Scavone v. Kings Craft Corp.

Order unanimously reversed, with costs, and partial summary judgment granted in accordance with the following memorandum: A subrogated insurance carrier obtains a vested interest in any cause of action that the insured had against the wrongdoer to the extent that the insurance carrier has actually paid claims under its policy. Its rights of subrogation may not be defeated by a release to the wrongdoer granted by the insured, subsequent to the payment by the insurance carrier, provided the wrongdoer has notice of the subrogated claim (Ocean Acc. & Guar. Corp. v Hooker Electrochemical Co., 240 NY 37 ). There are sufficient allegations in the opposing affidavits of plaintiffs counsel (actually counsel for Hartford Insurance Company, subrogee) and the affidavit of plaintiff Scavone’s personal counsel, David C. Laub, on the original motion to create a question of fact with respect to whether defendant had notice of the subrogated claim of Hartford Insurance Company prior to the execution of the releases. However, the evidence plaintiff sought to bring before the court on its motion to renew and reargue establishes beyond dispute that defendant had notice of the subrogated claim prior to the execution of the releases. Special Term incorrectly appraised the legal relevancy of the two letters from Hartford Insurance Company’s counsel to defendant giving explicit notice of Hartford’s subrogated claim prior to the execution of the releases and should have exercised its discretion pursuant to CPLR 2221 and permitted the motion to be reheard on the new evidence submitted (2A Weinstein-Korn-Miller, NY Civ Prac, par 2221.03). Defendant’s motion to dismiss the complaint was properly treated by Special Term as a motion for summary judgment (CPLR 3211, subd [c]). While plaintiff did not cross-move for summary judgment dismissing defendant’s defense of release, such relief may be granted (CPLR 3212, subd [b]). It being established on the evidence submitted by plaintiff on the motion to renew and reargue that defendant had notice of the subrogated claim of Hartford Insurance Company, the defense based upon the releases signed by Hartford’s insured and asserted to preclude Hartford is dismissed and summary judgment granted plaintiff dismissing the defense of release. (Appeal from order of Erie Supreme Court —renew motion.) Present—Marsh, P. J., Moule, Mahoney, Goldman and Witmer, JJ.