Opinion
601298/03.
October 10, 2008.
DECISION/ORDER
Defendant Chubb Indemnity Insurance Company ("Chubb") moves, pursuant to CPLR § 3212 (a), for summary judgment dismissing plaintiff Asher B. Edelman's Amended Complaint. The facts underlying this action are set forth in this court's March 28, 2006 decision and will be repeated here only to the extent necessary.
In brief, Willem de Kooning's painting, "Greece on Eighth Avenue" ("the Painting"), then owned by plaintiff, was one of the art works ensured by Chubb under an all risks Fine Arts/Valuable Articles policy issued to plaintiff. Plaintiff consigned the Painting to Phillips De Poury Luxembourg ("Phillips") for sale at an auction. The Painting failed to sell at that time, and plaintiff subsequently claimed that it had been badly damaged while in the possession of Phillips.
Plaintiff filed a claim with Chubb, which, thereupon, commenced an investigation as to whether the damage to the Painting was covered under its policy. Phillips, meanwhile, made a claim under its Fine Arts Dealer's policy with Lloyd's of London, which disclaimed coverage on May 29, 2003, on the ground that the damage to the painting fell under an exclusion for damage resulting-from "wear and tear, natural aging, gradual deterioration, [or] inherent defect."
Approximately four months after reporting his claim to Chubb, plaintiff commenced this action against Chubb, seeking to recover damages for breach of contract, breach of good faith and fair dealing and for a declaratory judgment. Chubb subsequently commenced a third-party action against Phillips, alleging anticipatory subrogation and two other claims which Chubb ultimately withdrew by stipulation.
On or about October 3, 2003, plaintiff served an amended Complaint alleging a direct claim against Phillips for breach of contract to procure appropriate insurance, or in the alternative, for failing to pay the proceeds of such insurance.
By letter dated September 15, 2004, more than a month after Phillips had moved for summary judgment, counsel for Chubb requested that plaintiff seek leave to amend his complaint to allege a cause of action for negligence against Phillips.
Specifically, counsel for Chubb wrote
As the claims are currently postured, it is conceivable that if Phillips were to prevail on its summary judgment motion against the plaintiff, an argument will be made by Phillips that Chubb's claim is barred because plaintiff has not asserted a cause of action for negligence. If that were to occur, it would be Chubb's position that by failing to assert a negligence claim against Phillips, plaintiff has violated "the "subrogation clause" of the Chubb policy and therefore is not entitled to coverage.
Plaintiff declined to do so.
In the March 28, 2006 decision on motions seq. nos. 002 and 003, this Court granted Phillips's motion for summary judgment on the breach of contract claim, on the grounds that Phillips had purchased the contractually required insurance and that there were no insurance proceeds to be paid to plaintiff. Reasoning that Chubb stood in the shoes of plaintiff, its insured, this Court also dismissed Chubb's third-party complaint against Phillips. The decision was affirmed by the Appellate Division, First Department on June 26, 2007 ( 41 AD3d 327; rearg/lv. to app. denied Dec. 18, 2007). Only then did Chubb move, once again for summary judgment, on a wholly new theory.
Citing Weinberg v Transamerica Ins. Co. ( 62 NY2d 379), Chubb argues that it is not liable to plaintiff under the Policy, because plaintiff's failure to assert a claim of negligence against Phillips destroyed Chubb's ability to recover from Phillips any payment that Chubb might make to plaintiff. In Weinberg, the Court held that a plaintiff who settled his claim against an alleged tort-feasor and gave him a general release of all claims that plaintiff might have had against him, without any reservation of rights to plaintiff's insurer, had thereby prejudiced the insurer's subrogation rights. Here, by contrast, plaintiff did not give Phillips a release of all his claims, and, thereby, foreclose Chubb's exercise of its subrogation rights. On the contrary, he litigated against Phillips, although, apparently, not in the manner that Chubb might have, had it paid on the Policy and sued as plaintiff's subrogee.
Chubb also argues that plaintiff cannot recover under the Policy because he violated the subrogation clause contained therein which provides, in relevant part, that:
[i]f we make a payment under this policy, we will assume any recovery rights a covered person has in connection with that loss, to the extent we have paid for the loss.
All of your rights of recovery will become our rights to the extent of any payment we make under the policy. A covered person will do everything necessary to secure such rights, and do nothing after a loss to prejudice such rights.
Neither this clause, nor anything else in the Policy, required plaintiff to sue Phillips. Indeed, Chubb states in its papers that it would have had no quarrel with plaintiff, had he not raised any claim against Phillips. Having refrained from paying plaintiff's loss, and having chosen not to assume control of plaintiff's litigation against Phillips once plaintiff asserted his direct claim, Chubb can no more complain about plaintiff's choice of his cause of action against Phillips than it could complain about any other litigation choice that plaintiff might have made.
Accordingly, defendant Chubb's motion for summary judgment is denied.
This constitutes the decision and order of this Court.