Opinion
5196/09.
Decided January 30, 2010.
Defendant Everest National Insurance Company (Everest) moves for an order dismissing the complaint of plaintiff Sigma Contracting Corp. (Sigma) against it; defendant Utica First Insurance Company (Utica) moves to dismiss the complaint against it and for a declaration that it has no obligation to indemnify or defend plaintiff and/or non-party MCH Construction LLC (MCH) with regard to a certain accident that occurred involving one of its employees; and Sigma cross-moves for an order granting it summary judgment that Everest is obligated to defend and indemnify it and for an inquest.
BACKGROUND
The instant motions and cross motion arise out of an action for relief commenced by Sigma, which seeks a declaration that Everest is required to defend and indemnify it in the underlying personal injury action under the terms of a policy of insurance issued to it by Everest, and that Utica is required to defend and indemnify it as an additional insured under a policy issued by it to Sigma's subcontractor.
Sigma is a general contractor which entered into a contract with Joseph Norton Realty Corp. (JNRC) to perform renovations on a property owned by JNRC located at 195 Hopkinson Avenue (a/k/a Thomas Boyland Street) in Brooklyn, New York (the premises). On May 2, 2008, Sigma entered into a subcontract with nonparty MCH to perform construction work on the premises. The terms of that subcontract, inter alia, provided the following insurance procurement provision:
Article 13 insurance and bonds
13.1 The Subcontractor shall purchase and maintain insurance of the following types of coverage and liability:
Sigma Contracting Corp. to be listed as an additional insured.
13.2 Coverages, whether written on an occurrence or claims-made basis, shall be maintained without interruption from date of commencement of the Subcontractor's Work until date of final payment and termination of any coverage required to be maintained after final payment to the Subcontractor.
MCH was insured under a general liability policy issued by Utica policy number ART 33212501 (the Utica Policy). The Utica Policy provided commercial liability coverage in the amount of $1.0 million per occurrence and $2.0 million in the aggregate. In the section entitled "Principal Coverages", the Utica Policy states:
"We provide insurance for the following coverages, indicated by a specific limit or premium charge on the Declarations.
COVERAGE L — BODILY INJURY LIABILITY PROPERTY DAMAGE LIABILITY
We pay all sums which an insured becomes legally obligated to pay as damages due to bodily injury or property damage to which this insurance applies."
The Utica Policy also contained a "Blanket Additional Insured" provision, applicable to contractors. The language of that provision is set forth, infra.
On June 26, 2008, Wilmer Guzman (Guzman), an employee of MCH, was allegedly injured when he fell off a ladder while performing carpentry work at the premises. On or about November 18, 2009, Guzman commenced a lawsuit entitled Guzman v Neighborhood Partnership Housing Development Fund Co., Inc. et al., in the Supreme Court of the State of New York, Kings County, under index number 21652/08 (the underlying action). In the underlying action, Guzman alleges, as causes of action, that the defendants violated Labor Law §§ 200, 240(1) and 241(6) as well as common-law negligence.
Exclusionary language contained in two separate insurance policies is thus at issue in the instant proceeding:
The Utica First Policy
The Utica First Policy (the Utica Policy), under which Sigma claims it was named as an additional insured, contains a provision entitled " Exclusion of Injury to Employees, Contractors, and Employees of Contractors" (XCNTR [1.0]) which states:
This insurance does not apply to
(i) bodily injury to any employee of any insured, to any contractor hired or retained by or for any insured or to any employee of such contractor, if such claim for bodily injury arises out of and in the course of his/her employment or retention of such contractor by or for any insured, for which any insured may become liable in any capacity;
(ii) any obligation of any insured to indemnify or contribute with another because of damage arising out of the bodily injury; or (iii) bodily injury sustained by the spouse, child, parent, brother or sister, or of a contractor, or of an employee of a contractor of any insured as a consequence of bodily injury to such employee, contractor, or employee of such contractor, arising out of and in the course of such employment or retention by or for any insured.
This exclusion applies to all claims and suits by any person or organization for damages because of such bodily injury, including damages for care and loss of services.
This exclusion replaces Exclusion 8 in the Exclusions Section of the AP-100 policy form to which this endorsement is attached.
The principal difference between the afore cited exclusion, and Exclusion 8, as written in said AP-100 policy form [ "(w)e do not pay for: (a) bodily injury to an employee of an insured if it occurs in the course of employment. . .Exclusion 8. applies where the Insured is liable either as an employer or in any other capacity; or there is an obligation to fully or partially reimburse a third person for damages arising out of paragraph 8.a. . . . Exclusion 8. does not apply to liability assumed by an insured under an incidental contract "] is the elimination of the foregoing emphasized provision ( see Monteleone v Crow Constr. Co., 242 AD2d 135).
The Everest Policy
Everest issued a comprehensive general liability policy to Sigma that was in effect for the policy period July 7, 2007 through July 7, 2008, with per occurrence limits of $1.0 million (the Everest Policy). The policy contained the following exclusion:
Injury and Liability Resulting from or Caused by the Work of a Contractor or Subcontractor and or Sub-Subcontractor Including Without Limitation Injuries to the Employee of a Contractor, Subcontractor And/or Sub-Subcontractor This endorsement modifies insurance provided under the following: Commercial General Liability Coverage Part
The following exclusion is added to Paragraph 2., Exclusions of Section I-Coverage A-Bodily Injury and Property Damage Liability and Paragraph 2., Exclusions of Section I-Coverage B-Personal Injury and Advertising Injury Liability:
A. This insurance does not apply to "bodily injury:, "property damage" or "personal and advertising injury" arising out of work performed on behalf of the Named Insured by a contractor, subcontractor and or sub-subcontractor of the Named Insured that provides labor, services and/or materials with respect to any construction, alteration, demolition or repair of real property or any structures or mobile equipment thereon:
i. when there is no prior written and signed contract entered into between the Named Insured and the contractor, subcontractor and/or sub-subcontractor to indemnify and hold harmless the Named Insured to the fullest extent permitted by applicable law in the event of a loss, including, but not limited to, any claim, suit, cost or expense arising out of any loss suffered by an employee of the contractor, subcontractor or sub-subcontractor, regardless of whether the Named Insured is partially negligent and excluding only liability created by the Named Insured's sole and exclusive negligence; or
ii. when the Named Insured's contractor, subcontractor or sub-subcontractor fails to have in force commercial general liability insurance including contractual liability coverage for the benefit of the contractor, subcontractor and/or sub-subcontractor, as well as the Named Insured for indemnification and/or contribution claims to the fullest extent permitted by applicable law in the event of a loss, including, but not limited to, any claim, cost, or expense arising out of any loss suffered by an employee of the contractor, subcontractor and/or sub-subcontractor, regardless of whether the Named Insured is partially negligent and excluding only liability created by the Named Insured's sole and exclusive negligence.
B. In the event this insurance does not apply pursuant to Paragraph A(i) or (ii) above, without limitation this policy will not provide coverage for "bodily injury" to the employees, agents or principals of the Named Insured's contractors, subcontractors or sub-subcontractors
C.This exclusion shall not apply if:
i. Prior to a loss the Named Insured has entered into a written and signed contract entered into between the Named Insured and the contractor, subcontractor or sub-subcontractor requiring the contractor, subcontractor and/or sub-subcontractor to indemnify and hold harmless the Named Insured to the fullest extent permitted by applicable law in the event of a loss, including but not limited to, any claim, suit, cost or expense arising out of any loss suffered by an employee of the contractor, subcontractor or sub-subcontractor, regardless of whether the Named Insured is partially negligent and excluding only liability created by the Named Insured's sole and exclusive negligence; and also
ii. The Named Insured's contractor, subcontractor or sub-subcontractor has in force commercial general liability insurance including contractual liability coverage for the benefit of the contractor, subcontractor and/or sub-subcontractor, as well as the Named Insured for indemnification and/or contribution claims to the fullest extent permitted by applicable law in the event of a loss, including, but not limited to, any claim, suit, cost or expense arising out of any loss suffered by an employee of the contractor, subcontractor and/or sub-subcontractor, regardless of whether the Named Insured is partially negligent and excluding only liability created by the Named Insured's sole and exclusive negligence.Everest's and Utica's disclaimers
By correspondence dated July 10, 2008, Everest received a "General Liability Loss Notice of an Occurrence/Claim" .Included therein was a memorandum from Sigma dated July 7, 2008, stating that "we have been notified of an injury that occurred to an employee of our subcontractor on June 26, 2008 at [the premises]".
By correspondence dated July 15, 2008, UTC Risk Management Services, Inc. (UTC), on behalf of Everest, acknowledged Sigma's request for defense and indemnification under the Everest Policy, and referred to the aforestated "Contractor's Exclusion". UTC requested that Sigma provide Everest with copies of all written contracts and hold-harmless agreements pertaining to the construction that occurred at the premises. It further advised that it was tendering Sigma's claim to Utica, as Sigma was entitled to additional insured status and liability coverage under the Utica Policy.
By correspondence dated August 20, 2008, UTC, on behalf of Everest, tendered Sigma's claim for coverage as an additional insured under the Utica Policy and based on the contractual indemnification language contained in the contract, to MCH and Utica.
By correspondence dated September 11, 2008, Utica disclaimed coverage to Sigma based on, among other things, the fact that the Utica Policy did not provide coverage to Sigma or MCH for contractual liability claims, or, pursuant to provisions contained in policy form AP-100 and policy form XCNTR (1.0), for bodily injury to an employee of an insured if same occurs in the course of employment. Thereafter, by correspondence dated October 6, 2008, UTC, on behalf of Everest, disclaimed coverage to Sigma based upon the Contractor's Exclusion contained in the Everest Policy in that MCH failed to obtain coverage for Sigma that would provide Sigma with a defense and/or indemnification with respect to the underlying personal injury action.
The instant action
Sigma commenced the instant Declaratory Judgment action on or about March 4, 2009, seeking a ruling that Everest and Utica are required to defend, indemnify and provide insurance coverage to Sigma in the underlying action, alleging that Sigma is entitled to coverage as a named insured under the Everest Policy, and as an additional insured under the Utica Policy.
In the present motion practice, Utica has urged this court to treat its motion to dismiss as one for summary judgment declaring that it is not obligated to defend or indemnify Sigma in the Guzman action.
CONTENTIONS
Everest's contentions
Citing what it characterizes as the unambiguous language of the Contractor's Exclusion, and contending that it issued a timely disclaimer, Everest argues that if a contractor retained by Sigma is not entitled to contractual liability coverage under the policies of insurance issued to the subcontractors it hires, the coverage under the Everest policy is excluded by the Contractor's Exclusion. Everest further maintains that it was discharged from any obligation in favor of Sigma after Utica, the insurer of Sigma's contractor, disclaimed coverage based upon a "contractor's liability" exclusion contained in its policy.
Utica's contentions
In support of its motion, Utica submits that the language of the Employee Exclusion set forth in its policy is unambiguous and operates so as to preclude coverage to insureds and additional insureds alike. It expressly takes no position as to (1) the validity of Everest's argument that the Everest policy exclusion is triggered if the Utica policy does not provide coverage for Sigma, and (2) the validity of Sigma's contention that it is an additional insured under the Utica Policy. However, addressing Sigma's allegations, Utica asserts that under the unambiguous exclusion contained within its policy, there is no coverage available for Sigma or MCH for injuries sustained by employees of any insured. Utica further argues that "even assuming, without conceding the validity of Everest's argument . ., unless and until [Utica's] motion for. . .a declaration of non-coverage is decided, it is premature for this court to make any finding with respect to Everest's coverage obligations to Sigma, and Everest's motion must be denied accordingly."
In reply to the foregoing argument, Everest contends that because Sigma and MCH are not entitled to coverage under the Utica Policy, then Sigma is not entitled to coverage under the Everest Policy based on the Contractor's Exclusion.
Sigma's contentions
Alleging that the subcontract was in effect during the relevant policy period, and that the Additional Insured Certificate, annexed as an exhibit to its papers and which contains an additional insured provision naming it, demonstrate that it was an additional insured under the Utica Policy, Sigma further alleges that the Utica Policy also contains a "Blanket Additional Insured Endorsement" (the Blanket Endorsement) for contractors such as Sigma. The Blanket Endorsement provides, in relevant part:
Item 7.d is added to the Additional Definitions of Commercial Liability Coverages of the Contractors special Policy form AP-100. 7. Insured also includes:
d. Any person or organization whom you are required to name as as an additional insured on this policy under a written contract or written agreement.
The written contract or written agreement must be:
(1) currently in effect or becoming effective during the terms of this policy; and
(2) Executed prior to the "bodily injury," "property damage," "personal injury," or "advertising injury."
The insurance provided the additional insured is limited as follows:
(3) That the person or organization is only an additional insured with respect to liability arising out of
A. "Your work" for that additional insured for or by you
(4) The limits of insurance applicable to the additional insured are those specified in the written contract or agreement or the limits available under this policy, whichever are less.
These limits are inclusive of and not in addition to the limits of insurance available under this policy.
(5) The insurance provided the additional insured does not apply to liability arising out the sole negligence of the additional insured.
Exclusions
A. The insurance provided the additional insured does not apply to:
"Bodily Injury"
"Property Damage" "Personal Injury"
"Advertising Injury" . . .
***
C. "We" do not pay for "bodily injury" or "property damage" (or "personal injury" or "advertising injury", if provided by the Commercial Liability Coverage) occurring after:
1. All work on the project. . .to be performed by or on behalf of the additional insured at the site of the covered operations has been completed; or
2. That portion of "your work" out of which the injury or damage arises has been put to its intended use by intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project.
D. "We" do not pay for "bodily injury" or "property damage". . . arising out of any act or omission of the additional insured or any of its "employees", other than the general supervision of work "you" performed for the additional insured.
Sigma contends that language of the Blanket Endorsement provides coverage to Sigma as an additional insured since it states that an insured includes "any person or organization whom you are required to name as an additional insured on this policy under a written contract or agreement. It further asserts that (1) the Blanket Endorsement has its own exclusions applicable to the additional insured, but which do not refer to the "Employee Exclusion" relied upon by Utica in its disclaimer, and (2) the "Employee Exclusion" does not refer to or mention the Blanket Endorsement, thus rendering its language applicable solely to the insured on that policy and not the additional insured. It thus argues that the ambiguity created by facial inconsistency must be resolved in its favor, obligating Utica to provide coverage to Sigma as an additional insured under the Utica Policy.
With regard to the Everest policy, Sigma contends in its cross motion that it never agreed to be bound by the Endorsement, which, noting that the exhibit provided by Everest contains a blank signature line, it claims it never executed. It further avers that the Everest controversy is not yet ripe for determination, that Everest's disclaimer was untimely and prejudicial, and that the language of the endorsement renders the policy illusory.
Utica's opposition
In opposition to Sigma's cross motion, Utica rejects the latter's contention that the Employee's Exclusion is inconsistent with the Blanket Endorsement. It further (1) in an apparent modification of its position as stated in its motion, challenges Sigma's status as an additional insured, claiming that there is no form or endorsement that names it as such, as is required by the language of the Blanket Endorsement, (2) rejects, as unsupported by an individual with personal knowledge, the subcontract with MCH upon which Sigma relies, and (3) rejects Sigma's reference to and reliance upon the certificate of insurance. It further argues that even the court rejects the foregoing arguments and finds that Sigma is entitled to additional insured status under the Utica Policy, the Employee Exclusion unambiguously precludes coverage for the accident and underlying lawsuit, relying on what it claims is controlling authority to support is position that exclusions must be read in seriatum so as to give them effect. In light thereof, Utica asserts that (1) it issued a policy with basic terms and conditions contained in Form AP-100, e, Exclusion 8 of which (an Employee Exclusion) was replaced by a broader form Employee Exclusion set forth in endorsement XCNTR 1.0; (2) its policy was also altered by the Blanket Endorsement (Form BAI-I, Ed. 1.1), entitled "Blanket Additional Insured", which specifies, "Item 7-d is added to the Additional Definitions of Commercial Liability Coverages of the Contractors Special Policy Form AP 100" (emphasis in original). By the addition of this language, Utica contends that any additional insureds under the policy were subject to an amended Employee Exclusion that excluded coverage where the injury for which coverage was sought was sustained by an employee of either the named insured or the additional insured, or to an employee of any contractor hired or retained by either the named insured or the additional insured.
Utica further contends that the precise wording of the endorsements demonstrates that the exclusions contained in the Blanket Endorsement do not replace all of those set forth in the policy for additional insureds, but rather simply adds additional exclusions that also apply to additional insureds thereunder. Finally, Utica submits that no party has opposed its assertion that MCH is not entitled to coverage for the accident or underlying lawsuit based upon the Employee Exclusion.
Everest's opposition
Proffering what it contends is documentary proof, Everest denies Sigma's allegations that it did not sign the Contractor's Exclusion where it agreed to be bound by the terms and conditions contained therein. It further notes that on or about June 9, 2007, Sigma submitted a "Commercial Insurance Application" and an "Inter-Reco Contractors' Program Contractor/Developers Supplemental Application" to Everest to obtain coverage, further noting that said document contains a signature line that was signed by Sigma.
In opposition to plaintiff's contention that the Everest motion is not yet ripe for determination, Everest argues that there is nothing to prevent the court from deciding its motion because of the applicability of the Contractor's Exclusion irrespective of the pendency of the Utica motion. In addition, Everest contends that its disclaimer was timely and preceded by an investigation into the circumstances underlying Sigma's claim. In this regard, it disputes, as unsupported, Sigma's allegation that it had a copy of the Utica Policy, averring that it did not learn that the Utica Policy did not provide Sigma with coverage until it received Utica's disclaimer, which was issued on September 11, 2008. Everest contends that its time to disclaim was triggered by that event, and disputes Sigma's allegation of prejudice. Finally, Everest denies that its policy was illusory, contending that irrespective of the present disclaimer, its policy provides Sigma with broad liability coverage for "a host of different claims that might arise during the course of its business operations." It rejects Sigma's argument that a policy which contains language such as that in the Contractor's Exclusion herein violates public policy, and asserts that while Sigma knew that the Everest Policy would not provide coverage for bodily injury claims arising out of Sigma's Contractor's operations if it did not comply with the Contractor's Exclusion, it nonetheless executed the policy.
Reply
In reply and further opposition regarding Utica, Sigma contends that it is entitled to coverage as an additional insured pursuant to the Blanket Endorsement contained in the Utica Policy, based upon (1) the fact that it is named as an additional insured on an Additional Insured Certificate provided by it during the project, and (b) the terms of the subcontract with MCH. Citing what it claims is controlling authority, it rejects Utica's argument that an attorney's affirmation is not sufficient to introduce documentary evidence, and points out that there is a verified pleading that supports those documents that are submitted by an attorney's affirmation. It reiterates its primary argument that the Employee Exclusion is inconsistent with the Blanket Endorsement, that the Employee Exclusion cannot be used to defeat any right to coverage which might have existed under the Blanket Endorsement, and that the resulting ambiguity must be resolved in Sigma's favor so as to provide it with coverage as an additional insured under the Utica Policy.
In reply and further opposition regarding Everest, Sigma asserts that Everest's original argument, as set forth in its motion papers, that the Endorsement precludes coverage to Sigma if the latter's contractors fail to obtain insurance coverage for Sigma's benefit to protect Sigma from liability based on bodily injury claims arising out of the work of its subcontractors, is undermined by the fact that the Endorsement upon which it relies contained a blank signature line. It further argues that Everest's introduction, for the first time in its reply papers, a new version of the Endorsement purportedly executed by Sigma, is not admissible and should be disregarded. It further argues that even if the court were to accept said new version, there are numerous issues of material fact that arise, such as (1) who exactly executed the document; (2) when the Endorsement was actually executed; and (3) what the best evidence is with respect to the conflicting versions of the Endorsement. In addition to reiterating its contention that Everest's motion is premature, Sigma once again avers that the Everest Policy is unenforceable as illusory, arguing that if, under the language of the Endorsement, Everest can deny coverage because, under the language of the Endorsement, liability for injured employees rests solely with the contractor's insurer, Everest has accepted significant premiums for providing relatively little or no insurance.
DISCUSSION
Since all of the parties have specifically requested summary judgment, and have made it clear that they are charting a summary judgment course of action, this Court will treat each motion as one for summary judgment under CPLR 3211(c) ( see Shah v Shah, 215 AD2d 287, 289-290); cf Sta-Brite Servs v Sutton , 17 AD3d 570 ).
Although Everest initially moved under 3211(a)(7) for an order dismissing the complaint, it asserts, in its papers submitted in opposition to plaintiff's cross motion, that no issue of material fact is presented, and that the court treat its motion as one for summary judgment and dismiss the complaint and any cross claims asserted against it.
The burden on a motion for summary judgment rests initially upon the moving party to come forward with sufficient proof in admissible form to enable a court to determine that it is entitled to judgment as a matter of law. If this burden cannot be met, the court must deny the relief sought (CPLR 3212; Zuckerman v City of New York, 49 NY2d 557). However, once a moving party has made a prima facie showing of its entitlement to summary judgment, "the burden shifts to the opposing party to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action" ( Garnham Han Real Estate Brokers v Oppenheimer, 148 AD2d 493; see also Zuckerman, 49 NY2d at 562). Mere conclusory statements, expressions of hope, or unsubstantiated allegations are insufficient to defeat the motion ( Gilbert Frank Corp. v Federal Ins. Co., 70 NY2d 966).
Utica
"'[C]ourts bear the responsibility of determining the rights or obligations of parties under insurance contracts based on the specific language of the policies'" ( Sanabria v American Home Assur. Co., 68 NY2d 866, 868, quoting State of New York v. Home Indem. Co., 66 NY2d 669, 671), whose unambiguous provisions must be given "their plain and ordinary meaning" ( United States Fid. Guar. Co. v Annunziata, 67 NY2d 229, 232 [internal quotations marks and citations omitted]; see Maroney v New York Cent. Mut. Fire Ins. Co. , 5 NY3d 467 , 471-473; Catucci v Greenwich Ins. Co. , 37 AD3d 513 , 514). "An exclusion from coverage 'must be specific and clear in order to be enforced' ( Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311), and an ambiguity in an exclusionary clause must be construed most strongly against the insurer" ( Guachichulca v Laszlo N. Tauber Assoc., LLC , 37 AD3d 760, 761; see Ace Wire Cable Co. v. Aetna Cas. Sur. Co., 60 NY2d 390, 398; Ruge v Utica First Ins. Co. , 32 AD3d 424 , 426, lv denied 7 NY3d 716). However, the plain meaning of the policy's language may not be disregarded to find an ambiguity where none exists ( see Bassuk Bros., Inc. v Utica First Ins. Co. , 1 AD3d 470 , 471, lv dismissed 3 NY3d 696; Garson Mgt. Co. v Travelers Indem. Co. of Ill., 300 AD2d 538, 539, lv denied 100 NY2d 503). The test for ambiguity is whether the language of the insurance contract is "susceptible of two reasonable interpretations" ( State of New York v Home Indem. Co., 66 NY2d 669, 671).
Because Utica takes no position regarding Sigma's claim that it is an additional insured under the Utica Policy, its argument that Sigma's referencing of its inclusion on the certificate of insurance cannot, as a matter of law, confer additional insured status ( see School Const. Consultants, Inc. v ARA Plumbing Heating Corp. , 63 AD3d 1029), is misplaced, and is thus completely refuted by Sigma's submission, in its cross motion, of (1) the Additional Insured Certificate which lists Sigma as an additional insured under the Utica Policy, and (2) a written subcontract with MCH, referred to in Sigma's Verified Complaint, which is verified and based on the personal knowledge of Emmanual Skoulas, Sigma's president. In light of such verification, and because it is well settled in New York that an affirmation in support of a motion for summary judgment submitted by an attorney for the party, which is, as here, supported by documentary proof, provides adequate support for the motion ( see Krohn v Felix Industries Inc., 302 AD2d 499), the court rejects Utica's argument that Sigma has failed to establish its entitlement to additional insured status.
"The duty to defend arises whenever the allegations in a complaint against the insured fall within the scope of the risks undertaken by the insurer" ( Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 310; see also Ruder Finn v Seaboard Sur. Co., 52 NY2d 663, 669). The insurer bears the burden of proving that the facts alleged in the complaint do not fit within the range of the policy's coverage ( see International Paper Co. v Continental Cas. Co., 35 NY2d 322, 327; Prashker v United States Guar. Co., 1 NY2d 584, 592). "An insurer's duty to defend its insured is exceedingly broad' ( Colon v Aetna Life Cas. Ins. Co., 66 NY2d 6, 8) and an insurer will be called upon to provide a defense whenever the allegations of the complaint suggest a reasonable possibility of coverage ( see BP A.C. Corp. v One Beacon Ins. Group , 8 NY3d 708 , 714). Insurance contracts are read in light of common speech' ( Ace Wire Cable Co. v Aetna Cas. Sur. Co., 60 NY2d 390, 398; see Pepsico, Inc. v Winterthur Intl. Am. Ins. Co. , 13 AD3d 599 , 600) and are to be interpreted "according to the reasonable expectations and purposes of ordinary businesspeople when making ordinary business contracts" ( City of New York v Evanston Ins. Co. , 39 AD3d 153 , 156). In interpreting an insurance policy, the policy should be read as a whole ( see MDW Enters. v CNA Ins. Co., 4 AD3d 338, 341)" ( City of New York v Philadelphia Indem. Ins. Co. , 54 AD3d 709 , 710). In construing an endorsement to an insurance policy, "the endorsement and the policy must be read together, and the words of the policy remain in full force and effect except as altered by the words of the endorsement" ( County of Columbia v Continental Ins. Co., 83 NY2d 618, 628). "[P]olicy exclusions are given a strict and narrow construction, with any ambiguity resolved against the insurer" ( Belt Painting Corp. v TIG Ins. Co., 100 NY2d 377, 383; see Monteleone, 242 AD2d at 140). "At the same time, an insured must demonstrate that an exception to an exclusion applies where coverage rests on the application of such exception" ( Id.).
The record herein fails to support Sigma's contention that the Employee Exclusion and the Blanket Endorsement are inconsistent and therefore ambiguous. Sigma argues that the Blanket Endorsement lists its own exclusions applicable to the additional insured, which do not refer to the "Employee Exclusion" upon which Utica's disclaimer was based. However, as can be seen from the plain language of both provisions, an exclusion for bodily injury to employees of the insured or of an additional insured/contractor is set forth in both provisions. By contrast, no such language was present in the policies at issue in Gonfranullah v 630 Realty Co. ( 16 Misc 3d 1122[A]) and LaBoutique NY, Inc. v Utica Ins. Co. ( 18 Misc 3d 1132[A] [2008]), relied upon by Sigma to support its argument that the Utica Policy is ambiguous. In those inapposite cases, unlike here, the language of the Blanket Additional Insured (Contractors) provisions did not specifically state that "[t]he insurance provided the additional insured does not apply to: "Bodily Injury". . .or "Personal Injury". Accordingly, since the plain meaning of the exclusionary language at issue here was to relieve Utica of liability when the insured or additional insured was sued or contribution was requested for damages arising out of bodily injury to employee sustained in course of employment, Utica has demonstrated that it is not required to defend or indemnify Sigma as an additional insured under the unambiguous terms of its policy ( see Bassuk Brothers, Inc., 1 AD3d at 471; Moleon v Kreisler Borg Florman General Const. Co., Inc., 304 AD2d 337; Hayner Hoyt Corp. v Utica First Ins. Co., 306 AD2d 806; Tardy v Morgan Trust Co., 213 AD2d 296; see also Monteleone, 242 AD2d at 135), and Sigma has failed to raise an issue of fact in opposition, or demonstrate, prima facie, entitlement to relief on its cross motion.
Everest
The determination that Utica has no coverage obligations to Sigma triggers the Contractor's Exclusion that is contained in the Everest Policy, which, as previously noted, excludes coverage for Sigma if the latter fails to have "in force commercial general liability insurance including contractual liability coverage for the benefit of the contractor. . .and [Sigma] for indemnification and/or contribution claims to the fullest extent permissible by applicable law in the event of a loss." Sigma's conclusory opposition to Everest's motion seeking denial based upon the argument that the endorsement in question contains a blank signature line, as well as its contention that the version contained in Everest's opposition papers is a different and undated version, is unsupported by reference to any authority, contains no affidavit by an individual with knowledge denying that the policy was in fact executed, and fails to refute Everest's showing that the document was properly presented in its opposition/reply papers in response to plaintiff's allegations. Similarly devoid of merit is Sigma's opposition based upon the argument that such a provision violates public policy ( see Utica First Ins. Co. v Santagata ,66 AD3d 876).
Even if the foregoing finding was not dispositive, the court would reject Sigma's contention that Everest's disclaimer was untimely. It is well settled that a notice of disclaimer is required where the policy covers the claim, but for the applicability of the exclusion ( see Squires v Robert Marini Bldrs., 293 AD2d 808, 810; Greater NY Mut. Ins. Co. v Clark, 205 AD2d 857, 858). Insurance Law § 3420(d) requires an insurer to provide a written disclaimer "as soon as is reasonably possible." An insurer must give notice of its intention to deny coverage after it first learns of the accident or reason for disclaimer ( see Hartford Ins. Co. v County of Nassau, 46 NY2d 1028, 1029; Matter of Nationwide Mut. Ins. Co. v Steiner, 199 AD2d 507, 507).
"The insurer bears the burden of justifying any delay"( Schulman v Indian Harbor Ins. Co. , 40 AD3d 957 , 958; see also First Fin. Ins. Co. v Jetco Contr. Corp. , 1 NY3d 64 , 69). The reasonableness of a delay is measured from the time when the insurer "has sufficient knowledge of facts entitling it to disclaim, or knows that it will disclaim coverage" ( First Fin. Ins. Co., 1 NY3d at 66; see also Consolidated Edison Co. of NY v Hartford Ins. Co., 203 AD2d 83, 84-85).
"While Insurance Law § 3420(d) speaks only of giving notice as soon as is reasonably possible,' investigation into issues affecting an insurer's decision whether to disclaim coverage obviously may excuse delay in notifying the policyholder of a disclaimer" ( First Fin. Ins. Co., 1 NY3d at 69). "[T]he burden is upon the insurance carrier to establish that the delay . . . was reasonably related to its completion of a thorough and diligent investigation" ( Schulman, 40 AD3d at 958). An insurer's explanation of such a delay "is insufficient as a matter of law where the basis for denying coverage was or should have been readily apparent before the onset of the delay" ( First Fin. Ins. Co., 1 NY3d at 69; see also Matter of Allstate Ins. Co. v Cruz , 30 AD3d 511 , 512).
Everest has met this burden by tendering a full explanation for the delay in its opposition papers ( see Hartford Ins. Co., 46 NY2d at 1028). Significantly, it refutes Sigma's allegation, made solely upon information and belief, that Everest had in its possession a copy of the Utica Policy, and that the time between the underlying accident and its disclaimer of October 6, 2008, cannot be justified. In UTC's letter, on behalf of Everest, to Sigma dated July 15, 2008, Sigma was made aware that Everest had commenced its investigation, as it requested that Sigma, within two to four business days, provide it with the required information to show that it complied with the requirements of the Contractor's Exclusion. As demonstrated by its opposition papers and the report of its investigator dated August 15, 2008, Everest conducted its investigation, which included speaking with Sigma to determine whether it obtained the required insurance from MCH. According to the report, Sigma's project manager went on vacation after he reported the loss and MCH's project manager was "currently away". The report further notes that Sigma's project manager did not appear to be knowledgeable or concerned about the underlying accident, and indicated that he did not feel that Sigma was significantly involved. Finally, Everest's investigator indicated that he had canvassed the job site but was unable to elicit any information from any individual at that location, and that he was in the process of attempting to obtain a copy of the contract with the owner of the premises.
As further demonstrated, on or about August 15, 2008, the investigator obtained a Certificate of Insurance, which referred to MCH as Utica's insured. Five days thereafter, on August 20, 2008, UTC, on behalf of Everest, tendered Sigma's claim for coverage to Utica. Under the totality of the circumstances, the court finds that Everest's disclaimer, issued twenty seven days after Utica's, was timely as a matter of law ( see Generali-U.S. Branch v Rothschild, 295 AD2d 236, 237 ["(t)he reasonableness of any delay in disclaiming coverage must be judged from that point in time when the insurer is aware of sufficient facts to issue a disclaimer"]).
Equally unavailing is plaintiff's allegation that it has been prejudiced by Everest's delay. In the first place, plaintiff fails to demonstrate that prejudice is even a factor to be considered herein. Although, under Insurance Law § 3420(d), "the insurer's failure to comply with the statutory requirement renders the denial or disclaimer ineffective, regardless of whether the insured . . . was in any way prejudiced by the delay" ( see State Farm Mut. Auto. Ins. Co. v Clift. 249 AD2d 800, 801; see also All City Ins. Co. v Pioneer Ins. Co., 194 AD2d 424; Kamyr, Inc. v St. Paul Surplus Lines Ins. Co., 152 AD2d 62), plaintiff fails to support its naked claim that the court should consider prejudice that purportedly resulted from the insurer's purported delay. Moreover, plaintiff has failed to demonstrate as a factual matter that it was prejudiced (see Fairmont Funding, Ltd. v Utica Mut. Ins. Co., 264 AD2d 581). Plaintiff, which does not challenge Everest's assertion that it received Everest's disclaimer prior to the commencement of the underlying action and retained counsel before it was sued, fails to support its conclusory claim that it was prejudiced due to Everest's disclaimer which, it alleges, "directly resulted in Sigma's failure to make other arrangements for its defense". Accordingly, its claim regarding prejudice is devoid of merit.
In view of the foregoing, the court (1) grants summary judgment in favor of Everest and dismisses the complaint as to it, (2) grants summary judgment in favor of Utica and dismisses the complaint as to it, and (3) denies Sigma's cross motions.
This constitutes the decision, order and judgment of the court.