FILED: ORLEANS COUNTY CLERK 11/01/2023 02:49 PM
`NYSCEF DOC. NO. 6
`
`INDEX NO. E23-01101
`
`RECEIVED NYSCEF: 11/01/2023
`
`
`
`
`
`
`
`
`
`
`
`ATTORNEY AFFIRMATION
`
`Index No.: E23-01101
`
`
`
`STATE OF NEW YORK
`SUPREME COURT : COUNTY OF ORLEANS
`_______________________________________
`
`LYNDONVILLE CENTRAL SCHOOL
`DISTRICT and LYNDONVILLE
`ELEMENTARY SCHOOL,
`
` Plaintiffs,
`vs.
`
`UTICA MUTUAL INSURANCE COMPANY,
`GRAPHIC ARTS MUTUAL INSURANCE
`COMPANY, UTICA NATIONAL
`ASSURANCE COMPANY, AB 511 DOE, and
`AB 524 DOE
`
` Defendants.
`_______________________________________
`
`
`
`The undersigned, Leah Costanzo, Esq., an attorney at law, affirms the following
`
`statements are true, under the penalties of perjury:
`
`1.
`
`That I am an attorney at law with the law offices of Steve Boyd, P.C., attorneys
`
`for defendants AB 511 Doe and AB 524 Doe.
`
`2.
`
`That I am familiar with the facts herein. This affirmation is being submitted on
`
`behalf of defendants, AB 511 Doe and AB 524 Doe, containing information which is believed to
`
`be true. Information not based upon personal knowledge is based upon matters believed to be
`
`true following telephone conversations, an investigation and review of correspondence and
`
`pleadings.
`
`3.
`
`This Affirmation is respectfully submitted in support of defendants AB 511 Doe’s
`
`and AB 524 Doe’s motion to dismiss in lieu of an answer pursuant to New York Insurance Law
`
`§3420 and for premature filing, or in the alternative, an order staying the action.
`
`
`
`3
`
`
`1 of 8
`
`

`

`FILED: ORLEANS COUNTY CLERK 11/01/2023 02:49 PM
`NYSCEF DOC. NO. 6
`
`INDEX NO. E23-01101
`
`RECEIVED NYSCEF: 11/01/2023
`
`
`
`PROCEDURAL BACKGROUND
`
`4.
`
`The instant litigation and the underlying tort actions (Orleans County Index No.
`
`20-46602 and Orleans County Index No. 21-47386) which are the basis of plaintiffs’ declaratory
`
`judgment action involve claims brought under the Child Victims Act for sexual abuse of a minor
`
`by an employee of the Lyndonville Central School District. AB 511 Doe and AB 524 Doe both
`
`allege that defendants, Lyndonville Central School District and Lyndonville Elementary School
`
`(“District”), were negligent in the hiring, training and supervision, and retention of their
`
`employees and breached a statutory duty to report child sexual abuse.
`
`5.
`
`On July 9, 2020, your affirmant commenced an action in Orleans County
`
`Supreme Court on behalf of AB 511 Doe as a plaintiff against defendant District. (Exhibit A).
`
`6.
`
`On or about November 20, 2020, Utica National Insurance Group issued a
`
`“Declination of Coverage” letter to the District and AB 511 Doe’s legal representation. (Exhibit
`
`B).
`
`7.
`
`On January 20, 2020, your affirmant filed a supplemental summons and amended
`
`complaint on behalf of AB 511 Doe as a plaintiff against defendant District (Exhibit C).
`
`8.
`
`On or about February 10, 2021, the District joined issue in AB 511 Doe’s
`
`underlying Orleans County action through service of an answer. (Exhibit D).
`
`9.
`
`On June 11, 2021, your affirmant commenced an action in Orleans County
`
`Supreme Court on behalf of AB 524 Doe as a plaintiff against defendant District. (Exhibit E).
`
`10.
`
`On or about July 20, 2021, Utica National Insurance Group issued a “Disclaimer
`
`of Coverage” letter to the District and AB 524 Doe’s legal representation. (Exhibit F).
`
`4
`
`
`2 of 8
`
`

`

`FILED: ORLEANS COUNTY CLERK 11/01/2023 02:49 PM
`NYSCEF DOC. NO. 6
`
`INDEX NO. E23-01101
`
`RECEIVED NYSCEF: 11/01/2023
`
`11.
`
`On or about August 4, 2021, the District joined issue in AB 524 Doe’s underlying
`
`Orleans County action through service of an answer. (Exhibit G).
`
`12.
`
`On October 12, 2023, the District commenced a declaratory judgment action
`
`against Utica Mutual Insurance Company, Graphic Arts Mutual Insurance Company, Utica
`
`National Assurance Company (collectively, “Utica”), AB 511 Doe and AB 524 Doe in Orleans
`
`County Supreme Court. (NYSCEF Doc. No. 1).
`
`13.
`
`Counsel for the District emailed a copy of their complaint to plaintiffs’ counsel in
`
`the underlying actions and asked if affirmant would accept service on behalf of AB 511 Doe and
`
`AB 524 Doe. On October 12, 2023, affirmant agreed to accept service by email as of that date
`
`(Exhibit H). This motion is therefore timely.
`
`ARGUMENT
`
`MOTION TO DISMISS FOR PREMATURE FILING
`
`14.
`
`Dismissal is appropriate where a defense is founded upon documentary evidence.
`
`CPLR § 3211(a)(1).
`
`15.
`
`The District acknowledges that Utica’s letters dated November 20, 2020 in AB
`
`511 Doe’s matter (Ex. B) and dated July 19, 2021 in AB 524 Doe’s action (Ex. F) constitute the
`
`only coverage position letters issued by Utica (NYSCEF Doc. No. 1, ¶119, 122).
`
`16.
`
`It is undisputed that Utica has never amended the coverage position set forth in
`
`these letters (NYSCEF Doc. No. 1, ¶60, 100).
`
`17. While these documents are labeled “Declination of Coverage” (Ex. B) and
`
`“Disclaimer of Coverage” (Ex. F), the District acknowledges in its complaint, these letters are, in
`
`relevant part, actually reservation of rights letters in that they acknowledge that coverage may
`
`5
`
`
`3 of 8
`
`

`

`FILED: ORLEANS COUNTY CLERK 11/01/2023 02:49 PM
`NYSCEF DOC. NO. 6
`
`INDEX NO. E23-01101
`
`RECEIVED NYSCEF: 11/01/2023
`
`apply and agree to provide a defense conditioned on further investigation (NYSCEF Doc. No. 1,
`
`¶53, 54, 98, 99, 102, 106). See also, Ex. A, p. 2; Ex. F, pp. 5, 6.
`
`18.
`
`It is well-established that a disclaimer must be unequivocal and unambiguous.
`
`QBE Ins. Corp. v. Jinx-Proof Inc., 22 N.Y.3d 1105, 1108-1109 (2014). This Court can
`
`determine on the documentary evidence submitted (the letters themselves) that these are
`
`reservation of rights letters, not disclaimers of coverage. A reservation of rights letter is not a
`
`disclaimer of coverage and cannot stand in its place. New York Cent. Mut. Fire Ins. Co. v.
`
`Hildreth, 40 A.D.3d 602 (2d Dept. 2007).
`
`19.
`
`Because Utica has never issued a disclaimer of coverage and cannot rely on the
`
`reservation of rights letters in place of an unequivocal, unambiguous disclaimer of coverage, the
`
`District’s motion is premature as no disclaimer has occurred.
`
`20.
`
`To the extent Utica may now be seeking to deny coverage and no longer provide a
`
`defense as alleged in the complaint, Utica may not do so without issuing a proper disclaimer.
`
`Until such a disclaimer is issued, there is no basis for the District’s action, Utica is required to
`
`continue providing a defense, and the District’s complaint is premature.
`
`21. With respect to the second basis for dismissal of the complaint as premature, your
`
`affirmant agrees with the District that having delayed for years since the issuance of its initial
`
`letters while purportedly conducting an investigation, Utica’s delay renders any disclaimer
`
`unreasonable (NYSCEF Doc. No. 1, ¶128). See W. 16th St. Tenants Corp. v. Pub. Serv. Mut.
`
`Ins. Co., 290 A.D.2d 278 (1st Dept. 2002) (holding insurer’s 30-day delay in disclaiming
`
`coverage was unreasonable as a matter of law pursuant to N.Y. Ins. Law §3420(d)); First Fin.
`
`Ins. Co., supra (holding a 48 day delay in disclaiming unreasonable); Utica Fire Ins. Co. v.
`
`Spagnolo, 221 A.D.2d 921 (4th Dept. 1995) (holding disclaimers of coverage made more than 2
`
`6
`
`
`4 of 8
`
`

`

`FILED: ORLEANS COUNTY CLERK 11/01/2023 02:49 PM
`NYSCEF DOC. NO. 6
`
`INDEX NO. E23-01101
`
`RECEIVED NYSCEF: 11/01/2023
`
`months after an insurer possessed all facts necessary to invoke exclusion was untimely as a
`
`matter of law).
`
`22.
`
`To the extent the District’s complaint seeks a judicial determination regarding
`
`underlying issues of its knowledge, notice and foreseeability related to the abuse of AB 511 Doe
`
`and AB 524 Doe (NYSCEF Doc. No. 1, ¶31, 54, 63, 79, 82), declaratory judgment actions are
`
`not to be utilized as advisory opinions in advance of trial of the underlying action where these
`
`issues are more appropriately to be determined.
`
`23.
`
`It is well-settled that a declaratory judgment action concerning a carrier’s
`
`obligation to indemnify may not be granted in advance of the trial in the underlying tort action
`
`unless it can be concluded as a matter of law that there is no possible factual or legal basis for the
`
`insurer to be held liable. Where a potential legal or factual basis for liability exists, a declaratory
`
`judgment action must be dismissed. First State Ins. Co. v. J&S United Amusement Corp., 67
`
`N.Y.2d 1044, 1046 (1986) (holding that it is well established that a declaratory judgment action
`
`should not be an advisory opinion, and that such relief is deemed premature in cases where a
`
`final determination on the underlying theories of liability has not been made).
`
`24.
`
`As a result, the District’s complaint should be dismissed on the basis of the
`
`attached documentary evidence which establishes that Utica has not disclaimed coverage, and on
`
`the basis that it cannot be determined that there is a possible factual or legal basis on which the
`
`insurer may eventually be held liable under its policy in advance of a trial in the underlying
`
`actions.
`
`
`
`
`
`
`
`7
`
`
`5 of 8
`
`

`

`FILED: ORLEANS COUNTY CLERK 11/01/2023 02:49 PM
`NYSCEF DOC. NO. 6
`
`INDEX NO. E23-01101
`
`RECEIVED NYSCEF: 11/01/2023
`
`MOTION TO STAY ACTION
`
`25.
`
`Should the Court decline to dismiss the District’s complaint, it is respectfully
`
`submitted that it would be appropriate to stay the declaratory judgment action until after
`
`resolution of the underlying tort claims.
`
`26.
`
`Even where there is not a complete identity of parties, a stay is appropriate where
`
`there are overlapping issues and common questions of law and fact and the determination of the
`
`prior action may dispose of or limit issues in the subsequent action. Allstate Ins. Co. v. Kemp,
`
`144 A.D.2d 853 (3d Dept. 1988); Belopolsky v. Renew Data Corp., 41 A.D.3d 322 (1st Dept.
`
`2007).
`
`27.
`
`The underlying tort actions has already proceeded through paper discovery and
`
`depositions. Under the circumstances of this case, it would be appropriate to stay the declaratory
`
`judgment action until after completion of trial in the underlying tort action as that trial may
`
`clarify issues in the declaratory judgment action.
`
`WHEREFORE, defendants AB 511 Doe and AB 524 Doe respectfully request that this
`
`Court grant their motion to dismiss in its entirety, or in the alternative stay this matter, together
`
`with such other and further relief as this court deems just and proper.
`
`DATED: Buffalo, New York
` November 1, 2023
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`/s/ Leah Costanzo
`Leah Costanzo, Esq.
`Steve Boyd, P.C.
`Attorneys for Defendants
`AB 511 Doe and AB 524 Doe
`2969 Main Street, Suite 100
`Buffalo, New York 14214
`(716) 400-0000
`
`8
`
`
`6 of 8
`
`

`

`FILED: ORLEANS COUNTY CLERK 11/01/2023 02:49 PM
`NYSCEF DOC. NO. 6
`
`INDEX NO. E23-01101
`
`RECEIVED NYSCEF: 11/01/2023
`
`
`
`TO:
`
`
`
`
`
`
`
`
`
`Jesse J. Cooke, Esq.
`Cooke Doyle, LLC
`Attorneys for plaintiffs
`The Brisbane Building
`Buffalo, New York 14203
`(716) 320-7777
`Jesse@CookeDoyle.com
`
`
`
`9
`
`
`7 of 8
`
`

`

`FILED: ORLEANS COUNTY CLERK 11/01/2023 02:49 PM
`NYSCEF DOC. NO. 6
`
`INDEX NO. E23-01101
`
`RECEIVED NYSCEF: 11/01/2023
`
`STATE OF NEW YORK
`SUPREME COURT : COUNTY OF ORLEANS
`___________________________________________
`
`LYNDONVILLE CENTRAL SCHOOL DISTRICT
`and LYNDONVILLE ELEMENTARY SCHOOL,
`
` Plaintiffs,
`vs.
`
`INSURANCE COMPANY,
`UTICA MUTUAL
`GRAPHIC ARTS MUTUAL
`INSURANCE
`COMPANY, UTICA NATIONAL ASSURANCE
`COMPANY, AB 511 DOE, and AB 524 DOE
`
` Defendants.
`__________________________________________
`
`
`
`
`
`
`
`
`
`
`
`CERTIFICATION PURSUANT TO
`22 N.Y.C.R.R. 202.8-b(c)
`
`Index No.: E23-01101
`
`I hereby certify pursuant to 22 N.Y.C.R.R. 202.8-b(c) that the word count of the attached
`
`attorney affirmation is 1,474 words exclusive of the caption and signature block in compliance
`
`with the word count limit set forth in 22 N.Y.C.R.R. 202.8-b(a).
`
`DATED: November 1, 2023
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
` /s/ Leah Costanzo, Esq.
`Leah Costanzo, Esq.
`
`
`
`
`
`10
`
`
`8 of 8
`
`