                           State of New York
                    Supreme Court, Appellate Division
                       Third Judicial Department
Decided and Entered: March 10, 2016                     521172
________________________________

TOWN OF FORT ANN,
                     Appellant,
     v                                       MEMORANDUM AND ORDER

LIBERTY MUTUAL INSURANCE
   COMPANY,
                    Respondent.
________________________________


Calendar Date:   January 14, 2016

Before:   McCarthy, J.P., Garry, Lynch, Devine and Clark, JJ.

                              __________


      Horigan, Horigan & Lombardo, PC, Amsterdam (Peter M.
Califano of counsel), for appellant.

      Mauro Lilling Naparty, LLP, Woodbury (Anthony L. DeStefano
of counsel), for respondent.

                              __________


McCarthy, J.P.

      Appeal from an order of the Supreme Court (Krogmann, J.),
entered January 6, 2015 in Washington County, which granted
defendant's motion to dismiss the amended complaint.

      The underlying facts related to this litigation are more
fully addressed in previous decisions by this court (Hosmer v
Kubricky Constr. Corp., 88 AD3d 1234 [2011], lv dismissed 19 NY3d
839 [2012]; Town of Fort Ann v Liberty Mut. Ins. Co., 69 AD3d
1261 [2010]; Alaimo v Town of Fort Ann, 63 AD3d 1481 [2009]).
Plaintiff is the owner of a pond within which a dam failed,
causing flooding. Defendant had issued an insurance policy in
relation to construction on that dam. Eventually, after
defendant had exhausted the relevant insurance coverage amount
                               -2-                521172

settling damages claims of property owners related to the
flooding, plaintiff released defendant from all claims except for
those specified in a complaint that was attached to that
agreement and except for those claims that were the subject of a
motion pending in an Albany County action. That same day,
plaintiff initiated this action by complaint identical to that
attached to the agreement and seeking a declaratory judgment that
it was entitled to coverage and indemnification from defendant
related to the dam's failure. Eventually, however, plaintiff
amended that complaint – so that it no longer was identical to
the one referenced in the release – by adding a cause of action
that defendant acted in bad faith by exhausting the insurance
policy and seeking indemnification beyond the policy limit.
Thereafter, Supreme Court granted defendant's motion to dismiss
the amended complaint. Plaintiff appeals.

      We agree with defendant that, even if plaintiff did not
waive its right to add the bad faith cause of action,1 the
previous order and judgment by Supreme Court (O'Connor, J.) in
the Albany County action has a collateral estoppel effect.
"[C]ollateral estoppel precludes a party from relitigating an
issue when it was clearly raised in a prior action . . . and
decided against that party in a final judgment on the merits
after a full and fair opportunity to be heard" (Clark v Farmers
New Century Ins. Co., 117 AD3d 1208, 1209 [2014], lv denied 23
NY3d 991 [2014]; see Conason v Megan Holding, LLC, 25 NY3d 1, 17
[2015]; State of New York v Zurich Am. Ins. Co., 106 AD3d 1222,
1223 [2013]). Accordingly, our review "focus[es] on the
questions of whether there is an identity of issue and whether
plaintiff had a full and fair opportunity to litigate the issue"
(Bartkowski v Friedman, 213 AD2d 873, 875 [1995]; see generally
Matter of Dunn, 24 NY3d 699, 704 [2015]).

      Defendant submitted proof that, in the Albany County
action, plaintiff had, among other things, sought indemnification
from defendant for all of plaintiff's costs related to the


     1
        Plaintiff contends that because the bad faith claim was a
part of the pending motion that was specified in the release, it
did not waive its right to raise that issue in this action.
                              -3-                  521172

flooding, including costs beyond the policy limit. In that
action, Supreme Court (O'Connor, J.) partially granted
defendant's motion for summary judgment, finding that defendant
owed plaintiff no further obligation and specifically rejecting
"plaintiff[']s . . . claim of bad faith" seeking liability by
defendant beyond the insurance policy limit. Plaintiff attempts
to relitigate that identical issue here, after having a full and
fair opportunity to do so previously. Accordingly, defendant
established that collateral estoppel applies (see Bartkowski v
Friedman, 213 AD2d at 875; see generally Montoya v JL Astoria
Sound, Inc., 92 AD3d 736, 738 [2012]).

     Garry, Lynch, Devine and Clark, JJ., concur.



     ORDERED that the order is affirmed, with costs.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
