Presently before the Court are four motions brought by Plaintiff American Home Assurance Company ("American Home"), Defendant The Port Authority of New York and New Jersey ("Port Authority"), Defendants Tishman Speyer Properties L.P. and Tishman Speyer Properties, Inc. ("the Tishman Defendants"), and non-party Hartford Accident and Indemnity Company ("Hartford") (motion sequence numbers 001, 002, 003, and 004).

Defendant Port Authority first seeks partial summary judgment regarding American Home's duty to defend it in personal injury actions stemming from the construction of the original World Trade Center. Next, Plaintiff American Home seeks dismissal of certain counterclaims asserted against it by the Port Authority. Finally, the Tishman Defendants move for dismissal of all counts asserted against them, while non-party Hartford seeks leave to intervene as plaintiff. Each motion will be considered in turn.

I.Background

This insurance coverage action, brought by Plaintiff-insurer American Home, seeks a declaratory judgment to determine the scope and nature of rights and obligations under an American Home policy (the "Policy") for underlying asbestos claims arising out of the construction of the original World Trade Center (the "WTC project"). American Home issued the Policy to Defendant Port Authority in 1966. (Compl. ¶ 1.)

In connection with the WTC project, the Port Authority retained Defendant Alcoa Inc. ("Alcoa") to install an aluminum curtain wall on the exterior of the World Trade Center towers. Id. ¶ 7. Alcoa then retained Defendant Mario & DiBono Plastering Company ("M & D") as a sub-contractor to perform the curtain wall contract. Id. ¶ 8.

The Complaint alleges that the Port Authority, Alcoa, M & D, and "certain Tishman entities" have been named in thousands of asbestos-related injury claims arising from exposure to asbestos during the WTC project (the "WTC Asbestos Claims"). Id. ¶ 26. American Home now brings the instant action seeking a declaration that pending WTC Asbestos Claims are not covered by the Policy and that American Home has no duty to defend or indemnify Defendants Port Authority, Alcoa, M & D, and the Tishman Defendants. Moreover, American Home seeks recoupment from Alcoa, M & D and the Tishman Defendants of any uncovered defense and indemnity payments already made.

Relevant to the pending motions, the Port Authority interposed an Answer and Counterclaims. Port Authority asserts, inter alia, that American Home breached the Policy and violated Section 349 of the General Business Law by refusing to defend and indemnify it in connection with the WTC Asbestos Claims.

II.Port Authority's Motion for Partial Summary Judgment

First, Defendant Port Authority brings a motion for partial summary judgment [*2]regarding Plaintiff American Home's duty to defend. By its motion, Port Authority seeks an order declaring that its insurer, American Home, is required to pay defense costs in full for asbestos personal injury lawsuits falling under the insurance Policy. In particular, Port Authority focuses on litigation brought against it claiming injury at both World Trade Center and non-World Trade Center sites in the same action. Port Authority asserts that American Home unilaterally began limiting the scope of its defense obligations in April 2011, deciding that it would pay only for those portions of defense costs allocated to the defense of World Trade Center-related claims.

American Home opposes the motion, stating that it is already defending Port Authority in those actions identified by Port Authority in its papers ("Underlying Actions"). Moreover, American Home asserts that the Policy is exhausted, terminating its duty to defend.

This dispute, therefore, distills down to two inquiries: (1) whether American Home is required to pay defense costs in full under the Policy and (2) if American Home is obligated to pay defense costs, whether Port Authority's potential exhaustion of the Policy terminates that obligation.

A.Duty to Defend Requirement

Under New York law, "[a]n insurer must defend whenever the four corners of the complaint suggest — or the insurer has actual knowledge of facts establishing — a reasonable possibility of coverage." Cont'l Cas. Co. v. Rapid-Am. Corp., 80 NY2d 640, 648 (1993). This duty to defend extends to the "entire action." Mendes & Mount v. Am. Home Assurance Co., 97 AD2d 384, 388 (1st Dep't 1983); see also Am. Home Assurance Co. v. Port Auth. of NY & N.J., 66 AD2d 269 (1st Dep't 1979) ("[i]f various grounds are alleged, some within and some without the coverage of the policy, the insurer is bound to undertake the defense of the action on behalf of its assured.").

On the instant motion, American Home does not dispute its obligation to pay "reasonable" defense costs for the Underlying Actions. See Affidavit of Amy Fitzpatrick at ¶ 3 ("American Home is presently paying reasonable defense costs for the (11) WTC Asbestos Claims ... subject to American Home's right of recoupment."). The issue, instead, is whether American Home is required to pay defense costs for the entire action, where only certain of the claims asserted fall under the Policy, while others pertain to non-World Trade Center sites.

Consistent with the First Department's decisions in Mendes and Mount v. American Home Assurance Company and American Home Assurance Company v. Port Authority of New York and New Jersey, American Home is required to pay defense costs for the "entire action." An insured's "right to recover the entire amount expended in the defense from American Home cannot be diminished because there may be additional insurers which may also have duties to defend." Mendes & Mount, 97 AD2d at 385; Port Authority, 66 AD2d at 277 ("The circumstance that some grounds are alleged in the [*3]complaints in the negligence actions which would involve the insurance company in liability, is enough to call upon it to defend these actions."). Accordingly, to the extent that American Home defines "reasonable" defense costs to exclude claims related to non-World Trade Center sites, such a position is inconsistent under New York law. Therefore, the Court concludes that American Home's duty to defend extends to the entirety of those WTC Asbestos Claims asserting claims covered by the Policy.

B.Exhaustion

American Home nevertheless maintains that its duty to defend has been terminated by Port Authority's exhaustion of the limits of the Policy. In support, American Home asserts that it has paid more than $10 million in indemnity for World Trade Center asbestos claims and that "discovery will show that the Policy is exhausted." (American Home Opp. Br. at 5-6.) As the parties are aware, discussion of what discovery "will show" fails to make the factual showing required to defeat a motion for summary judgment.

Moreover, American Home points to no provision of the Policy terminating defense costs upon exhaustion of the liability limit. A policy may expressly limit the duty to defend; however, American Home points to no such limitation here. Cf. In re East 51st Street Crane Collapse Litig., 84 AD3d 512, 513 (1st Dep't 2011) (rejecting argument that insurer required to continue defense of insureds after policy limit reached where policy language expressly disclaims duty to defend "when we have used up the applicable limit of insurance in the payment of judgments or settlements."). Accordingly, the Court cannot presume that such a limitation exists. See Am. Emp'r Ins. Co. v. Goble Aircraft Specialties, Inc., 205 Misc. 1066, 131 N.Y.S.2d 393, 400 (Sup. Ct. NY Cnty. 1954) (holding that duty to defend survives exhaustion of policy limits where policy stated that insurer would "defend any suit against the insured" without any indemnity limitation); see also Maryland Casualty Co. v. W.R. Grace & Co., 794 F.Supp. 1206, 1221 (S.D.NY 1991) (finding under New York law that duty to defend survives the exhaustion of policy limits); Fed. Ins. Co. v. Cablevision Sys. Dev. Co., 662 F.Supp. 1537, 1539-40 (E.D.NY 1987) ("It is well settled in New York that the obligation of insurers to defend their insured is heavy indeed' and broader than their obligation to indemnify.") American Home's argument fails to defeat Port Authority's motion for summary judgment.

Accordingly, Port Authority's motion for partial summary judgment is granted.

III.Plaintiff's Motion to Dismiss Counterclaims

In motion sequence 001, Plaintiff American Home seeks: (1) dismissal of Defendant Port Authority's Third Counterclaim and (2) to strike paragraph 41 from Port Authority's Second Counterclaim. Each request will be considered in turn below.

A.Counterclaim Three [*4]

Counterclaim Three asserts that American Home ^[FN1] engaged in deceptive acts and practices in violation of Section 349 of the General Business Law. Specifically, Port Authority alleges that American Home violated Section 349 by "failing to effectuate a prompt, fair, and equitable settlement of claims such as the Port Authority's even where liability is reasonably clear ..." (Counterclaims ¶ 49.)

"As a threshold matter, in order to satisfy General Business Law Section 349, plaintiff['s] claims must be predicated on a deceptive act or practice that is consumer oriented." Gaidon v. Guardian Life Ins. Co. of Am., 94 NY2d at 344. To satisfy the consumer-oriented conduct requirement, plaintiff must allege acts with "a broad impact on consumers at large." New York Univ. v. Cont'l Ins. Co., 87 NY2d 308, 320 (1995). "Private contract disputes, unique to the parties, for example, would not fall within the ambit of the statute." Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 NY2d 20, 25 (1995); see also Teller v. Bill Hayes, Ltd., 213 AD2d 141, 145 (2d Dep't 1995) ("In other words, the deceptive act or practice may not be limited to just the parties."). Further, the conduct alleged must be directed at the consuming public as opposed to sophisticated entities. See Teller, 213 A.2d at 146-147 (stating that Section 349 "was primarily intended to apply to more modest transactions" and not those involving "knowledgeable and experienced parties and large sums of money."); Clayton v. Katz, 2012 WL 4378035, *5 (S.D.NY Sept. 25, 2012) ("New York courts may consider the sophistication of the parties and the amount of the transaction at issue — in other words, whether the parties need the protection of the consumer-protection law.").

The instant dispute is between two large sophisticated parties regarding the scope of an insurance policy pertaining to the construction of the original World Trade Center. This is not the "modest type of transaction the statute was primarily intended to reach." Denenberg v. Rosen, 71 AD3d 187, 195 (1st Dep't 2010). In fact, it is precisely the type of "private contract dispute" between knowledgeable and experienced parties that courts have consistently deemed outside the reach of the statute. See, e.g., id. at 195 (describing transaction involving a "sophisticated, individual private pension plan" and a "sophisticated" commodities trader as "not the modest type of transaction the statute was primarily intended to reach"); Kramer v. Lockwood Pension Serv., Inc., 653 F.Supp.2d 354, 385 (S.D.NY 2009) (dismissing GBL 349 claim because "the parties include sophisticated insurance brokers and not ordinary consumers to whom the statute is directed"); Freefall Express, Inc. v. Hudson River Park Trust, 16 Misc 3d 1135(A), *3 (Sup. Ct. NY Cnty. 2007) ("Where the alleged deceptive practices occur between relatively sophisticated entities with equal bargaining power, such does not give rise to [*5]liability under GBL § 349.").

Indeed, the transaction at issue is different in type and kind from "modest transactions" covered by the statute. As the Court of Appeals noted in New York University v. Continental Insurance Company, 87 NY2d 308, 321 (1995), a "private contract dispute over policy coverage and the processing of a claim which is unique to these parties" is not "conduct which affects the consuming public at large." In so ruling, the Court of Appeals distinguished its previous ruling in Oswego Laborers' Local 214 Pension Fund, 85 NY2d 20 (1995), noting that the transaction in that case constituted "consumer-oriented" conduct as it involved "a bank customer receiving the standard forms and advice supplied to the consuming public at large, and in which the parties occupied disparate bargaining positions." Id. Conversely, the transaction in the New York University case, like the transaction at bar, "involves complex insurance coverage and proof of loss in which each side was knowledgeable and received expert representation and advice." NY Univ., 87 NY2d at 321. Drawing this distinction, the Court of Appeals held that the insurance policy dispute before it was not "consumer oriented," and the Court concludes the same here about the instant transaction.

Port Authority's assertions regarding American Home's decision to enter into a reinsurance agreement in 2011 do not breathe life into its counterclaim. Even taking all facts as pleaded by Port Authority as true, Port Authority does not explain now this private agreement between American Home and its reinsurer had a broad impact on the public at large, except through conclusory generalizations. See Counterclaim ¶ 63 ("numerous other New York policyholders who purchased general liability insurance policies from AIG in New York are subject to this improper reinsurance' arrangement, which arrangement results in unfair and unreasonable claims handling practices in violation of New York law.").

For the foregoing reasons, the Counterclaim fails to make the threshold pleading of "consumer-oriented" conduct. American Home's motion to dismiss is therefore granted.

B.Paragraph 41 of Counterclaim Two

American Home next seeks to strike paragraph 41 of Port Authority's Counterclaims. Paragraph 41 is included as part of Port Authority's Second Counterclaim for breach of contract and states:

Moreover, by unlawfully transferring its insuring and claims handling obligations to NICO — a "claims handler" AIG knew or should have known would not provide fair and reasonable claim adjustment practices and procedures — AIG breached the covenant of good faith and fair dealing inherent in the Policy.

The Court agrees with American Home that this paragraph seeks to assert a breach of the implied covenant of good faith and fair dealing, in addition to the breach of contract claim alleged in Counterclaim Two. This claim for breach of the implied [*6]covenant stems from the same facts as the breach of contract claim, asserting, at bottom, that American Home breached the Policy by not paying claims in a timely manner. Accordingly, the breach of the implied covenant of good faith and fair dealing claim is duplicative of the breach of contract claim. See, e.g., Logan Advisors, LLC v. Patriarch Partners, LLC, 63 AD3d 440, 466-67 (1st Dep't 2009) ("The claim that defendants breached the implied covenant of good faith and fair dealing was properly dismissed as duplicative of the breach of contract claim because both claims arise from the same facts.") The Court grants American Home's motion to strike paragraph 41.

IV.Tishman Speyer's Motion to Dismiss

The Tishman Defendants next move for dismissal of all counts asserted against them, arguing that American Home has failed to present a justiciable controversy, as required for a declaratory judgment under CPLR § 3001. The Court agrees.

To be justiciable, a controversy must "involve present, rather than hypothetical, contingent or remote, prejudice" to a party. Am. Ins. Ass'n v. Chu, 64 NY2d 379, 383 (1985). Thus, "[a] declaratory judgment may not be granted if it will only result in an advisory opinion." Combustion Eng'g, Inc. v. Travelers Indem. Co., 75 AD2d 777 (1st Dep't 1980). "[I]t is settled that the courts will not entertain a declaratory judgment action when any decree that the court might issue will become effective only upon the occurrence of a future event that may or may not come to pass." Id. The ability — or disability — of the courts to entertain a declaratory judgment action under such circumstances is not a matter of discretion, but one of law. Id. at 778-79.

Here, American Home pleads a claim seeking declaratory relief as to "certain Tishman entities [that] have sought or may seek coverage under the Policy." (Compl. ¶ 32.) The Complaint does not allege that either of the moving Tishman Defendants have sought coverage under the Policy. Further, the Complaint speaks generally to "certain" Tishman Defendants. Plaintiff tries to rehabilitate its claims by submitting five complaints filed in asbestos personal injury actions, in which "Tishman Properties" or "Tishman Properties, Inc." are listed as Defendants. See Affirmation of Bryce L. Friedman, Exs. A-D. However, American Home does not assert that claims were submitted as by the moving Tishman Defendants as a result of these complaints or even that all of the complaints involve the Policy at issue here. Instead, any declaration of American Home's rights vis-a-vis the moving Tishman Defendants would become effective "only upon the occurrence of a future event that may or may not come to pass" — a request for coverage under the Policy. Combustion Eng'g, Inc., 75 AD2d at 777.

Moreover, the insurer's contention that it requires discovery regarding the moving Tishman Defendants' corporate history in order to determine American Home's rights fails to state a justiciable controversy. Again, the moving Tishman Defendants have not sought coverage under the Policy. American Home has not stated a "present, rather than hypothetical, contingent or remote" claim against the moving Tishman Defendants. [*7]Plaintiff "will not be allowed to use pretrial discovery as a fishing expedition when it cannot set forth a reliable factual basis for what amounts to, at best, mere suspicions." Chappo & Co., Inc. v. Ion Geophysical Corp., 83 AD3d 499, 500-01 (1st Dep't 2011). Accordingly, Defendants Tishman Speyer Properties L.P. and Tishman Speyer Properties, Inc.'s motion to dismiss is granted without prejudice.

V.Hartford's Motion to Intervene as Plaintiff

Finally, non-party Hartford seeks leave to intervene in this action as plaintiff. Hartford does not seek to assert claims in connection with the American Home Policy at issue. Instead, Hartford wishes to litigate claims in connection with its own general liability policies issued to Defendant Mario & DiBono Plastering Co., Inc. ("M & D"), a subcontractor on the World Trade Center project. Hartford alleges that it has participated in the defense and resolution of asbesto-related claims asserted against M & D. Thus, to the extent that American Home establishes that it has no further obligation for asbestos-claims under the instant Policy, Hartford claims that M & D may request coverage from Hartford. Accordingly, Hartford claims that it has a "substantial interest" in this proceeding.

CPLR § 1013 provides that a court may grant leave to intervene if the proposed intervenor's claim and the main action "have a common question of law or fact." If this threshold requirement is met, the court then may exercise its discretion in determining whether to grant intervention. See Vincent C. Alexander, Practice Commentaries, McKinney's Cons. Laws of NY, Book 7B C1013. In particular, the Court may look to whether the proposed intervenor has a "real and substantial interest" in the outcome of the existing action. Yuppie Puppy Pet Prod., Inc. v. Street Smart Realty, LLC, 77 AD3d 197, 202 (1st Dep't 2010); see also Wells Fargo Bank, Nat. Ass'n v. McLean, 70 AD3d 676, 677 (2d Dep't 2010).

Here, Hartford has presented no common question of law or fact, aside from its representation that M & D also may seek coverage from Hartford for World Trade Center-related claims. However, such a request would not be under the American Home Policy. Instead, any potential coverage request would fall under separate policies issued by Hartford. See Affirmation of Michael S. Komar, Ex. 1 at ¶ 2 ("Hartford seeks a declaration ... that, among other things, it has no obligation to defend or indemnify M & D under the Hartford Policies against asbestos-related personal injury claims arising from the World Trade Center ("WTC") Hudson Tubes Project."). Accordingly, Hartford has not presented common questions of fact sufficient to warrant intervention in this action as plaintiff, and in fact, seeks to raise new facts and issues that are not currently before the Court. See East Side Car Wash, Inc. v. K.R.K. Capitol, Inc., 102 AD2d 157, 160 (1st Dep't 1984) ("A proposed intervenor is not permitted to raise issues which are not before the court in the main action.").

Even if Hartford had presented common issues of law or fact, intervention would [*8]be denied nonetheless since Hartford has not demonstrated a "real and substantial interest" in the outcome of this action. Again, Hartford offers only a speculative interest — i.e. that it may receive a coverage request from M & D depending on the outcome of this case. However, such an interest is neither real nor is it substantial. The outcome of this litigation does not affect whether the Hartford policies cover any claims that may potentially be asserted against it, and thus Hartford has no "bona fide interest in an issue involved" in this action. See Yuppie Puppy Pet Prod., Inc., 77 AD3d at 201.

Indeed, the cases cited by Hartford highlight its lack of real and substantial interest in this case. Hartford points to several cases in which non-party mortgage holders, pension funds, and creditors were granted leave to intervene in actions involving property in which they directly held an interest. See Am. Home Mortg. Servicing, Inc. v. Sharrocks, 92 AD3d 620, 621 (2d Dep't 2012) (granting judgment creditor leave to intervene in foreclosure action involving property on which judgment lien was placed); Yuppie Puppy Pet Prod., Inc., 77 AD3d at 201 (concluding that mortgage holder had "real and substantial interest" in outcome of litigation between mortgagor and alleged lienholder); McDermott v. McDermott, 119 AD2d 370, 374 (2d Dep't 1986) (holding that pension fund had a "real and substantial interest" in judgment affecting pension distribution determination). Hartford holds no such direct interest here in the subject of this litigation — the scope of American Home's coverage obligations under its own policies.

Finally, the Court notes that Hartford's proposed complaint seeks to interject new claims not presented in the American Home action that will raise complex and time consuming legal and factual issues entirely collateral to the issues raised by American Home. Specifically, Hartford's subrogation claim seeks recovery from the Port Authority and Alcoa for "excess amounts [Hartford] has paid on behalf of M & D that should have been paid by the Port Authority and Alcoa." See Komar Affirm. Ex. 1 at ¶ 26. Such a claim is far afield from the declaratory judgment and recoupment claims made by American Home related to its own policies. As such, Hartford's proposed complaint will result in undue delay to the existing parties and will serve to undermine judicial economy and efficiency. For the foregoing reasons, Hartford's motion is denied.

VI.Conclusion, Order, and Declaratory Judgment

Accordingly, it is

ORDERED that Defendant Port Authority's motion for partial summary judgment is granted (motion sequence 004) is granted; and it is further

ADJUDGED AND DECLARED that American Home is obliged to provide a defense to Defendant Port Authority in connection with the WTC Asbestos Claims; and it is further

ORDERED that Plaintiff American Home's motion to dismiss Defendant Port Authority's [*9]Counterclaim Three and paragraph 41 of Port Authority's Counterclaims (motion sequence 001) is granted; and it is further

ORDERED that the Tishman Defendants' motion to dismiss (motion sequence 003) is granted; and it is further

ORDERED that non-party Hartford's motion to intervene (motion sequence 002) is denied; and it is further

ORDERED that counsel are directed to appear for a preliminary conference in Room 442, 60 Centre Street, on September 24, 2013, at 10 a.m.

Dated: New York, New York

August 15, 2013ENTER:

/s/

Hon. Eileen Bransten, J.S.C.