Opinion
112373/09.
April 27, 2011.
DECISION, ORDER, DECLARATION and JUDGMENT
This action involves an insurance coverage dispute arising in connection with a property damage claim. Defendant and third-party plaintiff THI Properties, LTD (THI) owned real property on West 74th Street in Manhattan. Defendant Kingdom Associates, Inc. was hired in December 2008 to perform excavation on the property. The adjoining property, owned by Mascha Seiden, allegedly was damaged by the excavation. Seiden's insurance company, plaintiff Everest Reinsurance Company (Everest Re), paid money to repair and stabilize Seiden's property, and sues here to recover that money.
(THI commenced a third party action against movant Harleysville Worcester Insurance Company (Harleysville), which insured Kingdom Associates. THI seeks a declaration that it is entitled to coverage from Harleysville as an additional insured on the Kingdom Associates policy.
In this motion, Harleysville asks for summary judgment in its favor declaring that THI is not an additional insured on the policy it issued to Kingdom Associates, or, in the alternative, that the third party action be severed from the main action. THI cross-moves for summary judgment and a declaration that it is an additional insured on the Kingdom Associates policy. For the reasons below, Harleysville's is granted, and the cross-motion is denied.
Harleysville issued to Kingdom Associates a commercial general liability policy (Primary Policy, Notice of Motion, Ex. B) and excess policy (Excess Policy, Notice of Motion, Ex. C) (together referred to as the Policies). The Excess Policy follows form to the Primary Policy, which means that it provides coverage where the claim is covered by the Primary Policy (Affidavit of Lee Costelloe, Notice of Motion, Ex. A, ¶ 3). The Primary Policy has the following endorsement with respect to who is an additional insured:
COMMERCIAL GENERAL LIABILITY COVERAGE
Section II — Who Is An Insured is amended to include as an additional insured any person or organization for whom you are performing operations when you and such person have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy . . . Policy, CG 20 33 07 04)
Harleyaville maintains that there is no written contract or agreement between THI and its insured providing that Kingdom Associates will add THI as an insured on its policy.
In its cross-motion, THI contends that it had a verbal understanding with Kingdom Associates that THI would be an additional insured on its policy. THI submits a copy of a certificate of insurance provided by Kingdom Associates' insurance broker, dated December 18, 2008 (Certificate, Aff. Of Spencer Ting, Ex. 2). The Certificate identifies Harleysville as the insurer for Kingdom Associates, and THI as the certificate holder. It further states that "the Certificate Holder is an additional insured when required under written contract or agreement".
Spencer Ting, THI's vice president, alleges that he demanded that Kingdom Associates name THI as an additional insured on its insurance policy before he would accept Kingdom Associates' proposal to do the work (Ting Aff., ¶ 5). He signed the proposal on December 17, 2008, a day before the Certificate issued ( id., Ex. 1). Six days later, on December 23, 2008, Kingdom Associates sent Ting an email that reads "Hi Spencer, attached please find requested insurance certificates" (Ting Aff., Ex. 3).
Everest Re sued THI and the other defendants in August 2009. By a letter dated October 7, 2009, THI's attorney demanded coverage as an additional insured under the Policies; Harleysville sent a letter declining coverage on January 29, 2010, stating, inter alia, that THI was not its insured. THI's third party complaint seeks a declaration that it is entitled to a defense and indemnification under the Policies, and it demands reimbursement of defense expenses (Third Party Complaint, Notice of Motion, Ex D).
THI argues that the Certificate and the December 23, 2008 email from Kingdom Associates are writings memorializing an agreement to name THI as an additional insured on the Primary Policy. This argument fails because these documents contain no language obligating Kingdom Associates to name THI as an additional insured on its policy. Indeed, the Certificate provides a warning that an unwritten understanding or verbal agreement will not suffice. The Certificate also includes a specific disclaimer that it was issued as a matter of information only, and does not amend, extend or alter coverage in the referenced policy; therefore, the Certificate does not create coverage where the unambiguous language of the policy provides none ( see, American Motorist Ins. Co. v Superior Acoustics, Inc., 277 AD2d 97 [1st Dept 2000]). Contrary to THI's argument, Section II of the Primary Policy unambiguously provides that the agreement or contract requiring Kingdom Associates to add a person as an additional insured must be in writing ( Erin Constr. Dev. Co. v Gulf Ins. Co., 2008 NY Slip Op 32046U [Sup. Ct. NY County 2008]). Since THI was not an additional insured on the Primary Policy, there is no merit to its argument that coverage was created by Harleysville's alleged failure to issue a speedy disclaimer after THI tendered its defense. Accordingly, it hereby is
ORDERED that Harleysville's motion for summary judgment is granted, and THI's cross-motion is denied; and it further is
DECLARED and ADJUDGED that Harleysville is not obligated to defend or indemnify THI under the Policy with respect to the claims by plaintiff or co-defendants in the main action herein (New York County Index Number 112373/2009); and it further is
ORDERED that the third party complaint is severed and dismissed, with costs and disbursements to Harleysville as taxed by the Clerk of the Court, who shall enter judgment accordingly.