Monadnock Constr., Inc v Southwest Mar. & Gen. Ins. Co.

Supreme Court, Bronx County

Decided on April 8, 2026

Index No. 814469/24E

Fidel E. Gomez, J.

In this action for declaratory judgment, defendant/third-party plaintiff (Southwest) moves seeking an order pursuant to CPLR § 3025 granting it leave to amend its answer to assert seven counterclaims and its third-party complaint to assert a second cause of action for declaratory judgment. Saliently, Southwest avers that the amendments sought have merit, are the result of facts learned during the discovery process, and that leave to amend was sought soon after the facts on which the amendments are premised were discovered. Plaintiffs and third-party defendant (Starr) separately oppose the instant motion, asserting that the proposed pleadings and the causes of action interposed therein are devoid of merit.

For the reasons that follow hereinafter, Southwest's motion is denied.

The instant action is for declaratory judgment.

The complaint in the first-party action, filed on September 12, 2024, alleges, that on May [*2]22, 2022, plaintiffs and nonparty Core Scaffold Systems (Core) executed an agreement whereby the former retained the latter to install roof protection at the premises located at 1923 West Farms Road, Bronx, NY (1923). Thereafter, on February 1, 2021, Core executed an agreement with nonparty MD Scaffolding, Inc. (MD), whereby the former retained the latter to provide services at a project at 1923. The agreement between Core and MD required that MD carry and maintain a commercial insurance liability policy naming, inter alia, Core and its customers at 1923 as additional insureds. Additionally, per the agreement between Core and MD, the policy that MD was required to procure was required to include contractual liability insurance for the benefit of, inter alia, the contractor and owner at the project, and that the policy procured by MD would be required to be primary to any insurance separately procured by the owner and contractor at the project. Prior to July 16, 2022, Southwest issued a general liability insurance policy to MD, effective between September 18, 2021 and September 18, 2022. The foregoing policy provided bodily injury coverage to any additional insured which MD was required to include as an additional insured under any agreement for liability arising from MD's work. On July 16, 2022, nonparty Miguel Castro (Castro), MD's employee at 1923, was involved in an accident when, while working at 1923, a coworker dropped construction materials which struck Castro and caused him to be injured. Thereafter, Castro sued plaintiffs for the injuries he alleged were sustained as a result of the foregoing accident, alleging that plaintiffs were negligent and violated the New York State Labor Law. On February 6, 2024, via a tender letter, plaintiffs, as additional insureds under the policy issued to MD by Southwest, made a claim thereunder by timely notifying Southwest of the suit brought against plaintiffs by Castro. Plaintiffs' claim was assigned to Aimee Cooper (Cooper), Southwest's adjuster, who undertook to investigate the claim by, inter alia, engaging in discussions with MD. On April 8, 2024, Cooper advised plaintiffs that as additional insureds under Southwest's policy, they would be provided a defense in the action brought by Castro and would be indemnified for any damages up to the limits of the policy. Despite the foregoing, Southwest has failed to provide plaintiffs with a defense in the action brought by Castro nor have they indemnified plaintiffs for the damages arising from the claims made by Castro. The failure by Southwest to defend and indemnify plaintiffs has resulted in the incursion of damages. Based on the foregoing, plaintiffs interpose two causes of action. The first cause of action is for declaratory judgment wherein plaintiffs seek declaration that in failing to defend and indemnify plaintiffs with respect to the action brought against them by Castro, Southwest has breached the insurance policy issued to MD and is, therefore, obligated to defend and indemnify plaintiffs. The second cause of action is for attorney fees, costs, and expenses, wherein plaintiffs seek to be reimbursed for all expenses incurred in defending themselves in the action brought against them by Castro, all of which have been occasioned by Southwest's failure to defend plaintiffs as required by Southwest's insurance policy.

The third-party complaint, filed on December 11, 2024, alleges that on May 19, 2022, plaintiff MONADNOCK CONSTRUCTION, INC (Monadnock)FN1 and Core procured a contractor controlled insurance policy (CCIP policy) from Starr to provide liability insurance coverage at [*3]the project. Plaintiffs Monadnock, SAMARITAN-COMPASS VI HOUSING DEVELOPMENT FUND CORPORATION (Samaritan) and COMPASS SIX OWNER LLC (Compass) were insured by a policy issued by Starr, which provided liability coverage for Monadnock, Samaritan, and Compass and which was in effect on July 16, 2022. Per the agreement between Core and plaintiffs, unless they are deemed an excluded party, anyone performing work at the project was eligible to enroll in the CCIP policy issued to Monadnock, and enrollment was mandatory for eligible contractors and subcontractors who were directed by Manadnock to enroll therein. The CCIP policy provided coverage to all those enrolled therein, with the first layer of coverage being $8 million and with $50 million in excess coverage. Insofar as the claims made against plaintiffs by Castro are for bodily injury, plaintiffs, to whom Starr is providing a defense in the action asserted by Castro, are covered and insured by the CCIP policy for the foregoing claims. The CCIP policy is primary and is a consolidated insurance program, such that it precludes coverage to plaintiffs under an exclusion within the policy issued to MD by Southwest. Based on the foregoing, Southwest interposes a cause of action for declaratory judgment, wherein it seeks declaration that since plaintiffs were enrolled in the CCIP, the policy issued by Southwest excludes coverage to them and that the policy issued by Starr is exclusive requiring Starr to provide coverage to plaintiffs for the claims made by Castro against them.

On March 17, 2025, the Court issued a Preliminary Conference Order, ordering that discovery be completed by July 10, 2025.

On March 30, 2025, Southwest moved seeking an order granting it summary judgment against plaintiffs and Sterling. Thereafter, plaintiffs and Sterling separately cross-moved seeking an order granting them summary judgment against Southwest. Because the parties represented that they were amenable to settling these actions, the motion was not fully submitted until February 4, 2026. The motion remains sub judice.

On July 7, 2025, this Court issued a Compliance Conference Order, directing that discovery be completed by December 31, 2025, the date plaintiffs were directed to file their Note of Issue.

Standard of Review

Generally, leave to amend a pleading shall be freely granted absent prejudice or surprise resulting directly from the delay in seeking the proposed amendment (McMcaskey, Davies and Associates, Inc. v New York City Health & Hosps. Corp, 59 NY2d 755, 757 [1983]; Fahey v County of Ontario, 44 NY2d 934, 935 [1978]). Whether to grant a party leave to amend a pleading is addressed to the sound discretion of the court (Edenwald Contracting Co. v City of New York, 60 NY2d 957, 959 [1983]; New York Bus Operators Compensation Tr. v Arthur J. Gallagher & Co., 241 AD3d 568, 569 [2d Dept 2025]). Delay, however, in seeking leave to amend a pleading is not, in and of itself a barrier to judicial leave to amend. Instead, "[i]t must be lateness coupled with significant prejudice to the other side, the very elements of the laches doctrine" (Edenwald Contracting Co. at 958). Nevertheless, as a threshold matter, the failure to adequately explain the delay in seeking to amend the pleadings warrants denial of such motion (Ridgewood Sav. Bank v Glickman, 197 AD3d 1189 [2d Dept 2021] ["Here, the defendants failed to offer any reasonable excuse for their delay of more than two years in seeking leave to amend their answer despite knowledge of the allegedly erroneous mortgage satisfaction since the commencement of the action, and the proposed affirmative defenses were patently devoid of [*4]merit."]; Shucht v Innovative Biodefense, Inc., 217 AD3d 703, 704 [2d Dept 2023] ["The plaintiff failed to offer any reasonable excuse for his delay of four years in seeking leave to amend the complaint, despite knowing the facts surrounding his relationship with IBD since the commencement of this action."]). Of course, an unexplained delay coupled with prejudice will also warrant denial of any application seeking leave to amend a pleading (New York Bus Operators Compensation Tr. v Arthur J. Gallagher & Co., 241 AD3d 568, 570 [2d Dept 2025] ["Here, in light of the extended delay in moving for leave to amend the complaint, the lack of a reasonable excuse for the delay, the demonstrated prejudice the defendants would suffer if the proposed amendments were permitted, and the defendants' demonstration that the proposed amendments were patently devoid of merit, the Supreme Court did not improvidently exercise its discretion in denying those branches of NYBOCT's motion which were for leave to amend the complaint to add the proposed individual defendants and new causes of action to recover extracontractual damages based on the faithless agent doctrine."] Corsale v Pantry Pride Supermarket, Inc., 197 AD2d 659, 660 [2d Dept 1993] ["A belated motion for leave to amend will be defeated by a claim of laches where two elements are present: delay, and prejudice to the nonmoving party resulting directly from the delay."]).

Where, once, the proponent of an order seeking leave to amend a pleading was expressly required to demonstrate that the proposed amendment had merit (Thomas Crimmins Contracting Co., Inc. v City of New York, 74 NY2d 166, 170 [1989]["Where a proposed defense plainly lacks merit, however, amendment of a pleading would serve no purpose but needlessly to complicate discovery and trial, and the motion to amend is therefore, properly denied."]; Herrick v Second Cuthouse, Ltd., 64 NY2d 692, 693 [1984][Court concluded that defendant could amend its answer when the amendment would not prejudice plaintiff and where the amendment was found to have merit]; Mansell v City of New York, 304 AD2d 381, 381-382 [1st Dept 2003]), requiring the proffer of evidence establishing that the proposed amendment had merit (Curran v Auto Lab Serv. Ctr., 280 AD2d 636, 637 [2d Dept 2001]; Heckler Elec. Co. v Matrix Exhibits-N.Y., 278 AD2d 279, 279 [2d Dept 2000]), there is no longer such a requirement (MBIA Ins. Corp. v Greystone & Co., Inc., 74 AD3d 499, 500 [1st Dept 2010] ["On a motion for leave to amend, plaintiff need not establish the merit of its proposed new allegations."]; Lucido v Mancuso, 49 AD3d 220, 227 [2d Dept 2008] ["These cases make clear that a plaintiff seeking leave to amend the complaint is not required to establish the merit of the proposed amendment in the first instance."]).

Instead, absent prejudice, a motion to amend a pleading ought to be granted unless the proposed amendment is palpably insufficient or patently devoid of merit FN2 (US Bank N.A. v Murillo, 171 AD3d 984, 986 [2d Dept 2019]; WDF, Inc. v Trustees of Columbia Univ., 170 AD3d 518, 519 [1st Dept 2019]; MBIA Ins. Corp. at 500; Lucido at 226-227). Indeed, on an application seeking leave to amend a pleading, "the legal sufficiency or merits of a pleading will not be examined unless the insufficiency or lack of merit is clear and free from doubt" (Lucido v [*5]Mancuso, 49 AD3d 220, 227 [2d Dept 2008] [internal quotation marks omitted]; (Sample v Levada, 8 AD3d 465, 468 [2d Dept 2004]; Zacma Cleaners Corp. v Gimbel, 149 AD2d 585, 586 [2d Dept 1989]). Stated differently, an examination of the merits of the amendment sought is only warranted when the "additional factual allegations, and the newly pleaded causes of action, considered together, are [] so patently insufficient so as to warrant an examination of their merits upon a motion to amend" (Zacma Cleaners Corp. at 586).

Notwithstanding the foregoing, leave to amend a complaint will not be granted unless the proposed amendment, as pleaded, establishes a cause of action (Thompson v Cooper, 24 AD3d 203, 205 [1st Dept 2005]; Ancrum v St. Barnabas Hosp., 301 AD2d 474, 475 [1st Dept 2003]; Davis & Davis v Morson, 286 AD2d 585, 585 [1st Dept 2001]). Stated differently, "leave [to amend a pleading] should be denied where the proposed pleading fails to state a cause of action" (Monaco v New York Univ. Med. Ctr., 213 AD2d 167, 169 [1st Dept 1995]; Stroock & Stroock & Lavan v Beltramini, 157 AD2d 590, 591 [1st Dept 1990]).

Generally, if the statute of limitations on a claim and/or against a party has expired, leave to amend a pleading to add a new party must be denied (Dowdall v Gen. Motors Corp., 34 AD3d 1221, 1222 [4th Dept 2006]; Moller v Taliuaga, 255 AD2d 563, 564 [2d Dept 1998]; Reis v Manhattan and Bronx Surface Tr. Operating Auth., 161 AD2d 288, 288 [1st Dept 1990]). If however, the amendment sought seeks to add an additional defendant to an action and the statute of limitations has expired, because CPLR § 203(f) states that "[a] claim asserted in an amended pleading is deemed to have been interposed at the time the claims in the original pleading were interposed," the proponent must establish that the original complaint gave the defendant notice of the claim sought to be interposed by the proposed plaintiff (Giambrone v Kings Harbor Multicare Ctr., 104 AD3d 546, 547 [1st Dept 2013]; O'Halloran v Metro. Transp. Auth., 154 AD3d 83, 87 [1st Dept 2017]), and that no prejudice would result from such amendment (O'Halloran at 87). For purposes of the application of CPLR § 203(f), known as the relation back doctrine, the salient inquiry on the issue of notice "is not whether defendant had notice of the claim, but whether, as the statute provides, the original pleading gives 'notice of the transactions, occurrences . . . to be proved pursuant to the amended pleading'" (Giambrone at 548).

Leave to amend a pleading to add duplicative causes of action should be denied (Bleakley Platt & Schmidt, LLP v Barbera, 136 AD3d 725, 726 [2d Dept 2016] ("Since the claims asserted in the proposed counterclaim were duplicative of those set forth in the legal malpractice action, the Supreme Court providently exercised its discretion in denying the defendant's motion for leave to amend her answer to assert a counterclaim alleging legal malpractice."]; Feldman v Finkelstein & Partners, LLP, 76 AD3d 703, 705 [2d Dept 2010] ["However, the remaining causes of action contained in the proposed amended complaint were duplicative of the first cause of action; thus, the plaintiffs may not amend the complaint to include those causes of action, as the proposed amendment is patently devoid of merit."]").

Since the court must examine the proposed pleading for patent sufficiency, it is axiomatic that the proposed pleading must be provided with a motion seeking leave to amend the same and that a failure to do so warrants denial of the motion (Loehner v Simons, 224 AD2d 591, 591 [2d Dept 1996]; Branch v Abraham and Strauss Department Store, 220 AD2d 474, 476 [2d Dept 1995]; Goldner Trucking Corp. v Stoll Packing Corp., 12 AD2d 639, 640 [2d Dept 1960]).

Discussion

Southwest's motion seeking leave to amend its answer to interpose counterclaims against plaintiffs is denied. Significantly, the proposed counterclaims are patently devoid of merit because, inter alia, inasmuch as the counterclaims seek to assert an additional basis for Southwest's repudiation of coverage to plaintiff under the policy it issued to MD after Southhwest denied coverage under the policy, such counterclaims are waived. Southwest's motion seeking leave to amend its third-party complaint to assert an additional cause of action for declaratory judgment against Starr premised on facts discovered by virtue of an investigation is also denied. Significantly, the additional cause of action in the proposed third-party complaint is patently devoid of merit because it is identical to the first cause of action previously interposed and seeks identical relief.

In support of the instant motion, and to the extent relevant, Southwest submits the proposed counterclaim which it seeks leave to interpose, which states the following. Southwest issued a commercial liability insurance policy to MD, effective September 18, 2021 until September 18, 2022. The foregoing policy provided coverage to MD for any liability arising from bodily injury. Section I(1) of the policy states Southwest would "pay those sums that the insured becomes legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies." Section IV(2)(a), prescribing MD's duties under the policy upon an event for which the policy contemplated coverage, required that Southwest be notified as soon as practicable of an 'occurrence' or an offense which may result in a claim." Section IV(2)(b) and (c), required notice as soon as practicable in the event MD was sued for claims contemplated by the policy, that copies of any legal papers connected with such action be provided to Southwest, and that MD "[c]ooperate with us in the investigation or settlement of the claim or defense against the 'suit.'" With respect to other insurance and whether the policy is primary over any others, the policy states that "[t]his insurance is primary except . . . [that] This insurance is excess over . . . Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured." The policy also extended coverage to additional insureds. Specifically, per Endorsement CG 20 10 04 13, the policy was

amended to include as an additional insured the person(s) or Organization (s) shown in the Schedule, but only with respect to liability for 'bodily injury', 'property damage' or 'personal and advertising injury' caused, in whole or in part, by . . . The acts or omissions of those acting on your behalf; in the performance of your ongoing operations for the additional insured(s) at the location(s) designated above.

Moreover, "[t]he insurance afforded to such additional insured only applies . . . If coverage provided to the additional insured is required by a contract or agreement." Lastly, the Endorsement CG 21 31 05 09 excludes coverage under the policy if "a consolidated (wrap-up) insurance program has been provided by the prime contractor/project manager or owner of the construction project in which you are involved." Monadnock, Samaritan, and Compass were insured by a policy issued by Starr, which provided liability coverage for Monadnock, Samaritan, and Compass. The Starr policy has a substantial deductible. Per the agreement between Core and plaintiffs, unless they are deemed an excluded party, anyone performing work at the project was eligible to enroll in the CCIP policy issued to Monadnock and enrollment was mandatory for [*6]eligible contractors and subcontractors who were directed by Manadnock to enroll therein. The CCIP policy provided coverage to all those enrolled therein, with the first layer of coverage being $8 million and $50 million in excess coverage. Insofar as the claims made against plaintiffs by Castro are for bodily injury, plaintiffs, to whom Starr is providing a defense in the action asserted by Castro, are covered and insured by CCIP policy for the foregoing claims. The CCIP policy is primary, is a consolidated insurance program, such that it precludes coverage to plaintiffs under an exclusion within the policy issued to MD by Southwest. On July 26, 2024, after Monadnock requested that Southwest assume its defense in and indemnify it for the action brought against plaintiffs by Castro. Southwest issued two additional denials, on August 2, 2024 and then again on October 15, 2025. Prior to issuing the denials, Southwest undertook to investigate whether MD was enrolled in the CCIP Policy and whether Castro was employed by MD. When Castro was deposed on three separate occasions - January 10, 2023, March 13, 2023, and July 29, 2025 - he testified that with respect to the project, he worked for Core. Castor further asserted the same in his bill of particulars in the action against plaintiffs, and by virtue of a document in Castro's Workers Compensation file evincing the same, Monadnock became aware of the same in January 2023. Despite the foregoing, the fact that Castro was Core's special employer, and the fact that Core was enrolled in the CCIP policy, Monadnock issued a tender letter to Southwest on February 22, 2024 and the third-party complaint Monadnock filed in the action initiated by Castro against plaintiffs knowingly and falsely asserted that Castro was employed by MD. The foregoing statement was made in order to induce Southwest into providing coverage to Monadnock under the policy issued to MD. Additionally, in response to requests from Southwest that Monadnock provide information regarding Castro's employer, Monadncok provided pay stubs evincing that Castro was employed by MD but never provided the information within Castro's Workers Compensation file evincing that he was employed by Core. With regard to whether MD was enrolled in the CCIP Policy, Monadnock never provided the enrollment logs evincing the same. Based on the foregoing, Southwest interposes seven counterclaims, each for declaratory judgment, and each seeking a declaration that Southwest is not obligated to defend or indemnify Monadnock for the action brought by against it by Castro. The first is for breach of duty to cooperate, wherein it is alleged that Monadnock failed to, inter alia, provide Southwest with information regarding Castro's accident and documents related to his employment status, such failure is prejudicial and constitutes a breach of the obligations imposed by the policy. The second counterclaim is for lack of privity, wherein it is alleged that in the absence of any agreement between MD and Monadnock, there is no privity so as to require Southwest to extend coverage to Monadnock. The third counterclaim is for breach of the covenant of good faith and fair dealing, wherein it is alleged that Monadnock's breach of the terms of the policy issued by Southwest, namely, the failure to cooperate, constitutes a breach of the covenant of good faith and fair dealing. The fourth counterclaim is for bad faith wherein it is alleged that in violating the covenant of good faith and fair dealing, and in settling the action brought against it by Castro absent notice and consent by Southwest, Monadnock acted in bad faith thereby breaching the terms of the policy. The fifth counterclaim is for voluntary payment, wherein it is alleged that in settling the action brought by Castro absent notice to and consent from Southwest, the policy is voided. The sixth counterclaim is for priority of coverage, wherein it is alleged that the policy issued by Southwest is excess over the policy issued by Starr, [*7]which is primary. The last counterclaim is for fraudulent inducement, wherein it is alleged that Monadnock misrepresented MD's role in the project, such misrepresentation delaying Southwest's denial of the claim and causing Southwest to incur legal fees, costs and expenses.

Southwest also submits its proposed amended third-party complaint, wherein it adds an additional cause of action for declaratory judgment premised on the facts asserted in its proposed counterclaims. Specifically, on July 16, 2022, at the time of his accident, Castro was employed by Core. Such information was derived by Castro's deposition testimony, his bill of particulars in the action brought by Castro against plaintiffs, and documents obtained by Monadnock. Based on the foregoing and the terms of Southwest's policy, issued to MD, Castro is covered by the CCIP Policy issued by Starr and as such the Court should declare that Monadnock is covered by the policy issued by Starr.

Based on the foregoing, Southwest's application seeking to amend its answer to interpose seven counterclaims is denied.

As noted above, generally, leave to amend a pleading shall be freely granted absent prejudice or surprise resulting directly from the delay in seeking the proposed amendment (McMcaskey, Davies and Associates, Inc. at 757; Fahey at 935). Absent prejudice, a motion to amend a pleading ought to be granted unless the proposed amendment is palpably insufficient or patently devoid of merit (US Bank N.A. at 986; WDF, Inc. at 519; MBIA Ins. Corp. at 500; Lucido at 226-227). Indeed, on an application seeking leave to amend a pleading, "the legal sufficiency or merits of a pleading will not be examined unless the insufficiency or lack of merit is clear and free from doubt" (Lucido at 227 [internal quotation marks omitted]; Sample at 468; Zacma Cleaners Corp. at 586). Stated differently, an examination of the merits of the amendment sought is only warranted when the "additional factual allegations, and the newly pleaded causes of action, considered together, are [] so patently insufficient so as to warrant an examination of their merits upon a motion to amend" (Zacma Cleaners Corp. at 586).

Leave to amend a pleading to add duplicative causes of action should be denied (Bleakley Platt & Schmidt, LLP at 726; Feldman at 705).

With respect to the counterclaims for breach of the duty to cooperate, lack of privity, breach of the covenant of good faith and fair dealing, bad faith, and voluntary payment, since, on July 26, 2024, Southwest repudiated coverage to plaintiffs, as pleaded in its proposed counterclaims, and these are all claims concerning the failure to perform conditions to coverage under the terms of the policy, Southwest has waived them. Thus, the foregoing proposed counterclaims are patently devoid of merit.

It is well settled that once an insurer repudiates coverage to its insured under the policy, it waives any right to insist that the insured comply with the conditions to coverage required by the policy and any obligations imposed upon the insured by the policy (Lentini Bros. Moving & Stor. Co., Inc. v New York Prop. Ins. Underwriting Ass'n, 53 NY2d 835, 836 [1981] ["Nor is it a situation in which the insurer, by repudiating liability for the loss, has excused the insured from performance of its obligation."]; J.P. Morgan Sec. Inc. v Vigilant Ins. Co., 151 AD3d 632, 633 [1st Dept 2017] ["Defendants' unreasonable delay in dealing with plaintiffs' claims under the insurance contracts, consistently stated position that the various regulatory investigations and civil actions concerning plaintiffs' alleged late trading and marketing-timing transactions did not constitute claims under the contracts, and insistence that in any event disgorgement payments [*8]such as those demanded by the regulators were not insurable as a matter of law constitute a denial of liability under the contracts that justifies plaintiffs' settlement of those claims without defendants' consent. The record does not support defendants' contention that plaintiffs breached their obligation to cooperate, but in any event defendants' repudiation of liability for plaintiffs' claims also excuses plaintiffs from performance of that obligation."]; Matter of State Farm Ins. Co. v Domotor, 266 AD2d 219, 220 [2d Dept 1999] ["An insurance carrier may not insist upon adherence to the terms of its policy after it has repudiated liability on the claim by sending a letter disclaiming coverage for once an insurer repudiates liability the insured is excused from any of its obligations under the policy" [internal citations and quotation marks omitted].; Rajchandra Corp. v Tit. Guar. Co., 163 AD2d 765, 769 [3d Dept 1990] ["Similarly, however, an insurer cannot insist upon cooperation or adherence to the terms of its policy after it has repudiated liability on the claim."]; Treptow v Exch. Mut. Ins. Co., 106 AD2d 767, 768 [3d Dept 1984]; Matter of Ocean-Clear, Inc. v Cont. Cas. Co., 94 AD2d 717, 718). Indeed, the principle that undergirds the foregoing is that

[t]he insurance company must then stand or fall upon the defense upon which it based its refusal to pay. It may not thereafter attempt to create other grounds for refusal to pay by demanding compliance by the insured with other incidental provisions of the policy with which it had not demanded compliance prior to its repudiation of liability

(Beckley v Otsego County Farmers Co-op. Fire Ins. Co., 3 AD2d 190, 194 [3d Dept 1957]; see Van Der Velde v New York Prop. Underwriting Assn., 205 AD3d 970, 972 [2d Dept 2022]; Matter of State Farm Ins. Co. at 220). This, of course, makes sense since any post repudiation requests by an insurer, such as a request that the insured provide proof of loss (Matter of State Farm Ins. Co. at 220; Treptow at 768), that it give the insured an opportunity to consent to the counsel chosen by the insured (Rajchandra Corp. at 768-769), or that it consent to any settlement agreed to by the insured (J.P. Morgan Sec. Inc. at 633; Cohen Bros. Realty Corp. v RLI Ins. Co., 151 AD3d 512, 514 [1st Dept 2017] ["RLI's argument that the voluntary payment doctrine bars recovery of amounts paid to Greenberg Traurig in defense of the underlying claim is without merit. Having chosen to deny coverage and not participate in the defense, RLI excluded itself from any aspect of the plaintiff's defense in the Vasquez estate's action, including the negotiation of attorneys' fees and the selection of attorneys, as so found by the motion court, and cannot now be heard to complain" [internal citations and quotation marks omitted].) are irrelevant because, the insured has already denied coverage and is bound to litigate the denial of coverage solely on that basis (Van Der Velde at 972; Matter of State Farm Ins. Co. at 220; Beckley at 194).

Here, inasmuch as Southwest pleads that on July 26, 2024, it denied the claim for coverage made by plaintiffs via its tender letter dated February 22, 2024, said coverage sought from the suit by Castro, Southwest has waived any right to insist that plaintiffs comply with the terms of the policy. To be clear, by interposing the foregoing counterclaims, this is exactly what Southwest seeks to do, albeit without expressly stating the same. Indeed, the counterclaims each allege a breach imposed by Southwest's policy and based on such breach Southwest seeks a declaration that it is not obligated to defend or indemnify plaintiffs. Thus, Southwest impermissibly seeks to enforce the terms of the policy well after it denied coverage thereunder (Lentini Bros. Moving & Stor. Co., Inc. at 836; J.P. Morgan Sec. Inc. at 633; Matter of State Farm Ins. Co. at 220; Rajchandra Corp. at 769; Treptow at 768; Matter of Ocean-Clear, Inc. at [*9]718).

The counterclaim for lack of privity also lacks merit since, as a matter of law, irrespective of an agreement between either plaintiffs and Southwest and/or MD, coverage would nonetheless be required based on the agreement, as pleaded in the complaint between MD and Core, whereby the policy that MD was required to procure was required to include contractual liability insurance for the benefit of, inter alia, the contractor and owner at the project, and that the policy procured by MD would be primary to any insurance separately procured by the owner and contractor at the project.

"It is a general principle that only the parties to a contract are bound by its terms" (Highland Crusader Offshore Partners, L.P. v Targeted Delivery Tech. Holdings, Ltd., 184 AD3d 116, 121 [1st Dept 2020]). Accordingly, it is well settled that "[l]iability for breach of contract does not lie absent proof of a contractual relationship or privity between the parties" (CDJ Builders Corp. v Hudson Group Const. Corp., 67 AD3d 720, 722 [2d Dept 2009]; Hamlet at Willow Cr. Dev. Co., LLC v Northeast Land Dev. Corp., 64 AD3d 85, 104 [2d Dept 2009]; Simplex Grinnell v Ultimate Realty, LLC, 38 AD3d 600, 600 [2d Dept 2007]; M. Paladino, Inc. v J. Lucchese & Son Contr. Corp., 247 AD2d 515, 515 [2d Dept 1998]).

It has long been held that absent a violation of law or some transgression of public policy, people are free to enter into contracts, making whatever agreement they wish, no matter how unwise they may seem to others (Rowe v Great Atlantic & Pacific Tea Company, Inc., 46 NY2d 62, 67-68 [1978]). Consequently, when a contract dispute arises, it is the court's role to enforce the agreement rather than reform it (Grace v Nappa, 46 NY2d 560, 565 [1979]). In order to enforce the agreement, the court must construe it in accordance with the intent of the parties, the best evidence of which being the very contract itself and the terms contained therein (Greenfield v Philles Records, Inc., 98 NY2d 562, 569 [2002]). It is well settled that "when the parties set down their agreement in a clear, complete document, their writing should be enforced according to its terms" (Vermont Teddy Bear Co., Inc. v 583 Madison Realty Company, 1 NY3d 470, 475 [2004] [internal quotation marks omitted]). Moreover, "a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms" (Greenfield at 569). Accordingly, courts should refrain from interpreting agreements in a manner which implies something not specifically included by the parties, and courts may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing (Vermont Teddy Bear Co., Inc. at 475). This approach serves to preserve "stability to commercial transactions by safeguarding against fraudulent claims, perjury, death of witnesses [and] infirmity of memory" (Wallace v 600 Partners Co., 86 NY2d 543, 548 [1995] [internal quotation marks omitted]).

The proscription against judicial rewriting of contracts is particularly important in real property transactions, where commercial certainty is paramount, and where the agreement was negotiated at arm's length between sophisticated, counseled business people (Vermont Teddy Bear Co., Inc. at 475). Specifically, in real estate transactions, parties to the sale of real property, like signatories of any agreement, are free to tailor their contract to meet their particular needs and to include or exclude those provisions which they choose. Absent some indicia of fraud or other circumstances warranting equitable intervention, it is the duty of a court to enforce rather than reform the bargain struck (Grace v Nappa, 46 NY2d 560, 565 [1979]).

In the absence of fraud or other wrongful act, a party who signs a written contract is presumed to know and have assented to the contents therein (Pimpinello v Swift & Co., 253 NY 159, 162 [1930]; Metzger v Aetna Ins. Co., 227 NY 411, 416 [1920]; Renee Knitwear Corp. v ADT Sec. Sys., 277 AD2d 215, 216 [2d Dept 2000]; Barclays Bank of New York, N.A. v Sokol, 128 AD2d 492, 493 [2d Dept 1987]; Slater v Fid. & Cas. Co. of NY, 277 AD 79, 81 [1st Dept 1950]). In discussing this long-standing rule the court in Metzger stated that

[i]t has often been held that when a party to a written contract accepts it as a contract he is bound by the stipulations and conditions expressed in it whether he reads them or not. Ignorance through negligence or inexcusable trustfulness will not relieve a party from his contract obligations. He who signs or accepts a written contract, in the absence of fraud or other wrongful act on the part of another contracting party, is conclusively presumed to know its contents and to assent to them and there can be no evidence for the jury as to his understanding of its terms. This rule is as applicable to insurance contracts as to contracts of any kind.

(Metzger at 416 [internal citations omitted]).

Provided a writing is clear and complete, evidence outside its four corners "as to what was really intended but unstated or misstated is generally inadmissible to add to or vary the writing" (W.W.W. Assoc., Inc. v Giancontieri, 77 NY2d 157, 162 [1990]; see Greenfield at 569 ; Mercury Bay Boating Club Inc. v San Diego Yacht Club, 76 NY2d 256, 269-270 [1990]; Judnick Realty Corp. v 32 W. 32nd St. Corp., 61 NY2d 819, 822 [1984]). Whether a contract is ambiguous is a matter of law for the court to decide (W.W.W. Assoc., Inc. at 162; Greenfield at 169; Van Wagner Adv. Corp. v S & M Enterprises, 67 NY2d 186, 191 [1986]). A contract is unambiguous if the language it uses has "definite and precise meaning, unattended by danger of misconception in purport of the agreement itself, and concerning which there is no reasonable basis for a difference of opinion" (Greenfield at 569; see Breed v Ins. Co. of N. Am., 46 NY2d 351, 355 [1978]). Hence, if the contract is not reasonably susceptible to multiple meanings, it is unambiguous and the court is not free to alter it, even if such alteration reflects personal notions of fairness and equity (id. at 569-570). Notably, it is well settled that silence, or the omission of terms within a contract are not tantamount to ambiguity (Greenfield at 573; Reiss v Financial Performance Corp., 97 NY2d 195, 199 [2001]). Instead, the question of whether an ambiguity exists must be determined from the face of an agreement without regard to extrinsic evidence (Greenfield at 569-570), and an unambiguous contract or a provision contained therein should be given its plain and ordinary meaning (Rosalie Estates, Inc. v RCO International, Inc., 227 AD2d 335, 336 [1st Dept 1996]).

Based on the foregoing, it has been uniformly held that an additional insured under a policy, whose coverage is required by an agreement between the insured and the additional insured is covered despite the absence of privity between the additional insured and the insurer (Vargas v City of NY, 158 AD3d 523, 525 [1st Dept 2018]; Netherlands Ins. Co. v Endurance Am. Specialty Ins. Co., 157 AD3d 468, 469 [1st Dept 2018]). In Vargas, the Appellate Division affirmed the trial Court's decision declaring that the insured was required to defend an additional insured because the endorsement in the policy issued by the insurer to its insured required the policy to provide coverage to "any person or organization with whom [the insured] [has] agreed [*10]to add as an additional insured by written contract," and the contract between defendant and third-party defendant contained such language (id. at 524-525 ["By contrast, endorsement 4 says that an additional insured is any person or organization with whom you [L&L] have agreed to add as an additional insured by written contract.' Liberty argues that the City defendants are not additional insureds because it had no contract with them. If endorsement 4 were the only additional insured endorsement, Liberty would be correct. However, a contract between Liberty and the City defendants is not required under endorsements 1-3" [internal citations omitted]; see also Netherlands Ins. Co. at 468-469 [Court held that additional insured was covbered by the relevant policy because "[t]he additional insured endorsement to the subject general liability policy affords coverage to '[a]ny entity required by written contract . . . to be named as an insured.' The 'Bid Proposal Document' for the construction project in which the underlying personal injury action arose is such a written contract. The proposal names the parties and the 'Total agreed price,' contains the dated signatures of the parties immediately below the agreed price, and incorporates by reference 'the approved plan for the entire project,' stating that all work is to be completed in strict accordance with the approved plan and with the plans and specifications prepared by the architect."]).

Thus, whether there was privity between the parties by virtue of an agreement between plaintiffs and Southwest and/or MD is irrelevant for purposes of coverage since as pleaded, there was language extending coverage to plaintiffs in the agreement between Core and MD.

Since on this limited record, the portions of the agreement between Core and MD, clearly and unambiguously required that any policy procured by MD provide coverage to plaintiffs as an additional insured, the absence of privity is irrelevant. Again the complaint alleges that the agreement between Core and MD required that MD carry and maintain a commercial insurance liability policy naming, inter alia, Core and its customers at 1923 as additional insureds. Per the complaint, the agreement between Core and MD regarding the policy to be obtained by MD required contractual liability insurance for the benefit of, inter alia, the contractor and owner at the project, and that the policy procured by MD would be required to be primary to any insurance separately procured by the owner and contractor at the project.

The counterclaim for breach of the covenant of good faith and fair dealing lacks merit for the two reasons. First, as urged by Southwest, it had no contract between itself and plaintiffs rendering the covenant inapplicable. Moreover, to the extent that Southwest affirmative pleads that plaintiffs breached the conditions of the policy, namely the counterclaims for failure to cooperate, bad faith and voluntary payment, the counterclaim for breach of the covenant of good faith and fair dealing is impermissibly duplicative.

In New York, all contracts have an implied covenant that "neither party [to the contract] shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract (511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 153 [2002]; Dalton v Educ. Testing Serv., 87 NY2d 384, 389 [1995] [internal quotation marks omitted].; Van Valkenburgh, Nooger & Neville, Inc. v Hayden Pub. Co., 30 NY2d 34, 45 [1972]; Kirke La Shelle Co. v Paul Armstrong Co., 263 NY 79, 87 [1933]). Moreover, a cause of action for the beach of implied covenant of good faith and fair dealing only exists when the party against whom such claim is asserted is bound by a contract to the proponent of the cause of action (Stryker Sec. Group Inc. v Elite Investigations Ltd., 170 AD3d 553, 555 [1st Dept 2019] [*11]["The court correctly dismissed the claim against Mlynarick for breaching the covenant of good faith and fair dealing, because Mlynarick, plaintiff's president and a shareholder, was not party to any contract with defendant."]; Duration Mun. Fund, L.P. v J.P. Morgan Sec., Inc., 77 AD3d 474, 474-475 [1st Dept 2010] ["A cause of action based upon a breach of a covenant of good faith and fair dealing requires a contractual obligation between the parties."]). However, since the proponent of a claim for breach of the implied breach of an implied covenant of good faith and fair dealing, must "allege facts which tend to show that the defendant sought to prevent performance of the contract or to withhold its benefits from the plaintiff" (Aventine Inv. Mgt., Inc. v Can. Imperial Bank of Commerce, 265 AD2d 513, 514 [2d Dept 1999]; Dvoskin v Prinz, 205 AD2d 661, 662 [2d Dept 1994]), it is clear that such a cause of action is separate and distinct from one for breach of contract. Thus, whether defendant breached the covenant of good faith and fair dealing, does not mean, as urged, that plaintiff has a viable cause of action for breach of contract.

Notably, a breach of contract claim may not be concomitantly pleaded as a tort unless duties existing outside the contract exist and have been violated (Clark-Fitzpatrick, Inc. v Long Is. R. Co., 70 NY2d 382, 389 [1987]; Meyers v Waverly Fabrics, Div. of F. Schumacher & Co., 65 NY2d 75, 80, n 2 [1985] ["If in fact plaintiff sold only the right to use the design on fabric, the use of it in other and deceitful ways is no less a tort because it has its genesis in contract, for it is plain that a contracting party may be charged with a separate tort liability arising from a breach of duty distinct from, or in addition to, the breach of contract, as when it springs from extraneous circumstances, not constituting elements of the contract as such although connected with and dependent upon it, and born of that wider range of legal duty which is due from every man to his fellow, to respect his rights of property and person, and refrain from invading them by force or fraud" (internal citations and quotation marks omitted)]). Nor can a quasi contract claim survive when "a valid and enforceable written contract governing a particular subject matter" exists (Clark-Fitzpatrick, Inc. v Long Is. R. Co. at 388).

a quasi-contractual obligation is one imposed by law where there has been no agreement or expression of assent, by word or act, on the part of either party involved. The law creates it, regardless of the intention of the parties, to assure a just and equitable result

(id. at 388-389; Bradkin v Leverton, 26 NY2d 192, 196 [1970]). "A quasi contract claim may only be brought in the absence of an express agreement, and is not really a contract at all, but rather a legal obligation imposed in order to prevent a party's unjust enrichment" (Clark-Fitzpatrick, Inc. at 388; Parsa v State, 64 NY2d 143, 148 [1984]; Farash v Sykes Datatronics, Inc., 59 NY2d 500, 504 [1983]).

Stated differently, where a party sues in tort, solely to enforce a contract, a tort claim is barred (Encore Lake Grove Homeowners Ass'n, Inc. v Cashin Assoc., P.C., 111 AD3d 881, 883 [2d Dept 2013] ["A court enforcing a contractual obligation will ordinarily impose a contractual duty only on the promisor in favor of the promisee and any intended third-party beneficiaries. Thus where a party is merely seeking to enforce its bargain, a tort claim will not lie" [internal citation and quotation marks omitted].).

Indeed, it is well settled that when a party interposes a claim for the breach of the implied covenant of good faith and fair dealing which arises from the same facts as a concomitantly pleaded cause of action, the claim for breach fails and must be dismissed (Sebastian Holdings, [*12]Inc. v Deutsche Bank, AG., 108 AD3d 433, 434 [1st Dept 2013] ["Similarly, the seventh cause of action, for breach of the implied covenant of good faith and fair dealing, was properly dismissed as duplicative of the breach of contract claims."]; Logan Advisors, LLC v Patriarch Partners, LLC, 63 AD3d 440, 443 [1st Dept 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."]; Cerberus Intern., Ltd. v BancTec, Inc., 16 AD3d 126, 127 [1st Dept 2005] ["The claim for breach of the implied covenant of good faith and fair dealing was properly dismissed as duplicative of the contract claim."]).

Thus, here, the absence of an agreement between Southwest and plaintiffs precludes any claim that the latter breached the covenant of good faith and fair dealing (Stryker Sec. Group Inc. at 555; Duration Mun. Fund, L.P. at 474-475 [1st Dept 2010] ["A cause of action based upon a breach of a covenant of good faith and fair dealing requires a contractual obligation between the parties."]). Moreover, since here, Southwest also asserts counterclaims sounding in breach fo contract, such as the counterclaims for lack of cooperation, bad faith and voluntary payment, arising from plaintiffs' alleged failure to abide by the policy thereby breaching the same, the counterclaim for breach of the covenant of good faith and fair dealing is impermissibly duplicative.

With respect to the counterclaim for priority of coverage, such a claim may not be asserted against an insured.

Principles generally applicable to contract interpretation apply equally to insurance contracts and insurance policies (Loblaw v Employers' Liab. Assur. Corp., Ltd., 57 NY2d 872, 876 [1982]; State v Am. Mfrs. Mut. Ins. Co., 188 AD2d 152, 154 [3d Dept 1993]). To that end, the court has the responsibility of determining the rights and obligations of the parties under an insurance contract, using the specific language within the policy (Sanabria v Am. Home Assur. Co., 68 NY2d 866, 868 [1986]; State v Home Indem. Co., 66 NY2d 669, 671 [1985]; Stasack v Capital Dist. Physicians' Health Plan Inc., 290 AD2d 866, 866 [3d Dept 2002]).

When the language in an insurance policy is clear and unambiguous, the interpretation of said document and the determination of the rights and obligations of the parties is a question of law to be adjudicated by the court (Kenyon v Knights Templar & Masonic Mut. Aid Ass'n, 122 NY 247, 254 [1890]; Stasack at 866; Stainless, Inc. v Employers Fire Ins. Co., 69 AD2d 27, 32 [1st Dept 1979], aff'd sub nom. Stainless, Inc. v Employers' Fire Ins. Co., 49 NY2d 924 [1980]). However, if the language in the policy is ambiguous, the court can use extrinsic evidence to determine the intent of the parties to the policy and resolution of the rights and obligations of the parties is a question of fact, to be determined by the trier of fact (State of New York at 671; Stainless, Inc. at 32). If the extrinsic evidence is conclusory, failing to equivocally resolve the ambiguity in a policy, interpretation of the policy remains a question of law for the court to decide; deciding any ambiguities against the insurer (State of New York at 671; Stainless, Inc. at 32).

In interpreting an insurance policy, the language of the policy, when clear and unambiguous, must be given its plain and ordinary meaning (U.S. Fid. & Guar. Co. v Annunziata, 67 NY2d 229, 232 [1986]; Sanabria at 868). Moreover, the policy should be construed in a way "that affords a fair meaning to all of the language employed by the parties in [*13]the contract and leaves no provision without force and effect" (Raymond Corp. v Natl. Union Fire Ins. Co. of Pittsburgh, Pa., 5 NY3d 157, 162 [2005]. Stated differently, the language used in the policy "must be found in the common sense and common speech of the average person" Stainless, Inc. at 32-33).

Additionally, whether a policy is primary or the extent of the coverage provided "is controlled by the relevant policy terms, not by the terms of the underlying trade contract that required the named insured to purchase coverage" (Bovis Lend Lease LMB, Inc. v Great Am. Ins. Co., 53 AD3d 140, 145 [1st Dept 2008] ["Accordingly, we must review and consider all of the relevant policies at issue to determine the priority of coverage *148 among them. This determination turns on consideration of the purpose each policy was intended to serve as evidenced by both its stated coverage and the premium paid for it, as well as upon the wording of its provision concerning excess insurance" [internal citations and quotation marks omitted].; BP A.C. Corp. v One Beacon Ins. Group, 8 NY3d 708, 716 [2007] ["In order to determine the priority of coverage among different policies, a court must review and consider all of the relevant policies at issue."]). Indeed, while the agreements between insureds with respect to the priority of insurance coverage are not generally dispositive, they are when the policies in question determine priority of coverage by reference to the such agreements (Pecker Iron Works of New York, Inc. v Traveler's Ins. Co., 99 NY2d 391, 393-94 [2003] ["When Pecker engaged Upfront as a subcontractor and in writing provided that Upfront would name Pecker as an additional insured, Pecker signified, and Upfront agreed, that Upfront's carrier—not Pecker's—would provide Pecker with primary coverage on the risk. Pursuant to the policy provision at issue, Travelers agreed to provide primary insurance to any party with whom Upfront had contracted in writing for insurance to apply on a primary basis. When Upfront agreed to it, the policy provision was satisfied."]).

Thus, asto which policy is primary, Starr's or Southwest's is an issue between them based largely on the language in the policy, such a claim is one that must be and has been, by way of the third-party complaint, asserted by Southwest against Starr. Such a claim may not be asserted against plaintiffs. Again, whether a policy is primary or the extent of the coverage provided "is controlled by the relevant policy terms, not by the terms of the underlying trade contract that required the named insured to purchase coverage" (Bovis Lend Lease LMB, Inc. at 45; BP A.C. Corp. at 716).

Lastly, the counterclaim for fraudulent inducement is also devoid of merit since it is impermissibly duplicative of the claims for bad faith and failure to cooperate.

It is well settled that generally a tort cause of action for fraud arising from the same facts as a concomitantly pleaded cause of action for breach of contract must be dismissed as duplicative of the breach of contract claim (Cronos Group Ltd. v XComIP, LLC, 156 AD3d 54, 62-63 [1st Dept 2017] ["This Court has held numerous times that a fraud claim that arises from the same facts as an accompanying contract claim, seeks identical damages and does not allege a breach of any duty collateral to or independent of the parties' agreements is subject to dismissal as redundant of the contract claim"] [internal quotation marks omitted]; Havell Capital Enhanced Mun. Income Fund, L.P. v Citibank, N.A., 84 AD3d 588, 589 [1st Dept 2011] ["Similarly, the fraud claim, which arose from the same facts, sought identical damages and did not allege a breach of any duty collateral to or independent of the parties' agreements, was [*14]redundant of the contract claim."]; Fin. Structures Ltd. v UBS AG, 77 AD3d 417, 419 [1st Dept 2010] ["The motion court erred, however, in failing to dismiss the fraud cause of action as duplicative of the breach-of-contract cause of action, inasmuch as it is based on the same facts that underlie the contract cause of action, is not collateral to the contract, and does not seek damages that would not be recoverable under a contract measure of damages."]; Fairway Prime Estate Mgt., LLC v First Am. Intern. Bank, 99 AD3d 554, 557 [1st Dept 2012]["A claim for fraudulent inducement of contract can be predicated upon an insincere promise of future performance only where the alleged false promise is collateral to the contract the parties executed; if the promise concerned the performance of the contract itself, the fraud claim is subject to dismissal as duplicative of the claim for breach of contract."]; HSH Nordbank AG v UBS AG, 95 AD3d 185, 206 [1st Dept 2012] [same]).

However, if the alleged promise upon which a claim for fraudulent inducement is premised is collateral to the contract between the parties, then the claim is not duplicative and survives dismissal (Cronos Group Ltd. at 62-63; Havell Capital Enhanced Mun. Income Fund, L.P. at 589; Fin. Structures Ltd. at 419; Fairway Prime Estate Mgt., LLC at 557; HSH Nordbank AG at 206).

Notably, when the misrepresentation which undergirds a fraudulent inducement claim is a promise of future performance, the cause of action is barred as duplicative of a breach of contract cause of action, if and when it is pleaded in addition to a cause of action for breach of contract (Springut Law PC v Rates Tech. Inc., 157 AD3d 645, 646 [1st Dept 2018] ["Defendants' subsequent assurances of performance and alleged misrepresentations were not sufficiently collateral to the parties' contract to render the fraud claim nonduplicative."]; Fin. Structures Ltd. v UBS AG, 77 AD3d 417, 419 [1st Dept 2010] ["The essence of the fraudulent inducement cause of action is that defendants allegedly misrepresented to plaintiffs their intentions with respect to the manner in which they would manage the underlying assets, and thus plaintiffs allege a misrepresentation of future intent rather than a misrepresentation of present fact, which is not sustainable as a cause of action separate from breach of contract."]; Metro. Transp. Auth. v Triumph Adv. Productions, Inc., 116 AD2d 526, 527-528 [1st Dept 1986] ["The second cause of action asserted against Percival, for fraud, alleges only a breach of the representation of performance implicit in making the bid and a subsequent assurance of performance implicit in making the bid and a subsequent assurance of performance by Percival. None of these allegations are distinct from those giving rise to the breach of contract claim and relate to facts collateral and extraneous to the contract. Given that the alleged fraudulent misrepresentations set forth in the first cause of action relate only to the specifications of the contract, and that plaintiff seeks no special damages unrecoverable under the contract measure of damages, the second cause of action is redundant in light of the first cause of action for breach of contract against the corporate defendant."]). Indeed, the rationale for the foregoing is that the essence of an agreement is the promise of future performance and as such, a fraudulent inducement claim premised on the very same future promises in the relevant agreement is impermissibly duplicative.

To be sure, with respect to the failure to cooperate counterclaim, Southwest alleges that "Monadnock's cooperation with the claim investigation was cursory and deceptive." Similarly, in its counterclaim for bad faith, Southwest alleges that "Monadnock's failure to cooperate in complete candor and honesty with the claim investigation constitutes bad faith in its dealings [*15]with Southwest." Accordingly, to the extent that the fraudulent inducement counterclaim is premised upon Monadncok's statements to Southwest, which were "false," and "misrepresentations of material facts," it is clear that the fraud claim arises from the same operative facts as the counterclaims for bad faith and failure to cooperate.

Southwest's application seeking leave to amend its third-party complaint to add an additional cause of action for declaratory judgment is also denied.

Again, leave to amend a pleading to add duplicative causes of action should be denied (Bleakley Platt & Schmidt, LLP at 726; Feldman at 705).

Here, while the proposed amended third-party complaint is replete with factual allegations absent from the original pleading, it nevertheless seeks identical relief - a new cause of action declaring, inter alia, "the Starr CCIP Policy was in full force and effect on the date of the alleged Loss in the Underlying Matter . . . [and] Declaring that Starr's obligation to defend and indemnify Plaintiffs . . . under the CCIP is primary and exclusive." This relief is identical to that sought against Starr in the first cause of action, namely, that "Starr has a primary obligation to defend and indemnify the Plaintiffs; that the coverage provided to Starr to said Plaintiffs is exclusive; and that Southwest has no obligation to said Plaintiffs for the Underlying Matter."

Accordingly, the amendment sought is impermissibly duplicative and therefore, is bereft of merit.

Nothing urged by Southwest in opposition warrants the grant of its motion.

To the extent that Southwest avers that "[t]his is neither a motion for summary judgment, nor a trial, nor an appeal—Southwest only seeks to assert them in a pleading. The record is not yet fully developed to permit fact finding. Southwest does not, at this point in the proceedings, have a burden to prove its claims—contrary to Monadnock and Starr's assertions" (NY St Elec Filing [NYSCEF] Doc No. 137 at 9 [Memorandum of Law in Reply to Monadnock's and Starr's Oppositions to Southwest's Motion to Amend]), it is Southwest that fails to appreciate that if a claim is patently inactionable or given the record and procedural history, precluded by law, then it is patently devoid of merit and cannot be interposed.

Here, Southwest's proposed pleadings demonstrate that Southwest hastily repudiated coverage prior to conducting a thorough investigation and now is attempting to interpose additional reasons to deny plaintiffs coverage despite the well settled law that expressly proscribes the same. As the court in Beckley so aptly stated, and which bears repeating, once coverage has been repudiated, "[t]he insurance company must then stand or fall upon the defense upon which it based its refusal to pay." (id. at 194). Stated differently, Southwest has made its bed and now it must lay in it. This is not say that this Court has in any way made a determination on the merits of this action. Rather, it means that Southwest and the claims made against it by plaintiffs as well as the claims it has made against Starr must be and will be determined by the original pleadings in this action. It is hereby

ORDERED that plaintiffs serve a copy of this Decision and Order, with Notice of Entry, upon all parties within thirty (30) days hereof.

This constitutes this Court's decision and Order.

Dated: 4/8/26

Bronx, New York

HON. FIDEL E. GOMEZ, JSC