Opinion
Index No. 706217/2020
08-24-2023
Employers Insurance Company of Wausau, Plaintiff, v. Harleysville Preferred Insurance Company, Defendant.
Marshall T. Potashner, Esq. Florence Langer, Esq. Attorneys for Plaintiff EMPLOYERS INSURANCE COMP ANY OF WAUSAU RIKER DANZIG SCHERER HYLAND & PERRETTI LLP Attorneys for Defendant HARLEYSVILLE PREFERRED INSURANCE COMP ANY
Unpublished Opinion
Marshall T. Potashner, Esq. Florence Langer, Esq. Attorneys for Plaintiff EMPLOYERS INSURANCE COMP ANY OF WAUSAU
RIKER DANZIG SCHERER HYLAND & PERRETTI LLP Attorneys for Defendant HARLEYSVILLE PREFERRED INSURANCE COMP ANY
Hon. Pam Jackman Brown, J.S.C.
The following numbered papers read on the motion by Plaintiff to compel discovery pursuant to CPLR 3124 (Seq. # 1), and the motion by Defendant for summary judgment pursuant to CPLR 3212 declaring that it is not obligated to defend or indemnify nonparty Tully Construction Co., Inc. in an underlying action (Seq. No. 2).
E-Filed Papers Numbered
Seq. No. 1
Notice of Motion Affidavits - Exhibits................ 12-25
Answering Affidavits Exhibits............................. 62-63
Reply Affidavit........................................................ 70
Seq. No. 2
Notice of Motion - Affidavits - Exhibits................. 30-61
Answering Affidavits - Exhibits.............................. 64-69
Reply Affidavit......................................................... 71-78
Upon the foregoing papers, it is ordered that the motions are considered together for the purpose of a single decision and order and are determined as follows:
Plaintiff, Employers Insurance Company of Wausau (Wausau), commenced this action against Harleysville Preferred Insurance Company (Harleysville) seeking, among other things, a declaration that Harleysville is obligated to defend and indemnify Tully Construction Co., Inc. (Tully) in an underlying action entitled Orehosky v Tully Construction Co., Inc., Sup Ct, Queens County, index No. 717124/2019 (the underlying action).
By way of background, in March 2014, the New York State Department of Transportation hired Tully to perform work on a construction project involving bridge rehabilitation of the Major Deegan Expressway (the construction project) pursuant to a contract (the construction contract). In April 2014, Tully hired Hellman Electric Corp. (Hellman) to perform certain electrical work at the construction project pursuant to a subcontract (the subcontract). Paragraph 7 of the subcontract provides, in relevant part, that:
Before commencing work hereunder, the Subcontractor shall at his own cost and expense procure and keep in full force and effect during the performance of the work and up to the date of final acceptance thereof Workmen s Compensation Insurance and also Fire Insurance, Public Liability, Property Damage, Owner s Protective Liability and Property Damage, Contractual Liability and Contingent Liability Insurance and insurance covering special hazards and all other types of insurance required by the Construction Contract, covering and indemnifying the Contractor and the Owner as required by the Construction Contract with the limits not less than those specified in the Construction Contract and all said insurance shall be so written that the same cannot be cancelled without at least ten days notice in writing to the Contractor.
Harleysville issued a commercial business auto policy to Hellman, bearing policy number BA019507L, with per occurrence limits of $1,000,000.00, for the policy period of June 27, 2016 to June 27, 2017 (the Harleysville policy). Wausau issued a commercial general liability policy to Hellman, bearing policy number TBC-Z21-093853-016, with per occurrence limits of $2,000,000.00 for the policy period of June 27, 2016 to June 27, 2017 (the Wausau policy).
On October 17, 2019, Thomas Orehosky (Orehosky) commenced the underlying action against Tully to recover damages for alleged violations of, among other things, Labor Law §§ 200, 240 and 241. In the underlying action, Orehosky alleged that, on October 11, 2016, he was performing work at the construction project as a Hellman employee when he was in an accident and sustained injuries. Specifically, he alleged, among other things, that Tully was negligent in creating and failing to remove the dangerous condition of an unsecured, loose rebar at the construction project. In a Hellman incident report signed by Orehosky, dated October 12, 2016, he indicated that he was stepping off a boom truck on uneven pavement, that he slipped on a piece of rebar, and that he twisted his left leg at the knee.
Wausau now moves to compel Harleysville to provide, among other things, responses to discovery demands and interrogatories (Seq. No. 1). Harleysville opposes Wausau s motion and moves for summary judgment declaring that it is not obligated to defend or indemnify Tully in the underlying action (Seq. No. 2).
First, the court turns to Harleysville s motion for summary judgment. Harleysville points to that portion of its policy, which provides that it will pay all sums an insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto. Additionally, the Harleysville policy excludes coverage for the operation of mobile equipment. (Emphasis added)
In moving for summary judgment, Harleysville argues, among other things, that Orehosky's accident did not result from the ownership, maintenance, or use of the subject boom truck as an automobile. In opposition, Wausau argues, among other things, that Harleysville failed to deny coverage based on this ground in its disclaimer letters. Indeed, it its disclaimer letters dated May 1, 2020, and June 3, 2020, Harleysville denied the request to defend, indemnify, and/or insure Tully in the underlying action based on a mobile equipment exclusion in the Harleysville policy.
A notice of disclaimer must promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated (General Acc. Ins. Group v Cirucci, 46 N.Y.2d 862, 864 [1979]), and [a]n insurer s justification for denying coverage is strictly limited to the ground stated in the notice of disclaimer (Shell v Fireman s Fund Ins. Co., 17 A.D.3d 444, 446 [2d Dept 2005]). Thus, an insurer waives any ground for denying coverage that is not specifically asserted in its notice of disclaimer, even if that ground would otherwise have merit (Adames v Nationwide Mut. Fire Ins. Co., 55 A.D.3d 513, 515 [2d Dept 2008]).
However, the defense that a claim falls outside the scope of an insurance policy is not waived by the failure to set forth that ground in a notice of disclaimer (see Albert J. Schiff Assoc. v Flack, 51 N.Y.2d 692, 698 [1980]). A disclaimer is unnecessary when a claim does not fall within the coverage terms of an insurance policy (Markevics v Liberty Mut. Ins. Co., 97 N.Y.2d 646, 648 [2001]. Here, Harleysville meets its initial burden of establishing that the Harleysville policy s coverage was limited to accidents arising out of the use or operation of covered automobiles (see Zaccari v Progressive Northwestern Ins. Co., 35 A.D.3d 597, 599 [2d Dept 2006]). As such, this Court will consider Harleysville s argument that Orehosky s injuries did not arise from the use or operation of the subject boom truck (see id.).
The [d]etermination of whether an accident has resulted from the use or operation of a covered automobile requires consideration of a three-part test: 1. The accident must have arisen out of the inherent nature of the automobile, as such; 2. The accident must have arisen within the natural territorial limits of an automobile, and the actual use, loading, or unloading must not have been terminated; 3. The automobile must not merely contribute to cause the condition which produces the injury, but must, itself, produce the injury (U.S. Oil Ref. & Mktg. Corp. v Aetna Cas. & Sur. Co., 181 A.D.2d 768, 768-769 [2d Dept 1992], quoting 6B Appleman, Insurance Law and Practice § 4317, at 367-369).[T]he vehicle itself need not be the proximate cause of the injury, but negligence in the use of the vehicle must be shown, and that negligence must be a cause of the injury (Allstate Ins. Co. v Reyes, 109 A.D.3d 468, 469 [2d Dept 2013], quoting Zaccari v Progressive Northwestern Ins. Co., 35 A.D.3d at 599).To be a cause of the injury, the use of the motor vehicle must be closely related to the injury (Allstate Ins. Co. v Reyes, 109 A.D.3d at 469, quoting Zaccari v Progressive Northwestern Ins. Co., 35 A.D.3d at 599). Also, the injury must result from the intrinsic nature of the motor vehicle as such, and the use of the automobile must do more than merely contribute to the condition which produced it (id. at 600).
Here, a review of the complaint in the underlying action reveals no allegation of negligence regarding the boom truck. Moreover, it is not alleged that Orehosky s injuries resulted from the inherent nature of the boom truck or that the boom truck itself produced the injuries. Rather, the complaint in the underlying action alleged that Orehosky s accident occurred due to Tully s negligence with respect to the loose and unsecured rebar that he stepped on. Furthermore, in support of its motion, Harleysville submits, among other things, the transcript of Orehosky s deposition. Orehosky testified that before the accident occurred, the boom truck was parked for ten to twenty minutes. He further testified that he was operating the boom part of the truck to remove jersey barrier poles. When he finished removing the jersey barrier poles at that location, he stepped off the truck. He stated that the truck was parked on an uneven surface with rebar and concrete debris all over. He further stated that when he stepped off the truck, he stepped onto rebar, his leg twisted at his knee, and he fell. As such, Orehosky s injuries were allegedly caused by the rebar, and the boom truck, at most, merely contributed to the condition which produced the injury, namely, the location or situs for the injury (see Allstate Ins. Co. v Reyes, 109 A.D.3d at 469).
In opposition, Wausau argues, among other things, that Orehosky was allegedly injured while the boom truck was in use insofar as he was stepping off the ladder attached to the boom truck when the accident occurred. However, this argument is unavailing.Not every injury occurring in or near a motor vehicle is covered by the phrase use or operation. The accident must be connected with the use of an automobile qua automobile (Olin v Moore, 178 A.D.2d 517, 518 [2d Dept 1991], quoting United Servs. Auto. Assn. v Aetna Cas. & Sur. Co., 75 A.D.2d 1022, 1022 [4th Dept 1980]). In this case, there are no allegations that the boom truck itself was used negligently (see Progressive Cas. Ins. Co. v Yodice, 276 A.D.2d 540, 542 [2d Dept 2000]). As such, Harleysville established that a causal relationship between the boom truck and the incident was lacking and Wausau fails to rebut that showing (see id.; Empire Ins. Co. v Schliessman, 306 A.D.2d 512, 514 [2d Dept 2003]; Eagle Ins. Co. v Butts, 269 A.D.2d 558, 559 [2d Dept 2000]). Therefore, Harleysville is not obligated to defend or indemnify Tully in the underlying action (see Tishman Constr. Corp. v Zurich Am. Ins. Co., 204 A.D.3d 623, 625 [1st Dept 2022]; Rinaldi v Wakmal, 183 A.D.3d 652, 654 [2d Dept 2020]).
Considering the foregoing, the Court need not consider Harleysville s remaining arguments, and Wausau s motion to compel certain discovery pursuant to CPLR 3124 is denied as moot.
Accordingly, Wausau s motion, sequence #001, to compel is denied. Harleysville's motion, sequence #002, for summary judgment declaring that it is not obligated to defend or indemnify Tully in the underlying action is granted.
It is the declaration of this Court that the defendant Harleysville Preferred Insurance Company is not obligated to defend or indemnify Tully Construction Co., Inc. in the action entitled Thomas Orehosky v Tully Construction Co., Inc., Index No. 717124/2019.
The above constitutes the Decision and Order of the Court.