City of New York v Welsbach Elec. Corp. & Ins. Co. of N. America
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City of New York v Welsbach Elec. Corp. & Ins. Co. of N. America 2012 NY Slip Op 32960(U) December 14, 2012 Sup Ct, New York County Docket Number: 403335/03 Judge: Saliann Scarpulla 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] [* 2] \ SUPKEME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: PART 19 Index Number: 403335/03 Submission Date: 9/5/12 DECISION and ORDER - against - For Plaintiff Corporation Counsel of the City of New York 100 Church Street New York, NY 10007 2 12-788-0995 For Defendant Insurance Company of North ArnericdCIC: Cozen & O Connor 45 Broadway, 16 hFloor New York, NY 10006 2 12-509-9408 I f For Defendant Welsbach Electric Corp.: Anthony D. Capasso 59 Maiden Lane, 39 Floor New York, NY 10038 [LED ! f OEC 1 7 2012 Papcrs considered in review of this motion for summary judginenticross-motion w -: m n I ! I mumc;%ERmm~ Notice of MoliodAffm. of Counsel in Supp ............................................ 1 __ Memo. ofLaw in Opp. to Motion/Affkm. of Counsel in Opp................... 2 Reply Brief in Supp ................................................................................... 3 r ) HON SALTANN SCARPULLA, J.: In this action, plaintiff The City of New York (the City ) seeks indemnification from defendants Welsbach Electric COT. ( Welsbach ) and Insurance Company of North America, now lcnown as Century Indemnity Corp. (TIC ), to recover losses from a tort damages judgment rendered against the City. CIC now moves for suininary judgment dismissing the City s complaint pursuant to CPI,R 1 8 32 12. [* 3] Background A. Insurance Policy On or about October I , 1992, the City and Welsbach entered into a writtcn contract, in which Welsbach agreed to maintain certain traffic signal lights in Queens County (the Contract ). As part of the Contract, Wclsbach agreed to obtain insurance coverage to protect against injuries to persons or damage to property which may arise from or in connection with the performance of the work by Welsbach. In particular, the Contract required Welsbach to obtain a commercial general liability (CGL) insurance policy to protect the City, the Departinont of Transportation and the Contractor and hidher subcontractors performing work at the site from claims for property damage andor bodily injury which may arise from operations under this contract. The Contract also required Welsbach to name the City of New York and Department of Transportation as additional insureds. The Contract stated that Welsbach must maintain the CGL policy during the life of the contract from October 1, 1993 to October 1, 1994. In accordance with the Contract, Wclsbach obtained a CGL policy from Insurance Company of North America, CIC s predecessor corporation, in the amount of $2 million dollars, effective October 1, 1993 to October 1, 1 994 (the Tolicy ). Section 1 of the Policy entitled Coverage A. Bodily Injury and Property Damage Liability provides that CIC will pay those s u m that the Insured becomes legally obligated to pay as damages 2 [* 4] because of bodily injury or property damage to which this insurancc applies. Coverage A also contains a list of fourteen exclusions under which CIC is not obligated to pay bodily injury or property damage claims. The Policy contains an Endorsement 4, which amends Who Is An Insured (section TI) to include, as an additional insured, any municipality or corporation to which Welsbach is obligated by virtue of a written contract to provide insurance as provided hereunder, but oiily as respects liability arising out of your [Welsbach s] operation. E. Instant Action Pursuant to its duties under the Contract, Welsbach perfbrmed and completed repairs on a traffic signal light on October 10, 1993. The next day, on October 1 1, an accident occurred betwcen two vehicles involving a signal light repaired by Welsbach. The driver and passenger from one of the vehicles, who suffered bodily injuries from the accident, commenced a tort action against the City (Angerome v. City o New York, New f York Supreme Court, Queens County, Index No. 007728/94). In that action, a damages judgment was rendered against the City, based on the jury s finding that the plaintiffs injuries were caused by the defective traffic signal light. The City then filed the instant action against Welsbach and CIC for indemnification of its losses from the tort damages judgment. In its motion for summary judgment, CIC argues that the City s complaint should be dismissed because: (1) the Policy does not provide coverage to the City as an 3 [* 5] additional insured ¬or its completed operations claim; and (2j CIC had no statutory obligation to disclaim coverage under Insurance Law 5 3420(d). CIC s first argument is that the Policy only covers claims for bodily injury that occurred during Wclsbach s ongoing operations but it docs not cover claims for those that occurred after Wclsbach completed operations. To support this argument, CTC claims that the Contract language only required Welsbach to obtain insurance coverage for claims that occur while Welsbach was performing work at the site. In addition, CIC argues that because the Contract did not require Welsbach to obtain products liability coverage, there is no coverage for completed operations claims. In opposition, the City argues that: (1) the Policy covers the City as an additional insured for its completed operations claim which occurred during the policy period; and (2) CIC has a statutory obligation to disclaim coverage under Insurance Law 5 3420(dj. Discussion A movant seeking summary judgment must make aprima facie showing of entitlement to judgment as a matter of law and offer sufficient evidence to eliminatc any material issues of fact. Winegrad v. New York U i . n v Med. Ctr., 64 N.Y.2d 851, 853 ( I 985). Once a showing has been made, the burden shifts to the opposing party to demonstrate the existence of a triable issue of fact. Alvarez v. Prospect Hosp., 68 N.Y.2d 320,324 (1986); Zuckerrnan v. City o New York, 49 N.Y.2d 557,562 (1980). f 4 [* 6] In an insurance coverage action, the insured bears the initial burden of showing that the insurance contract covers the loss for which the claim is made. Kidalso Gas Corp. v. Lancer Ins. Co., 21 A.D.3d 779,780-81 (1st Dep t 2005). The burdcn then shifts to the insurer to demonstrate that a policy exclusion defeats the insured s claim. Monteleone v. Crow Constr. Company, 242 A.D.2d 135, 139 (1st Dep t 1998). In interpreting an insurance policy, the court must enforce the plain and ordinary meaning of the policy when its provisions are clear and unambiguous. Roundabout Theatre Co., Inc. v. Cont l Casually Co., 302 A.D.2d 1, 6 (1st Dep t 2002). The issue of whether a provision of an insurance policy is ambiguous is a question of law for the court. Atlantic Mut. lns. Co. 17. Terk Technologies Corp., 309 A.D.2d 22,28 (1st Dep t 2003). Here, CIC has failed to demonstrate its entitlement to judgment as a matter of law. The City demonstrated that the Policy covers its alleged claim for the tort damages judgment, and CIC failed to show that the Policy excludes the City s claim for bodily injury because it occurred after Welsbach conipleted operations. Coverage A of the Policy states that CIC will pay sums that the Insured becomes legally obligated to pay as damages because of bodily injury. This insurancc coverage is extended by Endorsement 4 to additional insureds, which includc any municipality or corporation to which Wclsbach has a written contract to provide insurance. Endorsement 4 extends insurance coverage to additional insureds to the extent of the written contract, but only with respect to liability arising out of Welsbach s operations. 5 [* 7] The City s claim falls within Coverage A of the Policy. The City seeks indemnification for sums that it is legally obligated to pay as damages because of bodily injury suffered by the Angerome plaintiffs. The City qualifies as an additional insured under Endorserncnt 4 because it is a municipality to which Welsbach was obligated, under the Contract, to provide coininercial liability insurance to protect the City from claims for bodily injury which may arisc from the operations performed by Welsbach. In addition, the City s alleged claim arises out of Welsbach s opcrations, as required by the Policy and the Contract. The phrases arises out of or arise from mean originating from, incident to, or having connection with. Regal Constr. Corp. v National Union Fire Ins. Co. ofpittsburgh, 15 N.Y.3d 34, 38 (2010). Here, the City claims that the accident and resulting bodily injury arose out of Welsbach s negligent repair or the traffic signal light. If the City can prove at trial that Welsbach s negligent repair causcd the defect in the traffic signal light, the Angerome plaintiffs injuries would certainly arise from or have a connection with Welsbach s repairs, and would therefore fall within the coverage of the Policy. In its motion, CTC argues that the Policy does not cover the City s claim bccausc the injuries occurred after Welsbach completed opcrations and the Policy only covers injuries that occur during Welsbach s ongoing operations. However, contrary to CIC s claims, the Policy and Contract make no distinclion whatsoever between claim for bodily injury that occur during Welsbach s ongoing operations and those that occur after G [* 8] Welsbach completed operations. The Policy and Contract only require that the bodily injuries arise from Welsbach s operations, such that soine causal relationship must exist betwecn the injuries and Welsbach s operations, not that the bodily injuries had to occur while Welsbach was actually performing its operations. Regal Comtr, Corp., 15 N.Y.3d at 38. Moreover, although the Contract stated that Welsbach must obtain a CGL policy to protect the City, the Department of Transportation and the Contractor and hidher subcontractors performing work at the site - it is clear and unambiguous that the phrase performing work at the site specif-rcally identifies the Contractor and subcontractors, and does not limit coverage to only those claims that occurred while Welsbach was performing work at the site. In addition, the fact that Welsbach was not required to obtain products liability coverage does not operate to exclude completed operations claims from the Policy s commercial general liability coverage. Products liability insurance generally protects manufacturers f rom injuries caused by its defective products, and is a distinct type of coverage than thc commercial general liability insurance at issue here, which covers injuries connected to maintenance and repair services provided by Wclsbach. See Frontier Insul. v. Merchants Mut. Ins., 9 1 N.Y .2d 169, 176 (1 997). Here, CIC failed to demonstrate a specific policy exclusion for completcd operations claims. A policy exclusion must be establishcd by the insurer in clear and 7 [* 9] unmistakable language. Continental Cas. Co. v Rapid-American Corp., 80 N.Y .2d 640, 652 (1993). Where the provisions of an insurance policy are clear and unambiguous - as is the case here - the court must enforce the contract as written and should not strain to superimpose an unnatural or unreasonable construction. Moshiko, Inc. v. Seiger & Smith, Xnc., 137 A.D.2d 170, 175 (1st Dep t 1988). In its motion, ClC separately argues that it does not have a statutory obligation to disclaim coverage under Insurance Law !j 3420(d) because the City is not an additional insured under the Policy. However, as discussed above, the Policy was written to cover the very situation for which the City made its claim. Mutter of Arbitration between State Farm Mut. Auto. Ins. Co. v. Merrill, 192 A.D.2d 824, 825 (3rd Dep t 1993). Thus, CIC was required to disclaim coverage under the statute because the City s claim falls within the scope of the Policy. Markevics v. Liberty Mut. Ins. Co., 97 N.Y.2d 646, 649 (1st Dep t 200 l). Accordingly, CIC s motion for suminary judgment dismissing the City s complaint pursuant to CPLK 3212 is denied. ~ The issue of whether ClC made a timely disclaimer is an issue of fact to be decided at trial. City ofNew York v. Welshach Elec. Corp., 11 Misc.3d 1085(A), at *4 (April 24,2006, Sup. Ct., Lehner, J.). 8 [* 10] In accordance with the foregoing, it is ORDERED that defendant CIC s motion for summary judgment dismissing the City s complaint pursuant to CPLR 5 3212 is denied. This constitutes the decision and order of this Court. Dated: New York, New York December 14,20 12 ENTER: I 9
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