SHORT FORM ORDER

SUPREME COURT OF THE STATE OF NEW YORKCOUNTY OF NASSAU

Present: HON. RANDY SUE MARDER

JUSTICE

BRANDS CYCLES and NATIONWIDEPROPERTY AN CASUALTY INSURNCECOMPANY,

Plaintiffs

-against-

GREAT AMRICAN E&S INSURNCECOMPANY d//a! GREAT AMRICAN E&SINSURNCE COMPANY and GREATAMRICAN INSURNCE COMPANY d//aGREAT AMRICAN CUSTOM INSURNCESERVICES, INC. , ORBEA U. A. and ZURCHAMRICAN INSURNCE COMPANY

Defendants.

Papers Submitted:

Notice of Motion (Mot. Seq. 04)........................Memorandum of Law..........................................Affirmation in Opposition.............. .........

.......... ..

Reply Affirmation................................................Notice of Motion (Mot. Seq. 05).........................Memorandum of Law..........................................Affidavit in Opposition........................................Reply Affirmation................................................Notice of Motion (Mot. Seq. 06).........................Memorandum ofLaw..........................................Memorandum of Law in Opposition....................

TR/IAS PART 18

Index No. 006546/09Motion Sequence... , 05, 06, 07Motion Date...04/15/11

Reply Affirmation.......................................... ......Notice of Motion (Mot. Seq. 07).........................Affirmation in Opposition...................................Reply Affidavit.......................................... ....... ...

Upon the foregoing papers, the Defendants , GREAT AMRICAN E&S

INSURNCE COMPANY d//a! GREAT AMRICAN E&S INSURNCE COMPANY

and GREAT AMRICAN INSURNCE COMPANY d//a GREAT AMRICAN

CUSTOM INSURNCE SERVICES , INC. GreatAmerican ), (Mot. Seq. 04) seek an order

pursuant to CPLR 3212 granting sumar judgment declaring that it owes no duty to

defend or indemnify the Plaintiff, Brands Cycles ("Brands ) or to reimburse the Plaintiff

Nationwide Propert and Casualty Company ("Nationwide ) for any defense or indemnity

costs incured in the underlying wrongful death action; the Defendants , Great American

(Mot. Seq. 05) seeks an order pursuant to CPLR 3212 granting Sumar Judgment

declaring that it owes no duty to defend or indemnify the Co-Defendant, Orbea, U. , LLC

Orbea ) in the underlying action; the Plaintiffs, Brands and Nationwide (Mot. Seq. 06) seek

an Order pursuant to CPLR 3212 granting sumar judgment against the Co-Defendant

Great American, declaring that the Great American insurance policy affords additional

insurance coverage to Brands in the underlying action, that Great American is obligated to

defend Brands in the underlying action and that Great American is required to reimburse

Nationwide for defense costs incured to date in the defense of Brands in the underlying

matter; and the Defendant, Orbea, seeks an order pursuant to CPLR 2221 granting

rearguent and upon reargument granting its motion for an order pursuant to CPLR 3212

granting sumar judgment declaring that Great American is obligated to defend Orbea in

the underlying negligence and product liabilty cause of action, that Great American is

obligated to reimburse Orbea for costs incurred its defense in the underlying action, and that

a hearing be scheduled to determine such costs, are determined as provided herein.

The instat action and the instant motions seeking declaratory judgments from

this Cour, arse from the underlying action filed in the Nassau County Supreme Cour in

Januar, 2011 Sulsan v. Orbea and et aI Index No. 713/08, alleging causes of action

sounding in negligence aid strict liabilty. The Plaintiff, the wife and Administrator of the

estate of Jules Suslan, filed the underlying complaint after Jules Sulsan sustained fatal

injures, in May 2007, when the frame of his bicycle allegedly fractued while he was riding

on the street in Massapequa, New York. The initial complaint named Brands, the vendor and

bicycle retail establishment, and its related business entities as defendants. The complaint

was amended in July, 2009, where Marec, the manufactuer of the bicycle and Orbea, the

vendor who purchased bicycle from Marec and sold it to Brands, were added as defendants.

Great American issued a primar products/completed operations liabilty

insurance policy to Marec which was in full force and effect at all times referred to herein.

Such policy contained an additional insured endorsement naming "all vendors , which

included Orbea and Brands, as insureds, and which generally provided coverage for bodily

injuries arising out of Marec ' s products sold in the ordinar course of business. Zurich

American Insurance ("Zurich") issued a commercial excess liabilty policy to Orbea, which

was in full force and effect at all times referenced to herein, citing all Marec ' s vendors,

including but not limited to Brands, as insureds. Brands and Nationwide, Brands ' primar

insurer, submitted its tender to Great American and Zurich for indemnification and defense

of the underlying cause of action and both insurers refused tender.

In April, 2009, Brands and Nationwide fied a breach of contract action against

Great American, Orbea, and Zurich, alleging that Great American and Zurich failed to

perform their obligations pursuant to their respective policies, and that Orbea failed to have

its insurer enforce the policy on Brands ' behalf. In July, 2009, Orbea, in its answer to

Brands and Nationwide, cross-claimed against Great American for claims alleging it failed

to provide coverage and failed to defend it in the underlying action. In June, 2010 , Zurich

and Orbea collectively filed a motion for sumar judgment seeking a declaratory judgment

that the Co-Defendant, Great American was obligated to provide coverage and to indemnify

and defend them in the underlying action. This Cour denied that motion in a decision dated

Januar 27, 2011.

The relevant provisions of the Great American policy are as follows:

...

SECTION IV - PRODUCTS/COMPLETED OPERATIONS LIAILITYCONDITIONS...

...

2. Duties In The Event Of Occurence, Claim or Suita. You must see to it that we are notified as soon as practicable of anoccurence' which may result in a claim. To the extent possible, notice

should include:

The action against Zurch and Orbea was discontinued in October, 2010, as per

stipulated agreement between the paries.

(1) how, when and where the ' occurence ' took place;(2) the names and addresses of any injured persons and witnesses; and(3) the natue and location of any injur or damage arising out of theoccurence.

' ......

ADDITIONAL INSURDS-VENDORS

...

WHO IS AN INSURED..is amended to include as insured any person ororganization...shown in the Schedule, but only with respect to 'bodily injuror 'propert damage ' arsing out of ' your products ' shown in the Schedulewhich are distrbuted or sold in the regular course of the vendor s business

subject to following exclusions:1. The insurance afforded the vendor does not apply to:a. 'Bodily injur ' or ' propert damage' for which the vendor isobligated to pay damages by reason of the assumption of liabilty in acontract or agreement. This exclusion does not apply to liabilty fordamages that the vendor would have in the absence of the contract oragreement.

c. Any physical change in the product made intentionally by the vendor

e. Any failure to make such inspections, adjustments , tests or servicingas the vendor has agreed to make or normally undertake to make in theusual course of business in connection with the distribution or sale ofthe products...g. Products which, after distribution or sale by you, have been labeledor relabeled or used as a container, par or ingredient of any other thingor substance by or for the vendor.This insurance does not apply to any insured person or organizationfrom whom you have acquired such products, or any ingredient, par orcontainer, entering into, accompanying or containing such products...

The relevant facts regarding this motion (Mot Seq. 04) is that Brands became

aware of the "occurrence" a few days after Sulsan s accident as its president and owner Gar

Sirota, in his Examination Before Trial, acknowledged that he was so informed "a day or two

or thee right after" it happened (see Great American Notice of Motion, Exhibit G, Tr. G.

Sirota, p. 14 , In. 19, 20). Brands issued tender to Great American on or about September 29

2008 for coverage as an additional insured on the policy issued to Marec, and Great

American denied its tender on or about November 11 2008.

Great American, in the instat motion, argues that Brands failed to comply with

the condition precedent that it was to notify the insurer as soon as practicable upon learing

of the occurence giving rise or potentially giving rise to a claim. Even if this Cour were to

accept Brands ' proffered excuse that the only manufactuer it was aware at the time of the

occurence was Orbea, Brands should have been aware of Marec s existence at least by

March 18 , 2008 during its discussion with Orbea s counselor on April 9, 2008 when Brands

attended an inspection of the bicycle along with representatives from Marec.

Notwithstanding the foregoing, Great American argues that Mr. Sirota

testimony that he did not bother to contact or seek the identity of an additional insurer

because Brands was insured by Nationwide, indicates Brands ' abject failure to exercise due

dilgence (see Great American Notice of Motion, Exhibit G, Tr. G. Sirota, p. 21-28).

Additionally, Great American argues that the exclusionary language in its policy

endorsement precludes coverage to Brands according to this Cour' s decision as to Orbea.

In sum, Great American avers that because of Orbea s conduct and actions regarding the

bicycle frame, Brands is also precluded from coverage.

Finally, in its Reply Affirmation, Great American contends that Insurance Law

~ 3420 (d), requiring a timely disclaimer ofan insured' s tender does not apply as the subject

policy has to be delivered or issued for delivery in the state of New York.

In opposition, Brands argues that Orbea has held itself out as the manufacturer,

particularly since it purchased the subject bicycle from Orbea and Orbea s label is affixed

on the bicycle. Furher, the identity ofMarec was not uncovered until August, 2009, during

the discovery phase of the underlying litigation. As cours have held that the use of discovery

is an acceptable means of accessing information regarding the identity of an insurer, its

alleged delay in submitting its tender was reasonable. Furer, Great American issued a late

disclaimer to its tender, and it failed to set fort a reasonable excuse for the delay.

In response to Great American s arguments regarding the exclusionar clause

Brands contends that it was a passive vendor which had no role in the frame s design and

manufacture as did Orbea. The exclusionar provisions, therefore, do not apply in the instat

motion.

The law regarding endorsement exclusions which set forth similar provisions

as the subject endorsement, requires some analysis. As previously stated in the Cour'

Januar 27, 2011 decision, there is little consistent authority regarding exclusions with

similar, if not the same, language and it is within the cour' s discretion to refer to outside

authority in interpreting such language (see People v. Scott, 195 Misc.2d 647 (N.Y. Sup.

2003)). Also, in determining a dispute over insurance coverage, the Cour must first look to

the language of the policy and "constre the policy in a way that affords a fair meaning to all

ofthe language employed by the paries in the contract and leaves no provision without force

and effect"(Raymond Corp. v. National Union Fire Ins. Co. of Pittsburgh, Pa. 5 N.Y.3d 157

(2005) quoting Consolidated Edison Co. ofN. 1' v. Allstate Ins. Co., 98 N. 2d 208 (2002)).

However, this Court in its cognizance that the paries negotiated the terms of the insurance

agreement, wil not rewrte or contravene the issues and factors which may have been

anticipated by the paries when entering into the agreement. The endorsement exclusion at

issue refers to injuries arsing out of "products" which have been relabeled or used as a par

of any other thing. At first glance, this language appears to ru strctly to the product itself

without requiring a nexus between any changes to the product and the resulting injures.

However, the cour in Mattocks v. Daylin, Inc. 452 F. Supp 512 (W. Pa.1978) applied the

principles of insurance law with equity and interpreted the "arising out of' language

preceding the exclusionar provision to mean that a nexus is required between the relabeling

and injur. The Court in American White Cross Laboratories, Inc. v. The Continental

Insurance Company, 495 A. 2d 152 (N.J. Super. 1985), in determining that the

exclusionar provisions of the endorsement precluded coverage in that case, not only

acknowledged that a nexus was required between the relabeling and using of the product as

par of another, but that the role of the manufactuer and/or vendor in the production of the

product, had to be active (supra at 159).

Great American s interpretation speaks strctly to the product regardless of

Brands ' role in the frame s design, development and/or creation. However, if this Cour

accepts that interpretation, then Brands wil always be precluded from coverage. As it would

be unfair to hold a manufacturer responsible for injures arising out of changes made after

the product left the manufacturer s control, it would also be unfair to hold the passive vendor

responsible for changes made before it acquired the product (see Sears, Roebuck and Co.

Reliance Ins. Co., 654 F2d 494 pth Cir 1981)).

The purpose of a vendor s endorsement is to protect the vendor and/or

distributor from the expense of being "dragged" in as an additional defendant into a lawsuit

arising from a defect in a product that it distributes. This is why manufactuers purchase this

tye of insurance, as it is anticipated that there may be litigation alleging defects in their

products. This assumes, however, that the vendor s role in the distrbution ofthe product

passive (see Sears, Roebuck and Co. v. Reliance Ins. Co. supra).

In sum, the frame was to be used as part of a bicycle and the insurer was

certinly aware that Brands, who was in the business of sellng bicycles, was an additional

insured and that it would ultimately sell a bicycle which included that frame. This Cour

must assume that Great American intended to insure Brands under the vendor s endorsement

of its policy unless there was a nexus between any action by Brands and the injuries

sustained.

The record indicates that Brands was an entirely passive vendor and Orbea

actions canot be attibuted to Brands. For the foregoing reasons, this Cour finds that for

the "relabeling" exclusion to be effective against Brands, it must have had an active role in

the manufacture and design of the frame. This Cour must now determine the issue regarding

timeliness of Brands ' tender to Great American , and the timeliness of Great American

disclaimer.

It is well settled that where an insurance policy requires that notice of an

occurence be given "as soon as practicable , such notice must be given within a reasonable

time in view of all of the circumstaces (seePonokRealty Corp. v. UnitedNat. Specialty Ins.

Co. , 69 A.D.3d 596 (2d Dept. 2010)). The insured' s failure to satisfy the notice requirement

constitutes a failure to comply with a condition precedent which, as a matter of law, vitiates

the contract. (see also Lukralle v. Durso Supermarkets, Inc. 238 A.D .2d 318 (2d Dept.1997),

Sputnik Restaurant Corp. v. United Nat. Ins. Co., 62 A. 3d 689 (2d Dept. 2009)). The

burden is therefore on the insured to show that there was a reasonable excuse for the delay

(see Interboro Mut. Indem. Ins. Co. v. Sarno, 277 A. 2d 454 (2d Dept. 2000)).

The relevant provision of the subject insurance policy required that the insured

give notice of an "occurence which may result in a claim" to Great American "as soon as

practicable" ( see Interboro Mut. Indem. Ins. Co. v. Sarno, 277 A. 2d 454 (2d Dept. 2000)).

As Brands, according to the evidence, leared of Suslan s accident a few days after it

occured, it is now obligated to demonstrate that it acted with due dilgence in ascertaining

the existence and identity of any additional insurer. It is paricularly noteworty that Brands

' ,

as per Mr. Sirota' s testimony, was aware that additional insurance was available though the

bicycle manufactuer such as Orbea, based on his "40 years of being in business" (Notice

of Motion, Exhibit G, Tr. Sirota, p. 22, In. 25, p. 23 lines 2- 12), and it made no attempt to

contact Orbea or Orbea s insurer. That action was deliberate as Brands so stated that it was

not "even concerned" because it was being covered by Nationwide (Notice of Motion

Exhibit G, Tr. Sirota, p. 22 , In. 25 , p. 23 lines 2- 12). This action or lack thereof, undermines

Brands ' arguents that it acted in due dilgence.

Brands ' additional arguent that Great American was notified by Martec as

far back as April, 2008 and because the two paries were not adverse at that time, that notice

was sufficient, is unavailng. The relevant authority provides that where two or more

insureds are defendants in the same action, notice of the occurence or of the lawsuit

provided by one insured wil be deemed notice on behalf of both insureds only where the two

paries are united in interest or where there is no adversity between them. This Court also

notes that timely (emphasis added) notice fuished by one insured may be deemed timely

notice by another (see 23-08- 18 Jackson Realty Associates v. Nationwide Mut. Ins. Co. 53

D.3d 541 (2d Dept. 2008)). Here, Marec and Orbea may have provided notice to Great

American since April, 2008, but there is nothing in the record to indicate that Marec ' sand/or

Orbea s notice was timely.

There is no evidence that Brands made any or more than little effort, to acquire

information regarding additional insurance coverage. Moreover, Brands ' excuse as to why

it did not make such an effort, is not reasonable. Even if Marec s identity could not be

ascertined until discovery in August, 2008, it should have least contacted Orbea for

insurance information and it chose not to. Accordingly, Brands did not sustain its burden of

demonstrating due dilgence or a reasonable excuse for the delay in ascertining Marec

existence and insurance status. Consequently, this Cour fmds that Brands failed to give

notice of the occurence as soon as practicable (see Interboro Mut. Indem. Ins. Co. v. Sarno

277 A. 2d 454 (2d Dept 2000)).

Notwithstading the foregoing, Insurance Law ~ 3420 (d) requires an insurer

to provide a wrtten disclaimer of coverage "as soon as is reasonably possible" (Insurance

Law ~ 3420 (d) (2)). An insurer s failure to comply with the foregoing statutory provisions

precludes it from disclaiming coverage even where the insured's own notice of the

incident is untimely (see Quincy Mut. Fire Ins. Co. v. Uribe, 45 A. 3d 661 (2d Dept.

2007), Bellavia v. Seneca Ins. Co., Inc. 78 A. 3d 1153 (2d Dept. 2010)). The timeliness

of an insurer s disclaimer is measured from the point in time when the insurer first lears of

the grounds for disclaimer ofliabilty or denial of coverage (see Danna Const. Corp. v. Utica

First Ins. Co., 17 A.D.3d 622 (2d Dept. 2005)).

Where there is a delay in providing the written notice of disclaimer, the burden

rests on the insurance company to explain and justify the delay (see First Fin. Ins. Co.

Jetco Contr. Corp., 1 N.Y.3d 64; Matter of Allstate Ins. Co. v. Cruz 30 A.D.3d 511). When

the explanation offered for the delay is an assertion that there was a need to investigate issues

that wil affect the decision on whether to disclaim, the burden is on the insurance company

to establish that the delay was reasonably related to the completion of a necessar, thorough,

and dilgent investigation (see Republic Franklin Ins. Co. v. Pistill, 16 A. 3d 477 (2dDept.

2007), Halloway v. State Farm Ins. Companies, 23 A.D.3d 617(2d Dept. 2005)).

According to the evidence, Great American had notice and was actively

involved in investigating the underlying case since at least April, 2008. Therefore, Great

American possessed sufficient information upon which to base a disclaimer as far back as

March, 2008 upon receiving tender from Orbea (See Brands Affirmation in Opposition

Exhibit M, Tr. John Surich, p. 28, In. 6 , 7). The accompanying documents included a copy

of the summons and complaint of the underlying action which disclosed the date of the

accident, the named paries , including Brands, the nature of the accident, and the extent of

the injuries (See Brands Affirmation in Opposition, Exhibit M, Tr. John Surich, p. 29, In. 5-

25). As such, Great American s proffered explanation for not responding to Brands

September 29, 2008 tender until November 18, 2008 because of the need to conduct an

investigation, is unreasonable (see Mohawk Minden Insurance Company v. Philips M Ferry,

Jr., et al. 251 A. 2d 846 (3d Dept. 1998)).

Furer, when asked about the delay in issuing the disclaimer and not issuing

a reservation of rights letter in the interim, Great American, by its claims director, John

Surch, testified that Great American was "in the process of preparing a comprehensive

coverage analysis...so.. (it) wouldn t piecemeal a reservation of rights on late notice..

Implicit in this statement is Great American s rationalization that since Brands ' notice was

untimely, it was not necessary to reserve its rights and it issued an untimely disclaimer to its

detriment.

Great American contends that the relevant provision in Insurance Law ~ 3420

(d) (2); requiring a timely disclaimer, only applies to coverage in a policy delivered or issued

for delivery in this State for death or bodily injur arising out of an accident occuring within

this State. Here, the subject policy was issued by its broker in the state of Uta. The Cour

in American Ref-Fuel Co. of Hempstead v. Employers Ins. Co. of Wausau, 265 A. 2d 49

(2d Dept. 2000)) analyzed this provision by tracing its historical origins. This provision first

appeared in 1958 as an amendment to Insurance Law former ~ 167 (1), which set fort

mandatory provisions for policies "issued or delivered in this State" insuring liabilty for

personal injuries or propert damages (see, L. 1958, ch. 759 ~ 3; L. 1939, ch. 882). As

originally enacted, it applied not only to liabilty for accidents occurrng in this State, but to

any liabilty under a policy "issued or delivered in this State

It should be noted that the language at issue here

, "

delivered or issued for

delivery in this State" differs from the 1958 language. As such, the present wording, "issued

for delivery" does not mean the same as actual delivery (see Preserver Ins. Co. v. Ryba 10

Y.3d 635 (2008)). Furer, the subject policy covered all vendors as additional insureds

and Great American was certainly aware that Brands was a New York entity and operated

its business in the state of New York. Furer, the cases cited by Great American in support

of its position, are distinguishable as those insureds were conducting business in and were

business entities of states other than New Y ork,z

Jn Preserver Ins. Co. v. Ryba 10 N.Y.3d 635 (2008), although the policy, which wasunderwtten and delivered in New Jersey, covered risks located in New York, the insured was

In the instat case, on the other hand, Great American provided coverage to

Marec s vendors which included Brands, a New York entity doing business in New York.

The fact that the policy also covered other corporations and entities operating in other states

and that the policies were executed and actually delivered in another state, is not

determinative. "Rather, the location of the insured and the risk to be insured are

determinative" (see New York Cent. Mut. Fire Ins. Co. v. Aguirre, 7 N.Y.3d 772 (2006)).

Accordingly, Brands ' tender is untimely, but Great American s disclaimer is

also untimely. Furer, the policy exclusions in the endorsement do not apply to Brands. The

instant motion is DENIED and Great American is obligated to defend and indemnify Brands

in the underlying action, and reimburse Brands for any costs incured in the defense of the

underlying action.

The Defendant, Orbea s motion to reargue (Mot. Seq. 07) shall be discussed

out of sequence, as the Cour' s decision regarding this motion wil impact the outcome of the

declaratory relief requested by Great American against Orbea.

Orbea filed its motion to reargue pursuant to ~ CPLR 2221 (d) (2) upon this

Cour' s Januar 27 2011 denialofits Sumar Judgment motion for a declaratory judgment

not located in New York; In Marno v. New York Telephone Co. 944 F.2d 109 C.A.2 (N.

1991, the policy was issued though an insurance agent in Manchester, New Hampshire, to a

New Hampshire corporation; and in First City Acceptance Corp. v. Gulf Ins. Co. 245 D. 2d

649 (3d Dept. 1997)), Insurance Law 3420 (d) did not apply to a policy issued and delivered inMassachusetts, where the insured was a Massachusetts Company.

that Great American is obligated to defend and indemnify it in the underlying action. Orbea

argues in its instant motion, that this Cour misapprehended the law in that once it determined

that Orbea met its prima facie burden, no fuher inquiry of the Cour was required, the Cour

went beyond the four corners ofthe complaint, and the Cour should not have considered the

evidence in the record and resolved factual issues at this level of litigation.

In opposition, Great American argues that Orbea is merely arguing the same

facts as was in its original motion and that the Court' s decision should stand.

It is noted that Orbea s original motion sought an Order of this Cour, granting

sumar judgment against Great American declaring that Great American afford additional

coverage to Orbea, that Great American is therefore obligated to reimburse the Defendants

for costs incurred in any defense of Orbea and directing a hearing before a referee to

determine the cost of defense. However, in its motion for re-arguent, Orbea rephrased the

prior relief seeking an Order declaring that Great American afford additional coverage, to

seeking an Order declaring that claims asserted against Orbea create the possibilty

(emphasis added) of coverage by Great American. This paricular wording was not before

the Court at the time of its motion and it is regarded as a significant change.

A motion to reargue is addressed to the discretion of the cour and is designed

to afford a par an opportity to establish that the court overlooked or misapprehended the

relevant facts, or misapplied a controllng principle oflaw. It is not designed as a vehicle to

afford the unsuccessful par an opportity to argue once again the very questions

previously decided. (Gellert Rodner v. Gem Community Mgt. , Inc., 20 A.D.3d 388 (2nd

Dept. 2005)) nor is it designed to provide an opportity for a par to advance arguents

different from those originally tendered (Amato v. Lord Taylor, Inc. 10 A.D.3d 374 375

(2d Dept.2004) ). As such, the specific issue regarding that the claims asserted against Orbea

to create the possibilty of coverage, wil not be addressed in this motion.

As Orbea taes issue with this Cour' s consideration of Great American

arguments in opposition to its motion for sumar judgment, a review of this procedural

vehicle is appropriate. The proponent of the motion for sumar judgment, must make a

prima facie showing of entitlement to judgment as a matter of law, by advancing sufficient

evidentiar proof in admissible form" to demonstrate the absence of any material issues of

fact (Winegrad v. New York Univ. Med. Ctr. 64 N. 2d 851 (1985); Zuckerman v. City of

New York 49 N. 2d 557 (1980)).

Alternatively, to defeat a motion for Summar Judgment, the opposing par

must show facts sufficient to require a tral of any issue of fact (CPLR ~ 3212 (b)). Thus

where the proponent of the motion makes a prima facie showing of entitlement to summar

judgment, the burden shifts to the par opposing the motion to demonstrate, by admissible

evidence, the existence of a factual issue requiring a trial of the action( see Zuckerman

560 562; Forrest v. Jewish Guildfor the Blind, 309 A. 2d 546 (1st Dept. 2003)). Like the

proponent of the motion, the par opposing the motion must set fort evidentiar proof in

admissible form in support of his or her claim that material triable issues of fact exist

(Zuckerman at 562).

First, Orbea s arguent that once this Cour determined that Orbea met its

prima facie burden that the Defendant was obligated to defend it, the Cour' s inquiry should

have ceased at that point, is unavailng. It is only when the movant fails to meet its burden

the sufficiency of the opposing papers need not be considered and the motion ultimately is

denied (McDonald v. Dudek, 100 A. 2d 839(2d Dept. 1984)). As Orbea met its initial

burden, the Cour was required to consider Great American s opposition papers and the

burden shifted to Great American, who had the opportity to present evidence to support

its position.

Orbea also argues that this Cour went beyond the four corners of the complaint

and resolved the issue on outside evidence; however, this is woefully inaccurate. The Cour

does agree that the duty to defend is extremely broad. In applying this rule oflaw, an insurer

may be contractually bound to defend even though it may not ultimately be bound to pay,

either because its insured is not factually or legally liable or because the occurence is later

proven to be outside the policy s coverage (see Rhodes v. Liberty Mut. Ins. Co., 67 A.D.3d

881 (2d Dept. 2009)).

On the other hand, an insurer can be relieved of its duty to defend by

establishing, as a matter oflaw, that there is no possible factual or legal basis upon which it

might eventually be obligated to indemnify the insured (see First State Ins. Co. v. & S

United Amusement Corp., 67 N. Y.2d 1044). If the allegations, on their face, do not bring the

case within the coverage of the policy, there is no duty to defend or indemnify (see Tartaglia

v. Home Ins. Co.240 D.2d 396 (2d Dept. 1997), Sears, Roebuck and Co. v. Reliance Ins.

Co. 654 F .2d 494 pth Cir 1981), Campoverde v. Fabian Builders, LLC, 83 A.D.3d 986 (2d

Dept. 2011)).

As with the constrction of contracts generally, unambiguous provisions of an

insurance contract must be given their plain and ordinar meaning, and the interpretation of

such provisions is a question oflaw for the court (Vigilant Ins. Co. v. Bear Stearns Cos., Inc.

10 N.Y.3d 170, 177 (2008), quoting White v. Continental Cas. Co. 9 N.Y.3d 264, 267

(2007); see Government Empls. Ins. Co. v. Kligler, 42 N. 2d 863, 864 (1977)). A policy

is read as a whole and in construing an endorsement to an insurance policy, the endorsement

its exclusions and the policy must be read together, and the words of the policy remain in full

force and effect except as altered by the words of the endorsement" (County of Columbia

Continental Ins. Co. 83 N. Y.2d 618, 628 (1994)). An insurance contract should not be read

so that some provisions are rendered meaningless (id. at 628 , see also Golden v. Tower

D.3d 586 (2d Dept. 2003)).

An exclusion from coverage must be specific and clear in order to be enforced

and an ambiguity in an exclusionar clause must be constred most strongly against the

insurer. As such, the plain meaning of the policy s language at bar is that the insurance

afforded the vendor does not apply to products after distribution and sale by the

manufactuer, which have been labeled or relabeled, or product or products used as a

container, par of ingredient or any other thing by or for the vendor, nor does it apply to

intentional changes made to the product by the vendor or any failure to test, service or inspect

the product.

The underlying complaint sets fort allegations that Sulsan sustained fatal

bodily injures arising out of the named Defendants ' negligence in , inter alia, designing,

assembling, inspecting, testing, labeling, monitoring, promoting, distributing and sellng of

the subject bicycle. The only possible interpretation of these allegations is that the factual

predicate for the Plaintiffs claim falls wholly within the employee exclusion. It is

noteworty that Orbea, in its instant motion, cites that the complaint alleges improper

assembly, testing, inspecting, but it ceased its list abruptly at that point where the predicate

labeling" immediately followed. Furer, it must also be noted that Orbea has not asserted

any arguent that the exclusionar provisions were ambiguous.

Orbea s argument that the Cour should not have considered evidence in the

record and resolved factual issues at this level of litigation is also unavailng. Orbea sought

a declaratory judgment where the principal purose ofthe declaratory judgment is to provide

a means by which the paries to a legal relationship may obtain a resolution of uncertinties

about curent, continuing or prospective obligations between them. Furer, while fact issues

certinly may be addressed and resolved in context of a declaratory judgment action, the

point and purose of relief is to declare respective legal rights of paries based on a given set

of facts, not to declare findings of facts (CPLR 3001 , see also Thome v. Alexander &

Louisa Calder Foundation, 70 A.D.3d 88 (1st Dept. 2009)). As such, it was not

inappropriate for this Court to consider the evidence presented before it for puroses of

determining the obligation between the insured and the insurer.

Finally, as previously stated, Orbea paricipated in the creation and design of

the subject bicycle frame and fork and such conduct arose prior to its labeling and/or

relabeling of the bicycle. The prohibited conduct fell within the four corners of the

complaint and also within the exclusion in the policy endorsement. Accordingly, Great

American established, as a matter of law, that it was not obligated to defend and indemnify

Orbea in the underlying action. Orbea s motion to reargue is therefore DENIED.

Based on the foregoing discussion, Mot Seq. 05, whereby Great American

seeks an order pursuant to CPLR ~ 3212 granting Sumar Judgment declaring that it owes

no duty to defend or indemnify the Co-Defendant, Orbea is GRATED.

Based on the foregoing discussion, Mot Seq. 06 whereby Brands and

Nationwide seek an Order pursuant to CPLR ~ 3212 granting sumar judgment against the

Co-Defendant, Great American, declaring that Great American s insurance policy affords

additional insurance coverage to Brands in the underlying action, that Great American is

obligated to defend Brands in the underlying action and that Great American is required to

reimburse Nationwide for defense costs incured to date in the defense of Brands in the

underlying matter is GRANTED.

Accordingly, it is hereby

ORDERED, that Great American s motion (Mot. Seq. 04) seeking sumar

judgment declaring that it owes no duty to defend or indemnify Brands or to reimburse

Nationwide for any defense or indemnity costs incured in the underlying wrongful death

action, is DENIED; and it is fuer

ORDERED, that Great American s motion (Mot. Seq. 05) seeking sumar

judgment declaring that it owes no duty to defend or indemnify Orbea in the underlying

action, is GRANTED; and it is fuer

ORDERED, that Brands ' and Nationwide s motion (Mot. Seq. 06) seeking

sumar judgment against Great American, declarng that the Great American insurance

policy affords additional insurance coverage to Brands in the underlying action, that Great

American is obligated to defend Brands in the underlying action, and that Great American

is required to reimburse Nationwide for defense costs incured to date in the defense of

Brands in the underlying matter, is GRATED; and it is fuerORDERED, that Orbea s motion (Mot. Seq. 07) seeking reargument

DENIED.

This constitutes the Decision and Order of the Cour.

All applications not specifically addressed are DENIED.

DATED: Mineola, New YorkJune 7 , 2011 ENTERED

JUN 0 9 2011NASSAU COUNTYCO K'

S OFFICEHon. andy Sue Marber, J. C.