------------------------------------------------------------------------X
SBP NEW YORK, LLC Third Third-Party
Index No. 595341/2024
Plaintiff,
-against-
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 1 of 20
Motion No. 004 006
1 of 20
[* 1]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
PEMBROOKE & IVES, INC., S.T.H. PAINTING INC., REN
INTERIORS, LLC, FRESCO DECORATIVE PAINTING, INC.,
RAEL AUTOMATIC SPRINKLER CO., INC., TRZASKA
CONSTRUCTION, LLC, LEWIS SANDERS, JOHN DOES
Defendant.
--------------------------------------------------------------------------------X
SBP NEW YORK, LLC Fourth Third-Party
Index No. 595532/2024
Plaintiff,
-against-
G&R FLOOR SOLUTION, INC.
Defendant.
--------------------------------------------------------------------------------X
The following e-filed documents, listed by NYSCEF document number (Motion 004) 223, 224, 225, 226,
227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 247,
248, 249, 250, 253, 269, 270, 271, 272, 273, 274, 276, 277, 278, 279, 280, 281, 282
were read on this motion to/for DISMISSAL .
The following e-filed documents, listed by NYSCEF document number (Motion 006) 304, 305, 306, 307,
308, 309, 310, 311, 312, 313, 314, 315, 316, 317, 318, 319, 323, 325, 330, 331, 332, 333, 334, 335, 336,
337, 338, 339, 340, 342
were read on this motion to/for DISMISS .
Motion sequences 004 and 006 are consolidated for disposition. In motion sequence 004,
defendant/third third-party defendants Lewis A. Sanders and Alice Sanders (collectively, the
Sanders) move for an order dismissing the first-party complaint and all cross-claims against them
pursuant to CPLR §§ 3211(a)(1) and (7) (NY St Cts Elec Filing [NYSCEF] Doc No. 223).
In motion sequence 006, defendant/third third-party defendant Pembrooke & Ives, Inc.
(Pembrooke) moves for an order dismissing the third third-party complaint as against it pursuant
to CPLR §§ 3211(a)(1), (4), and (7) (NYSCEF Doc No. 304).
I. Pertinent Background
This subrogation action and related third-party actions arise from a fire that occurred on
April 1, 2018 in a residential and commercial condominium building located at 432 Park Avenue
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 2 of 20
Motion No. 004 006
2 of 20
[* 2]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
in Manhattan (NYSCEF Doc No. 225).1 In February 2019, plaintiffs American Home Assurance
Company, Zurich American Insurance Company, Continental Casualty Company, and Westport
Insurance Corporation (collectively, American Home) commenced the subrogation action as
subrogees of the building’s residential condominium association, 432 Park Avenue Condominium
(432 PAC), against eight defendants: the Sanders, Pembrooke, defendant/second third-party
plaintiff/third third-party plaintiff/fourth third-party plaintiff SBP New York, LLC (SBP),
defendant/third-party plaintiff/third third-party defendant STH Painting, Inc. (STH), and
defendants/third third-party defendants Ren Interiors, LLC (Ren), Fresco Decorative Painting, Inc.
(Fresco), and Rael Automatic Sprinkler Co., Inc. (Rael). American Home seeks a judgment of at
least $6 million in damages (NYSCEF Doc No. 226).
According to the complaint, the fire started in an apartment owned by the Sanders in
connection with an apartment renovation project. It is alleged that Mr. Sanders retained SBP to
serve as construction manager for the renovation project and SBP, in turn, retained Pembrooke as
the project’s interior designer. Rael was the project’s plumbing subcontractor under a contract
between SBP and Pembrooke. As for STH, Ren, and Fresco, the pleading describes them as the
project’s painting subcontractors, and alleges, upon information and belief, that each had a contract
with SBP. It is also alleged in the complaint that American Home paid $470,485 to 432 PAC for
the property damage, and consequently became subrogated to 432 PAC’s claims.
American Home advances both negligence and breach of contract causes of action. It
alleges that defendants’ negligence caused the fire and the resulting damage to its subrogees’
property. The breach of contract claims are based on three agreements, exhibits A, B, and C to the
complaint.
1
Four other actions and their related third-party actions arise from the fire at 432 Park Avenue in Manhattan. The
actions have been previously joined for discovery (NYSCEF Doc No. 308, so-ordered stipulation dated April 4, 2022).
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 3 of 20
Motion No. 004 006
3 of 20
[* 3]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
Exhibit A is an “Alteration Agreement” signed by the general manager of 432 PAC’s
residential section and Mr. Sanders, and American Home alleges that the Sanders’ signature
thereon was a prerequisite for the renovation work. It also contends that the Sanders breached the
Alteration Agreement by not indemnifying American Home for damages that stemmed from the
renovation work and by not accepting sole responsibility for same.
At issue here are paragraphs 5, 6, 10, and 20 of the Alteration Agreement. Paragraph 5,
entitled “Work Done at Residence Owner’s Risk,” reads in part that:
Any damage to the Residence or other areas of the Building…caused by or resulting
from the Work, shall be covered by the insurance coverage required of Residence
Owner and Residence Owner’s contractor(s) or subcontractor(s), as the case may
be.
However, the existence of such insurance shall not relieve Residence Owner of
liability thereof. If the Board or the Resident Manager or the Managing Agent
advises Residence Owner of any damage, which [they deem] caused by the Work,
Residence Owner shall promptly submit such claim to Residence Owner’s
insurance carrier and to Residence Owner’s contractor(s) or subcontractor(s) for
submission to their insurance carrier, as appropriate.
(NYSCEF Doc No. 242 at 9-10).
Paragraph 6, entitled “Indemnification by Residence Owner,” reads:
Residence Owner hereby indemnifies and holds harmless the Condominium, the
Board and the Condominium Board both individually and as agents for and on
behalf of all Residence owners, the Condominium’s Engineer and employees, the
Managing Agent, and all Residence Owners and residents of the Building against
any damages suffered to persons or property as a result of the Work. Residence
Owner shall reimburse the Condominium and/or Residential Section, the
Condominium’s Engineer, Managing Agent, and other Residence Owners and
residents of the Building for any losses, costs, fines, fees and expenses (including,
without limitation, reasonable attorney’s fees and disbursements) incurred as a
result of the Work and/or the Residence Owners or any contractors or consultant’s
failure to conform with this Agreement or any law or ordinance and which may be
incurred by the Condominium and/or the Residential Section in the defense of any
suit, action, claim or violation in connection with the Work or the abatement
thereof.
(id. at 10).
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 4 of 20
Motion No. 004 006
4 of 20
[* 4]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
Paragraph 10, entitled “Residence Owners (sic) Responsibility for Consequences of
Work,” states in part that the “Residence Owner…assume(s) all risks of damage to the
Building…which may result from or be attributable to the performance or existence of the Work
and the maintenance and repair of any alterations and installations in the Residence after
completion” (id. at 12). It further states that “this obligation supersedes any conflicting provisions
of the Condominium’s governing documents regarding, among other things, the responsibility for
repairs and covers all aspects of the Work, whether or not structural, including…weather tightness
of windows, exterior walls or roofs, waterproofing…and the maintenance of all Work” (id. at 13).
Paragraph 20, entitled “Acceptance of Responsibility by Residence Owner and Residence
Owner’s Successor in Interest,” reads in part that:
The Residence Owner releases the Condominium…the Board and Condominium
Board…from any liability for damage to the portions of the Building or the
Residence affected by the Work which may occur in the performance of building
maintenance repairs. The Residence Owner accepts sole responsibility for the
Work and costs in connection with the maintenance, repair, restoration or
replacement of any portions of the Residence affected by the Work.
(id. at 17 [emphasis added]).
Exhibit B is an “Assumption of Alteration Agreement” between Pembrooke and Mr.
Sanders, and it is alleged that Pembrooke breached both the Alteration Agreement and the
Assumption of Alteration Agreement by not indemnifying American Home for the damages that
stemmed from the renovation work and by not accepting sole responsibility for same. Exhibit C
is an “Access Agreement” between 432 PAC’s residential board of managers and SBP, and SBP
allegedly breached it by not indemnifying plaintiff for damages caused by the renovation work.2
2
Unlike the breach of contract claims against the Sanders and Pembrooke, the breach of contract claim against SBP
does not allege that SBP rejected sole responsibility for the damages.
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 5 of 20
Motion No. 004 006
5 of 20
[* 5]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
Also pertinent here are various provisions of the Condominium and Residential bylaws,
including subsections 11.8.3(a) and (c) and 11.9 of the Condominium bylaws, and Subsection 6.4.2
of the Residential bylaws (NYSCEF Doc No. 224). Subsections 11.8.3(a) and (c) of the
Condominium bylaws provide that the required insurance policies for “Special Causes of Loss or
other property coverage [shall] contain a waiver of the insurer’s right of subrogation against the
Unit Owners [and] the Boards” (NYSCEF Doc No. 239 at 117).
Section 11.9 of the Condominium bylaws, entitled “Waiver of Subrogation,” provides in
part that:
Each of the Boards and the Unit Owners…releases and waives for itself, and each
Person claiming by, through or under it, each other Unit Owner and all
Boards…from any liability for any loss or damage to all property of such Releasing
Party located upon any portion of the Property, which loss or damage is of the type
covered by ‘All-Risk’ or Comprehensive Boiler & Machinery property insurance
policies required to be carried under these By-Laws, irrespective either of any
negligence on the part of the Released Party which may have contributed to or
caused such loss, or of the amount of such insurance required or actually carried,
including any deductible.
(id. at 120).
Subsection 6.4.2 of the Residential bylaws provides that “[a]ll policies obtained by any
Residential Unit Owner, or by the Residential Board on behalf of the Residential Section or the
Residential Unit Owners…shall contain a waiver of the insurer’s right of subrogation against the
Condominium Board, the Residential Board and any Unit Owner” (id. at 195).
Subsection 8.1.1 of the Condominium bylaws and Subsection 6.7.1(a)(i) of the Residential
bylaws both provide that the respective Board may require that a unit owner sign an alteration
agreement before the Board will consent to alterations in the unit (NYSCEF Doc No. 239 at 98
and 199, respectively).
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 6 of 20
Motion No. 004 006
6 of 20
[* 6]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
Subsection 8.1.3 of the Condominium bylaws provides in pertinent part that “[a] Unit
Owner making or causing…any Alteration shall be deemed to have agreed to indemnify and hold
the Condominium Board…the Residential Board…and all other Unit Owners harmless from and
against any liability, loss, cost, or expense arising therefrom” (id. at 99).
Subsection 6.7.2(e)(i) of the Residential bylaws similarly provides in pertinent part that:
[a] Residential Unit Owner making, or causing…any Alteration shall be deemed to
have agreed to indemnify and hold the Condominium Board, the Residential
Board…and all other Unit Owners harmless from and against any liability, loss,
cost, or expense arising therefrom, and from and against any and all loss, cost,
expense (including, but not limited to, attorneys' fees and disbursements), damage,
injury or liability, whether direct, indirect or consequential, resulting from, arising
out of, or in any way connected with, any of the foregoing.
(id. at 201).
This subsection also makes unit owners responsible for any liability stemming from their
noncompliance with “the provisions of any Laws insofar as the same relates to Alterations” (id.).
Each defendant answered the complaint and SBP later served an amended answer
(NYSCEF Doc Nos. 227 to 234). Relevant to motion sequence 004 are the cross-claims asserted
by all of the co-defendants against the Sanders for common-law indemnification; Pembrooke,
Rael, STH, Ren, SBP, and Fresco assert cross-claims against the Sanders for contribution; and
Fresco and STH assert cross-claims against the Sanders for contractual indemnification and breach
of contract for failure to procure insurance.3 SBP also asserted cross-claims against Pembrooke
(and the other defendants) for common-law indemnification and contribution.
3
The Sanders and SBP disagree as to the nature of SBP’s cross-claim. In the moving papers, the Sanders characterize
it as “a general, non-specific cross-claim for common law indemnification against all co-defendants” (NYSCEF Doc
No. 225 ¶ 12). In opposition, SBP contends that the cross-claim covers “contribution, indemnification, and breach of
contract” (NYSCEF Doc No. 274 ¶ 10). In reply, the Sanders mistakenly state that SBP did not assert any cross-
claims against them (NYSCEF Doc No. 281). The court finds that the cross-claim sounds in contribution and
common-law indemnification.
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 7 of 20
Motion No. 004 006
7 of 20
[* 7]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
After defendants answered, four third-party actions were commenced. By third-party
complaint (NYSCEF Doc No. 309), STH sued Trzaska Construction Corp. (Trzaska) for common-
law indemnification, contribution, and contractual indemnification/breach of contract. After
Trzaska failed to appear in the action, STH was awarded a default judgment against it, with
damages to be determined at trial (NYSCEF Doc No. 310).
By second third-party complaint (NYSCEF Doc No. 311), SBP sued I.J. Peiser’s Sons, Inc.
(IJPS) for negligence, breach of contract, common-law indemnification, contractual
indemnification, and breach of contract for failure to procure insurance. IJPS answered the second
third-party complaint (NYSCEF Doc No. 312).
By third third-party complaint (NYSCEF Doc No. 313), SBP sued Pembrooke, among
others, for contribution, breach of contract, common-law indemnification, contractual
indemnification, and breach of contract for failure to procure insurance. Instead of answering,
Pembrooke filed the instant motion to dismiss the complaint.
Finally, by fourth third-party complaint (NYSCEF Doc No. 315), SBP sued G&R Floor
Solution, Inc. for contribution and common-law indemnification. To date, G&R has not answered
or appeared.
II. Standards of Review
“On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal
construction,” and the court must “accept the facts as alleged in the [pleading] as true, accord [the
pleader] the benefit of every possible favorable inference, and determine only whether the facts as
alleged fit within any cognizable legal theory” (Leon v Martinez, 84 NY2d 83, 87 [1994]; see
CPLR § 3206). However, when the pleading’s “legal conclusions and factual allegations are flatly
contradicted by documentary evidence, they are not presumed to be true or accorded every
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 8 of 20
Motion No. 004 006
8 of 20
[* 8]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
favorable inference, and the criterion becomes whether the proponent of the pleading has a cause
of action, not whether he has stated one” (Morgenthow & Latham v Bank of N.Y. Co., 305 AD2d
74, 78 [1st Dept 2003] [internal quotation marks and citations omitted]).
Under that criterion and pursuant to CPLR § 3211(a)(1), the court must dismiss one or
more causes of action where “the documentary evidence submitted conclusively establishes a
defense to the asserted claims as a matter of law” (Liberty Sq. Realty Corp. v Doe Fund, Inc., 202
AD3d 55, 65 [1st Dept 2021] [internal quotation marks and citations omitted]). In addition,
pursuant to CPLR § 3211(a)(7), the court must dismiss any cause of action where “the [pleader]
fails to assert facts in support of an element of the claim, or if the factual allegations and inferences
to be drawn from them do not allow for an enforceable right of recovery” (Holder v Jacob, 231
AD3d 78, 86 [1st Dept 2024] [citation omitted]).
When a defendant submits evidence to support dismissal, the “inquiry [changes] from
whether the pleader has stated a cause of action to whether the pleader has a cause of action
amenable to relief, or whether the defendant has a complete defense to the claims” (id. [citations
omitted]). In this context, the court will grant dismissal when the evidence conclusively
establishes defendant’s defense as a matter of law (id.).
With respect to CPLR § 3211(a)(4), the court may dismiss any cause of action where “there
is another action pending between the same parties for the same cause of action.” However, the
“court need not dismiss upon this ground but may make such order as justice requires” (id.).
III. Motion Sequence 004
A. American Home’s Claims against the Sanders
“Subrogation is the principle by which an insurer, having paid losses of its insured, is
placed in the position of its insured so that it may recover from the third party legally responsible
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 9 of 20
Motion No. 004 006
9 of 20
[* 9]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
for the loss” (Blue Cross & Blue Shield of N. J., Inc. v Philip Morris USA Inc., 3 NY3d 200, 206
[2004] [citation omitted]). However, “[p]arties to an agreement may waive their insurer’s right of
subrogation” (Aspen Am. Ins. v Newman, 202 AD3d 613, 614 [1st Dept 2022]).
In Aspen Am. Ins., a case that involved building damage allegedly caused by a fire that
started in a defendant’s condominium unit, the Appellate Division, First Department dismissed a
complaint brought by the building’s insurer against the unit owner (id. at 613). Critical to the
decision was that “the condominium bylaws required the condominium to obtain [an insurance]
policy containing a waiver of subrogation to the extent such a policy was obtainable” (id. at 613-
614). Therefore, “because the policy issued by plaintiff allowed the condominium to waive
subrogation, the bylaws required it to do so” (id. at 614).
The Court went further in AIG Prop. Cas. Co. v Modi (154 AD3d 552, 552 [1st Dept 2017])
where it dismissed a complaint brought by a unit owner’s insurer on the ground that the insurance
policy did not contain a subrogation waiver but the condominium’s bylaws contemplated a waiver
of subrogation.
In sum, an insurer cannot maintain an action where the insurance holder waived or was
required to waive its right to subrogation (State Farm Fire & Cas. Co. v Pulse Creative, LLC., 209
AD3d 570 [1st Dept 2022]).
Here, the Sanders argue that the subrogation claims against them must be dismissed as the
Condominium and Residential bylaws contain several waivers of subrogation, and that the
Alteration Agreement and its indemnification provisions do not supersede the subrogation waivers.
They observe that the Condominium and Residential bylaws also contain provisions that pertain
to the alteration of units and indemnification, and that 432 PAC procured insurance policies that
“permitted [it] to waive the subrogation rights of the insurers prior to a loss” (NYSCEF Doc No.
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 10 of 20
Motion No. 004 006
10 of 20
[* 10]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
225 ¶ 26; see NYSCEF Doc Nos. 244-247). The Sanders thus contend that the presence of the
waiver and indemnity provisions in the bylaws establishes not only that those provisions coexist,
but that the indemnity provisions in the Alteration Agreement do not supersede the insured’s
subrogation waivers.
In opposition, American Home concedes that the bylaws contain a waiver of subrogation
(NYSCEF Doc No. 269, counsel’s affirmation), but contends that the Alteration Agreement
supersedes the bylaws to the extent that it permits the maintenance of the instant action against the
Sanders for the claimed damages.
In reply, the Sanders argue that American Home’s reliance on the Alteration Agreement is
misplaced as it does not address, let alone supersede, the subrogation waivers (NYSCEF Doc No.
279).
A review of the cited paragraphs of the Alteration Agreement reveals that subrogation is
not mentioned therein. Moreover, the same entity drafted both the Alteration Agreement and the
building’s bylaws, and thus, presumably, it may be inferred that it intentionally excluded the
mention of subrogation from the Alteration Agreement (see 22 NY Jur 2d, Contract 209 [2024]
[courts may not supply absent provision in contract; “ambiguity may not be imported, where none
exists, for the purpose of extending the terms of a contract to include matters not specifically
mentioned, whether the omission was deliberate or inadvertent through lack of prescience.”]; see
also Dunn Auto Parts, Inc. v Wells, 198 AD3d 1269, 1271 [4th Dept 2021] [based on maxim
“expression unius est exclusio alterius, which applies to contracts, where “document describes the
particular situations in which it is to apply, an irrefutable inference must be drawn that what is
omitted or not included was intended to be omitted or excluded”]).
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 11 of 20
Motion No. 004 006
11 of 20
[* 11]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
This conclusion is consistent with the policy rationale set forth in Schiller v Community
Tech., Inc. (78 AD2d 762, 763 [4th Dept 1980]), in which the Court explained that subrogation
waivers are designed to protect unit owners in the condominium setting:
Most condominiums are insured not only by a master policy, covering the entire
project, but also by policies covering the individual units…New York provides for
master policies…without prejudice to the right of each unit owner to insure his own
unit for his own benefit…The idea behind using both types of insurance is to
provide coverage for the project as a whole, as well as for the individual unit
owners. Of course, the use of various individual policies increases the risk that
subrogation rights will be asserted by one of the insurers against a unit owner
because the physical proximity and interdependence of the units makes it likely that
damage from fire will extend beyond any one unit…Obviously, subrogation in this
situation is undesirable because it jeopardizes the collective resources. Viewing the
condominium as a whole, there would in effect be no insurance if subrogation were
permitted, since the loss would ultimately fall on the careless unit owner.
(id. at 763 [internal quotation marks and citations omitted] [emphasis added]).
Moreover, this court reached the same result in another action arising from the same
building and fire as here (Privilege Underwriters Reciprocal Exch., as subrogree of
Thomas Peterffy and 432 Park Avenue #84A LTD. v SBP N.Y., LLC et al , 2024 NY Slip
Op 32217[U] [Sup Ct, NY County 2024]), finding that “the bylaws [] conclusively
establish a defense to plaintiff’s subrogation claims” (id. at *4).
Finally, American Home argues that the motion must be denied as the Sanders admit, in
their memorandum of law, that they are liable for 432 PAC’s insurance deductible. In reply, the
Sanders note that the complaint does not contain a cause of action for the insurance deductible,
nor does it state that 432 PAC assigned to American Home its right to seek recovery for it. In any
event, Section 11.9 of the bylaws includes language waiving 432 PAC’s right to recover the
insurance deductible (see pg. 8, supra).
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 12 of 20
Motion No. 004 006
12 of 20
[* 12]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
Therefore, the Sanders establish that the documentary evidence - i.e. the Condominium
bylaws and Residential bylaws - conclusively establish a defense to American Home’s causes of
action against them.
B. The Cross-Claims against the Sanders
Initially, it is necessary to address three procedural issues. First, Pembrooke and Rael did
not submit opposition to the motion, and therefore their cross-claims against the Sanders must be
dismissed (Saidin v Negron, 136 AD3d 458, 458 [1st Dept 2016] [holding that “[p]laintiff
abandoned his claim…by failing to oppose that part of the motion to dismiss the claim as against
him”]).
Second, though Fresco’s counsel did not sign his affirmation (NYSCEF Doc No. 276), the
court disregards the defect and considers the substance of that opposition (see CPLR § 2001).
Third, although a stipulation dated June 27, 2023 (NYSCEF Doc No. 253) set August 28,
2023 as the date for filing opposition, the court accepts the opposition from Ren and SBP that was
filed August 29, 2023 (NYSCEF Doc Nos. 273 and 274, respectively) as the Sanders were able to
reply to it (see Sanchez v Steele, 149 AD3d 458, 458 [1st Dept 2017] [finding that “[t]he motion
court providently exercised its discretion in accepting plaintiffs’ untimely opposition papers, since
defendants did not demonstrate any prejudice and were able to submit reply papers”]).
As to the cross-claims for common-law indemnification and contribution, they must be
dismissed as the co-defendants’ pleadings do not allege any facts which would give rise to a duty
that the Sanders owed them and which would establish that the Sanders committed a negligent act
or omission (Ramos v 200 W. 86 Apts. Corp., 179 AD3d 473, 473 [1st Dept 2020]; see McCarthy
v Turner Constr., Inc., 17 NY3d 369, 378 [2011] [duty imposed on those who actually supervised
the work]).
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 13 of 20
Motion No. 004 006
13 of 20
[* 13]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
Thus, what remains are Fresco’s and STH’s cross-claims for contractual indemnification
and breach of contract. The existence of a contract is the first element of a breach of contract claim
(Noto v Planck, LLC, 228 AD3d 516, 516 [1st Dept 2024]). “In order to state a cause of action to
recover damages for a breach of contract, the [pleading’s] allegations must identify the provisions
of the contract that were breached” (34-06 73, LLC v Seneca Ins. Co., 39 NY3d 44, 52 [2022]
[citation omitted]). Likewise, in order to state a cause of action to recover damages for contractual
indemnification, the pleading must allege the existence of a contract containing an indemnity
provision (see DiBrino v Rockefeller Ctr. N., Inc., 230 AD3d 127, 136 [1st Dept 2024]).
Here, the cross-claims must be dismissed as none of the co-defendants identify the contract
that the Sanders allegedly breached.
Finally, although the court has discretion to deny this branch of the motion if “it appear[s]
from affidavits submitted in opposition…that facts essential to justify opposition may exist but
cannot then be stated” (CPLR § 3211 [d]), there is no basis to exercise such discretion here.
By their respective affirmations in opposition, Ren and SBP essentially argue that the
motion should be denied as discovery is not complete, particularly due to the recent filing of IJPS’s
answer in the second third-party action. However, they fail to identify the information that the
discovery may reveal or how it could defeat the Sanders’s motion.
Similarly, STH does not raise a convincing argument in opposition as it only states that “a
new party was recently added to the litigation[,] [d]iscovery is ongoing and the issue [of the
Sanders’s] liability remains outstanding” (NYSCEF Doc No. 272, counsel’s affirmation ¶ 4). In
sum, “[defendants’] assertion that discovery is necessary in order to oppose [the Sanders’s] motion
is based on nothing more than unsubstantiated hope of discovering something relevant to [their]
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 14 of 20
Motion No. 004 006
14 of 20
[* 14]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
claims, and is an insufficient reason to deny the motion” (Leonard v Gateway II, LLC, 68 AD3d
408, 410 [1st Dept 2009]; see Freeman v Brecher, 155 AD3d 453, 454 [1st Dept 2017]).4
IV. Motion Sequence 006
Pembrooke moves to dismiss the first cause of action for contribution pursuant to CPLR §
3211(a)(4), the third cause of action for common-law indemnification pursuant to CPLR §
3211(a)(7), and the fourth, fifth, and sixth causes of action for contractual indemnification, breach
of a contract to procure insurance, and general breach of contract, all pursuant to CPLR §
3211(a)(1).
A. The Contribution Claim
Pembrooke argues that the court should dismiss SBP’s third third-party contribution claim
as duplicative of SBP’s contribution cross-claim in the underlying action (NYSCEF Doc No. 305,
counsel’s affirmation). Pursuant to CPLR § 1403, “[a] cause of action for contribution may be
asserted in a separate action or by cross-claim, counterclaim or third-party claim in a pending
action” (CPLR § 1403). The statute makes clear that SBP has the right to seek contribution via a
cross-claim or third-party cause of action, not both.
Anticipating the dismissal of the third third-party contribution cause of action, SBP
requests that the court conform the contribution cross-claim in the underlying action to encompass
the allegations in the third third-party complaint (NYSCEF Doc No. 331, mem of law). However,
Pembrooke notably did not move to dismiss the contribution cause of action for failure to state a
cause of action, and SBP is not precluded from moving to amend the contribution cross-claim.
4
Fresco did not argue that the motion should be denied due to pending discovery.
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 15 of 20
Motion No. 004 006
15 of 20
[* 15]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
B. The Common-Law Indemnification Claim
The purpose of common-law indemnification is “the shifting of a loss because failure to do
so would result in the unjust enrichment of one party at the expense of another” (Matter of Part
60 RMBS Put-Back Litig., 195 AD3d 40, 54 [1st Dept 2021]). It “is generally available in favor
of one who is held responsible solely by operation of law because of his relation to the actual
wrongdoer” (McCarthy, 17 NY3d at 375 [internal quotation marks and citation omitted]).
Therefore, “[a] party sued solely for its own alleged wrongdoing, rather than on a theory
of vicarious liability, cannot assert a claim for common law indemnification” (Esteva v Nash, 55
AD3d 474, 475 [1st Dept 2008] [citation omitted]; 63rd & 3rd NYC LLC v Advanced Contr.
Solutions, LLC, 223 AD3d 447, 449 [1st Dept 2024] [“As the pleadings fail to allege facts to
indicate third-party plaintiffs might potentially be vicariously liable, the third-party claims for
common-law indemnification fail and must be dismissed”]).
Here, Pembrooke argues that SBP’s complaint cannot and does not assert a claim for
common-law indemnification against it as American Home sued SBP for its own wrongdoing. A
review of American Home’s complaint reflects that it sued SBP and Pembrooke for negligence
and breach of contract, and alleged that each defendant’s conduct was the direct and proximate
cause of American Home’s loss. It specifies numerous failures by defendants which allegedly
caused it to sustain damages.
With respect to the third third-party complaint, it alleges that the Sanders retained
Pembrooke “to perform Interior Design Services and related services for the renovation project”
(NYSCEF Doc No. 313 ¶ 49), and that Pembrooke retained STH and Fresco “to perform Painting
and related work” in connection with the project, and that Mr. Sanders retained SBP “to provide
services for a portion of the renovation project” (id. at ¶¶ 50, 52, and 55; see exhibit E, SBP
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 16 of 20
Motion No. 004 006
16 of 20
[* 16]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
Agreement dated April 19, 2017). As for the common-law indemnification cause of action, the
pleading asserts, among other things, that “[i]f the plaintiffs sustained the damages alleged in
[American Home’s] complaint such damages were caused by the carelessness, negligence, fault,
want of care, breach of agreement or contract, and breach of obligations of Third-Third-Party
Defendants [including Pembrooke]…and not due to any negligence of SBP” (id. ¶ 67).
Construed liberally, the third third-party complaint states a theory of vicarious liability
such that dismissal of the cause of action is unwarranted, as the underlying complaint does not
solely assert that SBP is liable to American Home for its own actions; it also asserts that SBP is
vicariously liable to American Home for the actions of its co-defendants, including Pembrooke.
C. The Contract-Related Claims
As background to these claims, it is undisputed that the Pembrooke Proposal (Proposal) is
signed by Pembrooke’s president but not signed by the Sanders. SBP contends that the Proposal
is nevertheless an enforceable contract as Pembrooke signed it, performed services under its terms,
and received payment for those services. Pembrooke argues that this discussion is irrelevant to
the issues at hand (NYSCEF Doc No. 342), observing that the Sanders had not yet retained SBP
when the Proposal was signed by Pembrooke.
Against this background, the court turns to SBP’s third third-party claim for contractual
indemnification. “Indemnification provisions are strictly construed and a promise to indemnify
‘should not be found unless it can be clearly implied from the language and purpose of the entire
agreement and the surrounding facts and circumstances’” (Madison Hospitality Mgt. LLC v Acacia
Network Hous., Inc., 230 AD3d 1063, 1063 [1st Dept 2024] quoting Hooper Assoc. v AGS
Computers, 74 NY2d 487, 491-492 [1989]).
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 17 of 20
Motion No. 004 006
17 of 20
[* 17]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
Where an entity is not a party to a contract, the entity can still establish an “entitlement to
contractual indemnification…from its capacity as a third-party beneficiary of the contract”
between other parties (Hernandez v Ten Ten Co., 102 AD3d 431, 433 [1st Dept 2013]), and it must
show “that a valid and binding contract exists between other parties, that the contract was intended
for [its] benefit, and that the benefit was direct rather than incidental” (Edge Mgt. Consulting, Inc.
v Blank, 25 AD3d 364, 368 [1st Dept 2006]). Moreover, “the identity of a third-party beneficiary
need not be set forth in the contract or, for that matter, even be known as of the time of its
execution” (MK W. St. Co. v Meridien Hotels, 184 AD2d 312, 313 [1st Dept 1992]; CB v Howard
Sec., 158 AD3d 157, 166 [1st Dept 2018]).
In this case, the third third-party complaint alleges that SBP is entitled to contractual
indemnification based on the indemnification provision in the Pembrooke Proposal, which
provides that “[t]o the fullest extent permitted by law Designer shall indemnify, defend and hold
harmless Client and their respective partners…employees, agents, contractors…from and against
all claims, damages, losses and expenses…arising out of or resulting from [Designer’s] negligent
acts or omissions…in the performance of the Services required under this Agreement” (NYSCEF
Doc No. 313, exhibit C, Sec. F ¶ 26 [emphasis added]). The Proposal also expressly states that
“Client will retain the services of the general contractor and pay contractor directly” (id., Sec. D,
Subsec. “Construction Administration” at 74). Thus, contrary to Pembrooke’s assertion, the
indemnification provision does not conclusively establish that SBP is not an intended third-party
beneficiary of the contract.5
5
The court notes that Pembrooke’s affirmation describes SBP as the general contractor and as the construction
manager/general contractor.
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 18 of 20
Motion No. 004 006
18 of 20
[* 18]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
For the same reason, SBP’s breach of contract claim need not be dismissed - if the
indemnification provision covers SBP, then SBP can pursue its breach of contract claim predicated
on Pembrooke’s alleged negligent performance of services under the Proposal.
Finally, SBP’s third third-party claim for breach of contract for failure to procure insurance
is dismissed as the Pembrooke Proposal did not “expressly and specifically state a requirement
that [Pembrooke] name [any other entity] as an additional insured under an insurance policy”
(Nicholson v Sabey Data Ctr. Props., LLC, 160 AD3d 587, 587 [1st Dept 2018] [internal quotation
marks omitted]).
To the extent not specifically addressed herein, the court has considered the parties’
remaining contentions and finds them unavailing.
V. CONCLUSION
Accordingly, it is hereby
ORDERED, that the motion by defendants Lewis A. Sanders and Alice Sanders (motion
sequence 004) is granted and that the claims and cross-claims against them are severed and
dismissed; and it is further
ORDERED, that the motion by third third-party defendant Pembrooke & Ives, Inc. (motion
sequence 006) is granted to the extent that the claims for contribution and breach of contract for
failure to procure insurance (the first and fifth causes of action, respectively) as against Pembrooke
& Ives, Inc. are severed and dismissed, and the motion is otherwise denied; and it is further
ORDERED, that the clerk is directed to enter judgment accordingly; and it is further
ORDERED, that within 30 days of entry, Lewis A. Sanders and Alice Sanders shall serve
a copy of this decision and order upon all parties with notice of entry; and it is further
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 19 of 20
Motion No. 004 006
19 of 20
[* 19]
INDEX NO. 152177/2019
NYSCEF DOC. NO. 416 RECEIVED NYSCEF: 12/23/2024
ORDERED, that Pembrooke & Ives, Inc. is directed to file and serve an answer in the third
third-party action within 30 days after service of the decision and order with notice of entry; and
it is further
ORDERED, that the remaining parties appear for the previously scheduled status
conference on May 18, 2025, at 9:30 a.m. at 71 Thomas Street, Room 305, New York, New York.
12/23/2024
DATE DAVID B. COHEN, J.S.C.
CHECK ONE: CASE DISPOSED X NON-FINAL DISPOSITION
□
GRANTED DENIED X GRANTED IN PART OTHER
APPLICATION: SETTLE ORDER SUBMIT ORDER
□
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE
152177/2019 AMERICAN HOME ASSURANCE vs. SBP NEW YORK, LLC Page 20 of 20
Motion No. 004 006
20 of 20
[* 20]