Peleus Insurance Company v. Structureline Inc. et al

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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PELEUS INSURANCE COMPANY,
Plaintiff, 	REPORT AND
RECOMMENDATION
-against- 	23 CV 1223 (FB)(RML)
STRUCTURELINE INC. and
ANGEL C. TACURI BRITO,
Defendants.
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LEVY, United States Magistrate Judge:
By order dated May 2, 2025, the Honorable Frederic Block, United States District
Judge, referred plaintiff’s motion for default judgment against defendant Structureline, Inc. to me
for report and recommendation. For the reasons stated below, I respectfully recommend that the
motion be granted.
B ACKGROUND AND F ACTS
Plaintiff Peleus Insurance Company (“plaintiff” or “Peleus”) filed this case on
February 15, 2023, asserting claims under the Declaratory Judgment Act, 28 U.S.C. § 2201, et
seq., for a declaration that it has no duty to defend or indemnify defendant Structureline Inc.
(“defendant” or “Structureline”) in connection with the case entitled Angel C. Tacuri Brito v.
Noa-Lior LLC and Structureline Inc., Index No. 803418/2021E, in New York State Supreme
Court, Bronx County (the “Brito Action”). (Complaint, dated Feb. 15, 2023 (“Compl.”), Dkt.
No. 1, ¶ 1.) Plaintiff is a Virginia corporation with its principal place of business in Illinois. (Id.
¶ 2.) Defendant is a New York corporation with its principal place of business in New York. (Id.
¶ 3.)
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According to the complaint, Peleus issued a commercial general liability
insurance policy to Structureline with a start date of February 18, 2020 (the “Peleus Policy”).
(Id. ¶ 9; see also Declaration of Kevin Laugachi, dated Apr. 29, 2025 (“Laugachi Decl.”), Dkt.
No. 30-1, ¶ 4, Ex. 1.) The Peleus Policy was canceled effective May 15, 2020. (Compl. ¶ 10;
see also Laugachi Decl. ¶ 7, Ex. 3.) On March 5, 2021, Angel C. Tacuri Brito (“Brito”)
commenced the Brito Action, which seeks damages for injuries he allegedly sustained on
December 15, 2020, while doing construction work at 2086 Valentine Avenue in the Bronx (the
“Site”). (See Brito Action Complaint, attached to Laugachi Decl. as Ex. 5.) Pursuant to Brito’s
complaint, Structureline was acting as general contractor of construction, renovation, erection,
demolition, and repair work at the Site and had entered into an agreement with Brito’s employer,
Carben Construction, to perform work at the Site. (Id. ¶¶ 21-38.) By letter dated April 13, 2022,
Peleus denied coverage to Structureline for the Brito Action on the ground that the Peleus Policy
had been canceled effective May 15, 2020, before the date of the alleged accident. (Laugachi
Decl. ¶ 14, Ex. 7.)
Plaintiff served Structureline via the New York Secretary of State on February 28,
2023.1 (See Affidavit of Service of James Perone, sworn to Feb. 28, 2023, Dkt. No. 5.)
Structureline did not answer or move with respect to the complaint, and on May 24, 2023, the
Clerk of the Court noted its default. (See Certificate of Default, dated May 24, 2025
(“Certificate of Default”), Dkt. No. 9.) Plaintiff now moves for default judgment pursuant to
1 Plaintiff initially named Brito as a defendant in this case. On December 9, 2024, Peleus and
Brito entered into an agreement, so ordered by Judge Block, in which Brito agreed that he would
not oppose a motion by Peleus for default judgment on its claims against Structureline and that
he will be bound by any decision in this action on plaintiff’s claims. (See Declaration of Joseph
K. Poe, Esq., dated May 1, 2025, ¶ 16; Stipulated Order of Discontinuance, so ordered Dec. 10,
2024, Dkt. No. 24.)
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Rule 55(b) of the Federal Rules of Civil Procedure. (Motion for Default Judgment, dated May 1,
2025 (“Pl.’s Mot.”), Dkt. No. 30.)
DISCUSSION
A. 	Default Judgment
Federal Rule of Civil Procedure 55 “provides a two-step process for obtaining
default judgment.” Priestley v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011). First, where
a party’s failure to respond is “shown by affidavit or otherwise, the clerk must enter the party’s
default.” FED. R. C IV. P. 55(a). Second, the plaintiff must petition the court for an entry of
default judgment pursuant to Rule 55(b)(2). See Priestley, 647 F.3d at 505. Plaintiff has
satisfied these requirements. (Certificate of Default; Pl.’s Mot.)
In deciding a motion for default judgment, the court accepts the plaintiff’s well-
pleaded factual allegations as true. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973
F.2d 155, 158 (2d Cir. 1992); see also Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d
Cir. 1981). “The plaintiff bears the burden of alleging specific facts, rather than mere labels and
conclusions or a formulaic recitation of the elements, so that a court may infer a defendant’s
liability.” Dunston v. Babushka LLC, No. 24 CV 2969, 2024 WL 5164694, at *3 (E.D.N.Y.
Dec. 19, 2024) (internal quotation marks and citations omitted).
B. 	Declaratory Judgment
The Declaratory Judgment Act states that “[i]n a case of actual controversy within
its jurisdiction, . . . any court of the United States, upon the filing of an appropriate pleading,
may declare the rights and other legal relations of any interested party seeking such declaration,
whether or not further relief is or could be sought.” 28 U.S.C. § 2201(a). “[A] court may
exercise its discretion to issue a declaratory judgment, but only in cases where the party seeking
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the declaratory judgment can demonstrate the existence of an actual case or controversy.” Gov’t
Emps. Ins. Co. v. Infinity Health Prods., Ltd., No. 10 CV 5611, 2012 WL 1427796, at *4
(E.D.N.Y. Apr. 6, 2012), report and recommendation adopted, 2012 WL 1432213 (E.D.N.Y. Apr.
25, 2012). The relevant inquiry is “whether the facts alleged, under all the circumstances, show
that there is a substantial controversy, between parties having adverse legal interests, of sufficient
immediacy and reality to warrant the issuance of a declaratory judgment.” Olin Corp. v. Consol.
Aluminum Corp., 5 F.3d 10, 17 (2d Cir. 1993) (quoting Maryland Cas. Co. v. Pacific Coal & Oil
Co., 312 U.S. 270, 273 (1941)). “Declaratory relief is appropriate (i) where the judgment will
serve a useful purpose in clarifying and settling the legal relations in issue, or (ii) when it will
terminate and afford relief from the uncertainty, insecurity and controversy giving rise to the
proceedings.” Gov’t Emps. Ins. Co. v. Jacques, 14 CV 5299, 2017 WL 9487191, at *9 (E.D.N.Y.
Feb. 13, 2017) (internal quotation marks and citation omitted), report and recommendation
adopted, 2017 WL 1214460 (E.D.N.Y. Mar. 31, 2017).
Here, declaratory relief is appropriate. The Brito Action presents the requisite
case or controversy because Structureline could attempt to collect from plaintiff if found liable.
See Am. Eur. Ins. Co. v. Tirado Iron Works & Fence, Inc., No. 19 CV 6851, 2021 WL 7830143,
at *5 (E.D.N.Y. Oct. 20, 2021) (finding that a plaintiff seeking a declaration that it had no
obligation to defend or indemnify any party in an action pending in New York state court was
entitled to a declaratory judgment). Given that the Brito Action is still pending, declaratory relief
could relieve plaintiff “from the uncertainty” of potentially having to defend and indemnify
Structureline. Jacques, 2017 WL 9487191, at *9.
The allegations in the complaint establish that, at the time of Brito’s alleged
worksite accident, the Peleus Policy was no longer in effect. Under the terms of the Peleus
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Policy, plaintiff may provide coverage for bodily injury only if it occurs during the policy period.
(See Statement of Material Facts in Support of Peleus Insurance Company’s Motion for Default
Judgment, dated Apr. 30, 2024, ¶ 2; see also Laugachi Decl., Ex. 1, at 1 (stating that the policy
coverage is limited to bodily injury or property damage that “occurs during the policy period.”)
Courts typically find that this language clearly and unambiguously limits coverage to injuries
that occur during the policy period. See, e.g., Olin Corp. v. Ins. Co. of N. Am., 603 F. Supp. 445,
448 (S.D.N.Y. 1985) (“An insurance company . . . has no duty to defend claims which may have
merit, but for which liability coverage does not exist because injury occurred outside the policy
period.”) (citation omitted); Jericho Atrium Assoc. v. Travelers Prop. Cas. Co. of Am., 965
N.Y.S.2d 537, 539 (2d Dep’t 2013) (“Here, the subject insurance policy, read as a whole, clearly
and unambiguously provides that the duty to defend and indemnify will attach only to bodily
injury caused by an ‘occurrence’ that is covered by the policy and that occurs during the policy
period.”); Miccio v. Nat’l Sur. Corp., 566 N.Y.S.2d 760, 762 (3d Dep’t 1991) (“We find, as have
other courts concerning identical or similar language, that the terms of the policy are
unambiguously clear and that the event prompting coverage under the policy is the occurrence of
a specific injury during the policy period.”).
Since Brito’s alleged injury occurred outside the policy period, I respectfully
recommend that plaintiff’s motion for default judgment against Structureline be granted and that
the court declare that plaintiff does not have a contractual duty to defend or indemnify
Structureline.
CONCLUSION
For the reasons set forth above, I respectfully recommend that plaintiff’s motion
for default judgment be granted. Plaintiff is directed to serve a copy of this Report and
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Recommendation on defendant and file proof of service on the docket within ten (10) days. Any
objections to this Report and Recommendation must be filed within fourteen (14) days. Failure
to file objections within the specified time waives the right to judicial review. 28 U.S.C. §
636(b)(1); FED. R. C IV. P. 72, 6(a), 6(d).
Respectfully submitted,
ROBERT M. LEVY
United States Magistrate Judge
Dated: Brooklyn, New York
December 1, 2025
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