Great American Insurance Company v. Houlihan Lawrence, Inc

Background

Great American Insurance Company brought this declaratory-judgment action against Houlihan Lawrence, Inc. Great American sought a ruling that it had no obligation under a real-estate professional-liability insurance policy to provide Houlihan with a defense or indemnification for claims in an underlying state-court lawsuit. The underlying claims included breach of fiduciary duty, unjust enrichment, and alleged violations of New York Real Property Law § 443 and New York General Business Law § 349. The opinion states that the state court had dismissed the unjust-enrichment and Real Property Law § 443 claims.

In a March 27, 2020 ruling, this court denied Great American’s motion for judgment on the pleadings in full and granted Houlihan’s motion in part. The court held that Houlihan was entitled to independent legal counsel, with reasonable defense costs paid by Great American, but did not decide Great American’s indemnification obligation because the underlying lawsuit was still pending.

Motion to Stay

Great American later moved, with Houlihan’s cooperation, to stay—pause—this federal case until the underlying lawsuit was resolved. Great American stated that it would continue reviewing and paying covered defense costs during the stay. Houlihan did not object to the stay but reserved the right to seek to lift it. The parties also agreed to submit letters every 60 days reporting on the underlying case and the processing and payment of defense costs.

Great American argued that continuing the federal case would use the court’s and the parties’ resources without advancing the indemnification issue. It also relied on the parties’ continuing settlement discussions and cooperation regarding defense costs. The motion memorandum stated that the indemnification issue was not ripe for decision while the underlying lawsuit remained pending.

Ruling

The court granted the joint motion to stay the case. The provided text does not include a separate explanation by the court beyond the endorsement granting the motion. Judge Kenneth M. Karas entered the endorsement on February 24, 2021.