FILED: NEW YORK COUNTY CLERK 06/12/ :05 PM INDEX NO /2013 NYSCEF DOC. NO. 14 RECEIVED NYSCEF: 06/12/2017 EXHIBIT A

Transcription

1 EXHIBIT A

2 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X Index No.: /2013 VALIANT INSURANCE COMPANY and NORTHEAST REMSCO CONSTRUCTION, INC. (Part 7 - Hon. Gerald Levovits) -against- Plaintiffs, AMENDED COMPLAINT ARCH INSURANCE COMPANY, Defendant X 1. Plaintiffs VALIANT INSURANCE COMPANY ( Valiant ) and NORTHEAST REMSCO CONSTRUCTION, INC. ( Northeast ) (collectively plaintiffs ), by their undersigned counsel, as and for their Amended Complaint for declaratory judgment, upon information and belief, allege as follows: INTRODUCTION 2. Plaintiffs bring this action to obtain a declaratory judgment with respect to certain rights: (a) of Northeast to insurance coverage under insurance policy no.41pkg issued by defendant Arch Insurance Company ( Arch or defendant ) to Nicholson Construction Company ( Nicholson ) and effective from October 1, 2011 to October 1, 2012 (the Arch Policy ); and (b) of Valiant to reimbursement from Arch for certain monies paid by Valiant to Northeast pursuant to Valiant s policy covering Northeast. 3. Following initial discovery herein, in October 2013, Arch agreed to assume Northeast s defense without reservation and on a primary and non-contributing basis in connection with the lawsuit entitled Cheung et al., v. City of New York, Index No /2012 (Supreme Court, New York County) (the Cheung Action ), which alleges, e.g., property 1

3 damage to buildings at 183 and 185 Columbia Street, Brooklyn, New York. In 2015, Arch reached agreement with Valiant to reimburse Valiant for the costs that it had incurred in defending Northeast, and to pay all the future costs of defending Northeast. Arch, however, continued to reserve its rights with respect to indemnifying Northeast in connection with the Cheung Action. 4. Plaintiffs seek declarations: (a) confirming that Arch is obligated to continue to defend Northeast on a primary and non-contributing basis in connection with the Cheung Action; (b) that Arch is obligated to indemnify Northeast on a primary and non-contributing basis in connection with the Cheung Action ; (c) that Arch is obligated to reimburse Valiant the amount of $278, that Valiant paid to reimburse Northeast for the portion of the costs incurred by Northeast (the Remediation/Mitigation Costs ) to remediate and mitigate the damage at both 183 and 185 Columbia Street, to stabilize both properties and the structures located thereon, in order to re-open the poultry market business and to prevent further harm, damage or injury to adjoining properties; and (d) that Arch is obligated to reimburse Northeast for Remediation/Mitigation costs for which it has not been reimbursed by Valiant, approximately $634,406.64, as best the amount can currently be calculated. JURISDICTION AND VENUE 5. This Court has jurisdiction over this declaratory judgment action pursuant to CPLR Venue in this Court is proper under CPLR 503 because at least one of the parties resides in New York County. 2

4 PARTIES 7. Plaintiff Valiant is a Delaware corporation authorized to do business in the State of New York, and has its principal place of business in Manchester, New Hampshire. 8. Plaintiff Northeast is a New Jersey corporation authorized to do business in the State of New York, and has its principal place of business in Farmingdale, New Jersey. 9. Defendant Arch is a Missouri corporation with its principal place of business in New York, New York. 10. Defendant Arch was at all relevant times in the business, inter alia, of issuing policies of insurance and was conducting business within the State of New York. THE CONSTRUCTION PROJECT AND THE CHEUNG ACTION 11. Northeast contracted to perform certain work for the New York City Department of Environmental Protection in connection with the Gowanus Facilities Upgrade, Contract CSO- GC G (the Contract ). 12. Northeast subcontracted certain work under the Contract to Nicholson, pursuant to a contract, made as of April 1, 2009 (the Subcontract ). 13. On or about December 23, 2011, certain work performed by or on behalf of Nicholson caused damage to property at 183 and 185 Columbia Street, Brooklyn, New York. 14. On or after December 23, 2011, Northeast received notices of damage or claims arising from the incident referenced above. 15. On or about December 27, 2011, the City of New York issued an Emergency Declaration stating that the one-story masonry structure located at 185 Columbia Street had suffered severe damage and, as a result, was required to be fully demolished. 3

5 16. The damage suffered to the structure at 185 Columbia Street was the result of work negligently performed by or on behalf of Nicholson. 17. The structure located at 183 Columbia Street also suffered damage and was destabilized as a result of Nicholson s work. 18. Northeast incurred substantial sums in connection with the Remediation/Mitigation Costs. 19. On or about October 17, 2012, the Cheung Action was commenced; Northeast was among the defendants named therein. 20. Plaintiff Valiant issued commercial general liability insurance policy number CGL-VIC to Northeast as an insured for the period July 27, 2009 through July 27, 2013 ( the Valiant Policy ). 21. Subject to a reservation of rights, Valiant provided a defense to Northeast from the time Valiant was first notified of the relevant incident until, pursuant to a Memorandum of Understanding, executed in May 2015, a copy of which is attached as Exhibit A hereto (the Memorandum of Understanding ), Arch assumed Northeast s defense in the Cheung Action, subject to a reservation of rights, and agreed to reimburse Valiant for the attorneys and expert fees Valiant had incurred previously. TENDERS TO ARCH 22. Defendant Arch issued the Arch Policy to Nicholson. 23. The Subcontract requires Nicholson to obtain comprehensive general liability and 4

6 umbrella liability insurance for Northeast as an additional insured. 24. The Arch Policy in fact covers Northeast as an additional insured. 25. By letter dated December 30, 2011, RiverStone Claims Management LLC ( RiverStone ), which is administering this matter on behalf of Valiant, advised Nicholson that Northeast is seeking, inter alia, contractual indemnification from Nicholson and coverage as an additional insured under insurance policies issued to Nicholson. 26. By letter dated February 17, 2012, RiverStone sent a direct request to Arch that it defend and indemnify Northeast under the Arch Policy. 27. In a March 5, 2012 letter responding to RiverStone s December 30, 2011 letter, Gallagher Bassett Services, Inc. ( GBS ) acknowledged that the Arch Policy [c]ontained... additional insured endorsements for Contractors and that [Northeast], as the General Contractor would appear to be a party contemplated by the additional insured endorsements. The letter also stated: Since this claim is not in suit and there are no formal allegations filed against [Northeast] or Nicholson and our investigation is still proceeding it is unknown as to what the allegations may be and to what extent, if any, the policy provision may be applicable. Once our investigation is complete or a suit is filed we will revisit your request for coverage under the above mentioned policy. 28. By letter dated October 17, 2012, RiverStone sent GBS a copy of the newly-filed complaint in the Cheung Action and demanded that Arch assume Northeast s defense in that action. 29. Neither Arch nor GBS responded to RiverStone s October 17, 2012 letter. 30. In its follow-up letter dated December 13, 2012, RiverStone again demanded that Arch assume the defense of Northeast and noted, inter alia, Arch s failure to have offered a 5

7 timely explanation of why it does not or should not have any obligation to defend Northeast in the Cheung Action. 31. Neither Arch nor GBS responded to RiverStone s December 13, 2012 letter. 32. By letter dated January 28, 2013, RiverStone again demanded that Arch assume the defense of Northeast and noted, inter alia, Arch s failure to respond to its prior letters and offered it another opportunity to do so prior to the commencement of a declaratory judgment action against Arch. 33. Neither Arch nor GBS responded to RiverStone s January 28, 2013 letter. 34. By letter dated April 24, 2013, RiverStone, through counsel, demanded that Arch provide: (a) a copy of the Arch Policy; and (b) an acknowledgment that Arch would immediately undertake Northeast s defense and indemnity of the Cheung Action; if not, an explanation as to why Arch or GBS believed Arch did not owe Northeast full defense and indemnity in connection with the Cheung Action. The letter stated that, absent receiving the foregoing on or before May 3, 2013, Valiant would promptly commence a declaratory judgment action against Arch. 35. Neither Arch nor GBS has agreed to provide even a defense to Northeast until after this action was brought when Arch assumed Northeast s defense pursuant to the MOU. AS AND FOR THE FIRST CAUSE OF ACTION (Declaratory Judgment: Valiant and Northeast v. Arch) 36. Plaintiffs repeat and reallege each and every allegation set forth in paragraphs 1 through 34 of this Complaint as if fully set forth herein. 37. There exists a real and justiciable controversy between plaintiffs and defendant Arch. 6

8 38. Plaintiffs have no adequate remedy at law. 39. Northeast is an insured or additional insured under the Arch Policy. 40. Arch was provided timely notice of the Cheung Action and the occurrence from which it arises. 41. Defendant Arch wrongfully refused to acknowledge that it is obligated to defend and indemnify Northeast on a primary and non-contributory basis in connection with the Cheung Action and any other claims arising from the occurrence from which it arises and only belatedly acknowledged its duty to defend Northeast in connection with the Cheung Action As a result of Arch s failure to disclaim a duty to defend or indemnify Northeast in connection with the Cheung Action, Arch has waived, and/or is estopped from asserting, any purported right to deny a duty to defend or indemnify Northeast in connection with the Cheung Action and any other claims arising from the occurrence from which it arises. 43. Plaintiffs are entitled to a declaration confirming that Defendant Arch is obligated to continue to defend Northeast in the Cheung Action on a primary and non-contributing basis, pursuant to the terms set forth in the Memorandum of Understanding. 44. Plaintiffs are entitled to a declaration that Defendant Arch is obligated to indemnify Northeast in the Cheung Action on a primary and non-contributing basis. AS AND FOR THE SECOND CAUSE OF ACTION (Declaratory Judgment: Valiant v. Arch) 45. Plaintiffs repeat and reallege each and every allegation set forth in paragraphs 1 through 43 of this Complaint as if fully set forth herein. 46. There exists a real and justiciable controversy between plaintiff Valiant and 7

9 defendant Arch. 47. Plaintiff Valiant has no adequate remedy at law. 48. Pursuant to the Valiant Policy and the terms of a Partial Release, Valiant has reimbursed Northeast $278, of the Remediation/Mitigation Costs. 49. Northeast is an insured or additional insured under the Arch Policy. 50. Arch s coverage of Northeast under the Arch Policy is primary to and on noncontributory basis with the Valiant Policy. 51. Arch s policy requires Arch to indemnify and reimburse Northeast for the monies expended by Northeast to perform the remedial work and repairs at 183 and 185 Columbia Street. 52. Arch s obligation to indemnify Northeast is primary and non-contributory with any such obligation of Valiant under the Valiant Policy. 53. Accordingly, Valiant is entitled to a declaration that Arch is obligated to reimburse Valiant the $278, that Valiant paid to Northeast with respect to the Remediation/Mitigation Costs. AS AND FOR THE THIRD CAUSE OF ACTION (Declaratory Judgment: Northeast v. Arch) 54. Plaintiffs repeat and reallege each and every allegation set forth in paragraphs 1 through 52 of this Complaint as if fully set forth herein. 55. There exists a real and justiciable controversy between plaintiff Northeast and defendant Arch. 56. Plaintiff Northeast has no adequate remedy at law. 8

10 57. In addition to the monies expended for remedial repairs that Valiant reimbursed to Northeast, Northeast has incurred additional sums in connection with the Remediation/Mitigation Costs. 58. Plaintiff Northeast is an insured or additional insured under the Arch Policy. 59. Arch s coverage of Northeast under the Arch Policy is primary to and on noncontributory basis with the Valiant Policy. 60. Plaintiff Northeast is entitled to a declaration that Arch is obligated to indemnify and reimburse Northeast for $634, in unreimbursed Remediation/Mitigation Costs. WHEREFORE, plaintiffs are entitled to a judgment: a. declaring that plaintiff Northeast is insured under the Arch Policy; b. declaring that defendant Arch is obligated to defend plaintiff Northeast in connection with the Cheung Action pursuant to the terms of the Memorandum of Understanding; c. declaring that defendant Arch is obligated to continue to indemnify plaintiff Northeast in connection with the Cheung Action; d. declaring that the Arch Policy provides coverage on a primary and noncontributory basis for plaintiff Northeast in connection with the Cheung Action and any other claims arising from the occurrence from which it arises; e. declaring that defendant Arch is obligated to reimburse plaintiff Valiant for all past and future defense costs incurred in connection defense of Northeast in the Cheung Action; f. declaring that defendant Arch is obligated to reimburse plaintiff Valiant $278,836.64, representing monies that Valiant reimbursed to plaintiff Northeast for certain remedial work and repairs Northeast performed related to 183 and 185 Columbia Street; g. declaring that defendant Arch is obligated to reimburse plaintiff Northeast $634, for unreimbursed Remediation/Mitigation Costs; and 9

11 h. awarding plaintiffs pre-judgment interest, their attorney s fees, costs and disbursements herein, and such other legal and equitable relief as the Court deems just and proper. Dated: June 9, 2017 New York, New York Yours, etc. LANDMAN CORSI BALLAINE & FORD P.C. By: Stephen Jacobs 120 Broadway, 27th Floor New York, NY (212) Attorneys for Plaintiff Valiant Insurance Company LYONS & FLOOD, LLP By: Edward P. Flood One Exchange Plaza 55 Broadway, Suite 1501 New York, NY (212) Attorneys for Plaintiff Northeast Remsco Construction, Inc. 10