        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

840
CA 14-02027
PRESENT: CENTRA, J.P., CARNI, LINDLEY, AND DEJOSEPH, JJ.


MICHAEL J. CARLSON, SR., INDIVIDUALLY AND
AS ADMINISTRATOR OF THE ESTATE OF CLAUDIA
D’AGOSTINO CARLSON, AND AS ASSIGNEE OF
WILLIAM PORTER,
PLAINTIFF-RESPONDENT-APPELLANT,

                    V                                MEMORANDUM AND ORDER

AMERICAN INTERNATIONAL GROUP, INC.,
AIG DOMESTIC CLAIMS, INC., AMERICAN
ALTERNATIVE INSURANCE CO., NATIONAL UNION
FIRE INSURANCE COMPANY OF PITTSBURGH, PA,
DEFENDANTS-APPELLANTS-RESPONDENTS,
AND DHL EXPRESS (USA), INC., FORMERLY KNOWN AS
DHL WORLDWIDE EXPRESS, INC., DEFENDANT-RESPONDENT.


HODGSON RUSS LLP, BUFFALO (KEVIN D. SZCZEPANSKI OF COUNSEL), FOR
DEFENDANTS-APPELLANTS-RESPONDENTS AMERICAN INTERNATIONAL GROUP, INC.,
AIG DOMESTIC CLAIMS, INC. AND NATIONAL UNION FIRE INSURANCE COMPANY OF
PITTSBURGH, PA.

RUBIN, FIORELLA & FRIEDMAN LLP, NEW YORK CITY (PAUL KOVNER OF
COUNSEL), FOR DEFENDANT-APPELLANT-RESPONDENT AMERICAN ALTERNATIVE
INSURANCE CO.

BROWN CHIARI LLP, LANCASTER, MAGAVERN MAGAVERN GRIMM LLP, BUFFALO
(EDWARD J. MARKARIAN OF COUNSEL), FOR PLAINTIFF-RESPONDENT-APPELLANT.

WILSON ELSER MOSKOWITZ EDELMAN & DICKER LLP, NEW YORK CITY (PATRICK J.
LAWLESS OF COUNSEL), FOR DEFENDANT-RESPONDENT.


     Appeals and cross appeal from an order of the Supreme Court,
Niagara County (Ralph A. Boniello, III, J.), entered June 25, 2014.
The order, among other things, denied in part the motion of defendants
American International Group, Inc., AIG Domestic Claims, Inc., and
National Union Fire Insurance Company of Pittsburgh, PA, and the cross
motion of defendant American Alternative Insurance Co., to dismiss
plaintiff’s complaint.

     It is hereby ORDERED that the order so appealed from is
unanimously modified on the law by granting the motion and cross
motion in their entirety and dismissing the complaint, and as modified
the order is affirmed without costs.
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                                                         CA 14-02027

     Memorandum: Plaintiff commenced this action pursuant to
Insurance Law § 3420 (a) (2) to collect on certain insurance policies
after a second amended judgment against MVP Delivery and Logistics,
Inc. (MVP) and William Porter was entered upon a jury verdict (see
Carlson v Porter [appeal No. 2], 53 AD3d 1129, lv denied 11 NY3d 708).
DHL Worldwide Express, Inc., doing business as DHL Express (DHL), had
a cartage agreement with MVP, whereby MVP provided delivery services
for DHL. In the underlying wrongful death action, the jury determined
that Porter was negligent in causing the motor vehicle accident that
led to the death of plaintiff’s decedent, and MVP was statutorily
liable for Porter’s negligence as the owner of the vehicle driven by
Porter (see Carlson, 53 AD3d at 1133). Plaintiff recovered from MVP’s
insurer and now seeks to recover under a primary and umbrella policy
issued to DHL by defendant National Union Fire Insurance Company of
Pittsburgh, PA (National Union), and under an umbrella policy issued
to DHL by defendant American Alternative Insurance Co. (AAIC).
Defendants American International Group, Inc., and AIG Domestic
Claims, Inc. (collectively, AIG), together with National Union, moved
to dismiss the complaint against them, and AAIC cross-moved to dismiss
the complaint against it (collectively, defendants).

     Defendants moved and cross-moved, respectively, to dismiss the
complaint based on both a failure to state a cause of action (CPLR
3211 [a] [7]), and a defense based upon documentary evidence (CPLR
3211 [a] [1]). Supreme Court granted in part the motion and cross
motion. As a preliminary matter, we note that, “[o]n a motion to
dismiss under CPLR 3211, the pleading is to be given a liberal
construction, the allegations contained within it are assumed to be
true and the plaintiff is to be afforded every favorable inference”
(Simkin v Blank, 19 NY3d 46, 52). We further note that “[d]ismissal
under CPLR 3211 (a) (1) is warranted ‘only if the documentary evidence
submitted conclusively establishes a defense to the asserted claims as
a matter of law’ ” (511 W. 232nd Owners Corp. v Jennifer Realty Co.,
98 NY2d 144, 152, quoting Leon v Martinez, 84 NY2d 83, 88).

     We agree with defendants that the court erred in denying that
part of their motion and cross motion seeking to dismiss the first
cause of action, which was asserted pursuant to Insurance Law § 3420
(a) (2), and we therefore modify the order accordingly. As we
concluded in a companion appeal, plaintiff may not maintain a section
3420 (a) (2) action against AAIC inasmuch as AAIC did not issue or
deliver an insurance policy in this state (Carlson v American Intl.
Group, Inc., ___ AD3d ___ [July 2, 2015]). We also agree with AIG
that the first cause of action should be dismissed against them
because they established that they are not insurers. In the
alternative, and with respect to National Union, we conclude that
plaintiff may not maintain a section 3420 (a) (2) action against
defendants. The primary National Union policy defined an insured as,
inter alia, “[a]nyone else while using with your permission a covered
‘auto’ you own, hire or borrow.” The umbrella National Union policy
defined an insured as, inter alia, “[a]ny person . . . or organization
with respect to any auto owned by you, loaned to you or hired by you
or on your be half [sic] and used with your permission.” The umbrella
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                                                         CA 14-02027

AAIC policy defined an insured as, inter alia, “any person or
organization . . . included as an insured in the Scheduled Underlying
Insurance,” i.e., in the National Union primary policy. Thus, MVP and
Porter may be an “insured” under the three policies only if the
vehicle used by Porter at the time of the accident was “hired” by DHL
and was being used with DHL’s permission.

     We agree with defendants that in order for the MVP vehicle driven
by Porter to be deemed a vehicle “hired” by DHL, there must be a
showing that DHL exercised control over the vehicle, and not general
control over MVP (see 8A Couch on Insurance, §§ 118:48, 118:49 [3d ed
2014]). “Generally, a vehicle owned by an independent contractor who
contracts with the insured to perform services for the insured is not
a hired automobile . . . [T]he contract between the insured and the
independent contractor in those situations is generally for the
services of the subcontractor, not the vehicle used in providing the
services” (id., § 118:52 [emphasis added]). In Dairylea Coop. v
Rossal (64 NY2d 1, 7), an independent contractor was hired to
transport milk. The Court held that the tanker truck was not a hired
automobile where “the tank farm milk hauling contract . . . called for
transportation of milk by . . . an independent contractor rather than
use of a particular tanker in the rendition of such service” (id. at
10-11; see Federal Ins. Co. v Ryder Truck Rental, 189 AD2d 582, 584,
affd 82 NY2d 909, rearg denied 83 NY2d 830; see also U.S. Fid. & Guar.
Co. v Heritage Mut. Ins. Co., 230 F3d 331, 334-335; Toops v Gulf Coast
Mar. Inc., 72 F3d 483, 487-488; Chicago Ins. Co. v Farm Bur. Mut. Ins.
Co. of Arkansas, Inc., 929 F2d 372, 373-374; American Cas. Co. of
Reading, Pa. v Denmark Foods, 224 F2d 461, 463). General supervision
is not enough (see U.S. Fid. & Guar. Co., 230 F3d at 335). There is a
“distinction between hiring a company that provides transportation and
hiring a truck” (Toops, 72 F3d at 487).

     We conclude that the cartage agreement does not show that DHL had
sufficient control over the MVP vehicle in order for it to be deemed a
“hired” automobile. Rather, it showed that DHL hired MVP as an
independent contractor to provide delivery services. It provided that
MVP “shall have the sole right to determine all aspects of its
performance of its obligations under this Agreement, including the
staffing, operation, and routing of the [MVP] Vehicles in the Service
Areas.” MVP was responsible for registering, insuring, fueling, and
bearing all other costs and fees relating to the vehicles. The fact
that DHL required the MVP vehicles to have a certain appearance does
not, in our view, show the requisite control over the vehicle within
the meaning of a “hired” automobile. “The [vehicle] was not hired by
[DHL] and was not being used at the time of the accident by an
employee of [DHL] in its business or in its behalf, but was being used
by an employee of [MVP] under an independent contract” (American Cas.
Co. of Reading, Pa., 224 F2d at 463). Moreover, inasmuch as DHL did
not have control over the MVP vehicle, “it cannot be said in any
realistic sense that . . . [DHL] could grant [MVP] permission to use
it” (Dairylea Coop., 64 NY2d at 10).

     We further agree with defendants that the court erred in denying
                                 -4-                           840
                                                         CA 14-02027

that part of their motion and cross motion seeking to dismiss the
fourth cause of action, alleging a violation of General Business Law §
349, and we therefore further modify the order accordingly. The
allegations in the complaint show that this is a “ ‘private’ contract
dispute over policy coverage and the processing of a claim which is
unique to these parties” (New York Univ. v Continental Ins. Co., 87
NY2d 308, 321; see Shou Fong Tam v Metropolitan Life Ins. Co., 79 AD3d
484, 486; Cooper v New York Cent. Mut. Fire Ins. Co., 72 AD3d 1556,
1557-1558). In light of our determination, we conclude that
plaintiff’s cross appeal, which seeks reinstatement of the
misrepresentation and bad faith causes of action, is without merit.




Entered:   July 2, 2015                        Frances E. Cafarell
                                               Clerk of the Court
