Regal Constr. Corp. v National Union Fire Ins. Co. of Pittsburgh, Pa.
Annotate this CaseDecided on March 31, 2008
Supreme Court, New York County
Regal Construction Corporation and THE INSURANCE CORPORATION of NEW YORK, Plaintiffs,
against
National Union Fire Insurance Company of Pittsburgh, Pa and URS CORPORATION, Defendants.
601155/07
Plaintiff Counsel:
Melito & Adolfsen, PC
233 Broadway
New York, NY 10279
212 238 8900 Defendant Counsel (URS Corporation)
Winston & Strawn, LLP
200 Park Avenue
New York, NY 10166
212 294 6700
Debra A. James, J.
Plaintiffs Regal Construction Corporation and its insurance carrier the Insurance
Corporation of New York ("INSCORP") move for summary judgment seeking a declaration that
(i) the INSCORP policy issued to defendant URS Corporation ("URS") does not provide
coverage to URS in defense of the underlying personal injury action; (ii) URS is not entitled to
additional insured coverage in the underlying action under such policy ; (iii) defendant National
Union Fire Insurance Company of Pittsburgh, PA ("National Union"), collectively with the URS
defendant, is obligated to provide defense and indemnification on a primary basis of defendant
URS in the underlying personal injury action; (iv) plaintiff INSCORP is entitled to recover from
Nation Union and URS the amount of defense costs it incurred in defending URS, plus interest;
(v) or in the alternative, National Union is co-insurer of this claim as a primary insurer under the
"Other Insurance" clause contained in its policy to URS.
The underlying personal injury action is captioned LeClair v URS Corporation, Bronx County Supreme Court Index No. 139902/02 ("LeClair action"). According to the Complaint at bar, LeClair alleges that on March 6, 2001, he sustained injuries to his lower back while working as a Project Manager for plaintiff Regal at the Riker's Island Renovation Project (the "Project").
The defendants in the LeClair action are the City of New York ("City"), the owner of Riker's Island; URS, which contracted with the City to serve as Construction Manager for the Project; and Regal, who URS hired as prime contractor for the purpose of performing general construction services at the Project, including demolition and renovation of the job site. According to INSCORP, Regal subcontracted with Iron Man Construction for the performance of the actual demolition work at the job site.
In the complaint at bar, INSCORP contends that on March 5, 2001, the day before his accident, URS employees removed temporary sheets of plywood that were on the floor at the job [*2]site and began painting the exposed steel floor joists, which continued until the morning of March 6, 2001. INSCORP alleges that Leclair, while performing a walk through of the job site to show Iron Man Construction, the demolition subcontractor, what needed to be done to complete the demolition work, slipped and lost his balance afer stepping onto a two-inch wide by eight-inch long floor joist that had just been painted. INSCORP alleges that Regal would have been the entity responsible for scraping, cleaning and painting the floor joists, but did not begin that work because the demolition work had not yet been completed. INSCORP contends that URS's Project Manager ordered a URS employee to remove the temporary sheets of plywood and to paint the floor because City representatives were coming to inspect the job site, and that such action constituted negligence.
Defendant National Union cross moves for summary judgment declaring that INSCORP is obligated to defend and indemnify defendant URS on a primary basis. In that connection, National Union asserts that plaintiff Regal was contractually obligated to name URS as an additional insured; that Regal and INSCORP are legally obligated to provide a defense to URS since the injuries sustained by LeClair arose from the work Regal was performing on behalf of URS; and that Regal and URS are estopped from disclaiming coverage on the eve of trial; and that Regal and URS are not entitled to recover from National Union a portion of the costs incurred in defending URS in the LeClair action.
In a separate cross-motion, additional counsel for defendant URS Corporation moves for an Order pursuant to 22 NYCRR § 130.1. et seq. imposing sanctions in the amount of $10,000 against plaintiffs for frivolously asserting demonstrably false facts and awarding URS costs and attorneys fees incurred in defending against plaintiff's motion for summary judgment.
At oral argument of the motions on October 30, 2007, the court determined and gave notice to the parties that it exercises its discretion to treat the motions as for summary judgment although issue has not been joined with respect to defendant URS Corporation.
By letters dated February 6, 2008, counsel for Regal and INSCORP and counsel for URS advised the court that the LeClair action has settled. Counsel for Regal also submitted a proposed stipulation of discontinuance against URS only, with prejudice and without costs to any party. Counsel for all parties wrote letters dated March 20, 2008 clarifying their positions with respect to the proposed stipulation of discontinuance. While counsel for National Union "takes no position" with respect to plaintiff's offer, defendant URS asserts that its "cross-motion for sanctions, costs and attorneys' fees should be determined by this Court as it seeks separate, affirmative relief against Plaintiffs". [*3]
Plaintiffs must move pursuant to CPLR § 3217(b) to discontinue against URS, since no stipulation signed by all parties has been filed with the clerk pursuant to CPLR § 3217(d). Millicent Bender, Inc. v J.D. Posillico, Inc., 144 AD2d 548 (2d Dept 1988). In addition, even though URS has not answered and therefore has not interposed a counterclaim, URS's consent to plaintiff's proposed discontinuance has not been obtained as URS alleges that the sanctions and costs its seeks on its cross-motion for summary judgment against URS constitute affirmative relief. See Guglielmoni v Diamond, 263 AD 730 (2d Dept 1942).In the Contract of March 22, 1999 in which URS hired Regal as the prime contractor states at 5.2 Contractor's Liability Insurance:
***
5.2.2 Additional Insured Endorsement: General Liability and Automobile Liability policies shall be endorsed to name [URS Corporation] and each of their officers, employees and agents as Additional Insureds as respects operations performed by or on behalf of CONTRACTOR in the performance of Work under the Agreement.
5.2.3 Certificate of Insurance. CONTRACTOR shall provide [URS Corporation] Certificates of Insurance in the form and content satisfactory to {URS Corporation], evidencing all of the coverages stated above. CONTRACTOR shall not be permitted to perform Work until it has furnished satisfactory evidence of such required insurance.
Further, 4 captioned "Other Insurance" states
If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A or B of this Coverage Part, our obligations are limited as follows:
a. Primary Insurance
This insurance is primary except when b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in c. below.
A Certificate of Insurance dated April 5, 2000 listing INSCORP as Company A states in pertinent part: "Add'l insured status encompasses insurer letter A: URS Greiner Inc." at $1,000,000 limits on Policy Number IGL01793.
Plaintiff INSCORP issued a Commercial General Liability (CGL) Insurance Policy IGL01793 ("Policy") to Regal covering claims including bodily injury, which is appended to INSCORP's and Regal's papers as Exhibits C and D, respectively. The FORMS [*4]AND ENDORSEMENT LIST attached to the CGL Policy includes the following: "CG 20 10 03 97 Additional Insured- Owners, Lessees or Contractors- Scheduled Person or Organization". Searching Exhibits C to INSCORP's papers and Exhibit D to Regal's papers, the court finds the page "CG 20 10 03 97 Additional Insured- Owners, Lessees or Contractors- Scheduled Person or Organization" with a box entitled "Schedule" with the following text: "Name of Person or Organization AS ON FILE WITH COMPANY'".
This court finds that INSCORP has failed to lay bear its proof and come forward on its motion for summary judgment with any document meeting the description of "AS ON FILE WITH THE COMPANY". The court determines that by its failure to reveal whatever is or was on file, INSCORP is estopped from raising as a defense the purported absence of URS as an additional insured on the Schedule. Aarons Fifth Avenue, Inc. V Insurance Company of North America, 52 AD2d 855 (2d Dept 1976).
The court concurs with National Union's interpretation of the INSCORP's Policy endorsement for Additional Insured, which provides "Who is An Insured (Section II) is amended to include as an insured the person or organization shown in the Schedule, but only with respect to liability arising out of your ongoing operations performed for the insured." INSCORP alleges and therefore admits in its Complaint that LeClair, Regal's Project Manager, was carrying out a "walk through" at the job site at the time of his injury. Therefore, URS's fault is not relevant, and INSCORP is obligated to defend and indemnify URS "based on the undisputed fact that the underlying accident occurred while the injury party was employed by the named insured[] and that his accident occurred during the course of, and within the scope of employment." New York University v Royal Insurance Co., 200 AD2d 527 (1st Dept 1994).
Finally, the Comprehensive General Liability Policy issued by National Union to URS provides, in pertinent part: 4. Other Insurance
b. Excess Insurance
This insurance is excess over
(2) Any other primary insurance available to you covering liability for damages arising out of the premises or operations for which you have been added as an additional insured by attachment of an endorsement.
Upon tender by the defendants, INSCORP undertook its duty to defend URS in the LeClair action. INSCORP must indemnify URS, as an Additional Insured Contractor, on a primary basis up to the $1 million each occurrence limit of the CGL Policy issued to Regal. The reference to "b. below" under paragraph 4 as to the exception to primary coverage of INSCORP's CGL Policy and the sharing with other insurance applies to coverage other than [*5]bodily injury and so is inapplicable here.
Defendant URS's cross-motion for sanctions and costs is denied as unwarranted. Defendant has not shown that plaintiffs counsel's misinterpretation of the INSCORP Policy endorsement as to "Who is Insured" or his failure to come forward with proof of the "AS ON FILE WITH THE COMPANY" is conduct that justifies sanctions. Nor do defendants cite any authority for imposing costs where a party brings an action to declare rights under an insurance policy, particularly, as here, where plaintiff INSCORP timely undertook the defense of URS Corporation in the underlying personal injury action and where defendant itself in the declaratory judgment action at bar chose to move summarily prior to joinder of issue rather than first seeking to obtain from plaintiff INSCORP the Additional Insured Schedule that was "AS ON FILE WITH THE COMPANY" through the discovery process.
Accordingly, it is
ORDERED that plaintiffs' motion for summary judgment is DENIED and defendants' cross motion for summary judgment is GRANTED and the court hereby DECLARES that plaintiff THE INSURANCE CORPORATION of NEW YORK is obligated to provide defense and indemnification to defendant URS CORPORATION, in the action captioned LeClair v URS Corporation(Sup Ct, Bronx County, Index No.: 13990/02); and it is further
ORDERED that defendants NATIONAL UNION FIRE INSURANCE COMPANY of PITTSBURGH, PA's cross motion for costs and sanctions is DENIED; and it is further
ORDERED that the Clerk shall enter a declaratory judgment in favor of defendants NATIONAL UNION FIRE INSURANCE COMPANY of PITTSBURGH, PA and URS CORPORATION and against plaintiffs REGAL CONSTRUCTION CORPORATION and THE INSURANCE CORPORATION of NEW YORK; and it is further
ORDERED that defendants NATIONAL UNION FIRE INSURANCE COMPANY of PITTSBURGH, PA and URS CORPORATION's cross-motion for sanctions and costs against plaintiffs is DENIED.
This is the decision and order of the court.
Justice Debra A. James
Plaintiff Counsel:
Melito & Adolfsen, PC
233 Broadway
New York, NY 10279
212 238 8900
[*6]Defendant Counsel (URS Corporation)
Winston & Strawn, LLP
200 Park Avenue
New York, NY 10166
212 294 6700
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