Longwood Cent. School Dist. v Commerce & Indus. Ins. Co.

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Longwood Cent. School Dist. v Commerce & Indus. Ins. Co. 2012 NY Slip Op 31518(U) May 22, 2012 Sup Ct, Nassau County Docket Number: 23402/09 Judge: Michele M. Woodard Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. -------------- - ---------------- -------- ---- ------- --- - --- ---- - --- ---- ---- )( [* 1] SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU LONGWOOD CENTRAL SCHOOL DISTRICT and NEW YORK SCHOOLS INSURANCE FOUNDATION a/s/a attorney- in- fact for NEW YORK SCHOOLS INSURANCE RECIPROCAL MICHELE M. WOODARD Plaintiffs -against - COMMERCE AND INDUSTRY INSURANCE COMPANY BURLINGTON INSURANCE COMPANY , MORE CONTRACTING & CONSULTING , INC. , TK CITAK CORP. and MARION BOGACZ Defendants. TRIALIIAS Par 8 Index No. : 23402/09 Motion Seq. No. : 06 DECISION AND ORDER Papers Read on this Motion: of Motion Defendant Burlington Insurance Company s Notice Defendant Burlington Insurance Company s Affdavit in Support of Motion Defendant TK cn AK Corp. ' s Affirmation in Opposition Defendant More Contracting & Consulting, Inc. ' s Affirmation in Opposition Defendant Burlington Insurance Company Memorandum of Law in Support of Motion to Reargue Defendant Burlington Insurance Company s Affidavit in Support of Reply In this declaratory judgment action , the defendant Burlington Insurance Company moves for an order pursuant to CPLR 92221(d) granting reargument of this court' s order dated October 21 2011 which denied its motion for summar judgment dismissing all claims against it and granted the defendant More Contracting and Consulting, Inc. , and Citak Corp. s motions for summar judgment declaring that it had a duty to defend and indemnify them as well as Longwood Central School District in Marion Bogacz v Longwood Central School District and More Contracting Consulting, Inc. the [* 2] Bogacz action ) and upon reargument , granting it summary judgment dismissing the complaint and all cross- claims against it or in the alternative denying More Contracting and Consulting, Inc.'s and Citak Corp. ' s motions for summar judgment declaratory relief. The facts relevant to the determination of this motion were set forth in this cour' s order and decision dated October 21 , 2011. This cour found that Burlington Insurance Company is obligated to defend and indemnify Longwood School District and the general contractor at the school' s construction site , More Contracting and Consulting, Inc. , as additional insureds as well as its insured TK Citak Corp. , which was one of More Contracting action. In that action which Bogacz s subcontractors in the was commenced on or about July 22 2009 , Bogacz sought to recover for personal injuries he sustained on September 9 2008 while working at Longwood School District. This cour found that Burlington had clearly become aware that the claim was late when it originally received notice of it from the School District on December 15 2008 , and that it was also put on notice that it was the result of bodily injuries to its insured' s Citak' s employee no later than Februar 2 , 2009. This cour accordingly found that Burlington s grounds for disclaiming, and the other ground lateness , was known by it upon its receipt of the claim Employee Bodily Injur E)(clusion, was clearly known by it for over 30 days before coverage was denied. This court therefore held that Burlington s disclaimer to Citak and More failed due to untimeliness. See , Sirius American Ins. Co. v Vigo Const. 2008); Bovis LendLease LMB, Inc. Third Ave. Realty Associates Public Servo Mut. Ins. Co. Corp. 48 AD3d 450 (2d Dept st Dept 2005); 2833 Royal Surplus Lines Ins. Co. 27 AD3d 841 (1 Marcus 12 AD3d 329 (1 st Dept 2004); 290 AD2d 278 (1 st Dept 2002), West 16 Street Tenants Corp. Iv den. 98 NY2d 605 (2002). The fact that notice had been provided only by the School District was found to be of no consequence with regard Burlington s obligtions to Citak and More. This court further found that in any event , since Burlington wrote to both the School District and TK Citak following its receipt ofthe School District's notice on [* 3] December 15 2008 , Burlington waived the requirement that TK Citak give notice and that any notice Floor 128 AD2d Massachusetts Bay Ins. Co. by TK Citak at that point would have been superfluous. 683 (2d Dept 1987), app den. , 70 NY2d 612 (1987). This court additionally found that Burlington policy with TK Citak included coverage for bodily injur assumed in an " insured contract" and that the deleted e)(ception to the e)(clusion for liability assumed in an " insured contract" was in the empl yer ' s liability provision but not the contractual liability provision, which was applicable in this instance. This cour concluded that under the rule of inclusio unius, exclusio alterius the presumption is that Burlington intentionally decided not to exclude the e)(emption coverage for an insured contracts within the contractual e)(clusion , as it purposely failed to use that term in its determination. Motions for reargument are addressed to the sound discretion of the cour which decided the prior motion and may be granted upon a showing that the court overlooked or misapprehended the facts or law or for some other reason mistakenly arived at its earlier decision. 669 E.W Howell Co. , Inc. 670 (2d Dept 2009), quoting 2007), citing CPLR 92221 (dJ; York Cent. Mut. Ins. Co. S.A. F La Sala Corp. Stroh 44 AD3d 720 McDonald Barnett 721 (2d Dept 2007); Smith 64 AD3d 36 AD3d 653 (2d Dept Matter of New Davalos 39 AD3d 654 655 (2d Dept 2007). While effective Januar 17, 2009 , Insurance Law 93420(5) precludes denial of coverage based upon late notice absent prejudice , that amendment applies only to policies issued on or after that date and does not apply in this matter. Briggs Ave. , LLC Ins. Corp. of Hanover 11 NY3d 377 (2008). Burlington maintained that this cour' s determination that its disclaimer to Citak was untimely was incorrect because Citak never gave notice of Bogacz s accident or its claim and so its obligation to deny or disclaim was never triggered. In its prior decision this court , relying on Inc. Quest Builders Group Deco Interior Const. , Inc. (56 AD3d 744 (2d Dept 2008J), rejected that position , finding that Burlington s failure to timely disclaim vis-a-vis Citak was unacceptable since it had been notified of the [* 4] incident by the School District. In Quest (supra), notice of the underlying accident was first given to the defendant Burlington Insurance Company by Amuty, Demer&& McManus , which Quest's insurer Scottsdale Insurance Company had assigned to represent Quest in the underlying action after the injured par had commenced an action. Despite finding Burlington s disclaimer to be untimely, this court (LaMarca , 1.) held " that the statutory notice required to be given to the insured or other claimant , to avoid the risk posed by a delay in learning the insurer s position , does not apply to another insurer who seeks contribution or indemnity on the underlying litigation. Quest Builders, Inc. Deco Interior Construction, Inc., 2008 WL 6600250 (Supreme Court Nassau County). " (TJhe relief sought in (thatJ action (was J clearly for contribution , indemnification and reimbursement to Scottsdale , Burlington late notice of disclaimer does not mandate summary judgment to plaintiffs. The Second Deparment reversed , holding that "the plaintiffs Deco Interior Construction, Inc., supra. prima facie demonstrated a Quest Builders, Inc. entitlement to judgment as a matter of law with evidence that Burlington delay in issuing a disclaimer of coverage was uneasonable as a matter oflaw , and that , consequently, Burlington was precluded from disclaiming coverage based on a late notice of claim or policy e)(clusion (citations omitted). Quest Builders Group, Inc. Deco Interior Const. , Inc. 56 AD3d 744 (2d Dept 2008). In seeking reargument , Burlington calls upon this cour to e)(amine its analysis and application of Quest. In Quest its primar insurer the issue presented was coverage for Scottsdale Insurance. This court erred in relying on Quest as an additional insured and damages to Quest here: The situation here varies significantly. What is at stake here is coverage forthe School District as an additional insured which gave notice of Bogacz ' accident verses coverage for Citak , which was the primar insured under Burlington s policy as well as Bogacz ' employer but never gave notice to Burlington and seeks to ride on the School District' s. coat tails. It may not do so. [* 5] Each insured , whether a named or additional insured , has a duty to give notice to an insurer when seeking coverage for an incident under a policy unless both parties are defendants in the same action and the pary which gave Jackson Realty Assoc. notice is united in interest with the par 23- 08- that failed to do so. Nationwide Mut. Ins. Co. 53 AD3d 541 , 543 (2d Dept 2008) (citations omitted). This obligation remains when the insurer receives notice of the incident from another par including another insured. st Dept 2005); Volmar Constr. Co., Inc. 300 AD2d 40 (1 Travelers Ins. Co. 23- 08- 18 Jackson Realty Assoc. v Nationwide Mut. Ins. Co. , supra at p. 542 (citations omitted). " The law is clear that an insured' s obligation to provide timely notice is not excused on the basis that the insurer has received notice of the underlying occurrence from an independent source. Co. Volman Constr. Co. , supra AD2d 373 (1 st Dept 1989); at p. 43, citing Heydt Contr. Corp. American Mfrs. Mut. Ins. Co. Travelers Ins. CMA Enters. , 346 American Home Assur. Co. 146 AD2d at 499 (1 Dept 1998). It is undisputed that Citak never gave Burlington notice of the incident or sought coverage under the policy. In view ofCitak' s failure to provide notice , Burlington s obligation to timely disclaim was never triggered. This court also incorrectly relied on Massachusetts Bay Ins. Co. Flood, (supra), in holding that Cita' s failure to give notice was of no consequence because it would have been superfluous. In that case , the court forgave the injured par' s failure to give notice as superfluous as the insured had given notice. Quite a different situation than that presented in the case at bar. Turning to the validity of Burlington s disclaimer ofCitak , the policy provided: Contractual Liability or " propert damage " for which the insured is obligated to pay damages by reason of the assumption of the liability in a contract or agreement. Bodily injur " [* 6] However , it fuher provided: This e)(clusion does not apply to liability for damages: (2) Assumed in contract or agreement that is an ' insured contract,' provided the bodily injur ' or property damage ' occurs subsequent to the e)(ecution ofthe contract or agreement." Solely for the purposes of liability assumed in an " insured contract " reasonable attorney fees and necessary litigation e)(penses incured by or for a par other than an insured are deemed to be damages because of "bodily injury" or "property damage " provided: (a) Liability to such party for , or for the cost of, that par' s defense has also been assumed in the same " insured contract." The insurance agreement also provided that it did not apply to " Employer Liability for ' Bodily injur ' to (1) An ' employee ' ofthe insured arising out of and in the course of: (a) employment by the insured. " The policy provides that that or in any To any obligation to share damage with or repay (emphasis added). someone else who must pay e)(clusion applies: (1) Whether the insured may be liable as an employer other capacity and (2) damages because of the injury Again , the policy provided that this e)(clusion " does not apply to liability as assumed by the insured under an ' insured contract.' " However the endorsement provides: Under E)(clusion e. Employer s Liability of2. E)(clusions , COVERAGE A BODILY INJURY AND PROPERTY DAMAGE LIABILITY , SECTION 1 COVERAGES , the paragraph " This e)(clusion does not apply to liability assumed (emphasis added). is deleted by the insured under an ' insured contract.' " The deletion is under the Employer s Liability e)(emption to the e)(clusion , not the Contractual Liability portion. An insured contract is defined by the policy as: That par of any other contract or agreement pertining to your business (including an indemnification of a municipality in connection with work performed for a municipality) under which you assume the tort liabilty of another par to pay for "bodily injur" or "propert damage" to a third person or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement." An insurer bears the burden of demonstrating that a policy e)(clusion defeats an insured' s claim by establishing that the e)(clusion is ' stated in clear and unmistakable language , is subject to no other reasonable interpretation, and applies in the particular case. Monteleone Crow Constr. Co. , 242 [* 7] AD2d 135 , 139 (1 Iv den. st Dept 1998), American Corp. 80 NY2d 640 , 652 (1993); (1 st Dept Rapid- Continental Cas. Co. 92 NY2d 818 (1998), quoting Genera/Ins. Co. Moneta Dev. Corp. 212 AD2d 428, 429 1995). " Any ambiguity in such e)(c1usion wil be constructed against the insurer. Sur. Co. Aetna Cas. Cable Co. Co. 203 AD2d 83 60 NY2d 390 Ramirez 84 (pt Dept 1994); (2d Dept 1987). However demonstrate that it applies. 133 AD2d 146 , 148 Crow Constr. Co., supra at p. 139 , citing State of New York Monteleone 174 AD2d 24 , 31 (3 Insurance Co. Guar. Co. United States Fid. where coverage rests on the application of an e)(ception , the insured must Elec. Co. v Schenectady Hardware Hartford Ins. Consolidated Edison Co. 398 (1983); Wire & 223 AD2d 783 , 785 (3 Dept 1996); Borg- Warner Corp. v Iv den. 80 NY2d 753 (1992). Dept 1992), Even where one e)(clusion may at first appear to contradict another , or create an ambiguity, seriatim not cumulatively, and if anyone e)(clusion ( e J)(clusions in policies of insurance must be read applies there can be no coverage since no one e)(clusion can be regarded as inconsistent with another. Crow Constr. Co. , supra at p. 140- 141 , quoting Monteleone 81 AD2d 106 , 109 see also, Maroney Associates, L.P. Dept 2000); Carrier Inc. Stanley H Calkins, Inc. 54 NY2d 999 (1981); affd sub nom. Zandri Constr. Co. New York Cent. Mut. Fire Ins. Co. Metropolitan Metals Corp. Utica First Ins. Co. (2011); Ruge Hartford Ace. RLIIns. Co. Zandri Constr. Co. v Firemen s Ins. Co. 81 AD3d 475 (1 st Dept 2011), P. Reale Fed. App)( _ Hiscox Dedicated Corporate A1ember Iv den. 17 NY3d 702 Johnson 272 AD2d 956 Sampson 32 AD3d 424 (2d Dept 2006); Indem. Co. Third Avenue 5 NY3d 467 (2005); 385 Sons, Inc. 228 AD2d 935 (3 Dept 1996); United Health Group, 2012 WL 687843 (11thCir. 2012); Ltd., 2010 WL 550991 (D. Minn 2010). " It is immaterial whether the policy proceeds are sought by way of direct claims by the injured pary or by way of plaintiffs contractual indemnification claims against (the insuredJ." 385 Metropolian Metals Corp., supra at p. 476 , citing Guachichulca Third Avenue Assoc. Laszlo N Tauber Assoc. LLC [* 8] Iv den. 9 NY3d 802 (2007). 37 AD3d 760 , 762 (2d Dept 2007), Coverage for injuries to employees is clearly not afforded by the policy pursuant to the Employer s Liability E)(clusion. Burlington is not obligated to defend and/or indemnify Citak in the Bogacz action. Finally, contrar to More s opposition , Burlington is not obligated to defend and/or indemnify it action pursuant to the Supplementar Bogacz and Longwood as indemnities of Citak in the coverage. Not only has Citak not been named as a defendant by Bogacz as required Payments by the policy for that coverage , there is a conflict between Citak and More , which precludes application of that section. Scottsdale Ins. Co. United National Ins. Co. Reargument is granted Y. 2011). 2011 US Dist. LEXIS 21813 (E. and upon reargument , More Contracting & Consulting, Inc. ' s motions denied. for summar judgment and Citak' s motion for summary judgment are Company s motion for summar judgment is Burlington Insurance and all claims and cross- claims against it are granted and it is declared that it is not contractually obligated to defend or indemnify Longwood dismissed Longwood Marion Bogacz Central School District , TK Citak Corp. or More in the action entitled Consulting, Inc. Central School District and More Contracting This constitutes the Decision of the Cour. DA TE:D: May 22 , 2012 Mineola, N. Y. 11501 \1- . C..... . ::;",t...- 'L ENTER: HON. MICHELE M. WOODAR XXX F:\Longwood Cent. School Dist. v Commerce & Industry MLP. wpd ENTERED MAY 3 1 2012 NASSAU COUNTY S OFF'CE COUNTY CLERK'

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