Opinion
# 2018-053-568 Claim No. 120851 Motion No. M-92320 Cross-Motion No. CM-92723
12-21-2018
ROBERT M. KNAB, JR. v. STATE OF NEW YORK, NEW YORK STATE THRUWAY AUTHORITY AND THE CANAL CORPORATION and NEW YORK STATE DEPARTMENT OF TRANSPORTATION
LIPSITZ GREEN SCIME CAMBRIA, LLP BY: James T. Scime, Esq. HON. BARBARA D. UNDERWOOD New York State Attorney General BY: Wendy E. Morcio, Esq. Assistant Attorney General
Synopsis
In a motion by the NYSTA in support of their declaratory judgment action seeking indemnification from the third-party defendant insurance companies and the excess insurance carrier, the Court ruled that it had subject matter jurisdiction pursuant to Court of Claims Act § 9 (9-a) and that the insurance carriers had no right to a trial by jury; that no policy exclusion applied and that the insurance carriers have a duty and are obligated to indemnify the NYSTA under the contractor's commercial general liability (CGL) policy; and granted the cross-motion by the excess insurance carriers holding that the NYSTA was not entitled to excess coverage.
Case information
| UID: | 2018-053-568 |
| Claimant(s): | ROBERT M. KNAB, JR. |
| Claimant short name: | KNAB |
| Footnote (claimant name) : | |
| Defendant(s): | STATE OF NEW YORK, NEW YORK STATE THRUWAY AUTHORITY AND THE CANAL CORPORATION and NEW YORK STATE DEPARTMENT OF TRANSPORTATION |
| Footnote (defendant name) : | |
| Third-party claimant(s): | STATE OF NEW YORK, NEW YORK STATE THRUWAY AUTHORITY AND THE CANAL CORPORATION and NEW YORK STATE DEPARTMENT OF TRANSPORTATION |
| Third-party defendant(s): | TRAVELERS INDEMNITY COMPANY AND PHOENIX INSURANCE COMPANY, EVEREST NATIONAL INSURANCE COMPANY |
| Claim number(s): | 120851 |
| Motion number(s): | M-92320 |
| Cross-motion number(s): | CM-92723 |
| Judge: | J. DAVID SAMPSON |
| Claimant's attorney: | LIPSITZ GREEN SCIME CAMBRIA, LLP BY: James T. Scime, Esq. |
| Defendant's attorney: | HON. BARBARA D. UNDERWOOD New York State Attorney General BY: Wendy E. Morcio, Esq. Assistant Attorney General |
| Third-party defendant's attorney: | KENNEY SHELTON LIPTAK NOWAK, LLP Attorneys for Travelers Indemnity Company and Phoenix Insurance Company BY: Richard A. Galbo, Esq. KENNEDYS CMK, LLP Attorneys for Everest National Insurance Company BY: Daniel T. Beatty, Esq. |
| Signature date: | December 21, 2018 |
| City: | Buffalo |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
Defendants and Third-Party Claimants New York State Thruway Authority (NYSTA) and State of New York bring this motion M-92320 in support of a declaratory action seeking an order for conditional indemnification from Third-Party Defendants Travelers Indemnity Company, Phoenix Insurance Company, an entity incorrectly sued as "Travelers Insurance Company" (collectively, "Travelers"), and Everest National Insurance Co. (Everest) pursuant to Court of Claims Act § 9 (9-a). Third-Party Defendant Travelers opposes this motion and also brings a cross motion CM-92723 seeking declaratory relief that (1) Travelers is not obligated to indemnify the NYSTA under the Special Protective and Highway Liability policy (Oakgrove Highway policy) issued to the NYSTA; and (2) Travelers is not obligated to indemnify the NYSTA under the commercial general liability policy issued to Oakgrove Construction, Inc. ("Oakgrove CGL policy" and "Oakgrove", respectively). The underlying claim arises out of an incident that occurred on December 16, 2010 when claimant Robert M. Knab, Jr. was working in the median of the New York State Thruway in the Town of Westfield, County of Chautauqua and was struck from behind by a vehicle operated by Drew Robertson (Robertson) that had left the highway and traveled into the median. On or about February 24, 2011, a notice of intention to file a claim was served upon the Office of the Attorney General of the State of New York. The claim was commenced on January 30, 2012 and the answer was filed on April 25, 2012.
In the Decision of December 13, 2018 following the trial on the issue of liability only, all claims against the remaining Third-Party Claimants, the State of New York, the Canal Corporation and the Department of Transportation (DOT) were dismissed. Accordingly, this Decision and Order will address only the issue of coverage for Third-Party Claimant NYSTA.
Third-Party Defendant Everest attempted to file a cross motion, which was delivered to the Court via UPS on September 10, 2018, two days prior to the return date of Third-Party Claimants' motion and Third-Party Defendants' cross motion. However, Everest's cross motion was never filed with the Clerk of the Court of Claims in Albany in accordance with the Uniform Rules of the Court of Claims, Section 206.9, nor was it timely filed and served in accordance with CPLR Rule 2214 (b). As a result, Everest's cross motion to dismiss the Third-Party claim was rejected and its motion papers were not considered by the Court in reaching this decision.
The trial of this claim held in June 2018 was bifurcated and addressed the issue of liability only. The claimant asserted at trial that the NYSTA was negligent and violated Labor Law §§ 200, 241 (6) and Industrial Code regulation 12 NYCRR §§ 23-1.29. On December 13, 2018, the Court issued the Decision finding that the NYSTA violated Labor Law § 241 (6) and Industrial Code regulation 12 NYCRR § 23-1.29 (a) and that this violation was a proximate cause of claimant's accident and resulting injuries. In finding liability, the Court determined that the NYSTA's liability was the result of Foit-Albert Associates Architecture, Engineering and Land Surveying, P.C. (Foit-Albert) failure to install any protective or traffic control devices along that section of the Thruway where claimant was directed to work on the day of the accident. FACTS
The Decision of the Court, which is incorporated by reference herein, also dismissed claimant's causes of action for negligence and for a violation of Labor Law § 200. In addition, the Court determined that the driver of the vehicle, Drew Robertson was negligent in the operation of his vehicle and apportioned 50% liability upon him for his actions and 50% liability against the NYSTA for causing the accident and claimant's resulting injuries.
The NYSTA entered into agreements with Oakgrove and Foit-Albert to provide construction and construction inspection services, respectively, for a contract identified as TAB 10-15 (D213951), a pavement rehabilitation contract between Milepost 483.0 and 496.0 in the Buffalo Division of the New York State Thruway (Thruway). The agreement between the NYSTA and Oakgrove (hereafter, the "Oakgrove Agreement") that is referenced in the Affidavit in Support of Declaratory Judgment Action for Conditional Indemnification of Assistant Attorney General Wendy E. Morcio (AAG Morcio) is not included as an exhibit to her motion papers. Exhibit A includes only the agreement between the NYSTA and Foit-Albert. However, the Affidavit of Patrick J. Leathem in Opposition to the NYSTA's Motion for Summary Judgment includes the insurance policies obtained with Travelers in conjunction with the Oakgrove Agreement. Exhibit A is the Oakgrove Highway Liability policy and Exhibit B is the Oakgrove CGL policy.
The agreement between the NYSTA and Foit-Albert provided for a term to begin on July 1, 2010 and terminate on December 31, 2011 (the "Foit-Albert Agreement"), which includes the date of claimant's accident, December 16, 2010. The claimant was employed by PB America Inc. (PB America), a subcontractor retained by Foit-Albert in accordance with "Section 3.5 - Subcontracting" of the Foit-Albert Agreement. On the day of the accident, claimant was engaged in survey work in the median when a vehicle operated by Robertson left the eastbound lanes of the Thruway and traveled into the median, striking claimant from behind. The Foit-Albert Agreement provides in the description of "Work to Be Done" that Foit-Albert was responsible to provide traffic control during construction. On the day of the accident, Foit-Albert's Engineer-In-Charge (EIC), Kurt Covert, directed claimant to perform GPS survey work and between what mileposts to do it along the Thruway. The work performed by claimant was listed in the "Scope of Work" in the Foit-Albert Agreement, as was a description of what constituted "Survey Operations." Claimant was performing this survey work within the work zone defined by the Agreement when the accident occurred.
Third-Party Claimants' motion papers at Exhibit A.
Third-Party Claimants' motion papers at Exhibit A, page 83.
Third-Party Claimants' motion papers at Exhibit A, page 209.
Section 3.5 of the Foit-Albert Agreement provided that Foit-Albert "is fully responsible to the [NYSTA] for the acts and omissions of persons [such as the EIC, Kurt Covert] directly employed by it." Article IV, Section 4.1 - Insurance Conditions, provides that Foit-Albert was to obtain insurance covering all services and operations under the Foit-Albert Agreement, whether those services were performed by Foit-Albert or its subcontractors [including, PB America], and that all required insurance shall be primary to any NYSTA insurance policy or self-insurance program, which shall be excess and non-contributory. Section 4.2 - Required Insurance Coverages, set forth that Foit-Albert was to provide, among other types of insurance, commercial general liability insurance (Foit-Albert CGL), which "shall cover liability arising from premises, operations, independent contractors, products/completed operations, personal injury, advertising injury, and contractual liability". The NYSTA was to be included as an additional insured on the Foit-Albert CGL policy. Finally, Article V, Section 5.1 - Liability, provides that Foit-Albert "shall be responsible for all damage to life and property due to negligent or otherwise tortious acts, errors or omissions of [Foit-Albert] in connection with its services under this Agreement." In addition, it also provides that:
Third-Party Claimants' motion papers at Exhibit A, Sections 4.1 and 4.2.
"Further, it is expressly understood that [Foit-Albert] shall indemnify and save harmless the [NYSTA] and/or the State of New York, as their interests may appear, from claims, suits, actions, damages, and costs of every name and description resulting from the negligent performance of the services of [Foit-Albert] . . . , and such indemnity shall not be limited by reason of enumeration of any insurance coverage herein provided."
On or about March 4, 2011, the Office of the Attorney General of the State of New York was served with a copy of claimant's Notice of Intention to File a Claim. On March 15, 2011, Travelers replied to the letter from the NYSTA tendering the Notice of Intention and advised that they were disclaiming coverage to the NYSTA on the basis that the loss did not arise out of operations performed by Oakgrove, that it did not arise out of general supervision of Oakgrove's operations, and it did not arise out of the existence of any condition in any portion of a state highway included in the contract. On March 22, 2011, Travelers, which had issued a policy to Foit- Albert under the entity "The Phoenix Insurance Company", wrote to Foit-Albert and advised that the aforementioned Notice of Intention was not covered by their policy based upon the mistaken belief that claimant was working as a subcontractor for Oakgrove, when in fact, his employer was PB America, a subcontractor retained by Foit-Albert. This mistake of fact apparently was derived from a NYSTA memorandum by Jeremy Lefort, Assistant Traffic Supervisor, who had erroneously identified claimant's employer as a subcontractor of Oakgrove. This was set forth in a letter from Travelers dated April 9, 2012 and correctly set forth that the work that claimant was engaged in was performed under the Foit-Albert Agreement.
Third-Party Claimants' motion papers at Exhibit C.
Travelers also denied coverage on the basis that there was no claim pending as only a Notice of Intention had been served to date.
Third-Party Claimants' motion papers at Exhibit E.
On March 22, 2012, after the NYSTA were served with the first party claim, a letter was sent to Travelers seeking a coverage determination for defense and indemnification under the provisions of the Oakgrove Agreement and the Foit-Albert Agreement. On April 4, 2012 and April 23, 2012, Travelers, on behalf of its insured, Foit-Albert, for policies issued by the St. Paul Fire & Marine Insurance and Phoenix Insurance Indemnity Co. (Phoenix), replied to the NYSTA letter and denied coverage not because claimant was identified as an employee of a subcontractor of Oakgrove, but on the basis that claimant was an employee of a subcontractor of Foit-Albert and that his work at the time of the accident was subject to a professional services exclusion within the meaning of that policy. The NYSTA then served an answer to the first party claim on April 24, 2012.
Third-Party Claimants' motion papers at Exhibit G. Travelers also denied coverage as there was no claim pending as only a Notice of Intention had been served to date.
Third-Party Claimants' motion papers at Exhibit C.
On March 6, 2013, the Notice of Impleader and Third-Party Claim was filed in the Court of Claims. No answer was filed and in January 2014, AAG Morcio contacted Travelers' adjuster, Patrick Leathem, as a courtesy to advise that Travelers was in default and had failed to answer or appear. Travelers did not answer but on February 5, 2014, agreed to provide a defense and retain counsel for the NYSTA in the subject claim and reserved its right to deny any obligation to indemnify the NYSTA or any other state entity in the event of a recovery. Travelers agreement to provide a defense to the NYSTA was under the policy with Oakgrove and the Certificate of Liability Insurance included in Exhibit B to NYSTA's motion. Also attached to Exhibit B is the Certificate of Liability Insurance for Foit-Albert listing as insurers, Phoenix, The Travelers Indemnity Co., and Zurich North America. There is also a Certificate of Liability Insurance for the NYSTA listing Travelers Indemnity Company as the insurer. Based upon Travelers agreement to provide a defense to NYSTA in the subject claim under one of its applicable policies (Oakgrove CGL), a stipulation of discontinuance without prejudice was executed but never filed by Travelers in accordance with CPLR § 3217. On June 18, 2018, at the commencement of the trial of the subject claim, Travelers then agreed to also provide a defense to the NYSTA under the Phoenix Insurance policy with its insured, Foit-Albert.
Third-Party Claimants' motion papers at Exhibit H.
Affidavit of Assistant Attorney General Wendy E. Morcio at paragraph 30. Reply Affirmation in Support of Declaratory Judgment Action for Conditional Indemnification and Opposition to Cross Motion at paragraphs 8 - 10.
Affidavit of Judith A. Wilder in Opposition to the Third-Party Claimants' Motion for Summary Judgment at paragraph 7 and the Reply Affirmation in Support of Declaratory Judgment Action for Conditional Indemnification and Opposition to Cross Motion at paragraph 26.
In the Supreme Court action, an appeal was taken by Oakgrove of a denial of their motion for summary judgment. The Appellate Division, Fourth Department reversed that trial court decision and dismissed the complaint against Oakgrove. In so doing, the Appellate Division determined that: (1) Foit-Albert was retained by the NYSTA to inspect Oakgrove's work; (2) Foit-Albert subcontracted some of that work to claimant's employer, PB America; (3) Oakgrove began to perform drainage and clearing work in August 2010, but suspended that work in November for the winter shutdown period; (4) before that shutdown Oakgrove determined that some of the elevation measurements provided by the NYSTA were incorrect; (5) Foit-Albert's contract with the NYSTA provided that its inspection responsibilities included surveying; and (6) Foit-Albert assigned claimant to take new measurements during Oakgrove's winter shutdown (Knab v Robertson, 155 AD3d 1565 [4th Dept 2017]).
ANALYSIS
Travelers opposes this motion for declaratory relief on several grounds, namely, that (1) the NYSTA cannot move for summary judgment under CPLR 3212 until issue has been joined; (2) the Court of Claims does not have jurisdiction over Travelers; (3) the decision of the Appellate Division, Fourth Department in the Supreme Court companion action, Knab v Robertson, supra., is determinative that no coverage exists for policies to Oakgrove that are triggered by injuries arising from Oakgrove's operations or a condition on the highway involving Oakgrove's work; (4) the motion with respect to the Foit-Albert CGL policy is premature as there has been no liability finding against Foit-Albert in the Supreme Court companion action; (5) that the motion regarding the Foit-Albert CGL policy is also premature as it requires that the NYSTA demonstrate that Foit-Albert's operations proximately caused claimant's injury to trigger coverage; and (6) that the NYSTA is not entitled to coverage under the Foit-Albert excess policy because they claim that the Foit-Albert Agreement did not require it or Travelers to provide excess coverage to the NYSTA.
With respect to the procedural issue asserted by Travelers, Third-Party Claimants' declaratory judgment motion was returnable on July 23, 2018 and was adjourned by the Court in that the Third-Party Defendants had not yet filed answers to the Third-Party Claim and the motion was then rescheduled for September 12, 2018. The Court directed that the Third-Party Defendants file and serve their answers on or before August 23, 2018 and serve any additional supplemental motion papers for this motion on or before September 7, 2018. On August 23, 2018, Travelers served its answer on the Office of the Attorney General and on August 27, 2018, filed its Answer with the Clerk of the Court of Claims. On September 11, 2018, Travelers filed an Amended Answer. Everest did not file an answer and is in default on the Third-Party Claim.
Reply Affirmation in Support of Declaratory Judgment Action for Conditional Indemnification and Opposition to Cross Motion at Exhibit O.
As issue has been joined with respect to Travelers, Third-Party Claimants' declaratory judgment motion complies with CPLR 3212 and may proceed. Travelers' secondary procedural argument that this motion is highly prejudicial and requires discovery is without merit. The Travelers' adjusters assigned have been aware of the existence of the subject claim and the Supreme Court companion action since their inception over six years ago and retained counsel over four years ago. This Court's Trial Order was issued on September 21, 2017, almost nine months prior to the June 18, 2018 trial date, and counsel retained by Travelers has represented the defendants and that trial went forward as scheduled on June 18, 20 and 21, 2018.
Travelers' next asserts that the Court does not have jurisdiction over this declaratory judgment action. The Court of Claims Act, Section 9 (9-a) provides that:
"To make a declaratory judgment as defined in section three thousand one of the civil practice law and rules with respect to any controversy involving the obligation of an insurer to indemnify or defend a defendant in any action pending in the court of claims, provided that the court shall have no jurisdiction to enter a judgment against an insurer pursuant to this subdivision either: (i) for money damages; or, (ii) if the insurer would otherwise have a right to a jury trial of the controversy with respect to which the declaratory judgment is sought."
Travelers contends that it has a right to a jury trial of this controversy. In support, it relies upon the Court of Appeals decision in Hartford Acc. & Indem. Co. v Wesolowski, 33 NY2d 169 (1973), asserting that this case holds that "if there is any ambiguity in the terminology used or if the 'determination of the intent of the parties depends on the credibility of extrinsic evidence. . . then such determination is to be made by the jury' " (Id. at 172, emphasis added). Travelers assertion that extrinsic evidence will create factual issues that must be considered by a jury regarding the Oakgrove and Foit-Albert policies is based upon a clearly incorrect recitation of the holding in Hartford. As AAG Morcio addresses in her reply affirmation, counsel for Travelers has misquoted the holding in Hartford by inserting the conjunction "or" in place of "and", and by doing so has changed the holding in that case. By use of the conjunction "and", the Court of Appeals clearly intended that only where there is an ambiguity present in the policy terminology may extrinsic evidence then be considered that may raise a factual issue(s) requiring a trial by jury. In the present case, Travelers does not contend that an ambiguity exists in any of the policies issued by them that are applicable to Oakgrove, Foit-Albert or the NYSTA. In fact, Travelers relies upon the language of its policies to contend that the NYSTA has no right to indemnification either under the Oakgrove or Foit-Albert policies. Accordingly, this Court finds that there is no right to a trial by jury of any issue in this declaratory judgment action and that this Court has jurisdiction to make a determination as to whether the NYSTA is entitled to indemnification under any of the Travelers' policies in accordance with Court of Claims Act, Section 9 (9-a).
Quotation at pp. 22-23 of Memorandum of Law in Opposition to Third-Party Claimants' Motion for Declaratory Judgment.
The next issue to be addressed is whether the Fourth Department decision in the Supreme Court companion action, Knab v Robertson, supra, is determinative as to whether coverage exists for the NYSTA with the policies issued by Travelers to Oakgrove. Travelers contends that although the NYSTA is a named insured under the Oakgrove Highway policy and the Oakgrove CGL policy, the Fourth Department has already determined as a matter of law that Oakgrove did not have control over the plaintiff (claimant) or the work he was performing and did not have control over the work site at the time of plaintiff's (claimant's) injury and dismissed the Labor Law §§ 200 and 241 (6) and common-law negligence causes of action. It has been held that an insurer's duty to indemnify as opposed to providing a defense is distinctly different as "the duty to pay is determined by the actual basis for the insured's liability to a third person" and not by what is set forth in the allegations of the pleading (Servidone Constr. Corp. v Security Ins. Co. of Hartford, 64 NY2d 419, 424 [1985]). As set forth in Travelers' letters of March 15, 2011 in response to the NYSTA's letter tendering the Notice of Intention to File Claim and in subsequent correspondence, the Oakgrove Highway policy limits coverage for "bodily injury" caused by an "occurrence" that arises out of operations performed by Oakgrove or out of its general supervision or any condition in any portion of a highway included in the designated contract. As the Fourth Department has already dismissed the causes of action against Oakgrove, this Court finds that the NYSTA is not entitled to indemnification by Travelers under the Oakgrove Highway policy or the Oakgrove CGL policy.
Letters of March 15, 2011, January 25, 2012, April 9, 2012, February 12, 2014, and February 13, 2018, all attached as Exhibit C to the Affidavit of Patrick J. Leathem.
Travelers next contends that the NYSTA motion regarding the Foit-Albert CGL policy is premature as it requires that it demonstrate that Foit-Albert's operations proximately caused claimant's injury to trigger coverage and this must await a determination in the Supreme Court companion action. This Court disagrees. Supreme Court lacks jurisdiction over any causes of action alleged by claimant against the NYSTA and the State of New York. An action may only be brought against the State of New York and its public authorities in the Court of Claims where pursuant to Court of Claims Act, Article II, Section 8, the State has waived its immunity from liability and action and assumes liability and consents to have the same determined in accordance with the same rules of law as apply to a Supreme Court action against individuals or corporations. In turn, the NYSTA entered into an agreement with Foit-Albert which contains insurance requirements and coverages and provides that Foit-Albert shall be responsible for all damage to life and property due to negligent or otherwise tortious acts, errors or omissions in connection with Foit-Albert's services under this agreement and which expressly obligates them to indemnify and save harmless the NYSTA and the State of New York. Travelers, pursuant to the Oakgrove Agreement and on the eve of trial, the Foit-Albert Agreement, agreed to provide a defense to the NYSTA and the State of New York in the Court of Claims action.
Foit-Albert Agreement at Article IV - Insurance Requirements and Article V - Liability, Ethics, Confidentiality and Required Certifications, Section 5.1 - Liability.
A bifurcated trial on the issue of liability in the Court of Claims action had already been conducted in the Court of Claims prior to the return date of this motion, where this Court heard testimony from, among others, Kurt Covert, Foit-Alberts' EIC. Following the trial, this Court's Decision included numerous factual findings, including that (1) Covert as the Foit-Albert EIC was responsible to supervise the consultant inspection staff, including claimant; (2) Covert assigned the construction inspectors their daily tasks and directed them where to go and what part of the project to inspect or survey; (3) Covert was aware on the day of the accident that there was no traffic protection in place on the highway at claimant's work site; (4) Covert instructed claimant as to his job duties for that day; (5) claimant's work was performed within the scope of work of the Foit-Albert Agreement (TAB 10-15); (6) claimant's work was performed within the contract work site and in the median adjacent to the eastbound lanes of the Thruway; (7) claimant's work placed him in close proximity to the eastbound lanes of the Thruway where the speed limit is 65 mph; and (8) claimant was not provided with any protection from vehicular traffic. In addition, both claimant's and the NYSTA's expert witnesses agreed that Foit-Albert failed to provide any traffic warning or protections devices and that one or more such devices should have been utilized to alert and warn traffic before they reached the area where claimant was working. The Court held that the failure to provide claimant with any protection from vehicular traffic created a hazardous and dangerous condition in violation of 12 NYCRR § 23-1.29 (a). Accordingly, the Court held that the NYSTA violated Labor Law § 241 (6), which statute imposes a nondelegable duty upon owners to provide reasonable and adequate protection and safety to construction workers and that this violation was a proximate cause of claimant's accident and resulting injuries. By this holding, this Court has also determined that Foit-Albert, who was responsible to provide traffic protection was negligent and that its conduct violated 12 NYCRR § 23-1.29 (a), which resulted in liability upon the NYSTA pursuant to the nondelegable duty of Labor Law § 241 (6). This Court does not have to await the result of a trial of the Supreme Court companion action as liability has already been determined against Foit-Albert and the NYSTA and this finding of liability in the Court of Claims now requires a trial on the issue of damages, regardless of whether liability is found against Foit-Albert in the Supreme Court companion action.
The Decision of the Court following the bifurcated trial had not yet been rendered as of the date of oral argument of this motion. The parties had requested and the Court granted them until October 14, 2018 to prepare and submit post-trial memoranda.
Accordingly, the NYSTA is entitled to contractual indemnification from Foit-Albert in accordance with the terms of the Foit-Albert Agreement. The finding of liability triggers the Travelers and the Phoenix policy issued to Foit-Albert (Foit-Albert CGL policy). The Court will next address Travelers contention that the blanket additional insured endorsement does not apply to the NYSTA because the "professional services" exclusion as defined in the policy does not provide coverage for this claim. In so doing, Travelers relies upon the Court of Claims decision in Riccobono v State of New York, 57 Misc3d 737 (2017). The Court finds this case distinguishable. In Riccobono, the claimant was driving his car when a large piece of concrete fell from an overpass and crashed through his windshield and caused his injuries. The claimant brought an action against the State for its negligent inspection and maintenance of the subject overpass. The State then brought a declaratory judgment action against Zurich American Insurance Company and Stantec Consulting Services, Inc. alleging that they were obligated to provide a defense and indemnify the State as pursuant to a contract with the State, Stantec had inspected the subject overpass nearly two years prior to the accident. The Court examined the insurance policies in place and held that the "professional services" exclusion applied and that Stantec's alleged negligent inspection was not covered by Zurich's policy.
The negligence established in the present claim that was determined at trial is that Foit-Albert failed to provide any traffic protection or warning devices and that its failure to provide claimant with any protection from vehicular traffic created a hazardous and dangerous condition that was a proximate cause of the motor vehicle accident that was a proximate cause of claimant's injuries. The negligence alleged and established at trial had nothing to do with the GPS survey work that was being performed by claimant at the moment he was struck from behind by the vehicle operated by Robertson. The subject claim did not arise from Foit-Albert's negligence in performing inspection services or survey work but from Foit-Albert's failure to provide claimant with any traffic warning or protection devices from vehicular traffic.
The Foit-Albert CGL policy issued by Phoenix (Exhibit A to the Affidavit of Judith A. Wilder in Opposition to NYSTA's Motion for Declaratory Judgment) provides in the Blanket Additional Insured endorsement that the NYSTA is an additional insured, "but only with respect to liability for 'bodily injury', 'property damage', 'personal injury' caused, in whole or in part, by your acts or omissions or the acts or omissions of those acting on your behalf . . . [i]n the performance of your ongoing operations." Travelers relies upon subparagraph 'e', which states that insurances to an additional insured is limited and "does not apply to the rendering of or failure to render any 'professional services'. " Relying upon this provision, Travelers stated in its April 4, 2012 disclaimer letter that "[a]s the services being performed by [Foit-Albert] . . . was as an engineer hired to perform engineering construction inspection services, the professional services exclusion of coverage applies" and no coverage (defense or indemnity) is afforded to the NYSTA.
Exhibit A at "TRAVELERS DOC MGMT" 24 of 262 and in Exhibit C, April 4, 2012 Travelers disclaimer letter, to the Affidavit of Judith A. Wilder.
Unlike the factual scenario in Riccobono, the claimant's injury did not arise out of the rendering or failure to render a professional service. The injury arose from a failure to install traffic warning or protection device(s) at the work site where claimant was performing his work. At the liability trial of this claim, there was testimony indicating that prior to the winter shutdown, the placement of traffic warning devices (known as "maintenance and protection of traffic") was the responsibility of Oakgrove. It was only after Oakgrove shut down its operations for the winter season that Foit-Albert assumed the responsibility for traffic control. This responsibility is not a "professional service" as defined by the Foit-Albert CGL policy. Foit-Albert's failure to do so created a hazardous and dangerous condition and was held by this Court to have been a proximate cause of the accident and the claimant's "bodily injury" within the meaning of the policy. Thus, the accident is an "occurrence" within the meaning of the policy and that occurrence is not subject to the "professional services" exclusion in the policy.
It has been held that "[i]n an insurance coverage case, the insurer bears the burden of establishing that the claimed policy exclusion defeats the insured's claim to coverage by demonstrating that the exclusion relied upon is 'stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case' " (Guishard v. General Sec. Ins. Co., 32 AD3d 528, 529 [2d Dept 2006], affd 9 NY3d 900 [2007]). Foit-Albert's failure to make certain that adequate traffic control or protection devices were in place in accordance with the Foit-Albert Agreement and the relevant Industrial Code regulation did not require Foit-Albert's professional engineering acumen, but rather normal construction supervision and oversight (Reliance Ins. Co. v National Union Fire Ins. Co. of Pittsburgh, PA, 262 AD2d 64 [1st Dept 1999]). As such, it is a reasonable interpretation of the Foit-Albert CGL policy to include the negligent acts that were unrelated to Foit-Albert's performance of "professional services" and that the policy would apply to motor vehicle accidents or Labor Law claims (see Riccobono, supra at 746). To hold otherwise "would have the exclusion swallow the policy" (Reliance, supra at 65). Accordingly, it is the finding of this Court that the Foit-Albert CGL policy applies and that Travelers and Phoenix are obligated to defend and indemnify the NYSTA in the Court of Claims action.
The final issue to address is whether the excess coverage policy provided by the Foit-Albert CGL policy provides additional coverage to the NYSTA. It is Travelers contention that the NYSTA is not entitled to coverage under the Foit-Albert excess policy because the Foit-Albert Agreement did not require it to provide excess coverage to the NYSTA. The Foit-Albert Agreement at Section 4.2 - Required Insurance Coverages required specific coverages, including commercial general liability insurance with specific limits and coverages, as well as professional liability or errors and omissions insurance, business auto liability insurance, railroad protective liability insurance and workers compensation and NYS disability benefits insurance. Nowhere within the listed insurance coverages is any obligation for Foit-Albert to obtain excess coverage beyond the limits and coverages listed in Section 4.2 nor is it anywhere mentioned in the previous section, Section 4.1 - Insurance Conditions. Accordingly, I find that any excess coverage provided by Travelers and the Phoenix in the Foit-Albert Policy does not apply to the NYSTA as Foit-Albert was under no contractual obligation to obtain excess coverage pursuant to the terms of the Foit-Albert Agreement.
Section 4.1, paragraph L provides that the NYSTA does not represent that certain coverages and limits will necessarily be adequate to protect Foit-Albert, and such coverages and limits shall not be deemed a limitation on Foit-Albert's liability to the NYSTA under the Foit-Albert Agreement.
After considering the submissions by both parties and after due deliberation, it is the holding of this Court that the NYSTA's motion for declaratory relief is granted, in part, and Travelers' cross motion is denied, in part, to the extent that Travelers and Phoenix owe a duty to defend and indemnify the NYSTA in this claim under the provisions of the Foit-Albert CGL policy. Accordingly, it is hereby
ORDERED, that the NYSTA's motion for declaratory relief is denied, in part, and Travelers' cross motion is granted, in part, that Travelers and Phoenix do not have a duty to indemnify NYSTA under the Oakgrove Highway policy and the Oakgrove CGL policy. In addition, as the third-party claim relative to Everest is based upon an excess liability policy issued to Oakgrove and as this Court has granted Travelers' cross motion that no duty exists to indemnify NYSTA as to the Oakgrove policies, NYSTA's motion for declaratory relief with respect to Everest is denied and Everest has no duty to indemnify NYSTA; and it is hereby
ORDERED, that NYSTA's motion for declaratory relief is granted, in part, and Travelers' cross motion is denied, in part, to the extent that Travelers and Phoenix have a duty and are obligated to defend and indemnify NYSTA under the Foit-Albert CGL policy with limits of insurance coverage as stated therein; and it is hereby
ORDERED, that NYSTA's motion is denied, in part, and Travelers' cross motion is granted, in part, to the extent that Travelers and Phoenix do not have a duty to provide excess coverage under the Foit-Albert CGL policy.
All other contentions and alternative forms of relief sought in the motion and cross motion not previously addressed are hereby denied.
December 21, 2018
Buffalo, New York
J. DAVID SAMPSON
Judge of the Court of Claims The following were read and considered by the Court: 1. Notice of Motion for Declaratory Judgment and Affirmation of Assistant Attorney General, Wendy E. Morcio, Esq., dated May 25, 2018 with annexed Exhibits A-N; 2. Notice of Third-Party Defendants' Cross Motion and Affirmation of Richard A. Galbo, Esq., dated August 16, 2018; 3. Travelers' Answer to Third-Party Claim dated August 23, 2018; 4. Reply Affirmation of Richard A. Galbo, Esq., dated September 10, 2018; 5. Memorandum of Law of Richard A. Galbo, Esq. and Judith Treger Shelton, Esq. dated July 17, 2018; 6. Affidavit of Judith A. Wilder sworn to July 16, 2018 with annexed Exhibits A-D; 7. Affidavit of Patrick J. Leathem, sworn to July 17, 2018 with annexed Exhibits A-D; 8. Reply Affirmation in support of Declaratory Judgment and Opposition to Cross Motion of Wendy E. Morcio, dated September 5, 2018 with annexed Exhibits O-P; and 9. Copy of the trial transcript of testimony of Kelly Thompson, P.E.