Plaintiff 222 Broadway, LLC ("LLC"), and its parent company, co-plaintiff Merrill Lynch & Co., Inc. (collectively referred to as "plaintiffs"), move for an order: (1) pursuant to CPLR 602, consolidating this insurance coverage action with two other insurance coverage actions currently pending (referred to as Actions 1, 2, and 3)^[FN1] brought by the plaintiffs and/or related [*2]entities (collectively referred to as "Merrill"), for purposes of joint discovery and trial; (2) granting leave to file amended complaints in Actions 1, 2, and 3, adding additional defendants and causes of action;^[FN2] and (3) scheduling these matters for a joint discovery conference after joinder of all actions.

The instant action ("Action 1") is the first of three insurance coverage actions Merrill commenced against defendant Continental Casualty Company ("CNA" or "defendant") seeking a declaratory judgment that Merrill is an additional insured under a certain CNA Commercial General Liability policy (the "CNA Policy"). Merrill also seeks damages for breach of contract. All of the claims involve insurance coverage for Merrill under the same policy of insurance CNA issued to ABM Industries Inc. and numerous subsidiaries and/or affiliates of that entity (collectively referred to as "ABM").

ACTION 1 (the Marku Action)

On or about January 24, 2007, plaintiffs commenced the instant action seeking damages for breach of contract and declaratory relief. The underlying claim in this action arose out of an incident which occurred on September 5, 2001, at premises known as 222 Broadway, New York, New York (the "Broadway Premises"). At the relevant time, Dashnor Marku ("Marku") was an employee of ABM, when he allegedly slipped and fell on steps on the Broadway Premises. On or about July 31, 2002, Marku commenced a personal injury action against LLC and the New York City Transit Authority.

At the time of the alleged incident, Marku was working under a Janitorial Maintenance Service Agreement (the "Janitorial Agreement") entered into between Merrill and ABM. The Janitorial Agreement contained, among other things, an insurance procurement obligation at paragraph 9 entitled "Insurance," which obligated ABM to maintain commercial general liability and umbrella liability insurance in the amount of $3 to $5 million, and to name LLC and/or Merrill as additional insureds. Prior to September 5, 2001, CNA issued a CNA Policy to ABM, which was in effect on the date of the alleged incident.

Merrill seeks a declaration that plaintiffs are additional insureds under the CNA Policy, and that CNA is required to afford primary coverage for plaintiffs for defense and indemnity in connection with the underlying action.^[FN3] Merrill further seeks a declaration that the Janitorial Agreement was an insured contract under the CNA Policy.

ACTION 2 (the Tkacsik Action)

On or about December 11, 2007, Merrill commenced Action 2 against CNA seeking a declaratory judgment and damages for breach of contract in connection with the underlying action. The underlying action in Action 2 involves plaintiff John Tkacsik ("Tkacsik"), who alleges that, on July 6, 2003, he suffered serious injuries when he slipped and fell on grease on [*3]the third floor of premises known as 4 Financial Center a/k/a 250 Vesey Street, New York, New York (the "Financial Center Premises"). At the time of the incident, Tkacsik was employed by ABM Engineering and/or ABM at the subject premises pursuant to an Engineering Services Agreement entered into between Merrill and ABM Engineering Services on September 27, 2001. On or about January 2006, Tkacsik commenced a personal injury action against Merrill for the injuries he allegedly sustained when he fell at the Financial Center Premises.

Pursuant to the Engineering Services Agreement, ABM was to perform facility engineering services at the Financial Center Premises. The agreement provided, inter alia, for an insurance procurement obligation at paragraph 9 entitled "Insurance," which obligates ABM to maintain comprehensive general liability insurance and umbrella liability insurance, in the amount of $3 million to $5 million. On or about November 1, 2000, CNA issued a CNA Policy to ABM, which was in effect on the date of the underlying incident.

Merrill seeks a declaration that the underlying action is covered by the CNA Policy, and that CNA is required to, inter alia, afford primary and non-contributory coverage for Merrill for defense and indemnity in connection with the underlying claim.

ACTION 3 (The Torres Action)

On or about December 11, 2007, Merrill and its indemnitee, Brookfield Financial Properties ("Brookfield"), commenced Action 3 against CNA for a declaratory judgment and damages for breach of contract in connection with the underlying action. The underlying action in Action 3 arose from an incident which occurred on July 31, 2002 at premises known as Two World Financial Center a/k/a 225 Liberty Street, New York, New York (the "Liberty Street Premises"). At the relevant time, Shairin Torres ("Torres") allegedly sustained serious injuries when she slipped and fell on water in the 31st floor bathroom thereat. On or about April 24, 2004, Torres commenced an action against Merrill and Brookfield for personal injuries that she allegedly sustained on the Liberty Street Premises.

At the time of the incident, ABM had an Engineering Maintenance Agreement with an affiliate of Merrill, pursuant to which ABM was to provide engineering and plumbing services at the Liberty Street Premises. The agreement also required ABM to obtain commercial general liability insurance, and to name Merrill and Brookfield as additional insureds. On or about November 1, 2000, CNA issued a CNA Policy to ABM.

Merrill and Brookfield seek a declaratory judgment that, inter alia, they are additional insureds under the CNA Policy issued to ABM, and that CNA is obligated to defend and indemnify Merrill and Brookfield in the underlying personal injury action.

THE MOTION TO CONSOLIDATE THE THREE ACTIONS

Plaintiffs argue that their claims for insurance coverage in Actions 1, 2, and 3 all involve common questions of law and fact. They point out that all three actions involve the same CNA Policy and require, inter alia, interpretation of the provisions of the CNA Policy which contain identical defense and indemnification language, a determination as to plaintiffs' status as additional insureds under the CNA policy, an analysis of the language of the Policy, including the specific endorsement which is allegedly part of the CNA Policy, and the state law which should govern. Plaintiffs urge that the denial of their motion could lead to inconsistent decisions and a waste of judicial resources.

CNA argues in opposition to Merrill's motion that consolidation of the three actions for [*4]trial would result in CNA being prejudiced, and would lead to confusion in both briefing motions for summary judgment, and for the finder of fact at trial. CNA contends that, since each action relates to separate underlying actions which involve different plaintiffs, and different accidents that occurred at different times and different locations, different legal and factual issues are present.

It is well settled that a motion for consolidation of actions for joint trial rests in the sound discretion of the court, and the granting of the motion is preferred where common questions of law or fact exist, absent prejudice to a substantial right of the opposing party, or the possibility of jury confusion (Geneva Temps, Inc. v New World Communities, Inc., 24 AD3d 332 [1st Dept 2005]; Progressive Ins. Co. v Vasquez, 10 AD3d 518 [1st Dept 2004]; Raboy v McCrory Corp., 210 AD2d 145 [1st Dept 1994]; CPLR 602 [a]). The burden for showing prejudice to a substantial right rests upon the party opposing a motion for consolidation (Amcan Holdings, Inc. v Torys LLP, 32 AD3d 337 [1st Dept 2006]; Raboy v McCrory Corp., supra).

CNA has failed to carry its burden of demonstrating prejudice to a substantial right if the motion is granted (see Geneva Temps, Inc. v New World Communities, Inc., supra). Merely because the amount of the deductible endorsement changed over the course of the CNA Policy is not a basis to deny consolidation. The amount of the deductible endorsement, and the date upon which any change took place, can be determined in a joint trial. Further, it is clear by the parties' agreement to have joint discovery that the parties in each of the actions possess knowledge and information, including documents, relevant to the claims in the other actions, that the potential witnesses and evidence would be similar in all of the actions, and that there are questions of law and fact common to all of the actions.

This court has taken into consideration that there are different facts underlying the three declaratory judgment actions, but finds that joint trial is appropriate, since individual issues do not predominate, all three actions involve common questions of fact and law, and the relief sought in each action is the same. A joint trial will avoid unnecessary duplication of proceedings, save unnecessary costs and expenses and prevent an injustice which would result from divergent decisions (Raboy v McCrory Corp., supra). This court has considered CNA's remaining arguments and found them to be without merit. Accordingly, Merrill's motion to consolidate Actions 1, 2, and 3 for discovery and trial is granted.

MOTION TO AMEND THE COMPLAINTS

Plaintiffs seek leave to serve amended complaints, pursuant to CPLR 3025 (b), adding as defendants American Building Maintenance Co. and/or ABM Engineering Services, ABM Engineering Services and AIU Insurance Company ("AIU"). AIU issued a commercial umbrella liability policy to ABM and its related entities, with a policy period of November 1, 1999 to November 1, 2002 (the "AIU Policy"). Merrill alleges that the AIU Policy provides defense and indemnity umbrella liability coverage to Merrill upon exhaustion of the applicable limits of the CNA Policy.

CPLR 1001 mandates joinder in the following two circumstances: (1) where that party is necessary if complete relief is to be accorded between the persons who are parties to the action; or (2) where the unnamed party might be inequitably affected by a judgment in the action (CPLR 1001 [a]). The principal justification for the requirement of joining certain parties is to avoid multiplicity of actions and to protect those parties who have a material interest in the subject [*5]matter (see Castaways Motel v Schuyler, 24 NY2d 120, 125 [1969] [non-parties are "indispensable" where the determination of the court will adversely affect their rights]; Joanne S. v Carey, 115 Ad2d 4, 7 [1st Dept 1986]).

Merrill argues that AIU is a necessary party in all three actions as to any determination relating to coverage issues to the extent that any exposure exceeds CNA's policy limits, since serious injuries are alleged in Actions 1 and 2. With regard to Action 3, Merrill advises that the underlying action was the subject of a recent partial settlement, pursuant to which Merrill and Brookfield agreed to pay $250,000 towards a partial settlement. It points out that a determination by this court is still pending as to whether CNA is responsible for any of the costs under the CNA Policy.

CNA does not oppose adding AIU and the above mentioned ABM entities to the actions. However, it opposes Merrill's attempt to add new claims against CNA for attorney's fees in connection with prosecuting these actions, as well as claims for consequential damages and injunctive relief.

Leave to amend a pleading is freely given in the absence of prejudice or surprise resulting from the delay, and provided that the proposed amendment is not palpably insufficient or totally devoid of merit (Edenwald Contracting Co. v City of New York, 60 NY2d 957, 959 [1983]; see also AYW Networks, Inc. v Teleport Communications Group, Inc., 309 AD2d 724, 725 (2nd Dept. 2003); CPLR 3025 [b]). Prejudice arises when a party incurs a change in position or is hindered in the preparation of its case or has been prevented from taking some measure in support of its position (Whalen v Kawasaki Motors Corp., U.S.A, 92 NY2d 288, 293 [1998]).

In the proposed amended complaints, Merrill seeks: (1) damages for breach of contract against CNA in connection with the CNA Policy, and injunctive relief enjoining CNA from refusing to defend and indemnify Merrill in the underlying actions; (2) a declaratory judgment against CNA declaring the rights of the parties with respect to the CNA Policy, and with respect to counsel fees and other expenses paid to defend the three actions; (3) a declaratory judgment against AIU with respect to the AIU Policy; and (4) breach of contract against ABM.

CNA does not allege prejudice, but argues that certain claims are palpably meritless. CNA's argument that Merrill's claim for injunctive relief is duplicative of Merrill's demand for a declaratory judgment that CNA is obligated to defend and indemnify Merrill in the underlying actions is persuasive. That branch of Merrill's motion which seeks to amend the complaints to add an injunctive relief claim enjoining CNA from failing to defend and indemnify plaintiffs in connection with the underlying actions is denied, since the injunctive relief claim seeks identical relief as the declaratory judgment claim (see Estate of Nevelson v Carro, Spanbock, Kaster & Cuiffo, 290 AD2d 399 [1st Dept 2002]).

With regard to Merrill's proposed claim for attorney's fees and consequential damages, CNA argues that under New York Law, these claims are meritless. This argument is premature at this juncture, since, among other things, no determination has yet been made as to which state's law applies to the CNA Policy. Based upon the above, Merrill's motion to amend the complaints is granted, except as to the proposed claim for injunctive relief.

Accordingly, it is hereby

ORDERED that plaintiffs' motion is granted in part and denied in part; and it is further

ORDERED that the above captioned action is consolidated in this Court for [*6]discovery and joint trial with the actions captioned Merrill Lynch & Co., Inc. v Continental Casualty Company, Index No. 116422/07 and Merrill Lynch & Co., Inc. and Brookfield Financial Properties v Continental Casualty Company, Index No. 116605/07; and it is further

ORDERED that a copy of this order with notice of entry shall be served upon the Clerk of the Trial Support Office, who is hereby directed to transfer Merrill Lynch & Co., Inc. v Continental Casualty Company, Index No. 116422/07 and Merrill Lynch & Co., Inc. and Brookfield Financial Properties v Continental Casualty Company, Index No. 116605/07 to this part and to mark the court's records to reflect the consolidation for purposes of discovery and joint trial; and it is further

ORDERED that the amended complaints in the proposed forms annexed to the moving papers, but omitting the proposed causes of action for injunctive relief, shall be served upon defendant CNA and filed with the New York County Clerk; and it is further

ORDERED that the defendant CNA shall serve an answer to the amended complaint within 20 days from the date of said service; and it is further

ORDERED that upon plaintiffs' filing of proof of service of the supplemental summonses and amended complaints as provided for herein upon American Building Maintenance Co., ABM Engineering Services and AIU Insurance Company, the captions of these actions shall be deemed amended to add American Building Maintenance Co., ABM Engineering Services and AIU Insurance Company as party defendants; and it is further

ORDERED that counsel for plaintiff shall serve a copy of this Order with notice of entry, together with proof of service of the supplemental summonses and amended complaints upon all defendants, upon the Clerk of the Court and upon the Clerk of the Trial Support Office, who are directed to amend their records to reflect such consolidation and change in the captions herein.

Counsel for the parties are directed to appear for a preliminary conference on June 23, 2009 at 9:30 a.m. at I.A.S. Part 1, 111 Centre Street, Room 1127B, New York, New York.

The foregoing constitutes this court's Decision and Order. A copy of this Decision and Order has been sent to counsel for the parties.

Dated: April 21, 2009________________________

New York, New YorkHon. Martin Shulman, J.S.C.