Shaya B. Pacific, Llc. v. Wilson, Elser, Moskowitz, Edelman & Dicker, Llp

38 A.D.3d 34 (2006)

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Nature of the Case

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Facts

Kazimierz Golebiewski was seriously injured while performing demolition work at P's premises. As a result, Golebiewski and his wife commenced a personal injury action against P and others. In July 2000 P's primary carrier, Certain Underwriters at Lloyd's of London (hereinafter Lloyd's), retained D to defend P in the personal injury action. The policy limit of Lloyd's' primary policy was $1,000,000. Golebiewski was seeking damages of $52,500,000. On January 25, 2001, Lloyd's wrote to P, stating in relevant part: '...that the demand in the suit papers of $ 52,500,000 is in excess of your policy limits of $ 1,000,000 per occurrence. As such you may wish to engage counsel of your own choice at your own expense to act on your behalf in regards to any potential excess judgments. We are continuing the defense of this matter on your behalf through the Law Offices of D. Furthermore you may wish to check with your insurance agent to determine if any excess insurance coverage is in force. If so we would urge you to quickly notify any excess insurance carrier of this suit situation.' In February 2003 Golebiewski was awarded summary judgment against P on the issue of liability. On April 24, 2003, before the commencement of the trial on the issue of damages, the D law firm, on P's behalf, tendered the case to National Union Fire Insurance Company (hereinafter National Union) for further defense and for indemnification with respect to the excess claim. On April 24, 2003, before the commencement of the trial on the issue of damages, the D law firm, on P's behalf, tendered the case to National Union Fire Insurance Company (hereinafter National Union) for further defense and for indemnification with respect to the excess claim. National Union had issued a commercial umbrella policy to Greendel Developers, Ltd. (hereinafter Greendel). Greendel was not a party to Golebiewski's action against P, and its relationship to P if any, was not revealed. National Union declined the tender and disclaimed coverage because it had not received timely notice of Golebiewski's action. National Union also claimed it had no information to confirm that P was an insured under the excess policy. On October 22, 2003, Golebiewski obtained a judgment against P for $5,694,320, and his wife obtained a judgment for $795,000. On March 8, 2004, P commenced this action against D, asserting causes of action sounding in legal malpractice and breach of contract. P claimed that D had been negligent in failing to advise National Union or, alternatively, that its failure to do so constituted a breach of contract. D moves to dismiss arguing that (1) P failed to establish its status as an insured under the National Union policy, and therefore could not establish causation, (2) any negligence on D's part was not a proximate cause of the loss of excess coverage because the firm was retained more than three months after P first became aware of the need to notify any excess carrier, and approximately two months after P became aware of the Golebiewski action, and (3) and as the defense counsel provided by P's primary carrier, D had no duty to advise the P concerning coverage issues. The Supreme Court granted the motion. P appealed.