Neighborhood Shopp, Ltd. v. Employers Commercial Union Insurance

In an action to declare the rights of plaintiff’s creditors to the insurance proceeds from the settlement of a claim of fire loss and to declare that the balance from the proceeds is payable to plaintiff, the parties cross-appeal from so much of an order of the Supreme Court, Suffolk County, dated July 28, 1980, as denied their respective motions for summary judgment. Order modified, on the law, by deleting therefrom the provisions denying defendant’s motion for summary judgment and substituting therefor a provision granting said motion to the extent of declaring that there will be no insurance proceeds remaining after the payment of the plaintiff’s debts and otherwise dismissing the complaint. As so modified, order affirmed insofar as appealed from, without costs or disbursements. In opposing defendant’s motion for summary judgment, plaintiff conceded that its corporate debts exceeded the insurance proceeds. Moreover, the plaintiff’s own computation of its debts leaves no question that a balance would not remain after determining the rights of the corporate creditors to the proceeds. Therefore, summary judgment should have been granted to the defendant to the extent of declaring that there would be no such balance. That part of plaintiff’s complaint which seeks a determination of the rights of its creditors to the proceeds must be dismissed for failure to join said creditors as parties to the action (CPLR 1001, subd [a]; 3211, subd [a], par 10). Damiani, J.P., Gulotta, O’Connor and Thompson, JJ., concur.