There Are No Such Things -- First Department Affirms Dismissal of CGL Insurer's "Equitable Indemnity" and "Equitable Reapportionment" Causes of Action

COMMERCIAL GENERAL LIABILITY – COMMERCIAL UMBRELLA LIABILITY – COINSURANCE RECOVERY ACTION 

United Natl. Ins. Co. v. Travelers Prop. Cas. Co. of Am.
(1st Dept., 2/27/2018)

Construction site accident.  Injured employee of subcontractor Phoenix Mechanical Piping, LLC, sued the property owner, Metropolitan Tower Life Insurance Company, and general contractor Independent Temperature Control Services, Inc. (ITCS).  ITCS impleaded Phoenix Mechanical, presumably for contribution and/or indemnification.

Plaintiff, Utica National Insurance Company, insured Phoenix Mechanical under a CGL policy with a $1 million per occurrence coverage limit.  Defendant Travelers insured MetLife, Inc. under a CGL policy with a $2 million per occurrence limit.  Defendant Zurich insured MetLife under a commercial umbrella liability policy with a $25 million per occurrence limit.  Defendant National Union insured Phoenix Mechanical under a commercial umbrella liability policy with a $1 million per occurrence limit.

United National defended the personal injury action, allegedly expending over $500,000 in doing so.  Following a jury trial, judgment was entered for the underlying personal injury plaintiff in the amount of $6,697,534.93. United National paid $1,075,000 in indemnification towards that judgment, with Travelers, Zurich and National Union paying the rest.

United National then brought this coinsurance recovery action against the defendant insurers, alleging that because it did not owe defense or indemnification coverage to Phoenix Mechanical at all based on the "Residential Projects Exclusion" contained in United National’s policy, the defendant insurers were obligated to reimburse United National for its defense and indemnification costs.  United National's complaint alleged seven causes of action, styled as:

I.     Equitable Indemnity
II.    Equitable Indemnity
III.   Equitable Contribution
IV.    Equitable Reapportionment
V.     Equitable Subrogation
VI.   Equitable Subrogation
VII.  Declaratory Judgment

Supreme Court granted Zurich's motion to dismiss the first, second and fourth causes of action of the complaint and United National appealed.  In AFFIRMING the dismissal order, the First Department held:

The motion court properly dismissed plaintiff's first and second causes of action for "equitable indemnity" and fourth cause of action for "equitable reapportionment" as against Zurich since there is no recognized cause of action for equitable indemnity or equitable reapportionment under New York law. Furthermore, even assuming that truth of the facts as alleged by plaintiff, these claims do not "state[] the elements of a legally cognizable cause of action" (P.T. Bank Cent. Asia, N.Y. Branch v ABN AMRO Bank N.V., 301 AD2d 373, 376 [1st Dept 2003]; see 1199 Hous. Corp. v International Fid. Ins. Co., 14 AD3d 383, 384 [1st Dept 2005]).

In insurer coinsurance recovery actions, there are no such things as equitable indemnity or equitable reapportionment in New York.